S.D.Ohio: Rooker-Feldman doctrine misinterpreted to bar Medicaid claim

An Ohio federal district court held that the Rooker-Feldman doctrine barred a preemption-based challenge to denial of Medicaid benefits.

An Ohio federal district court held that the Rooker-Feldman doctrine barred a preemption-based challenge to denial of Medicaid benefits. The court reasoned that the case would require it to interpret and affirm prior decisions by state hearing officers. This appears to stretch the doctrine, which generally only applies to review of state court judgments. Immel v. Lumpkin, 2009 WL 173862 (S.D. Ohio Jan. 23, 2009) (No. 07-1214).

 

          Mary K. Immel’s Medicaid application has been rejected three times. The first time, the agency said that a promissory note she had purchased was an improper transfer. A hearing officer said this was wrong and ordered the agency not to consider the note. The agency again deemed Immel ineligible, citing an improper transfer and excess resources. A hearing officer again rejected the state’s reasons. The agency then, once again, deemed Immel ineligible, citing excess resources and excess income. Immel went to federal court, asserting that the agency’s interpretation of state law violated the transfer of asset rules under 42 U.S.C. § 1396p(c), and seeking declaratory relief. Parties both moved for summary judgment.

 

          Under the Rooker-Feldman doctrine, lower federal courts lack jurisdiction to review judgments by state courts. If the federal claim would require holding that the state court was in error, the district court lacks jurisdiction. Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280 (2005). To apply this doctrine here the court reasoned as follows:

[T]he Court finds that Plaintiff's federal claims are inextricably intertwined with claims earlier asserted in state administrative proceedings. Plaintiff's action in this Court essentially seeks to affirm a prior State Hearing Officer Decision. Plaintiff argues that the Rooker-Feldman doctrine is inapplicable because she has not lost in state court. Regardless of how Plaintiff characterizes it, she has not been awarded Medicaid benefits and is essentially a loser for purposes of application of this doctrine. Otherwise, why would Plaintiff even initiate this action? The Court finds that Plaintiff is essentially asking the Court to clarify the … State Hearing Officer's Decision.

The court cited no precedent for the application of Rooker-Feldman to state administrative proceedings.

 

In fact, the Supreme Court has stated that this doctrine “has no application to [federal] judicial review of executive action, including determinations made by a state administrative agency.” Verizon Maryland, Inc. v. Public Service Commission of Maryland, 535 U.S. 635, 644 n. 3 (2002). At least one court has refused to apply the doctrine to denials of Medicaid benefits. Sanders ex rel. Rayl v. Kansas Dept. of Soc. and Rehab. Servs., 317 F.Supp.2d 1233 (D.Kan. 2004). There does not appear to be any precedent specifically regarding decisions of state hearing officers, but the district court does not say that hearing officers are courts, or give any reason why they should be treated as such.

The court suggested, in passing, that Immel’s claims might also fail on the merits, because the agency relied on a different theory than the ones previously rejected by the hearing officer. The court gives little discussion of the merits or the plaintiff’s theory of the case, however, and it is therefore hard to tell how the case would have turned out.