HOME CARE PROVIDERS, INC., et al., Plaintiffs-Appellants, v. Kelly HEMMELGARN, et al., Defendants-Appellees. In re: Nightingale Home Healthcare, Inc., Debtor. Nightingale Home Healthcare, Inc., Plaintiff-Appellant, v. United States of America, et al., Defendants-Appellees.
Nos. 16-2054, 16-3668, & 16-3669
United States Court of Appeals, Seventh Circuit.
Argued May 16, 2017. Decided June 27, 2017.
Rehearing En Banc Denied August 22, 2017
861 F.3d 615
III. Conclusion
For the foregoing reasons, we AFFIRM the judgment of the district court.
Aaron T. Craft, Kyle Hunter, Betsy M. Isenberg, Attorneys, Office of the Attorney General, Bob Wood, Attorney, Office of the United States Attorney, Indianapolis, IN, Jeffrey A. Clair, Attorney, Department of Justice, Civil Division, Appellate Staff, Washington, DC, for Defendants-Appellees.
John Anthony Edwards Pottow, Attorney, University of Michigan Law School, Ann Arbor, MI, for Amicus Curiae.
Before BAUER, FLAUM, and KANNE, Circuit Judges.
FLAUM, Circuit Judge.
This consolidated appeal was prompted by the federal government‘s termination of Nightingale Home Healthcare, Inc.‘s Medicare provider agreement. Nightingale sought and received a preliminary injunction from the bankruptcy court that prevented the government from terminating Nightingale‘s agreement. On appeal, the district court concluded that the bankruptcy court had lacked jurisdiction to issue an injunction and reversed the order. We conclude, however, that the issue of whether the bankruptcy court properly granted the injunction was moot, as the bankruptcy court had dissolved the underlying injunction prior to the district court‘s ruling. Separately, Home Care Providers, Inc., Nightingale‘s sole shareholder, and its
I. Background
Nightingale Home Healthcare, Inc. provides home health care services in a number of states, including Indiana. In the course of this business, Nightingale signed a provider agreement with the United States Secretary of Health and Human Services to receive Medicare reimbursements and agreed to conform to certain statutory and regulatory requirements.
In October and November 2015, the Indiana State Department of Health (“ISDH“) conducted a survey at one of Nightingale‘s facilities and concluded that Nightingale had failed to comply with the applicable requirements.2 The ISDH found that Nightingale‘s deficiencies placed its patients in “immediate jeopardy,”3 and recommended that the Centers for Medicare & Medicaid Services (“CMS“), which administers Medicare, terminate Nightingale‘s Medicare agreement. On November 17, CMS notified Nightingale that the agency would terminate Nightingale‘s agreement on December 10, unless Nightingale corrected its irregularities. Later, on December 8 and 9, the ISDH conducted a revisit survey and concluded that Nightingale had failed to comply, and CMS informed Nightingale that its provider agreement would terminate as scheduled. Nightingale filed an administrative appeal and requested expedited review.
A. Bankruptcy Proceedings
On December 10, before CMS terminated the Medicare agreement, Nightingale filed a voluntary petition to reorganize in bankruptcy. Nightingale then commenced an adversary proceeding in the United States Bankruptcy Court for the Southern District of Indiana against federal and state officials administering the Medicare program, invoking the court‘s subject-matter jurisdiction under
On January 19, 2016, the bankruptcy court held an evidentiary hearing on Nightingale‘s request for injunctive relief. It granted the motion on January 25, directing the federal government to abide by the Medicare provider agreement. The court cautioned Nightingale that it was still obligated to comply with the applicable Medicare requirements. Finally, the court concluded that
On April 22, while the government‘s appeal was pending, the ISDH investigated several complaints concerning Nightingale‘s post-petition services. The agency again found that Nightingale was placing patients in “immediate jeopardy.” The federal government subsequently sought relief from the bankruptcy court‘s preliminary injunction, and the court dissolved the injunction on July 15. CMS notified Nightingale that CMS would terminate the provider agreement on July 16.
On May 9, a Medicare Administrative Law Judge (“ALJ“) affirmed the termination of Nightingale‘s provider agreement. The ALJ concluded that the evidence overwhelmingly proved that Nightingale had violated regulatory and statutory requirements, and that those deficiencies placed patients in “immediate jeopardy.” Nightingale appealed the ALJ‘s decision to the Departmental Appeals Board in June. (Recently, on April 14, 2017, the Board affirmed the ALJ‘s decision, constituting a final administrative decision on Nightingale‘s claims).
On June 2, 2016, Nightingale sought the bankruptcy court‘s authority to sell all of its assets. After failing to complete a sale by July, however, Nightingale began discharging its patients and winding down Indiana business operations. As of August 17, 2016, Nightingale had completely halted its business in Indiana.
Finally, on September 16, 2016, the district court addressed the federal government‘s bankruptcy appeal. The court concluded that the bankruptcy court had lacked subject-matter jurisdiction to issue the preliminary injunction, pursuant to
Separately, on February 4, 2016, Nightingale initiated a civil proceeding in federal court against Sylvia Matthews Burwell, then-Secretary of the United States Department of Health and Human Services; Jerome Adams, Commissioner of the Indiana State Department of Health; and Kelly Hemmelgarn, Randall Snyder, and Ingrid Miller, three Indiana state surveyors. According to the complaint, the defendants had collectively abused the Medicare survey process, violating Nightingale‘s (1) equal-protection, (2) First Amendment, (3) due-process, and (4) Fourth Amendment rights. Nightingale requested an order directing the state defendants to withdraw all of the survey reports issued against Nightingale since January 1, 2015, including those underlying the termination of Nightingale‘s Medicare agreement. Nightingale also sought an injunction preventing CMS from using the Indiana State Department of Health to conduct further surveys of Nightingale, or an order directing Indiana to conduct surveys against Nightingale only upon the filing of a bona fide, third-party complaint alleging facts likely to constitute an immediate threat to the health and well-being of patients. Finally, Nightingale requested money damages from the state surveyors.
Defendants moved to dismiss Nightingale‘s complaint, arguing that the district court lacked subject-matter jurisdiction under
On May 1, 2017, while this appeal was pending, Nightingale moved to dismiss its case against the Secretary and the Commissioner, and all claims for equitable relief, as Nightingale had ceased its operations in Indiana. All that remains are Nightingale‘s constitutional claims against the state surveyors and its request for damages.
II. Discussion
A. Bankruptcy Appeal
As a threshold matter, Nightingale asserts that the bankruptcy case was moot prior to the district court‘s decision, because the bankruptcy court had already dissolved the injunction at issue. The government does not dispute that the bankruptcy court had dissolved the injunction, but argues that its separate restitution action (now pending before the district court) presented a live and equitably redressable controversy. “Whether a case has been rendered moot is a question of law that we review de novo.” Fed‘n of Advert. Indus. Representatives, Inc. v. City of Chi., 326 F.3d 924, 928-29 (7th Cir. 2003) (citation omitted). “Under Article III of the Constitution, the judicial power of the United States extends only to cases and controversies.” Wis. Right to Life, Inc. v. Schober, 366 F.3d 485, 488 (7th Cir. 2004) (citing Steel Co. v. Citizens for a Better Env‘t, 523 U.S. 83, 102, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)). “This jurisdictional requirement ensures that the resources of the federal judiciary are not expended on advisory opinions and hypothetical disputes.” Id. Accordingly, “cases that do not involve ‘actual, ongoing controversies’ are moot and must be dismissed for lack of jurisdiction.” Id. at 490-91. (quoting Fed‘n, 326 F.3d at 929). Nightingale, the party asserting mootness, bears
The scope of an appellate court‘s review over a preliminary injunction that has expired while on appeal is controlled by the Supreme Court‘s decision in University of Texas v. Camenisch, 451 U.S. 390, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981); see also Nat‘l Kidney Patients Ass‘n v. Sullivan, 902 F.2d 51, 54 (D.C. Cir. 1990) (Kidney Patients I) (citing Camenisch, 451 U.S. at 394-95). In Camenisch, a deaf graduate student sought and received injunctive relief that required the University of Texas to appoint him a sign-language interpreter. Id. at 392. The university appealed the injunction decision and, while that appeal was pending, the university paid for the plaintiff‘s interpreter, and the plaintiff graduated. Id. at 393. The Fifth Circuit affirmed the injunction and rejected the notion that the case was moot, explaining that the issue of who should pay for the interpreter still remained. Id. The Supreme Court, however, concluded that the appeal was moot, because the terms of the injunction had been fully carried out. Id. at 398. The question of who should bear the cost of the injunction was “significantly different” from the “[validity of the] injunction itself,” and could not breathe life into the now-moot controversy. See id. at 393 (“[T]he issue before the Court of Appeals was not who should pay for the interpreter, but rather whether the District Court had abused its discretion in issuing a preliminary injunction requiring the University to pay for him. The two issues are significantly different....“) (internal citations omitted). Instead, the case was “simply another instance in which one issue in a case ha[d] become moot, but the case as a whole remain[ed] alive because other issues ha[d] not become moot.” Id. (citation omitted). Because the injunction was the only issue before the Court at that time, id. at 394, the Court concluded that it lacked jurisdiction and remanded the case to the district court for a trial on the merits to address questions of costs, id. at 398.
Here, the case before the district court—sitting as a court of review—was indistinguishable from Camenisch. The issue on appeal was whether the bankruptcy court had improperly implemented the preliminary injunction, and that issue became moot once the bankruptcy court dissolved the injunction. Unfortunately for the government, courts of review may consider only the issues raised before them. See Camenisch, 451 U.S. at 393; see also St. Pierre v. United States, 319 U.S. 41, 42, 63 S.Ct. 910, 87 L.Ed. 1199 (1943) (“A federal court is without power to decide moot questions or to give advisory opinions which cannot affect the rights of the litigants in the case before it.” (citing United States v. Alaska S.S. Co., 253 U.S. 113, 115, 40 S.Ct. 448, 64 L.Ed. 808 (1920))) (emphasis added); Kidney Patients I, 902 F.2d at 54 (citation omitted). In fact, unlike the university in Camenisch, the government has not presented a restitution issue on appeal; rather, it brought the restitution claim as a separate lawsuit that is still pending before the district court. Because a party cannot avoid mootness by making reference to a different live issue, it follows that it cannot do so using an entirely separate action. Accordingly, the district court lacked jurisdiction to address the merits of the injunction, and the government‘s separate restitution action did not revive that court‘s jurisdiction. See Camenisch, 451 U.S. at 393-95; see also Orion Sales, Inc. v. Emerson Radio Corp., 148 F.3d 840, 842 (7th Cir. 1998) (“[R]eview of a preliminary injunction that has become moot would run afoul of the constitutional
The government‘s reliance on Arkadelphia Milling Co. v. St. Louis Southwestern Railway Co., 249 U.S. 134, 145-46, 39 S.Ct. 237, 63 L.Ed. 517 (1919), is unpersuasive. In Arkadelphia, railway companies had sought and received injunctions to restrain the enforcement of certain intrastate freight and passenger rates. Id. at 137-38. In assessing the defendants’ appeal against the injunctions, the Supreme Court delineated the equitable principle that a party against whom an erroneous judgment has been carried into effect is entitled to be restored. Id. at 145. The power to carry out that principle, however, is only inherent in a court “so long as it retains control of the subject-matter.” Id. at 146 (emphasis added). In this case, the issue was moot by the time it came before the district court, and, as a result, the district court lacked subject-matter jurisdiction. See Pakovich v. Verizon LTD Plan, 653 F.3d 488, 492 (7th Cir. 2011). Thus, no equitable relief was permissible.
The government‘s reliance on National Kidney Patients Association v. Sullivan, 958 F.2d 1127, 1136-37 (D.C. Cir. 1992) (Kidney Patients II), meets the same fate. There, the government challenged an injunction enjoining it from reducing Medicare reimbursements for certain treatments and eventually sought recoupment of amounts paid under the injunction. Id. at 1129. Before addressing recoupment in Kidney Patients II, however, the court had concluded in a previous opinion that the injunction issue had been mooted by newly-enacted legislation, stripping the court of subject-matter jurisdiction. Id. (citing Kidney Patients I, 902 F.2d at 55); see also Kidney Patients I, 902 F.2d at 54-55. In fact, in Kidney Patients I, the court had rejected the argument that the government now proffers, stating,
[T]he recoupment of any reimbursement for [the expenses at issue] ... was not presented on appeal. Those claims must first be determined by the trial court on the merits before they can furnish a basis for appellate review.... The only issue presently before us—the correctness of the decision to grant a preliminary injunction—is no longer justiciable. Accordingly, the appeal is dismissed....
Id. at 54-55 (internal citations omitted). This case mirrors Kidney Patients I, and we likewise conclude that the “correctness of the decision to grant a preliminary injunction” was moot. Id. at 55.
This leads us to the question of vacatur. The government argues that if there is no longer a controversy regarding the preliminary injunction, this court should simply dismiss the appeal, not reverse the lower court‘s judgment. See Orion, 148 F.3d at 843. Thus, concludes the government, the district court‘s decision that the bankruptcy court lacked jurisdiction to issue the injunction should be left intact. While the government‘s reasoning is correct, its conclusion ignores the additional layer of review in bankruptcy cases. In Orion, the district court‘s preliminary injunction became moot, and this Court, the first reviewing court, dismissed the appeal without disturbing the district
B. Constitutional Claims
We turn next to Nightingale‘s constitutional challenges. Like the bankruptcy appeal, this dispute begins and ends with jurisdiction.
Nightingale argues that its claims invoked the district court‘s subject-matter jurisdiction under
If the Secretary determines that additional administrative review would be futile either because the agency‘s needs have been satisfied or because the requested relief is beyond the agency‘s power to confer the Secretary may waive the exhaustion requirement at any stage of the administrative process. Similarly, if the claimant raises a constitutional challenge which is entirely collateral to his claim of entitlement, and the claimant‘s interest in having the issue resolved promptly is so great that deference to the agency‘s judgment is inappropriate, the court may waive the exhaustion requirement.
Northlake, 654 F.2d at 1241 (internal quotation marks and alterations omitted (quoting Eldridge, 424 U.S. at 330) (citing Salfi, 422 U.S. at 765-67)). This case does not fall into either of these exceptions. The Secretary has not waived Nightingale‘s exhaustion requirement, and the constitutional claims are either not “colorable,” not “entirely collateral” to Nightingale‘s substantive entitlement claims, or both. See id. (“The mere assertion of a constitutional claim is not enough” to mandate a waiver of
As pled, most of Nightingale‘s constitutional challenges are not entirely collateral to its substantive entitlement claims. It alleged, in part, “class-of-one” and racial discrimination equal-protection claims, a First Amendment claim, and a due-process claim—all based on its allegations that the state surveyors subjected them to an inordinate number of surveys and administrative complaints, issued harsh findings and reports, and failed to provide specific information regarding the Medicare termination, all without a rational basis. “A party,” however, “cannot avoid the Medicare Act‘s jurisdictional bar simply by styling its attack as a claim for collateral damages instead of a challenge to the underlying denial of benefits.” Bodimetric Health Servs., Inc. v. Aetna Life & Cas., 903 F.2d 480, 487 (7th Cir. 1990). Indeed, “[i]f litigants who have been denied benefits could routinely obtain judicial review of these decisions by recharacterizing their claims under state and federal causes of action, the Medicare Act‘s goal of limited judicial review for a substantial number of claims would be severely undermined.” Id. (citing Bowen v. Mich. Acad. of Family Physicians, 476 U.S. 667, 680 n.11, 106 S.Ct. 2133, 90 L.Ed.2d 623 (1986)). We understand Nightingale‘s claims to be administrative challenges framed as collateral constitutional ones—inappropriately attacking the survey results underlying Nightingale‘s Medicare termination. See id. at 484-86 (citing United States v. Erika, 456 U.S. 201, 102 S.Ct. 1650, 72 L.Ed.2d 12 (1982)). It is telling that Nightingale originally sought orders to remove the state‘s survey results and prevent the state from surveying Nightingale moving forward.9 The applicable Medicare regulations provided Nightingale an opportunity to challenge the surveyors’ approach in a two-tiered appellate system, including formal evidentiary hearings and opportunities to present written argument. See generally
Further, Nightingale did not include arguments or cite to legal authority in its opening brief regarding its First Amendment or due-process claims. It has thus waived any argument on appeal that these claims are colorable. See, e.g., United States v. Beavers, 756 F.3d 1044, 1059 (7th Cir. 2014) (“Perfunctory, undeveloped arguments without discussion or citation to pertinent legal authority are waived.” (quoting Mahaffey v. Ramos, 588 F.3d 1142, 1146 (7th Cir. 2009))).
This case thus does not call for us to waive
III. Conclusion
For the foregoing reasons, we VACATE the judgment of the district court regarding the bankruptcy appeal, and REMAND to the district court for further proceedings. Additionally, we VACATE the judgment of the district court regarding the constitutional claims and REMAND with instructions to dismiss these claims without prejudice for lack of subject-matter jurisdiction.