Case: 15-10807 Document: 00513616605 Page: 1 Date Filed: 07/29/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 15-10807 FILED
July 29, 2016
DR. DRALVES GENE EDWARDS,
Lyle W. Cayce
Clerk
Plaintiff - Appellant
v.
SYLVIA MATHEWS BURWELL, Secretary of the United States Department
of Health and Human Service; HER UNKNOWN FEDERAL CENTRAL AND
REGIONAL OFFICER AGENTS FOR THE TITLE XVIII MEDICARE
PROGRAM,
Defendants - Appellees
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:14-CV-3124
Before HIGGINBOTHAM, PRADO, and GRAVES, Circuit Judges.
PER CURIAM:*
Dralves Edwards appeals from the district court’s dismissal of his
complaint alleging improper review of Medicare claims. The complaint was
dismissed for lack of subject matter jurisdiction and for failure to state a claim.
For the following reasons, we AFFIRM.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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FACTS AND PROCEDURAL HISTORY
Dralves Edwards is a physician who provided care to Medicare
beneficiaries in Texas. Edwards was subject to a Medicare review process from
1997 to 2001, during which time most or all of his Medicare claims were
initially denied. Edwards appealed the denials and most of them were
successfully overturned. However, Edwards asserts that the review process
forced him to have to close his practice in 2001.
On August 30, 2014, Edwards filed an action against the, Sylvia Burwell,
Secretary of Health and Human Services (“HHS Secretary” or “HHS”), and
Unknown Agents alleging the improper review of Medicare claims from 1997
to 2001 and seeking compensatory damages, a declaratory judgment, a
restraining order and attorney’s fees. Edwards claimed that his Medicare
claims were initially denied on the basis of racial profiling. The district court
dismissed Edwards’ complaint pursuant to Rule 12 of the Federal Rules of Civil
Procedure for lack of subject matter jurisdiction and failure to state a claim.
See Fed. R. Civ. P. 12(b)(1), (6). Subsequently, Edwards filed this appeal.
DISCUSSION
This court reviews de novo the district court’s grant of a motion for
dismissal under both Rules 12(b)(1) and 12(b)(6), applying the same standard
used by the district court. Ramming v. United States, 281 F.3d 158, 161 (5th
Cir. 2001). “The burden of proof for a Rule 12(b)(1) motion to dismiss is on the
party asserting jurisdiction.” Id. To survive a motion to dismiss for failure to
state a claim under Rule 12(b)(6), “the plaintiff must plead enough facts to
state a claim to relief that is plausible on its face.” In re Katrina Canal Breaches
Litig., 495 F.3d 191, 205 (5th Cir. 2007) (internal marks omitted) (citing Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
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Edwards asserts that the district court erred in granting the motion to
dismiss because the defendants were not entitled to sovereign immunity, that
he properly alleged a constitutional claim under Bivens, 1 and that he properly
alleged a claim upon which declaratory relief can be predicated.
Burwell asserts that Edwards’ claims are barred by 42 U.S.C. § 405(h),
that he failed to establish jurisdiction under 42 U.S.C. § 405(g), that his Bivens
action is barred by sovereign immunity and Texas’ two-year statute of
limitations, that he is not entitled to declaratory relief, that he failed to satisfy
jurisdictional prerequisites, and that he failed to state a claim upon which
relief could be granted.
Under 42 U.S.C. § 405(g), an individual may seek judicial review of a
final decision of the Commissioner of Social Security by filing a civil action
within 60 days of such decision. See 42 U.S.C. § 405(g). Further, section 405(h)
provides:
The findings and decision of the Commissioner of Social Security
after a hearing shall be binding upon all individuals who were
parties to such hearing. No findings of fact or decision of the
Commissioner of Social Security shall be reviewed by any person,
tribunal, or governmental agency except as herein provided. No
action against the United States, the Commissioner of Social
Security, or any officer or employee thereof shall be brought under
section 1331 or 1346 of Title 28 to recover on any claim arising
under this subchapter.
42 U.S.C. § 405(h); 42 U.S.C. § 1395ii (making § 405(h) applicable to Medicare).
The district court examined applicable case law to determine whether
Edwards’ claim “arises under” the Medicare Act and found that it did. See
Heckler v. Ringer, 466 U.S. 602, 615 (1984); Weinberger v. Salfi, 422 U.S. 749,
760-61 (1975); and Marsaw v. Thompson, 133 F. App’x 946, 948 (5th Cir. 2005)
1 Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388
(1971).
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(Marsaw II). The district court said that, otherwise, exercising jurisdiction
would require it to revisit the Medicare claims and make determinations
regarding the appropriateness of the original denial of such claims. Thus, the
district court concluded that it lacked subject matter jurisdiction. The district
court further concluded that the HHS Secretary and employees were acting
within the scope of their official duties in administering the Medicare Act and
were entitled to sovereign immunity. The district court held that Edwards had
failed to state a Bivens claim because Congress has created a comprehensive
statutory administrative review mechanism to address any problem with
Medicare reimbursements. See Marsaw II, 133 F. App’x at 948. As for the
declaratory judgment, the district court concluded that, because it dismissed
all of the underlying claims, the request for relief could not stand alone or
provide an independent basis for subject matter jurisdiction.
The district court relied on this court’s decision in Affiliated Professional
Home Health Care Agency v. Shalala, 164 F.3d 282 (5th Cir. 1999), where the
plaintiff health care agency alleged that the HHS Secretary violated its
constitutional rights by improperly and arbitrarily enforcing various Medicare
rules based solely on the fact that it was African-American owned. Id. at 284.
This court said that the claim was not collateral to the claim for entitlement
under the Medicare Act because resolving the issues would require the court
to immerse itself in Medicare regulations and make factual determinations
regarding the Medicare claims. Id. at 285-86. This court also concluded that
the claims against the United States under the civil rights statutes were
barred by sovereign immunity and, since the Secretary was not being sued in
her individual capacity, neither Bivens nor the civil rights statutes provided
jurisdiction. Id. at 286.
This court decided another similar case in Marsaw. Marsaw, an African-
American owner of several Medicare providers, and his clinics brought suit
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against HHS and the Medicare contractor, Trailblazer, alleging that
Trailblazer engaged in racial discrimination when it placed the clinics in pre-
payment review which ultimately forced Marsaw out of business. Marsaw
sought an injunction to correct the administrative process and judicial review
of the denied claims. He also asserted various constitutional claims and state
law claims for tortious interference. The district court found that Marsaw’s
claims arose under the Medicare Act and that his failure to exhaust
administrative remedies under section 405(g) precluded judicial review based
on a lack of subject matter jurisdiction. See Marsaw v. Trailblazer Health
Enters., L.L.C., 192 F. Supp.2d 737 (S.D. Tex. 2002) (Marsaw I). There was no
appeal.
However, after the administrative review process was complete and most
of the claims previously denied had been paid, Marsaw then filed the second
action seeking damages from HHS and Trailblazer for initially denying his
Medicare claims and asserting the same factual allegations and legal claims
as Marsaw I. The district court dismissed the second action for lack of subject
matter jurisdiction, holding that his claims arose under the Medicare Act
because they were inextricably intertwined with a substantive claim of
administrative entitlement and the fact that he sought damages for
constitutional violations did not undercut that conclusion. See Marsaw II, 133
F. App’x at 947. The district court further held that section 405(g) precluded
jurisdiction because Marsaw was successful during the administrative review
process. Id. With regard to the Bivens claim against the HHS Secretary in her
official capacity, the district court held that it was barred by sovereign
immunity. Id.
On appeal, Marsaw asserted federal jurisdiction over an implied right of
action based on Bivens. However, Marsaw waived any challenge to the
determination that the Secretary was entitled to sovereign immunity. This
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court concluded that “Marsaw’s constitutional claims arise under the Medicare
Act (and are not collateral to it) because they are inextricably intertwined with
plaintiffs’ substantive claims for entitlement under Medicare.” Id. at 948. This
court further concluded that, because section 405(g) requires a determination
adverse to the claimant and Marsaw had later received the payments he
claimed were wrongfully denied, his case was moot and the constitutional
nature of Marsaw’s claim did not alter that conclusion. Id. Finally, this court
determined that Trailblazer was entitled “to sovereign immunity because it
was acting under the direction of the federal government in performing duties
delegated by HHS.” Id. at 949.
Here, as the district court found, sections 405(g) and 405(h) require that
Edwards first exhaust Medicare’s administrative appeals process and receive
a final decision before seeking judicial review. Edwards successfully appealed
most, if not all, of his claims and got reversals of more than 90 percent. Thus,
Edwards fails to meet the requirements under section 405(g) necessary to seek
judicial review. See Marsaw II, 133 F. App’x at 948. Edwards also fails to
specifically address any claims that were not reversed. Not to mention that
405(g) provides for judicial review “by a civil action commenced within sixty
days.” 42 U.S.C. § 405(g) (emphasis added). Thus, the district court properly
dismissed for lack of subject matter jurisdiction.
With regard to the Bivens claim, Edwards alleges that the HHS
Secretary and employees were acting within the scope of their official duties in
administering the Medicare Act. Based on the applicable authority set out
above, they are entitled to sovereign immunity. 2 See also Peterson v.
Weinberger, 508 F.2d 45, 50 (5th Cir. 1975). Further, as the district court
2 Edwards fails to support his claim of an ultra vires exception. Danos v. Jones, 652
F.3d 577, 583 (5th Cir. 2011) (A plaintiff must do more than merely allege the actions are
illegal or unauthorized).
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found, there is a comprehensive statutory review mechanism available. Also,
Edwards’ action is several years beyond the forum state’s limitations period of
two years. See Bivens, 403 U.S. 388; Gartrell v. Gaylor, 981 F.2d 254 (5th Cir.
1993); and Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a). This court has also
previously said that the constitutional nature of a claim has no effect in such
a case. See Marsaw II, 133 F. App’x at 948. Accordingly, the district court
properly dismissed for failure to state a claim. Because the district court
properly dismissed the underlying claims, there is no basis for declaratory
relief.
AFFIRMED.
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