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Tom Myers (SBN 176008)
Samantha R. Azulay (SBN 283424)
Arti Bhimani (SBN 235240)
Liza M. Brereton (SBN 261380)
AIDS Healthcare Foundation
6255 W. Sunset Blvd., 21st FL
Los Angeles, CA 90028
323-860-5200
Fax: 323-467-8450
Attorneys for Plaintiffs
AIDS HEALTHCARE FOUNDATION
MICHAEL WEINSTEIN
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF LOS ANGELES
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Plaintiffs,
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vs.
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COUNTY OF LOS ANGELES; MARIO J.
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PEREZ; and DOE DEFENDANTS 1 through )
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100 inclusive,
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Defendants.
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AIDS HEALTHCARE FOUNDATION;
MICHAEL WEINSTEIN,
Case No.:
COMPLAINT FOR INJUNCTIVE
RELIEF BASED ON RETALIATORY
CONDUCT AND VIOLATIONS OF
STATE CONSTITUTIONAL RIGHTS
UNLIMITED CIVIL CASE
JURY TRIAL DEMANDED
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1
COMPLAINT
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JURISDICTION AND VENUE
1.
Plaintiffs AIDS Healthcare Foundation (“AHF”) and Michael Weinstein
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(“Weinstein”) bring this complaint pursuant to Article I, Section 2 of the California Constitution,
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and section 526 of the California Code Civil Procedure.
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2.
Venue is proper in the County of Los Angeles pursuant to Code of Civil
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Procedure Section 394 in that Defendants are government entities and/or agents of the County of
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Los Angeles.
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INTRODUCTION
3.
Los Angeles County is the largest county in California and the jurisdiction with
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the second largest HIV/AIDS disease burden in the United States. As such, it is given the second
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largest amount of federal funding for HIV/AIDS treatment and prevention.
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4.
AHF is committed to treating hundreds of thousands of patients in Los Angeles
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County and around the globe. Plaintiffs advocate on behalf of AHF’s client population and its
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colleagues. On occasion, some of Plaintiffs’ advocacy positions have been contrary to the
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positions taken by the Defendants, and Plaintiffs have publicly criticized Defendants. As a result,
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Plaintiffs contend that Defendants conspired and continue to retaliate against Plaintiffs to punish
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them for their advocacy.
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5.
AHF files this lawsuit against Defendants to seek an injunction preventing
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Defendants from engaging in retaliatory conduct that discriminates against AHF for their
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protected speech that advocates for government and healthcare systems to be accountable,
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transparent and devoted to serving the public health.
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THE PARTIES
6.
Plaintiff AHF is a California nonprofit corporation. Its mission is to provide
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cutting edge medicine and advocacy to people with HIV/AIDS regardless of ability to pay.
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Among other things, it operates a number of HIV/AIDS outpatient medical clinics and AIDS
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2
COMPLAINT
1
specialty pharmacies in California, which primarily serve a low income/indigent patient
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population, including Medi-Cal beneficiaries.
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7.
Plaintiff Michael Weinstein is the Co-Founder and President of AHF, which
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position he has held since 1987. For the past 25 years, he has dedicated his life to ending the
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AIDS epidemic, and to providing care, comfort, and treatment to those who are infected with it.
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Weinstein is also a Los Angeles County resident and taxpayer. Weinstein pays property tax and
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other taxes related to his residency and ownership interests in real property in Los Angeles
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County.
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8.
Defendant County of Los Angeles (“County”) is the public, governmental entity
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serving the people of Los Angeles County. Los Angeles County is a political subdivision of the
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State of California.
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9.
Defendant Mario J. Perez (“Perez”) is the Director of the County of Los Angeles
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Department of Public Health, Division of HIV and STD Programs (“DHSP”). DHSP is an
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administrative unit of the Los Angeles County Department of Health (DPH) whose mission is “to
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respond to the HIV/AIDS epidemic in Los Angeles County by preventing its spread, maximizing
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health and social outcomes, and coordinating effective and efficient targeted services for those at
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risk for, living with, or affected by HIV.” DHSP is charged with, among other things, disbursing
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funds received from the state and federal governments, through the County, to provide health
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services to people in need, including people living with HIV/AIDS, in the Los Angeles
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metropolitan area. As Director of DHSP, Perez is the final policy-making authority in DHSP.
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He plays a substantial role in the administration of funding for HIV programs in Los Angeles
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County and manages a budget of approximately $83,884,000.
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representative, and individual capacities.
Perez is sued in his official,
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10.
The County and Perez are hereinafter referred to as “Defendants.”
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11.
The true names and capacities, whether individual, corporate, associate, or
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otherwise, of Defendants Does 1 through 100, inclusive, are presently unknown to Plaintiffs and
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for that reason those Doe Defendants are sued by such fictitious names. Plaintiffs are informed
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and believe, and thereon allege, that each of Does 1 through 100 is in some way responsible for
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COMPLAINT
1
the conduct alleged in this Complaint. Plaintiffs will seek leave of this Court to amend their
2
complaint when the true names and capacities of said Defendants are known.
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12.
Plaintiffs are informed and believe, and thereon allege, that at all times relevant
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hereto, unless otherwise specified, Defendants were each acting as an agent, servant, or
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representative of each of said other Defendants, were at all times mentioned acting within the
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course and scope of said agency, servitude or representation, and that all acts of said Defendants
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and each of them, were authorized, directed and ratified by each of the remaining Defendants.
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GENERAL ALLEGATIONS
13.
AIDS is one of the worst pandemics in history. By the end of 2010, an estimated
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30 million people had died from AIDS and 34 million people were infected with HIV/AIDS
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worldwide. Each day, more than eight thousand people die worldwide from AIDS and thirteen
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thousand more contract the virus. Indeed, in 2011, 1.7 million people died from AIDS and 2.5
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million became newly infected.
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14.
To help deal with the crisis in the United States, the United States federal
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government provides monies under the Ryan White Comprehensive AIDS Resource Emergency
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(“CARE”) Act, Title 42 U.S.C Section 300ff-11 et seq., to local governments, including the
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County of Los Angeles, for HIV/AIDS services. A federal department called the Health
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Resource Services Administration (“HRSA”) administers the program on behalf of the federal
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government and distributes funds to Eligible Metropolitan Areas (“EMAs”) through various
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public agency grantees.
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15.
In the case of the Los Angeles EMA, Los Angeles County acts as the designated
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statutory “grantee,” receives the CARE Act and other funds distributed under the program, and
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disburses the funds, primarily via contracts, to various public and private organizations which
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utilize the funds to provide CARE Act services.
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16.
While the County is the named “grantee,” the Board of Supervisors formally
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accepts the funds from HRSA and delegate responsibility for disbursement of the funds to DPH,
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who, in turn, gives the funding to DHSP for contracting with public and private organizations to
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perform the CARE Act services. Therefore, the applications for receiving funds, and all
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COMPLAINT
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subsequent spending of the funds received, is a collaborative effort amongst the County
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Defendants.
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17.
In addition, the County receives monies from a variety of local and state sources,
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including funds allocated by the California Department of Health Services Office, and also
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utilizes its own so-called “County AIDS funds.” The County must provide County AIDS funds
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in accordance with the “maintenance of effort” requirements set forth in the CARE Act and as
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dictated by the other funding sources.
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18.
The County, as the statutory grantee of all of the above-described funds (hereafter
collectively “AIDS Funds”), through DPH and DHSP, must disburse these funds to various
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public and private organizations pursuant to the express requirements of all applicable federal,
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state and local laws, including the CARE Act, California’s Welfare & Institutions Code, County
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ordinances, and the directives of the Los Angeles County Board of Supervisors and certain other
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County agencies.
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19.
Further, the County, as a statutory grantee of the AIDS Funds, must comply with
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other statutory requirements when it applies for the AIDS Funds. Specifically, in order to obtain
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Ryan White CARE Act funds, County Defendants file an Application with HRSA to receive
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funds. In this Application, County Defendants must set forth their current HIV/AIDS treatment
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and prevention needs in the County, and describe how it will allocate the Ryan White CARE Act
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funds it is awarded. For example, in its FY 2011 Ryan White Part A Application, County
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Defendants requested $49,812,316, and represented that no less than 75% of Part A funds would
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be allocated toward “core medical services,” with 85% being allocated to direct services, 10% to
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grantee administration, and 5% to quality management. HRSA relies on these representations in
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determining the amount of funds to award the County Defendants.
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20.
As another example of the CARE Act’s express statutory requirements, local
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grantees like Los Angeles County must establish HIV health services planning councils to study
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and monitor the allocation of funds within each of the EMAs. As a result, Los Angeles County
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established the Los Angeles HIV Planning Commission (“HIV Commission”), which monitors
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COMPLAINT
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DHSP’s (and formerly OAPP’s) allocation and expenditure of AIDS Funds for people living
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with HIV/AIDS in the Los Angeles metropolitan area.
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21.
Pursuant to the CARE Act, the HIV Commission may not be directly involved in
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the administration and allocation of AIDS Funds. Instead, the HIV Commission has the statutory
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obligation to study the needs of the Los Angeles EMA and monitor the extent to which DHSP is
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allocating funds to meet those needs. Some of the organizations and entities represented on the
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HIV Commission have entered into contracts with and/or received AIDS Funds as described
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above.
AHF’s Outpatient Service Contract With The County
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22.
As the largest safety net HIV/AIDS care provider in Los Angeles County, AHF
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has been providing CARE Act services to uninsured, and underinsured, County residents for at
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least 23 years. It has received CARE Act funding to provide these services via a contract with
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the County.
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23.
These contracts include services for hospice, psychiatry, medical case
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management, specialty care, and outpatient medical services. The sources of the funds paid by
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the County for this care include the State of California, the County, and the federal government
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through the Ryan White CARE Act, 42 U.S.C. Section 300ff-11 et seq.
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24.
In particular, since at least 1998 AHF has contracted with the County to provide
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ambulatory outpatient services, with funding in part provided by the Ryan White CARE Act,
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under Contracts H-209006 and PH-002460 (the “AHF-LAC Contract”).
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Defendants’ Retaliatory Conduct Against Plaintiffs For Their Public Activism
25.
AHF was founded in 1987 as the “AIDS Hospice Foundation.” At that time, there
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was no effective treatment for AIDS, and AHF’s mission was to provide Los Angeles residents
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afflicted with AIDS a place and means to die with dignity.
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26.
Since that time, AHF has grown to provide HIV/AIDS prevention, testing, and
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medical care services to over 436,000 people per year, in 36 countries and in 15 states. The vast
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majority of this care is provided for free to people without means of paying for it, and to people
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COMPLAINT
1
of limited means who rely on government programs such as Medicaid, Medicare, and the Ryan
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White CARE Act to pay for this care.
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27.
In the last 25 years, AHF has been able to grow to serve this vulnerable
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population by providing quality, cost effective care to its clients, as well as aggressively and
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effectively advocating for their rights and interests with governmental bodies, including the
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government of Los Angeles County.
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28.
In advocating for its clients’ rights, on occasion some of the advocacy positions
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AHF has taken have been contrary to the positions taken by the County. For at least the last 10
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years, Plaintiffs have repeatedly complained to the County about, inter alia, its deficiencies,
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improper governance, conflicts of interest, waste of public funds, improper or inadequate
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contracting practices, improper Request for Proposal (“RFP”) processing, misrepresentations,
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and failure to abide by laws.
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29.
Plaintiffs’ public criticisms of the County have included statements at relevant
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meetings and conferences open to the public, press conferences, public statements, and lawsuits
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protesting financial improprieties, mismanagement and other missteps by Defendants.
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30.
Plaintiffs’ challenges to Defendants’ spending and operations resulted in
considerable hostility by Defendants against Plaintiffs.
31.
The County’s retaliatory conduct against Plaintiffs took (and still takes) the form
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of: (1) disproportionately burdensome program and fiscal compliance reviews, with findings
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from such reviews used as pretext to reduce funding to AHF; (2) reduction or cancellation of
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contracting services; (3) imposing tax assessments that are not applicable to a non-profit
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organization such as AHF; (4) disparaging Plaintiffs at public forums; and (5) excluding AHF
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from being able to bid for County contracts.
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32.
Some examples of the County’s retaliatory conduct against AHF for its exercise
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of free speech, include but are not limited to, making false and injurious statements about AHF
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in 2006, the Antelope Valley reduction in services in 2009, unfair contracting practices related to
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benefit specialty services in 2011, imposing a disproportionate compliance review burden on
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AHF for its use of federal funds that is not mandated by the federal government or imposed on
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COMPLAINT
1
other providers that are similarly situated, imposing a disparate standard for AHF’s program
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compliance reviews as compared to other providers that are similarly situated, and refusing to
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provide AHF with various tax exemptions that it is entailed to as a non-profit organization.
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2007-2008: Reduction in Services
33.
AHF and Weinstein believed that directing more funds to CARE Act-defined
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“core medical services” would lead to better services and outcomes for people with HIV/AIDS.
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Core medical services are a specific set of services listed in the CARE Act, and increasing funds
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to those services would limit the County’s ability to fund other, non-core services. AHF
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advocated that the Ryan White CARE Act be amended to require that 75% of funds go directly
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to these “core medical services.” The County loudly opposed the imposition of such a
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requirement in the law. However, in 2007, due in part to AHF’s advocacy, the Ryan White
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CARE Act was amended to require that 75% of CARE Act funds be spent on core medical
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services. Thus, the County’s obligation under the Ryan White CARE Act was changed, and its
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ability to fund other non-core services was limited.
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34.
Shortly after this 75% requirement was imposed, the County cut $1 million from
its annual budget for AHF’s outpatient services.
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2009: Antelope Valley Reduction In Service And Favoritism
At The Expense Of Patients
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35.
Los Angeles County is the de facto capital of the hardcore pornography industry,
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which produces thousands of films every year. DPH officials conducted research and
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documented the fact that STDs are common among adult performers in hardcore pornography
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and that there have been multiple HIV outbreaks.
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36.
After conducting considerable research on the subject in and around 2008, DPH
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cited numerous figures confirming an epidemic of sexually transmitted diseases among
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performers, including that:
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a.
Performers in hardcore pornography are ten times more likely to be
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infected with a sexually transmitted disease than members of the
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population at large.
8
COMPLAINT
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b.
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There were 2013 documented cases of chlamydia among performers
between the years 2003 and 2007.
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c.
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There were 965 documented cases of gonorrhea among performers in the
same period.
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d.
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At least 15% of reinfected performers had four or more infections over the
course of a year.
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e.
In the period of April 2004 to March 2008 there had been “2,847 STD
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infections diagnosed among 1,884 performers” in the hardcore
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pornography industry in Los Angeles County.
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37.
Despite this clear threat to public health, DPH decided to do nothing about it.
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38.
Throughout 2008 and 2009, AHF approached the County Defendants and urged
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them to take action to reduce the risk of infection to performers and their non-industry sexual
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partners. Specifically, Plaintiffs urged the County, under the authority of Dr. Jonathan Fielding,
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to enforce its own Health and Safety Codes. The County Defendants refused to take action, and
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Plaintiffs publicly criticized them for their shortcomings.
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39.
Plaintiffs’ public outcry against Defendants included repeated press conferences,
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public statements, a lawsuit, and Weinstein’s effort to get a measure on the next election ballot
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that would hold public officials accountable for reducing the risk of STDs in the adult film
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industry.
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40.
In July 2009, AHF sued DPH seeking a writ of mandate to force them to comply
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with their own regulations related to the adult film industry—sections 120575 and 120175 of the
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Health and Safety Code.
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41.
Plaintiffs’ position on regulation of the adult film industry was contrary to the
County’s interests because the County did not want to enforce such regulations.
42.
Until 2009, Defendants allocated funding to AHF and at least two other health
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providers in the Antelope Valley. For years, AHF had provided HIV/AIDS medical services in
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the Antelope Valley.
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COMPLAINT
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43.
In 2009, the County Defendants suddenly discontinued 100% of this funding to
44.
Instead, Defendants decided to allocate all funding in this area (approximately
AHF.
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$1.2 million dollars) solely to the Tarzana Treatment Center (“Tarzana”). AHF learned that it
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would no longer receive funding for its services in Antelope Valley when it saw one of Tarzana’s
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informational flyers being distributed.
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45.
Tarzana had less experience than AHF and other providers in the area at treating
HIV/AIDS.
46.
Defendants’ retaliatory act of cutting 100% of its funding to AHF in Antelope
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Valley not only caused AHF significant monetary loss, but was done at the expense of patient
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care in the Antelope Valley.
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47.
Plaintiffs publicly advocated against and criticized this funding decision, and its
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adverse effects on the public health in the County. Perez was upset by this advocacy, and
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considered it to be a “gross violation of [a] settlement agreement between LA County and AHF.”
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48.
AHF, true to its mission, still serves its patient population in the Antelope Valley.
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Without any funding from the County, AHF serves these patients at a substantial financial loss.
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When AHF announced it would do this, a direct report of Perez stated that he was “furious,” and
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would consider cancelling an upcoming meeting with AHF “just out of spite.”
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Most Recent Criticism Of The County And Consequences
Suffered By Plaintiffs
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2011: Cutting Services to HIV/AIDS Patients in Order to Punish Plaintiffs
49.
In 2011 the County sent out a “Request for Proposal” (“RFP”) #2011-01
pertaining to Ryan White Program Client Benefits Administrative Services, wherein entities,
including AHF, were able to submit proposals by the stated deadline. The County had
determined that there was an essential need for benefits specialty services to facilitate patient
access to disability benefits and programs to ensure that people living with HIV are receiving all
of the aid for which they are eligible and entitled. Defendants sought a contractor to implement
and manage the benefit specialty program.
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COMPLAINT
1
50.
AHF responded to this RFP, and in fact was the only organization to respond to
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this RFP. On information and belief, rather than award AHF the contract, Defendants, and
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specifically Mario Perez, decided not to offer the benefit specialty service to patients anymore.
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The end result was that AHF lost a $3 million contract, and the services that the Defendants had
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identified as vital to the community were not provided. As a result, the needs of the most
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vulnerable County residents were not served.
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2010-2012: Condoms In Porn Campaign Continues
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51.
In addition to the lawsuit against the County to mandate that it follow its own
Health and Safety Code, Weinstein and four other official proponents launched a campaign to
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get a measure on the ballot that would force the County of Los Angeles to take responsibility for
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the health and safety of adult film performers.
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52.
Preliminarily, in 2010, Weinstein and the other official proponents circulated a
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petition to get their initiative on the City of Los Angeles ballot and obtained more than enough
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signatures to present their initiative to the City Council. Once presented, the City Council almost
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unanimously adopted the initiative.
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53.
Weinstein and the other official proponents then drafted a second initiative, and
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circulated a petition to get that initiative on the Los Angeles County Ballot. Weinstein and the
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other official proponents succeeded, and on July 24, 2012, Measure B, formally known as the
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County of Los Angeles Safer Sex in the Adult Film Industry Act, found its official place on the
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November 6, 2012 Los Angeles County ballot.
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54.
Weinstein’s public activism generated, amongst Defendants, considerable
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opposition to and animus toward Plaintiffs because Defendants did not want to enforce Measure
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B.
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55.
In fact, Members of the Los Angeles County Board of Supervisors were
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outspoken in opposition to the passage of Measure B. Supervisor Yaroslavsky, claiming to be
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concerned about the “enforceability” of the law, pronounced worry that the Measure would be “a
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mockery from the starter’s gate.” Supervisor Yaroslavsky also claimed that adult film
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production is a “niche that generates only about 1.5% of [Los Angeles County’s] sexually
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COMPLAINT
1
transmitted diseases.” Further, explaining her vote to not adopt the measure, Supervisor Gloria
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Molina stated, “I’m trying to understand why we would, as a county, take on the huge
3
responsibility of workplace issues . . .. We’re all in favor of porno stars using . . . condoms. . . .
4
But the issue is . . . liability for the county . . .. Why would we add to this burden?” Further,
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Supervisor Molina declared that regulating the adult film industry is the State of California’s job:
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“[T]ell me where local jurisdictions have taken over workplace responsibilities that belong to
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Cal/OSHA? . . . [W]hy would our municipality take on responsibility for workplace issues that
8
are not presently our responsibility? . . . So I just don’t understand how all of a sudden we are
9
taking away the workplace responsibilities of Cal/OSHA and inheriting all the liability that goes
10
along with this.” In addition, the Board signaled its opposition to Measure B when, after the
11
measure garnered enough signatures to qualify for the ballot, it refused to adopt the Measure
12
itself.
13
56.
Likewise, opposition to Measure B throughout the County governmental
14
bureaucracy has been manifest. Defendant Perez claimed that “[While] [e]very resident of the
15
county matters to us . . . there are many groups we have to serve with scarce resources.”
16
57.
The Los Angeles County Counsel’s office has also expressed skepticism with
17
respect to the Measure. In previous litigation, County counsel noted that efforts to protect the
18
health of workers in the adult film industry amounted to a “minimal” public need. Further, as
19
stated in a July 23, 2012 Memorandum from County Counsel to the Board of Supervisors,
20
Counsel claims that “[a] challenge solely to the constitutionality of the ordinance . . . need not be
21
defended by the County.”
22
58.
In early May of 2012, Michael Weinstein released a pre-election survey showing
23
that Measure B was highly supported by the citizens of Los Angeles, and was predicted to pass.
24
Shortly thereafter, Defendants released a fiscal compliance review of AHF that stated that AHF
25
overbilled the County for CARE Act funds three years prior to the issuance of the compliance
26
review. No other provider of services under the CARE Act has had a compliance review issued
27
for a time period going back three years. In fact, Perez has stated under oath that it is the policy
28
of DHSP to only perform compliance reviews of the fiscal year that was just completed.
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COMPLAINT
1
59.
In both September and October of 2012, Michael Weinstein organized random
2
sample surveys with validated results, which also confirmed the high level of support for
3
Measure B. As discussed below, in September 2012 through November 2012, Defendants took
4
additional steps to enforce the audit findings.
5
6
7
60.
On November 6, 2012, the citizens of Los Angeles County voted in favor of
Measure B. The law went into effect in December 2012.
61.
In January 2013, the adult film industry filed a lawsuit challenging the
8
constitutionality of Measure B. The Defendants, including the County and Jonathan Fielding,
9
have declined to defend the constitutionality of Measure B in that lawsuit.
10
2010-2012: Violations of Competitive Bidding Laws:
The Ramsell Sole-Source Contracts
11
12
62.
On November 2, 2010, the California Department of Health Services
13
implemented a new state Medicaid program, commonly known as the “California Bridge to
14
Reform.” The Bridge to Reform’s objective was to anticipate implementation of the federal
15
Affordable Care Act (“ACA”) and ease the transition to any related health coverage changes. In
16
particular, a Los Angeles County Bridge to reform initiative provided for the creation of a
17
pharmacy network that would expand pharmacy access to patients with HIV/AIDS.
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63.
DHS was charged with the responsibility to implement the California Bridge to
Reform.
64.
Over fifteen months after California’s Bridge to Reform was initiated, on
21
February 7, 2012, DHS recommended in writing, that the Board delegate DHS the authority to
22
award Ramsell the pharmacy administrator service contract on a non-competitive basis.
23
65.
This was a $75 million per year contract arrangement between the County and a
24
private party, and was pushed through for approval in just one day. In explanation of why this
25
contract should be awarded on a non-competitive basis, the County simply stated that there was
26
no time for a standard RFP process, and (incorrectly) stated that there was only one entity they
27
thought could offer these pharmacy administrator services.
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13
COMPLAINT
1
2
3
66.
On that same day, the Board was presented with the Ramsell proposal and
unanimously approved DHS’s recommendation.
67.
Shortly thereafter, Plaintiffs protested the Defendants’ decision to award a $75
4
million per year contract without competitive bidding, and demanded that DHS open up
5
competitive bidding. DHS Director, Michael Katz M.D., wrote Plaintiff Weinstein back
6
personally, stating that the County would not void the contract with Ramsell, citing to the
7
Board’s approval of the contract. Plaintiffs then wrote to the Board reiterating their protest to the
8
sole-source award of the contract to Ramsell, and pointing out the corresponding violations of
9
the law in awarding this contract. Defendants still refused to withdraw the contract award and
10
11
open the contract to a lawful bidding process.
68.
Since the Defendants refused to follow the competitive bidding rules, Plaintiffs
12
were forced to file suit in state court seeking a writ of mandate. On April 6, 2012, Plaintiffs sued
13
the County, Board, DHS, and the individual Board Supervisors, arguing that their award of the
14
contract to Ramsell extended from a non-competitive bidding process that was procedurally and
15
substantively flawed and, therefore, legally invalid under applicable law governing the award of
16
county contracts to private entities.
17
69.
The Superior Court of Los Angeles County agreed. On June 6, 2012, it issued a
18
ruling that the County had abused its discretion, and granted a writ of mandate compelling the
19
County to void the contract with Ramsell and comply with the law in any further contracting for
20
pharmacy administrator services.
21
70.
Nine days later the County still awarded a “new” and allegedly “temporary”
22
contract to Ramsell, pending the issuance of an RFP which AHF also protested in Court
23
(“Ramsell II”).
24
71.
Once again, on June 5, 2013, the Court issued a Writ invalidating the Ramsell II
25
contract, finding that the County had abused its discretion when issuing the sole source Ramsell
26
II contract. Specifically, the Court found that the County’s determination that the contract was
27
exempt from Proposition A was “arbitrary, capricious, and entirely lacking in evidentiary
28
14
COMPLAINT
1
support.” Finally, despite issuing an RFP related to these services on March 28, 2013, the
2
County never awarded the RFP to any party.
3
72.
On June 13, 2013, the County attended an HIV Commission meeting. One of the
4
items on the agenda regarded pharmaceutical reimbursement methodology. Defendant Perez
5
participated in this agenda item and purposefully incited an inflammatory discussion about AHF,
6
and its role in invalidating the County’s pharmacy administration contract with Ramsell. Perez
7
encouraged bad sentiment about AHF by asking County staff to explain the background and
8
circumstances of the lawsuit filed by AHF, by repeatedly bringing up the lawsuit with AHF, by
9
referring to the Court’s decision as unfortunate, and by referring to the actions of AHF as
10
“unconscionable.” Perez stated that the County was “highly disappointed” in AHF. Perez also
11
said the “fact is that [the Court’s decision] is a significant blow to our commitment to preserving
12
continuity of care for thousands of patients in LA, and this issue absolutely cannot go
13
unnoticed.” In other settings, Perez has characterized AHF’s actions in enforcing the Los
14
Angeles County public contracting laws applicable to this contract as preventing the County
15
“from mak[ing] sure that people living with HIV had uninterrupted access to lifesaving
16
medication.”
17
73.
Members of the HIV Commission became so enraged that they voted in favor of
18
writing a letter to the Board of Supervisors expressing their disappointment in AHF. This letter
19
was in fact sent to the Board of Supervisors, the County Chief Executive Office and other
20
County divisions on June 23, 2013. Specifically, the five-page letter states in pertinent part:
21
“Commission members were disappointed to learn that the plaintiff in AHF v. LA County is one
22
of the providers in the local Ryan White network, given that Ryan White providers know first-
23
hand how devastating the consequences could be to HIV patients if the DHS PBM solution
24
proved ineffective” and “are alarmed at the potential damage to patient and community health
25
that could easily emerge from the lawsuit and its final disposition.”
26
74.
On information and belief, at the July 9, 2015 HIV Commission meeting, Perez
27
criticized AHF for citing incorrect numbers of persons infected with HIV/AIDS who are not in
28
care in its advocacy efforts, even though these numbers were provided by the County itself.
15
COMPLAINT
1
Upon information and belief, at this same meeting Perez accused AHF of “throwing stones” in
2
its efforts to advocate for increased testing for HIV/AIDS.
3
75.
This ill will towards Plaintiffs exists throughout the County government. In
4
January, 2014, the Supervisor Zev Yaroslavsky, when considering Plaintiff Weinstein’s
5
advocacy efforts, stated that “[Weinstein’s] out of control.”
6
7
8
Retaliatory Compliance reviews Disproportionately Burden AHF, with Findings Used as
Pretext to Discriminate Against AHF for its Protected Speech
76.
Defendants’ fiscal compliance reviews of AHF are retaliatory because the fiscal
9
compliance reviews: (1) are more frequent and onerous than compliance reviews sought from
10
other similarly situated providers (some of which have never been reviewed in the over twenty
11
years that they have received similar funding from DHSP); (2) are unduly burdensome; (3)
12
employ standards of review that are not imposed on other similarly situated providers (to the
13
extent the provider is reviewed at all for compliance); and (4) contain findings that are not
14
supported by any contract term or the CARE Act. The findings in the fiscal compliance reviews
15
of AHF are used as pretext to reduce funding provided to AHF and to disparage Plaintiffs.
16
During these compliance reviews, AHF is asked to stop its regular duties to assemble files, data
17
and other information requested by Defendants. These disproportionately burdensome
18
compliance reviews substantially interfere with the regular conduct of business and provision of
19
services at AHF’s facilities.
20
77.
On approximately July 22, 2013, the County initiated a fiscal compliance review
21
of AHF’s use of CARE Act funds. On approximately July 31, 2014, the County published on the
22
internet to the public a report of their compliance review of AHF that stated that AHF had
23
overbilled the County approximately $3.5 mm during the time period between 2009 – 2013 (the
24
“Review”). By letter dated August 13, 2014, the County demanded and continues to demand
25
that AHF repay this money, which the County claims it must return to the federal government.
26
78.
The Review and its findings were conducted in a knowingly flawed, arbitrary, and
27
discriminatory manner in order to retaliate against Plaintiffs for their public advocacy and
28
criticism of the County.
16
COMPLAINT
1
79.
In the Review, the County made a determination that CARE Act funds cannot be
2
used to provide services to any person who has some form of insurance. Because some of the
3
patients AHF serves have some form of insurance, such as Medicare or Medicaid, the County
4
determined that reimbursement for costs associated with various personnel that may have served
5
those patients was impermissible under the CARE Act. The County further claims that it is
6
required to collect the amounts found to have been overbilled by AHF in the Review because the
7
federal government has demanded those funds from the County. The County, however, at all
8
times knew that the federal government has made no legally binding demand for the return of
9
any federal funds. The County also at all times has been aware that its findings in the Review
10
are not supported by any provision in the CARE Act, and are contrary to how the County utilizes
11
CARE Act funds in its own clinics and hospitals. The County thus has treated AHF differently
12
than it treats itself or others similarly situated to AHF, and this disparate treatment of AHF is
13
directly related to AHF’s protected speech.
14
80.
During the course of the Review, AHF presented additional studies,
15
documentation, and evidence to rebut the County’s findings, explain AHF’s performance, and
16
establish AHF’s compliance with federal law. However, the County arbitrarily rejected this
17
information without any rational basis, in order to reach its discriminatory, unfounded
18
conclusion. Upon information and belief, the County’s actions were retaliatory in that, when
19
reviewing the performance of other entities to which it has disbursed CARE Act funds, the
20
County has accepted similar information to establish compliance with the CARE Act. The
21
County’s refusal to accept AHF’s additional evidence provides further evidence of the County’s
22
disparate treatment of AHF in retaliation of AHF”s protected speech.
23
81.
In addition to discriminating against AHF in the fiscal compliance review that are
24
performed of its use of CARE Act funds, AHF is discriminated against in the program
25
compliance reviews that are performed of it. The standards that AHF is held to are different
26
from the standards other similarly situated providers are held to. Findings from the
27
discriminatory program reviews of AHF are then used as pretext to reduce funding for AHF in
28
retaliation of AHF’s protected free speech.
17
COMPLAINT
1
2
3
Funding is Disproportionately Reduced for AHF in Retaliation of AHF’s Protected Free
Speech
82.
Beginning January 1, 2013, the County changed the method by which it would
4
disburse CARE Act funds to AHF. Previously, the County disbursed the funds on a
5
“reimbursable net cost basis,” which meant that the County would reimburse AHF for the costs
6
of staffing and operating nine facilities in the County where CARE Act services are provided.
7
Beginning in 2013, the County began disbursing funds based on a “fee for service” model – the
8
County reimburses AHF a set amount of money each time it performs a certain service to a
9
certain individual. Under this arrangement, AHF receives Care Act funds only when it directly
10
provides a service, and the amount of funds it receives is dependent on the number of services it
11
provides. In addition, the County has capped the total amount of CARE funds it will pay to
12
AHF, which essentially caps the number of services it can provide. If AHF performs more
13
services or sees more patients than the cap, AHF will not receive CARE Act funds for providing
14
these services.
15
83.
Based on information and belief, since the implementation of the fee for service
16
arrangement, the County has continually sought to limit the number of services AHF can
17
provide, and the number of patients AHF can serve, and the amount of CARE Act funds AHF
18
can receive in an arbitrary manner to retaliate against Plaintiffs for their advocacy. The County
19
has not so limited itself and/or other entities who do not engage in advocacy against the County.
20
These other similarly situated entities have not had their CARE Act funds reduced in the same
21
manner that AHF’s funds are being reduced. Instead, funds are disproportionately being
22
allocated from AHF in retaliation for their protected speech to other entities that do not engage in
23
advocacy against the County.
24
FIRST CAUSE OF ACTION
25
Violations of Article I, Section 2 of the California Constitution
26
[Against All Defendants]
27
28
84.
Plaintiffs refer to and incorporate each of the allegations in each of the preceding
paragraphs, as if fully set forth herein.
18
COMPLAINT
1
85.
Defendants have acted and continue to act under color of state law and all actions
2
and omissions complained of herein were in execution of actual or implied official policies,
3
practices and procedures.
4
86.
As described in detail above, Plaintiffs have filed lawsuits and publicly
5
complained to the Defendants and to other public entities, regarding matters of public concern
6
such as the Defendants’ improper governmental activity.
7
8
9
87.
In response to these public complaints, Defendants have retaliated and continue to
retaliate against Plaintiffs by, among other things:
a.
Subjecting AHF to the Review, which was disproportionally
10
burdensome as compared to fiscal compliance reviews performed on other
11
similarly situated entities that receive CARE Act funds from the County
12
(some of which have never been fiscally reviewed in the over twenty years
13
that they have been providing services under the CARE Act);
14
b.
15
punitive program compliance reviews that were much more invasive than
16
the program compliance reviews conducted on other similarly situated
17
providers.
18
c.
19
compliance reviews in a disparate manner as compared to others similarly
20
situated that interferes with AHF’s regular conduct of business and
21
provision of services;
22
d.
23
service Defendants identified as essential to the community;
24
e.
25
with AHF;
26
f.
27
(such as higher positivity rates) than all other health providers; and
Subjecting AHF to a continuing series of pretextual, arbitrary and
Requiring AHF assemble files, data and other information for the
Refusing to award a contract to AHF, instead cancelling a public
Refusing to oblige by the terms of agreements they have made
Holding AHF to different terms and conditions in service contracts
28
19
COMPLAINT
1
g.
2
contracts; and
3
h.
4
non-profit organization such as AHF.
5
88.
Reducing services awarded to AHF under various County
Imposing tax requirements on AHF that are not applicable to a
Defendants subjected Plaintiffs to the above conduct for the specific and
6
malicious purpose of chilling, disrupting, misdirecting, discrediting, neutralizing, or otherwise
7
suppressing or punishing the Plaintiffs for exercising their freedom of speech.
8
9
89.
These activities were undertaken by each of the Defendants with the specific
intent to chill Plaintiffs’ speech, by disrupting AHF’s and Weinstein’s nonprofit activities,
10
punishing Plaintiffs for their complaints, disparaging Plaintiffs to the public including the very
11
industry Plaintiffs work within, and attempting to reduce the services provided by and/or
12
payments to AHF for the health care it provides to L.A. County residents.
13
90.
Defendants’ punitive actions would deter persons and agencies of ordinary
14
firmness from future exercise of their free speech rights under the California Constitution. In
15
fact, on information and belief, they have deterred other health providers from publicly
16
commenting on specific issues of public importance.
17
91.
Defendants’ adverse actions against Plaintiffs were substantially motivated by
18
their malicious desire to stifle Plaintiffs’ exercise of constitutionally protected conduct, in that,
19
among other things, they: (a) engaged in retaliatory actions in close proximity to Plaintiffs’
20
expressive conduct; (b) engaged in disparate treatment of AHF as compared to other similarly
21
situated providers of HIV/AIDS services; (c) expressed their opposition to Plaintiffs’ speech both
22
to Plaintiffs and to the public at large; and (d) provided explanations as to why, for example,
23
they will not award a contract to AHF, or why they claim AHF overbilled them that are
24
nonsensical, and are therefore a mere pretense for their retaliatory conduct.
25
26
27
28
92.
Defendants’ retaliatory actions constitute practices that violate Plaintiffs’ free
speech rights under the California Constitution.
93.
Plaintiffs seek an order declaring that Defendants have violated Plaintiffs’ rights
under Article I, Section 2 of the California Constitution, and temporarily and permanently
20
COMPLAINT
1
enjoining Defendants from further violating Plaintiffs’ free speech rights through their acts of
2
retaliation.
3
PRAYER FOR RELIEF
4
WHEREFORE, Plaintiffs demand judgment as follows:
5
1.
6
7
8
9
10
For a declaration that Defendants violated and continue to violate the free speech
rights of Plaintiffs pursuant to Article I, Section 2 of the California Constitution;
2.
For an order preliminarily and permanently enjoining Defendants from violating
Plaintiffs’ free speech rights under Article I, Section 2 of the California Constitution;
3.
For an award of Plaintiffs’ costs of suit and attorneys’ fees incurred herein pursuant
to California Code of Civil Procedure § 1021.5, or as otherwise allowed by law.
11
12
Dated this __ day of July, 2015,
13
14
15
16
17
18
19
20
Tom Myers
AIDS Healthcare Foundation
6255 W. Sunset Blvd., 21st FL
Los Angeles, CA 90028
323-860-5200
Fax: 323-467-8450
Tom Myers (SBN 176008)
Samantha R. Azulay (SBN283424)
Arti Bhimani (SBN 235240)
Liza M. Brereton (SBN 261380)
21
22
23
24
25
26
27
28
21
COMPLAINT