After a Washington State Agency was successful in removing a case to federal court that alleges that the agency defied a ruling by the Supreme Court of Washington, a district court granted the Plaintiffs’ motion to remand to state court but denied the request for attorneys’ fees. M.T.E. v. Wash. State Dep’t of Soc. and Health Servs., No. C11-5508BHS, 2011 WL 4403025 (W.D. Wash. Sept. 21, 2011). The court did so after finding that the Plaintiffs’ claims were not preempted by federal law and did not arise under federal law. Judge Benjamin H. Settle, a George W. Bush nominee, wrote the opinion.
In 2005, the Washington State Department of Social and Health Services (“DSHS”) adopted the “children’s assessment rule,” which reduces the financial assistance payable for in-home personal services care based upon the age of the child and whether the child lives with a parent. Wash. Admin. Code § 388-106-0213 (2005). Six years later, the Supreme Court of Washington struck down the rule for violating federal Medicaid comparability requirements under 42 U.S.C. § 1396a. Samantha A. v. Dep’t of Soc. and Health Servs., No. 84325-2, 2011 WL 2054645, *7 (Wash. May 26, 2011) (en banc).
However, according to the Plaintiffs in this case, DSHS defied the ruling in Samantha A. by continuing to apply the children’s assessment rule to all covered children except Samantha A. In response, the Plaintiffs filed a class action in state court seeking to enforce the ruling in Samantha A. against DSHS. Subsequently, DSHS successfully removed the case to federal court, arguing that the Plaintiffs’ state law claims are based on substantial federal questions and are preempted by Medicaid. The Plaintiffs responded by filing a motion to remand to state court.
Reviewing the Plaintiffs’ motion, the court first held that DSHS failed to prove that Medicaid completely preempts the Plaintiffs’ state law claims, and that, in fact, the Plaintiffs provided authority that compels the opposite conclusion.
After rejecting DSHS’s preemption argument, the court turned to DSHS’s argument that removal was proper because the Plaintiffs’ claims involve federal questions. The court began its analysis by discussing a Ninth Circuit case that addresses the well-pleaded complaint rule, which held that “arising under” jurisdiction does not exist where substantial federal issues are presented but not on the face of the complaint. See Cal. Shock Trauma Air Rescue v. State Comp. Ins. Fund, 636 F.3d 538, 543 (9th Cir. 2011). Returning to the facts of the case, the court held that DSHS’s argument fails because the Plaintiffs’ well-pleaded complaint asserts only state law clauses of actions. Because DSHS asserted no other basis for federal jurisdiction, the court granted the Plaintiffs’ motion to remand to state court.
However, the court rejected the plaintiffs’ request for attorneys’ fees incurred as a result of removal. The court was not convinced that DSHS had no “objectively reasonable basis” for seeking removal.
–Scott Herrig, University of California, Berkeley-School of Law 2012