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Aids Healthcare Foundation, Inc. v. City of Baton Rouge

United States District Court, M.D. Louisiana

July 7, 2017

AIDS HEALTHCARE FOUNDATION, INC.
v.
CITY OF BATON ROUGE/PARISH OF EAST BATON ROUGE, THROUGH THE CITY OF BATON ROUGE DIVISION OF HUMAN DEVELOPMENT AND SERVICES

          RULING AND ORDER

          BRIAN A. JACKSON, CHIEF JUDGE.

         Before the Court is the Motion for Preliminary Injunction (Doc. 17) filed by AIDS Healthcare Foundation, Inc. ("Plaintiff). In its motion, Plaintiff requests that the Court enjoin the City of Baton Rouge/Parish of East Baton Rouge, through the City of Baton Rouge Division of Human Development and Services ("Defendant") from "communicating with [Plaintiffs] patients regarding any alleged change to a patient's service provider, transitioning services to other providers, or any matter related to [Plaintiff], patient services, or this litigation." (Doc. 17). Defendant filed a memorandum in opposition, (Doc. 20), Plaintiff filed a reply memorandum, (Doc. 26), and Defendant filed a sur-reply, (Doc. 28). The Court held an evidentiary hearing on the motion on June 27, 2017. (See Doc. 21). For the reasons that follow, Plaintiffs motion is DENIED.

         I. BACKGROUND

         Plaintiff is a non-profit organization that provides medical care to HIV/AIDS patients throughout the United States. (Doc. 10 at pp. 2-3). On April 10, 2017, Plaintiff filed the instant action, alleging, inter alia, that Defendant wrongfully failed to renew Plaintiffs federally funded Ryan White Program contract, pursuant to which Plaintiff provided medical services to uninsured and underinsured HIV/AIDS patients in the Baton Rouge area. (Docs. 1, 10). According to information gleaned from the record. Defendant declined to renew its contract under the Ryan White Program, which expired on February 28, 2017, because Plaintiff did not provide documentation regarding the 340B Program for discount drugs as requested by Defendant. (Doc. 10 at p. 12). Plaintiff claims that it was not statutorily required to provide said documentation to Defendant, and therefore Defendant should not have based its decision to deny renewal of the contract on Plaintiffs failure provide the requested documents.

         Plaintiff thus requests, pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., a declaration that: 1) Defendant lacks the authority under federal law to decertify Plaintiff as a covered entity under the 340B Program; 2) Defendant lacks the authority under federal law to demand documentation from Plaintiff regarding the 340B program; 3) Defendant's non-renewal of the contract was arbitrary, capricious, and in violation of federal regulations; 4) Defendant breached its contract with Plaintiff; and 5) Defendant violated the Louisiana Public Bid Law. (Doc. 10 at p. 23). Plaintiff also seeks money damages and a permanent injunction: 1) enjoining Defendant from decertifying Plaintiff as a covered entity under the 340B Program; 2) enjoining Defendant from requiring that Plaintiff provide it with 340B documentation; and 3) ordering Defendant to renew Plaintiffs contract for the 2017-2018 grant year. (Doc. 10 at p. 24).

         On June 14, 2017, Plaintiff filed the instant motion requesting a preliminary injunction enjoining Defendant from communicating with Plaintiffs patients "regarding any alleged change to a patient's service provider, transitioning services to other providers, or any matter related to AHF, patient services, or this litigation." (Doc. 17 at p. 1). The motion derives from a letter sent by Defendant to several of Plaintiffs uninsured or underinsured patients who had previously received medical care covered by the Ryan White Program contract between the parties. In the letter, Defendant notified Plaintiffs patients that "[t]he City of Baton Rouge...ended its contract with AFH in Baton Rouge, " that they could receive services at other sites supported by the City's program, and encouraged individuals without health insurance to transition to a funded clinic to avoid any out-of-pocket expenses. (Doc. 17-2 at p. 1). Plaintiff claims that Defendant's communications with its patients caused "immediate and irreparable harm" to Plaintiff and its patients, causing distress to patients and Plaintiffs employees. (Doc. 17-1 at p. 4).

         II. DISCUSSION

         A. STANDARD OF REVIEW

         "A preliminary injunction is an extraordinary and drastic remedy; it is never awarded as of right." Munafv. Geren, 553 U.S. 674, 689-90 (2008) (internal citations and quotations omitted). See also Allied Mktg. Grp., Inc. v. CDL Mktg., Inc., 878 F.2d 806, 809 (5th Cir. 1989) (preliminary injunctive relief "is an extraordinary remedy and should be granted only if the movant has clearly carried the burden of persuasion with respect to all four factors"); Mississippi Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir. 1985) f[t]he decision to grant a request for preliminary injunction is to be treated as the exception rather than the rule"). The decision whether to grant or deny a request for a preliminary injunction is within the sound discretion of the Court. See Allied Mktg. Grp., Inc., 878 F.2d at 809.

         To receive relief in the form of a preliminary injunction, a plaintiff must establish: (1) a substantial likelihood of prevailing on the merits; (2) a substantial threat of irreparable injury if the injunction is not granted; (3) the threatened injury outweighs any harm that will result to the non-movant if the injunction is granted; and (4) the injunction will not disserve the public interest. See Ridgely v. Fed. Emergency Mgmt. Agency, 512 F.3d 727, 734 (5th Cir. 2008). At all times, the burden of persuasion remains on a plaintiff as to each of the four elements. If a plaintiff fails to meet his burden regarding any of the necessary elements, the Court need not address the other elements necessary for granting a preliminary injunction. See Roho, Inc. v. Marquis, 902 F.2d 356, 261 (5th Cir. 1990) (declining to address the remaining elements necessary to obtain a preliminary injunction after finding that the plaintiff failed to show a substantial likelihood of success on the merits).

         B. ANALYSIS

         After reviewing the record, the Court finds that Plaintiff has failed to demonstrate that it is entitled to the injunctive relief it requests. Specifically, Plaintiff has not established the presence of a substantial threat of irreparable injury if the requested injunctive relief is not awarded. Plaintiffs motion and arguments on this element assert that both Plaintiffs patients and the clinic itself have suffered or will suffer irreparable injury in that (i) patients felt coerced, compelled or intimidated into changing service providers, and (ii) Plaintiff lost patients, which will result in disruption of services and serious, permanent financial damage. (Doc. 17-1 at p. 6). These claims, however, are unavailing for reasons more fully explained below.

         1. Substantial Threat of Irreparable Injury to Plaintiff

         In its motion, Plaintiff has claimed that the potential loss of patients in response to the May 5 letter "will cause disruption of services and will cause serious and permanent financial damage to [Plaintiff]." (Doc. 17-1 at p. 6). Because Plaintiff fails to explain what a disruption of services means or to distinguish it from the potential "serious and permanent Financial damage" it will suffer should its request for a preliminary injunction be denied, the injury Plaintiff asserts it might experience is best characterized as potential financial harm. Concerning this type of alleged injury, the United States Court of Appeals for the Fifth Circuit has recognized that a preliminary injunction is an inappropriate remedy where the potential harm to the movant is strictly financial. Atwood Turnkey Drilling, Inc. v. Petroleo Brasileiro, S.A.,875 F.2d 1174 (5th Cir. 1989). An exception exists where the potential economic loss is so great as to threaten the existence of the movant's business. Atwood,875 F.2d 1174 at 1179 (citing Doran v. Salem Inn, Inc., 422 U.S. 922 (1975) (the ...


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