150417 final motion to dismiss -...

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------------x ANGIE CRUZ, I.H., AR’ES KPAKA and : RIYA CHRISTIE, on behalf of themselves : and all other similarly situated, :

: 14-CV-4456 (JSR) (GWG) Plaintiffs, :

-against- : : HOWARD ZUCKER, as Commissioner of the : New York State Department of Health, :

: Defendant. :

--------------------------------------------------------------x

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS THE AMENDED CLASS ACTION COMPLAINT

ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Defendant 120 Broadway - 24th Floor New York, New York 10271 JOHN GASIOR ZOEY S. CHENITZ Assistant Attorneys General Of Counsel 212-416-8570

Case 1:14-cv-04456-JSR Document 30 Filed 04/17/15 of 33

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TABLE OF CONTENTS Page TABLE OF AUTHORITIES ............................................................................................. iii

PRELIMINARY STATEMENT ........................................................................................ 1

STATUTORY AND REGULATORY BACKGROUND .................................................. 3

Medicaid Regulations ............................................................................................ 3

Department of Health Medicaid Regulations Related to Gender Dysphoria ......... 5

STANDARD OF REVIEW ................................................................................................ 8

Rule 12(b)(1) ............................................................................................................. 8

Rule 12(b)(6) ............................................................................................................. 8

ARGUMENT ...................................................................................................................... 9

POINT I PLAINTIFFS’ CLAIMS BASED ON THE NEW YORK STATE

CONSTITUTION ARE BARRED BY THE ELEVENTH

AMENDMENT.............................................................................................. 9

POINT II NONE OF THE MEDICAID PROVISIONS PLAINTIFFS CITE GIVE

RISE TO A PRIVATE RIGHT OF ACTION UNDER 42 U.S.C.

§1983.......................................................................................................... 10

A. Congress Has Not Manifested An Unambiguous Intent to Confer

Individual Rights On Plaintiffs To The Medical Procedures They

Seek .................................................................................................... 11

B. The Medicaid Provisions Relied Upon By Plaintiffs Fail The

Three-Part Blessing Test For A Private Right Of Action Under

§1983................................................................................................. 12

1. Evolution of Supreme Court case law regarding a private

right of action under § 1983 ...................................................... 12


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2. The Blessing Test as Modified by Gonzaga ............................. 13

i. 42 U.S.C. § 1396a(a)(10)(A) ............................................ 16

ii. 42 U.S.C. § 1396a(a)(10)(B)(i)......................................... 18

iii. 42 U.S.C. § 1396a(a)(17).................................................. 18

POINT III PLAINTIFFS HAVE NO CAUSE OF ACTION UNDER THE

SUPREMACY CLAUSE FOR ALLEGED VIOLATIONS OF

MEDICAID ................................................................................................ 19

POINT IV THE NEW REGULATION’S AGED-BASED LIMITATIONS

DO NOT VIOLATE TITLE IX’s PROHIBITION OF SEX

DISCRIMINATION .................................................................................. 20

POINT V PLAINTIFFS’ CLAIMS REGARDING COVERAGE

FOR COSMETIC PROCEDURES ARE NOT RIPE ................................ 21

POINT VI THE AMENDED COMPLAINT FAILS TO STATE A

PLAUSIBLE CLAIM THAT THE NEW REGULATION

VIOLATES §1396a(a)(10)(B) ................................................................... 24

CONCLUSION ................................................................................................................. 25


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TABLE OF AUTHORITIES

Cases Page(s)

Aplin v. McCrossen, 12-CV-6312, 2014 U.S. Dist. LEXIS 119682 (W.D.N.Y. Aug. 26, 2014) .............................18

Armstrong v. Exceptional Child Ctr., Inc., __ U.S. ___, 135 S.Ct. 1378 (Mar. 31, 2015) ................................................................2, 19, 20

Ashcroft v. Iqbal, 556 U.S. 662 (2009) .........................................................................................................8, 9, 24

Atlantic Mut. Ins. Co. v. Balfour Maclaine Int’l Ltd., 968 F.2d 196 (2d Cir. 1992).......................................................................................................8

Bank of New York v. First Millennium, Inc., 607 F.3d 905 (2d Cir. 2010).....................................................................................................16

Beal v. Doe, 432 U.S. 438 (1977) .................................................................................................................19

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) .............................................................................................................8, 25

Blessing v. Freestone, 520 U.S. 329 (1997) ...........................................................................................2, 12, 13, 15, 17

Boucher v. Syracuse Univ., 164 F.3d 113 (2d Cir. 1999).....................................................................................................23

Boyland v. Wing, 487 F. Supp. 2d 161 (E.D.N.Y. 2007) .....................................................................................12

Bronx Household of Faith v. Bd. of Educ., 492 F.3d 89 (2d Cir. 2007).......................................................................................................22

Brooklyn Legal Servs. Corp. v. Legal Servs. Corp., 462 F.3d 219 (2d Cir. 2006).....................................................................................................22

Casillas v. Daines, 580 F. Supp.2d 235 (S.D.N.Y. 2008) (Castel, J.) ..............................................2, 16, 17, 18, 19

Concourse Rehabilitation & Nursing Ctr., Inc. v. DeBuono, 179 F.3d 38 (2d Cir. 1999).......................................................................................................10

Concourse Rehabilitation & Nursing Ctr. v. Wing, 150 F.3d 185 (2d Cir. 1998).....................................................................................................10


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Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc., 502 F.3d 91 (2d Cir. 2007).......................................................................................................23

Dajour B. v. The City of New York, 00 Civ. 2044, 2001 U.S. Dist. LEXIS 10251 (S.D.N.Y. July 23, 2001) .................................17

Doe v. Karadzic, 192 F.R.D. 133 (S.D.N.Y. 2000) .............................................................................................23

Evans v. N.Y. Botanical Garden, No. 02 Civ. 3591 (RWS), 2002 U.S. Dist. LEXIS 16434 (S.D.N.Y. Sept. 4, 2002) .................6

Flast v. Cohen, 392 U.S. 83 (1968) ...................................................................................................................22

Gaines v. Hadi, 06-60129-CIV., 2006 WL 6035742 (S.D. Fla. 2006) ..............................................................25

Gonzaga University v. Doe, 536 U.S. 273 (2002) ...............................................................................2, 11, 12, 14, 15, 16, 18

Graus v. Kaladjian, 2 F. Supp. 2d 540 (S.D.N.Y. 1998) (Rakoff, J.) ............................................................2, 17, 18

Harris v. Mills, 572 F.3d 66 (2d Cir. 2009).........................................................................................................9

Kostok v. Thomas, 105 F.3d 65 (2d Cir. 1997).......................................................................................................10

Lankford v. Sherman, 451 F.3d 496 (8th Cir. 2006) ....................................................................................................18

Maine v. Thiboutot, 448 U.S. 1 (1980) ...............................................................................................................12, 14

Makarova v. United States, 201 F.3d 110 (2d Cir. 2000).......................................................................................................8

Midwest Foster Care & Adoption Assoc. v. Kinkade, 11 cv 1152, 2012 U.S. Dist. LEXIS 190367 (D. Mo. Mar. 9, 2012) .......................................15

Morningside Supermarket Corp. v. N.Y. State Dep’t of Health, 432 F. Supp. 2d 334 (S.D.N.Y. 2006) ......................................................................................10

Morrison v. Nat’l Australia Bank Ltd., 547 F.3d 167 (2d Cir. 2008), aff’d, 130 S. Ct. 2869 (2010) ......................................................8


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Nat'l Org. for Marriage, Inc. v. Walsh, 714 F.3d 682 (2d Cir. 2013).....................................................................................................23

Ohio Forestry Ass'n v. Sierra Club, 523 U.S. 726 (1998) .................................................................................................................23

Olmsted v. Pruco Life Ins. Co. of N.J., 283 F.3d 429 (2d Cir. 2002).....................................................................................................11

Pac. Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm'n, 461 U.S. 190 (1983) .................................................................................................................22

Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89 (1984) ...................................................................................................9, 10, 12, 14

Ralabate v. Wing, 93-CV-0035E(H), 1996 WL 377204 (W.D.N.Y. July 27, 1996) – and 42 C. .........................18

Ravenwood v. Daines, No. 06-CV-6355-CFS, 2009 U.S. Dist. LEXIS 61547 (W.D.N.Y. 2009) ...........................2, 19

Rock of Ages Corp. v. Sec'y of Labor, 170 F.3d 148 (2d Cir. 1999)...............................................................................................22, 23

Rodriguez v. City of N.Y., 197 F.3d 611 (2d Cir.1999)................................................................................................18, 24

Simmonds v. I.N.S., 326 F.3d 351 (2d Cir. 2003).....................................................................................................23

Suter v. Artist M., 503 U.S. 347 (1992) ...........................................................................................................12, 15

Terio v. Johann, No. 05 Civ. 5918, 2006 U.S. Dist. LEXIS 72083 (S.D.N.Y. Sept. 29, 2006), aff’d, 257 Fed. Appx. 374, 2007 U.S. App. LEXIS 28676 (2d Cir. 2007)........................................10

Texas v. United States, 523 U.S. 296 (1998) .................................................................................................................22

Thomas v. Union Carbide Agr. Products Co., 473 U.S. 568 (1985) .................................................................................................................22

Touche Ross & Co. v. Redington, 442 U.S. 560 (1979) .................................................................................................................11

Westside Mothers v. Haveman, 289 F.3d 852 (6th Cir. 2002) ......................................................................................................3


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Wilder v. Va. Hosp. Ass'n, 496 U.S. 498 (1990) .......................................................................................................3, 12, 13

Wright v. City of Roanoke Redevelopment & Hous. Auth., 479 U.S. 418 (1987) ...........................................................................................................12, 13

Constitutions

U.S. Const., amend. XI .......................................................................................................... 2, 9-10

U.S. Const., amend. XIV ...............................................................................................................16

U.S. Const., art. vi ........................................................................................................ 1, 2, 9, 19-20

N.Y. Const. art. 1, § 11 .......................................................................................................... 2, 9-10

Federal Statutes

20 U.S.C. § 1681(a) ..................................................................................................................................15 § 1681 et seq. ...........................................................................................................................20

42 U.S.C. § 1396.........................................................................................................................................3 § 1396a .................................................................................................................................3, 15 § 1396a(a) ......................................................................................................................3, 11, 17 § 1396a(a)(10) ..........................................................................................................................19 § 1396a(a)(10)(A) .................................................................................................4, 9,16, 17, 19 § 1396a(a)(10)(A)(i) ..................................................................................................................4 § 1396a(a)(10)(B)(i) .......................................................................................................9, 16, 18 § 1396a(a)(10)(B) ......................................................................................................3, 4, 18, 24 § 1396a(a)(10)(C) ......................................................................................................................4 § 1396a(a)(17) ......................................................................................................5, 9, 16, 18, 19 § 1396c .......................................................................................................................................3 §§ 1396d(a)(1)-(5), (17) and (21) ..............................................................................................4 § 1983...................................................................2, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 24

Affordable Care Act, 42 U.S.C. § 18116.....................................................................................................................................20

Federal Rules

Fed. R. Civ. P. 12(b)(1)................................................................................................................1, 8

Fed. R. Civ. P. 12(b)(6)................................................................................................................1, 8

Fed. R. Civ. P. 12(c) ......................................................................................................................16


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Fed. R. Civ. P. 23 ...........................................................................................................................23

Fed. R. Civ. P. 23(a) ......................................................................................................................23

Fed. R. Civ. P. 23(a)(2), 23(b) .......................................................................................................24

Fed. R. Civ. P. 23(c)(1) ..................................................................................................................23

Federal Regulations

42 C.F.R. § 430.10 ..................................................................................................................................3, 4 § 440.70......................................................................................................................................4 § 440.210......................................................................................................................4, 5, 9, 17 §§ 440.220..............................................................................................................................4, 5 § 440.230..........................................................................................................................4, 5, 19 § 440.230(c) ...............................................................................................................5, 9, 18, 19 § 440.230(d) ...................................................................................................................5, 17, 18 § 440.240(a) ...........................................................................................................................4, 5 § 440.240(b) .....................................................................................................................5, 9, 18

State Statutes

New York State Administrative Procedures Act (“SAPA”) § 202...........................................................................................................................................6

New York Social Services Law (“SSL”) Title 11 of Article 5 ....................................................................................................................5 § 363-a(2) ...................................................................................................................................5 §§ 365-a(1)-(2) ...........................................................................................................................5

State Regulations

18 N.Y.C.R.R. § 505.2(l) (the “New Regulation”) ................................................................ passim

18 N.Y.C.R.R. § 533.5 ...................................................................................................................24

Miscellaneous Authorities

13B C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3532, at 365, (3d ed. 2008) ............................................................................................................................22


Defendant Howard Zucker, as Acting Commissioner of the New York State Department

of Health (“Defendant” or “DOH”), respectfully submits this memorandum of law, and the April

17, 2015, declaration of John Gasior ("Gasior Decl."), in support of his motion to dismiss

plaintiffs’ Amended Class Action Complaint (“Amended Complaint” or “Am. Compl.”),

pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6).

PRELIMINARY STATEMENT

Plaintiffs’ original complaint sought to repeal a 1998 DOH regulation which completely

barred coverage for gender reassignment surgery or any care, services, drugs, or supplies in

connection with such treatment (hereinafter referred to as the “Old Regulation”). On March 11,

2015, DOH repealed the Old Regulation, and adopted a new regulation that authorized Medicaid

coverage for medically necessary hormone therapy and/or gender reassignment surgery for the

treatment of gender dysphoria. 18 N.Y.C.R.R. 505.2(l) (the “New Regulation”).1 Gasior Decl.

Exh. 1.

Nonetheless, 16 days after the New Regulation became effective, plaintiffs filed an

Amended Complaint seeking to repeal the New Regulation.2 Even though the New Regulation

provides plaintiffs almost all of the relief sought in the original complaint, they assert that it is

insufficient, apparently for two distinct reasons: (1) it limits payments for cosmetic surgery, and;

(2) it limits gender reassignment surgery and hormone therapy for certain persons based on age.

Plaintiffs therefore seek declarations that the New Regulation: (i) is preempted by the Supremacy

Clause of the U.S. Constitution because of alleged inconsistencies with the Medicaid Act; (ii)

violates three subsections of the Medicaid Act, which are claimed to be enforceable pursuant to

1 The Old Regulation had the same section number as the New Regulation in the New York State Code Rules and Regulations, 18 N.Y.C.R.R. 505.2(l), but the substantive texts are completely different. 2 A copy of the Am. Compl. is annexed to the Gasior Decl. as Exh. 6.


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42 U.S.C. § 1983; (iii) violates the Equal Protection clause of the New York State Constitution,

and; (iv) violates the Patient Protection and Affordable Care Act’s prohibition of sex-based

discrimination.

However, Plaintiffs claims are simply without merit. Plaintiffs are not, as a matter of

law, entitled to any of the relief they seek. First, the recent Supreme Court decision Armstrong

v. Exceptional Child Center, Inc., __ U.S. ___, 135 S.Ct. 1378, 1384 (Mar. 31, 2015),

unambiguously holds that the Supremacy Clause of the United States Constitution does not

confer a private right of action, thereby precluding plaintiffs’ request for a declaration that the

New Regulation is inconsistent with the Medicaid Act. See Am. Compl. ¶ 178(b)(i). Second,

the Medicaid provisions upon which plaintiffs premise this suit do not confer “rights” for which

42 U.S.C. § 1983 provides a private right of action. See, e.g., Gonzaga Univ. v. Doe, 536 U.S.

273 (2002); Blessing v. Freestone, 520 U.S. 329 (1997). Indeed, several federal courts have

reviewed the specific Medicaid provisions at issue in this case and have concluded that those

provisions do not give rise to a private right of action under § 1983. See, e.g., Casillas v. Daines,

580 F. Supp.2d 235 (S.D.N.Y. 2008) (Castel, J.); Ravenwood v. Daines, No. 06-CV-6355-CFS,

2009 U.S. Dist. LEXIS 61547 (W.D.N.Y. 2009); Graus v. Kaladjian, 2 F. Supp. 2d 540

(S.D.N.Y. 1998) (Rakoff, J.). Third, plaintiffs’ claim that the New Regulation violates the New

York State Constitution is precluded by the Eleventh Amendment to the United States

Constitution. Fourth, the New Regulation’s aged-based limits on hormone therapy and surgeries

that would result in sterilization, which are otherwise available for the treatment of adults with

gender dysphoria, are not based on sex or gender. Fifth, the limits on cosmetic procedures

present claims which are not ripe. Sixth the Amended Complaint fails to state a plausible claim


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that the New Regulation violates 42 U.S.C. §1396a(a)(10)(B), one of the Medicaid provisions

upon which suit is brought.

Accordingly, the Amended Complaint should be dismissed.

STATUTORY AND REGULATORY BACKGROUND

Medicaid Regulations

Medicaid is a cooperative federal-state program through which the Federal

Government provides financial assistance to states so that they may furnish medical care to

needy individuals. Wilder v. Va. Hosp. Ass'n, 496 U.S. 498, 502 (1990). The Medicaid

program, Title XIX of the Social Security Act, was created in 1965 and "provides a federal

subsidy to states that choose to reimburse poor individuals for certain medical care." Westside

Mothers v. Haveman, 289 F.3d 852, 855 (6th Cir. 2002). "Although participation in the

program is voluntary, participating states must comply with certain requirements imposed by

the Act and regulations promulgated by the Secretary of Health and Human Services."

Wilder, 496 U.S. at 502. States participate in the program through State plans for medical

assistance that are submitted to, and approved by, the Secretary of Health and Human Services

(“HHS”). 42 U.S.C. 1396; see also 42 C.F.R. § 430.10. Once the State plan is approved, the

federal government reimburses the state for a percentage of the state’s payments made for the

medical care of the indigent. A state that fails to comply with its approved medical assistance

plan and certain federal requirements runs the risk of having HHS revoke its funding. 42

U.S.C. § 1396c.

All three of the Medicaid provisions upon which suit is brought are part of 42 U.S.C. §

1396a(a). Section 1396a is titled “State plans for medical assistance,” and the immediately

following subsection 1396a(a), titled “Contents – A State plan for medical assistance must--,”


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is a list of items that are required to be present in a state plan submitted to HHS for approval

in order for the state to participate in the Medicaid program.

States participating in the Medicaid program are mandated to cover certain mandatory

eligibility groups, including recipients of Supplemental Security Income (SSI) and low-income

children, pregnant women, and families with dependent children. 42 U.S.C.

§ 1396a(a)(10)(A)(i). In addition, states are granted discretion to cover other optional

eligibility groups of “medically needy” individuals. 42 U.S.C. § 1396a(a)(10)(C). With

respect to the mandatory eligibility groups, a state plan for medical assistance must provide for

coverage of the care and services listed in 42 U.S.C. §§ 1396d(a)(1)-(5), (17) and (21).

An implementing federal regulation, 42 C.F.R. § 440.210, provides that the state plan

must specify that, at a minimum, individuals in the mandatory eligibility groups (the

“categorically needy”) are furnished with the services defined in 42 C.F.R. §§ 440.10 through

440.50 and § 440.70.

Pursuant to 42 U.S.C. § 1396a(a)(10)(A), the “State plan” for medical assistance must

ensure that certain forms of medical assistance are made available to listed individuals who are

eligible to receive Medicaid benefits. 42 U.S.C. § 1396a(a)(10)(B), then goes on to state that

medical assistance to those individuals described in subparagraph (A):

(i) shall not be less in amount, duration, or scope than the medical assistance made available to any other such individual, and (ii) shall not be less in amount, duration, or scope than the medical assistance made available to individuals not described in paragraph (A).

HHS regulations repeat the statutory requirements. The State plan must ensure “that the

services available to any categorically needy recipient under the plan are not less in amount,

duration, and scope than those services available to a medically needy recipient,” 42 C.F.R. §


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440.240(a), and that the services available to an individual in the categorically needy group or in

the medically needy group are “equal in amount, duration, and scope” to those available to all

other beneficiaries within that group. Id. at § 440.240(b).

Under 42 C.F.R. § 440.230, the state plan “must specify the amount, duration, and scope

of each service that it provides for – (1)The categorically needy; and (2) Each covered group of

medically needy,” and “be sufficient in amount, duration, and scope to reasonably achieve its

purpose.” Id. at § 440.230(a)-(b). Federal regulations further provide that the state “Medicaid

agency may not arbitrarily deny or reduce the amount, duration, or scope of a required service

under §§ 440.210 and 440.220 to an otherwise eligible recipient solely because of the diagnosis,

type of illness, or condition” but “may place appropriate limits on a service based on such criteria

as medical necessity or on utilization control procedures.” Id. at § 440.230(c)-(d).

As set forth in 42 U.S.C. § 1396a(a)(17), the “State plan for medical assistance must . . .

include reasonable standards . . . for determining eligibility for and the extent of medical

assistance which . . . are consistent with the objectives of [the Medicaid Act].”

DOH’s general authority for administration of New York State’s Medicaid program is

set forth at Title 11 of Article 5 of the New York Social Services Law (“SSL”), with DOH

acting as the single state agency for such administration. Defendant is authorized to

promulgate regulations in the implementation and administration of the Medicaid program,

SSL § 363-a(2), and for the determination of the amount, nature and manner in which services

are to be provided under the Medicaid program. See SSL §§ 365-a(1) and (2).

Department of Health Medicaid Regulations Related to Gender Dysphoria

Plaintiffs’ original complaint challenged the Old Regulation, promulgated in 1998 (the

“Old Regulation”), a one sentence, blanket prohibition of Medicaid payments for gender


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reassignment that, in its entirety, stated:

Gender reassignment. Payment is not available for care, services, drugs, or supplies rendered for the purpose of gender reassignment (also known as transsexual surgery) or any care, services, drugs, or supplies intended to promote such treatment.

Gasior Decl. Exh. 2 at 6,043.

On December 17, 2014, DOH published a Notice of Proposed Rulemaking (“NOPR”) in

the New York State Register, the stated purpose of which was “To authorize Medicaid coverage

for transgender related care and services.” 3 Gasior Decl. Exh. 3. With respect to the then-

current Old Regulation at § 505.2(l), the NOPR specifically stated that the proposed regulatory

action would repeal subdivision (l) and add a new subdivision (l).4

On February 24, 2015, following a 45-day public comment period mandated by the New

York State Administrative Procedures Act (“SAPA”) § 202, DOH filed a Notice of Adoption

(“NOA”) with the New York Department of State, which was published in the New York State

Register on March 11, 2015. Gasior Decl. Exh. 4. At that point, the New Regulation, as

published on December 17, 2014, became a fully effective State Medicaid regulation.

Paragraph (1) of the New Regulation states, “Gender dysphoria treatment. As provided

in this subdivision, payment is available for medically necessary hormone therapy and/or gender

reassignment surgery for the treatment of gender dysphoria.” Gasior Decl. Exh. 1. Paragraph

3 A court may take judicial notice of the records of state administrative procedures, as these are public records, without converting a motion to dismiss to one for summary judgment. Evans v. N.Y. Botanical Garden, No. 02 Civ. 3591 (RWS), 2002 U.S. Dist. LEXIS 16434, at *11-12 (S.D.N.Y. Sept. 4, 2002). 4 Gasior Decl. Exh. 3 contains the entire NOPR, including the text of the proposed regulation and sections analyzing “Statutory Authority,” “Legislative Objective,” “Needs and Benefits” and “Alternatives.” In the latter section, DOH specifically considered two alternatives to the proposed regulation – maintaining the current prohibition on Medicaid payment for gender reassignment services or providing payment for all services and procedures performed in connection with gender reassignment, even those that are solely cosmetic. The proposed regulation charted a middle course for the reasons therein described.


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(2) provides for “hormone therapy, whether or not in preparation for gender reassignment

surgery.” Id. Paragraph (3) provides for “gender reassignment surgery,” subject to the

submission of letters from two qualified New York State licensed professionals. Id.

Subparagraphs (4)(i-iv) list four categories of services and procedures for which payment is not

available, including cryopreservation of reproductive tissue, reversal of genital and/or breast

surgery and reversal of any procedure resulting in sterilization, among others. Id. Subparagraph

(4)(v) excludes payment for “cosmetic surgery, services and procedures,” providing examples of

such procedures, including neck tightening, breast, brow, face, or forehead lifts, calf, cheek, chin,

nose, or pectoral implants, breast augmentation, jaw shortening, rhinoplasty, lip reduction, voice

therapy and voice lessons, among others. Id. Paragraph (5) provides that, “For purposes of this

subdivision, cosmetic surgery, services, and procedures refers to anything solely directed at

improving an individual’s appearance.” Id. (emphasis added.)

The New Regulation contains two other limitations on the scope of Medicaid coverage to

be provided for the treatment of Gender Dysphoria, limitations which will here be called the

“Under 18/21 Limitations.” Paragraph (2) limits hormone therapy to persons 18 and older and

Paragraph (3) limits gender reassignment surgery to persons 18 and older, or 21 and older if the

surgery will result in sterilization. Gasior Decl. Exh. 1.

In early April 2015, DOH issued its March 2015 Medicaid Update.5 Gasior Decl. Exh. 5.

Pages 15 through 17 provide information to Medicaid providers about the New Regulation and

the scope of coverage available thereunder. At page 16, the update states that

For male-to-female transgender individuals, augmentation mammoplasty will be considered medically necessary, regardless of whether the individual plans to pursue genital surgery, when both of the following criteria are met: 1.) The patient

5 The Medicaid Update is the “The Official Newsletter of the New York State Medicaid Program.”


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meets all the pre-requisites for gender reassignment surgery set forth in the regulation; and 2.) The patient has completed a minimum of 24 months of hormone therapy during which time no breast growth has occurred, or hormone therapy is medically contraindicated or the patient is otherwise unable to take hormones.

For female-to-male transgender individuals, mastectomy is a covered service, provided that the pre-requisites for surgery have been met.

Id. at 16. STANDARD OF REVIEW

Rule 12(b)(1)

Under Fed. R. Civ. P. 12(b)(1), a complaint “is properly dismissed for lack of subject

matter jurisdiction . . . when the district court lacks the statutory or constitutional power to

adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). “In considering a

motion to dismiss for lack of subject matter jurisdiction, [courts] accept as true all material

factual allegations in the complaint. However, argumentative inferences favorable to the party

asserting jurisdiction should not be drawn.” Atl. Mut. Ins. Co. v. Balfour Maclaine Int’l Ltd.,

968 F.2d 196, 198 (2d Cir. 1992) (internal citations omitted). In evaluating jurisdictional issues,

the court may also properly consider matters outside the pleadings. Morrison v. Nat’l Austl.

Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008), aff’d, 130 S. Ct. 2869 (2010).

Rule 12(b)(6)

“To survive a motion to dismiss [under Fed. R. Civ. P. 12(b)(6)], a complaint must

contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its

face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Id. A complaint that merely alleges facts that are “consistent with” or

“compatible with” liability fails to state a cognizable claim. Twombly, 550 U.S. at 557; Iqbal,


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129 S. Ct. at 1950.

In considering the legal sufficiency of a complaint, the Court should accept its well-

pleaded factual allegations to be true. However, the Court is not required to accept as true “legal

conclusions” or “threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements.” Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quotations omitted).

“Determining whether a complaint states a plausible claim for relief will . . . be a context-

specific task that requires the reviewing court to draw on its judicial experience and common

sense.” Iqbal, 129 S. Ct. at 1950 (citation omitted).

ARGUMENT

Plaintiffs contend that the New Regulation violates the Equal Protection Clause of the

New York State Constitution and three provisions of the federal Medicaid Act, 42 U.S.C. §§

1396a(a)(10)(A), 1396a(a)(10)(B)(i), 1396a(a)(17), and their implementing regulations at 42

C.F.R. §§ 440.240(b), 440.210, and 440.230(c). See Am. Compl., ¶¶ 1, 63, 64, 65 and 66. The

vehicles by which plaintiffs assert these alleged violations are § 1983 and the Supremacy

Clause of the United States Constitution. Plaintiffs also contend that the New Regulation

violates the Affordable Care Act’s prohibition on sex-based discrimination. Am. Compl. ¶ 175.

As plaintiffs’ arguments fail as a matter of law, Defendants’ motion to dismiss should be

granted.

POINT I PLAINTIFFS’ CLAIMS BASED ON THE NEW YORK STATE CONSTITUTION

ARE BARRED BY THE ELEVENTH AMENDMENT

Plaintiffs’ fourth claim for relief (Am. Compl. ¶¶ 170-73) alleges violations of the Equal

Protection Clause of New York State Constitution. In Pennhurst State School & Hospital v.

Halderman, 465 U.S. 89 (1984), the Supreme Court observed that “it is difficult to think of a


10

greater intrusion on state sovereignty than when a federal court instructs state officials on how to

conform their conduct to state law. Such a result conflicts directly with the principles of

federalism that underlie the Eleventh Amendment.” 465 U.S. at 106. The Amended Complaint

asserts that Defendant has violated, and is violating, the New York State Constitution.6 This

claim must be dismissed because “the Eleventh Amendment bars . . . consideration of purely

State law claims” brought against states. Morningside Supermarket Corp. v. N.Y. State Dep’t of

Health, 432 F. Supp. 2d 334, 339 (S.D.N.Y. 2006) (quoting Concourse Rehab. & Nursing Ctr.,

Inc. v. DeBuono, 179 F.3d 38, 44 (2d Cir. 1999)). Indeed, “the Eleventh Amendment protects

state officials from suits in federal court alleging violations of state law.” Terio v. Johann, No.

05 Civ. 5918, 2006 U.S. Dist. LEXIS 72083, at *16 (S.D.N.Y. Sept. 29, 2006), aff’d, 257 Fed.

Appx. 374, 2007 U.S. App. LEXIS 28676 (2d Cir. 2007) (citing Pennhurst, 465 U.S. at 106, and

Kostok v. Thomas, 105 F.3d 65, 68 (2d Cir. 1997)). Cf. Concourse Rehab. & Nursing Ctr. v.

Wing, 150 F.3d 185, 187 (2d Cir. 1998) (state Medicaid regulation does not become federal law

merely by virtue of its inclusion in state plan required by federal law).

Accordingly, claims asserted under the New York State Constitution must be dismissed.

POINT II

NONE OF THE MEDICAID PROVISIONS PLAINTIFFS CITE GIVE RISE TO A PRIVATE RIGHT OF ACTION UNDER 42 U.S.C. §1983

Plaintiffs’ suit invokes a federal funding program, Medicaid, promulgated as part of

Congress’s spending power. Specifically, plaintiffs’ claims are based on three provisions within

the federal Medicaid statute, all three of which are part of the extensive federal requirements that

6 A claim that state officials violated state law as part of their official responsibilities is a claim against the State that is protected by the Eleventh Amendment. Pennhurst, 465 U.S. at 106.


11

instruct the states as to what must be part of their Medicaid plans.7 See 42 U.S.C. § 1396a(a).

As the language of the provision makes clear, the focus of § 1396a(a) is on the state and what

components a state plan must contain if the state is to continue to receive federal funds. The

language plainly does not focus on individual Medicaid beneficiaries. In short, all of the

Medicaid Act provisions cited by plaintiffs fail to unambiguously express a Congressional intent

to create private “rights” to the care, services, drugs or supplies required for gender reassignment

surgery, and by extension there is no enforceable right to such treatment pursuant to 42 U.S.C. §

1983.

A. Congress Has Not Manifested An Unambiguous Intent to Confer Individual Rights On Plaintiffs To The Medical Procedures They Seek.

In Gonzaga, the Supreme Court stated that, “unless Congress ‘speaks with a clear voice,’

and manifests an ‘unambiguous’ intent to confer individual rights, federal funding provisions

provide no basis for private enforcement by § 1983.” 536 U.S. at 280; see also infra at II.B.

Congress knows how, with a clear voice, to unambiguously provide a private right of action, see,

e.g., Olmsted v. Pruco Life Ins. Co. of N.J., 283 F.3d 429, 433 (2d Cir. 2002); Touche Ross &

Co. v. Redington, 442 U.S. 560, 572 (1979), yet it manifestly did not do so with respect to the

statutory provisions that plaintiffs invoke here.

The Amended Complaint does not cite, and does not allege violations, of any portion of

the Medicaid Act which unambiguously allows for individual redress in this Court. Accordingly,

their claims should be dismissed.

7 Plaintiffs assert that Defendant has violated 42 U.S.C. §§ 1396a(a)(10)(A), 1396a(a)(10)(B) and 1396a(a)(17). Am. Compl. ¶¶ 163, 166 and 169.


12

B. The Medicaid Provisions Relied Upon By Plaintiffs Fail The Three-Part Blessing Test For A Private Right Of Action Under §1983.

1. Evolution of Supreme Court case law regarding a private right of action

under § 1983.

Maine v. Thiboutot, 448 U.S. 1 (1980), established a private right of action under § 1983

for "purely statutory violations of federal law."8 Following Thiboutot, Supreme Court § 1983

jurisprudence evolved, albeit in ways that the Court itself has described as something less than a

"model of clarity." Gonzaga, 536 U.S. at 278. Among the first decisions after Thiboutot was

Pennhurst, 451 U.S. 1 (1981), which held that a state's non-compliance with spending power

legislation — of which the Medicaid Act is an example — typically does not create a private

right of action for individual plaintiffs, but rather may be addressed by the restriction or

termination of federal funding. Id. at 28. That principle remains an analytical foundation of §

1983 private right jurisprudence. See, e.g., Boyland v. Wing, 487 F. Supp. 2d 161, 167-68

(E.D.N.Y. 2007).

Following Pennhurst, four Supreme Court decisions leading up to Gonzaga stand as

landmarks, defining and refining the limits of a private right of action under §1983: Wright v.

City of Roanoke Redevelopment & Hous. Authority, 479 U.S. 418 (1987); Wilder v. Virginia

Hospital Association, 496 U.S. 498 (1990); Blessing v. Freestone, 520 U.S. 329 (1997); and,

Suter v. Artist M., 503 U.S. 347 (1992). Careful analysis of these cases leads to the conclusion

that plaintiffs here have no private right of action under §1983.

8 42 U.S.C. § 1983 provides, in pertinent part, that:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, 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 . . . .


13

Wright clarified that, since § 1983 speaks of "rights, privileges and immunities," not mere

violations of federal law, only "federal rights" are enforceable under §1983. 479 U.S. at 423.

Wilder further refined the analysis, holding that the determination of whether a statute creates a

"federal right" enforceable under §1983 itself:

turns on whether the provision in question was intend[ed] to benefit the putative plaintiff. . . . If so, the provision creates an enforceable right unless it reflects merely a congressional preference for a certain kind of conduct rather than a binding obligation on the governmental unit, . . . or unless the interest the plaintiff asserts is too vague and amorphous such that it is beyond the competence of the judiciary to enforce.

Wilder, 496 U.S. at 510-11 (emphasis added). 2. The Blessing Test as Modified by Gonzaga. Blessing synthesized prior decisions, setting forth a three-part test that should guide

judicial inquiry into whether a statute confers a "right" enforceable by private plaintiffs under

§1983. Those factors are:

(1) Congress must have intended that the provision in question benefit the plaintiff; (2) the plaintiff must demonstrate that the right assertedly protected by the statute is not

so vague and amorphous that its enforcement would strain judicial resources; and (3) the provision giving rise to the asserted right must be couched in mandatory, rather

than precatory, terms. Blessing, 520 U.S. at 340-41. Disagreement among lower courts regarding application of the first part of the Blessing

test led to Gonzaga. There the Supreme Court noted that,

confusion has led some courts to interpret Blessing as allowing plaintiffs to enforce a statute under § 1983 so long as the plaintiff falls within the general zone of interest that the statute is intended to protect; something less than what is required for a statute to create rights enforceable directly from the statute itself under an implied private right of action.


14

Gonzaga, 536 U.S. at 283. Substantially narrowing the holdings in Wilder and Blessing,

Gonzaga expressly, “reject[ed] the notion that [the Court’s] cases permit anything short of an

unambiguously conferred right to support a cause of action brought under § 1983.” Id. at 283

(emphasis added.) The Supreme Court emphasized that, “it is rights, not the broader or vaguer

‘benefits’ or ‘interests,’ that may be enforced under the authority of that section.” Id. at 283.

Thus, the Court concluded that, “unless Congress ‘speaks with a clear voice,’ and manifests an

‘unambiguous’ intent to confer individual rights, federal funding provisions provide no basis for

private enforcement by § 1983.” Gonzaga, 536 U.S. at 280 (quoting Thiboutot, 448 U.S. at 17,

28, n.21). Importantly, Gonzaga reaffirmed that federal spending power legislation, such as the

Medicaid Act, generally is not enforceable by private claimants. Id. at 280. This finding is

appropriate because “the typical remedy” for non-compliance with conditions for federal

spending legislation “is not a private cause of action for noncompliance but rather action by the

Federal Government to terminate funds to the State.” Id. (quoting Thiboutot, 448 U.S. at 28).

See also Pennhurst, 451 U.S. at 28 (typical remedy for State noncompliance with conditions

imposed on federal spending legislation is not private cause of action but federal administrative

action to terminate funding).

With these overarching principles in mind, the Court must analyze whether the Medicaid

provisions upon which plaintiffs’ have sued – i.e., provisions that govern what state Medicaid

plans must contain – provide individual Medicaid beneficiaries with a private right of action. In

a statutory scheme as broad as Title XIX of the Social Security Act, a plaintiff must identify with

particularity the rights claimed. Indeed,

Only when the complaint is broken down into manageable analytic bites can a court ascertain whether each separate claim satisfies the various criteria [the Supreme Court has] set forth for determining whether a federal statute creates rights.


15

Blessing, 520 U.S. at 342.

Here, plaintiffs assert a private right of action for alleged violations of the Medicaid Act

§§ 1396a(a)(10)(A), 1396a(a)(10)(B) and 1396a(a)(17). However, though the plaintiffs may be

beneficiaries of the New York-Federal HHS Medicaid partnership,9 they have no standing to

assert a private right of action under § 1983 premised on their alleged entitlement to particular

treatments for gender dysphoria.

As noted above, plaintiffs base this suit on violations of Medicaid provisions explicitly

focused on the content of state Medicaid plans. In contrast with the paradigmatic rights-

conferring language of Title IX of the Education Amendments of 1972, that the Supreme Court

pointed to in Gonzaga for its focus on protections to individuals, see 536 U.S. at 284, 287

(quoting 20 U.S.C. § 1681(a) “No person . . . shall, on the basis of sex . . . be subjected to

discrimination under any education program or activity receiving Federal financial assistance.”)

(emphasis added), the provision at issue in this case – § 1396a of the Medicaid Act – focuses

instead on states’ compliance obligations to qualify for federal funding. Like other federal

funding statutes, § 1396a "more closely resembles an affirmative obligation on the state than the

creation of an individual right." Cf. Midwest Foster Care & Adoption Assoc. v. Kinkade, 11 cv

1152, 2012 U.S. Dist. LEXIS 190367, *9 (D. Mo. Mar. 9, 2012) (referring to Child Welfare Act

provision). In this case, the plaintiff class certainly is within the "zone of interest" that Congress

established under the Medicaid federal-state contractual arrangement. But that is insufficient to

9 The Supreme Court in Suter likened federal disbursement of money to the states as a contract, noting that "The legitimacy of Congress’ power to legislate under the spending power thus rests on whether the State voluntarily and knowingly accepts the terms of the ‘contract.’ There can, of course, be no knowing acceptance if a State is unaware of the conditions or is unable to ascertain what is expected of it. Accordingly, if Congress intends to impose a condition on the grant of federal moneys [such as private enforcement of the statute], it must do so unambiguously." Suter, 503 U.S. at 356.


16

create directly enforceable statutory rights. Gonzaga, 536 U.S. at 283. In short, the three

portions of the Medicaid Act cited in the Amended Complaint – 42 U.S.C. §§ 1396a(a)(10)(A),

1396a(a)(10)(B)(i) and 1396a(a)(17) – do not contain the unambiguous "rights giving" language

prescribed by Gonzaga.

These three portions of the Medicaid Act were addressed in Casillas v. Daines, 580 F.

Supp. 2d 235 (S.D.N.Y. 2008) (Castel J.). The plaintiff in Casillas, similar to the named

plaintiffs here, was diagnosed with Gender Identity Disorder10 and was eligible for Medicaid

benefits. Id. at 237. She had been examined by a medical doctor who opined that hormones,

orchiectomy and vaginoplasty were medically necessary to treat her GID, an opinion endorsed

by her current psychologist and a prior treating psychiatrist. Id. at 238. Plaintiff in Casillas was

denied Medicaid coverage, pursuant to the Old Regulation, for surgeries and services alleged to

be necessary to treat her GID, and she filed an action against New York State’s then

Commissioner of DOH, under § 1983 and the Fourteenth Amendment. Id. at 237.11 In

particular, Casillas alleged that the Commissioner acted under color of a state regulation – the

Old Regulation – to deprive her of rights secured by the three provisions in the Medicaid Act that

are at issue in this case: 42 U.S.C. §§ 1396a(a)(10)(A), 1396a(a)(10)(B)(i), and 1396a(a)(17).

The Commissioner moved for judgment on the pleadings pursuant to Rule 12(c).12

i. 42 U.S.C. § 1396a(a)(10)(A)

Casillas first found that the “right” conferred by 42 U.S.C. § 1396a(a)(10)(A), and the

10 The Am. Compl. ¶ 1 states that “Gender Dysphoria (‘GD’)” formerly was known as “Gender Identity Disorder (‘GID’).” 11 Plaintiffs here seek a permanent injunction pursuant to § 1983 (Am. Compl. ¶ 178(a)) and reference § 1983 in their fifth and sixth claims for relief. See Am. Compl. ¶¶ 174-77. 12 The legal standards applicable to a Fed. R. Civ. P. Rule 12(c) motion are the same as those to be applied to the instant motion. Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905, 922 (2d Cir. 2010).


17

regulation at 42 C.F.R. § 440.210,13 is not unambiguously conferred upon any individual or class

of individuals, and noted that the regulations adopted by the Secretary of HHS allow state plans

to contain “broad exclusions,” namely that “‘[t]he [state] agency may place appropriate limits on

a service based on such criteria as medical necessity or on utilization control procedures’ 42

C.F.R. § 440.230(d).” Id. at 242-43.

The court also found that the “broad carve-out in section 440.230(d)” raised another

fundamental problem for plaintiff, namely, her claim “would fail on the second element of

Blessing: ‘the right assertedly protected by the statute is not so ‘vague and amorphous' that its

enforcement would strain judicial competence.’” Casillas, 580 F. Supp. 2d at 243. With respect

to § 1396a(a)(10)(A), the court concluded, “subdivision 10(A) of section 1396a(a) does not

unambiguously confer the right that this plaintiff asserts. Alternatively, enforcement of the right

would require the application of vague and amorphous standards and, therefore, would strain

judicial competence.” Id. (citing Blessing, 520 U.S. at 340-41)

That conclusion is consistent with this Court’s decision in Graus v. Kaladjian, 2 F. Supp.

2d 540 (S.D.N.Y. 1998) (Rakoff, J.), which found that § 1396a(a)(10)(A) constituted a “nebulous

provision” that simply requires that state plans provide “‘for making medical assistance

available’” for eligible individuals and, as such, could not be read to confer a private right of

action under § 1983. See id. at 544 n.9.

Notably, those courts that have held that § 1396a(a)(10)(A) does give rise to

enforceable private rights under § 1983, e.g., Dajour B. v. The City of New York, 00 Civ.

2044, 2001 U.S. Dist. LEXIS 10251 (S.D.N.Y. July 23, 2001), have generally predated

Gonzaga have and failed to make critical distinction that “it is rights, not the broader or

13 See Am. Compl., ¶ 162-64.


18

vaguer ‘benefits’ or ‘interests,’ that may be enforced under the authority of that section

[1983].” Gonzaga, at 283.

ii. 42 U.S.C § 1396a(a)(10)(B)(i)

Casillas also found that 42 U.S.C § 1396a(a)(10)(B)(i) – referred to as the

“comparability-of-services” provision, Ralabate v. Wing, 93-CV-0035E(H), 1996 WL 377204,

*2 (W.D.N.Y. July 27, 1996) – and 42 C.F.R. § 440.240(b),14 do “not unambiguously confer a

right of the nature claimed.” Casillas, 580 F. Supp. 2d at 245. Particularly relevant in reaching

that conclusion was the court’s analysis of Rodriguez v. City of New York., 197 F.3d 611 (2d

Cir.1999), where the Circuit “rejected a theory that because the state had provided funding for

one type of service, there was an enforceable right under section 1396a(a)(10)(B) to a

comparable, though not identical, type of service.” Casillas, 580 F. Supp. 2d at 244 (citing

Rodriguez, at 615-16). The Casillas court also concluded that § 1396a(a)(10)(B) fails the first

and second elements of the Blessing test in that the state has a “lawful right under section

440.230(d) to place ‘appropriate limits’ for ‘such criteria’ as ‘medical necessity’ or ‘utilization

control procedures.’” Casillas, at 245.

iii. 42 U.S.C. § 1396a(a)(17)

Casillas also analyzed 42 U.S.C. § 1396a(a)(17) and 42 C.F.R. § 440.230(c),15 and

concluded that “there is no language which could be reasonably construed as unambiguously

conferring the right which plaintiff asserts.” Casillas, , 580 F. Supp. 2d at 245; accord, Graus, 2

F. Supp. 2d at 544, n.9; Lankford v. Sherman, 451 F.3d 496, 509 (8th Cir. 2006) (insufficient

evidence of congressional intent to create individually-enforceable right in § 1396a(a)(17));

Aplin v. McCrossen, 12-CV-6312, 2014 U.S. Dist. LEXIS 119682, at *59 (W.D.N.Y. Aug. 26,

14 See Am. Compl., ¶ 166-67. 15 See Am. Compl., ¶ 169.


19

2014) (§ 1396a(a)(17) not enforceable under § 1983). Casillas reached this conclusion by

reasoning that § 1396a(a)(17), “a provision of considerable length, requires states to develop

‘reasonable standards’ for its plan.” Casillas, at 245. This finding is consistent with Beal v. Doe,

432 U.S. 438, 444 (1977), which found that § 1396a(a)(17) “confers broad discretion on the

states to adopt standards for determining the extent of medical assistance, requiring only that

such standards be ‘reasonable’ and ‘consistent with the objectives' of the Act.” Beal, at 444.

Notable in this case is plaintiffs’ cite to 42 C.F.R. § 440.230(c), which Casillas found “must be

read in conjunction with [§ 440.230] subsection (d), “which allows appropriate limits on a

service . . .” Casillas, 580 F. Supp. 2d at 246.

In Ravenwood v. Daines, the Court adopted the reasoning set forth in Casillas and found

that the same statutes and regulations relied upon by the Plaintiffs in this case did not confer

rights upon which suit could maintained under § 1983. Ravenwood, 2009 U.S. Dist. LEXIS at

*34.

In short, plaintiffs have no private right of action under § 1983 to enforce the Medicaid

regulations upon which they bring suit.16

POINT III PLAINTIFFS HAVE NO CAUSE OF ACTION UNDER THE

SUPREMACY CLAUSE FOR ALLEGED VIOLATIONS OF MEDICAID

Plaintiffs’ first (¶¶ 162-64), second (¶¶165-67) and third (¶¶ 168-69) claims for relief

allege that the New Regulation is in conflict with the federal Medicaid statute and its

16 The Am. Compl. at ¶ 177 adds a Sixth Claim for Relief not present in the initial complaint, alleging that the New Regulation violates “§ 1396a(a)(10) and its implementing regulations by failing to provide medical assistance to . . . individuals under the age of twenty-one, which is enforceable under 42 U.S.C. § 1983.” If the plaintiff class has no private right of action under §§ 1396a(a)(10)(A) or (a)(10)(B), they can have no private right under § 1396a(a)(10). The Sixth Claim suffers also from the fact that this action purports to vindicate rights allegedly violated on the basis of sex or gender, not age. On that issue, see Point IV and footnote 19 below.


20

implementing regulations, and is thus preempted by the Supremacy Clause of the U.S.

Constitution, art. VI. The Supreme Court recently decided Armstrong v. Exceptional Child Ctr.,

Inc., __ U.S. ___, 135 S.Ct. 1378, 1384 (Mar. 31, 2015), which definitively held that the

Supremacy Clause does not confer a private right of action.

The Armstrong decision has foreclosed the Supremacy Clause as an alternative avenue to

the well-established standards for finding a private right of action. Accordingly, plaintiffs’

claims asserted pursuant to the Supremacy Clause must be dismissed.

POINT IV THE NEW REGULATION’S AGED-BASED LIMITATIONS DO NOT VIOLATE

TITLE IX’s PROHIBITION OF SEX DISCRIMINATION

Plaintiffs’ fifth claim for relief (¶¶ 174-75) asserts that the New Regulation violates the

Affordable Care Act, 42 U.S.C. § 18116, which incorporates Title IX of the Education

Amendments of 1972, 20 U.S.C. § 1681 et seq., allegedly because it discriminates against

plaintiffs on the basis of sex by providing Medicaid coverage for most – but not all – treatments

for GD. This claim must fail.

Plaintiffs do not assert that the New Regulation provides no Medicaid coverage for the

treatment of GD, nor could they. Section 505.2(l)(1) of the New Regulation clearly provides

payment for “medically necessary hormone therapy and/or gender reassignment surgery for the

treatment of gender dysphoria.” Gasior Decl. Exh. 1. Rather, plaintiffs’ posit that the “conflict”

between the New Regulation and §§ 1396a(a)(10)(A), 1396a(a)(10)(B) and 1396a(a)(17) lies in

the New Regulation’s limitation on two forms of coverage. First, there are the Under 18/21

Limitations in paragraph 2 of the New Regulation, which limit hormone therapy to persons 18

years of age or older, and which also limit gender reassignment surgery to persons 18 or over,

unless the surgery will result in sterilization, in which case the limitation is to persons over 21.


21

Id. at paragraphs (2) and (3).17 Second, the New Regulation provides that payment will not be

made for cosmetic surgery, services, and procedures, collectively hereafter “Cosmetic

Procedures.” Id. at paragraphs (4)(v). The issue of Cosmetic Procedures will be addressed in

Point V below.

Plaintiffs’ claim that the Under 18/21 Limitations violate the Affordable Care Act/Title

IX cannot be supported by a plain reading of the challenged regulation: the New Regulation

provides Medicaid coverage for surgery and hormone therapy to treat GD and, on their face,

paragraphs (2) and (3) of the New Regulation clearly base the Under 18/21 Limitations solely on

age. Members of the class certified in this action who are 18 years of age or older are eligible to

receive Medicaid coverage for both hormone therapy and gender reassignment surgery.

Accordingly, plaintiffs’ claim that the Under 18/21 Limitations violate the Affordable Care Act

and its prohibition of sex-based discrimination should be dismissed because that limitation is

solely age-based.

POINT V PLAINTIFFS’ CLAIMS REGARDING COVERAGE FOR COSMETIC PROCEDURES ARE NOT RIPE

Plaintiffs’ assertion that the New Regulation’s limitations on Cosmetic Procedures is

unlawful ignores paragraph (5) of the New Regulation, which clarifies that the coverage

limitation applies to services and procedures that are medically unnecessary when they are

“solely directed at improving an individual’s appearance.” Gasior Decl. Exh. 1. Nothing in the

Amended Complaint indicates that any of the named plaintiffs have asked for and been denied

Medicaid coverage for the Cosmetic Procedures listed in paragraph (4) of the New Regulation.

17 Paragraphs 72-75 of the Am. Compl., which allege that the Under 18/21 Limitations “lacks an adequate basis in medical or scientific fact and is thus unreasonable,” plainly do not assert that the Under 18/21 Limitations excludes plaintiffs from participation in New York’s Medicaid program on the basis of sex, gender or gender identity. See Fifth Claim For Relief ¶ 175.


22

Justiciability is an expansive concept which embodies, inter alia, the overlapping

doctrines of ripeness, standing and mootness. See Flast v. Cohen, 392 U.S. 83, 94-97 (1968).

The ripeness doctrine requires that an action brought in federal court be "matured to a point that

warrants decision." 13B C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §

3532, at 365, 3d ed. 2008); see Thomas v. Union Carbide Agr. Products Co., 473 U.S. 568, 581

(1985); Pac. Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm'n, 461 U.S. 190,

201 (1983).

A claim simply is not ripe for adjudication if it rests upon contingent future events that

may not occur as anticipated, or may not occur at all. Texas v. United States, 523 U.S. 296, 300

(1998). Ripeness overlaps with standing, "most notably in the shared requirement that the

[plaintiff's] injury be imminent rather than conjectural or hypothetical," Brooklyn Legal Servs.

Corp. v. Legal Servs. Corp., 462 F.3d 219, 225 (2d Cir. 2006), and courts have used both terms

to refer to this requirement. See Bronx Household of Faith v. Bd. of Educ., 492 F.3d 89, 111 (2d

Cir. 2007).

Here, plaintiffs do not allege that they have applied for and been denied medically

necessary services of the sort described in subparagraph (4)(v) of the New Regulation.18 Instead,

they allege that “upon information and belief” Medicaid will not pay for the treatments that they

may seek. See Am. Compl. ¶¶ 103, 126, 143. Plaintiffs’ interpretation of the New Regulation

ignores the language of paragraph (5), which provides at least for the possibility of coverage of a

service or procedure listed in subparagraph (4)(v), if such service or procedure serves a medical

purpose and is not solely for the purpose of improving an individual’s appearance. See Rock of

18 Plaintiffs initiated this action by Order to Show cause and sought a preliminary injunction to compel Defendant to approve medically necessary gender affirming medical care for plaintiff I.H. Defendant stipulated to provide the emergency preliminary injunctive relief sought. Dkt. Doc. 20. To date, I.H. has not accessed the relief pursuant to the stipulation. Gasior Decl. ¶ 8.


23

Ages Corp. v. Sec'y of Labor, 170 F.3d 148, 155 (2d Cir. 1999) (“When interpreting a…

regulation, we are required to read [it] as a whole”). In short, Plaintiffs’ claims that they will be

denied treatments listed in subparagraph (4)(v) of the New Regulation is, at this point, purely

conjectural. Plaintiffs do not allege an injury in fact arising from the New Regulation’s

limitations on treatments that may qualify as “cosmetic,” and this Court therefore lacks

jurisdiction to review those claims under the constitutional ripeness doctrine. See Nat'l Org. for

Marriage, Inc. v. Walsh, 714 F.3d 682, 687-88 (2d Cir. 2013).

In any event, even if the Court were to determine it has jurisdiction over the claims,

prudence suggests that it should decline to exercise that jurisdiction, since there is currently no

palpable injury that is fit for judicial analysis, nor will plaintiffs face any “direct and immediate

dilemma” if they are required to apply for Medicaid reimbursement for services before seeking

judicial review. See id. at 691; Simmonds v. I.N.S., 326 F.3d 351, 359-61 (2d Cir. 2003); see

also Ohio Forestry Ass'n v. Sierra Club, 523 U.S. 726, 736 (1998) (ripeness doctrine seeks to

avoid adjudication of abstract disagreements over administrative policies).19

19 A separate issue implicating justiciability stems from the questions of whether the named class plaintiffs are aligned with class members under 21. All of the class representatives named in the complaint are over 21. See Am. Compl. ¶¶ 91, 112, 136, 148 . This fact raises several questions: (1) does the certified class continue to have Rule 23(a) commonality; and (2) are the claims of the named plaintiffs typical of class members who are under 21 and will they adequately represent their interests, i.e., are the two age groups sufficiently aligned? A district court that has certified a class under Rule 23 “can always alter, or indeed revoke, class certification at any time before final judgment is entered should a change in circumstances” render a class action no longer appropriate. Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 104, n. 9 (2d Cir. 2007). See also Boucher v. Syracuse Univ., 164 F.3d 113, 118 (2d Cir. 1999) (“[U]nder Rule 23(c)(1), courts are required to reassess their class rulings as the case develops.”), Doe v. Karadzic, 192 F.R.D. 133, 137 (S.D.N.Y. 2000) (compelling reason to reassess class includes intervening change of law).


24

For these reasons, the Court should dismiss the plaintiffs’ claims on the issue of Cosmetic

Procedures as unripe.20

POINT VI THE AMENDED COMPLAINT FAILS TO STATE A PLAUSIBLE CLAIM

THAT THE NEW REGUALTION VIOLATES §1396a(a)(10)(B)

Even if the Court were to find that §1396a(a)(10)(B) provides plaintiffs with a private

right of action under § 1983, which it should not, plaintiffs’ claims under that section still should

be dismissed because the Amended Complaint does not “contain sufficient factual matter . . . to

‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678. The proper

application of §1396a(a)(10)(B) is only in situations where the same benefit is funded for some

recipients but not others, i.e., there must be comparability of services. Rodriguez, 197 F.3d at

611. The Amended Complaint alleges that the New Regulation provides medical assistance

coverage for the same surgical procedures and treatments needed to treat a named plaintiff’s GD

to Medicaid recipients who are similarly situated but suffering from medical conditions other

than GD. See Am. Compl. ¶¶ 107, 134, 146 and 160. The Amended Complaint’s only factual

support for this bald allegation is a general citation to 18 N.Y.C.R.R. § 533.5, which lists

hundreds of procedures covered by New York’s Medicaid program. The Amended Complaint

fails to specify with any particularity the manner in which the New Regulation violates the

Medicaid Acts comparability requirement and, as such, fails to satisfy the most basic of pleading

20 In addition, because the administrative determination of what constitutes a “cosmetic” treatment turns on the individual circumstances of a particular patient and the intended purpose of a particular treatment for that patient, under paragraph 5 of the New Regulation, the ultimate determination of whether a denial of such a treatment is improper will turn on fact-specific issues that are not common to all class members. As such, if and when such claims should arise, they presumably will not be well-suited to a class action such as this. See Fed. R. Civ. P. 23(a)(2), 23(b).


25

requirements. See Twombly, 550 U.S. at 557. Accordingly, the Amended Complaint should be

dismissed. See Gaines v. Hadi, 06-60129-CIV., 2006 WL 6035742, *24 (S.D. Fla. 2006).

CONCLUSION

Defendant respectfully requests that this Court deny the relief requested in the Amended

Complaint, dismiss this action against Defendant, and grant such other and further relief as the

Court deems just and proper.

Dated: New York, New York April 17, 2015 ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Defendant 120 Broadway, 24th Floor New York, New York 10271

By:_________/s/________________ John Gasior Zoey S. Chenitz Assistant Attorneys General (212) 416-8570


150417 final motion to dismiss -...

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