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McGinnis v. Central Kentucky Management Services

United States District Court, E.D. Kentucky, Central Division, Lexington

October 15, 2019


          OPINION & ORDER


         In November 2018, pro se Plaintiff Will McGinnis sued Central Kentucky Management Services (“CKMS”), a billing agency for University of Kentucky HealthCare, in Fayette Circuit Court. DE 1-3 at 2 (State Court Record). After various procedural steps (including a complaint amendment, removal, and a rejected remand request), CKMS now seeks dismissal of McGinnis's operative pleading. DE 19 (Motion); see also DE 1-2 (Amended Complaint). The motion is fully briefed and stands ripe for review. See DE 21 (Response); DE 22 (Reply); DE 24 (Unauthorized Surreply). Principally because immunity bars all of McGinnis's claims, but also for several other reasons, the Court grants CKMS's motion.


         To survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. However, “a formulaic recitation of a cause of action's elements will not do[.]” Twombly, 127 S.Ct. at 1965. Courts “must construe the complaint in the light most favorable to the plaintiff and accept all allegations as true.” Keys, 684 F.3d at 608. Yet, courts need not accept “legal conclusion[s] couched as [ ] factual allegation[s].” Papasan v. Allain, 106 S.Ct. 2932, 2944 (1986).

         Hinging on Rule 8's minimal standards, Twombly and Iqbal require a plaintiff to “plead facts sufficient to show that her claim has substantive plausibility.” Johnson v. City of Shelby, 135 S.Ct. 346, 347 (2014). Where plaintiffs state “simply, concisely, and directly events that . . . entitle[ ] them to damages, ” the rules require “no more to stave off threshold dismissal for want of an adequate statement[.]” Id.; El-Hallani v. Huntington Nat. Bank, 623 Fed.Appx. 730, 739 (6th Cir. 2015) (“Although Twombly and Iqbal have raised the bar for pleading, it is still low.”). Further, when testing the sufficiency of pro se pleadings, courts apply forgiving rigor, liberally construing legal claims in the plaintiff's favor. Davis v. Prison Health Servs., 769 F.3d 433, 437-38 (6th Cir. 2012). Nonetheless, the liberal construction obligation has limits. See Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989). Courts will not “conjure allegations on a litigant's behalf.” Erwin v. Edwards, 22 Fed.Appx. 579, 580 (6th Cir. 2001); see also Coleman v. Shoney's, Inc., 79 Fed.Appx. 155, 157 (6th Cir. 2003) (“Pro se parties must still brief the issues advanced with some effort at developed argumentation.”).

         Generally, “matters outside of the pleadings are not to be considered by a court in ruling on a . . . motion to dismiss.” Weiner v. Klais & Co., 108 F.3d 86, 88 (6th Cir. 1997). However, the Court may “consider other materials that are integral to the complaint, are public records, or are otherwise appropriate for the taking of judicial notice.” Ashland, Inc. v. Oppenheimer & Co., 648 F.3d 461, 467 (6th Cir. 2011) (internal quotation marks and citation omitted).

         Additionally, the Court rejects Plaintiff's contention that “the rules of procedures [sic] clearly say a judge will not dismiss at this stage unless it is IMPOSSIBLE for the defendant [sic] to win at trial.” DE 21 at ¶ 3. As the Sixth Circuit has explained:

The Supreme Court recently raised the bar for pleading requirements beyond the old “no-set-of-facts” standard of Conley v. Gibson . . . that had prevailed for the last few decades. [Iqbal; Twombly.] Conley itself had reflected the change away from “code pleading” to “notice pleading, ” and the standard it announced was designed to screen out only those cases that patently had no theoretical hope of success. . . .
The Court has now explained, however, that a civil complaint only survives a motion to dismiss if it “contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 129 S.Ct. at 1949. Indeed, while this new Iqbal/Twombly standard screens out the “little green men” cases just as Conley did, it is designed to also screen out cases that, while not utterly impossible, are “implausible.”

Courie v. Alcoa Wheel & Forged Prod., 577 F.3d 625, 629-30 (6th Cir. 2009) (footnote omitted).

         II. ANALYSIS

         McGinnis brings three claims against CKMS: “fraudulent concealment and fraudulent over-billing” (Count One); a 42 U.S.C. § 1983 claim for violation of the Fourteenth Amendment (Count Two); and “conspiracy to over-bill and conspiracy to fraudulently conceal material facts in order to gain financially” (Count Three). DE 1-2 at 4-7. The Court finds that sovereign immunity bars all three claims. Further, Plaintiff's § 1983 claim does not pass Twombly/Iqbal muster (and is time barred). Accordingly, the Court will grant Defendant's motion.

         Failure to State a Claim

         The defense contends that Plaintiff's claims hinge entirely on alleged conduct of non-parties, UK or the Kentucky Department of Revenue (“DOR”). DE 19 at 7. Thus, per Defendant, Plaintiff has sued the wrong entity and fails to state any claim against CKMS. The Court partly agrees.

         A viable § 1983 claim requires plausible allegations of: “(1) deprivation of a right secured by the Constitution or laws of the United States (2) caused by a person acting under color of state law.” Hunt v. Sycamore Cmty. Sch. Dist. Bd. of Educ., 542 F.3d 529, 534 (6th Cir. 2008). Though it is unclear whether McGinnis alleges a substantive or procedural theory, it is apparent that Plaintiff's due process claim principally challenges (1) DOR collections of UK medical bills and (2) the University's review process as to McGinnis's denied application for “UK's Financial Assistance Program (FAP).” DE 1-2 at 6 & 10 (July 30, 2014, Letter from UK's Office of Legal Counsel); see also Fed. R. Civ. P. 10 (“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”). McGinnis does not claim that CKMS is, itself, the allegedly unconstitutional medical provider or collector or that it conducted the subject hearing. Obviously, Plaintiff has not sued (here) either the DOR or UK. Nor does Plaintiff allege any theory that could justify deeming CKMS vicariously liable for alleged University or DOR wrongs.[2] Stated otherwise, Plaintiff identifies no mechanism for holding Defendant liable for any other entity's purported misdeeds.

         Plaintiff's only direct claim against the named Defendant is that “CKMS is not entitled to use the [DOR] as a collection agency.” DE 1-2 at 6. This single-sentence allegation does not amount to a plausible § 1983 claim. McGinnis, citing no federal law and relying on a Fayette Circuit Court ruling against UK, apparently bases his due process claim on state law. See Id. at 1. While procedural due process protections apply to rights “derived from state law rather than the Constitution, substantive due process rights are created only by the [federal] Constitution.” Charles v. Baesler, 910 F.2d 1349, 1354 (6th Cir. 1990) (quoting Regents of the Univ. of Mich. v. Ewing, 106 S.Ct. 507, 515 (1985) (Powell, J., concurring)); Young v. Twp. of Green Oak, 471 F.3d 674, 684 (6th Cir. 2006) (“[A]reas in which substantive rights are created only by state law . . . are not subject to substantive due process protection under the Due Process Clause[.]”). Thus, assuming arguendo ...

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