DHHS, former directors ask federal judge to dismiss Supremacy Clause damages complaint

By Ben Solis
Gongwer News Service

The Department of Health and Human Services and two of its former directors have asked a judge to dismiss a years-old lawsuit that has been kicked back and forth between the state and federal district courts without any favorable progress for the plaintiff.

The agency, former directors Nick Lyon and Robert Gordon and the Office of Administrative Hearing and Rules on Wednesday filed a renewed motion to dismiss Donaldson v. Lyon (USEDM Docket No. 18-13994).

The state defendants said an amended complaint in the matter was rambling, hard to decipher and stems from the plaintiff’s receipt of Medicaid and a 2018 administrative hearing over a dispute regarding mileage reimbursement.

One of the plaintiffs is now deceased, the defendants argued, and that the surviving plaintiff cannot represent her interests.

More pressing, the defendants argued, was the fact that the plaintiff was seeking monetary damages for alleged violations of the Supremacy Clause, but the claim was not valid under federal law.

Further, the claims against the agencies – specifically their demands for money damages as a remedy – are barred by 11th Amendment, and any personal capacity claims lack evidence of the alleged involvement of the defendants. That warrants dismissal, the defendants argued.

“Donaldson’s claims are a challenge to a state administrative agency decision. As this court previously explained, Donaldson alleges that ‘defendants have denied him access to his case file and neglected to respond properly for forms and information’ and that ‘the Michigan administrative law judges assigned to hear his appeals have improperly denied him access to his case file and prevented him from submitting documents and otherwise developing a record,’” the motion said. “But the question of whether Donaldson received a fair administrative hearing has now been fully adjudicated on appeal to the state courts charged under Michigan law with considering this issue. For that reason, the Rooker-Feldman doctrine and res judicata bar his claims.”

The case surrounds the plaintiff’s request for an Office of Administrative Hearings and Rules meeting to resolve a dispute over a Medicaid milage reimbursement. The case record shows that neither DHHS, Lyon nor Gordon was involved in the hearing.

The plaintiff later filed a motion to examine the contents of his file, which was denied by an administrative law judge because the rule he cited did not support the request. He was eventually given the documents he sought to be used at the hearing.

Still, the plaintiff sought an appeal on the matter in state circuit court, which also declined to take up the issue.

After some back and forth, an administrative law judge found minimal differences in the numbers presented by the plaintiff and the defendants regarding his mileage reimbursement and denied the plaintiff’s motion for rehearing and reconsideration.

Numerous appeals were filed in state circuit court, the Michigan Court of Appeals and the Michigan Supreme Court, all of which denied leave to appeal. The plaintiff continued to assert that his due process rights were violated by the initial administrative law proceedings when the judge denied him access to his case file.

In the federal district court, the plaintiff asserted the violation of his rights and demanded various injunctions against DHHS, Lyon, Gordon and other named defendants. The case was appealed after an unfavorable ruling for the plaintiff to the 6th U.S. Circuit Court of Appeals, which remanded the case back to the federal district court.

A motion to dismiss was pending before the court, but it was ruled on in the context of parallel proceedings in the state court.

On Wednesday, DHHS, Lyon, Gordon and other named defendants with the agency said that none of the grounds for dismissal they raised were considered by the federal district court, nor the 6th Circuit, and that the motion should be renewed to dismiss the complaint.

“The state defendants’ alleged actions are clearly related to the administrative hearing concerning Donaldson’s Medicaid benefits. Thus, Donaldson’s allegations against state defendants formed a ‘convenient trial unit’ that were – or could have been – adjudicated in the state court proceedings,” the motion said. “If Donaldson believed that any decisions of the circuit court were unconstitutional, he could have asserted those claims and arguments during those proceedings. All prongs weigh in favor of dismissal because the plaintiff’s claims as to state defendants are barred by the doctrine of res judicata.”

U.S. District Judge David Lawson of the Eastern District of Michigan has yet to rule on the motion, court records show.


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