Health clinic transparency initiative to remain on upcoming California ballot

Proposition 44 would lay greater restrictions on how California health centers use revenue, which some centers say is actually creating an unlawful state-operated auditing process.SAN FRANCISCO (CN) — A magistrate judge found two California health center organizations can’t sue to stop California Secretary of State Shirley Weber from placing an initiative on revenue use on November’s ballot.Magistrate Judge Alex Tse said the suit over Proposition 44 failed on standing rather than questions of constitutionality.“Plaintiffs cite to no authority in support of their position,” Tse wrote in his 14-page ruling. “Plaintiffs concede Weber has no duty (statutory or otherwise) to review ballot initiatives for their constitutionality. In sum, plaintiffs fail to show an ongoing violation of federal law."Tse noted in the ruling issued Friday that the plaintiffs’ arguments would allow any party to stop Weber in the course of her job because they didn’t agree with what was listed on ballot materials.The judge also noted that Weber is immune under the Eleventh Amendment from the suit, writing, “without an ongoing violation of federal law or a sufficient connection to such, this suit against Weber isn’t permitted by Ex parte Young.”The secretary of state’s press office did not immediately respond to a request for comment.Weber and a healthcare union representing more than 120,000 healthcare workers asked in July to dismiss the case and deny the health center organizations a preliminary injunction.The plaintiffs, California Primary Care Association, which represents 2,300 community health centers, and Open Door Community Health Centers, which operates 12 community health centers in Northern California, sued the secretary of state in April to block the initiative, arguing it would create an unlawful, exclusively state-operated auditing process for community health centers across the state.“The Clinic Funding Accountability and Transparency Act,” ballot initiative seeks to require federally qualified health centers to dedicate at least 90% of total revenue to “program services advancing their charitable purpose,” which includes patient services, but not management and overhead costs. The attorney general would have the authority to issue guidance defining what “qualifying expenditures” included.The initiative would also penalize centers that do not comply with the 90% spending ratio, with fines directed to a “Mission Spend Ratio Penalty Account.” Funds in the account could be recouped by the center if it came into compliance or would be put towards “initiatives funding clinical worker training, recruitment, and retention,” according to the plaintiffs.The centers claimed most of them do not meet the 90% spending ratio requirement and, if passed, the measure would result in at least $1.7 billion in penalties in the first year, forcing an estimated 88% of centers to operate at a loss and threatening up to 11.7 million patient visits annually.The plaintiffs also named Service Employees International Union — United Healthcare Workers West as a real-party-in-interest for leading the campaign to get the initiative onto the November ballot.In April, the union delivered petitions with more than a million signatures to the Sacramento County Registrar of Voters, nearly double the signature required to qualify the Clinic Funding Accountability and Transparency Act for the November ballot.The following month, election officials verified enough signatures to successfully qualify the initiative. The Secretary of State’s Office certified the initiative as qualified for the November ballot in June, officially designating the initiative as Proposition 44.In his ruling, Tse found the plaintiffs’ arguments were not ripe because the initiative hasn’t passed and the attorney general hasn’t given guidance on “qualifying expenditures.”Furthermore, while arguing for pre-election review, Tse said the plaintiffs didn’t show convincing harm.“In arguing harm, plaintiffs make only abstract and generic arguments about harm to voters, initiative proponents, and the electoral process,” he wrote. “These generalized hardships are not unduly burdensome.”“Prop 44 is a reckless initiative that will force hundreds of clinics to shut down, eliminating services for millions of patients," Joey Cachuela, Community Primary Care Association’s general counsel, said in a statement to Courthouse News. “Prop 44 creates an exclusively state-operated penalty scheme preempted by federal law. The ruling on the case is limited to the timing of the lawsuit, not the merits of the lawsuit. We are evaluating next steps in the case.”An attorney representing the Service Employees International Union — United Healthcare Workers West did not immediately respond to a request for comment.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads