Oaks of Mid City Resident Council v. Sebelius
723 F.3d 581
5th Cir.2013Background
- CMS determined Oaks was no longer eligible for Medicare/Medicaid programs and gave notice of termination dated April 9, 2010.
- Oaks sued for injunctive relief and mandamus; district court preliminarily enjoined the government from acting on the Notice of Termination.
- Injunction prohibited actions based on the Notice, including revoking billing privileges or refusing to pay for services after May 9, 2010, and from relocating residents pending injunction.
- Between May 5, 2010 and August 9, 2011, the government paid Oaks $2,047,115.14 while the injunction and restraining order were in effect or pending.
- Oaks sought contempt in December 2011, alleging nonpayment for 2010 services, denial of access to CMS billing, and failure to pay for services after June 8, 2010.
- District court held the government in contempt for violating the injunction; the government challenged, arguing it merely delayed termination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the injunction require delaying termination or more? | Oaks: injunction prohibited acting on the basis of the Notice to terminate. | Government: injunction only required delaying termination; did not bar later actions. | Gov't complied by delaying termination; no contempt. |
| Did actions like cutting off billing and post-injunction payments violate the injunction? | Oaks contends these actions violated the injunction during its effect. | Government argues actions occurred after injunction lapsed or did not rely on Notice. | No contempt for post-injunction actions; status quo was maintained. |
| Did the 2010 cost report adjustment constitute contempt given timing of the report and injunction? | Oaks claims 60-day window should have allowed an adjusted payment during injunction. | Intermediary had until August 29, 2011 to make a tentative adjustment, after injunction expired. | No contempt; adjustment occurred after injunction and restraining order had expired. |
Key Cases Cited
- Whitcraft v. Brown, 570 F.3d 268 (5th Cir. 2009) (clear and convincing standard for civil contempt; express injury must be proven)
- Travelhost, Inc. v. Blandford, 68 F.3d 958 (5th Cir. 1995) (contempt standards and evidentiary requirements for civil contempt)
- Piggly Wiggly Clarksville, Inc. v. Mrs. Baird’s Bakeries, 177 F.3d 380 (5th Cir. 1999) (standard for proving contempt; requires clear and convincing evidence)
- Drummond Co. v. Dist. 20, United Mine Workers, 598 F.2d 381 (5th Cir. 1979) (role of injunction scope and compliance in contempt analyses)
- Norman Bridge Drug Co. v. Banner, 529 F.2d 822 (5th Cir. 1976) (compensatory civil contempt reimburses losses due to non-compliance)