Planned Parenthood

Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 1 of 66
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE

MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
PLANNED PARENTHOOD
SOUTHEAST, INC.; and
JANE DOE,
Plaintiffs,
v.
ROBERT BENTLEY, Governor
of Alabama, in his
official capacity; and
STEPHANIE McGEE AZAR,
Acting Commissioner,
Alabama Medicaid Agency,
in her official capacity,
Defendants.
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CIVIL ACTION NO.

2:15cv620-MHT
(WO)
OPINION
Before the court is a challenge to a decision by
the
Governor
Medicaid
of
provider
Southeast,
Inc.
Alabama
to
agreement
(PPSE),
terminate
with
the
Planned
which
funds
States
Parenthood
services
unrelated to abortion, including routine gynecological

exams,
pregnancy
counseling,
cervical-cancer screenings.
and
breast-
and
The plaintiffs are PPSE
and Jane Doe, a PPSE patient and Medicaid recipient,
suing individually and on behalf of a putative class of

similarly situated Medicaid-recipient patients of PPSE.
The
defendants
Acting
are
the
Commissioner
of
Governor
the
of
Alabama
Alabama
Medicaid
and
the
Agency;
both are sued in their official capacities.

The plaintiffs filed this lawsuit to challenge the
termination of PPSEs provider agreement as unlawful
under
the
free-choice-of-provider
provision
of
the
Medicaid Act, which states in relevant part that any

individual
eligible
for
medical
assistance ... may
obtain such assistance from any institution, agency,

community pharmacy, or person, qualified to perform the
service
provide
or
services
[her]
1396a(a)(23).
required ... who
such
services.
undertakes
42
to
U.S.C.
PPSE also claims that the termination
violates its rights under the First Amendment and the

Due
Process
and
Equal
Fourteenth Amendment.
Protection
Clauses
of
the
PPSE and Doe bring all of their
claims under 42 U.S.C. 1983.
Jurisdiction is proper
under
28
U.S.C.
1331
(federal
question)
and
1343
(civil rights).
This matter is currently before the court on PPSE
and Does motion for entry of a preliminary injunction.
The
motion
will
be
granted
on
the
basis
of
Does
Medicaid Act claim.
I. LEGAL STANDARD
To
demonstrate
that
preliminary
injunction
is
warranted, a plaintiff must show that (1) there is a

substantial likelihood that he ultimately will prevail
on
the
merits
of
the
claim;
(2)
he
will
suffer
irreparable injury unless the injunction issues; (3)

the threatened injury to the movant outweighs whatever
damage the proposed injunction may cause the opposing
party; and (4) the public interest will not be harmed
if the injunction should issue.
Cate v. Oldham, 707
F.2d 1176, 1185 (11th Cir. 1983).
The plaintiff bears
the
each
burden
of
persuasion
as
to
of
the
four
required showings.
McDonalds Corp. v. Robertson, 147
F.3d 1301, 1306 (11th Cir. 1998).
II. BACKGROUND
A. State Medicaid Program
The
federal
Congress
to
Medicaid
provide
individuals,
program
low-income
pregnant
women,
affordable medical care.

partnership
between
States.
Subject
federal
government
assistance,
the
was
types
families,
and
by
disabled
children
with
The program operates as a
the
to
established
federal
guidelines
government
and
the
established
by
the
regarding
eligibility
for
of
covered,
the
services
and
costs of those services, States receive federal funds.

See 42 U.S.C. 1396a.
discretion
in
Although States are afforded
administering
the
program,
they
are
required to submit their plans for federal approval.

See
42
contract
C.F.R.
430.10.
between
the
The
plan
participating
operates
State
and
as
the
federal government, and the Department of Health and
Human Services may withhold federal funds if the State

fails
to
comply
substantially
approved and adopted.
with
the
plan
as
42 C.F.R. 430.35.
As a state participant, Alabama maintains such a

plan
with
maintains
the
federal
provider
government.
agreements
The
with
State
also
health-care
providers, which impose on providers state and federal

regulatory requirements governing the filing of claims.
When a provider renders covered services to a Medicaid
recipient,
the
State
pays
that
provider
directly.
Family-planning services are covered under the Medicaid

Act and under the Alabama plan.1
1. Except in rare cases, Medicaid monies are not

used to provide abortions in Alabama.
The Hyde
Amendment,
a
rider
attached
to
congressional
appropriations bills since 1976, prohibits the use of
federal funds to pay for abortions.
Although it was
initially an all-out ban, the Amendment has evolved to
exempt cases in which the life of the mother would be
endangered by carrying the fetus to term, as well as
cases of rape and incest. See, e.g., Pub. L. No. 11376, 506-07, 128 Stat. 5, 409 (2014) ("Consolidated
Appropriations Act").
However, States are free to fund abortions for
Medicaid recipients from their own coffers.
Alabama
(continued)
5
PPSE
affiliated
is
with
regional
Planned
non-profit
Parenthood
corporation
Foundation
of
America (PPFA); it operates health centers in Mobile

and
Birmingham.
Through
family-planning
including
and
physical
these
centers,
it
preventive-health
exams,
contraceptive
provides
services,
counseling,
contraception, breast- and cervical-cancer screenings,

treatment
for
pregnancy
counseling.
abortions.
from
the
sexually
transmitted
Both
infections,
offices
also
and
provide
As an affiliate of PPFA, PPSE is distinct

national
organization;
PPSE
maintains
an
independent board and exercises exclusive control over

its daily affairs.
Although PPSE is not supervised by
PPFA, it must comply with certain standards adopted by

PPFA in order to operate under the Planned Parenthood
name.
does not do so.

See Ala. Admin. Code 560-X-6-.09(1)
("Payment is available for abortions as provided under
federal law.
In the event the abortion does not meet
the requirements of federal law, and the recipient
elects to have the abortion, the provider may bill the
recipient for the abortion.").
6
Until the termination of the provider agreement,2

both
of
PPSEs
offices
participated
in
the
States
Medicaid program and, therefore, were able to provide

the aforementioned services for free or at reduced cost
to Medicaid recipients in the State.
PPSE provided
services to Medicaid recipients one to two times per

week.
Over the past two fiscal years, PPSE received
approximately
$ 5,600
in
state
Medicaid
funds.
All
parties agree that PPSE receives no Medicaid funding

for abortion services.
B. Videos Regarding Fetal-Tissue Donation

Beginning
August,
the
in
mid-July
Center
2015
for
and
Medical
ending
in
Progress,
early
an
anti-abortion group, released a series of controversial

videos on fetal-tissue donation programs operated by
2. The State of Alabama technically maintained a

separate, yet identical, provider agreement for each
PPSE facility; however, the agreement itself was
between the State and PPSE.
For clarity, the court
will refer to these identical agreements as one
provider agreement in this opinion.
7
certain abortion clinics.
These programs permit women
who elect to have abortions to donate fetal tissue for

medical
research
purposes.
At
the
PPFA-affiliated
clinics that provide these services, the fetal tissue

is
collected
procurement
collect
and
parties
do
by
providers.
companies
partner
transmit
tissue
not
dispute
In
with
to
some
the
instances,
providers
researchers.
that
no
to
The
employee
or
representative of PPSE is depicted in these videos and

that
PPSE
does
not
participate
in
fetal-tissue donation, and never has.

The videos feature individuals affiliated with the
Center for Medical Progress posing as employees of a
fake
tissue-procurement
participate
in
conversations
with
company.
series
employees
PPFA-affiliated
clinics.
all--discuss
purported
First,
the
impression
two
videos
that
are
the
These
of
of
covertly
PPFA
The
depicted
at
intended
PPFA
filmed
and
various
videos--nine
practices
clearly
individuals
issue
to
in
here.
give
affiliates
the
profit
from the sale of fetal tissue.
Second, the videos
attempt to give the impression that providers at the

affiliates
that
participate
in
fetal-tissue-donation
programs alter abortion procedures in order to obtain

intact--and therefore more valuable--specimens.
Following
the
representatives
release
criticized
of
the
the
videos,
tactics
PPFA
of
the
filmmakers and argued that the videos falsely portray

the
practices
of
those
affiliates
that
engage
in
fetal-tissue donation.
PPFA contends that much of what
was
videos
omitted
from
the
recorded
conversations
with staff reflects that PPFA affiliates recover only

their costs, and do not profit from their fetal-tissuedonation programs.
An independent analysis of several
of the videos, submitted by the plaintiffs, concludes

that
the
released
videos
were
heavily
edited
therefore lack any legal evidentiary value.
and
Pls.
Ex. G, Reply Br. Mot. Prelim. Inj. 2, doc. no. 36-1.

The
immediate
release
of
backlash
the
videos
against
PPFA
led
to
and
strong
the
and
clinics
affiliated with it.
Both PPSE and other affiliates
report an increase in death threats and incidents of

harassment.
first
Only two days after the release of the
video,
investigation
State.
the
into
Similar
politicians
in
Governor
of
Indiana
PPFA-affiliated
investigations
clinics
were
Massachusetts,
Pennsylvania, and Georgia.
ordered
in
launched
South
an
that
by
Dakota,
Louisiana, Arkansas, Utah,
Texas, and New Hampshire also responded with efforts to

terminate
affiliated
clinics
from
their
Medicaid
programs.
C. Termination of PPSEs Provider Agreement

On August 6, 2015, the Governor of Alabama sent a
letter to PPSE to notify it that its provider agreement
was being terminated.
The letter did not provide a
reason for the termination and advised PPSE that the

termination would go into effect 15 days later.
The
Governor states in his briefing in this court that his

decision to terminate was based on his viewing one of
10
the videos released by the Center for Medical Progress.

The plaintiffs cite a statement the Governor made to
the media, in which he contends that comments made in
the video he viewed displayed a lack of respect for
human life.
The Governor states that he had no plan to
terminate PPSEs provider agreement before viewing this

video.
Further,
it is undisputed that, prior to the
receipt of this letter, PPSE had not been made aware of

any investigation into its medical or administrative
practices by the Alabama Medicaid Agency.
III. DISCUSSION
To
determine
whether
issuance
of
preliminary
injunction is warranted, the court will first evaluate

the plaintiffs likelihood of success on the merits of
their claims, then consider the threat of irreparable
injury, and, finally, discuss whether the balance of
harms and the public interest weigh in favor of or
against an injunction.
Because Doe has made a showing
on
claim
her
Medicaid
Act
11
adequate
to
warrant
preliminary injunction, the court does not reach PPSEs

constitutional claims.
A. Likelihood of Success on the Merits

1. Private Enforcement of the
Free-Choice-of-Provider Right
In order to prevail on the merits, the plaintiffs
must,
as
relief
Governor
threshold
under
their
and
the
matter,
stated
Acting
be
cause
entitled
of
Commissioner
provision
is
to
pursue
action.
argue
not
that
The
the
enforceable
under 42 U.S.C. 1983, by either Medicaid providers or

by recipients.
least
with
This court finds to the contrary, at
respect
to
Doe,
who
is
recipient
of
Medicaid benefits.3
3. Because the court finds that Doe has a privateenforcement right, the court need not decide whether
PPSE also has such a right, on behalf of its recipientpatients or on its own behalf. See Silver v. Baggiano,
804 F.2d 1211, 1217 (11th Cir. 1986) (declining to
resolve
whether
1396a(a)(23)
creates
a
right
enforceable by a provider since Medicaid recipients do
have enforceable rights under 1396a(a)(23), and an
actual recipient has made a motion to intervene in this
(continued)
12
The
federal
Courts
of
Appeals
to
consider
the
issue, as well as other federal district courts, have

reached the same conclusion: 1396a(a)(23) creates a
private
right
enforceable
under
1983.
Planned
Parenthood Ariz. Inc. v. Betlach, 727 F.3d 960, 965-68

(9th Cir. 2013), cert. denied, 134 S. Ct. 1283 (2014);
Planned
Parenthood
of
Ind.,
Inc.
v.
Commr
of
Ind.
State Dept of Health, 699 F.3d 962, 972-77 (7th Cir.

2012),
cert.
denied,
133
S.
Ct.
2736
(2013),
cert.
denied, 133 S. Ct. 2738; Harris v. Olszewski, 442 F.3d

456,
460-65
Parenthood
(6th
Gulf
Cir.
2006);
Coast,
Inc.
see
v.
also
Planned
Kliebert,
No.
3:15-cv-565, 2015 WL 6122984, at *18-19 (E.D. La. Oct.

18, 2015) (deGravelles, J.); Planned Parenthood Ark. &
E. Okla. v. Selig, No. 4:15-cv-566, slip op. at 11-14
(E.D. Ark. Oct. 2, 2015) (Baker, J.); Womens Hosp.
Found. v. Townsend, No. 07-711, 2008 WL 2743284, at *8
case); see also Nutritional Support Servs., L.P. v.
Miller, 826 F. Supp. 467, 468-70 (N.D. Ga. 1993)
(Carnes, J.) (concluding that providers--the only
plaintiffs--had no enforcement right under the freechoice-of-provider provision).
13
(M.D. La. July 10, 2008) (Brady, J.).
Although the
Eleventh Circuit Court of Appeals has not explicitly

held that the free-choice-of-provider provision creates
a private right enforceable under 1983, it suggested
as much in Silver v. Baggiano, 804 F.2d 1211, 1216-18
(11th Cir. 1986) (noting, in remanding for the district
court
to
provider
consider
had
in
such
the
first
right,
instance
that
the
whether
district
court
might not need to reach each issue, because Medicaid

recipients
do
have
1396a(a)(23),
and
enforceable
an
actual
rights
recipient
has
under
made
motion to intervene in this case), abrogated on other

grounds by Lapides v. Bd. of Regents of Univ. Sys. of
Ga., 535 U.S. 613, 618 (2002).
These
courts
articulated
by
applied
the
Supreme
the
three-step
Court
in
test
Blessing
v.
Freestone, 520 U.S. 329 (1997), for determining whether

a statutory provision can be enforced under 1983: (1)
Congress
question
must
have
benefit
the
intended
that
plaintiff;
14
the
(2)
provision
the
in
plaintiff
must demonstrate that the right assertedly protected by

the statute is not so vague and amorphous that its
enforcement would strain judicial competence; and (3)
the
statute
must
unambiguously
impose
binding
obligation on the States. Id. at 340-41 (citations and

internal quotation marks omitted).
With respect to the first factor, they explained
that, in guaranteeing the free choice of provider to
any individual eligible for medical assistance, the
free-choice-of-provider provision employs individually
focused terminology that unambiguously confer[s] an
individual
entitlement.
Harris,
442
F.3d
at
461
(citations omitted); see also Planned Parenthood Ariz.,

727 F.3d at 966-67 (citing Ball v. Rodgers, 492 F.3d
1094, 1108 (9th Cir. 2007) (While express use of the
term individuals (or persons or similar terms) is
not essential to finding a right for 1983 purposes,
usually such use is sufficient for that purpose.));
Planned
language
Parenthood
does
not
of
Ind.,
simply
15
699
F.3d
set
an
at
974
aggregate
(This
plan
requirement, but instead establishes a personal right

to which all Medicaid patients are entitled.).
The
Supreme Court, too, has explained as much.
OBannon v.
Town
785
Court
([The
Nursing
Ctr.,
447
U.S.
recipients
qualified
the
right
providers
to
(1980)
provision]
choose
without
773,
among
government
gives
range
of
interference.
(emphasis omitted)).
As
ruled
for
on
the
second
this
issue
falls
comfortably
factor,
have
right
within
interpretive competence.
the
courts
held
that
that
is
administrable
the
judiciarys
have
the
and
core
Planned Parenthood of Ind.,
699 F.3d at 974; see id. (Planned Parenthood argues

that
state
infringes
the
right when it excludes a provider from its Medicaid

program for a reason other than the providers fitness
to render the medical services required.
is
the
proper
interpretation
of
Whether this
1396a(a)(23)
is
legal question fully capable of judicial resolution.);
16
see
also
Planned
Parenthood
Ariz.,
727
F.3d
at
967
([W]hether the doctor is qualified ... may require []

factual development or expert input, but still falls
well
within
requirement
the
range
could
be
of
judicial
established,
competence.
for
example,
The
by
combination of evidence as to the medical licenses the

doctor holds and evidence as to the licenses necessary
under state law to perform family planning services.);
Townsend, 2008 WL 2743284, at *8 ([T]he plain language
of the provision is sufficiently clear to allow for
judicial enforcement.).
The
provision
also
meets
the third Blessing requirement, because it is couched

in mandatory, rather than precatory, language: a State
must
provide
recipients
the
freedom
of
choice.
Harris, 442 F.3d at 461 (quoting Blessing, 520 U.S. at

341); see also Planned Parthood Ariz., 727 F.3d at 967
(calling
Parenthood
this
of
conclusion
indubitabl[e]);
Ind.,
F.3d
699
at
974
Planned
([Section]
1396a(a)(23) is plainly couched in mandatory terms.);
17
Townsend, 2008 WL 2743284, at *8 ([T]he language is

mandatory ... .).
Thus,
courts
have
right
enforceable under 1983.

536
U.S.
273,
presumption
of
284
found
that
is
the
presumptively
See Gonzaga Univ. v. Doe,
(2002).
Under
enforceability
could
Gonzaga,
be
this
overcome
if
Congress had foreclosed 1983 lawsuits by recipients,

either
expressly
or
impliedly,
by
creating
comprehensive enforcement scheme that is incompatible

with
private
lawsuits.
Id.
Blessing, 520 U.S. at 341).

Appeals
to
Congress
consider
had
not
the
at
n.4
(quoting
But the three Courts of
question
expressly
private-enforcement actions.
284
or
all
concluded
impliedly
that
foreclosed
Planned Parenthood Ariz.,
727 F.3d at 968; Planned Parenthood of Ind., 699 F.3d

at 975-76; Harris, 442 F.3d at 462.
This
court
is
persuaded
consistent holdings are correct.

and
state
law
provide
for
18
an
that
these
remarkably
The fact that federal

administrative
appeals
process
does
not
prompt
different
conclusion.
Exhaustion of administrative remedies available under

state
law--by
either
Doe
or
PPSE--was
not
required
before Doe could file suit in federal court.

points
out,
circuit
the
to
exhaustion
Eleventh
consider
is
Medicaid Act.
not
Circuit,
the
issue,
required
like
has
for
As she
every
other
concluded
claims
that
under
the
See Alacare, Inc. North v. Baggiano, 785
F.2d 963, 965-67 (11th Cir. 1986) (The evidence of a

congressional
preference
requirement
in
inevident ... .
Regents,
457
for
imposing
Medicaid
(applying
U.S.
496
cases
Patsy
(1982));
v.
see
an
exhaustion
is
Fla.
also
simply
Bd.
Romano
of
v.
Greenstein, 721 F.3d 373, 376 (5th Cir. 2013); Roach v.

Morse, 440 F.3d 53, 58 (2d Cir. 2006); Houghton ex rel.
Houghton v. Reinertson, 382 F.3d 1162, 1167 n.3 (10th
Cir. 2004); Talbot v. Lucy Corr. Nursing Home, 118 F.3d
215, 220 (4th Cir. 1997).
Further, it is relevant that the letter sent by the
Governor was--as the court determines below--based on
19
an
at-will
termination
clause
in
PPSEs
agreement, and not any for-cause ground.
provider
Because the
termination letter lacked any substantive basis for the

termination
of
the
provider
agreement,
it
is
questionable whether meaningful review could have been

sought
through
defendants'
the
argument
administrative
that
the
process.
plaintiffs
The
could
have
uncovered through the administrative appeal process the

for-cause
reason
the
defendants
offer is unpersuasive.
now
retrospectively
Their argument ignores the fact
that the Governor did implicitly identify a basis for

terminating the agreement, which was his contractual
authority to terminate it at will, at any time, without
giving any other reason.
action
strikes
the
This basis for administrative

court
as
fundamentally
unappealable one, impervious to evidentiary rebuttal.

Even if every factual allegation leveled against PPSE
were
disproven,
the
agency--believing
that
it
was
empowered to terminate a provider agreement without any
20
basis whatsoever in the conduct of the provider--would

hold a trump card.
The defendants argue that a recent decision by the
Supreme
Court,
Armstrong
v.
Exceptional
Child
Ctr.,
Inc., 135 S. Ct. 1378 (2015), warrants reconsideration

of the above precedents establishing that recipients
have
enforceable
rights
under
the
free-choice-of-provider provision.
However, Armstrong
does
doubt
not
cast
significant
on
this
now-well-established proposition.
Armstrong involved a challenge by providers to a
different
provision
of
the
Medicaid
Act,
42
U.S.C.
1396a(a)(30)(A) (the equal-access provision), which

requires
state
procedures
payment
plans
relating
for,
plan ... as
care
may
to
to
and
be
provide
the
such
utilization
services
necessary
methods
of,
available
to
and
and
the
under
the
safeguard
against
unnecessary utilization of such care and services and

to assure that payments are consistent with efficiency,
economy,
and
quality
of
care
21
and
are
sufficient
to
enlist enough providers so that care and services are

available under the plan at least to the extent that
such care and services are available to the general
population in the geographic area ... .
1382.
135 S. Ct. at
The equal-access provision, the Court observed,
lacks the sort of rights-creating language needed to

imply a private right of action, id. at 1387--that is,
just
the
sort
of
language
provision
does
that
contain.
the
See
also Townsend, 2008 WL 2743284, at *8 (drawing the same

contrast between 1396a(a)(23) and 1396a(a)(30)(A));
Planned Parenthood Gulf Coast, 2015 WL 6122984, at *18
(recognizing that the equal-access provision lacks the
rights-creating
and
individual-focused
language
so
prominent in [the free-choice-of-provider provision]).

The Armstrong Court concluded that two aspects of
the
equal-access
provision,
considered
together,
establish[ed] Congresss intent to foreclose equitable

relief.
135 S. Ct. at 1385 (citation and internal
quotation marks omitted).
Only one of these factors
22
applies with any force to the free-choice-of-provider

provision:
provided
that
for
the
remedy
States
Congress
failure
to
affirmatively
comply
with
the
provisions of the Medicaid Act was the withholding of

funds by the Secretary of Health and Human Services.
Id. (citing 42 U.S.C. 1396c).
the
Court
made
clear
that
Critically, however,
[t]he
provision
for
the
Secretarys enforcement by withholding funds might not,

by
itself,
relief.4
preclude
the
availability
of
equitable
Id. (citing Va. Office for Prot. & Advocacy
v. Stewart, 131 S. Ct. 1632, 1639 n.3 (2011) (The fact

that the Federal Government can exercise oversight of a
federal spending program and even withhold or withdraw
4. This enforcement provision applies to a number
of other substantive provisions of the Medicaid Act,
many of which have been repeatedly held to be privately
enforceable under 1983. See, e.g., Bontrager v. Ind.
Family & Soc. Servs. Admin., 697 F.3d 604, 606-07 (7th
Cir. 2012) ( 1396a(a)(10)); Doe v. Kidd, 501 F.3d 348,
355-57 (4th Cir. 2007) ( 1396a(a)(8)); S.D. ex rel.
Dickson v. Hood, 391 F.3d 581, 602-07 (5th Cir.
2004)( 1396a(a)(10));
Sabree
ex
rel.
Sabree
v.
Richman,
367
F.3d
180,
182-93
(3d
Cir.
2004)
( 1396a(a)(8), 1396a(a)(10), 1396a(a)(15)); Gean v.
Hathaway,
330
F.3d
758,
772-73
(6th
Cir.
2003)( 1396a(a)(3)).
23
funds ... does
not
demonstrate
that
Congress
has
displayed an intent not to provide the more complete

and
more
immediate
relief
that
would
otherwise
be
available under Ex parte Young[, 209 U.S. 123 (1908)].

(citation
and
internal
quotation
marks
omitted))).
Rather, the Court held, the express provision of an

administrative
remedy,
when
combined
with
the
judicially unadministrable nature of the equal-access

provision,
demonstrated
precluded.
that
private
enforcement
was
Armstrong, 135 S. Ct. at 1385 (emphasis
added).
The equal-access provision at issue in Armstrong
and the free-choice-of-provider provision at issue here
could hardly be more different with respect to judicial
administrability.
requirement
equal-access
Id.
It
broader
is
and
difficult
less
provisions
to
specific
judgment-laden
imagine
than
a
the
standard.
By contrast, the free-choice-of-provider provision
articulates
enforcement.
concrete
and
objective
standards
for
Planned Parenthood Ariz., 727 F.3d at

24
967 (citation omitted).
For example, to adjudicate a
claim under the equal-access provision, a court might

be required to determine whether a particular procedure
was
necessary
to
safeguard
against
unnecessary
utilization of covered care--a near-impossible task.

42 U.S.C. 1396a(a)(30)(A).
To decide a claim under
the
provision,
not
demand
obtain
that
health-systems
the
court
administration;
however,
does
crash-course
determining
that
in
a
provider is qualified to perform [a] service ... and

undertakes to provide [] such service[] is well within
a
courts
competence.
Id.
If,
as
the
defendants
contend, States had free rein to define qualified in

whatever ways they wished, deciding a claim under the
more
difficult,
However,
the
and
court
provision
perhaps
rejects
might
indeed
judgment-laden
this
expansive
be
task.
reading;
qualified to perform the service or services required

means
just
competency
what
and
the
plain
language
professional
standing
25
says:
as
having
medical
provider generally.
Planned Parenthood of Ariz., 727
F.3d at 967-69; Planned Parenthood of Ind., 699 F.3d at

978 (If the states are free to set any qualifications
they want--no matter how unrelated to the providers
fitness
to
treat
Medicaid
patients--then
requirement
could
be
the
easily
undermined by simply labeling any exclusionary rule as

a
qualification.
This
would
open
significant
loophole for restricting patient choice, contradicting

the broad access to medical care that 1396a(a)(23) is
meant to preserve.).
Doe,
as
recipient
of
Medicaid
benefits
and
patient of PPSE, has pleaded a viable cause of action.

She is entitled to bring an enforcement action under
1983 to vindicate her right to receive care from any
qualified
(and
willing)
provider
under
the
free-choice-of-provider provision.
This conclusion is particularly well-supported by
the
statute
in
the
context
services at issue here.
of
the
family-planning
Although the Medicaid Act does
26
permit States to limit a recipients free choice of

provider in certain ways when she is enrolled in a
managed-care plan,5 the statute is clear that the State
still shall not restrict the choice of the qualified
person from whom the individual may receive services
under
section
1396d(a)(4)(C)
of
this
title,
which
pertains to family planning services and supplies.

42
U.S.C.
1396a(a)(23)(B).
Congress
saw
fit
to
identify family planning as the area of medical care

with
respect
to
which
recipients
provider was most critical.
free
choice
of
It is not hard to imagine
why--just as business owners do, healthcare providers

and
Medicaid
recipients
have
widely
varying
honest
conviction[s] about the appropriateness of different

family-planning methods.
See Burwell v. Hobby Lobby
Stores, Inc., 134 S. Ct. 2751, 2779 (2014) (citation

omitted).
Congress presumably intended to ensure that
women who receive Medicaid benefits would be able to
5. Neither party has suggested that Doe is enrolled

in such a plan.
27
receive
care
from
provider
whose
perspectives
on
family planning were aligned with her own.

One final point bears discussing.
the
Acting
Commissioner
The Governor and
argue
that
no
free-choice-of-provider claim can be brought, whether

by a provider or a recipient, when the State terminates
an
individual
provider
agreement
pursuant
1396a(p)(1) (the exclusion provision).

they
emphasize
in
their
brief,
to
This is,
because
such
terminations are an exception to the requirement that

States must give recipients a free choice of qualified
providers.6
The
court
understands
this
argument
as
6. For the first time at oral argument, the

defendants hinted at a different argument--that in
terminating PPSE under the exclusion provision, they
have effectively rendered it (or recognized it to be)
unqualified for purposes of the free-choice-of-provider
provision. Tr. Hrg Mot. Prelim. Inj. 26, doc. no. 44.
However, the defendants cannot have it both ways.
If they rely on the exclusion provision as an exception
to the free-choice-of-provider provision, they are
necessarily conceding that an exception is necessary
because the rule applies; that is, because PPSE cannot
be terminated as unqualified.
Then, the court must
determine (as it does, below) whether Doe has a right
(continued)
28
follows:
The
terminate
reasons
exclusion
provider
other
qualified.
agreement
than
When
provision
that
a
permits
for
the
State
at
States
least
provider
terminates
to
some
is
not
qualified
provider for one of these reasons, the argument goes, a

recipient is not entitled to choose to receive covered
care from that provider, despite the fact that it is
qualified.
This is true, but of little help to the
defendants case.
There plainly are some reasons that
a State may terminate a provider agreement under the

exclusion
provision
unqualified.
reasons
wholly
other
(Whether
unrelated
than
State
to
the
may
the
provider
do
so
purposes
being
based
on
of
the
to challenge PPSEs termination under the exclusion

provision, and whether the termination was proper under
the terms of that provision.
If instead defendants were to contend that they
terminated PPSE because it was unqualified, the court
would have to consider whether Doe could challenge the
termination on those grounds, and whether the State is
free to determine, without giving any reason related to
the services it provides, that PPSE is unqualified. As
the 6th, 7th, and 9th Circuits have held, the answers
to these questions are clearly yes and no.
29
Medicaid Act will be discussed below.)

providers
who
have
been
properly
Additionally,
excluded
from
States Medicaid program under the exclusion provision

do fall within an exception[] to a recipients right
to choose any qualified provider.
Planned Parenthood
Ariz., 727 F.3d at 973. But here, Doe does not argue
that the free-choice-of-provider provision entitles her
to choose a provider that was rightfully excluded for,
say,
claim
fraud
under
42
U.S.C.
1320a-7a(a)
(a
ground for exclusion by a State under the exclusion

provision),
provide
yet
her
is
care;
nonetheless
that
fully
grievance
qualified
would
not
to
be
actionable under the free-choice-of-provider provision.

Rather,
Doe
alleges
that
her
qualified
provider
of
choice, PPSE, was wrongfully removed from the pool of

providers
among
whom
she
has
right
to
choose.
Indeed, Doe argues not only that there exists no basis

in fact for PPSEs termination, but also that PPSE was
excluded on a basis which, as a matter of law, falls
outside the exclusion-provision exception.
30
If
right
State
to
could
select
defeat
particular
Medicaid
recipients
qualified
healthcare
provider merely by terminating its agreement with that

provider
on
an
unlawful
totally eviscerated.
Commissioner
were
terminations
of
challenged
by
basis,
the
right
would
be
If the Governor and the Acting

correct
provider
that
agreements
recipients
allegedly
could
pursuant
provision,
that
unlawful
not
to
be
the
provisions
individual entitlement, the personal right it gives

recipients, would be an empty one.7
Planned Parenthood
7. OBannon is not to the contrary.

In OBannon,
the
Court
held
that
the
provision did not give residents of a nursing home a
due-process right to a pre-deprivation hearing when the
State, after an audit, determined that their nursing
home no longer met specific federal statutory and
regulatory standards for skilled nursing facilities
and terminated its Medicaid provider agreement.
447
U.S. at 775-76, 785.
OBannon is inapposite here for
two reasons.
First, as the Seventh Circuit put it,
[t]his is not a due-process case. Planned Parenthood
and its patient[] are not suing for violation of their
procedural rights; they are making a substantive claim
that [the termination of the provider agreement]
violates
[the
provision].
Planned Parenthood of Ind., 699 F.3d at 977. Even more
(continued)
31
of
Ind.,
699
(citation
States
F.3d
at
omitted).
Statement
of
974;
See
Harris,
also
Interest
442
Pls.
in
F.3d
Ex.
Planned
S,
at
461
United
Parenthood
Gulf Coast, Inc. v. Kliebert 7 n.3, doc. no. 7-1 ([The

free-choice-of-provider provision] is violated whenever
a beneficiary is denied her right to receive covered
Medicaid services from any qualified provider of her
choice willing to provide the services; it does not
matter
whether
Medicaid
that
program
on
provider
an
was
excluded
individualized
or
from
the
class-wide
basis.).
2. At-Will Termination
basically, as discussed in greater detail below, PPSEs
termination letter included no basis for the decision
that could even plausibly be construed as relating to
its competency and professional standing as a medical
provider generally.
Planned Parenthood Ariz., 727
F.3d at 969.
OBannon held that a Medicaid recipient
has no due-process right to a hearing before his
unqualified nursing homes agreement is terminated; it
does not stand for the proposition that any time a
State terminates a Medicaid provider agreement, for any
reason or for no reason at all, that decision is
insulated from substantive review at the behest of
recipients.
32
Although the parties in this case have presented

significant evidence regarding the motivation for and
validity of the Governors decision to terminate PPSEs
provider agreement, the court need not delve into it.
This
is
because
the
termination
letter
sent
by
the
Governor was clearly based on the at-will termination

provision in PPSEs provider agreement.
The letter sent by the Governor to PPSE did not
provide a substantive reason or statutory basis for the
termination
of
its
provider
agreement.
Rather,
it
simply stated that [p]ursuant to the Alabama Medicaid

Agency
Provider
Agreement
under
section
IV.
Term,
Amendment, and Termination, the Agency is exercising

its ability to terminate the existing agreement(s) with
Planned Parenthood Southeast, Inc. with fifteen (15)
days written notice.
agreement(s)
with
The termination of the provider
Planned
Parenthood
Southeast,
Inc.
will be effective fifteen (15) days after receipt of

this letter.
Pls. Ex. 1, doc. no. 1-1.
33
Section IV of the provider agreement sets forth two

different methods of termination.
an
at-will
termination
First, it sets forth
provision:
Either
party
may
terminate this Agreement by providing the other party

with fifteen (15) days written notice.
at 24, doc. no. 28-16.
Defs. Ex. 16,
Second, it sets forth a for-
cause termination provision: MEDICAID may immediately

terminate the Agreement for cause if the Provider is
excluded from the Medicare or Medicaid programs for any
reason,
loses
its
licenses
or
certificates,
becomes
ineligible for participation in the Medicaid program,

fails to comply with the provisions of this Agreement,
or if the Provider is or may be placing the health and
safety of recipients at risk.
Id. at 5.
Along with the failure to articulate any specific

cause
for
the
termination,
the
15-day
delay
clearly
indicates that the Governor and the Acting Commissioner

terminated
PPSEs
provider
agreement
not
under
the
for-cause termination provision, but instead under the

at-will
termination
provision.
34
This
assessment
is
corroborated by the fact that the letter sent to PPSE

would have been inadequate to effectuate a for-cause
termination, because it failed to provide the notice
required
by
federal
law.8
In
order
to
exclude
provider under [the exclusion provision], a state must

give the provider to be excluded notice of the states
intent to exclude, 42 C.F.R. 1002.212 ... .
Planned
Parenthood Ariz., Inc. v. Betlach, 899 F. Supp. 2d 868,

882
(D.
Ariz.
1002.212
2012)
requires
(Wake,
States
to
J.).
give
Specifically,
providers
whose
agreements are terminated notification consistent with

subpart E of part 1001 of this chapter, which in turn
requires that such notice include the basis of the
exclusion.
42 C.F.R. 1001.2002(c).
Although the
Governor made public statements via Twitter regarding

8. This failure to provide adequate notice of a
for-cause ground for termination illustrates vividly
why PPSEs failure to pursue an administrative appeal
has no bearing on the outcome of this case.
The
purpose of giving a provider notice of the reason for
termination of its agreement is obvious: so that it can
submit evidence and argument to meaningfully contest
the agencys determination.
When no reason has been
articulated, an appeal becomes a sham.
35
his decision to terminate PPSEs provider agreement,

tweets are plainly not an acceptable form of notice.
Hence,
the
narrow
question
before
the
court
is
whether the Medicaid Act allows a State to terminate a

provider agreement based on no reason other than the
existence
of
contractual
at-will
provision like the one in PPSEs.
termination
The answer to that
narrow question is no.

The Governor and the Acting Commissioner argue that
Alabama
is
agreements
empowered
on
any
to
terminate
basis
Medicaid
recognized
under
provider
state
law
(including, as relevant in this case, state contract

law).
This authorization, they suggest, comes from the
first clause of the exclusion provision, which states:

In
addition
exclude
any
participating
to
any
other
individual
under
or
the
authority,
entity
State
for
plan
State
purposes
under
may
of
this
subchapter for any reason for which the Secretary could

exclude the individual or entity from participation in
[Medicare under the for-cause bases listed in] section
36
1320a-7, 1320a-7a, or 1395cc(b)(2) of this title.
42
U.S.C. 1396a(p)(1) (emphasis added).

However,
does
not
this
give
clause
States
of
carte
the
exclusion
blanche;
the
provision
defendants
read[] the phrase for more than its worth.

Parenthood of Ind., 699 F.3d at 979.
Planned
It is true that
States have the authority to suspend or to exclude

providers from state health care programs for reasons
other than those upon which the Secretary of [Health
and Human Services] has authority to act.
Guzman v.
Shewry, 552 F.3d 941, 949 (9th Cir. 2009).
But this
authority is not unbounded.
As the Seventh and Ninth
Circuits have concluded, the exclusion provision is a

standard
savings
clause
[which]
signals
only
that
what follows is a non-exclusive list and does not

imply that the states have an unlimited authority to
exclude providers for any reason whatsoever.
Planned
Parenthood
Planned
Ariz.,
727
F.3d
at
972
Parenthood of Ind., 699 F.3d at 979).
(citing
[T]he Medicaid
Act itself must provide that other authority, just as
37
it supplies the authority covered by the rest of the

subsection.
Were
it
otherwise--were
states
free
to
exclude providers as they see fit--then the bulk of

1396a(p)(1)
itself
would
be
unnecessary,
as
authority it supplies would be superfluous.
the
Planned
Parenthood Ariz., 727 F.3d at 972.

The Governor and the Acting Commissioners broad
reading of the exclusion provision is therefore not
plausible.
at
882.
Planned Parenthood Ariz., 899 F. Supp. 2d
If
provision]
state
to
non-arbitrary
exceptions,
could
rely
on
[the
exclude ... providers
reason,
which
then
the
carefully
set
exclusion
for
remainder
forth
any
of
the
circumstances
under which the Secretary and states have authority to

exclude
providers,
interpretation
statutory
would
be
undermines
interpretation
unnecessary.
the
that
cardinal
no
Such
rule
provision
[of
an
of
a
statute] should be construed to be entirely redundant.

Id. at 882-83 (citation and internal quotation marks
omitted)
(discussing,
as
38
an
example,
42
U.S.C.
1396n(b)(4), which allows the Secretary of Health and

Human
Services
to
waive
the
requirement, but only when a State limits choice based

on standards that are consistent with access, quality,
and efficient and economic provision of covered care
and services).
The Governor and the Acting Commissioner also cite
the regulation implementing the exclusion provision and
the provisions legislative history in support of their
claim.
42 C.F.R. 1002.2 states: Nothing contained
in this part should be construed to limit a States own

authority
to
exclude
an
individual
or
entity
from
Medicaid for any reason or period authorized by State

law.
However, a close reading reveals that [t]hat
provision is only a limitation on interpretation of the

referenced part of the regulations--Title 42, Chapter
V, Subchapter B, Part 1002--which does not encompass
the
requirement.
Parenthood Ariz., 727 F.3d at 972 n.8.
Planned
Although the
legislative history of the provision includes a note
39
stating that it is not intended to preclude a State

from establishing, under State law, any other bases for
excluding
individuals
or
entities
from
its
Medicaid
program, S. Rep. No. 100-109, at 20 (1987), reprinted

in 1987 U.S.C.C.A.N. 682, 700, this note makes clear
only
that
exclusion,
State
not
may
what
limits
discretion in doing so.

suggests
those
establish
other
exist
on
bases
a
for
States
The legislative history itself
limits,
in
explaining
that
the
overarching purpose of [the exclusion provision] is to

grant
authority
providers
to
exclude
quality
of
provider
based
services ... .
on
the
Planned
Parenthood Ariz., 899 F. Supp. 2d at 882-83 (citing S.

Rep.
No.
100-109
(1987),
at
1-2,
reprinted
in
1987
U.S.C.C.A.N. 682, 700).

If
State
were
free
to
terminate
provider
agreement for any reason with a basis in state law,

recipients
rights
would
be
greatly weakened, and subject to state policies and

politics
having
nothing
to
40
do
with
the
Medicaid
program.
Id.
An at-will termination clause might (or
might not) defeat a provider's right to challenge such

a
decision
on
appeal,
but
it
has
no
effect
on
recipient's rights; after all, "Jane Doe[] [is] not [a]

part[y] to the agreement[] cited." Planned Parenthood
Ark. & E. Okla., slip op. at 25.
Because
the
enumerated
statutory
bases
for
excluding providers cross-referenced in the exclusion

provision involve various forms of malfeasance such as
fraud, drug crimes, and failure to disclose necessary
information to regulators, Planned Parenthood of Ind.,
699 F.3d at 979, the provisions any other authority
clause, when [r]ead in context, ... reaffirm[s] state
authority to exclude individual providers pursuant to
analogous state law provisions relating to fraud and
misconduct,
but
does
not
give
States
license
to
terminate provider agreements on grounds unrelated to

medical
competency
or
legal
and
ethical
Planned Parenthood Ariz., 727 F.3d at 972.
41
propriety.
The
state-law
ground
terminated
PPSEs
termination
clause--falls
on
provider
which
the
Governor
agreement--the
well
outside
the
at-will
range
of
grounds germane to the purposes of the Medicaid Act.

See
also
Interest
Pls.
in
Ex.
S,
Planned
United
Parenthood
States
Gulf
Statement
Coast,
Inc.
of
v.
Kliebert 2, doc. no. 7-1 ([States] cannot evade the

statutory
mandate
provision]
simple
expedient
of
termination
provisions
into
provider
would
not
the
at-will
Medicaid
otherwise
[the
through
incorporating
their
of
agreements.
only
strip
the
To
conclude
Medicaid
Acts
free-choice-of-provider provision of all meaning, but

also
give
would
contravene
Medicaid
covered
clear
beneficiaries
services
from
any
congressional
the
right
qualified
intent
to
to
receive
and
willing
provider.).
In sum, Doe is likely to prevail on the merits of
her Medicaid Act claim.
42
3. For-Cause Termination
Had this termination been for cause, it would have
been necessary for the court to consider whether the
reasons of which PPSE would have been given notice were
sufficient to support the termination of its provider
agreement.
Because
Commissioner
have
the
Governor
and
retrospectively
the
(and
Acting
belatedly)
articulated a for-cause ground that they believe would

support such an action, the court turns now, briefly,
to whether, on the record before the court, they would
have
been
justified
in
terminating
the
agreement
on
that basis.
In
their
brief
opposing
the
motion
for
preliminary injunction, the defendants identified the

following
ground
entity
that
for
excluding
the
furnished ... services
PPSE:
[State]
to
that
it
is
an
determines ... has
patients ... of
quality
which fails to meet professionally recognized standards

of
health
care.
42
U.S.C.
1320a-7(b)(6)(B).
Specifically, they assert that statements in a video
43
purporting
to
describe
the
practices
of
some
PPFA
affiliates with respect to fetal-tissue donation run

afoul
of
safeguards
Medical Association.
prescribed
by
the
American
See Am. Med. Assoc. Code on Med.
Ethics, Op. 2.161 (last updated June 1996) (doc. no.

28-7).
According to the defendants, this video gave
the Governor reason to be concerned that (1) decisions

regarding
the
technique
used
to
induce
abortion
by
practitioners at some PPFA affiliates were being based

in part on a desire to obtain intact tissue samples and
therefore not exclusively on concern for the safety of
the
pregnant
woman,
and
(2)
that
fetal
tissue
is
[being] provided in exchange for financial remuneration

above
that
expenses.
which
is
necessary
to
cover
reasonable
Id.
If there was any indication--allegation, even--that

PPSE had itself provided substandard care in these or
any
other
respect
to
ways,
the
various
questions
applicability
regarding the quality of care.
44
of
would
arise
with
1320a-7(b)(6)(B)
The court would be
compelled to examine a number of issues: the amount of

evidence
required
to
terminate
for
failure
to
meet
professionally recognized standards of healthcare, the

type of evidence such a showing would require, whether
abortion procedures had actually been altered in such a
way
as
to
pose
any
additional
risks
to
women,
and
whether providers had actually received remuneration in

excess of reasonable expenses.
However, the court has not assessed the strength of
the evidence in the videos because it is beside the
point.
PPSE
states
that
it
fetal-tissue donation at all.

this
effect,
point.
and
Rather,
specifically,
the
does
argue
(alleged)
engage
in
It offers evidence to
defendants
they
not
do
not
that
the
ethical
contest
the
practices--
violations--of
separately incorporated organizations in other regions

with which PPSE is affiliated are properly attributed
to PPSE.
The court disagrees.
First,
provision
when
considered
( 1396a(p)(1))
and
45
together,
the
exclusion
1320a-7(b)(6)(B),
the
for-cause ground cited by the defendants, make clear

that the entity that a State may exclude must be
the same entity that the [State] determines ... has
furnished ... services to patients ... of a quality
which fails to meet professionally recognized standards
of
health
provision
care.
This
authorizes
is
the
because
State
to
the
exclusion
exclude
any
...
entity if the Secretary of Health and Human Services

could
exclude
1320a-7 ... .
principle
of
the
...
entity
(emphasis
legislative
under
added).
drafting
...
It
that
is
the
section
a
basic
definite
article (the) is used in place of such to mean the

previously mentioned.
See Lawrence E. Filson & Sandra
L. Strokoff, The Legislative Drafters Desk Reference

228
(2d
ed.).
It
is
evident
from
the
termination
letter that the entity the State has exclude[d] is

PPSE--the entity with which it entered into, and then
terminated, a provider agreement.
See 1396a(p)(3)
(defining the term exclude to mean the refusal to

enter into or renew a participation agreement or the
46
termination
of
such
an
agreement).
Therefore,
the
termination is authorized by the provision the State

cites only to the extent that this entity--PPSE--has
furnished substandard care.
Second,
context
of
when
other
1320a-7(b)(6)(B)
enumerated
is
read
for-cause
in
the
termination
grounds, it is apparent that it was intended to apply

to only services furnished by the provider itself, and
not to any services furnished by affiliates.
Another
provision does permit the exclusion of an entity based

on
affiliation,
person--who
must
but
have
only
been
when
the
sanctioned
affiliated
under
the
Medicaid Act--has an ownership or control interest in

the
entity
or
is
an
officer,
managing employee of the entity.

7(b)(8).
strongly
Congresss
suggests
that
inclusion
director,
agent,
or
42 U.S.C. 1320aof
that
1320a-7(b)(6)(B)
provision
was
not
intended to allow for the termination of one entitys

agreement on the basis of the infractions of another
party in the absence of ownership, control, management,
47
or
an
agency
relationship.9
The
defendants
do
not
claim, and the evidence does not suggest, that PPSE has
such
close
connection
with
depicted in the video.

Ark.
&
E.
Okla.,
"contention
slip
that
any
of
the
affiliates
See also Planned Parenthood

op.
at
Planned
27-28
(rejecting
the
Parenthood
Federation
of
America and its affiliates function as a unified whole,

and
thus,
that
the
acts
of
one
affiliate
may
be
attributed to all other affiliates").

The Governor and the Acting Commissioner also seek
to place the policies of PPFA at issue, arguing that
because
PPSE
has
agree[d]
to
certain
standards
and
policies which are contained in the by-laws of PPFA[,]

Planned
Parenthood
Fedn
of
Am.,
Inc.
v.
Problem
Pregnancy of Worcester, Inc., 498 N.E.2d 1044, 1048-49

9. Section 1320a-7(b)(8), unlike most of the other
permissive for-cause exclusion grounds enumerated in
1320a-7(b), applies to only those entities controlled
by
a
sanctioned
individual--not
individual
or
entity. However, this strengthens rather than weakens
the conclusion that Congress did not intend to allow
for exclusion in cases where an entity is controlled in
part by a sanctioned entity.
Had the drafters of the
statute intended to do so, they knew how.
48
(Mass.
1986),
PPFAs
involvement
in
the
allegedly
unethical practices of other affiliates is attributable

to
PPSE
and
constitutes
1320a-7(b)(6)(B).
argument
if
the
This
PPFA
policy
that
fetal-tissue
better
donation,
preserve
to
had
had
be
all
intact
and
affiliates
alter
it
under
persuasive
claimed--much
adopted
abortion
less
enforced
engage
procedures
specimens,
compensation in excess of costs.

no such thing.
exclude
might
defendants
demonstrated--that
requiring
cause
and
a
in
to
accept
But they have argued
Even construing the defendants factual
allegations generously--and setting aside the question

of evidentiary support--they suggest at most that PPFA
has
supported
the
decisions
engage in these practices.

PPFA
requires
donation
practices.
at
affiliates
all,
much
of
some
affiliates
to
There is no evidence that

to
less
engage
in
in
fetal-tissue
unethical
donation
What PPFA permits other affiliates to do
49
therefore has no bearing on PPSE, which, to reiterate,

has elected not to engage in fetal-tissue donation.10
10. The defendants reference a letter from the

president of PPFA to Congress, which they argue
underscores the unity of the organization.
Defs.
Br. in Oppn 37, doc. no. 29 (citing Defs. Ex. 8, at
3, doc. no. 28-8). But the letter does not help their
case; it makes clear that PPFA has policies and
practices that guide the affiliates that offer tissue
donation services. Id. These policies and practices
are inapplicable to PPSE, which does not.
Nor does the odd assortment of cases cited in the
defendants brief, all of which deal with corporate
relationships not applicable here, aid their cause.
None of these decisions stands for the proposition that
one corporation can be held responsible for the
policies of an umbrella organization regarding a
practice that other affiliated corporations engage in.
In re Phenylpropanolamine (PPC) Prods. Liab. Litig.,
344 F. Supp. 2d 686, 691-92 (W.D. Wash. 2003)
(Rothstein, J.), discusses whether a court can obtain
personal jurisdiction over a parent corporation based
on
the
subsidiary
corporations
forum
contacts.
Moreover, In re Phenylpropanolamine itself states that
the contacts of a subsidiary will not be imputed to the
parent simply because of the parents articulation of
general policies and procedures.
Id. (citing United
States v. Bestfoods, 524 U.S. 51, 72 (1998). Bowoto v.
Chevron Texaco Corp., 312 F. Supp. 2d 1229, 1237 (N.D.
Cal. 2004) (Illston, J.), which concerns piercing of
the corporate veil for tort-liability purposes, is
likewise concerned with attribution of a subsidiarys
acts to the parent corporation.
In the present case,
there is nothing in the record to show that PPSE and
PPFA bear a subsidiary-parent relationship.
See
(continued)
50
Hence, on the record before the court, Doe would be

likely to succeed on her claim that the Governor and
the Acting Commissioner had no cause to exclude PPSE
from
the
States
Medicaid
program
under
1320a-
7(b)(6)(B).
B. Irreparable Injury
On
her
Medicaid
Act
claim,
Doe
argues
that
faces irreparable injury without an injunction.

has
made
irreparable
showing
injury
of
substantial
sufficient
preliminary-injunction standard.
to
threat
satisfy
she
She
of
the
Because she has made
Bestfoods, 524 U.S. at 61 (explaining that parent

corporation[s] [are] so-called because of control of
ownership of another corporations stock).
BrowningFerris Indus. of Cal., Inc., No. 32-RC-109684, 2015 WL
5047768, at *1-2 (N.L.R.B. Aug. 27, 2015), is no more
on point, in that it involves the statutorily derived
and therefore inapplicable standard for assessing
joint-employer
status
under
the
National
Labor
Relations Act. Finally, the trademark cases cited in
the defendants brief merely stand for the proposition
that affiliates who share a mark with a national
organization will generally have consistent policies
and standards.
51
such
showing,
it
is
unnecessary
to
consider
any
irreparable harm to PPSE.11

The plaintiffs rely on Does inability to continue
receiving
medical
care
at
PPSE,
specifically
at
the
Birmingham clinic, where she goes every three months

for a Depo-Provera shot.
Doe states that she strongly
11. Because Doe has shown virtually certain success

on the merits of her Medicaid Act claim, her required
showing as to irreparable injury may be lessened. The
former Fifth Circuit used a sliding scale standard
when
evaluating
whether
to
issue
a
temporary
restraining order or preliminary injunction. See Siff
v. State Democratic Executive Comm., 500 F.2d 1307,
1309 (5th Cir. 1974) (explaining that a sliding scale
must be applied in considering the probability of
plaintiffs winning on the merits and plaintiffs
irreparable injury in the absence of interlocutory
relief); see also State of Tex. v. Seatrain Int'l,
S.A., 518 F.2d 175, 180 (5th Cir. 1975) ([N]one of the
four prerequisites has a fixed quantitative value.
Rather, a sliding scale is utilized, which takes into
account the intensity of each in a given calculus.).
The Eleventh Circuit has adopted as precedent all
decisions of the former Fifth Circuit rendered prior to
October 1, 1981, and all Former Fifth Circuit Unit B
and non-unit decisions rendered after October 1, 1981.
See Stein v. Reynolds Secur., Inc., 667 F.2d 33, 34
(11th Cir. 1982); Bonner v. City of Prichard, 661 F.2d
1206, 1207 (11th Cir. 1981) (en banc).
While the
Eleventh Circuit has not explicitly referred to this
sliding-scale standard, even a more rigid requirement
that movants meet a certain threshold as to each prong
of the test--does not demand a different result.
52
prefer[s] receiving care from PPSE, as opposed to from

a private doctor.
Pls. Ex. 1, Declaration of Jane Doe
2, doc. no. 31-1.
She further states that she would
try to locate another provider if she could not obtain

covered care there, but does not know where she would
go.
She is due to receive another contraceptive shot
this
month.
PPSE
represents
that,
due
to
the
termination, it is being forced to turn away Medicaid

patients.
If
Doe
attempted
to
return
to
PPSE
to
receive her shot, she would be turned away.

The Governor and the Acting Commissioner argue that
Doe
can
entirely
elsewhere.
of
numerous
PPSEs
mitigate
any
harm
by
seeking
care
In particular, they point to the existence

Medicaid
Birmingham
providers
clinic.
As
within
five
the
Seventh
miles
of
Circuit
recognized in Planned Parenthood of Indiana, however,

[t]his argument misses the mark.
699 F.3d at 981.
In that case, the court affirmed the district courts

issuance of a preliminary injunction on the plaintiffs
Medicaid Act claim, reasoning that the fact [t]hat a
53
range
of
beside
qualified
the
providers
point.
[The
remains
available
is
provision] gives Medicaid patients the right to receive

medical assistance from the provider of their choice
without
Although
state
Doe
interference ... .
can
seek
Id.
at
family-planning
981.
services
elsewhere, this does not diminish the injury that will

result from her inability to see the provider of her
choice.
See Planned Parenthood Ark. & E. Okla., slip
op. at 22 (concluding, in a similar case, that denial

of ... freedom
of
choice
is
more
likely
than
not
exactly the injury Congress sought to avoid when it

enacted
That
Doe
[the
will
be
forced
to
seek
out
provision]).
a
replacement
provider within such a short span of time--and may even

face
difficult
long
to
wait
for
adhere
to
an
appointment,
her
current
making
it
Depo-Provera
regimen--makes this harm especially imminent.

Further, there is no adequate remedy at law for
this injury.
The Supreme Court has stated that the
54
lack of any legal remedy is a central consideration in

the
irreparable-injury
Murray,
415
injunction,
U.S.
Doe
61,
would
analysis.
88-89
be
See
(1974).
forced
Sampson
Without
to
stop
v.
the
seeking
services from a provider with whom she is comfortable,

and she might well not be able to identify another
provider with whom she could forge such a relationship.
Such an injury is clearly not susceptible to monetary
relief.
Doe has therefore demonstrated that she faces
a substantial threat of irreparable injury absent the

issuance of an injunction.
C. Other Preliminary-Injunction Considerations

The
balance
of
harms
and
the
public
interest
likewise favor issuance of a preliminary injunction.

As discussed above, Doe will face significant harm if
an injunction does not issue.
The Governor and the
Acting Commissioner rely on the videos claims that the

fetal-tissue donation programs of some PPFA affiliates
breach ethical standards to argue that the continued
55
funding of PPSE through taxpayer dollars would itself

cause an injury to the State.
This argument is not
persuasive because the defendants do not dispute the

plaintiffs
assertions--or
record--that
PPSE
donation.
does
the
not
evidence
engage
in
in
the
fetal-tissue
The practices purported to be portrayed by
the videos, therefore, cannot possibly cause any harm

to the State or to Alabama taxpayers.
The defendants also assert that the issuance of an
injunction
would
undermine
respect
agreement.
The defendants offer no legal support for

regardless,
such
an
the
the
decision
argument;
terminate
due
Governors
this
to
the
provider
injury
cannot
outweigh the injury to Doe discussed above.

Moreover, the issuance of an injunction is in the
public interest.
In particular, an injunction would
reinforce Does right to seek family-planning services

from
the
explicitly
qualified
and
provider
emphatically
law.
56
of
her
protected
choice--a
under
right
federal
In
sum,
requirements
the
plaintiffs
for
the
have
issuance
satisfied
of
the
preliminary
injunction on Does Medicaid Act claim.
IV. SCOPE OF RELIEF

Because Doe has satisfied her burden to show that
entry
of
court
now
preliminary
turns
injunction.
to
injunction
the
is
appropriate
Specifically,
the
warranted,
scope
court
must
of
the
that
consider
whether to order the State to resume Medicaid payments

to
PPSE
to
defendants
cover
the
contend
cost
is
of
Does
care
appropriate,
see
alone--as
Planned
Parenthood Ark. & E. Okla., slip op. at 17 ([I]n the

absence
of
class
certification,
the
preliminary
injunction may properly cover only named plaintiffs.

(citation
omitted)),
or
to
reinstate
the
States
provider agreement with PPSE such that PPSE would be

reimbursed
for
care
provided
to
recipient--as PPSE urges the court to do.
57
any
Medicaid
Based on the evidence currently in the record and

the
representations
on-the-record
court
of
telephonic
finds
that,
the
parties
hearing
at
on
least
this
at
during
an
issue,
the
present,
the
reinstatement of the provider agreement is necessary to

guarantee meaningful relief to Doe.
The Supreme Court
has recognized the general principle that injunctive

relief should not be more burdensome to the defendant
than
necessary
to
to ... plaintiffs.
provide
Califano
complete
v.
Yamasaki,
relief
442
U.S.
682, 702 (1979); see also Lion Health Servs., Inc. v.

Sebelius, 635 F.3d 693, 703 (5th Cir. 2011) (citing
Yamasaki for this rule).
would
an
provider
injunction
agreement
Hence, the question is this:
that
afford
does
Doe
urgent--relief she requires.
not
the
reinstate
the
meaningful--and
The answer is apparently
no.
The
Acting
Commissioner,
who
is
charged
with
administering the states Medicaid plan, has indicated

that the Alabama Medicaid Agency has sought but not yet
58
identified a logistical means of allowing PPSE to file

for and receive Medicaid reimbursements for Does care
while its provider agreement remains, for purposes of
all
other
recipients,
nonexistent.
See
Official
Tr.
October 14, 2015 Telephone Conference Proceedings 11,

doc. no. 57.
As of now, then, enabling PPSE to file
reimbursement requests for Does care will require the

agency to reauthorize PPSE in its reimbursement system
with respect to all recipients. Since the defendants
have not been able to explain to the court how, as a
practical matter, limited relief is feasible, and have
stated that it is not immediately feasible, the court
is presented with no concrete way in which to tailor
the
injunction
more
narrowly
while
still
providing
the
provider
meaningful, immediate relief to Doe.

Moreover,
agreement
is
the
no
reinstatement
more
burdensome
of
than
necessary
to
ensure that Does provider of choice, PPSE, is actually

reimbursed for her care (and thus that she is actually
able
to
obtain
that
care).
59
Practically
speaking,
compliance with an injunction limited to Doe will, the

State says, be no less burdensome than compliance with
an
injunction
identical
that
relief
covers
[is]
all
recipients.
inevitable
to
Because
remedy
the
individual plaintiffs rights, Zepeda v. I.N.S., 753

F.2d 719, 729 n.1 (9th Cir. 1983) (opinion of Wallace,
J.) (describing the crux of the holding of Bailey v.
Patterson, 323 F.2d 201 (5th Cir. 1963)), the court
will enter the injunction requested by the plaintiffs,
at least until such time as the defendants can assure
the court of their ability to reimburse PPSE for Does
care without reinstating the provider agreement.12
In
so
doing,
the
court
notes
that,
since
the
hearing on the motion for a preliminary injunction, Doe
12. Aside from the logistical barriers that would

prevent Doe from receiving care under a grant of relief
that did not in practice extend to all recipients, the
plaintiffs have suggested that the State could not
resume Medicaid payments to PPSE only as to Doe without
running afoul of federal Medicaid law, state law, or
both.
Because such a remedy is, as of now,
functionally indistinct from a broader injunction, it
is unnecessary to consider whether limited relief would
be permissible under the applicable legal regimes.
60
has
filed
motion
to
certify
class
of
Medicaid
recipients who wish to receive care from PPSE (doc. no.

54).
This
motion,
if
granted,
would
obviate
the
question whether relief should be tailored, if it even

can be practically, to cover only Doe.
See, e.g.,
Hollon v. Mathis Indep. Sch. Dist., 491 F.2d 92, 93

(5th Cir. 1974) (recognizing that, had a class been
certified, injunctive relief restraining enforcement of
a
regulation
applied
as
to
appropriate);
to
all
named
individuals,
plaintiff,
Soto-Lopez
v.
rather
would
N.Y.
City
than
have
Civil
as
been
Service
Commn, 840 F.2d 162, 168 (2d Cir. 1988) (explaining

that
relief
where
of
general
plaintiff
application
class
has
been
is
appropriate
certified,
and
considering whether such relief was available absent a

class).
an
Because certification of a class would provide
additional
basis
for
injunctive
relief
which
benefits recipients other than Doe, the court will set
61
an expedited briefing schedule on Does motion in a

separate order.13
Finally, the parties both agree that the questions
answered here--that the termination of PPSE's provider
agreement
was
at-will,
and
that
such
at-will
terminations are not valid under the Medicaid Act--are

essentially
additional
pure
questions
evidence
would
significant for two reasons.
of
be
law
to
relevant.
which
no
This
is
First, although the court
is presently granting only a motion for a preliminary

injunction,
evidence
there
will
is
alter
no
its
possibility
conclusion
that
at
the
additional
permanent
injunction and declaratory relief stage, so the caution

that should normally accompany a preliminary injunction
that
might
be
vacated
once
additional
considered is not required here.
evidence
is
See Bresgal v. Brock,
13. Additionally, based on the current record, the

court is of the belief that the plaintiffs are likely
to prevail on their motion for class certification. In
making this observation, the court recognizes that it
has not heard all of the evidence and, accordingly,
does not predict the eventual outcome of the motion.
62
843 F.2d 1163, 1169 (9th Cir. 1987) (recognizing that,

at the preliminary injunction stage, the fact that a
court had not ruled on substantive issues in the case,
but had only determined that the plaintiff had a fair
chance of prevailing on the merits counseled against
a grant of broad relief).
Relatedly, because the only
attribute of Doe relevant to the court's resolution of

this
claim
covered
by
is
one
the
that
she
shares
injunction--namely,
with
that
all
those
she
is
Medicaid recipient who wishes to receive covered care

from
PPSE--there
is
no
possibility
that
additional
evidence would reveal that the injunction would be any

less
appropriately
entered
with
respect
to
recipient not presently a party to the case.
another
Cf. Soto-
Lopez, 840 F.2d at 168 (When a state statute has been

ruled unconstitutional, state actors have an obligation
to desist from enforcing that statute. Thus, when it
has
been
held
otherwise
members
of
unconstitutional
qualified
a
persons
certain
group,
63
on
to
deny
the
the
benefits
to
ground
they
are
officials
have
the
obligation to cease denying benefits not just to the

named
plaintiffs
but
also
to
all
other
qualified
members of the group. (citation omitted)).

A
recent
Eleventh
courts approach.
Circuit
case
supports
this
In Garrido v. Dudek, 731 F.3d 1152
(11th Cir. 2013), the court reviewed a district courts

entry of a permanent injunction striking down a state
agencys
rule
that
particular
form
of
autism
treatment was experimental and therefore not covered

under the Medicaid Act.
The
court
district
vacated
courts
and
Garrido, 731 F.3d, at 1159.

remanded
injunction
the
portion
requiring
the
of
the
state
to
provide a blanket authorization of the treatment for

all
Medicaid
recipients
with
autism
because,
as
the
district court had itself discussed at some length, a

determination
whether
the
treatment
was
indeed
medically necessary had to be made for each individual

recipient;
the
court
could
properly
make
this
determination only with respect to the named plaintiffs

before
it.
Id.
at
1159-61.
64
In
other
words,
the
appellate court vacated the portion of the injunction

that purported to guarantee treatment to others about
whom
no
individualized
determination
had
been
made.
Here, by contrast, all Medicaid recipient-patients at

PPSE
are,
for
the
purposes
of
this
narrow
legal
question, indistinguishable.
The
appellate
court
upheld
the
portion
of
the
Garrido injunction analogous to the injunction being

entered here--the portion that enjoined the State from
enforcing
the
generally.
Supp.
2d
rule
that
mandated
denial
of
coverage
See K.G. ex rel. Garrido v. Dudek, 864 F.

1314,
(Defendant
1328
is
(S.D.
enjoined
Fla.
from
2012)
(Lenard,
enforcing
J.)
Florida
Behavioral Health Rule 214 as it relates to autism,

Autism
Spectrum
Disorder,
Analysis treatment.).
and
Applied
Behavioral
Though the court held that it
was inappropriate to grant relief ordering coverage of

treatment
enforcement
in
of
all
a
cases,
rule
determinations--relief
an
that
that
65
injunction
prevented
directly
against
case-by-case
benefitted
far
more recipients than the three named plaintiffs--was

nevertheless proper.
It is proper here as well.

* * *
In summary, Doe is very likely to succeed on her

claim
that
provider
the
Governors
agreement
violated
termination
the
reasons for this are simple.
Medicaid
of
PPSEs
Act.
The
The Act requires States
to provide a reason for such terminations.
Here, as is
plain from the Governors letter, the State provided

none.
Finally, even the post-hoc reasons cited by the
defendants in briefing before this court are plainly

inapplicable to PPSE.
On these bases, Does success on
the merits of her Medicaid claim is near-certain.

An
appropriate
preliminary
injunction
will
be
entered, requiring that, for the benefit of Doe, the

State reinstate its Medicaid provider agreement with
PPSE.
DONE, this the 28th day of October, 2015.
/s/ Myron H. Thompson____
UNITED STATES DISTRICT JUDGE

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Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 1 of 66

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE

CIVIL ACTION NO.

unrelated to abortion, including routine gynecological

The plaintiffs are PPSE

and Jane Doe, a PPSE patient and Medicaid recipient,

Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 2 of 66

suing individually and on behalf of a putative class of

both are sued in their official capacities.

Medicaid Act, which states in relevant part that any

assistance ... may

obtain such assistance from any institution, agency,

required ... who

PPSE also claims that the termination

violates its rights under the First Amendment and the

PPSE and Doe bring all of their

claims under 42 U.S.C. 1983.

Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 3 of 66

Medicaid Act claim.

warranted, a plaintiff must show that (1) there is a

irreparable injury unless the injunction issues; (3)

Cate v. Oldham, 707

F.2d 1176, 1185 (11th Cir. 1983).

The plaintiff bears

Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 4 of 66

McDonalds Corp. v. Robertson, 147

F.3d 1301, 1306 (11th Cir. 1998).

affordable medical care.

The program operates as a

costs of those services, States receive federal funds.

Although States are afforded

required to submit their plans for federal approval.

federal government, and the Department of Health and

Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 5 of 66

Human Services may withhold federal funds if the State

approved and adopted.

As a state participant, Alabama maintains such a

providers, which impose on providers state and federal

Family-planning services are covered under the Medicaid

1. Except in rare cases, Medicaid monies are not

Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 6 of 66

America (PPFA); it operates health centers in Mobile

contraception, breast- and cervical-cancer screenings,

As an affiliate of PPFA, PPSE is distinct

independent board and exercises exclusive control over

Although PPSE is not supervised by

PPFA, it must comply with certain standards adopted by

does not do so.

Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 7 of 66

Until the termination of the provider agreement,2

Medicaid program and, therefore, were able to provide

services to Medicaid recipients one to two times per

Over the past two fiscal years, PPSE received

parties agree that PPSE receives no Medicaid funding

B. Videos Regarding Fetal-Tissue Donation

anti-abortion group, released a series of controversial

2. The State of Alabama technically maintained a

Case 2:15-cv-00620-MHT-TFM Document 63 Filed 10/28/15 Page 8 of 66

certain abortion clinics.