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

United States District Court, M.D. Louisiana

November 16, 2017




         Before the Court are the Second Motion to Dismiss under Rule 12(b)(1) and 12(b)(6) (Doc. 48) and the First Motion to Dismiss under Rule 12(b)(1) and 12(b)(6) (Doc. 11) filed by Defendant City of Baton Rouge/Parish of East Baton Rouge C'EBR"), through the City of Baton Rouge Division of Human Development and Services. Plaintiff, AIDS Healthcare Foundation, Inc. ('AHF'), filed an Opposition to the First Motion to Dismiss. (Doc. 29). Defendant then filed a Reply Memorandum to the Opposition to the Motion to Dismiss. (Doc. 34). In response, Plaintiff filed a Sur-Reply Memorandum in Opposition to the Motion to Dismiss. (Doc. 35). Subsequently, Plaintiff filed its Second Amended Complaint (Doc. 47), which alleged the amount in controversy for diversity jurisdiction. In response, Defendant filed its second Motion to Dismiss (Doc. 48). The Court has jurisdiction under 28 U.S.C. § 1332. Oral argument is not necessary. For the following reasons, the Motions to Dismiss (Doc. 11; Doc. 48) are DENIED.

         I. BACKGROUND

         Plaintiff seeks declaratory relief, injunctive relief, and damages arising from Defendant's decision not to renew its federally-funded Ryan White Program Contract ("the Contract") with Plaintiff. (Doc. 10 at ¶¶ 1, 4). On October 2, 2015, Defendant issued a request for proposal (the "RFP"), which sought proposals from qualified public or non-profit entities to become a sub-recipient of Defendant's Ryan White Program funds to assist in providing core services to persons living with HIV/AIDS. (Id. at ¶¶ 29, 31). Plaintiff and Defendant entered into the Contract with an effective date of March 1, 2016. (Id. at ¶ 41). The Contract provided for an initial term of March 1, 2016 to February 28, 2017, and the RFP provided that "[u]p to two additional 12-month renewal awards may be made based upon the availability of funds and acceptable contract performance." (Id. at ¶ 43) (quoting Doc. 10-1 at p. 9).

         Under the Contract, Plaintiff, a sub-recipient of Defendant's federal funds, provided medical services to uninsured and under insured people with HIV/AIDS in Baton Rouge, Louisiana. (Doc. 10 at ¶ 1). In January 2017, Defendant scheduled a routine Ryan White Program monitoring review of Plaintiffs operations related to its 2016-17 Contract. (Id. at ¶ 49). Pursuant to Section XXL "Program Income" of the Contract, Defendant requested production of several documents to review, including documents regarding Plaintiffs use of the 340B Program.[1] (Id. at ¶ 50). Plaintiff refused to comply, explaining that it did not believe Defendant had the authority to collect and review Plaintiffs 340B documentation. (Id. at ¶ 51).

         On April 18, 2017, Defendant wrote to Plaintiff to inform it of the non-renewal of the Contract due to its failure to submit documentation requested by Defendant concerning the 340B program, (Doc. 10 at ¶ 70). Defendant informed Plaintiff that it would be transitioning Plaintiffs patients to other agencies; however, some of Plaintiffs patients indicated that they wished to continue to receive services from Plaintiff. (Id., at ¶¶ 70-71). Plaintiff continued to provide these services, even though it had to pay for these services with its own funds, and has billed Defendant for reimbursement. (Id. at ¶¶ 72-73).

         Plaintiff seeks a declaration that Defendant lacks the authority under 42 U.S.C. § 256b to decertify Plaintiff as a covered entity under the 340B program and to demand documentation from Plaintiff regarding the 340B program. (Doc. 10 at pp. 14, 16). Plaintiff also seeks a declaration that Defendant's failure to renew the Contract was arbitrary, capricious, and in violation of 45 C.R.F. § 75.328(a). (Id. at p. 18). Lastly, Plaintiff raises a number of state law claims based on breach of contract and the Louisiana Public Bid Law, and requests injunctive relief. (Id. at pp. 19-20, 22).


         A. Motion to Dismiss For Lack of Jurisdiction

         1. Legal Standard

         A motion to dismiss under Rule 12(b)(1) is analyzed under the same standard as a motion to dismiss under Rule 12(b)(6). Benton v. United States, 960 F.2d 19, 21 (5th Cir. 1992) (per curiam). "A claim may not be dismissed unless it appears certain that the plaintiff cannot prove any set of facts that would entitle him to legal relief." In re Supreme Beef Processors, Inc., 468 F.3d 248, 251 (5th Cir. 2006) (en banc). The Court "take[s] the well-pled factual allegations of the complaint as true and view[s] them in the light most favorable to the plaintiff." Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008). When analyzing a Rule 12(b)(1) motion, the Court "may find a plausible set of facts by considering any of the following: '(1) the complaint alone; (2) the complaint supplemented by the undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.'" Id. (quoting Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir. 1996)).

         Even so, the party asserting federal jurisdiction bears the burden of proof on a motion to dismiss for lack of subject-matter jurisdiction. Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). When a district court finds that it lacks subject-matter jurisdiction, its determination is not on the merits of the case, and does not bar the plaintiff from pursuing the claim in a proper jurisdiction. Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1977) (per curiam).

         2. Diversity Jurisdiction under 28 U.S.C. § 1332

         A Plaintiff properly invokes § 1332 jurisdiction when he presents a claim between parties of diverse citizenship that exceeds the required jurisdictional amount, that is, $75, 000, exclusive of interest and costs. Arbaugh v. Y&H Corp.,546 U.S. 500, 513 (2006) (citing ยง 1332 ...

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