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Galletta v. Velez

United States District Court, Third Circuit

November 10, 2013

ALMA GALLETTA, individually and on behalf of herself and all others similarly situated, Plaintiff,
v.
JENNIFER VELEZ, COMMISSIONER, NEW JERSEY DEPARTMENT OF HUMAN SERVICES; VALERIE HARR, DIRECTOR, NEW JERSEY DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES; and BERGEN COUNTY BOARD OF SOCIAL SERVICES, Defendants.

OPINION

ROBERT B. KUGLER, District Judge.

This matter comes before the Court on the motion of Defendant Jennifer Velez, Commissioner of the New Jersey Department of Human Services, and Defendant Valerie Harr, Director of the New Jersey Division of Medical Assistance and Health Services, to dismiss as moot the complaint of Plaintiff Alma Galletta ("Plaintiff").[1]

For the reasons stated herein, the motion will be DENIED.

I. BACKGROUND

This matter arises out of Plaintiff's application for Medicaid benefits in May, 2012, which was originally denied. Compl. at ¶ 21. Medicaid is a program created by federal law, but implemented at the state level, which provides coverage for medical care to individuals who cannot afford to obtain it on their own. See 42 U.S.C § 1396, et seq. The program is designed to provide benefits to persons "whose income and resources are insufficient to meet the cost of necessary medical services." 42 U.S.C. § 1396-1. State participation is voluntary; however, states that participate in the Medicaid program must comply with the federal statutory and regulatory framework governing Medicaid. Sabree v. Richman , 367 F.3d 180, 182 (3d Cir. 2004). New Jersey has authorized participation in the Medicaid program through its Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1, et seq. The state's Medicaid program is administered by the New Jersey Division of Medical Assistance and Health Services ("DMAHS"), the Director of which is Defendant Valerie Harr. See N.J.A.C. 10:49-1.1(a). DMAHS, in turn, is a division of the New Jersey Department of Human Services, the Commissioner of which is Defendant Jennifer Velez. See N.J.S.A. 30:4D-4. Individual decisions on eligibility are made on the local level by county welfare agencies that DMAHS contracts with. N.J.A.C. 10:71-1.5. When seeking an eligibility decision, applicants must provide the county agencies with documentation and evidence related to their resources. See N.J.A.C. 10:71-2.2(e); N.J.A.C. 10:71-3.1(b). In this case, Plaintiff's eligibility determination was made by Defendant Bergen County Board of Social Services ("BCBSS"). Compl. at ¶ 27.

Plaintiff, who is the widow of a World War II veteran, applied for benefits through the "Global Options for Long Term Care" ("Global Options") waiver program, which is a program funded by Medicaid that covers medical care in assisted living facilities. See N.J.S.A. 30:4D-17.23 through 30:4D-17.32. In order to be approved for the Global Options program, a person must be found eligible, which requires a showing of income and resources below certain maximum levels, which was $2, 094.00 per month at the time of Plaintiff's application. Id. at ¶¶ 19-20. Plaintiff's application was denied, because her income was found to exceed the income eligibility ceiling for Medicaid benefits under the Global Options program. Id. at ¶ 21. The denial related in part to compensation that Plaintiff received through her late husband's veterans benefits, paid to her by the Veterans Administration Improved Pension ("VAIP") pursuant to 38 U.S.C. § 1541(d)(1). Id. at ¶ 22. The relevant statute for Medicaid eligibility provides that income is not to be counted toward the limit if it is a "[p]ayment from the Department of Veterans Affairs resulting from unusual medical expenses." 20 C.F.R. § 416.1103(a)(7).[2] Had the payments Plaintiff received from VAIP not been included in her monthly income for the purposes of Medicaid eligibility, Plaintiff would have been eligible for the Medicaid benefits she applied for. Compl. at ¶ 27. Prior to her denial of benefits, she had submitted to BCBSS a letter from the Department of Veterans Affairs ("VA"), dated May 23, 2012, which indicated that of the $1, 094.00 Plaintiff received every month, $684.00 was designated as "pension" and $410.00 was designated as "aid and attendance." Id. at Ex. D. The $684.00 was counted as part of her income by BCBSS for Medicaid eligibility purposes, and the $410.00 was not. Id. at ¶¶ 24, 27.

Plaintiff contended that the entire income she received from VAIP resulted from unreimbursed medical expenses, and therefore none of it should have ever been counted toward her income calculation for Medicaid eligibility purposes. Pl. Opp'n at 6. Prior to filing this action, she obtained an undated letter from the VA indicating that the entire $1, 094.00 per month that Plaintiff received was for "aid and attendance." Compl. Ex. F. However, BCBSS refused to change its decision based upon this letter, indicating that because it was undated and seemingly conflicted with the earlier letter from the VA, the letter was not reliable evidence and BCBSS could not tell which one was accurate. Def. Br. at 10-11. Plaintiff believes that a letter should not have been required and that no VAIP benefits should be treated as income in any event for purposes of the Medicaid income ceiling.

On January 28, 2013, Plaintiff filed a putative class action complaint against Defendants, seeking to enjoin Defendants from treating VAIP payments as income for Medicaid eligibility purposes, a re-determination of eligibility, an order granting such eligibility on a retroactive basis to class members who would have been eligible for benefits had VAIP payments not been treated as income, and attorneys' fees and costs. In February 2013, after filing her complaint, Plaintiff submitted a new letter from the VA, dated February 14, 2013, to BCBSS. In the new letter, the VA indicated that the entire amount of VAIP benefits, then totaling $1, 113.00 per month, constituted "aid and attendance." Def. Mot. Ex. C. Based upon the letter, BCBSS determined that Plaintiff's income fell below the income ceiling and that she was thus eligible for the Global Options program. Id. at Ex. D. Defendants now move to dismiss the complaint, arguing that this Court can no longer grant effective relief to Plaintiff, and because a class has not been certified, no plaintiff can assert a justiciable claim.

II. LEGAL STANDARD

Defendants move to dismiss Plaintiff's complaint on the grounds that her claims are moot. Article III of the United States Constitution constrains the jurisdiction of federal courts to "cases and controversies." U.S. Const. art III § 2; see also Flast v. Cohen , 392 U.S. 83, 94 (1968). Therefore, the issue of mootness is jurisdictional and relates to the very power of the Court to hear a case. Sutton v. Rasheed , 323 F.3d 236, 245, 248 (3d Cir. 2003). Any dismissal such as the one sought by Defendants would be pursuant to Federal Rule of Civil Procedure 12(b)(1), which allows a defendant to seek dismissal for lack of subject matter jurisdiction. If at any point while the matter is before the court, a claim ceases to be a "live case or controversy, the claim is moot and the federal court lacks jurisdiction to hear it." Nextel West Corp v. Unity Twp. , 282 F.3d 257, 261 (3d Cir. 2002). "An offer of complete relief will generally moot the plaintiff's claim, as at that point the plaintiff retains no personal interest in the outcome of the litigation." Weiss v. Regal Collections , 385 F.3d 337, 340 (citing Rand v. Monsanto Co. , 926 F.2d 596, 598 (7th Cir. 1991).

A district court may treat a party's motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) as either a facial or factual challenge to the court's jurisdiction. Gould Elecs., Inc. v. United States , 220 F.3d 169, 176 (3d Cir. 2000). "In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Id . (citing PBGC v. White , 998 F.2d 1192, 1196 (3d Cir. 1993)). "In reviewing a factual attack, the court may consider evidence outside the pleadings." Id . (citing Gotha v. United States , 115 F.3d 176, 178-79, 36 V.I. 392 (3d Cir. 1997)); see also United States ex rel. Atkinson v. Pa. Shipbuilding Co. , 473 F.3d 506, 514 (3d Cir. 2007). A district court has "substantial authority" to "weigh the evidence and satisfy itself as to the existence of its power to hear the case." Mortensen v. First Fed. Sav. & Loan Ass'n , 549 F.2d 884, 891 (3d Cir. 1977). "[N]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Id.

Although courts generally treat a pre-answer motion under Rule 12(b)(1) as a facial challenge, see Cardio-Med. Assoc., Ltd. v. Crozer-Chester Med. Ctr. , 721 F.2d 68, 75 (3d Cir. 1983), a motion to dismiss on the grounds of mootness is a factual challenge. See Ortho Pharma. Corp. v. Amgen, Inc. , 882 F.3d 806, 811 (3d Cir. 1989); Strahan v. Roughead , 910 F.Supp.2d 358, 364 (D. Mass. 2012). When a defendant raises a factual challenge to jurisdiction, the plaintiff bears the burden of establishing jurisdiction. Gould Elecs. Inc. , 220 F.3d at 176-77. In determining the merits of such an attack, the Court may consider affidavits and other relevant evidence outside of the pleadings. Berardi v. Swanson Memorial Lodge No. 48 of Fraternal Order of Police , 920 F.2d 198, 200 (3d Cir. 1990).

III. DISCUSSION

Defendants argue that because Plaintiff, as of March, 2013, has been granted coverage under the Global Options program, Plaintiff has received all the benefits to which she is entitled and that she sought in her complaint, and thus the complaint should be dismissed on mootness grounds. Plaintiff does not dispute that the coverage has been granted, but counters that although she has been granted benefits, she was not granted the other relief that she sought in her complaint. She therefore argues that a live case or controversy still exists, and thus her claims are not moot. In the alternative, she argues that an exception to ...


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