United States District Court, D. Colorado
ROBERT CUNNINGHAM, on behalf of himself and all others similarly situated, Plaintiff,
SUSAN E. BIRCH, in her official capacity as Executive Director of the Colorado State Department of Health Care Policy & Financing, Defendant.
MEMORANDUM OPINION AND ORDER
Y. Wang, United States Magistrate Judge
Judge Nina Y. Wang This matter is before the court on
Defendant's Motion to Dismiss Under Fed.R.Civ.P. 12(b)(1)
and 12(b)(6) (“Motion to Dismiss”) [#24, filed
November 10, 2016]. The court considers this motion pursuant
to 28 U.S.C. § 636(c) and the Order of Reference dated
October 31, 2016 [#18]. After considering the Parties'
briefing, including the Supplemental Authority submitted by
Plaintiff on February 14, 2017 [#60-1]; arguments at the
December 22, 2016 hearing; and the applicable law, the court
GRANTS Defendants' Motion to Dismiss for lack of
following facts are drawn from the Complaint, the briefing
associated with the instant Motion to Dismiss in this action,
and viewed in the light most favorable to Plaintiff for the
purposes of considering the instant Motion to Dismiss. The
Medicaid program was established by Title XIX of the Social
Security Act, 42 U.S.C. § 1396 et seq. and is a
cooperative federal-state program that provides medical care
to income-eligible families and individuals. Blum v.
Yaretsky, 457 U.S. 991, 993-94 (1982). While a state is
not required to participate in the Medicaid program, once it
does, it must comply with the federal statutes and
regulations governing Medicaid. 42 U.S.C. §
1396a(a)(10). Colorado has elected to provide its citizens
with a Medicaid Program. Colo. Rev. Stat. § 25.5-4-101
et seq. Defendant Susan E. Birch
(“Defendant”) is the Executive Director of the
Colorado State Department of Health Care Policy and Financing
(“HCPF”), the agency responsible for
administering the Colorado Medicaid Program. [#1 at ¶
5]. Plaintiff Robert Cunningham (“Plaintiff” or
“Mr. Cunningham”) is a Medicaid enrollee in
Colorado who suffers from a chronic infection from HCV, a
virus causing Hepatitis C. [Id. at ¶¶ 1,
4, 7]. Untreated, chronic Hepatitis C can cause symptoms such
as pain, fatigue, depression, and an increased risk of liver
failure, as well as fibrosis, cirrhosis, liver cancer, and
death. [Id.]. The severity of liver damage due to
the Hepatitis C virus is measured by a Metavir Fibrosis Score
(“MFS”), with a score of F0 or F1 indicating no
or minimal liver scarring to F4 indicating cirrhosis.
[Id. at ¶ 4 & n.1]. Mr. Cunningham has a
MFS score of F1. [Id. at ¶ 4].
Cunningham contends that under the HCPF's criteria, his
MFS score categorically disqualifies him from receiving
Direct Acting Antiviral medications (“DAAs”),
which he describes as “breakthrough medications.”
[Id.]. Starting in 2013, the Federal Drug
Administration (“FDA”) has approved a series of
DAAs for the treatment of HCV, which are capable of curing
the disease within a relatively short course of once-daily
pills over the course of 8-12 weeks, with minimal side
effects. [Id. at ¶ 19]. The FDA has approved
DAAs for use on HCV infected patients regardless of fibrosis
score. [Id. at ¶ 20]. On November 5, 2015, the
federal Centers for Medicare and Medicaid Services
(“CMS”) issued Guidance, advising state Medicaid
agencies that the new DAAs should be included in coverage of
outpatient prescription drugs. [Id. at ¶ 28
(citing Centers for Medicare and Medicaid Services, Assuring
Medicaid Beneficiaries Access To Hepatitis C (HCV) Drugs
(Release No. 172), Nov. 5, 2015)]. In pertinent part, CMS
indicated that it was “concerned that some states are
restricting access to DAA HCV drugs contrary to the statutory
requirements in section 1927 of the Act by imposing
conditions for coverage that may unreasonably restrict access
to these drugs.” [Id. at ¶ 29]. Mr.
Cunningham cites to guidelines and studies that indicate that
DAAs are recommended for all patients with chronic HCV
infections, with a narrow exception for patients with short
life expectancies that cannot be remediated by treating HCV,
by transplantation or by other directed therapy.
[Id. at ¶ 23].
Cunningham's physician submitted a prior authorization
request (“PAR”) for DAAs on or about August 8,
2016. [#24 at 6; #24-3 at ¶¶4-6]. The August 8 PAR
was considered under a previous version of HCPF's
Preferred Drug List [#24-2], and Colorado Medicaid denied Mr.
Cunningham DAA treatment because his MFS was
[#1 at ¶ 4]. He avers that he is “frustrated,
irritated, disheartened, and disappointed” because he
is unable to receive this breakthrough medication that could
cure him of HCV. [Id. at ¶¶ 1, 4].
September 2, 2016, Colorado Medicaid promulgated a new
Preferred Drug List and modified the prior authorization
criteria for DAA treatment, but did not eliminate the MFS
criteria completely. [Id. at ¶ 31; #24-1; #24-1
at 22-24]. Rather, it lowered the fibrosis score minimum from
F3 to F2 and eliminated the fibrosis score altogether for
women planning to become pregnant the following year. [#1 at
¶ 31; #24-1 at 23]. It also contemplates DAA treatment
for individuals “with serious extra-hepatic
manifestations of HCV such as leukocytoclastic vasculitis,
hepatocellular carcinoma meeting Milan criteria,
membranoproliferative glomerulonephritis, or symptomatic
cryoglobulinemia despite mild liver disease” or
“with fibrosing cholestatic HCV.” [#24-1 at 22].
As of the filing of this action, Mr. Cunningham had not
submitted a request for approval for treatment under the
treatment criteria effective October 1, 2016. [#57 at 4].
Subject Matter Jurisdiction and Standing
courts are courts of limited jurisdiction. Under Article III
of the United States Constitution, federal courts only have
jurisdiction to hear certain “cases” and
“controversies.” Susan B. Anthony List v.
Driehaus, 134 S.Ct. 2334, 2341 (2014). As such, courts
“are duty bound to examine facts and law in every
lawsuit before them to ensure that they possess subject
matter jurisdiction.” The Wilderness Soc. v. Kane
Cty., Utah, 632 F.3d 1162, 1179 n.3 (10th Cir. 2011)
(Gorsuch, J., concurring). Indeed, courts have an independent
obligation to determine whether subject matter jurisdiction
exists, even in the absence of a challenge from any party.
1mage Software, Inc. v. Reynolds & Reynolds,
Co., 459 F.3d 1044, 1048 (10th Cir. 2006) (citing
Arbaugh v. Y & H Corp., 546 U.S. 500 (2006)).
plaintiff must establish Article III standing to bring each
of his claims separately. See DaimlerChrysler Corp. v.
Cuno, 547 U.S. 332, 352 (2006); Bronson v.
Swensen, 500 F.3d 1099, 1106 (10th Cir. 2007). The
standing inquiry has two components: constitutional and
prudential. To establish constitutional standing, a plaintiff
must demonstrate “(1) an ‘injury in fact, '
(2) sufficient ‘causal connection between the injury
and the conduct complained of, ' and (3) a
‘likel[ihood]' that the injury ‘will be
redressed by a favorable decision.'” Susan B.
Anthony List, 134 S.Ct. at 2341 (quoting Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). A
plaintiff must also satisfy the requirements of prudential
standing. To establish prudential standing, a plaintiff must
(1) assert his own rights, rather than those belonging to
third parties; (2) demonstrate that his claim is not simply a
“generalized grievance;” and (3) show that
plaintiff's grievance falls within the zone of interests
protected or regulated by statutes or constitutional
guarantee invoked in the suit. See Bd. of Cty.
Comm'rs of Sweetwater Cty. v. Geringer, 297 F.3d
1108, 1112 (10th Cir. 2002) (citations omitted). The elements
of standing “are not mere pleading requirements but
rather an indispensable part of the plaintiff's
case.” Lujan, 504 U.S. at 561.
addition, in order to bring a class action, the named
plaintiff must have individual standing, and may not rely
upon potential class members' injuries to establish their
standing. See Simon v. E. Ky. Welfare Rights Org.,
426 U.S. 26, 40 n. 20, (1976) (citing Warth v.
Seldin, 422 U.S. 490, 502 (1975) (stating that named
plaintiffs who seek to represent a class “must allege
and show that they personally have been injured, not that
injury has been suffered by other, unidentified members of
the class to which they belong and which they purport to
represent”)); Thomas v. Metro. Life Ins. Co.,
631 F.3d 1153, 1159 (10th Cir. 2011) (“Prior to class
certification, the named Plaintiffs' failure to maintain
a live case or controversy is fatal to the case as a
whole-that unnamed plaintiffs might have a case or
controversy is irrelevant.”). If the named plaintiff
does not have standing, then this court lacks subject matter
over the action as a whole. O'Shea v. Littleton,
414 U.S. 488, 494 (1974).
Rule 12(b)(6), a court may dismiss a complaint for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). In deciding a motion
under Rule 12(b)(6), the court must “accept as true all
well-pleaded factual allegations . . . and view these
allegations in the light most favorable to the
plaintiff.” Casanova v. Ulibarri, 595 F.3d
1120, 1124 (10th Cir. 2010) (quoting Smith v. United
States, 561 F.3d 1090, 1098 (10th Cir. 2009)). However,
a plaintiff may not rely on mere labels or conclusions,