[00:00:00] Speaker 02:
Next case is 25-6000 Lancaster versus Cartmel and Mr. Riffle first.

[00:00:13] Speaker 00:
Yes, my name is Mr. Riffle, Craig Riffle.

[00:00:15] Speaker 00:
I represent the appellant who's also the plaintiff in this case.

[00:00:20] Speaker 00:
that we're here because the court dismissed his case on a 12b6 motion.

[00:00:25] Speaker 00:
The plaintiff had filed his complaint alleging he was qualified for Medicaid benefits, that he couldn't be penalized under the loan that was in his case, and that he was entitled to injunctive relief.

[00:00:36] Speaker 00:
the defendants responded by filing a 12b6 motion, which the court granted.

[00:00:42] Speaker 00:
Now, on the dismissal standard, what I'd really like just to do is highlight the Brown case that the Tenth Circuit decided in January of this year.

[00:00:49] Speaker 00:
And what that case says is it says that the district court in reviewing a 12b6 motion must restrict its review to the allegations within the four corners of the complaint, cannot consider other pleadings or external allegations.

[00:01:03] Speaker 00:
Now, there are three exceptions to that.

[00:01:05] Speaker 00:
one being an exhibit attached to the complaint, or two, a document referenced in the complaint, or three, anything the court can take judicial notice of.

[00:01:14] Speaker 00:
The Brown case is a very good case.

[00:01:15] Speaker 00:
It summarizes the long line of jurisprudence we have regarding the dismissal standard.

[00:01:19] Speaker 00:
I mean, it incorporates the Ashcroft case from the Supreme Court

[00:01:23] Speaker 00:
that says a plaintiff must only plead sufficient allegations and must not prove those.

[00:01:29] Speaker 00:
It incorporates the Munt case, the Tenth Circuit case from 2024, which says that the court must accept the well-pled allegations and construe them most light and the light most favorable to the plaintiff.

[00:01:42] Speaker 00:
The Glover case, which says the plaintiff is not required to prove this case at this point.

[00:01:46] Speaker 03:
And so- I'm sorry, go ahead.

[00:01:50] Speaker 00:
The Skinner case, which says that the court's neither to assess legal feasibility or weigh the evidence.

[00:01:55] Speaker 00:
And so what the court did in this case is the court did exactly that.

[00:01:58] Speaker 00:
The court went beyond the four corners of the documents, considered information allegations that were external to that and even arguments that were external to complaint.

[00:02:08] Speaker 03:
After Medina, does any of that matter?

[00:02:11] Speaker 00:
Yes, it does.

[00:02:12] Speaker 00:
Medina was a case that talks about whether a private right of action is created and it does focus on spending statutes litigation.

[00:02:23] Speaker 00:
But what's really important about Medina is it doesn't overrule a private right of action in

[00:02:29] Speaker 00:
in this case or in any particular case, what it does is it gives a lot of instruction to lower courts as to how to apply the Gonzaga standard.

[00:02:40] Speaker 00:
The Gonzaga test, Medina is real clear in its reading that it considers Gonzaga to be the gold standard.

[00:02:47] Speaker 00:
And it didn't even go as far as overruling Wilder or blessings.

[00:02:54] Speaker 00:
But it says that the statute that we're following must satisfy the Gonzaga standard.

[00:03:00] Speaker 00:
Now, what's also important is that we already have a circuit court.

[00:03:04] Speaker 00:
I believe it's the Third Circuit in the case named Sabri that went through excruciating detail and explaining about how

[00:03:13] Speaker 00:
this particular statute that we're relying on this case does satisfy the Gonzaga standard.

[00:03:18] Speaker 00:
And that statute that we're relying on is specifically 1396 AA8.

[00:03:25] Speaker 00:
And it went through that, it applied the Gonzaga standard and walked through all the steps enumerated in Gonzaga to determine that, yes, it does create a private right of action.

[00:03:34] Speaker 02:
It's probably the best.

[00:03:36] Speaker 02:
Medina casts a lot of skepticism towards the

[00:03:40] Speaker 02:
lower the other cases, Wright, Wilder, et cetera, in Medina.

[00:03:47] Speaker 02:
And those were the primary cases that Sabri relied on in reaching its conclusion.

[00:03:55] Speaker 02:
What do we do about Medina's fairly broad statements about the limited precedential value of those cases, even though it didn't outright reverse them?

[00:04:10] Speaker 00:
Your honor, Medina relied heavily on Gonzaga.

[00:04:14] Speaker 00:
It addressed Wilder, Wright, and Blessings.

[00:04:17] Speaker 00:
It didn't overrule those.

[00:04:18] Speaker 00:
I mean, I agree, it cast doubt as far as their application, and it really provided limits on their application.

[00:04:26] Speaker 00:
But Medina was very, very clear in stating that and illustrating where Gonzaga is the gold standard.

[00:04:34] Speaker 00:
Now,

[00:04:35] Speaker 00:
The Sabri case applied specifically Gonzaga to our statute and held that it does create a private right of action.

[00:04:43] Speaker 00:
Additionally, there's been six other court of appeals that have found that our statute also under Gonzaga does apply, does create a private right of action.

[00:04:54] Speaker 03:
But those are all before Medina.

[00:04:57] Speaker 00:
That's correct, but they're based upon the same authority.

[00:05:00] Speaker 00:
In other words, all those statutes, Medina is based upon the Gonzaga standard, Sabri is based upon the Gonzaga standard, and so are those other cases.

[00:05:13] Speaker 00:
Now, Sabri in particular is based upon, it goes into great detail about how Gonzaga satisfies that test.

[00:05:22] Speaker 02:
And what would you say, why is this statutory provision clearly and unambiguously creating a private right of action?

[00:05:29] Speaker 00:
Well, I think Sabry said it best in going through and comparing the actual language and enumerating the three parts, the three steps that have to be followed.

[00:05:38] Speaker 00:
And that's why the Sabry case was so very important is because it provided an analysis as how to analyze 1396 AA8

[00:05:47] Speaker 00:
under Gonzaga, and it enumerated the steps, talked about everything that Gonzaga talked about, and even compared 1396-888 to the statutes that Gonzaga held did create a private right of action.

[00:06:03] Speaker 00:
For instance, Gonzaga considered a couple of statutes in which they prohibited discrimination, and they specifically said that the state shall not do whatever it was, shall not discriminate.

[00:06:15] Speaker 00:
And they were specific to this, or they referenced specific individuals.

[00:06:21] Speaker 00:
What Sabre did is went in and considered that as well and said, well, when we compare 1398 A.A.A.

[00:06:26] Speaker 00:
the language to those two, to the previous statutes in Gonzaga,

[00:06:33] Speaker 00:
The language is the same.

[00:06:34] Speaker 00:
It says the state insists a shall not, it says the state shall, but then specifically identifies a specific person to be benefited.

[00:06:43] Speaker 00:
Now that's very different than the statute that was considered in Medina.

[00:06:47] Speaker 00:
The Medina statute was much more general in its application.

[00:06:51] Speaker 00:
It talked about if as far as the things that state may do and also talked about in terms of

[00:06:58] Speaker 00:
funding being withheld or that the governmental body that was in charge of that would restrict funding if a certain policy wasn't followed.

[00:07:09] Speaker 00:
And so that's really how they are distinguished.

[00:07:12] Speaker 00:
And SAVERY was a real good, in my opinion, was a real good analysis of walking through, painfully walking through every step.

[00:07:20] Speaker 00:
I mean, it even went through and covered congressional preclusion.

[00:07:28] Speaker 00:
So in this case, what we have is the case was dismissed on Rule 12b6 Motion.

[00:07:37] Speaker 00:
The problem with that is that the court went well beyond the four corners of the complaint.

[00:07:41] Speaker 00:
The court considered information and documents that weren't even in the complaint.

[00:07:46] Speaker 00:
That's why we're here.

[00:07:48] Speaker 00:
The court talked about Medicaid entitlement and the note being a resource, everything, things that weren't in the complaint.

[00:07:55] Speaker 00:
The court basically tried this case in the motion to dismiss phase.

[00:07:59] Speaker 00:
And keeping in mind, we haven't had any kind of procedure in this case yet.

[00:08:02] Speaker 00:
There's been no discovery or anything else.

[00:08:05] Speaker 00:
The court did not limit its inquiries.

[00:08:06] Speaker 00:
The plausibility of the plaintiff's complaint, the court

[00:08:10] Speaker 00:
Order is evidence of that.

[00:08:12] Speaker 00:
It has many different statements regarding arguments, arguing against the plaintiff's position instead of just assessing the plausibility of the order.

[00:08:23] Speaker 00:
The other thing, or the complaint, the other thing that's problematic about the order

[00:08:28] Speaker 00:
is the fact that the Medicaid applicant had a loan in this case to an LLC, and the order contradicts itself.

[00:08:37] Speaker 00:
In other words, the judge specifically identified the proper regulation in determining that we have both formal and informal loans.

[00:08:47] Speaker 00:
The court also properly identified that that same regulation says an informal loan is between individuals who are not in the business of lending money.

[00:08:58] Speaker 00:
and then concluded that the loan was not an informal loan.

[00:09:01] Speaker 00:
Well, then the court had to have concluded that the LLC was an individual in order to fit the definition.

[00:09:09] Speaker 00:
Now, the regulation doesn't define individual.

[00:09:11] Speaker 00:
Black's Law Dictionary would define that to include an LLC, but in the very next paragraph in the order, what the court did

[00:09:18] Speaker 00:
is the court went in to say, although the court's already concluded the LLC is an individual, already concluded it was an informal loan, the court came in and said, no, the LLC is not an individual.

[00:09:28] Speaker 00:
The order itself contradicts itself is one of the problems.

[00:09:33] Speaker 00:
The last thing I'd like to say at this point and before I reserve time is that in the state's response, they pointed out that Mrs. Lancaster is deceased and she has died.

[00:09:46] Speaker 00:
There's a big, big difference in this case versus prior authority.

[00:09:50] Speaker 00:
There's two cases out there, PECA, one's named PECA and one's named Lamley.

[00:09:55] Speaker 00:
And in those cases, they were single person applicants.

[00:09:59] Speaker 00:
They were not married in any way.

[00:10:01] Speaker 00:
So what happened in those cases is when they died, their Medicaid eligibility was no longer alive.

[00:10:08] Speaker 00:
It was not a controversy because the only one that could benefit from that eligibility would be the applicants.

[00:10:14] Speaker 00:
This case is different because it's a married couple case.

[00:10:16] Speaker 00:
And not only is it a married couple case, but it's a married couple case in which both Mr. and Mrs. Lancaster sought benefits.

[00:10:22] Speaker 00:
Their application was filed in October of 23.

[00:10:26] Speaker 00:
Mrs. Lancaster died in October of 24.

[00:10:28] Speaker 00:
Mr. Lancaster is still alive.

[00:10:31] Speaker 00:
But the reason Mrs. Lancaster's eligibility is still important is because in this particular case, both the statute and the regulations say in determining his eligibility that we have to add or we have to consider assets of both spouses in determining his eligibility, except

[00:10:51] Speaker 00:
if she's already qualified for benefits.

[00:10:54] Speaker 00:
In other words, if she's determined to be Medicaid eligible, then that computation will not work that way.

[00:10:59] Speaker 00:
We would not have to pull those assets into the computation.

[00:11:02] Speaker 03:
The claim is for wrongfully being denied future benefits, right?

[00:11:10] Speaker 03:
Yes, and I don't think- She's dead.

[00:11:12] Speaker 03:
She can't get any future benefits.

[00:11:14] Speaker 03:
So whether she's married or not, she has no claim.

[00:11:19] Speaker 03:
It's moot.

[00:11:21] Speaker 00:
I agree with that as far as the payment of benefits.

[00:11:25] Speaker 00:
What I intend to say is that her eligibility is still an issue.

[00:11:31] Speaker 00:
In other words, her application is not moved because not for the payment of benefits, but for the determination as to which assets must be included or not included in Mr. Lancaster's application.

[00:11:43] Speaker 00:
If she was determined to be Medicaid eligible on that application, then the assets are counted differently than if she's not Medicaid eligible.

[00:11:51] Speaker 03:
I mean, even if she's dead?

[00:11:53] Speaker 00:
Yes, because it affects his calculation.

[00:11:56] Speaker 00:
Now, I agree.

[00:11:57] Speaker 00:
The appellant doesn't say that she's entitled to benefits.

[00:12:02] Speaker 00:
The appellant saying is that her Medicaid status affects what assets are counted in Mr. Lancaster's application.

[00:12:12] Speaker 00:
And I've cited that in the brief.

[00:12:14] Speaker 03:
The statute is that it's her eligibility before she died.

[00:12:19] Speaker 00:
Correct.

[00:12:20] Speaker 03:
And once she died, her eligibility is irrelevant, even to him.

[00:12:25] Speaker 00:
Correct.

[00:12:26] Speaker 03:
OK.

[00:12:26] Speaker 00:
Correct.

[00:12:27] Speaker 00:
I'm sorry.

[00:12:28] Speaker 00:
Yeah, it's the eligibility at the date he died because it has a bearing on his application.

[00:12:33] Speaker 00:
Not her eligibility today, obviously.

[00:12:35] Speaker 02:
Well, does it matter that the application was filed before she died?

[00:12:39] Speaker 02:
In other words, could a husband whose spouse had died then realize that it would have helped him if his

[00:12:48] Speaker 02:
deceased spouse had been Medicaid eligible, could you do it retroactively?

[00:12:55] Speaker 00:
I don't know that you could do it retroactively.

[00:12:57] Speaker 00:
What does have a bearing on this case is because since he's alive, he's entitled to injunctive relief.

[00:13:03] Speaker 00:
Well, that injunctive relief will also give rise under 1396 AA 34 to the payment of benefits back to the date of application, not for her, but for Mr. Lancaster.

[00:13:16] Speaker 00:
Now that case, that statute's already been analyzed.

[00:13:19] Speaker 00:
The Marin's case, the Bernard case, they're in our brief.

[00:13:22] Speaker 00:
If I may, I'd like to reserve the rest of my time for rebuttal.

[00:13:25] Speaker 02:
Thank you, Counselor.

[00:13:27] Speaker 02:
I think Ms.

[00:13:29] Speaker 02:
Eads is gonna go first.

[00:13:37] Speaker 04:
Do you please the court?

[00:13:39] Speaker 04:
I'm Susan Eads, and along with my co-counsel, Josh Holloway, we represent the Appalachian

[00:13:46] Speaker 04:
Director Jeffrey Cartmell of the Oklahoma Department of Human Services.

[00:13:51] Speaker 04:
We're joined today by Mr. Ryan Gillette, who represents the Appellee of the Oklahoma Health Care Authority.

[00:13:57] Speaker 04:
In this matter, Mr. Gillette and I would like to split our time equally today.

[00:14:08] Speaker 04:
So I will be first addressing the aspect of the determination on benefits and eligibility.

[00:14:14] Speaker 04:
for the Lancasters and then Mr. Gillette will then discuss that the appellants are not entitled to the relief that they seek under 42 USC 1983 and 1988.

[00:14:30] Speaker 04:
Also, they're directing the court's attention to the Appellee's joint motion for summary disposition that was previously submitted, summarily denied by this court in favor of having the oral argument here today.

[00:14:44] Speaker 04:
I wanna first off thank the court for giving us the opportunity to be able to bring the issues in this case back into focus.

[00:14:54] Speaker 04:
I want to begin with Mrs. Lancaster's claim.

[00:15:00] Speaker 04:
What was absent from the oral argument just presented by appellants council was the fact that this court should dismiss Mrs. Lancaster's claims because she lacks standing currently

[00:15:13] Speaker 04:
As she passed away in October of 2024, as pointed out by Appellants Council, there's been no substitution of a real party and interest on her behalf.

[00:15:24] Speaker 04:
Currently, she is proceeding in this case by and through her daughter, Jan Green, who held her power of attorney.

[00:15:33] Speaker 04:
during her lifetime, but as the court is aware, the efficacy as well as the authority of that power of attorney died when Mrs. Lancaster died.

[00:15:43] Speaker 04:
So therefore, there is no standing for Mrs. Lancaster's claims to proceed herein, so appellees ask that Mrs. Lancaster's claims be dismissed as a result.

[00:15:55] Speaker 04:
Now, turning our attention to the claims of Mr. Lancaster, as was alluded to in Appellant's argument, the underlying issue here includes a determination by the district court that the Oklahoma Department of Human Services denial of eligibility for Mr. and Mrs. Lancaster was appropriate.

[00:16:22] Speaker 04:
There was the underlying

[00:16:24] Speaker 04:
transfer of substantial resources by Mr. and Mrs. Lancaster, totaling $3,754,228 in exchange for a $3.8 million promissory note.

[00:16:41] Speaker 04:
Now it's notable, Your Honors, that at the time of application, the maximum resource threshold per individual was $2,000 or a total of $4,000

[00:16:52] Speaker 04:
for the couple, Mr. and Mrs. The appellee Oklahoma Department of Human Services did deny the eligibility to Mr. and Mrs. Lancaster because the underlying promissory note was not a proper informal loan and it was not bona fide.

[00:17:11] Speaker 04:
And also there was the determination by the agency that the underlying transaction created what essentially is a trust like device.

[00:17:22] Speaker 03:
What do we do with the fact that in the decision itself, the court contradicts itself.

[00:17:31] Speaker 03:
It rules first.

[00:17:32] Speaker 03:
It concludes first that the promissory note was an informal loan because those involved were individuals not in the business of lending money.

[00:17:42] Speaker 03:
And then in the next breath, it says that the court, the loan was not informal.

[00:17:49] Speaker 03:
and accepted the government's argument that the loan had to be informal to be bona fide.

[00:17:56] Speaker 03:
Aren't those conflicting findings?

[00:17:59] Speaker 04:
Your honor, with regard to that issue, the district court noted that there was no legal authority put forward by appellants that the loan was anything other than an informal loan.

[00:18:15] Speaker 04:
There was no case law.

[00:18:16] Speaker 04:
There was no legal authority cited

[00:18:18] Speaker 04:
to make it a formal loan, and just because there was personal guarantees that were issued by the three children of the appellants did not then convert it to a formal loan.

[00:18:34] Speaker 03:
Well, that may be true, but the court said it's an informal loan, and then it said it's not an informal loan.

[00:18:45] Speaker 03:
I mean, if nothing else, don't we need clarification?

[00:18:48] Speaker 03:
Does it matter to the determination of whether the promissory note was a countable resource, whether it is or is not a formal loan?

[00:19:00] Speaker 04:
Your honor, it's my opinion that the district court's order, it clearly and unambiguously determines and concludes that the loan is an informal loan, and it is an informal loan based upon the Social Security Administration's program operating manual, officially referred to as the POMS.

[00:19:22] Speaker 04:
So they did make a clear finding about it, and that's a legal determination that was made.

[00:19:27] Speaker 04:
So the court agreed and concluded in agreement with the appellees that the loan was an informal loan and it wasn't a proper informal loan because it was not between the individuals.

[00:19:40] Speaker 04:
It was between two individuals, Mr. and Mrs. Lancaster and the family LLC.

[00:19:47] Speaker 05:
Well, you can see why we're struggling.

[00:19:49] Speaker 05:
little bit and it's the start of page four there where it says applying the same plain language the court also agrees with the defendant the informal loan so it's sticking to it that it's informal loan is not bona fide because it was not made between individuals period but if you look at 220d what cited it's the same section that was cited earlier is it just the court not continuing the thought and including the rest of the words or is it something

[00:20:19] Speaker 04:
I would say that's correct.

[00:20:20] Speaker 04:
I mean, again, the issue here is, I mean, you can put lipstick on a pig, but it's still a pig.

[00:20:27] Speaker 04:
Ultimately, the reality of it is that the resource amount by a $3.8 million resource amount was determined by the agency and then determined by the court that it was a countable resource.

[00:20:43] Speaker 04:
And in other words, was available to Mr. and Mrs. Lancaster

[00:20:46] Speaker 04:
to pay for their own long-term care expenses.

[00:20:50] Speaker 05:
It's not just that they gave $3.8 million.

[00:20:55] Speaker 05:
It has to be for reasons.

[00:20:56] Speaker 05:
And the reason the court gave was it's informal and it's not bona fide.

[00:21:00] Speaker 04:
Correct.

[00:21:01] Speaker 04:
And the bona fide aspect also goes to the appellee's briefing on the aspect of the repayment term under the promissory note was not feasible, which is one of the

[00:21:15] Speaker 04:
clear factors to be considered as to whether a promissory note is bona fide or not bona fide.

[00:21:21] Speaker 05:
And in this case... But now we're past the district court opinion in this discussion, aren't we?

[00:21:26] Speaker 05:
The district court just said not bona fide and cited that.

[00:21:29] Speaker 05:
It didn't get into feasibility, did it?

[00:21:32] Speaker 04:
No, sir, it did not, because ultimately the district court earlier on page

[00:21:37] Speaker 04:
three of the opinion had indicated that, you know, for a promissory note to not be considered a resource, it must be bona fide cited to the poems 1120.220C2C there.

[00:22:01] Speaker 04:
And so that's the situation where they made a finding

[00:22:06] Speaker 04:
That carries on and talks about the informal loan is long between individuals for not the business of lending money or providing credit.

[00:22:13] Speaker 04:
And if it is informal, it is bona fide if it's enforceable under state law alone agreement was in effect at the time of the transaction.

[00:22:21] Speaker 04:
There's acknowledgement of obligation to pay.

[00:22:23] Speaker 04:
There's a plan for repayment and the repayment plan is feasible.

[00:22:27] Speaker 04:
So it does, the district court does touch on the aspect of that requirement that the repayment plan be feasible, but it determines that ultimately we're not going to look any further because we agree with the appellees hearing that the loan itself was an informal loan.

[00:22:47] Speaker 04:
And it's clear in unambiguous language brought about by the poems that it has to be between

[00:22:51] Speaker 04:
individuals.

[00:22:52] Speaker 04:
There's also the application there, Your Honor, of the case of Mohammed versus Palestinian Authority 566 U.S.

[00:23:00] Speaker 04:
449 at 453 to 456, which specifies there in the court held unanimously that the individual as used in federal statutes encompassed only natural persons, excluding organizations.

[00:23:16] Speaker 04:
So the district court felt very confidently that this case involved an informal loan that was not between individuals as was required.

[00:23:26] Speaker 04:
And so therefore they determined that the underlying amended complaint should be dismissed because while there might be a cause of action, it wasn't properly pled as such.

[00:23:38] Speaker 05:
Can I ask you just a point of curiosity, which is when the money comes back, the first payment, the 100,000 or whatever it was,

[00:23:47] Speaker 05:
Wouldn't the recipient immediately be ineligible for too many resources or how did that work?

[00:23:55] Speaker 04:
No, Your Honor.

[00:23:55] Speaker 04:
Actually, the payment terms under this loan were for

[00:23:59] Speaker 04:
around $850,000 per year.

[00:24:02] Speaker 04:
And so ultimately it should work that when the individual receives the repayment of the 850,000, it could make them ineligible at that point because they're over resources at that point.

[00:24:19] Speaker 04:
However, what has happened in other cases that we have been involved with that Mr. Riffle has cited to and some he has not cited to is

[00:24:29] Speaker 04:
that Mr. Riffle's firm has taken the promissory note, transferred it to a trust that became irrevocable at the death of the beneficiary, and excused any liability for repayment by the borrowers.

[00:24:43] Speaker 04:
And so that's a problem that we have not seen in this particular case, but that can be an issue there.

[00:24:50] Speaker 04:
They also have been involved in previous cases that have went before the 10th Circuit where when that repayment is made, that annual payment is made,

[00:24:59] Speaker 04:
it is immediately swept up into a successive promissory note.

[00:25:04] Speaker 04:
So they create a new promissory note.

[00:25:06] Speaker 05:
And I realized that it's kind of an impoverishment system plan.

[00:25:12] Speaker 05:
And they're going to vary.

[00:25:14] Speaker 05:
Have you ever seen this one before?

[00:25:16] Speaker 05:
And are you aware of any cases where courts have dealt with something similar to what's being done here?

[00:25:23] Speaker 05:
In other words, are any authority or we are on our own?

[00:25:26] Speaker 04:
As far as, um, in what aspect, your honor, as far as with regard to the promissory note being between an individual and an LLC.

[00:25:35] Speaker 05:
Oh, the money's here.

[00:25:38] Speaker 05:
The money's there.

[00:25:39] Speaker 05:
The money's not really there.

[00:25:40] Speaker 05:
It's really over here.

[00:25:41] Speaker 05:
And we're eligible.

[00:25:45] Speaker 04:
Right.

[00:25:46] Speaker 04:
That would ultimately be looking back at the Rose case.

[00:25:50] Speaker 04:
Um, it's the Brown case and in the way that Mr. Riff will refer to it.

[00:25:54] Speaker 04:
Um, that involved three different individuals who had promissory notes.

[00:25:58] Speaker 04:
Um, the aspect of how the Medicaid planning was used there concerning those promissory notes.

[00:26:05] Speaker 04:
Um, we also had.

[00:26:10] Speaker 04:
Yeah, that's good.

[00:26:12] Speaker 03:
You're almost out of time and we'd like to hear.

[00:26:17] Speaker 04:
Yes, I'll just pass my time to Mr. Gillette at this point.

[00:26:25] Speaker 01:
Thank you, your honor is the quarter and a range of health care authority council address her issues and I will.

[00:26:35] Speaker 01:
I'll see my points to narrow points 1st.

[00:26:38] Speaker 01:
The Dino was decided during this deal and I do think when you follow that, it's in line with this courts.

[00:26:46] Speaker 01:
prior precedents in Hobbs and Mandiar and finds that the statutes at present here do not clearly and unambiguously create individual rights enforceable under 1983.

[00:27:00] Speaker 01:
And in regards to the individual cases

[00:27:03] Speaker 01:
of blessing wilder and right.

[00:27:05] Speaker 01:
While I agree with counsel that the Supreme Court not overturned those, I think in Medina, Justice Gorsuch clearly cautions lower courts to no longer rely on those cases when dealing with spending clause statutes.

[00:27:18] Speaker 01:
The second point I'd make briefly is that even if the provisions invoked here are not privately enforceable under Section 1983, that does not leave Medicaid beneficiaries, including Mr. Lancaster in this situation, without meaningful avenues of relief.

[00:27:36] Speaker 01:
There is a robust structure for beneficiaries to seek relief outside of 1983 through administrative hearing process that's reviewable by the state courts and ultimately can seek certiorari from the United States Supreme Court.

[00:27:49] Speaker 01:
In fact, Mr. Lancaster filed such an administrative appeal and asked that the administrative court held it on abeyance while he sought this case at issue here.

[00:28:00] Speaker 01:
And finally, in conjunction with that, there's also federal oversight.

[00:28:04] Speaker 01:
HHS has the ability to accept complaints from beneficiaries, can issue corrective actions to the state, and even in extreme systemic issues, withdraw federal funding.

[00:28:16] Speaker 01:
With that, Your Honor, we ask that this court affirm the lower court's decision, if not for the reasons cited by my co-counsel for DHS, for finding that there's no private right of action under 1983.

[00:28:29] Speaker 02:
Thank you, Council.

[00:28:31] Speaker 02:
We have some rebuttal time.

[00:28:33] Speaker 00:
Yes, this whole discussion proves my point about the fact this was a 12 v 6 motion.

[00:28:39] Speaker 00:
Council has spent their entire time arguing the merits of the underlying case.

[00:28:43] Speaker 00:
That's not the proper standard under all the jurisprudence we have, both from the Tenth Circuit and the Supreme Court.

[00:28:50] Speaker 00:
That may be proper for a motion for summary judgment, but it's not proper for a 12b6 motion.

[00:28:55] Speaker 00:
And the court went way beyond its authority and considered any arguments outside the complaint.

[00:28:59] Speaker 00:
This whole discussion illustrates that and these other allegations that have been made.

[00:29:04] Speaker 00:
The other thing I'd like to say on the formal versus informal, let me say specifically, as I said earlier, the regulation says, quote,

[00:29:12] Speaker 00:
An informal loan is between individuals who are not in the business of lending money.

[00:29:16] Speaker 00:
I'm reading from the court's decision that says, page 3, bottom paragraph, applying this plain language, which is referring to that, the court must conclude that the plaintiff's made an informal loan to the LLC.

[00:29:28] Speaker 00:
Well, then he had to conclude that the LLC was an individual.

[00:29:32] Speaker 00:
But on the very first sentence of the next paragraph, he says, applying the same language, the court also agrees that the informal loan is not bona fide because it is not made between individuals.

[00:29:44] Speaker 00:
That is directly inconsistent.

[00:29:47] Speaker 00:
In their sentences, they abut each other.

[00:29:49] Speaker 00:
The first sentence he says they are an individual, the next sentence he says they're not.

[00:29:55] Speaker 00:
The other thing I'd like to say is Medina didn't overrule right, wilder, and blessings.

[00:30:00] Speaker 00:
Council's correct.

[00:30:01] Speaker 00:
They gave instructions and cautioned courts, but it did not overrule those the court could have.

[00:30:06] Speaker 00:
And the last thing I'd like to say is we're not seeking benefits from Ms.

[00:30:09] Speaker 00:
Lancaster.

[00:30:10] Speaker 00:
We understand that Mr. Lancaster is asserting her eligibility in trying to determine his Medicaid eligibility and his application, which is required.

[00:30:22] Speaker 00:
Thank you, Your Honors.

[00:30:23] Speaker 02:
And counsel, we appreciate the argument your excuse in the case is submitted.