DHS (Oct. 17, 2025)

Case details
Full caption
Twyla Leach Minnesota DHS et al.
Country
United States
Jurisdiction
Minnesota (MN)
Court
Minnesota Supreme Court
Decided
Oct. 17, 2025
Disposition
Dismissed
Twyla Leach (Martin) d/b/a Home Care Staffing, Plaintiff, v...., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.12025 WL 2962486Only the Westlaw citation is currently available.United States District Court, D. Minnesota.Twyla Leach (Martin) d/b/a Home Care Staffing, Plaintiff,v.Minnesota Department of Human Services, UCareMinnesota, and HealthPartners, Inc., Defendants.Civ. No. 25-3220 (PAM/SGE)|Filed 10/17/2025MEMORANDUM AND ORDERPaul A. Magnuson United States District Court Judge*1 This matter is before the Court on Plaintiff Twyla Leach(Martin) d/b/a Home Care Staffing's Motion for a temporaryrestraining order.1 For the following reasons, the Motion isdenied.BACKGROUNDPlaintiff Twyla Leach (Martin) d/b/a Home Care Staffingis enrolled as a Minnesota Health Care Programs provider,approved to provide housing stabilization services underMinn. Stat. § 265B.051. (Decl. of Melanie LaBrie (DocketNo. 50) 2.) Defendant Minnesota Department ofHuman Services (“DHS”) is a state agency responsiblefor administering Medicaid in Minnesota. (Am. Compl.(Docket No. 39) 11.) Defendants UCare Minnesota andHealthPartners, Inc. are managed-care organizations thatcontract with DHS to administer payments to vendors andseek Medicaid reimbursements. See Minn. Stat. § 256B.064,subd. 1b.Federal and state law require the DHS commissioner towithhold payments to a Medicaid provider if DHS determinesthat there is a “credible allegation of fraud” while aninvestigation is pending. Id. § 256B.064, subd. 2(b); see 42C.F.R. § 455.23(a)(1). The withholding period ends when“the commissioner determines there is insufficient evidenceof fraud by the vendor, or after legal proceedings relating tothe alleged fraud are completed.” Minn. Stat. § 256B.064,subd. 2(d).In summer 2025, DHS determined that there is a credibleallegation of fraud against Plaintiff for overbilling, and DHSis investigating that potential fraud. (LaBrie Decl. 6.)DHS also referred the matter to law enforcement, which isalso investigating Plaintiff. (Id.) On August 1, 2025, DHSsent Plaintiff a “Notice of Payment Withold,” informing herthat a temporary withholding would begin on that date and“continue until DHS or a prosecuting authority determinesthat there is insufficient evidence of fraud, or until legalproceedings related to the alleged fraud are complete.” (Id.Ex. C at 1.) Because DHS “placed a hold” on Plaintiff,HealthPartners and UCare suspended payments to Plaintiff,as required by law. (Aff. of Martin J. Michael (Docket No.53) ¶¶ 4–5; Def. UCare's Mem. in Opp'n (Docket No. 56) at4.) Plaintiff exercised her right to submit written evidence toDHS demonstrating that the temporary withhold should belifted. (LaBrie Decl. 13.) DHS reviewed the materials andupheld the temporary withhold. (Id. ¶¶ 15–16.)This lawsuit followed. Plaintiff alleges claims for unjustenrichment, violations of federal Medicaid laws, a violationof due process against DHS, and claims of breach of contractagainst UCare and HealthPartners and tortious interferencewith contract against DHS. Plaintiff moves for emergencyinjunctive relief, and although the Motion does not stateexplicitly the relief she seeks, in the Amended Complaint,Plaintiff asks that the Court: (1) enjoin Defendants fromcontinuing to withhold payments from her, (2) order thatall withheld payments be immediately released to her, (3)enjoin the agencies investigating Plaintiff from contactingher clients, and (4) declare that the temporary withholdingof payments violates the Due Process Clause of the UnitedStates Constitution and federal laws governing Medicaid.(Am. Compl. at 8.2) Plaintiff also seeks to supplement herAmended Complaint. The Court will discuss the Motions inturn.DISCUSSIONA. Standing*2 Article III of the United States Constitution limitsthe jurisdiction of federal courts to justiciable cases andcontroversies. U.S. Const. art. III, § 2; Lujan v. Defendersof Wildlife, 504 U.S. 555, 559–60 (1992). Standing is an“essential and unchanging part of the case-or-controversyrequirement of Article III.” Lujan, 504 U.S. at 560 (citationomitted). To satisfy Article III standing requirements, aplaintiff must demonstrate:
Twyla Leach (Martin) d/b/a Home Care Staffing, Plaintiff, v...., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.2(1) [she] has suffered an injury in factthat is (a) concrete and particularizedand (b) actual or imminent, notconjectural or hypothetical; (2) theinjury is fairly traceable to thechallenged action of the defendant;and (3) it is likely, as opposed tomerely speculative, that the injury willbe redressed by a favorable decision.Friends of the Earth, Inc. v. Laidlaw Env't. Servs. (TOC), Inc.,528 U.S. 167, 180–81 (2000) (quotations omitted). Whetherthe plaintiff has established the three elements of standingis an “inescapable threshold question.” Advantage Media,L.L.C. v. City of Eden Prairie, 456 F.3d 793, 799 (8th Cir.2006) (citing Lujan, 504 U.S. at 560). If a plaintiff lacksstanding, the court has no subject-matter jurisdiction and mustdismiss the claim. See Fed. R. Civ. P. 12(h)(3).UCare argues that Plaintiff lacks standing to bring herclaims against it because she cannot show that “UCare'sministerial compliance” with DHS's legal requirement towithhold payments is an injury traceable to UCare. (Def.UCare's Mem. in Opp'n at 5.) Plaintiff does not respondto UCare's argument and thus appears to have waived anyobjection to it.The Court concludes that Plaintiff has not establishedstanding as to her claims against UCare or HealthPartners.Therefore, the Court denies Plaintiff's Motion for injunctiverelief as to those Defendants and dismisses the claimsagainst them, as the Court lacks subject-matter jurisdiction.Even if Plaintiff established standing, her Motion would failregarding UCare and HealthPartners, as described below.B. Younger AbstentionIn Younger v. Harris, 401 U.S. 37 (1971), and its progeny,the Supreme Court has made clear that lower federal courtsmust decline to hear challenges to pending state actionsinvolving important state interests. See, e.g., MiddlesexCnty. Ethics Comm. v. Garden State Bar Ass'n, 457 U.S.423, 432 (1982) (dismissal appropriate in light of pendingattorney disciplinary proceeding); Moore v. Sims, 442 U.S.415 (1979) (dismissal appropriate in light of pending childcustody proceedings). The principles espoused in Youngerare often referred to as the “Younger abstention doctrine.”The Younger doctrine applies when (1) there are ongoingstate proceedings involving the same or related matters to thefederal proceeding; (2) those proceedings involve importantstate interests; and (3) the federal court plaintiff has anadequate opportunity to raise questions of federal law in thestate proceedings. Middlesex Cnty. Ethics Comm., 457 U.S.at 432.Defendants UCare and HealthPartners argue that the Youngerabstention doctrine prevents the Court from taking actionhere. The Court disagrees. Although the state is investigatingHome Care Staffing for allegations of fraud, both civillyand criminally, there exists no underlying state judicialproceeding, although that may change pending the resultsof the investigations. Additionally, DHS lacks the authorityto hear or resolve the constitutional claims Plaintiff raises.See Minn. Stat. § 256.01, subd. 2 (list of the DHScommission's powers and duties does not include adjudicatingconstitutional issues). Thus, the Court determines theYounger abstention is inapplicable here.*3 Although Plaintiff argues that the Younger abstentiondoes not apply, the Court reached its conclusions separatelyfrom Plaintiff's arguments, as the Court is gravely concernedwith Plaintiff's briefing on the subject. (Docket No. 77.)A legal citation provided in Plaintiff's supplementarymemorandum includes a quotation not found within the casecited, nor could the Court locate the quotation elsewhere.With the proliferation of litigants employing artificialintelligence to assist in legal research, the Court stronglycautions Plaintiff against using such research tools to provideinaccurate information to the Court. In this instance, the Courtextends leniency as Plaintiff is proceeding pro se; however,the Court will strike any further submissions that include whatappear to be hallucinated citations or quotations and may takefurther action as appropriate.C. Motion for Preliminary InjunctionInjunctive relief is “an extraordinary remedy that may onlybe awarded upon a clear showing that the plaintiff is entitledto such relief.” Winter v. Natural Res. Def. Council, Inc., 555U.S. 7, 22 (2008) (citation omitted). When deciding whetherto issue a preliminary injunction, courts consider four factors:(1) the movant's likelihood of success on the merits; (2) thethreat of irreparable harm to the movant; (3) the balanceof harm the injunction would have on the movant and theopposing party; and (4) the public interest. Dataphase Sys.,Inc. v. CL Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981). While
Twyla Leach (Martin) d/b/a Home Care Staffing, Plaintiff, v...., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.3no factor is dispositive, “the absence of a likelihood of successon the merits strongly suggests that preliminary injunctiverelief should be denied.” Barrett v. Claycomb, 705 F.3d 315,320 (8th Cir. 2013) (quoting CDI Energy Srvs., Inc. v. WestRiver Pumps, Inc., 567 F.3d 398, 402 (8th Cir. 2009)).1. Likelihood of Success on the MeritsTo demonstrate a likelihood of success on the merits, Plaintiffmust establish that she has a “fair chance of prevailing” ona claim. Planned Parenthood of Minn., N. Dak., S. Dak. v.Rounds, 530 F.3d 724, 732 (8th Cir. 2008). Plaintiff submitsno evidence to show that she is likely to prevail on any claim.Plaintiff does not dispute that she is under investigation forfraud. Rather, she attempts to litigate any potential underlyingfraud in this court, where that is not at issue. The law requiresDHS to “suspend all Medicaid payments to a provider after[DHS] determines there is a credible allegation of fraudfor which an investigation is pending under the Medicaidprogram against an individual or entity unless [DHS] hasgood cause to not suspend payments or to suspend paymentonly in part.” 42 C.F.R. § 455.23(a)(1). Plaintiff fails toprovide any authority to support that the Court could orderinjunctive relief under these circumstances, nor could shedo so, as no such authority exists. The Court cannot orderinjunctive relief that conflicts with the law. This alone doomsPlaintiff's Motion.In any event, the sparse facts alleged in the AmendedComplaint do not identify the elements of any of Plaintiff'sclaims and are devoid of any mention of Defendants’ specificconduct that allegedly violated the law. Further, Plaintiffprovides no support for her argument that 42 U.S.C. §1396a or the various federal regulations under which shebrings her claims allow for a private right of action. Plaintifffails to provide any support for her claims that Medicaidproviders have a protected property interest in Medicaidpayments while an underlying fraud investigation is ongoing.And she provides no basis to bring constitutional claimsagainst private entities—UCare and HealthPartners—anddoes not allege that they acted under the color of law.Moreover, neither her Motion for a temporary restrainingorder nor her reply memorandum mention any of the claims inher Amended Complaint, instead asserting bald conclusionsabout the four Dataphase factors. Plaintiff utterly fails to showa likelihood of success on the merits.2. Irreparable Harm*4 “Irreparable harm occurs when a party has no adequateremedy at law, typically because its injuries cannot be fullycompensated through an award of damages.” Gen. MotorsCorp. v. Harry Brown's, LLC, 563 F.3d 312, 319 (8th Cir.2009). “[T]o demonstrate irreparable harm, a party must showthat the harm is certain and great and of such imminence thatthere is a clear and present need for equitable relief.” NovusFranchising, Inc. v. Dawson, 725 F.3d 885, 895 (8th Cir. 2013)(quoting Iowa Utils. Bd. v. Fed. Commc'ns Comm'n, 109 F.3d418, 425 (8th Cir. 1996)). “Failure to show irreparable harmis an independently sufficient ground upon which to denya preliminary injunction.” Watkins Inc. v. Lewis, 346 F.3d841, 844 (8th Cir. 2003) (citing Adam–Mellang v. ApartmentSearch, Inc., 96 F.3d 297, 299 (8th Cir. 1996)).Plaintiff argues that irreparable harm has occurred becauseshe has suffered economic injuries, including unpaid claims,lost revenue, and business hardship. But “economic lossdoes not, in and of itself, constitute irreparable harm ....Recoverable monetary loss may constitute irreparable harmonly where the loss threatens the very existence of the[plaintiff]’s business.” Packard Elevator v. I.C.C., 782 F.2d112, 115 (8th Cir. 1986). Since DHS began withholdingpayments, Plaintiff has submitted 36 new claims forreimbursement in a total amount of $9,936.13. (La Brie Decl.¶¶ 10, 12.) The withhold does not prevent Plaintiff fromcontinuing to provide services to Medicaid and non-Medicaidclients, it only prevents her from receiving Medicaid fundsto reimburse her services during the withhold period. (Id. 9.) She projects that her business could fail because of thewithhold, but that is mere speculation. A court may only orderinjunctive relief if the plaintiff demonstrates that the threat ofinjury is “real and immediate.” O'Shea v. Littleton, 414 U.S.488, 496 (1974). If the investigation concludes without anyfinding of wrongdoing, all of the withheld payments will belater issued to Plaintiff. (LaBrie Decl. 11.)Further, Plaintiff argues that irreparable harm has occurredbecause her clients are suffering as they are not receiving thehousing services she provides. Although Plaintiff contendsthat her clients will be harmed in the absence of injunctiverelief, “[t]he irreparable-harm analysis focuses on the movingparty, not the nonmoving party or some third party.” Kansasv. United States, 124 F.4th 529, 534 (8th Cir. 2024) (emphasesin original) (quoting Walsh v. Ahern Rentals, Inc., No.21-16124, 2022 WL 118638, at *2 n.2 (9th Cir. Jan. 12,2022)). Plaintiff fails to demonstrate irreparable harm.3. Balance of Harms and Public Interest
Twyla Leach (Martin) d/b/a Home Care Staffing, Plaintiff, v...., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.4The remaining Dataphase factors weigh sharply against therelief Plaintiff seeks as she has not demonstrated that thebalance of harms or public interest weigh in favor of issuingan injunction. Plaintiff fails to provide any reason why thedifficulties she faces due to her own business decisionsoutweigh the harm that Defendants would incur should theCourt order that payments be released to her. Also, there isno doubt that the public interest heavily weighs in favor ofprotecting against fraud in government programs and courtsupholding clearly enunciated statutory authority to monitorthe same. Plaintiff's conclusory allegations fail to meet thehigh burden to warrant emergency injunctive relief, and theCourt denies her Motion.D. Motion to AmendRule 15 allows a court to “permit a party to servea supplemental pleading setting out any transaction,occurrence, or event that happened after the date of thepleading to be supplemented.” Fed. R. Civ. P. 15(d). Plaintiffseeks to amend her pleadings to include documents draftedafter this lawsuit began, expert reports created for thislitigation, and a “Report on Exhibits J-S for SupplementalCritical Evidence” that she appears to have drafted. Thesedocuments are plainly not those contemplated by the Rule andPlaintiff's Motion to Supplement Evidence is denied.CONCLUSION*5 Accordingly, IT IS HEREBY ORDERED that:1. Plaintiff's Addendum and Renewed Motion forTemporary Restraining Order (Docket No. 41) isDENIED;2. Plaintiff's claims against Defendants UCare andHealthPartners are DISMISSED as the Court lackssubject-matter jurisdiction;3. Defendants UCare and HealthPartners’ Motions toDismiss (Docket Nos. 63, 73) are found as MOOT; and4. Plaintiff's Motion to Amend (Docket No. 45) isDENIED.All CitationsSlip Copy, 2025 WL 2962486Footnotes1Plaintiff styles her Motion as one for a temporary restraining order. Because Defendants received noticeof the Motion and had an opportunity to respond, the Court will treat the Motion as one for a preliminaryinjunction. See Fed. R. Civ. P. 65(a)–(b).2This citation refers to the ECF page number.End of Document© 2025 Thomson Reuters. No claim to original U.S. Government Works.
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