Alameda Health Sys. v. Ctrs. for Medicare & Medicaid Servs.

The parties' cross-motions for summary judgment came on for hearing before this court on August 23, 2017. Plaintiffs Alameda Health System, County of Contra Costa, Regents of the University of California, County of San Mateo, and County of Santa Clara appeared by their counsel Robert C. Leventhal, and plaintiff County of Santa Clara appeared by its counsel Danny Y. Chou. Defendants Centers for Medicare and Medicaid Services ("CMS"), Eric D. Hargan in his official capacity as Acting Secretary of the United States Department of Health and Human Services ("HHS"), 1 and Seema Verna in her official capacity as Administrator of CMS, appeared by their counsel Carole Federighi. Having read the parties' papers and carefully considered their arguments and the relevant legal authority, the court hereby GRANTS plaintiffs' motion and DENIES defendants' motion as follows.

BACKGROUND

These two related cases arise under the Medicaid Act, Title XIX of the Social Security Act, 42 U.S.C. § 1396 , et seq. The plaintiffs-five California public health care districts-bring a challenge under the Administrative Procedures Act, 5 U.S.C. § 701 , et seq. ("APA"), to the federal government's interpretation…