State of Florida, Agency for Health Care Administration v. Michael Lee Smathers, II

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
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No. 1D17-4239
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STATE OF FLORIDA, AGENCY FOR
HEALTH CARE ADMINISTRATION,

Appellant,

v.

MICHAEL LEE SMATHERS, II,

Appellee.
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On appeal from the Division of Administrative Hearings.
John G. Van Laningham, Judge.

January 22, 2019

PER CURIAM.

After Michael Lee Smathers obtained a settlement in a
personal injury lawsuit, the Agency for Health Care
Administration (AHCA) asserted a lien against the settlement
proceeds for reimbursement of medical assistance provided to
Smathers under the Medicaid program. Smathers filed a petition
with the Division of Administrative Hearings (DOAH) to contest
the amount of the lien. The administrative law judge (ALJ)
concluded that DOAH lacked jurisdiction and entered a final order
dismissing the petition.

AHCA appealed, arguing that the ALJ erred in concluding
that he was required to dismiss the petition for lack of jurisdiction.
Because it appeared that AHCA did not have standing to appeal,
and because Smathers did not cross-appeal, we ordered the parties
to show cause why the appeal should not be dismissed.

Both parties conceded that the final order did not adversely
affect AHCA. Because the final order was wholly favorable to
AHCA, the agency lacked standing and we must dismiss the
appeal. See § 120.68(1)(a), Fla. Stat. (2018); Fla. Dep’t of Envtl.
Prot. v. Fla. Reemployment Assistance Appeals Comm’n, 123 So. 3d
1154, 1154-55 (Fla. 1st DCA 2012) (dismissing an appeal where
the order on appeal was wholly favorable to the state agency
seeking review of the order); Dep’t of Health v. Fresenius Med. Care
Holdings, Inc., 935 So. 2d 636, 637 (Fla. 1st DCA 2006) (“An appeal
of a wholly favorable judgment must be dismissed.”); Fla. Comm’n
on Hurricane Loss Projection Methodology v. Dep’t of Ins., 716 So.
2d 345, 346 (Fla. 1st DCA 1998) (“We decline to examine an
administrative law judge’s rationale for a ruling at the behest of
the party in whose favor the administrative law judge ruled.”).

DISMISSED.

ROWE and WINOKUR, JJ., concur; WETHERELL, J., concurs with
opinion.

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Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
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WETHERELL, J., concurring.

I fully concur in the dismissal of this appeal. I write
separately to make three points.

First, although AHCA was not adversely affected by the final
order because the effect of the order was to allow AHCA to recover
the full amount of its lien, Smathers was adversely affected by the
order and could have appealed it. But, inexplicably, he failed to do
so. By not appealing the final order (or filing a notice of joinder or

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cross-appeal after AHCA filed its appeal), Smathers waived his
opportunity to obtain a reversal of the order and, ultimately, a
reduction in the lien upon remand. Smathers’ suggestion 1 that he
can now obtain relief from the lien in the circuit court is meritless
because a party who does not exhaust all available avenues to
remedy an erroneous administrative decision cannot thereafter
obtain relief in a judicial forum. See Robinson v. Dep't of Health,
89 So. 3d 1079, 1081 (Fla. 1st DCA 2012) (“As a general rule,
exhaustion of administrative remedies includes pursuing an
appeal from an administrative ruling where a method of appeal is
available.”).

Second, although there is no question that ALJs have the
authority (if not the duty) to independently consider whether they
have jurisdiction over a dispute, that authority does not permit the
ALJ to ignore a statute that explicitly grants DOAH jurisdiction
over a dispute—like section 409.910(17)(b), Florida Statutes,
does—simply because, in the ALJ’s view, the statute is
“inoperative,” ineffectual, or otherwise invalid. See
Communications Workers of America, Local 3170 v. City of
Gainesville, 697 So. 2d 167, 170 (Fla. 1st DCA 1997) (“The
Administrative Procedure Act does not purport to confer authority

1 In his reply to AHCA’s response to our order to show cause
why AHCA had standing to appeal the final order, Smathers did
not argue that AHCA had standing. Rather, he suggested that
AHCA “may come to a different conclusion regarding whether it is
aggrieved by the ALJ’s dismissal in this case” because the
dismissal “eliminates the rationale relied upon by the circuit court
for the Eleventh Circuit in Miami-Dade County to decline
Smathers[’] request to adjudicate AHCA’s lien.” Smathers
continued:

Thus, the circuit court's order declining to exercise its
jurisdiction can be vacated, potentially pursuant to
Florida Rule of Civil Procedure 1.540(b)(5) if necessary,
so that the circuit court can exercise its traditional role
to adjust AHCA’s lien. As a court of general jurisdiction,
in the absence of any alternative mandatory forum, the
circuit court can and should decide the issues regarding
adjudication of AHCA’s lien on Smathers’ proceeds.
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on administrative law judges or other executive branch officers to
invalidate statutes on constitutional or any other grounds.”).
Indeed, so long as the dispute falls within the scope of the statute
and all jurisdictional prerequisites have been met (e.g., timely-filed
by a person with standing), the ALJ is duty-bound to adjudicate
the merits of the dispute.

Third, our dismissal of this appeal should not be viewed as an
approval of the ALJ’s novel conclusion that DOAH lacked
jurisdiction to adjudicate the merits of Smathers’ petition. This
conclusion was based on the ALJ’s view that the federal district
court’s decision in Gallardo v. Dudek 2 “substantially undermines
the superficially available administrative remedy” in section
409.910(17) to the point that it leaves DOAH with no remedy to
offer to petitioners such as Smathers, but that conclusion finds no
support in the court’s decision. Indeed, on rehearing, the court
expressly recognized that DOAH would continue to have a role in
determining the proper amount of AHCA’s lien. See 2017 WL
3081816, at **8-9. Moreover, even if the ALJ’s view about the
unavailability of a remedy was correct, that still would not have
justified dismissal of the petition for lack of jurisdiction; at most,
it would have justified denial of the petition on the merits.

With these additional observations, I join the majority
opinion.

2 263 F. Supp. 3d 1247 (N.D. Fla. 2017) (Walker, J.) (holding
that section 409.910, Florida Statutes, is preempted by the federal
Medicaid Act insofar as the statute (1) allows AHCA to seek
reimbursement of its past Medicaid payments from the portion of
the Medicaid recipient’s tort recovery that represents future
medical expenses, and (2) requires proof by clear and convincing
evidence when the recipient challenges the amount of AHCA’s
statutorily-calculated lien), clarified on rehearing sub nom,
Gallardo v. Senior, 2017 WL 3081816 (N.D. Fla. July 18, 2017),
appeal filed, No. 17-13693 (11th Cir. Aug. 17, 2017). Accord
Giraldo v. Agency for Health Care Admin., 248 So. 3d 53, 56 (Fla.
2018) (holding that “federal law allows AHCA to lien only the past
medical expenses portion of a Medicaid beneficiary's third-party
tort recovery to satisfy its Medicaid lien”).

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 _____________________________

Ashley Brooke Moody, Attorney General, and Elizabeth Teegen,
Assistant Attorney General, Tallahassee, for Appellant.

John H. Pelzer of Greenspoon Marder LLP, Fort Lauderdale, for
Appellee.

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