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Cunningham v. Birch

United States District Court, D. Colorado

February 17, 2017

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.


          Nina Y. Wang, United States Magistrate Judge

         Magistrate 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 standing.


         The 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].

         Mr. 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].

         Mr. 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 F1.[1] [#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].

         On 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.[2] [#57 at 4].


         I. Subject Matter Jurisdiction and Standing

         Federal 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)).

         A 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.

         In 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).

         II. Rule 12(b)(6)

         Under 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, ...

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