Opinion
Case No. 03-4202-JAR
April 27, 2004
MEMORANDUM ORDER AND OPINION GRANTING DEFENDANTS' MOTIONS TO DISMISS
Plaintiff Daniel Hamrick, proceeding pro se and in forma pauperis, seeks monetary damages against the following defendants: Farmers Alliance Insurance Co. ("Farmers"); Paula Greathouse, Director of Workers Compensation for the State of Kansas; Sandy Praeger, Kansas Insurance Commissioner; and Administrative Law Judge Kenneth J. Hursh. Plaintiff has also filed a request for temporary restraining order (Doc. 3), seeking to enjoin the Kansas Workers Compensation Division from proceeding with administrative hearings in Case No. WC 183,004, and requests appointment of counsel (Doc. 10). Defendants have moved to dismiss the plaintiff's action (Docs. 16, 21 and 24), arguing that the Court lacks subject matter jurisdiction and, alternatively, that plaintiff has failed to state a claim upon which relief can be granted. Plaintiff responded to defendants' motions to dismiss (Docs. 26, 31 and 32). Plaintiff subsequently filed a motion to amend complaint (Doc. 35), followed by a motion for summary judgment (Doc. 36) and a motion to dismiss defendant Hursh from the case (Doc. 42).
Standards Governing Motions
Rule 12(b)(1)
Since federal courts are courts of limited jurisdiction, there is a strong presumption against federal jurisdiction. A court lacking subject matter jurisdiction "must dismiss the case at any stage of the proceeding in which it becomes apparent that such jurisdiction is absent." When a defendant brings a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the plaintiff must carry the burden of proving jurisdiction.
Penteco. Corp. Ltd. Partnership 1985A v. Union Gas System, Inc., 929 F.2d 1519, 1521 (10th Cir. 1991).
Basso v. Utah Power Light Co., 495 F.2d 906, 909 (10th Cir. 1974).
Mounkes v. Conklin, 922 F. Supp. 1501, 1505 (D. Kan. 1996).
Defendant Kansas Department of Human Resources, on behalf of defendants Greathouse and Hursh, has attached extraneous materials in reference to its motion to dismiss, consisting of copies of the administrative and court orders relative to plaintiffs workers compensation award, the same orders that plaintiff challenges as unconstitutional, and which he lists in an attachment to his amended complaint. In deciding a Rule 12(b)(1) motion, the court may consider evidence outside the pleadings without converting the proceeding to one for summary judgment. An exception to this general rule exists when the jurisdictional question is meshed with the merits of the case. Under this exception, a court is required to convert a Rule 12(b)(1) motion to dismiss into a Rule 12(b)(6) motion or a Rule 56 summary judgment motion. The jurisdictional question is intertwined with the merits of the case if subject matter jurisdiction is dependent on the same statute which provides the substantive claim in the case. When a federal statute serves as both the basis for the court's subject matter jurisdiction and the plaintiff's substantive claim, a court should assume jurisdiction and resolve the issue on the merits. In this case, plaintiffs claims of federal jurisdiction are based on diversity jurisdiction and violation of plaintiff's constitutional rights, both claims that are not interwoven with the merits of this action. Rule 12(b)(6)
Id. (citing Cizek v. United States, 953 F.2d 1232, 1233 (10th Cir. 1992); Jensen v. Johnson County Youth Baseball League, 838 F. Supp. 1437, 1440 (D. Kan. 1993)).
Wheeler v. Hurdman, 825 F.2d 257, 259 (10th Cir.), cert. denied, 484 U.S. 986 (1987).
Id.
Id.
Cf. Jensen v. Johnson County Youth Baseball League, 838 F. Supp. at 1440 (plaintiff's claims of federal jurisdiction were dependent on her Title VII and Equal Pay Act allegations, thus were interwoven with the merits of the action and court would treat motion to dismiss as one for summary judgment).
A court may dismiss a complaint for "failure to state a claim upon which relief can be granted." Dismissal is appropriate "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." "The purpose of Rule 12(b)(6) is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true."
Hishon v. King Spalding, 467 U.S. 69, 73 (1984) (citation omitted).
Mounkes, 922 F. Supp. at 1506 (quotation omitted).
On a Rule 12(b)(6) motion, the court judges the sufficiency of the complaint accepting as true the well-pleaded factual allegations and drawing all reasonable inferences in favor of the plaintiff. The court construes the allegations in the light most favorable to the plaintiff. These deferential rules, however, do not allow the court to assume that a plaintiff "can prove facts that it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." "[I]f the facts narrated by the plaintiff `do not at least outline or adumbrate' a viable claim, his complaint cannot pass Rule 12(b)(6) muster." Dismissal is a harsh remedy to be used cautiously so as to promote the liberal rules of pleading while protecting the interest of justice.
Shaw v. Valdez, 819 F.2d 965, 968 (10th Cir. 1987).
Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Hall v. Bellmon, 935 F.2d 1106, 1109 (10th Cir. 1991).
Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519, 526 (1983) (footnote omitted).
Mounkes v. Conklin, 922 F. Supp. at 1506 (citing Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir. 1988) (quotation omitted)).
Id.
As mentioned above, the Kansas Department of Human Resources has attached administrative and court documents to its motion to dismiss. It is well established that "[a] motion to dismiss for failure to state a claim upon which relief can be granted must be converted into a motion for summary judgment whenever the district court considers matters outside the pleadings." Courts have broad discretion in determining whether or not to accept materials beyond the pleadings. Reversible error may occur, however, if the district court considers matters outside the pleadings but fails to convert the motion to dismiss into a motion for summary judgment.
5A Charles Alan Wright et al., Federal Practice and Procedure § 1366 (2nd ed. 1990).
Lowe v. Town of Fairland, 143 F.3d 1378, 1381 (10th Cir. 1998) (citing Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991)).
The Court finds it is appropriate to consider the workers compensation proceeding documents and orders attached to the defendant's motion to dismiss. It is accepted practice that, "if a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to plaintiffs claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss." "If the rule were otherwise, a plaintiff with a deficient claim could survive a motion to dismiss simply by not attaching a dispositive document upon which the plaintiff relied." As discussed above, these are the same orders that plaintiff challenges as unconstitutional, and which he lists in an attachment to his amended complaint.
GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997); see also Brooks v. Blue Cross Blue Shield of Florida, Inc., 116 F.3d 1364, 1369 (11th Cir. 1997) ("[W]here the plaintiff refers to certain documents in the complaint and those documents are central to the plaintiff's claim, . . . the Court may consider the documents part of the pleadings for purposes of Rule 12(b)(6) dismissal, and the defendant's attaching such documents to the motion to dismiss will not require conversion of the motion into a motion for summary judgment." (citation omitted))
See GFF, 130 F.3d at 1385.
"When a defendant seeks dismissal under Rule 12(b)(1) and 12(b)(6) in the alternative, the court must decide first the 12(b)(1) motion for the 12(b)(6) challenge would be moot if the court lacked subject matter jurisdiction."
Mounkes, 922 F. Supp. at 1506 (citation omitted).
Pro se defendant
Because plaintiff appears pro se, the court must remain mindful of additional considerations. A pro se litigant's pleadings are to be construed liberally and held to a less stringent standard than pleadings drafted by lawyers. Thus, if a pro se plaintiff's complaint can reasonably be read "to state a valid claim on which the plaintiff could prevail, it [the court] should do so despite the plaintiffs failure to cite proper legal authority, his confusion of various legal theories, his poor syntax and sentence construction, or his unfamiliarity with pleading requirements." However, it is not "the proper function of the district court to assume the role of advocate for the pro se litigant." For that reason, the court should not "construct arguments or theories for the plaintiff in the absence of any discussion of those issues," nor should it "supply additional factual allegations to round out a plaintiff's complaint or construct a legal theory on plaintiff's behalf."
Hall v. Bellmon, 935 F.2d at 1110 (citing Haines v. Kerner, 404 U.S. 519, 520-21 1972)).
Id.
Id.
Drake v. City of Fort. Collins, 927 F.2d 1156, 1159 (10th Cir. 1991).
Whitney v. State of New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997).
In addition, 28 U.S.C. § 1915(e)(2) provides that an in forma pauperis action shall be dismissed "at any time if the court determines that —
(B) the action or appeal —
(i) is frivolous or malicious;
(ii) fails to state a claim on which relief may be granted; or
(iii) seeks monetary relief against a defendant who is immune from such relief."
"[A] finding of factual frivolousness is appropriate when the facts alleged rise to the level of the irrational or the wholly incredible, whether or not there are judicially noticeable facts available to contradict them." However, the court may not dismiss an in forma pauperis complaint "simply because the court finds the plaintiffs allegations unlikely." Generally, "a complaint is legally frivolous if it is based on an `indisputably meritless legal theory' such as an `infringement of a legal interest which clearly does not exist.'"
Denton v. Hernandez, 504 U.S. 25, 33 (1992).
Id.
Neitzke v. Williams, 490 U.S. 319, 327 (1989).
Background/Facts as Alleged in Plaintiff's Complaint
Plaintiff suffered a heart attack in October 1990. He filed for workers compensation benefits in 1993 on the basis that work-related stress caused his heart attack. On August 25, 1995, a workers compensation administrative law judge granted plaintiff an award of 62% permanent partial disability from the heart attack. In February 1997, the Appeals Board for the Division of Workers Compensation affirmed the ruling of the administrative law judge that plaintiff's heart attack was work-related, but modified the award by increasing the percentage of disability to 72% and ordering the employer and insurance carrier, Farmers, to pay related medical benefits and granting plaintiff the opportunity to file with the Director a request seeking additional medical benefits for future medical treatment. In its order, the Board noted plaintiff had introduced evidence of medical bills totaling $39,635.80, but that his employer and Farmers could seek utilization and peer review as provided by the Workers Compensation Act should there be any question whether the bills were excessive or unjustified. In August 1998, the Kansas Court of Appeals affirmed the Workers Compensation Board of Appeals' order, although the order does not mention the $39,635.80 in medical expense that was noted in the Board's order.
On November 4, 2000, plaintiff wrote Farmers, demanding payment to him of the $39,635.80 in medical expense that was noted in the Board's February 1997 order. On December 4, 2000, plaintiff filed with the Division of Workers Compensation an Application for Post Award Medical in which he requested "lifetime heart related medical benefits including those in that class excluded by omission from the Award February 7, 1997 by the Kansas Workers Compensation Appeals Board." Assistant Director Kenneth Hursh conducted a hearing on April 6, 2001, addressing plaintiff's post-award requests. On May 30, 2001, he issued a decision entitled Award on Post-Award Medical Hearing in which he retroactively applied K.S.A. 44-510k, and limited plaintiffs request for reimbursement of post-award medical expenses to those incurred no more than six months before the filing date of plaintiff's application.
Plaintiff appealed Director Hursh's order, and in January 2002, the Appeals Board for the Division of Workers Compensation reversed Director Hursh on several key issues. The Board reversed Hursh's retroactive application of K.S.A. 44-510k and modified the order to include penalties in the sum of $4,016.30 and reimbursement for medical expense in the sum of $3,501.81 that plaintiff paid before April 6, 2001. The Board held that plaintiff was entitled to receive penalties because Farmers failed to pay the medical expense ordered by the Board in February 1997, in the amount of $39,635.80. The Board declined to enter a second order to pay these expenses, as that order is valid and may be enforced in the district court where the cause of action arose for collection of past due medical compensation and any civil penalties, pursuant to K.S.A. 44-512a(b). The Board further awarded plaintiff additional ongoing, lifetime medical benefits for treating his heart condition, hypercholesterolemia and stress. The Board declined to award medical benefits for treatment of plaintiff's diabetes or high blood pressure. The Board's order was affirmed by the Kansas Court of Appeals on November 27, 2002.
In May 2003, plaintiff suffered a second heart attack during a medical procedure to insert a heart catheter. On August 11, 2003, plaintiff filed an "Application for Post Award Medical" with the Division of Workers Compensation, wherein he requested all medical expenses associated with the May 2003 heart attack, which exceeded $100,000. Plaintiff also requested he be awarded civil fines and penalties for respondent's refusal to pay the medical expenses for the second heart attack. Plaintiff alleged that the medical expenses of $39,635.80 awarded in 1997 and affirmed by the Board in 2002 "is still owed" and requested modification of the Board's 2002 holding that plaintiff cannot be reimbursed directly for medical expenses. Plaintiff also requested that Farmers' license to do business in Kansas be revoked. Plaintiff specifically requested a hearing, but stated that the process is so slow and cumbersome so as to be unconstitutional. He also objects that the Board's directive to go to state district court to enforce his medical services award, is unconstitutional. On August 12, 2003, the Division sent a Notice of Hearing to plaintiff, who subsequently filed an "Application for Review and Modification." In response, defendant Judge Hursh sent plaintiff a second Notice of Hearing.
In fact, plaintiff raised these issues in an appeal to the United States Supreme Court from the Kansas Court of Appeals decision; cert was denied on October 6, 2003. Hamrick v. Arabian Horse Exp., 124 S.Ct. 70 (2003).
On November 7, 2003, plaintiff filed the instant action in federal district court, seeking a temporary restraining order against all defendants, and requesting an injunction against any further proceedings by the Kansas Workers Compensation Division. Accordingly, Judge Hursh postponed the hearing. Plaintiff's complaint further alleges that holding a workers compensation hearing violates his constitutional rights under the Fifth and Fourteenth Amendments. Plaintiff charges the Division of Workers Compensation and the Insurance Department with negligence, deprivation of property and recovery of damages, and claims that the Board violated Article I, Section 10 prohibition against ex post facto laws that impair contracts and is liable under the Kansas Tort Claims Act for "money removed by Judge Hursh." Plaintiffs complaint also asserts that approximately $300,000 is owed to him for back payment of medical benefits, fines, civil penalties, and statutory interest and requests punitive damages of $1 million.
On August 4, 2000, the Fraud and Abuse Unit of the Division of Workers Compensation referred plaintiff's allegations of Medicare fraud to the Medicare Fraud Unit of the Kansas Insurance Department.
All four defendants filed motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and (6) (Docs. 16, 21 and 24). On December 16, 2003, plaintiff moved for leave to amend his complaint (Doc. 23). This motion was filed after defendants Greathouse, Hursh and Farmers had filed their respective motions to dismiss, and no proposed amended complaint was attached. Plaintiff filed a second motion to amend complaint on January 12, 2004 (Doc. 35), which attached a proposed amended complaint.
On February 5, 2004, plaintiff filed a motion for summary judgment (Doc. 36). The Court has entered orders deferring defendants' responses to the motion for summary judgment until the pending motions to dismiss have been disposed of (Docs. 47 and 58).
On February 20, 2004, plaintiff moved to dismiss Judge Hursh as a defendant (Doc. 42), conceding that defendant was shielded by judicial immunity. The other defendants do not object to dismissal of Judge Hursh.
On March 29, 2004, plaintiff filed a "Request for Leave of Court for Order to Compel Enforcement of the Law" (Doc. 57), essentially restating his demand that defendants Praeger and Greathouse be compelled to enforce specific provisions of the Workers Compensation Act against defendant Farmers.
Analysis
1. Motion to Appoint Counsel
Plaintiff does not have a constitutional or statutory right to appointed counsel. Plaintiff has mistakenly requested court-appointed counsel "in an action under Title VII of the Civil Rights Act of 1964," which provides that the district court in its discretion may appoint counsel for plaintiff "in such circumstances as the court may deem just." Because plaintiff has not filed an action under Title VII, his case does not warrant the special concern Congress showed regarding legal representation in Title VII actions, which involve allegations of discrimination against employers. Out of an abundance of caution, however, the Court will apply the four factors identified by the Tenth Circuit as relevant to the decision.
Castner v. Colorado Springs Cablevision, 979 F.2d 1417, 1420 (10th Cir. 1992).
Before the court may appoint counsel, plaintiff must affirmatively show: (1) that he is financially unable to pay for counsel; (2) that he has diligently attempted to secure counsel; and (3) that his allegations of discrimination are meritorious. In close cases, the court considers a fourth factor — plaintiffs ability to present the case without counsel — as an aid in exercising discretion.
Castner, 979 F.2d at 1420.
See id.
The Court assumes for purposes of this ruling that plaintiff has satisfied the first two factors; in fact, it appears that plaintiff contacted at least seven attorneys about representing him in this matter. Plaintiff's motion to appoint counsel makes no attempt, however, to demonstrate that his allegations against defendants are meritorious. As noted below, plaintiffs complaint is rife with jurisdictional defects, nonmeritorious claims and issues of abstention. In so ruling, the Court notes that, as fully discussed below, plaintiff's claims may have merit in the proper forum, Kansas state court, brought pursuant to the proper procedures under the Workers Compensation Act. Plaintiff's frustration with this process and the actors involved and his resulting refusal to proceed in state court or before the Division of Workers Compensation does not warrant appointment of counsel in a case where this federal court clearly lacks jurisdiction and his claims lack merit.
Although the merit of plaintiff's complaint is not a close call, the Court will nonetheless examine plaintiff's ability to present his case without counsel. In this regard, the Court looks to the complexity of the legal issues and plaintiff's ability to gather and present crucial facts. The factual and legal issues in this case are not complex, and the numerous filings by plaintiff indicate that he is an intelligent and articulate individual. Thus, the Court concludes that plaintiff is able to present his case without counsel. Accordingly, plaintiff's motion to appoint counsel is denied.
Id. at 1422.
2. Motion to Amend Complaint
Plaintiff's motion to amend is governed by Rule 15(a) of the Federal Rules of Civil Procedure, which provides:
A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served. . . . Otherwise, a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.
In this case, plaintiff's motion was filed after defendants had filed their respective motions to dismiss; defendants have objected to plaintiff's motion to amend.
Although Rule 15 requires that leave to amend "be freely given when justice so requires," whether leave should be granted is within the trial court's discretion. The factors the court should consider in determining whether to allow amendment of a pleading are undue delay, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, and undue prejudice to the opposing party or futility of the amendment.
Castleglen, Inc., v. Resolution Trust Corp., 984 F.2d 1571, 1585 (10th Cir. 1993) (citing Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971)).
Foman v. Davis, 371 U.S. 178 (1962); Castleglen, 984 F.2d at 1585.
In order to justify denying leave to amend based on futility, the proposed amendment must be clearly fufile. "If a proposed amendment is not clearly fufile, then denial of leave to amend is improper." The court may deny a motion to amend as fufile if the proposed amendment would not withstand a motion to dismiss or otherwise fails to state a claim upon which relief may be granted.
6 Charles Alan Wright et al., Federal Practice Procedure § 1487, at 637-43 n. 23 (2d ed. 1990).
Ketchum v. Cruz, 961 F.2d 916, 920 (10th Cir. 1992); Schepp v. Fremont County, 900 F.2d 1448, 1451 (10th Cir. 1990).
Plaintiff's motion asking leave to amend his complaint states:
This Amendment does not change defendants. It contains the same basic complaints against them. But it amplifies on them and cites more specific statutes that the plaintiff believes were violated. It is better organized and gives the defendants an opportunity to answer the charges one by one, if they so choose.
Plaintiffs amended complaint is clearly fufile — even an amplified, better organized version of his complaint suffers from the same inherent jurisdictional defects and abstention issues as the first. Nevertheless, the Court will grant plaintiff's motion to amend, as it newly invokes the Fifth Amendment as well as the Kansas Tort Claims Act. To the extent the amended complaint contains issues not addressed in the respective motions to dismiss, the Court shall address them sua sponte pursuant to 28 U.S.C. § 1915(e).
3. Lack of Subject Matter Jurisdiction
a. State defendants Eleventh Amendment Immunity
Plaintiff's complaint seeks monetary relief from two officers of the State of Kansas, Director of Workers Compensation Greathouse and Kansas Insurance Commissioner Sandy Praeger. Eleventh Amendment immunity provides protection for state governmental entities sued in federal court for damages unless the state waives its immunity. The standards governing the Eleventh Amendment immunity are also applicable where violations of the Fourteenth Amendment are alleged. While this immunity can be waived, the State of Kansas has not done so in this case, nor has this immunity been abrogated for any cause of action that plaintiff has alleged under the facts of this case. The Kansas Legislature, by enacting the Kansas Tort Claims Act, K.S.A. 76-6101 et seq., has not waived the state's Eleventh Amendment immunity from suit in federal court.
K.S.A. 40-102.
Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 241 (1985); Ramirez v. Oklahoma Dept. of Mental Health, 41 F.3d 584, 588 (10th Cir. 1994).
See Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996).
See Baker v. Board of Regents of the State of Kansas, 721 F. Supp. 270, 274 (D. Kan. 1989) (lawsuits under 42 U.S.C. § 1981 and 1983 are not exempt from the Eleventh Amendment bar).
Ndefru v. Kansas State University, 814 F. Supp. 54, 55 (D. Kan. 1993).
Director of Workers Compensation Greathouse and Kansas Insurance Commissioner Sandy Praeger are both officers of the State of Kansas and are sued in their official capacities. "An official-capacity suit is, in all respects other than name, to be treated as a suit against the entity. . . . It is not a suit against the official personally, for the real party in interest is the entity." "Generally, the law considers state officials acting in their official capacities to be acting on behalf of the state and immune from unconsented lawsuits under the Eleventh Amendment." Accordingly, this Court lacks jurisdiction over plaintiffs claims against defendants Greathouse and Praeger in their official capacities.
K.S.A. 40-102.
See Kentucky v. Graham, 473 U.S. 159, 165-66 (1985).
See Elephant Butte Irrigation Dist. of New Mexico. v. Dept. of Interior, 160 F.3d 602, 607 (10th Cir. 1998), cert. denied, 526 U.S. 1019 (1999).
Fifth Amendment
Plaintiff alleges in his amended complaint that Farmers has failed to pay the award of medical benefits in the amount of $39,635.80, despite the order of the Board of Appeals and the Kansas Court of Appeals. Plaintiff contends that the Kansas Workers Compensation Division and the Insurance Department have failed to enforce the provisions of the Workers Compensation Act, thus depriving him of property under the Fifth Amendment.
The Fifth Amendment, applied to the states through the Fourteenth Amendment, prohibits "takings" absent just compensation from the government. An aggrieved property owner must show more than the deprivation of property; the owner must also show that the government refused just compensation for the loss. A property owner has not suffered a Fifth Amendment violation until the owner has unsuccessfully attempted to obtain just compensation through the procedures provided by the government for obtaining such compensation.
J.B. Ranch, Inc. v. Grand County, 958 F.2d 306, 308 (10th Cir. 1992) (citing Williamson County Regional Planning Com'n v. Hamilton Bank, 473 U.S. 172, 174 n. 1 (1985) and Miller v. Campbell County, 945 F.2d 348, 352 (10th Cir. 1991), cert. denied, 502 U.S. 1096 (1992).
J.B. Ranch, 958 F.2d at 308 (citations omitted).
Id. at 308-309 (citations omitted); National Advertising Co. v. City and County of Denver, 912 F.2d 405, 413 (10th Cir. 1990).
The Court concludes that plaintiff cannot avoid filing an action in state court to obtain just compensation for the alleged deprivation of his property. Plaintiff has not met the prerequisite showing of a "taking." The compensation plaintiff claims as due was awarded by the Workers Compensation Division, and would be owed by Farmers rather than the state. Further, there is no evidence that plaintiff has unsuccessfully attempted to obtain just compensation through the procedures provided by the Workers Compensation Act for obtaining such compensation. On the contrary, out of frustration with past delays, plaintiff has indicated that he does not wish to proceed with an action in state district court to enforce his medical benefits award pursuant to the procedure set forth in the Workers Compensation Act. Accordingly, the Court concludes that plaintiffs Fifth Amendment claim is unripe and must be dismissed for lack of subject matter jurisdiction.
Ex post facto impairment of contract
Plaintiff contends in his amended complaint that "in the second round of hearings, Judge Hursh applied a law enacted in 2000 to wipe out nearly 10 years of past benefits in violation of the Constitution's Article I, Section 10 prohibition against ex post facto laws that impair the obligations of contracts." Although plaintiff has dismissed his claim against Judge Hursh, he continues to contend that the Workers Compensation Board of Appeals never mentioned this trespass and failed to restore the money "removed" by Judge Hursh, and is liable under the Kansas Tort Claims Act, the Kansas Tort Outrage Act and for failure to enforce the Kansas Administrative Agency Act. The Court notes that the Workers Compensation Board of Appeals reversed Judge Hursh on the issue of retroactive application of K.S.A. 44-512a; however, it declined to enter a second order to pay the medical expenses ordered paid in 1997, "as that order is valid and may be enforced in district court" pursuant to K.S.A. 44-512a(b). To the extent plaintiff is disputing the Workers Compensation Board of Appeals decision, which was affirmed by the Kansas Court of Appeals, this Court may not review the decision of either state court. Accordingly, the Court does not have jurisdiction to review this issue.
See Kenmen Eng'g v. City of Union, 314 F.3d 468, 476 (10th Cir. 2002) (Under the Rooker-Feldman doctrine, "lower federal courts possess no power whatever to sit in direct review of state court decisions"); Johnson v. Riddle, 305 F.3d 1107, 1116 (10th Cir. 2002) ("The Rooker-Feldman doctrine bars a party losing in state court from seeking what in substance would be appellate review of the state judgment in a United States district court, based on the losing party's claim that the state judgment itself violates the loser's federal rights.")
b. Farmers Alliance
Plaintiff also asserts a claim against Farmers for failure to pay over $300,000 in "medical benefits, fines, civil penalties, and statutory interest stemming from medical benefits and penalties owed and unpaid." Plaintiff alleges that this amount was awarded by previous orders of the Workers Compensation Board of Appeals and the Kansas Court of Appeals, and characterizes this lawsuit as a "collection case" against Farmers.
To the extent plaintiff is seeking to enforce the previous orders of the Workers Compensation Board and Kansas Court of Appeals, this Court lacks jurisdiction. As noted in those orders, plaintiffs remedy against Farmers for any medical compensation lies under the Kansas Workers Compensation Act. K.S.A. 44-512a sets forth the procedure and remedies for failure to pay compensation when due, and states that after the claimant serves a written demand, the employee may maintain an action in the district court of the county where the cause of action arose for the collection of such past due medical compensation, as well as any penalties due. The Kansas Workers Compensation Act provides an exclusive remedy for an employee who is injured while performing work for his employer. Jurisdiction of case arising under state workers compensation laws lies exclusively with the states.
K.S.A. 44-501 et seq.
K.S.A. 44-512a (emphasis added).
Scheidegger v. Cargill, Inc., 1999 WL 451212 (D. Kan. June 15, 1999); Yocum v. Phillips Petroleum Co., 228 Kan. 216, 220, 612 P.2d 649 (1980).
See 28 U.S.C. § 1445(c) (a civil action in any state court arising under the workers compensation laws of such state may not be removed to any district court of the United States).
4. Failure to State a Claim
a. Defendants Greathouse and Praeger
Although plaintiff does not specifically plead his claims as such, the Court liberally interprets his complaint to include claims against defendants Greathouse and Praeger in their individual capacities. Specifically, plaintiff contends that Director Greathouse and Commissioner Praeger have deprived him of his property rights by "neglecting to apply laws on fraud and abuse."
Both Director Greathouse and Commissioner Praeger assert that they are entitled to qualified immunity from plaintiffs civil complaint. The defense of qualified immunity shields government officials performing discretionary functions from individual liability unless their conduct violates "clearly established statutory or constitutional rights of which a reasonable person would have known." Where a qualified immunity defense is asserted in a Rule 12(b)(6) motion, the court must apply a heightened pleading standard, and require the complaint to contain "specific, non-conelusory allegations of fact sufficient to allow the district court to determine that those facts, if proved, demonstrate that the actions taken were not objectively reasonable in light of clearly established law."
Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982).
Dill v. City of Edmond, 155 F.3d 1193, 1204 (10th Cir. 1998).
The Tenth Circuit has developed a framework for analyzing claims of qualified immunity: once a defendant pleads qualified immunity, the plaintiff bears the burden of (1) coming forward with sufficient facts to show that the defendant's actions violated a federal constitutional or statutory right and (2) demonstrating that the right violated was clearly established at the time of the conduct at issue. "In order to carry [this] burden, the plaintiff must do more than identify in the abstract a clearly established right and allege that the defendant has violated it. Rather, the plaintiff must articulate the clearly established constitutional right and the defendant's conduct which violated the right with specificity. . . ." The court must first determine whether Plaintiff has alleged a deprivation of a constitutional right; only after determining that plaintiff has alleged a determination of a constitutional right, does this court ask whether the right allegedly violated was clearly established at the time of the conduct at issue. The Kansas Tort Claims Act also provides an immunity defense for discretionary functions.
Baptiste v. J.C. Penney Co., 147 F.3d 1252, 1255 (10th Cir. 1998) (citing Clanton v. Cooper, 129 F.3d 1147, 1153 (10th Cir. 1997); Albright v. Rodriquiez, 51 F.3d 1531, 1534 (10th Cir. 1995).
Romero v. Fay, 45 F.3d 1472, 1475 (10th Cir. 1995) (citations omitted).
Baptiste, 147 F.3d at 1255 n. 6 (citing County of Sacramento v. Lewis, 523 U.S. 833 (1998)).
K.S.A. 75-6104(e) (providing immunity for "any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a governmental entity or employee, whether or not the discretion is abused and regardless of the level of discretion involved . . .").
Plaintiff seeks "damages as yet uncalculated by the state for neglecting to apply laws on fraud and abuse." The fraud and abuse statutes found at K.S.A. 44-5,120 to 44-5,150, grant Director Greathouse the authority and discretion to prosecute actions that are defined as fraudulent and abusive practices by the Workers Compensation Act. The Director does not have authority to investigate Medicare fraud, as alleged by plaintiff in his complaint. The statutes also grant the Commissioner of Insurance the authority and discretion to examine workers compensation records of insurance companies necessary to ensure compliance with the Workers Compensation Act, and to suspend or revoke an insurance carrier's right to do business in Kansas. Commissioner Praeger does not have the authority to regulate the procedures of the Workers Compensation Act.
Plaintiff fails to state a claim with sufficient specificity to overcome defendants' entitlement to a defense of qualified immunity. Plaintiff has wholly failed to articulate the clearly established constitutional rights that were violated, and the conduct that violated those rights.
Merely stating that the defendants neglected to apply laws insufficiently describes the conduct and fails to articulate the affected rights. Further, under these circumstances, plaintiff cannot successfully bring an action under the Kansas Tort Claims Act against Director Greathouse or Commissioner Praeger for a decision made in exercising or failing to exercise their respective discretionary authority relative to administering the fraud and abuse statutes.
5. Abstention
Plaintiff contends that the administrative procedures set forth in the Kansas Workers Compensation Act have deprived him, under the Fourteenth Amendment, of property without due process of law, seeking to enjoin the administrative hearing in Workers Compensation Case No. WC 183,004, and requesting that the unconstitutional practices be ceased. Plaintiff also alleges that his due process rights have been violated due to Farmers' failure to pay for his second heart attack and the resulting treatment.
The issue of abstention was not raised by the defendants in their respective motions to dismiss. Because plaintiff proceeds in forma pauperis however, the Court raises the issue sua sponte, and concludes that it is obligated to abstain from enjoining the state court workers compensation proceedings under Younger v. Harris.
401 U.S. 37 (1971).
" Younger abstention dictates that federal courts not interfere with state court proceedings by granting equitable relief — such as injunctions of important state proceedings or declaratory judgments regarding constitutional issues in those proceedings — when such relief could adequately be sought before the state court." Younger abstention "is the exception, not the rule." In determining whether Younger abstention is appropriate, a court considers whether: "(1) there is an ongoing state criminal, civil, or administrative proceeding, (2) the state court provides an adequate forum to hear the claims raised in the federal complaint, and (3) the state proceedings involve important state interests, matters which traditionally look to state law for their resolution or implicate separately articulated state policies." Once these three conditions are met, Younger abstention is non-discretionary and, absent extraordinary circumstances, a district court is required to abstain. The Court will address each of these conditions in turn.
Rienhardt v. Kelly, 164 F.3d 1296, 1302 (10th Cir. 1999).
Joseph A. v. Ingram, ex rel. Corrine Wolfe, 275 F.3d 1253, 1267 (10th Cir. 2002) (quoting Ankenbrandt v. Richards, 504 U.S. 689, 705 (1992)).
Crown Point, LLC v. Intermountain Rural Electric Assoc., 319 F.3d 1211, 1215 (10th Cir. 2003) (quoting Amanatulla v. Colorado Bd. of Med. Exam'rs, 187 F.3d 1160, 1163 (10th Cir. 1999) (internal quotations omitted)).
Id. (citing Seneca-Cayuga Tribe v. Oklahoma, 874 F.2d 709, 711 (10th Cir. 1989).
First, it was plaintiff himself who initiated state proceedings by filing an "Application for Post Award Medical" with the Kansas Division of Workers Compensation, three months prior to the date plaintiff filed his federal complaint. The state proceedings in this case are governed by the Kansas Workers Compensation Act, K.S.A. 44-501, et seq. Specifically, K.S.A. 44-510k governs post-award medical benefits. That section provides in relevant part:
(a) At any time after the entry of an award for compensation, the employee may make application for a hearing, in such for as the director may require for the furnishing of medical treatment. Such post-award hearing shall be held by the assigned administrative law judge, in any county designated by the administrative law judge, and the judge shall conduct the hearing as provided in K.S.A. 44-523 and amendments thereto. The administrative law judge can make an award for further medical care if the administrative law judge finds that the care is necessary to cure or relieve the effects of the accidental injury which was the subject of the underlying award. No post-award benefits shall be ordered without giving all parties to the award the opportunity to present evidence, including taking testimony on any disputed matters. A finding with regard to a disputed issue shall be subject to a full review by the board under subsection (b) of K.S.A. 44-551 and amendments thereto. Any action of the board pursuant to post-award orders shall be subject to review under K.S.A. 44-556 and amendments thereto.
Plaintiff contended that all treatment for his second heart attack be compensated by Farmers. Farmers questioned whether the 2003 heart attack was in fact related to the 1993 heart attack that was the subject of the underlying award, and was prepared to submit evidence to show that the second heart attack was more likely due to age and other heart diseases unrelated to the original myocardial infarction. Upon request for a hearing from the administrative law judge by Farmers, plaintiff asserted various constitutional violations and penalties to be assessed against Farmers through written correspondence to various parties. Plaintiff then filed for a temporary restraining order in this Court, requesting an injunction against any further proceeding by the Kansas Workers Compensation Division. Plaintiff asserts that these proceedings have been going on for over 13 years, and accordingly, he should not have to suffer through another series of hearings in order to be compensated for medical treatment relative to the second heart attack.
The Court first holds that state proceedings began in August 2003, when plaintiff filed his "Application for Post Medical Award" with the Division of Workers Compensation, Case No. WC 183,004. Substantial state proceedings took place before plaintiff filed his federal complaint on November 7, 2003.
Second, the state provides an adequate forum to hear plaintiff s constitutional and civil rights claims raised in his federal complaint. Typically, a plaintiff has an adequate opportunity to raise federal claims in state court "unless state law clearly bars the interposition of the [federal statutory] and constitutional claims." Kansas law does not bar such claims. Furthermore, the final action of the administrative law judge and workers compensation board shall be subject to judicial review. It is sufficient for purposes of Younger abstention that federal challenges, such as plaintiffs constitutional claims, may be raised in state court judicial review of administrative proceedings.
J.B. ex rel. Hart. v. Valdez, 186 F.3d 1280, 1292 (10th Cir. 1999) (quoting Moore v. Sims, 442 U.S. 415, 425-26(1979)).
K.S.A. 44-556.
See Ohio Civil Rights Comm'n v. Dayton Christian Schools, Inc., 477 U.S. 619, 629 (1986) ("[I]t is sufficient under Middlesex, supra, at 436, 102 S.Ct. 2515, that constitutional claims may be raised in state-court judicial review of the administrative proceeding.")
At the time plaintiff filed his federal complaint, there had been no hearing before Administrative Judge Hursh. Plaintiff apparently had raised the constitutional issues and claims and would have had ample opportunity to present his constitutional rights claims to the administrative law judge at the hearing. The Court assumes that Judge Hursh would have followed his obligations under K.S.A. 44-510k and considered plaintiff's constitutional claims. Plaintiff also has the opportunity to raise his federal constitutional claims in the judicial review process.
See Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 15 (1987) ("[W]hen a litigant has not attempted to present his federal claims in related state-court proceedings, a federal court should assume that state procedures will afford an adequate remedy, in the absence of unambiguous authority to the contrary.")
Third, there is little doubt that workers compensation proceedings implicate "important state interests" and are "matters which traditionally look to state law for their resolution." The Kansas Workers Compensation Act provides an exclusive remedy for an employee who is injured while performing work for his employer. There is no question that workers compensation involves important state interests, matters which traditionally look to state law for their resolution, or implicate separately articulated state policies. It is difficult to imagine an interest more inherent to state law than the protection of its citizens for work-related injuries.
K.S.A. 44-501 et seq. See Mahaffey, Hanson, and Employers Mutual Co. v. United States of America, 785 F. Supp. 148 (D. Kan. 1992); Yocum v. Phillips Petroleum Co., 228 Kan. at 220.
Finally, the Court further notes that the Younger abstention doctrine does not apply "in cases of proven harassment or prosecutions undertaken by state officials in bad faith without hope of obtaining a valid conviction and perhaps in other extraordinary circumstances where irreparable injury can be shown." "[I]t is the plaintiff's `heavy burden' to overcome the bar of Younger abstention by setting forth more than mere allegations of bad faith or harassment." Plaintiff has not met this burden. On the record before it, there is no evidence that any exceptions to the Younger doctrine apply to this case.
Perez v. Ledesma, 401 U.S. 82, 85 (1971); see Younger, 401 U.S. at 54 (creating exception on "showing of bad faith, harassment, or any other unusual circumstances that would call for equitable relief."); Phelps v. Hamilton, 59 F.3d 1058, 1066-68 (analyzing exceptions).
Phelps v. Hamilton, 122 F.3d 885, 889 (10th Cir. 1997) (quoting Phelps, 59 F.3d at 1066).
Considering the equitable nature of the plaintiff's claims, the pending workers compensation proceedings initiated by plaintiff, and the state procedural avenues available to him, plaintiff has not demonstrated the extraordinary circumstances necessary for federal equitable intervention. Consequently, Younger requires the dismissal of plaintiff's federal action. IT IS THEREFORE ORDERED BY THE COURT that plaintiff's application for appointment of counsel (Doc. 10) is DENIED.
Even if the Court were to exercise jurisdiction over these claims, it appears they would not survive a Rule 12(b)(6) motion to dismiss. First, in order to have a property interest in post-award workers compensation medical benefits the plaintiff must show that the care is "necessary to cure or relieve the effects of the accidental injury which was the subject of the underlying award." K.S.A. 44-510k(a). Contrary to plaintiff's argument that he is entitled to all medical treatment once the employer's initial liability is established, until a hearing is held under 44-510k, it cannot be determined that the medical treatment for the second heart attack is related to the first heart attack. While plaintiff has established his eligibility for medical treatment, he has yet to establish that the particular treatment he seeks for the second heart attack is related to the first. Consequently, he does not have a property interest in having Farmers pay for treatment that has yet to be found necessary to treat the underlying first heart attack. See American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 60-61 (1999).
Second, in the American case cited above, the Supreme Court concluded that private workers compensation insurers do not act under color of state law in an action brought under 42 U.S.C. § 1983. Id. at 49-50. Similarly, the Fourteenth Amendment requires state action; merely private conduct, no matter how discriminatory or wrongful, is excluded from its reach. Accordingly, Farmers, as a private actor, is not held to the Constitutional standard of due process.
IT IS FURTHER ORDERED that plaintiff's motion to amend complaint (Doc. 35) is GRANTED.
IT IS FURTHER ORDERED that defendants' motions to dismiss (Docs. 16, 21 and 24) are GRANTED.
IT IS FURTHER ORDERED that plaintiff's motion to dismiss defendant Hursh (Doc. 42) is GRANTED.
IT IS SO ORDERED.