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Court order denying temporary restraining order against L.A. County audit of the AIDS Healthcare Foundation

Court order denying temporary restraining order against L.A. County audit of the AIDS Healthcare Foundation

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A judge on Friday, July 19, 2013 denied a temporary restraining order request by the AIDS Healthcare Foundation to stop an L.A. County audit.
A judge on Friday, July 19, 2013 denied a temporary restraining order request by the AIDS Healthcare Foundation to stop an L.A. County audit.

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Published by: Los Angeles Daily News on Jul 20, 2013
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08/03/2013

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UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.CV 12-10400 PA (AGRx)DateJuly 19, 2013TitleAIDS Healthcare Foundation, et al. v. Los Angeles County, et al.Present: The Honorable PERCY ANDERSON, UNITED STATES DISTRICT JUDGEPaul SongcoNot ReportedN/ADeputy ClerkCourt ReporterTape No.Attorneys Present for Plaintiffs:Attorneys Present for Defendants: NoneNone
Proceedings:
IN CHAMBERS — COURT ORDER Before the Court is an Ex Parte Application for Temporary Restraining Order and OSC rePreliminary Injunction (“Application for TRO”) filed by plaintiffs AIDS Healthcare Foundation(“AHF”) and Michael Weinstein (collectively “Plaintiffs”) (Docket No. 59). Pursuant to Rule 78 of theFederal Rules of Civil Procedure and Local Rule 7-15, the Court finds that this matter is appropriate for decision without oral argument.I.Factual Background and Procedural HistoryPlaintiffs commenced this action against defendants Los Angeles County (the “County”),Jonathan Fielding, Mario Perez, Zev Yaroslovsky, and Gloria Molina on December 5, 2012. On March18, 2013, the Court granted defendants’ Motion to Dismiss the original Complaint and Plaintiffs filed aFirst Amended Complaint (“FAC”). The FAC alleges, among other things, that defendants have, over the past ten years, “engaged in repeated audits of Plaintiffs’ facilities and contracts with the County, eachtime shortly after Plaintiffs have criticized Defendants.” (FAC ¶ 112.) Specifically, AHF alleges that in2010, the County’s Division of HIV and STD Programs (“DHSP”) asked the Auditor Controller toconduct an audit of AHF and incorrectly told the Auditor Controller that AFH had not filed a costallocation plan. (FAC ¶¶ 114-15.) A draft of this audit (the “2010 Audit”) was released in September 2010 and concluded that AHF had overbilled the County in excess of $1.7 million. AHF disputed the2010 Audit’s findings in a November 24, 2010 response. According to the FAC:On May 31, 2012, (around the time AHF sued the County Defendants over the Ramsell contract, and when Measure B showed strong public support),the Auditor Controller issued another identical audit report labeled May“xx” 2012. This report again claimed that AHF owed the County over $1.7 million (the “2012 Audit”).(FAC ¶ 125.) The FAC alleges that the County again demanded payment of the $1.7 million inSeptember 2012, October 2012, and on election day, November 6, 2012, when Measure B was on the ballot. (FAC ¶¶ 128, 132, 133.) On one occasion in 2012, according to the FAC, Mario Perez, theDirector of DHSP, allegedly brought representatives from the Auditor Controller’s office to a Health and
CV-90 (06/04)
CIVIL MINUTES - GENERAL
Page 1 of 4
Case 2:12-cv-10400-PA-AGR Document 61 Filed 07/19/13 Page 1 of 4 Page ID #:4699
 
UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.CV 12-10400 PA (AGRx)DateJuly 19, 2013TitleAIDS Healthcare Foundation, et al. v. Los Angeles County, et al.Mental Health Services Cluster meeting “for the sole purpose of intimidating Plaintiffs.” (FAC ¶ 136.)According to the FAC, after the filing of the original Complaint, Plaintiffs announced a campaign tocreate an independent health department within the City of Los Angeles that would replace the County’sDepartment of Public Health (“DPH”). (FAC ¶ 142.) The FAC alleges that defendants have respondedto this new campaign by announcing a new audit of AHF’s programs. (FAC ¶ 145.) Plaintiffs allegethat this new audit “is not within regular audit patterns and not sought against other providers.” (FAC ¶147.)The FAC alleges claims for: (1) violation of the First Amendment pursuant to 42 U.S.C. § 1983;(2) conspiracy to violate federal constitutional rights; (3) retaliation under the False Claims Act, 31U.S.C. § 3730(h); and (4) declaratory relief pursuant to California Civil Code § 1060. Defendants filed aMotion to Dismiss the FAC. On June 3, 2013, the Court granted in part, and denied in part, the Motionto Dismiss the FAC. Specifically, the Court dismissed Plaintiffs’ claims except with respect to AHF’sclaim for declaratory relief against the County, Plaintiffs’ First Amendment claim brought pursuant to 42U.S.C. § 1983 against Perez, and the Monell and Canton claims against the County. The Courtdismissed the remaining claims and defendants without leave to amend.In their Application for TRO, Plaintiffs seek to delay the County from beginning its latest auditof AFH from July 22, 2013, to no earlier than September 1, 2013. According to Plaintiffs, the new auditcomes shortly after AHF’s staff to devoted significant resources to previous audits. Plaintiffs assert thatthey are still “playing ‘catch up’ to compensate for time lost in performing their normal day-to-dayfunctions” as a result of the prior audits and that the patient care provided by AHF will suffer if theCounty’s new audit begins on July 22, 2013.According to the County, it has been attempting to schedule the new fiscal audit, which isrequired by the federal agency overseeing the County’s dispersal of federal health care funds, sinceMarch 2013, and already delayed the audit from May to July 22, 2013, when AHF refused to agree to the proposed May dates. The County asserts that in the past, “AHF and other providers have never indicatedthat fiscal audits have had any impact on the delivery of patient care at their clinics.” (Perez Decl. ¶ 6.)According to the County, “the July 22 fiscal audit would only require the involvement of AHF’sfinancial and administrative staff; no involvement from AHF’s clinical and program staff would berequired.” (Id.)II.AnalysisThe standard for issuing a temporary restraining order is identical to the standard for issuing a preliminary injunction. See Lockheed Missile & Space Co., Inc. v. Hughes Aircraft Co., 887 F. Supp.1320, 1323 (N.D. Cal. 1995). “A plaintiff seeking a preliminary injunction must establish that he islikely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminaryrelief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”Winter v. Natural Resources Defense Council, 555 U.S. 7, 20, 129 S. Ct. 365, 374, 172 L. Ed. 2d 249
CV-90 (06/04)
CIVIL MINUTES - GENERAL
Page 2 of 4
Case 2:12-cv-10400-PA-AGR Document 61 Filed 07/19/13 Page 2 of 4 Page ID #:4700
 
UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.CV 12-10400 PA (AGRx)DateJuly 19, 2013TitleAIDS Healthcare Foundation, et al. v. Los Angeles County, et al.(2008). “A preliminary injunction is an extraordinary remedy never awarded as of right.” Id. The NinthCircuit employs a “sliding scale” approach to preliminary injunctions as part of this four-element test.Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011). Under this “slidingscale,” a preliminary injunction may issue “when a plaintiff demonstrates . . . that serious questionsgoing to the merits were raised and the balance of hardships tips sharply in the plaintiff’s favor,” as longas the other two Winter factors have also been met. Id. (internal citations omitted). “[A] preliminaryinjunction is an extraordinary and drastic remedy, one that should not be granted unless the movant, by aclear showing, carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S. Ct.1865, 1867, 138 L. Ed. 2d 162 (1997).The Application for TRO contends that Plaintiffs have a substantial likelihood of success on themerits of their First Amendment claim. “The First Amendment forbids government officials fromretaliating against individuals for speaking out.” Blair v. Bethel School Dist., 608 F.3d 540, 543 (9thCir. 2010). To prevail on a § 1983 First Amendment retaliation claim, a plaintiff must prove:(1) he engaged in constitutionally protected activity; (2) as a result, he wassubjected to adverse action by the defendant that would chill a person of ordinary firmness from continuing to engage in the protected activity; and(3) there was a substantial causal relationship between the constitutionally protected activity and the adverse action.Id. The only evidence submitted in support of Plaintiffs’ allegations of retaliation in violation of theFirst Amendment is contained in a single paragraph of Michael Weinstein’s Declaration. That paragraphstates:Plaintiffs in this action allege that Defendants have initiated a retaliatorycampaign against Plaintiffs using, among other tools, unwarranted andunduly burdensome audits and incorrect audit findings, including thosediscussed above, to punish Plaintiffs for exercising their rights and for taking positions critical of the County. Defendants have continued thatcampaign during the pendency of this action, most recently by insistingthat an audit of unprecedented scope commence on July 22, 2013 directlyon the heels of the conclusion of the information-gathering portions of  prior audits that have been pending for the last several months.Defendants have stated no basis for insisting that the contemplated auditcommence on the heels of the conclusion of the prior audits and, moreimportantly, have ignored AHF’s pleas that Defendants’ continuedinsistence on conducting the contemplated audit would put the health of AHF’s patients at risk.
CV-90 (06/04)
CIVIL MINUTES - GENERAL
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Case 2:12-cv-10400-PA-AGR Document 61 Filed 07/19/13 Page 3 of 4 Page ID #:4701

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