Developmental Services Network v. Toby Douglas

Toby Douglas, the Director of the California Department of Health Care Services, appeals the district court’s preliminary injunction precluding enforcement of California Welfare and Institutions Code § 14105.191(f), which amended California’s Medicaid Plan and set provider reimbursement rates for the 2009-2010 rate year, and for each year thereafter. The Developmental Services Network and the United Cerebral Palsy/Spastic Children’s Foundation of Los Angeles and Ventura County, and the California Association of Health Facilities challenged the law under 42 U.S.C. § 1983 and the Supremacy Clause because the State did not obtain federal approval of its State Plan Amendment (“SPA”) prior to implementing the rate changes. The State argues that the district court abused its discretion in ordering the preliminary injunction because the Providers have not shown a likelihood of success on the merits, or irreparable harm, or that the balance of equities and the public interest warrant an injunction. We vacate the preliminary injunction and remand.

BACKGROUND

The Providers are trade associations representing, among other facilities, intermediate care facilities for the mentally…