729 F.3d 993
9th Cir.2013Background
- Medicare made conditional payments for plaintiffs’ medical treatment after accidents; Medicare later sought reimbursement from settlement proceeds. 3 named beneficiaries: Patricia Haro, Jack McNutt, Troy Hall; attorney John Balentine represented Haro.
- Medicare demand letters required reimbursement within 60 days and warned interest would accrue; letters also informed recipients of appeal and waiver rights and sometimes instructed attorneys not to disburse funds until Medicare was paid.
- Haro contested the up‑front reimbursement practice in administrative correspondence, paid an initial amount, later received a refund, and sued; McNutt and Hall disputed amounts but did not administratively challenge the Secretary’s up‑front demand practice.
- District court certified a nationwide class, granted summary judgment for plaintiffs, and enjoined the Secretary from (1) seeking up‑front reimbursement from beneficiaries while appeals/waiver requests were unresolved and (2) requiring attorneys to withhold settlement proceeds pending Medicare reimbursement.
- On appeal, the Secretary challenged Article III standing, mootness, and subject‑matter jurisdiction under 42 U.S.C. § 405(g); the Ninth Circuit found beneficiaries’ claims were not presented to the agency (jurisdiction lacking) but Balentine’s attorney claim was justiciable and reached the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing for beneficiaries (class representative) | Haro was directly injured (money withheld/refunded) and thus may seek injunctive relief for the class | Secretary argued no standing or class injury | Haro had standing to represent class (concrete, traceable, redressable injury) |
| Mootness of beneficiaries’ injunctive claim | Claim fits "capable of repetition, yet evading review" and Sosna/McLaughlin doctrines preserve class relief | Secretary contended individual claims moot after refund | Not moot under transitory‑claim doctrine; class action viable |
| Statutory subject‑matter jurisdiction under § 405(g)/§405(h) (channeling/presentment) | Plaintiffs argued their administrative benefit disputes sufficed to present the policy challenge to the agency | Secretary argued §405(h) channels such challenges through agency and plaintiffs failed to present the up‑front‑reimbursement policy claim | Beneficiaries’ policy claim was not fairly presented to the agency; district court lacked jurisdiction over beneficiaries’ claim |
| Attorney (Balentine) claim re: withholding/disbursement of settlement proceeds; merits under Chevron | Balentine argued Secretary lacks statutory authority to demand attorneys withhold/disburse proceeds | Secretary defended regulation interpreting "entity that receives payment" to include attorneys and to require reimbursement within 60 days; interpretation permissible | Balentine had Article III standing; Secretary’s interpretation is reasonable under Chevron and the injunction against the Secretary was vacated/reversed |
Key Cases Cited
- Zinman v. Shalala, 67 F.3d 841 (9th Cir. 1995) (describing Medicare secondary payer scheme and reimbursement framework)
- Los Angeles Haven Hospice, Inc. v. Sebelius, 638 F.3d 644 (9th Cir. 2011) (presumption of standing where government action is directly applied to plaintiff)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (Article III standing framework)
- City of Los Angeles v. Lyons, 461 U.S. 95 (U.S. 1983) (injunctive‑relief standing requires likelihood of future injury)
- McLaughlin v. County of Riverside, 500 U.S. 44 (U.S. 1991) (relation‑back doctrine for class certification and transitory claims)
- Weinberger v. Salfi, 422 U.S. 749 (U.S. 1975) (§405(h) bars federal question jurisdiction when claim arises under Social Security/Medicare scheme)
- Heckler v. Ringer, 466 U.S. 602 (U.S. 1984) (Medicare challenges must be channeled through administrative scheme)
- Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667 (U.S. 1986) (interpretation of channeling requirements; later clarified)
- Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (U.S. 2000) (explaining §405(h) channeling purpose and breadth)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (U.S. 1984) (two‑step deference to reasonable agency statutory interpretations)