Jefferson Community Health Care Centers, Inc. v. Jefferson Parish Government
2017 U.S. App. LEXIS 3401
| 5th Cir. | 2017Background
- JCHCC, a federally funded Section 330 community health center, occupied two parish‑owned facilities rent‑free under Cooperative Endeavor Agreements (CEA) to serve medically underserved populations; Marrero agreement ran through July 31, 2016 with an automatic five‑year renewal absent notice.
- Federal and state audits (2009–2012) revealed serious financial misconduct at JCHCC; a corrective action plan from HRSA followed and a new CEO (Dr. Shondra Williams) implemented recoupment efforts.
- Parish Councilman Spears allegedly pressured JCHCC leadership for personnel and vendor changes after JCHCC sought recovery of misspent funds; the Parish later moved to terminate the CEAs and solicit alternative providers.
- On May 11, 2016 the Parish Council voted to terminate the CEAs (River Ridge immediately; Marrero as of July 31, 2016) and solicited Statements of Qualifications for replacement providers; JCHCC sued and moved for a preliminary injunction on July 18, 2016.
- The district court issued a preliminary injunction restraining eviction but allowed the Parish to dissolve the injunction upon showing that Medicaid patients’ needs would be met; the Parish appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal courts had jurisdiction over JCHCC’s §1983 and §330 claims | JCHCC argued federal-question jurisdiction: §1983 enforcement of Medicaid Act and preemption/rights under §330 support federal relief | Parish argued federal claims were frivolous/insubstantial and thus district court lacked jurisdiction | Court: Jurisdiction exists; claims not "wholly insubstantial and frivolous," so federal courts may decide merits |
| Whether Burford abstention required dismissal | JCHCC relied on federal law; no special state forum or unsettled state law issues | Parish argued local/state policy and contract termination implicate important state interests and coherent state policy | Court: Abstention inappropriate — factors (federal cause, no special state forum, paramount federal Medicaid interest) weigh against Burford |
| Whether legislative immunity/privilege barred relief | JCHCC sought equitable relief and sued parish in official capacity; privilege should not bar adjudication | Parish claimed councilmembers’ votes were legislative acts immune from suit/evidence privileged | Court: Official‑capacity claims against the parish survive (local government not immune); evidentiary legislative privilege limited and does not bar adjudication |
| Whether JCHCC showed substantial likelihood of success on the merits for a preliminary injunction under §1983 (Medicaid Act) and §330 (PHS Act) | JCHCC: Parish’s termination would deprive Medicaid beneficiaries of required services and §330/preemption protect JCHCC’s federally funded operations | Parish: Medicaid obligations bind the State, not the Parish; no authority imposes an obligation on local governments; §330 does not give rise to claim the district court could enjoin | Court: Reversed preliminary injunction — JCHCC failed to show substantial likelihood of success: Medicaid Act imposes obligations on states (not the parish), and JCHCC forfeited or failed to establish a private cause of action under §330 before the district court |
Key Cases Cited
- Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (jurisdictional standards; insubstantial/frivolous federal claims)
- Bell v. Hood, 327 U.S. 678 (when federal claim is so insubstantial as to deprive federal courts of jurisdiction)
- Burford v. Sun Oil Co., 319 U.S. 315 (abstention doctrine where federal review would disrupt state policy)
- New Orleans Public Service, Inc. v. Council of New Orleans, 491 U.S. 350 (explaining Burford abstention standards)
- Kentucky v. Graham, 473 U.S. 159 (official‑capacity suits treated as suits against the governmental entity)
- Armstrong v. Exceptional Child Center, Inc., 575 U.S. 320 (limits of Supremacy Clause as a source of cause of action; equity may enjoin unlawful acts by public officers in proper case)
- Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (discussion of Medicaid scheme and state participation requirements)