`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`
`
` §
`SONAS MEDICAL SUPPLY, INC.,
` §
`
`
`
`
`
`
` §
`
`Plaintiff,
`
`
`
` §
`
`
`
`
`
`
` §
`vs.
`
`
`
`
`
` §
`
`
`
`
`
`
` §
`
`
`
`
`
`
` §
`XAVIER BECERRA, Secretary,
`
` §
`UNITED STATES DEPARTMENT
` §
`OF HEALTH AND HUMAN
`
` §
`SERVICES,
`
`
`
` §
`
`
`
`
`
`
`
` §
`
`Defendant.
`
`
`
`
`
`
`
`
`
`
`
`COMPLAINT FOR JUDICIAL REVIEW, ATTORNEY FEES,
`AND EXEMPLARY DAMAGES
`
`SONAS MEDICAL SUPPLY, Inc. (hereinafter “Sonas,” “Plaintiff,” or the “Supplier”), by
`
`
`
`
`
` CIVIL ACTION NO. 4:21-cv-529
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`and through its attorneys, hereby files this its Complaint for Judicial Review, Attorney Fees, and
`
`Exemplary Damages against Defendant, Xavier Becerra, Secretary of the United States
`
`Department of Health and Human Services (“HHS” or the “Agency”), and alleges and avers as
`
`follows:
`
`INTRODUCTION AND FACTS
`
`
`
`1.
`
`In this case, HHS seeks to collect from Plaintiff an alleged Medicare overpayment.
`
`On November 10, 2016, AdvanceMed, a Medicare contractor, sent a letter notifying Plaintiff of
`
`an extrapolated overpayment in the amount of $1,339,239.44. According to the contractor, the
`
`overpayment stemmed from a review of 45 claims with 59 claim lines submitted by Plaintiff to
`
`CMS from May 1, 2012 to July 20, 2015 for payment. AdvanceMed denied payment on all claims,
`
`calculating an “actual” overpayment which was then projected over a universe of all claims billed
`
`by Plaintiff from May 1, 2012 to July 20, 2015.
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 2 of 15 PageID #: 2
`
`2.
`
` Plaintiff received denial information from AdvanceMed in an attachment which
`
`recounted service dates for each of the claims. In the attachment, the dates of service reviewed
`
`were included, as was a summary explanation for each denial. However, only cursory information
`
`was provided to Plaintiff as to the statistical sampling and extrapolation methodology utilized in
`
`projection of the overpayment.
`
`
`
`3.
`
`On November 16, 2016, CGS, a Medicare contractor, issued a formal demand letter
`
`notifying Plaintiff of the alleged overpayment and extending appeal rights. The demand letter was
`
`received by Plaintiff on or about December 2, 2016.
`
`
`
`4.
`
`Plaintiff submitted a request for redetermination pursuant to 42 C.F.R. § 405.940
`
`et seq, and on February 17, 2017, CGS issued an unfavorable redetermination decision. Plaintiff
`
`then sought reconsideration in accordance with 42 C.F.R. § 405.968.
`
`5.
`
`On August 7, 2017, CGS issued an unfavorable reconsideration decision. However,
`
`it was not until January 22, 2018, that Plaintiff received notice of the overpayment's recalculation,
`
`which finalized the reconsideration decision pursuant to Medicare regulations.
`
`6.
`
`On March 7, 2018, Plaintiff's Former Counsel drafted a Request for ALJ Hearing
`
`on behalf of Plaintiff. However, the request was not mailed until the end of the month and was not
`
`received until April 2, 2018. The Honorable ALJ dismissed the request on September 30, 2020.
`
`Plaintiff received the notice of dismissal on or about October 8, 2020.
`
`7.
`
`On or about December 4, 2020, Plaintiff filed its request for review of the ALJ
`
`decision by the Medicare Appeals Council (“Council” or “MAC”). On or about May 13, 2021,
`
`Plaintiff received a copy of the MAC’s decision which denied the request for review as the Council
`
`upheld the ALJ decision which dismissed the request for hearing as it was deemed untimely.
`
`(Exhibit A).
`
`
`
`2
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 3 of 15 PageID #: 3
`
`
`
`8.
`
`Plaintiff now files this request for judicial review of the MAC’s decision pursuant
`
`to 42 C.F.R. § 405.1136 within 60 days from the date of receipt.
`
`PARTIES
`
`
`
`9.
`
`Plaintiff, Sonas Medical Supply, Inc., is a corporation organized under the laws of
`
`the State of Texas, a durable medical equipment prosthetics, orthotics, and supplies ("DMEPOS")
`
`supplier participating in the Medicare program and is located in Collin County, TX.
`
`
`
`10.
`
`Defendant, Xavier Becerra, is Secretary of the U.S. Department of Health and
`
`Human Services (hereinafter “HHS” or “Defendant”), an agency of the United States of America,
`
`and he may be served by delivering a copy of the summons and complaint to the United States
`
`Attorney for the Eastern District of Texas and by sending a copy of the summons and complaint
`
`by certified mail to the Attorney General of the United States in Washington, DC. The Secretary
`
`of HHS oversees the Medicare program, and he adopts and issues the final decision made by the
`
`Medicare Appeals Council such that the Secretary of HHS becomes the Defendant in appeals for
`
`judicial review pursuant to 42 C.F.R. § 405.1136(d).
`
`JURISDICTION AND VENUE
`
`
`
`11.
`
`This action arises under the Medicare Act, a part of the Social Security Act at 42
`
`U.S.C. §§ 1395 et seq. Plaintiff appeals a decision of the MAC issued on March 22, 2018 and a
`
`final decision of the Secretary of Health and Human Services. See 42 C.F.R. § 405.1130.
`
`Additionally, the Court has supplemental jurisdiction under 28 U.S.C. § 1367 over a certain
`
`number of Plaintiff’s other claims because they are so related to the claims within the Court’s
`
`original jurisdiction that they form part of the same case or controversy under Article 3 of the U.S.
`
`Constitution. Plaintiff received the final decision of the MAC on or about May 13, 2021. Plaintiff
`
`now timely files its original complaint for judicial review in federal district court in the judicial
`3
`
`
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 4 of 15 PageID #: 4
`
`district in which Plaintiff resides on or before the expiration of sixty days (60) from receipt of the
`
`final decision. See 42 U.S.C. § 1395ff(b).
`
`
`
`12.
`
`Plaintiff’s principal office is located in Dennison, Texas, therefore, venue is proper
`
`in the Eastern District of Texas. See 42 U.S.C. §§ 405(g) and 1395ff(b).
`
`
`
`APPLICABLE MEDICARE LAW
`
`The Medicare Program
`
`
`
`13.
`
`As part of the Social Security Amendments of 1965, Congress established the
`
`Medicare program: a national health insurance plan to cover the cost of medical care for the elderly
`
`and disabled. See 42 U.S.C. § 1395 et seq. Officially known as “Health Insurance Benefits for the
`
`Aged and Disabled,” it provides basic protection against the costs of inpatient hospital and other
`
`institutional care. It also covers the costs of physician and other healthcare practitioner services
`
`and items not covered under the basic program. In 1997, beneficiaries were extended the option of
`
`choosing a managed care plan. More recently, in 2006, the program was expanded further to
`
`include a prescription drug benefit.
`
`Durable Medical Equipment
`
`
`
`14. Medicare covers durable medical equipment furnished to beneficiaries by suppliers
`
`participating in the program. See 42 U.S.C. § 139x(s)(6); 42 C.F.R. §§ 410(h), 410.38(a). To be
`
`reimbursed for such medical equipment, a supplier must receive a signed certificate of medical
`
`necessity (“CMN”) from the treating physician. A supplier must have a signed original, faxed,
`
`photocopied, or electronic CMN in its records before it can submit a claim for payment to
`
`Medicare. Also, it must maintain the supporting documentation and make them available to CMS
`
`upon request for seven years from the date of service. See 42 C.F.R. §§ 410.38(g)(5) and
`
`424.516(f).
`
`
`
`4
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 5 of 15 PageID #: 5
`
`Payment and Audit Functions
`
`
`
`15. Medicare’s payment and audit functions are performed by various federal
`
`contractors. For instance, the payment of durable medical equipment at issue in this case was
`
`made by AdvancedMed. Various other contractors, like Qlarant., a Unified Program Integrity
`
`Contractor (or “UPIC”), investigate instances of suspected fraud, waste, and abuse as well as
`
`identify any improper payments that are to be collected by administrative contractors.
`
`
`
`Statistical Sampling and Extrapolation of Overpayments
`
`16.
`
`Congress authorized HHS to “use extrapolation to determine overpayment
`
`amounts” if the Secretary determines that “there is a sustained or high level of payment error.” 42
`
`U.S.C. § 1395ddd(f)(3)(A); 42 C.F.R. § 405.926(p). Thus, the law allows extrapolation to be used
`
`to derive an overpayment from a statistically valid random sample of sampling units applied across
`
`the frame of sampling units. See Chaves County Home Health Servs. v. Sullivan, 931 F.2d 914 (D.
`
`C. Cir. 1991). Based on the legislature’s instruction, the Secretary promulgated policy and rules
`
`on the framework for extrapolation, as permitted by statute. The Secretary’s policy is encapsulated
`
`in CMS Rules 86-1-9 and 86-1-10. The Secretary’s guidance, found in the Medicare Program
`
`Integrity Manual (“MPIM”), Pub. 100-08, Chap. 3, (eff. 5-10-04, now at MPIM Chap. 8, eff. 06-
`
`28-11), provides instructions to ensure that a “statistically valid sample is drawn and that
`
`statistically valid methods are used” to project an overpayment from the sample to the audit frame.
`
`The MPIM, which is not a statistics text, includes references upon which the theory of sampling
`
`and extrapolation are based. However, for an overpayment estimate to be valid, the laws and
`
`assumptions of probability and statistics must be met. See Robert D. Messer, M.D. & Assoc.,
`
`Docket No. M-11-2534, Medicare Appeals Council (Dec. 11, 2011). In other words, the
`
`
`
`5
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 6 of 15 PageID #: 6
`
`Secretary’s policy and processes founded in statistics must comport with developed and articulated
`
`governing mathematical concepts and principles.
`
`
`
`
`
`Appeal Process
`
`
`
`17.
`
`Durable medical equipment suppliers participating in the Medicare program are
`
`entitled to appeal an initial action. See 42 U.S.C. § 1395ff. Federal regulations establish an
`
`elaborate administrative appeal process to review the adverse action. See 42 C.F.R. Subpart I –
`
`Determinations, Redeterminations, and Appeals Under Original Medicare. A supplier dissatisfied
`
`with an initial determination may request a Redetermination by a contractor in accordance with 42
`
`C.F.R. §§ 405.940 through 405.958. The Redetermination must be issued within 60 calendar days.
`
`If a supplier is dissatisfied with a Redetermination decision, it may request a Reconsideration by
`
`a Qualified Independent Contractor (or “QIC”) in accordance with 42 C.F.R. §§ 405.960 through
`
`405.986. The Reconsideration must be issued within 60 calendar days. After the issuance of a
`
`Reconsideration decision, the supplier is no longer protected from recoupment. In the event the
`
`supplier is dissatisfied with the Reconsideration decision, it may request an Administrative Law
`
`Judge (or “ALJ”) hearing in accordance with 42 C.F.R. §§ 405.1000 through 405.1054. The ALJ
`
`must issue a decision within 90 calendar days. The supplier may request review of the ALJ’s
`
`decision by the Medicare Appeals Council in accordance with 42 C.F.R. §§405.1100 through
`
`405.1140. The MAC must issue a decision within 90 calendar days. The MAC’s decision is the
`
`final agency action, and it is subject to judicial review. See 42 U.S.C. § 1395ff; 42 C.F.R. §§
`
`405.1130, 405.1132, 405.1134. See also 42 U.S.C. § 405(g).
`
`
`
`
`
`18. When suppliers appeal overpayments stemming from claim denials, including
`
`extrapolations, the decisions are very frequently reversed. The third-stage review by an ALJ is the
`
`
`
`6
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 7 of 15 PageID #: 7
`
`first opportunity to obtain a hearing and present testimony evidence to an independent adjudicator,
`
`and most suppliers obtain reversals at this level of the appeals process.
`
`CONDITIONS PRECEDENT
`
`
`
`
`
`19.
`
`20.
`
`All conditions precedent have been performed or have occurred.
`
`In accordance with 42 C.F.R. § 405.1130, the MAC decision is final and binding
`
`on all parties, and it is the Agency’s final action and subject to judicial review. Plaintiff filed
`
`requests for review by
`
`the various administrative
`
`triers of fact
`
`in Redetermination,
`
`Reconsideration, ALJ hearing, and MAC reviews.
`
`
`
`21.
`
`Accordingly, Plaintiff is filing its complaint for judicial review to contest the MAC
`
`decision, which was the final decision of the Secretary of Health and Human Services within 60
`
`days of receipt of the decision as set forth in 42 C.F.R. § 405.1130.
`
`
`
`22.
`
`The MAC decision is the final decision of the Secretary of Health and Human
`
`Services and it subject to judicial review before this Court in accordance with 42 U.S.C. §
`
`1395ff(b), and under 42 C.F.R. § 405.1130 and 42 C.F.R. § 405.1136.
`
`CLAIMS FOR RELIEF
`
`COUNT I
`
`EXCUSABLE NEGLECT EXISTED FOR THE LATE FILING
`AND THE MAC ERRED IN DENYING REVIEW
`
`Plaintiff hereby incorporates by reference paragraphs 1 through 22 herein.
`
`Plaintiff argues that the MAC erred in dismissing the case as the late filing falls
`
`
`
`
`
`23.
`
`24.
`
`under the category of “excusable neglect” pursuant to Pioneer Inv. Servs. Co. v. Brunswick Assoc.
`
`Ltd., 507 U.S. 380, 395 (1993). The excusable neglect standard is “[T]he determination is at bottom
`
`an equitable one, taking account all of the relevant circumstances surrounding the party’s
`
`
`
`7
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 8 of 15 PageID #: 8
`
`omission. These include … the danger of prejudice …, the length of the delay and its potential
`
`impact on judicial proceedings, the reasons for the delay, including whether it was within the
`
`reasonable control of the movant, and whether the movant acted in good faith.” Here, Plaintiff’s
`
`Former Counsel drafted a cover letter and request on March 7, 2020. It was not mailed on that date
`
`which was well before the deadline. However, it was sent and was received only a few days after
`
`the deadline had expired. The letter accompanying the request clearly stated that the attorney
`
`intended it to be mailed on March 7, 2020. However, it was not due to excusable neglect.
`
`Excusable neglect should fall under the category of good cause under 42 C.F.R. § 405.942(b)(3)
`
`as it only provides some, but not all, examples of good cause for an extension.
`
`COUNT II
`
`AGENCY ACTION IS ARBITRARY AND CAPRICIOUS
`
`
`
`25.
`
`Provided the Court finds excusable neglect existed, Plaintiff argues that the
`
`decision of the Council was arbitrary and capricious.
`
`26.
`
`27.
`
`
`
`Plaintiff hereby incorporates by reference paragraphs 1 through 24 herein.
`
`Based upon the administrative record developed before the Agency, the final
`
`decision is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
`
`
`
`28.
`
`Specifically, the Agency failed to adjudicate the appeal in accordance with the
`
`requirements of 42 U.S.C. § 1395ff and 42 C.F.R. § 405.900 et seq. The evidence of record
`
`supports payment on the denied claims that comprise the sample.
`
`
`
`29.
`
`Notwithstanding the overwhelming evidence favoring Plaintiff, it is clear that
`
`Defendant HHS usurps the physician’s role and the medical judgment of physician suppliers in
`
`determining that Plaintiff was not entitled to payment for durable medical equipment it had
`
`provided.
`
`
`
`8
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 9 of 15 PageID #: 9
`
`
`
`
`
`30.
`
`Also, Defendant committed error by applying a non-technical interpretation of
`
`statistics outside the range of developed and articulated governing mathematical concepts and
`
`principles. Defendant HHS ignored the record evidence of its deficiencies and wrongly concluded
`
`the methodology utilized met requirements and that the extrapolation was valid.
`
`
`
`31.
`
`Additionally, Defendant has effectively deprived the Plaintiff of the very
`
`administrative process that is required under 42 U.S.C. § 1395ff(b)-(d) due to its egregious delays
`
`in adjudicating the case which far exceed the statutory time-frames for adjudication and caused
`
`severe harm to Plaintiff. Plaintiff was noticed of the initial determination in 2016. Plaintiff has just
`
`now completed the administrative appeals process and it is 2021.
`
`32.
`
`Defendant committed further error by failing to overturn the statistical sampling for
`
`the failure to notice affected beneficiaries as required by its own regulations.
`
`COUNT III
`
`VIOLATION OF PROCEDURAL DUE PROCESS OF LAW
`
`
`
`33.
`
`Provided the Court finds excusable neglect existed, Plaintiff now argues it has
`
`suffered a violation of its procedural due process rights.
`
`34.
`
`35.
`
`
`
`Plaintiff hereby incorporates by reference paragraphs 1 through 32 herein.
`
`The Fifth and Fourteenth Amendments to the U.S. Constitution guarantee that no
`
`person shall be deprived of life, liberty, or property without Due Process of Law.
`
`
`
`36.
`
`Defendant has effectively deprived the Plaintiff of the very administrative process
`
`that is required under 42 U.S.C. § 1395ff and 42 C.F.R. § 405.900 et seq. due to its egregious
`
`delays in adjudicating the case which far exceed the statutory time-frames for adjudication and
`
`
`
`9
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 10 of 15 PageID #: 10
`
`caused severe harm to Plaintiff. Plaintiff was noticed of the initial determination in 2016. Plaintiff
`
`has just now completed the administrative appeals process and it is 2021.
`
`COUNT IV
`
`AGENCY ACTION IS CONTRARY TO CONSTITUTIONAL RIGHT
`
`37.
`
`Provided the Court finds excusable neglect existed, Plaintiff argues the Agency
`
`action is contrary to its constitutional rights.
`
`38.
`
`39.
`
`
`
`Plaintiff hereby incorporates by reference paragraphs 1 through 36 herein.
`
`Based upon the administrative record developed before the Agency, the final
`
`decision is contrary to constitutional right, power, privilege, or immunity.
`
`
`
`40.
`
`Specifically, the Agency failed to adjudicate the appeal in accordance with the
`
`requirements of 42 U.S.C. § 1395ff and 42 C.F.R. § 405.900 et seq., or to properly determine the
`
`validity of each Medicare claim as well as the statistical sampling methodology.
`
`
`
`41.
`
`Notwithstanding the overwhelming evidence favoring Plaintiff, it is clear that
`
`Defendant HHS usurps the physician’s role and the medical judgment of physicians in determining
`
`that Plaintiff was not entitled to payment for durable medical equipment it had provided.
`
`
`
`42.
`
`Also, Defendant committed error by applying a non-technical interpretation of
`
`statistics outside the range of developed and articulated governing mathematical concepts and
`
`principles. Defendant HHS ignored the record evidence of its deficiencies and wrongly concluded
`
`the methodology utilized met requirements and that the extrapolation was valid.
`
`
`
`43.
`
`Additionally, Defendant has effectively deprived the Plaintiff of the very
`
`administrative process that is required under 42 U.S.C. § 1395ff(b)-(d) due to its egregious delays
`
`in adjudicating the case which far exceed the statutory time-frames for adjudication and caused
`
`severe harm to Plaintiff.
`
`
`
`10
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 11 of 15 PageID #: 11
`
`44.
`
`Defendant committed further error by failing to overturn the statistical sampling for
`
`the failure to notice affected beneficiaries as required by its own regulations.
`
`COUNT V
`
`AGENCY ACTION IS IN EXCESS OF STATUTORY AUTHORITY
`
`
`
`45.
`
`Provided the Court finds excusable neglect, Plaintiff also argues that the agency
`
`action was in excess of its statutory authority.
`
`46.
`
`47.
`
`
`
`Plaintiff hereby incorporates by reference paragraphs 1 through 44 herein.
`
`Based upon the administrative record developed before the Agency, the final
`
`decision is in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.
`
`
`
`48.
`
`Specifically, the Agency failed to adjudicate the appeal in accordance with the
`
`requirements of 42 C.F.R. § 405.1100 et seq., or to properly determine the validity of each
`
`Medicare claim as well as the statistical sampling methodology. The evidence of record supports
`
`payment on the denied claims that comprise the sample.
`
`
`
`49.
`
`Notwithstanding the overwhelming evidence favoring Plaintiff, it is clear that
`
`Defendant HHS usurps the physician’s role and the medical judgment of physicians in determining
`
`that Plaintiff was not entitled to payment for durable medical equipment it had provided.
`
`
`
`50.
`
`Also, Defendant committed error by applying a non-technical interpretation of
`
`statistics outside the range of developed and articulated governing mathematical concepts and
`
`principles. Defendant HHS ignored the record evidence of its deficiencies and wrongly concluded
`
`the methodology utilized met requirements and that the extrapolation was valid.
`
`
`
`51.
`
`Additionally, Defendant has effectively deprived the Plaintiff of the very
`
`administrative process that is required under 42 U.S.C. § 1395ff(b)-(d) due to its egregious delays
`
`
`
`11
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 12 of 15 PageID #: 12
`
`in adjudicating the case which far exceed the statutory time-frames for adjudication and caused
`
`severe harm to Plaintiff.
`
`52.
`
`Defendant committed further error by failing to overturn the statistical sampling for
`
`the failure to notice affected beneficiaries as required by its own regulations.
`
`COUNT VI
`
`AGENCY ACTION IS WITHOUT OBSERVANCE OF PROCEDURE
`AND IS UNSUPPORTED BY SUBSTANTIAL EVIDENCE
`
`Provided the Court finds excusable neglect, Plaintiff argues that the Agency action
`
`53.
`
`is without observance of proper procedure and is unsupported by substantial evidence.
`
`54.
`
`55.
`
`
`
`Plaintiff hereby incorporates by reference paragraphs 1 through 52 herein.
`
`Based upon the administrative record developed before the Agency, the final
`
`administrative decision is without observance of procedure required by law.
`
`
`
`56.
`
`Based upon the administrative record developed before the Agency, the final
`
`administrative decision is unsupported by substantial evidence.
`
`COUNT VII
`
`VIOLATION OF THE STATUTORY LIMITATION ON RECOUPMENT
`
`
`
`57.
`
`Provided the Court finds excusable neglect, Plaintiff argues the Agency violated
`
`the statutory limitation on recoupment.
`
`58.
`
`Plaintiff hereby incorporates by reference paragraphs 1 through 56 herein.
`
`
`
`59. Defendant has effectively deprived Plaintiff of the very administrative process that
`
`is required under 42 U.S.C. § 1395ff and 42 C.F.R. § 405.900 et seq., violated its Due Process
`
`rights, and it also has deprived of it of the statutory protections against premature recoupment
`
`under 42 U.S.C. § 1395ddd(f)(2).
`
`
`
`12
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 13 of 15 PageID #: 13
`
`
`
`60.
`
`Indeed, Defendant has effectively deprived Plaintiff of its administrative appeal
`
`rights and a meaningful opportunity to dispute and contest the alleged overpayment, while
`
`collecting the overpayment under threat of illegal recoupment due to its egregious delays in
`
`adjudicating the case which far exceed the statutory time-frames for adjudication and caused
`
`severe harm to Plaintiff
`
`COUNT VIII
`
`DAMAGES
`
`
`
`61.
`
`As a direct and proximate result of Defendant’s conduct, Plaintiff suffered the
`
`following damages:
`
`
`
`
`
`
`
`
`
`
`
`
`
`62.
`
`63.
`
`a.
`
`b.
`
`actual damages.
`
`lost profits.
`
`EXEMPLARY DAMAGES
`
`Plaintiff hereby incorporates by reference paragraphs 1 through 61 herein.
`
`For Defendant’s egregious conduct towards Plaintiff and reckless disregard of
`
`Plaintiff’s Due Process rights under law, Plaintiff seeks exemplary damages.
`
`ATTORNEY FEES AND COSTS
`
`
`
`64.
`
`Plaintiff is entitled to an award of attorney fees and costs under the Equal Access
`
`to Justice Act, pursuant to 28 U.S.C. § 2412(d)(1)(A), upon showing the applicant is a “prevailing
`
`party”; a showing that the applicant is “eligible to receive an award”; and a statement of “the
`
`amount sought, including an itemized statement from any attorney . . . stating the actual time
`
`expended and the rate” charged. The prevailing party is entitled to such attorney fees unless the
`
`government’s position was “substantially justified” or special circumstances make an award
`
`unjust.
`
`
`
`13
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 14 of 15 PageID #: 14
`
`PRAYER
`
`
`
`65.
`
`For these reasons, Plaintiff prays for judgment against Defendants and setting aside
`
`the Secretary’s final agency action as unlawful based upon the following reasons:
`
`a.
`
`
`b.
`
`
`c.
`
`
`d.
`
`
`e.
`
`
`f.
`
`g.
`
`h.
`
`i.
`
`j.
`
`k.
`
`l.
`
`excusable neglect existed and therefore, the MAC should not have denied
`the request for review;
`
`the Agency action is arbitrary, capricious, an abuse of discretion, or
`otherwise not in accordance with law;
`
`the Agency action is a violation of Plaintiff’s procedural Due Process of
`law;
`
`the Agency action is contrary to constitutional right, power, privilege, or
`immunity;
`
`the Agency action is in excess of statutory jurisdiction, authority, or
`limitations, or short of statutory right;
`
`the Agency action is without observance of procedure required by law;
`
`the Agency action is unsupported by substantial evidence;
`
`the Agency committed a violation of the statutory limitation on recoupment;
`
`assess damages and exemplary damages against Defendant;
`
`assess prejudgment and post-judgment interest against Defendant;
`
`assess reasonable attorney fees and costs of suit;
`
`for such other and further relief as the Court may deem just and proper under
`law.
`
`14
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Case 4:21-cv-00529 Document 1 Filed 07/09/21 Page 15 of 15 PageID #: 15
`
`Dated this 9th day of July, 2021.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`KENNEDY
`Attorneys & Counselors at Law
`
`
`
`
`
`/s/ C. Trey Scott
`__________________________
`MARK S. KENNEDY
`State Bar of Texas No. 24000122
`LURESE A. TERRELL
`State Bar of Texas No. 24008139
`C. TREY SCOTT
`State Bar of Texas No. 24083821
`12222 Merit Drive, Suite 17500
`Dallas, TX 75251
`Telephone: (214) 445-0740
`Fax: (972) 661-9320
`trey@markkennedylaw.com
`
`ATTORNEYS FOR PLAINTIFF
`
`15
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`