United States District Court, D. New Mexico
ADVANTAGEOUS COMMUNITY SERVICES, LLC, ARMINDER KAUR, HARASPAL SINGH, and HARCHI SINGH, Plaintiffs,
GARY KING, AMY LANDAU, ELIZABETH STALEY, MARC WORKMAN, CATHY STEVENSON, ORLANDO SANCHEZ, and WALTER RODAS, Defendants.
MEMORANDUM OPINION AND ORDER
FASHING, UNITED STATES MAGISTRATE JUDGE
MATTER comes before the Court on defendants Gary King, Amy
Landau, Elizabeth Staley, Mark Workman, Cathy Stevenson,
Orlando Sanchez, and Walter Rodas' (collectively
“State Defendants”) Motion for Summary Judgment
(Doc. 95), filed April 12, 2019. Plaintiffs filed their
Response to Defendants' Motion (Doc. 98) on April 29,
2019. State Defendants filed their Reply in Support of Their
Motion for Summary Judgment (Doc. 102) on May 20, 2019. The
parties consented to my entering final judgment in this case.
Docs. 6-14. Having read the submissions of the parties and
being fully advised, and for the following reasons, the Court
GRANTS the State Defendants' Motion for Summary Judgment.
Statement of Facts
Mexico Human Services Department (“HSD”) is
responsible for administering Medicaid and maintaining the
managed care system for Medicaid recipients. UMF 8. The State
Defendants assert, without any evidentiary support,
that the Medicaid Assistance Division (“MAD”) is
a division within HSD that is responsible for executing
Provider Participation Agreements to ensure that Medicaid
providers are qualified under the Medicaid Act. UMF 9. HSD
works under an interagency agreement with the New Mexico
Department of Health (DOH) to administer a portion of the
Medicaid program. UMF 10. HSD had primary responsibility for
accepting claims for services rendered, reviewing claims to
ensure accuracy, then paying the claims. Id.
provides program management and technical assistance to
Medicaid programs, including enrolling providers and
providing training to providers on how to provide services,
as well as advising them of the rules and requirements of the
Medicaid system. UMF 11. Plaintiff Advantageous Community
Services, LLC, (“Advantageous”) is a New Mexico
business that provided home-based care to Medicaid recipients
pursuant to the Developmental Disabilities Waiver Program.
Doc. 1-1 ¶ 16; Doc. 77 ¶ 16. Defendant Cathy
Stevenson was the Acting Director of the Developmental
Disabilities Supports Division (“DDSD”). UMF 12.
DDSD reported to DOH. Id. The Division of Health
Improvement-another division under DOH-was responsible for
the criminal history screening of Medicaid providers'
employees. UMF 13. DDSD was not responsible for conducting
this screening. Id.
Medicaid Fraud Division is a division within the New Mexico
Attorney General's Office charged with reviewing and
prosecuting referrals of potential claims of Medicaid fraud.
UMF 14. During the relevant time period, defendant Gary King
was the New Mexico Attorney General, and defendant Amy Landau
was an attorney in his office. Doc. 1-1 ¶¶ 6, 7;
Doc. 77 ¶¶ 6, 7. Defendant Elizabeth Staley also
was an attorney at the Attorney General's Office and was
Director of the Medicaid Fraud and Elder Abuse Division
there. Doc. 1-1 ¶ 8; Doc. 77 ¶ 8. Defendant Marc
Workman was an investigator for the Attorney General's
Office. Doc. 1-1 ¶ 9; Doc. 77 ¶ 9. Defendants
Orlando Sanchez and Walter Rodas both were employees of DOH.
Doc. 1-1 ¶¶ 11, 12; Doc. 77 ¶¶ 11, 12.
January 10, 2006, after completing a review of suspected
fraudulent behavior, MAD referred “the issue” to
the Medicaid Fraud Division, which opened an investigation
into Advantageous' billing practices. UMF 1. On June 4,
2007, after approximately 15 months of investigation, the
Medicaid Fraud Unit (“MFU”) of the New Mexico
Attorney General's Office demanded repayment to the State
of payments made to Advantageous for services provided by six
Advantageous employees whom the MFU believed did not have
required background clearances. UMF 3; see also Doc.
95-1 (Hughes depo at 45:2-51:7; explaining the MFU's
claim for repayment); Doc. 95-2 (attachment showing MFU's
claim). Advantageous did not respond to MFU's demand. UMF
3. DOH placed a moratorium on business with Advantageous. UMF
4; Doc. 98 at 2 (“Advantageous does not dispute that
the Department of Health placed a moratorium on business with
Advantageous, ” but it does dispute the reason for
than three years after MAD made the referral to the Attorney
General's Medicaid Fraud Division, on September 28, 2009,
the State of New Mexico filed suit against Advantageous for
Recovery of Medicaid Overpayments, Civil Penalties, and
Breach of Contract (hereafter sometimes referred to as the
“underlying complaint”). UMF 6. The underlying
complaint alleged that Advantageous “submitted false,
fraudulent, excessive, or incomplete billings to the
State's Medicaid program” by submitting claims for
services provided by individuals for whom Advantageous had
not obtained criminal history screenings. Doc. 95-2 at 2,
¶ 8. The underlying complaint alleged that billing for
services provided by such individuals entitled the State to
recover all amounts paid for those services as well as civil
penalties. See Id. at 2-3, ¶¶ 10-12. The
underlying complaint also alleged that billing for services
performed by individuals who “had not undergone a
background check as required by state law” was a breach
of Advantageous' contract with the State, and the State
sought damages for that breach. Id. at 3-4,
September 16, 2011, nearly two years after the State filed
its lawsuit against Advantageous, Judge Shannon Bacon
dismissed a similar lawsuit, State of New Mexico v.
Behavioral Home Care, Inc., D-202-CV-201008273, for
failure to state a claim. See UMF 7 (mistakenly
stating that the case was dismissed on September 30, 2011);
see also Doc. 98-6 at 3 (docket entry showing
dismissal on September 16, 2011). The New Mexico Court of
Appeals affirmed the dismissal on June 9, 2014 in a published
opinion. UMF 7; see also State ex rel. King v. Behavioral
Home Care, Inc., 2015-NMCA-035, 346 P.3d 377 (N.M. Ct.
App. Jun. 9, 2014), cert. granted, 2014-NMCERT-008,
334 P.3d 425 (Aug. 15, 2014), cert. dismissed,
2015-NMCERT-004, 348 P.3d 695 (Apr. 3, 2015).
on October 28, 2011, about six weeks after Judge Bacon
dismissed the suit against Behavioral Home Care, Judge
Valerie Huling dismissed the state's case against
Advantageous as a sanction for the Attorney General's
Office's use of “document know to be false”
in conjunction with a deposition. Doc. 98-1 (Judge
Huling's opinion). Judge Huling stated in her order that
“[d]ismissal of the Complaint is warranted as a
sanction considering the egregious nature of the actions of
the State's investigator.” Doc. 98-1 at 5. Judge
Huling also stated, “Summary Judgment is granted,
” but she did not analyze the merits of the State's
case under the summary judgment standard. See id.; see
also Romero v. Philip Morris Inc., 2010-NMSC-035,
¶¶ 7-11, 148 N.M. 713, 720-22, 242 P.3d 280, 287-89
(reviewing stringent summary judgment standard in New
Mexico). On April 28, 2014, the New Mexico Court of Appeals
affirmed Judge Huling's imposition of the sanction of
dismissal with prejudice for the State's severe
misconduct in using false documents to prosecute its case.
State ex rel. King v. Advantageous Community Services,
LLC, 2014-NMCA-076, 329 P.3d 738 (2014). The Court of
Appeals did not address the State's argument that Judge
Huling erred in granting summary judgment. Id.,
2014-NMCA-076, ¶ 11, 329 P.3d at 741.
Legal Standard for Summary Judgment
judgment will be granted “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A genuine dispute exists if “the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party” on the issue.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). “Only disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.” Id.
movant bears the initial burden of establishing that there is
no genuine issue as to any material fact and that the movant
is entitled to judgment as a matter of law. Celotex Corp.
v. Catrett, 477 U.S. 317, 323-24 (1986). “[T]he
movant need not negate the non-movant's claim, but need
only point to an absence of evidence to support the
non-movant's claim.” Kannady v. City of
Kiowa, 590 F.3d 1161, 1169 (10th Cir. 2010) (quoting
Sigmon v. CommunityCare HMO, Inc., 234 F.3d 1121,
1125 (10th Cir. 2000)). If this burden is met, the non-movant
must come forward with specific facts, supported by
admissible evidence, which demonstrate the presence of a
genuine issue for trial. Celotex, 477 U.S. at 324.
The non-moving party cannot rely upon conclusory allegations
or contentions of counsel to defeat summary judgment. See
Pueblo Neighborhood Health Ctrs., Inc. v. Losavio, 847
F.2d 642, 649 (10th Cir. 1988). Rather, the non-movant has a
responsibility to “go beyond the pleadings and
designate specific facts so as to make a showing sufficient
to establish the existence of an element essential to [his]
case in order to survive summary judgment.” Johnson
v. Mullin, 422 F.3d 1184, 1187 (10th Cir. 2005)
(alteration in original) (internal quotation marks omitted).
summary judgment stage, the Court must view the facts and
draw all reasonable inferences in the light most favorable to
the non-movant. Scott v. Harris, 550 U.S. 372, 378
(2007). The Court's function “is not . . . to weigh
the evidence and determine the truth of the matter but to
determine whether there is a genuine issue for trial.”
Anderson, 477 U.S. at 249. There is no issue for
trial “unless there is sufficient evidence favoring the
nonmoving party for a jury to return a verdict for that
party.” Id. Summary judgment may be granted
where “the evidence is merely colorable, or is not
significantly probative.” Id. at 249-50
(internal citations omitted).
Section 1983 Claims and Qualified Immunity Generally
1983 states in relevant part:
Every person who, under color of any statute, ordinance,
regulation, custom, or usage, of any State . . . subjects, or
causes to be subjected, any citizen of the United States or
other person within the jurisdiction thereof to the
deprivation of any rights, privileges, or immunities secured
by the Constitution and laws, shall be liable to the party
injured in an action at law, suit in equity, or other proper
proceeding for redress.
42 U.S.C. § 1983. To establish a claim under §
1983, a plaintiff must allege that a defendant acted under
color of state law to deprive the plaintiff of a right,
privilege, or immunity secured by the Constitution or the
laws of the United States. West v. Atkins, 487 U.S.
42, 48 (1988). The plaintiff also must identify an
“affirmative link” between the alleged
constitutional violation and each individual defendant.
Gallagher v. Shelton, 587 F.3d 1063, 1069 (10th Cir.
immunity shields government officials performing
discretionary functions from liability for civil damages
unless their conduct violates clearly established statutory
or constitutional rights of which a reasonable person would
be aware. Harlow v. Fitzgerald, 457 U.S. 800, 818
(1982). Under the Tenth Circuit's two-part test for
evaluating qualified immunity, the plaintiff must show (1)
that the defendant's conduct violated a constitutional or
statutory right, and (2) that the law governing the conduct
was clearly established when the alleged violation occurred.
Baptiste v. J.C. Penney Co., 147 F.3d 1252, 1255
(10th Cir. 1998); accord Tonkovich v. Kan. Bd. of
Regents, 159 F.3d 504, 516 (10th Cir. 1998). For a right
to be clearly established, “[t]he contours of the right
must be sufficiently clear that a reasonable official would
understand that what he [or she] is doing violates that
right.” Anderson v. Creighton, 483 U.S. 635,
640 (1987). Unless both prongs are satisfied, the defendant
will not be required to “engage in expensive and time
consuming preparation to defend the suit on its
merits.” Siegert v. Gilley, 500 U.S. 226, 232
Court is not required to address the two prongs of the test
in order. Pearson v. Callahan, 555 U.S. 223, 236
(2009). The Supreme Court's decision in Pearson
permits courts to grant qualified immunity without first
deciding whether a constitutional violation occurred so long
as the right claimed to be violated was not clearly
established. Id. The right that is alleged to have
been violated must be “clearly established” not
just as a general proposition (for example, in the way the
right to free speech is clearly established), but “in a
more particularized . . . sense: The contours of the right
must be sufficiently clear that a reasonable official would
understand that what he [or she] is doing violates that
right.” Anderson, 483 U.S. at 640. Stating the
right too broadly would destroy the balance that the Supreme
Court has sought to establish “between the interests in
vindication of citizens' constitutional rights and . . .
public officials' effective performance of their duties
by making it impossible for officials reasonably to
anticipate when their conduct may give rise to liability for
damages.” Id. at 639 (quotation and citation
in order for the law to be clearly established, there must be
a Supreme Court or Tenth Circuit decision on point, or the
clearly established weight of authority from other courts
must have found the law to be as the plaintiff
maintains.” Fogarty v. Gallegos, 523 F.3d
1147, 1161 (10th Cir. 2008) (internal quotations omitted).
“The plaintiff is not required to show, however, that
the very act in question previously was held unlawful . . .
to establish an absence of qualified immunity.”
Weigel v. Broad, 544 F.3d 1143, 1153 (10th Cir.
2008) (internal quotations omitted). The degree of
specificity required depends on the egregiousness of the
challenged conduct; “[t]he more obviously egregious the
conduct in light of prevailing constitutional principles, the
less specificity is required from prior case law to clearly
establish the violation.” Pierce v. Gilchrist,
359 F.3d 1279, 1298 (10th Cir. 2004). “Qualified
immunity gives government officials breathing room to make