Indep. Living Ctr. of So. Cal., Inc. v. Kent, __ F.3d __, 2018 WL 6072624 (9th Cir. Nov. 21, 2018)
In 2008, California enacted legislation that reduced the Medi-Cal reimbursement rate for healthcare providers by 10 percent. A group of healthcare industry advocates and providers filed a petition for a writ of mandamus in state court against the Director of the California Department of Health Care Services, alleging that the reduction violated the federal Medicaid Act. The Director removed the case to federal court because it presented a federal question. Ultimately, the case settled favorably for plaintiffs, who moved for attorneys’ fees under California’s Private Attorney General statute—Code of Civil Procedure section 1021.5. The district court denied the motion, ruling that state law on attorney’s fees should not apply to an action involving federal claims.
The Ninth Circuit reversed, explaining that the plaintiffs did not assert a federal claim because the Medicaid Act did not authorize a private right of action. Instead, their claim arose under state law—specifically, California Code of Civil Procedure section 1085, which permits “any court” to issue a writ compelling state agencies to perform acts prescribed by law. The Court noted the peculiarity that the defendants had removed a state-law claim under federal question jurisdiction. The state-law character of the plaintiffs’ claim did not become federal merely because they sought to compel the defendants’ compliance with federal law and a federal court exercised jurisdiction. Concluding that applying state law was also consistent with the Erie doctrine, the Ninth Circuit held that the district court should have applied the state-law statute to determine whether plaintiffs were entitled to an attorneys’ fees award.
Prepared by H. Thomas Watson and Peder K. Batalden, Horvitz & Levy, LLP
California Society for Healthcare Attorneys
1215 K Street, Suite 800
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