Judge balks at health centers’ attempt to block ballot measure

The centers claim the vast majority of them do not meet the proposed 90% spending ratio requirement and, if passed, the measure would result in at least $1.7 billion in penalties in the first year.SAN FRANCISCO (CN) — Community health centers told a federal judge Friday a California ballot measure that would change how centers are funded should be left off the November ballot because it conflicts with federal law.“What we are asking is just to alleviate the irreparable harm and maintain status quo,” Long Do of Athene Law, representing the plaintiffs, told Magistrate Judge Alex G. Tse. “If you take it off the ballot, there is no harm to put it on later."The ballot initiative at issue, named the “The Clinic Funding Accountability and Transparency Act,” 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.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 plaintiffs also named Service Employees International Union — United Healthcare Workers West, a healthcare union representing more than 120,000 healthcare workers, as a real-party-in-interest for leading the campaign to get the initiative onto the November ballot.The centers claim the vast majority 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.Do said the initiative’s spending requirement does not include funding for capital investments, such as opening new centers, renovations and recruiting health care professionals to work at the rural centers.“If the initiative passes, it will be devastating to the industry,” he said.Do asked the court to issue a preliminary injunction blocking Secretary of State Shirley Weber from putting the initiative on the November ballot, a remedy Tse called “an extraordinary measure.”“Discussion should happen. Why shouldn’t that happen? Why is it the court has to come in and take that process away?” he asked Do.Do argued the type of preelection challenge was warranted to prevent an unconstitutional initiative from being added to the ballot. When pressed, he said both the definition of how to calculate the 90% funding ratio, in addition to its application, would be unconstitutional.Tse seemed skeptical that he could rule the initiative unconstitutional before it passed, noting he would not be able to go to the attorney general or state Supreme Court for guidance because there is no law yet. The judge noted the plaintiffs would have a chance to challenge the constitutionality of the initiative if it passes, but until then, he said, there is no recognizable harm to the centers.“This highlights what I have a problem with: to get to say this is unconstitutional, I would’ve left out the California attorney general and the California Supreme Court on something not even passed, all based on the idea that it is so blatantly unconstitutional, so unconstitutional, that it calls for the most extreme remedy,” he said.Tse further balked at the plaintiffs’ attempt to deprive the voters of the chance to weigh in on the issue at hand, saying the democratic process gives the union the power to continually put similar initiatives on the ballot.“Isn’t that what democracy allows them to do?” he asked, adding, “You want to take that power away from the people — that is what you are asking me to do?”Catha Worthman of Feinberg Jackson, representing the union, agreed with the judge that the plaintiffs did not have the power to challenge the initiative before the election, arguing that because the plaintiffs only named the secretary of state as a defendant, there is nothing for the court to enjoin at the current moment.Deputy Attorney General Jay Russell, representing the secretary of state, concurred, telling the judge that there are no claims the secretary has violated federal law.“The petitioners conceded there is no procedural problem with what the secretary is doing,” he said.Tse did not indicate when he would release a ruling.A representative for the secretary of state’s office declined to comment.A representative for the plaintiffs and the union did not immediately respond to a request for comment.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.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