United States District Court, D. New Jersey
JANE M. FEARN-ZIMMER, ROTHKOFF LAW GROUP, HERRY HILL, NJ. Attorney for plaintiff Ada Brill
JENNIFER LAUREN FINKEL, MOLLY ANN MOYNIHAN, STATE OF NEW JERSEY OFFICE OF THE ATTORNEY GENERAL, R.J. HUGHES COMPLEX TRENTON, NJ. Attorney for defendants Jennifer Velez and Valerie Harr.
NOEL L. HILLMAN, District Judge.
Before the Court is Defendants' Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(1). Plaintiff commenced this action by filing a Complaint pursuant to 42 U.S.C. § 1983, naming as defendants Jennifer Velez and Valerie Harr, respectively the Commissioner of the New Jersey Department of Human Services and the Director of the Division of Medical Assistance and Health Services. The Complaint alleges violations of subchapter XIX of the Social Security Act ("Federal Medicaid Act"), 42 U.S.C. §§ 1396 to 1396w-5.
Previously, Defendants moved to dismiss Plaintiff's Complaint arguing that the case had become moot. The Court denied that motion. Defendants have now renewed their motion to dismiss based on developments since the resolution of their prior motion. For the reasons set forth below, the motion will be granted in part and denied in part.
By way of background, on March 22, 2012, Plaintiff applied to the Camden County Board of Social Services ("Board") for long-term care benefits under New Jersey's Medicaid program. Due to the fact that Plaintiff had purchased an annuity the day before she filed her application, Plaintiff's caseworker sought guidance from the State on the issue of whether Plaintiff must incur a penalty waiting period before receiving benefits.
Approximately fifteen months after filing her application, by letter dated June 21, 2013, Plaintiff learned she would be subject to a penalty period if the Board found her to be otherwise eligible for benefits. The Penalty period was imposed because the State deemed several asset transfers below fair market value, including the annuity purchase. The letter also informed Plaintiff she had two weeks to rebut the State's findings by proving that the transfers were not made for the purpose of becoming eligible for Medicaid. Plaintiff's counsel submitted a letter to the Board explaining why the annuity purchase should not count toward a penalty period, but to no avail.
On July 29, 2013, Plaintiff received the Board's determination stating that she was eligible for benefits but would be subject to a penalty period until November 17, 2013. In response to the Board's determination, Plaintiff filed this action seeking to enjoin Defendants from treating her annuity purchase as an Impermissible Transfer and from applying a "de facto policy of delaying determinations involving annuities." Plaintiff also requested costs, attorney's fees, and "such other relief as the court may deem just and equitable."
By letter dated October 4, 2013, two weeks after Plaintiff filed her Complaint, the Board reversed its previous determination and informed Plaintiff that her annuity purchase would not count towards her penalty period. However, instead of recalculating the penalty period without the annuity, the Board rescinded Plaintiff's eligibility determination, changed her application status to "pending, " and requested additional information. As of the date of the Court's prior Opinion on June 27, 2014, Plaintiff still had not received benefits or a revised eligibility determination.
Even though Defendants argued that the October 4, 2013 letter mooted her claims against them, the Court rejected their argument. The Court found that Defendants did not identify any facts that would assure the Court it could not reasonably expect Defendants to revert back to their original position after dismissal, and without more, the sole fact that the State voluntarily ceased the challenged conduct could not provide the requisite assurance. The Court also found that Plaintiff had waited over sixteen months for an eligibility determination that should have been made within forty-five days, and that if sufficiently proven, the Court could remedy this claim with an injunction against further violation of the reasonable promptness requirement.
Defendants have now renewed their motion to dismiss based on mootness, and they point to new developments since the filing of Plaintiff's Complaint and the filing of Defendants' prior motion to dismiss that they contend should assuage the Court's concerns that supported the denial of their first motion. On December 3, 2013, the Board issued a Medicaid eligibility decision to Plaintiff, and she has been receiving benefits since that time. The Board's December 2013 decision honored its October 2013 promise that it would not treat Plaintiff's annuity purchase as an impermissible transfer.
Defendants further point out that there has been no delay in Plaintiff's receipt of benefits, as her effective eligibility date was June 1, 2012, and the transfer penalty period ended on December 20, 2013. The decision concerning the effective date of eligibility and the imposition of other transfer penalties are not the basis for Plaintiff's claims in this case, which concerns the annuity. In supplementation of their motion, Defendants have submitted the August 18, 2014 final agency decision by the Director of the Division of Medical Assistance and Health Services for the State of New Jersey, which upheld and adopted the initial decision. Defendants posit that any issues Plaintiff has with this decision can be appealed to the New Jersey Superior Court, Appellate Division.
When Plaintiff filed her opposition to Defendants' renewed motion to dismiss, Plaintiff objected to the motion on two bases. First, Plaintiff considered Defendants' renewed motion to dismiss to effectively be an improper motion for reconsideration of the Court's decision on their first motion to dismiss. Second, Plaintiff argued that because she was still waiting for a definitive eligibility decision from the Board, the reasoning of the Court's ...