Rita L. TRISTANI, by and through her Attorney in Fact, Maria C. Karnes, and Joshua C. Valenta, individually, and on behalf of others similarly situated, Plaintiffs, v. Estelle B. RICHMAN, in both her individual and official capacities, and Feather Houstoun, in her individual capacity, Defendants, 609 F. Supp. 2d 423

MEMORANDUM OPINION CONTI, District Judge. Introduction Pending before the court are cross-motions for

summary judgment filed by Rita L. Tristani, by and through her Attorney in Fact, Maria C. Karnes, and Joshua C. Valenta, individually and on behalf of others similarly situated (“plaintiffs”), and by Estelle B. Richman, in both her individual and official capacities, and Feather Houstoun, in her individual capacity (“defendants”). This controversy concerns liens placed by the Pennsylvania Department of Public Welfare on settlement proceeds obtained from third parties by recipients of Medicaid benefits under Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq. For the reasons that follow, the motion for

summary judgment filed by defendants will be granted in part and denied without prejudice in part, and the motion for partial

summary judgment filed by plaintiffs will be denied. Background, On September 14, 2001, plaintiff Rita L. Tristani (“Tristani”), by and through her attorney in fact, Maria C. Karnes (“Karnes”), commenced a medical malpractice action in the Pennsylvania Court of Common Pleas of Washington County against the Washington Hospital, the Washington Family Practice Center, Jason W. Booth, M.D. (“Dr. Booth”), T. Grant Phillips, M.D. (“Dr. Phillips”), Sarah C. Duncan, M.D. (“Dr. Duncan”), Richard A. Aprea, M.D. (“Dr. Aprea”), and Janice M.

Salansky, R.N. (“Salansky”), alleging that they had provided negligent medical treatment to her, thereby causing her to suffer serious and permanent injuries. (Defs.’ Summ. J.App. 17A-19A.) According to Tristani, she underwent a bunionectomy in early September 1999. (Id. 21A.) This surgery was performed by Dr. Mark Hofbauer (“Dr. Hofbauer”). (Id.) On September 28, 1999, eighteen days after her surgery, Tristani was examined by Dr. Hofbauer. (Id.) During his examination, Dr.

Hofbauer discovered that Tristani’s left leg had recently become painful- and warm with a red, black and blue discoloration. (Id.) Suspecting that Tristani was suffering from deep venous thrombosis, Dr. Hofbauer immediately referred Tristani to the Washington Family Practice Center. (Id.) Later that day, Tristani was examined by Dr. Booth, who was a resident physician. (Id. 22A.) Dr. Phillips was Dr. Booth’s preceptor. (Id.) Dr. Booth and Dr. Phillips allegedly performed no laboratory studies, imaging studies or diagnostic tests on Tristani, opting to rely solely on Dr.

Booth’s physical examination findings. (Id.) They allegedly ruled out deep venous thrombosis as the cause of Tristani’s medical problem and diagnosed her as having superficial thrombophlebitis. (Id. 22A-23A.) Despite Dr. Booth’s relative inexperience, Dr. Phillips did not examine Tristani himself. (Id. 23A.) Dr. Booth and Dr.

Phillips indicated that Tristani should be reevaluated if her symptoms were not resolved within two to three days. (Id. 24A.) Tristani’s symptoms did not resolve as expected. (Id. 23A.) On October 1, 1999, Tristani telephoned the Washington Family Practice Center to inquire about whether she should be reevaluated. (Id.) A medical assistant responded to Tristani’s first telephone call by emailing Dr. Booth. (Id. 24A.) Dr. Booth allegedly failed to respond to the message. (Id.) Five hours later, Dr.

Apnea, another resident physician, responded with an email instructing the medical assistant to “follow up as needed.” (Id.) Tristani apparently received no further communication in response to her first telephone call. (Id.) Later that day, Tristani again called the Washington Family Practice Center. (Id.) The call was answered by another medical assistant, who responded by sending an email message to Salansky, a registered nurse. (Id.) Salansky allegedly returned Tristani’s telephone call, instructing her to continue to take medication which had been prescribed by Dr. Booth and Dr.

Phillips and advising her that she did not need to be reevaluated. (Id.) Four days later, on October 5, 1999, Tristani suffered a massive pulmonary embolism and stroke. (Id. 25A.) She suffered brain damage, partial paralysis and disfigurement. (Id.) Because of her impairments, Tristani resides in a full-time medical care facility. (Id.) She is paralyzed on her right side, and uses a wheelchair to get around. (Joint Concise Statement of Material Facts, PL’s Facts (“J.S.P.”) ¶¶ 22-23.) She needs assistance in washing, getting dressed, using the bathroom, and preparing her food. (Id. ¶ 23.) On November 7, 2001, while Tristani’s action was pending in the state trial court, Jessica L.

Bupp (“Bupp”), a third-party liability program investigator for the Pennsylvania Department of Public Welfare (“DPW”), sent a letter to Tristani’s counsel indicating that Tristani was a recipient of medical assistance under the Medicaid program, and that Pennsylvania law provided that the rights of medical assistance recipients to recover the costs of medical care from liable third parties were assigned to the DPW by operation of law. (Defs.’ Summ.

J.App. 1A-3A.) Tristani’s counsel continued to correspond with Bupp for the next three years. (Id. 4A-7A.) In a letter to Tristani’s counsel dated December 14, 2004, Bupp stated: The Department of Public Welfare maintains a lien in the amount of $247,514.98 for the above-referenced incident. The Department has agreed to reduce its lien by 33.33% and accept the net payment of $165,018.24 to satisfy the total lien amount. (Id. 8A (underlining in original).) The “above-referenced incident” referred to in the letter was Tristani’s massive pulmonary embolism and stroke on October 5, 1999.CM) Jessica L.

Strawbridge (“Strawbridge”), another third-party liability program investigator, began to handle the matter on or around March 1, 2005. (Id. 10A.) In a letter to Strawbridge dated April 12, 2005, Tristani’s counsel advised that Tristani had retained his law firm on a 40% contingency fee basis, and not on a 33.33% contingency fee basis. (Id. 11 A.) On April 19, 2005, Strawbridge responded with a letter to Tristani’s counsel which stated: The Department of Public Welfare maintains a lien in the amount of $2Jf.7,5H.98 for the above-referenced incident.

The Department has agreed to reduce its lien by J0% and accept the net payment of $H8,508.99 to satisfy the total lien amount. (Id. 14A.) A settlement was reached in Tristani’s medical malpractice action on or around May 31, 2005. (J.S.P. ¶ 35.) In an order dated June 2, 2005, the state trial court acknowledged the settlement of the case for a total of $5,200,000.00. (Defs.’ Summ. JApp. 35A-36A.) The order indicated that the settlement was to be paid on behalf of the Washington Hospital and Dr. Phillips, and that the claims against the Washington Family Practice Center, Dr. Booth, Dr. Duncan, Dr.

Aprea and Salansky were being dismissed with prejudice. (Id. 36A.) The Washington Hospital and Dr. Phillips were ordered to pay $1,030,761.00 to “Pacific Life & Annuity Company” and $4,169,239.00 to “Maria C. Karnes, Attorney in Fact for Rita L. Tristani, and Loughren, Loughren & Loughren, P.C., her attorneys.” (Id. 35A.) Beginning on June 15, 2005, Pacific Life & Annuity Services, Inc., was ordered to make monthly, tax-free payments of $3,800.00, which were to increase annually by 3%, to the Trustee of the Rita L.

Tristani Irrevocable Trust. (Id.) These payments were to continue for the duration of Tristani’s life if she were to live for more than twenty-five years, or for a minimum of twenty-five years if she were to expire sooner. (Id.) The law firm which had represented Tristani was ordered to pay, within twenty days of its receipt of the $4,169,239.00 payment, $1,847,268.59 to the “Smithfield Trust Company, Trustee of the Rita L.

Tristani Irrevocable Trust,” $148,508.99 to the DPW “in full and final satisfaction of its subrogation lien” against Tristani, $47,223.98 to “UFCW, Local 23 and Employers Benefit Funds” “in full and final satisfaction of its subrogation lien” against Tristani, $693,333.33 to “Amatangelo & Baisley” “in full and final satisfaction of its attorney fee,” and $1,432,904.14 to itself (i.e., “Loughren, Loughren & Loughren, P.C.”) “in full and final satisfaction of its attorney fee and litigation expenses.” (Id. 36A.) The order did not specify what portion of the settlement was attributable to Tristani’s medical expenses.

On July 5, 2005, in conformity with the terms of the settlement order, Tristani’s counsel sent Strawbridge a check payable to the “Pennsylvania Department of Public Welfare” in the amount of $148,508.99. (Id. 15A.) In a letter sent with the check, Tristani’s counsel specifically referenced Strawbridge’s letter of April 19, 2005. (Id.) Sharon E. Smith (“Smith”), another third-party liability program investigator, acknowledged the DPW’s receipt of the $148,508.99 payment in a letter to Tristani’s counsel dated July 18, 2005. (Id. 16A.) Plaintiff Joshua C.

Valenta (“Valenta”) was injured in a multi-vehicle accident on January 29, 2005. (J.S.P. ¶ 5.) The accident resulted in two fatalities. (Id. ¶ 9.) As a result of his injuries, Valenta was hospitalized for a period of six days. (Defs.’ Summ.

J.App. 140A.) He suffered multiple fractures to his right femur, and a rod was implanted into his femur during his hospital stay. (Id. at 104A, 141A.) Because of the fatalities, multiple claimants were seeking recovery from the responsible third-party’s liability limits of $300,000.00 per occurrence under an insurance policy issued by State Farm Insurance Company (“State Farm”). (Id. 95A.) Valenta was enrolled in a medical assistance program subsequent to the accident. (J.S.P. ¶ 10.) On April 26, 2005, DPW claims investigative agent Ara K.

Danchick (“Danchick”) sent Valenta’s counsel a letter stating that the rights of medical assistance recipients to recover the costs of medical care from liable third parties were assigned to the DPW by operation of law. (Defs.’ Summ. J.App. 84A-86A.) Margaret L.

Sohn (“Sohn”), another claims investigative agent, informed Valenta’s counsel by way of correspondence dated August 2, 2005, that the DPW had a lien in the amount of $15,581.56 against Valenta’s “personal injury award.” (Id. 87A-89A.) The DPW reduced the lien to $10,000.00 to account for attorneys’ fees and costs. (J.S.P. ¶ 18.) In a letter to the DPW dated August 18, 2005, Valenta’s counsel stated: Enclosed please find a check in the amount of $10,000.00, payable to Department of Public Welfare, which represents full and complete payment and final satisfaction of any and all liens pertaining to Department of Public Welfare payments made due to injuries Joshua C.

Valenta sustained in the above-dated accident. The Department of Public Welfare agreed, on August 10, 2005, to accept this amount as full and complete satisfaction. (Defs.’ Summ. J.App. 90A.) The “above-dated accident” referenced in the letter was Valenta’s accident of January 29, 2005. (Id.) In a letter to Valenta’s counsel dated August 24, 2005, Sohn acknowledged the DPW’s receipt of the $10,000.00 payment. (Id. 91A.) On November 1, 2005, Valenta commenced an action in the Pennsylvania Court of Common Pleas of Allegheny County against Lingaraj S. Patil (“Patil”) and Deondre E.

Morris (“Morris”), alleging that Patil’s negligence had been the cause of Valenta’s injuries. (Id. 92A-93A.) On October 30, 2006, Patil and State Farm settled with Valenta for $70,000.00. (Id. 95A-96A.) Through his counsel, Valenta also pursued and recovered underinsured motorist (“UIM”) benefits. (J.S.P. ¶ 12.) Valenta’s total gross recovery for his injuries was $130,000.00. (Id. ¶ 13.) Procedural History Tristani and Valenta commenced this action against defendants Estelle B.

Rich-man (“Richman”), Pennsylvania’s Secretary of Public Welfare, Feather Houstoun (“Houstoun”), Richman’s predecessor in that position, and the DPW on May 26, 2006, alleging that the DPW’s liens against their recoveries had violated Title XIX of the Social Security Act, the Takings Clause of the Fifth Amendment to the United States Constitution, the Due Process Clause of the Fourteenth Amendment to the United States Constitution, and the Takings Clause of

article I,

section 10, of the Pennsylvania Constitution. (Compl. (Docket No. 1) ¶¶ 108-21.) The action was filed as a proposed class action under Federal Rule of Civil Procedure 23. (Id. ¶¶ 99-106.) On June 9, 2006, Tristani and Valenta filed an amended class action complaint, naming only Richman and Houstoun as defendants. (Am.

Compl. (Docket No. 3).) Richman and Houstoun filed a motion to dismiss on September 29, 2006. (Mot. to Dismiss (Docket No. 10).) While the motion to dismiss was still pending, Tristani and Valenta sought leave to amend their complaint for the second time. (Mot. to Amend (Docket No. 13).) The court granted the request for leave to amend on October 27, 2006. (Order of Ct. (Docket No. 16).) Tristani and Valenta filed their second amended class action complaint on November 10, 2006. (Second Am.

Compl. (Docket No. 19).) On January 3, 2007, Richman and Houstoun filed a new motion to dismiss. (Second Mot. to Dismiss (Docket No. 22).) The court heard oral argument with respect to the motion to dismiss on April 17, 2007. (Tr. of Oral Argument (Docket No. 47).) The motion to dismiss was denied without prejudice so that the relevant factual and legal issues could be evaluated on a more developed record at the

summary judgment stage. Richman and Houstoun filed a motion for

summary judgment on April 9, 2008. (Defs.’ Mot. for Summ. J. (Docket No. 64).) Tristani and Valenta filed a motion for partial

summary judgment on April 10, 2008. (Pis.’ Mot. for Partial Summ. J. (Docket No. 68).) These motions are the subject of this memorandum opinion. Standard of Review Federal Rule of Civil Procedure 56(

c) provides that

summary judgment may be granted if, drawing all reasonable inferences in favor of the non-moving party, “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). A motion for

summary judgment will not be defeated by the mere existence of some disputed facts, but will be defeated only if there is a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether a dispute is genuine, the court’s function is not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 249, 106 S.Ct. 2505. Discussion A.

The Relevant Legal Developments The present controversy resulted from a complicated history of legal developments concerning the Medicaid program under the Social Security Act. Medicaid is a complex program. “The system is a web; a tug at one strand pulls on every other.” Stephenson v. Shalala, 87 F.3d 350, 356 (9th Cir.1996). For this reason, the court must trace the legal developments so that the issues raised by Tristani and Valenta can be viewed in context.

Congress appropriated funds to enable the states to provide “medical assistance” for those “whose income and resources are insufficient to meet the costs of necessary medical services.” 42 U.S.C. § 1396. The Medicaid program involves cooperation between the states and the federal government. A participating state is required to comply with statutorily-prescribed mandates involving eligibility determinations, the collection and maintenance of relevant information, and the administration of the program. 42 U.S.C. § 1396a.

Depending on the particular state’s per capita income, the federal government pays anywhere between 50% and 83% of the costs that the state incurs for providing medical assistance to those who are,eligible to receive it. 42 U.S.C. § 1396d(b). Because Congress provides funding for the Medicaid program, it possesses the constitutional authority under the Spending Clause and the Necessary and Proper Clause to attach conditions on the states’ receipt of federal funds in order to “further broad policy objectives.” South Dakota v. Dole, 483 U.S. 203, 206, 107 S.Ct. 2793, 97 L.Ed.2d 171 (1987) (quoting Fullilove v.

Klutznick, 448 U.S. 448, 474, 100 S.Ct. 2758, 65 L.Ed.2d 902 (1980) (Burger, C.J.)). Title XIX of the Social Security Act includes many such conditions. The relevant portions of 42 U.S.C. § 1396a provide: § 1396a. State plans for medical assistance (

a) Contents. A State plan for medical assistance must— (25) provide— (

A) that the State or local agency administering such plan will take all reasonable measures to ascertain the legal liability of third parties ... to pay for care and services available under the plan, including— (

i) the collection of sufficient information (as specified by the Secretary in regulations) to enable the State to pursue claims against such third parties, with such information being collected at the time of any determination or redetermination of eligibility for medical assistance, and (ii) the submission to the Secretary of a plan (subject to approval by the Secretary) for pursuing claims against such third parties, which plan shall be integrated with, and be monitored as a part of the Secretary’s review of, the State’s mechanized claims processing and information retrieval systems required under

section 1903(r) [42 U.S.C. §‘ 1396b®]; (

B) that in any case where such a legal liability is found to exist after medical assistance has been made available on behalf of the individual and where the amount of reimbursement the State can reasonably expect to recover exceeds the costs of such recovery, the State or local agency will seek reimbursement for such assistance to the extent of such legal liability; (

H) that to the extent that payment has been made under the State plan for medical assistance in any case where a third party has a legal liability to make payment for such assistance, the State has in effect laws under which, to the extent that payment has been made under the State plan for medical assistance for health care items or services furnished to an individual, the State is considered to have acquired the rights of such individual to payment by any other party for such health care items or services. 42 U.S.C. § 1396a(a)(25)(A)-(B), (H).

Other provisions of Title XIX, which are codified at 42 U.S.C. § 1396k, provide: § 1396k. Assignment, enforcement, and collection of rights of payments for medical care; establishment of procedures pursuant to State plan; amounts retained by State (

a) For the purpose of assisting in the collection of medical support payments and other payments for medical care owed to recipients of medical assistance under the State plan approved under this title [42 U.S.C. § 1396 et seq.], a State plan for medical assistance shall— (

I) provide that, as a condition of eligibility for medical assistance under the State plan to an individual who has the legal capacity to execute an assignment for himself, the individual is required— (

A) to assign the State any rights, of the individual or of any other person who is eligible for medical assistance under this title [42 U.S.C. § 1396 et seq.] and on whose behalf the individual has the legal authority to execute an assignment of such rights, to support (specified as support for the purpose of medical care by a court or administrative order) and to payment for medical care from any third party; (

B) to cooperate with the State ... (ii) in obtaining support and payments (described in subparagraph (A)) for himself and for such person ...; and (

C) to cooperate with the State in identifying, and providing information to assist the State in pursuing, any third party who may be liable to pay for care and services available under the plan, unless such individual has good cause for refusing to cooperate as determined by the State agency in accordance with standards prescribed by the Secretary, which standards shall take into consideration the best interests of the individuals involved .... (

b) Such part of any amount collected by the State under an assignment made under the provisions of this

section shall be retained by the State as is necessary to reimburse it for medical assistance payments made on behalf of an individual with respect to whom such assignment was executed (with appropriate reimbursement of the Federal Government to the extent of its participation in the financing of such medical assistance), and the remainder of such amount collected shall be paid to such individual. 42 U.S.C. § 1396k(a)(l), (b). While no state is required to participate in the Medicaid program, all fifty states have opted to do so.

Pennsylvania carried out its federally-imposed obligation to seek reimbursement for its Medicaid expenses by enacting 62 Pa. Stat. Ann. § 1409, which governs third-party liability in the Medicaid context.

Section 1409(b)(1) gives the DPW the right to recover from a liable third-party tortfeasor or insurer “the reasonable value” of the medical assistance benefits provided to a Medicaid beneficiary in an action instituted and prosecuted by the state attorney general of Pennsylvania in the name of either the DPW or the injured medical assistance recipient. 62 Pa. Stat. Ann. § 1409(b)(1). An action brought on behalf of the DPW in accordance with

section 1409(b)(1) does not bar an action brought by the Medicaid beneficiary against the liable tortfeasor or insurer, nor does it deny him or her the portion of a recovery not subject to the DPW’s claim for reimbursement. 62 Pa. Stat. Ann. § 1409(b)(3). In addition to the provisions governing an action by the DPW against a liable third-party tortfeasor or insurer, Pennsylvania iaw provides for the reimbursement of the DPW for the cost of medical assistance benefits out of the proceeds of a Medicaid recipient’s judgment, award or settlement in a suit or claim against a liable third-party tortfeasor or insurer. 62 Pa. Stat. Ann. § 1409(b)(7). Prior to July 7, 2005,

section 1409(b)(7) provided: § 1409. Third party liability

(7) In the event of judgment or award in a suit or claim against such third party or insurer: (

i) If the action or claim is prosecuted by the beneficiary alone, the court or agency shall first order paid from any judgment or award the reasonable litigation expenses, as determined by the court, incurred in preparation and prosecution of such action or claim, together with reasonable attorney’s fees, when an attorney has been retained.

After payment of such expenses and attorney’s fees the court or agency shall, on the application of the department, allow as a first lien against the amount of such 'judgment or award, the amount of the department’s expenditures for the benefit of the beneficiary under the medical assistance program, as provided in subsection (d). (ii) If the action or claim is prosecution [sic] both by the beneficiary and the department, the court or agency shall first order paid from any judgment or award, the reasonable litigation expenses incurred in preparation and prosecution of such action or claim, together with -reasonable attorney’s fees based solely on the services rendered for the benefit of the beneficiary.

After payment of such expenses and attorney’s fees, the court or agency shall apply out of the balance of such judgment or award an amount of benefits paid on behalf of the beneficiary under the medical assistance program. 62 Pa. Stat.

Ann. § 1409(b)(7). ■ The DPW instituted a managed care program on February 7, 1997. (J.S.P. ¶ 56.) Under this program, the DPW contracts with managed care organizations (“MCOs”), which are private entities, to provide medical assistance services to Medicaid recipients on a capitated basis. (Id. ¶ 57.) Pursuant to this arrangement, an MCO provides medical assistance to a particular recipient in exchange for a monthly fee paid to it by the DPW. (Id. ¶ 59.) The DPW pays the capitation fees for all individuals enrolled in MCOs at the beginning of each month. (Id. ¶ 60.) The monthly capitation fee is the only money that the DPW spends on a medical assistance recipient who is enrolled in an MCO. (Id. ¶ 61.) Enrollment in an MCO is mandatory for recipients in twenty-five Pennsylvania counties and voluntary for recipients in twenty-seven Pennsylvania counties. (Id. ¶ 63.) On January 31, 2005, the Pennsylvania Superior Court decided In re C.S., No. 83 WDA 2004, 2005 WL 1214668 (Pa.Super.Ct.

Jan. 31, 2005). (Docket No. 28 at 1-8.) In that unpublished decision, the superior court construed the phrase “the amount of the department’s expenditures for the benefit of the beneficiary under the medical assistance program,” as it appeared in

section 1409(b)(7)(i), to refer only to the amount of the capitation fees paid by the DPW to an MCO for the benefit of the particular medical assistance recipient at issue. (Id. at 6-7.) The superior court reasoned that the DPW would obtain a windfall if it were able to recover the medical expenses incurred by the MCO in providing medical assistance to the recipient because the only expenses incurred by the DPW for that recipient’s benefit had been the capitation fees paid to the MCO. (Id. at 7.) Rule 65.37(

A) of the superior court’s internal operating procedures provides: An unpublished memorandum decision shall not be relied upon or cited by a Court or a party in any other action or proceeding, except that such a memorandum decision may be relied upon or cited (1) when it is relevant under the doctrine of law of the case, res judicata, or collateral estoppel, and (2) when the memorandum is relevant to a criminal action or proceeding because it recites issues raised and reasons for a decision affecting the same defendant in a prior action or proceeding.

When an unpublished memorandum is relied upon pursuant to this rule, a copy of the memorandum must be furnished to the other party [and] to the Court. 210 Pa.Code § 65.37(A). By its very terms, rule 65.37(

A) permits a party to rely on an unpublished decision of the Superior Court for purposes of res judicata and collateral estoppel. In Liberto v. Suburban General Hospital, GD No. 02-020275, 2005 WL 6082276 (Pa. Ct. Com. Pl. Allegheny County June 23, 2005), the Pennsylvania Court of Common Pleas of Allegheny County held that the DPW was collaterally estopped from arguing that

section 1409(b)(7)(

i) permitted the DPW to recover the expenses incurred by an MCO in providing medical assistance to a Medicaid recipient, since the superior court had already held, in In re C.S., that

section 1409(b)(7)® provided only for the recovery of the capitation fees paid to an MCO by the DPW for the treatment of a recipient enrolled in an MCO. (Docket No. 71-2 at 2-5.) In so holding, the state trial court relied on language in Mellon Bank v.

Rafsky, 369 Pa.Super. 585, 535 A.2d 1090, 1093 (Pa.Super.Ct.1987), declaring that “[collateral estoppel may be used as either a sword or a shield by a stranger to the prior action if the party against whom the doctrine is invoked was a party or in privity with a party to the prior action.” (Id. at 3.) The state trial court'reasoned that since the DPW had been a party in In re C.S., the medical assistance recipient at issue in Liberto could use the superior court’s decision in that case as a “sword” with respect to the construction of

section 1409(b)(7)®. (Id. at 2-4.) Apparently displeased with the superior court’s decision in In re C.S., the Pennsylvania legislature on July 7, 2005, amended § 1409(b)(7). 2005 Pa. Laws 190. The word “settlement” was added to the prefatory language contained • in

section 1409(b)(7) to clarify that the provision was applicable to a “settlement” as well as to a “judgment” or an “award.” Id. In addition, the following language was added to

section 1409(b)(7): (iii) With respect to claims against third parties for the cost of medical assistance services delivered through a managed care organization contract, the department shall recover the actual payment to the hospital or other medical provider for the service. If no specific payment is identified by the managed care organization for the service, the department shall recover its fee

schedule -amount for the service. 62 Pa. Stat. Ann. § 1409(b)(7)(iii). The effect of this statutory amendment was to reverse the decision in In re C.S., thereby allowing the DPW to recover from liable third-party tortfeasors and insurers the costs incurred by MCOs in providing medical assistance to Medicaid recipients. The next major legal development relevant to this case occurred on May 1, 2006, when the United States Supreme Court decided Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006).

At issue in Ahlbom was an Arkansas statute providing that where a Medicaid recipient obtained a tort settlement after the payment of medical costs on his or her behalf by Medicaid, a lien was to be placed on the settlement proceeds in an amount equal to Medicaid’s costs. Id. at 272, 126 S.Ct. 1752. The amount of the lien was” tied to the costs incurred by the Medicaid program rather than to the portion of the settlement proceeds attributable to medical costs. Id.

Consequently, where the amount of Medicaid’s expenditures on behalf of a recipient exceeded the portion of the recipient’s settlement proceeds attributable to medical costs, satisfaction of the state’s lien required payment out of settlement proceeds attributable to damages other than medical costs, such as damages for pain and suffering, lost wages, or loss of future earnings. Id. The question presented in Ahlbom was whether the enforcement of that lien was consistent with federal law.

In a unanimous decision, the Supreme Court construed the phrase “payment by any other party for such health care items or services” appearing in § 1396a(a)(25)(H), and the phrase “payment for medical care from any third party” appearing in § 1396k(a)(l)(A), to mean that federal law required a state to recoup only the portion of a Medicaid recipient’s settlement that was attributable to medical expenses. Id. at 280-82, 126 S.Ct. 1752.

The Supreme Court explained that Title XIX contained other provisions which expressly limited a state’s authority to recover expenses incurred for the benefit of a Medicaid recipient, thereby precluding a determination that Title XIX merely “supplied a recovery ‘floor’ upon which States were free to build.” Id. at 283, 126 S.Ct. 1752. The provisions to which the Supreme Court referred are codified at 42 U.S.C. §§ 1396a(a)(18) and 1396p(a)-(b).

Under § 1396a(a)(18), “[a] State plan for medical assistance must ... comply with [§ 1396p] with respect to liens, adjustments and recoveries of medical assistance correctly paid ____” 42 U.S.C. § 1396a(a)(18). The relevant portions of § 1396p provide: § 1396p. Liens, adjustments and recoveries, and transfers of assets (

a) Imposition of lien against the property of an individual on account of medical assistance rendered to him under a State plan.

(1) No lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan, except— (

A) pursuant to the judgment of a court on account of benefits incorrectly paid on behalf of such individual, or [in circumstances not relevant to this case]. (

b) Adjustment or recovery of medical assistance correctly paid under a State plan.

(1) No adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan may be made, except [in circumstances not relevant to this case]. 42 U.S.C. § 1396p(a)-(b). In Ahlbom, the Supreme Court observed that the anti-lien provision contained in § 1396p(a)(l), “[r]ead literally and in isolation,” would appear to preclude a lien even on the portion of a recipient’s settlement proceeds attributable to payments for medical care. Ahlborn, 547 U.S. at 284, 126 S.Ct. 1752.

The Medicaid recipient at issue in that case, however, did not argue that the anti-lien provision precluded the encumbrance of the portion of her settlement proceeds attributable to medical expenses. Id. (“Ahlborn does not ask us to go so far, though; she assumes that the State’s lien is consistent with federal law insofar as it encumbers proceeds designated as payments for medical care.”). Instead, she argued only that the anti-lien provision precluded the Arkansas Department of Health and Human Services (“ADHHS”) from attaching or encumbering the remainder of her settlement proceeds. Id.

The Supreme Court found this argument to be persuasive. At the outset, it was noted in Ahlbom that §§ 1396a(a)(25) and 1396k(

a) expressly provided Arkansas with the authority to require a Medicaid recipient to assign his or her right, or chose in action, to receive payments for medical care. Id. The Supreme Court also assumed, as did the parties in the case, that Arkansas could also “demand as a condition of Medicaid eligibility that the recipient ‘assign’ in advance any payments that may constitute reimbursement for medical costs.” Id. Proceeding on the assumption that it was authorized by §§ 1396a(a)(25) and 1396k(a), the Supreme Court treated this “forced assignment” as an exception to § 1396p(a)(l).

Id. {“To the extent that the forced assignment is expressly authorized by the terms of §§ 1396a(a)(25) and 1396k(a), it is an exception to the anti-lien provision.”) (emphasis added). The Supreme Court held that the “exception carved out by §§ 1396a(a)(25) and 1396k(a) [was] limited to payments for medical care,” and that § 1396p(a)(

l) prohibited Arkansas from placing a lien on any portion of a Medicaid recipient’s settlement award which was not attributable to medical expenses. Id. at 284-85, 126 S.Ct. 1752. The language used in Ahlbom shows that the Supreme Court assumed that §§ 1396a(a)(25) and 1396k(

a) created an exception to § 1396p(a)(l). Id. at 291-92, 126 S.Ct. 1752 (“That does not mean, however, that Congress meant to authorize States to seek reimbursement from Medicaid recipients themselves; in fact, with the possible exception of a lien on payments for medical care, the statute expressly prohibits liens against the property of Medicaid beneficiaries.”) (emphasis added). Consequently, whether a state can place a lien on the portion of a Medicaid recipient’s settlement proceeds attributable to payments for medical care remains an open question. McMillian v.

Stroud, 166 Cal.App.4th 692, 83 Cal.Rptr.3d 261, 272-73 (Cal.Ct.App.2008) (recognizing that the Supreme Court, in Ahlbom, did not determine whether a state could impose a lien on the portion of a Medicaid recipient’s settlement proceeds attributable to payments for medical care). Ahlbom’s holding is that a state cannot place a lien on portions of a recipient’s settlement proceeds attributable to other forms of damages, such as pain and suffering, lost wages, or loss of future earnings. The applicability of the anti-recovery provision contained in § 1396p(b)(

l) in the context of liens imposed on payments for medical care remains an open question. The parties in Ahlbom did not raise that issue, and the Supreme Court stated in a footnote that it would “leave for another day the question of [§ 1396p(b)(l)’s] impact on the analysis.” Ahlborn, 547 U.S. at 284 n. 13, 126 S.Ct. 1752. On July 4, 2008, the Pennsylvania legislature enacted legislation in order to bring Pennsylvania’s administration of the Medicaid program into conformity with the Supreme Court’s decision in Ahlbom. 2008 Pa. Legis. Serv. 279 (West). This statutory amendment is codified in 62 Pa. Stat. Ann. § 1409.1, which provides:

Section 1409.1. Federal Law Recovery of Medical Assistance Reimbursement (

a) To the extent that Federal law limits the department’s recovery of medical assistance reimbursement to the medical portion of a beneficiary’s judgment, award or settlement in a claim against a third party, the provisions of this

section shall apply. (

b) In the event of judgment, award or settlement in a suit or claim against a third party or insurer:

(1) If the action or claim is prosecuted by the beneficiary alone, the court or agency shall first order paid from any judgment or award the reasonable litigation expenses, as determined by the court, incurred in preparation and prosecution of the action or claim, together with reasonable attorney fees. After payment of the expenses and attorney fees, the court or agency shall allocate the judgment or award between the medical portion and other damages and shall allow the department a first lien against the medical portion of the judgment or award, the amount of the expenditures for the benefit of the beneficiary under the medical assistance program.

(2) If the action or claim is prosecuted both by the beneficiary and the department, the court or agency shall first order paid from any judgment or award the reasonable litigation expenses incurred in preparation and prosecution of the action or claim, together with reasonable attorney fees based solely on the services rendered for the benefit of the beneficiary.

After payment of the expenses and attorney fees, the court or agency shall allocate the judgment or award between the medical portion and other damages and shall make an award to the department out of the medical portion of the judgment or award the amount of benefits paid on behalf of the beneficiary under the medical assistance program.

(3) The department shall be given reasonable advance notice before the court makes any allocation of a judgment or award under this section.

(4) The provisions of

section 1409(b)(7)(iii) shall apply to this section. 62 Pa. Stat. Ann. § 1409.1.

Section 1409(b)(7)(iii), which is specifically referenced in

section 1409.1(b)(4), is the provision that was designed to reverse the effects of the superior court’s decision in In re C.S. The new legislation also established a mechanism designed to enable medical assistance recipients to pursue liable third parties without seeking compensation for medical expenses incurred by the Medicaid program. This mechanism is codified at 62 Pa. Stat.

Ann. § 1409(b)(5), which provides: (5)If either the beneficiary or the department brings an action or claim against such third party or insurer, the beneficiary or the department shall within thirty days of filing the action give to the other written notice by personal service, or by certified or registered mail of the action or claim. Any third party or insurer that has received information indicating that the beneficiary received benefits under the medical assistance program shall give written notice to the department by personal service or by certified or registered mail of the action or claim.

Proof of the notices shall be filed in the action or claim. (

i) If a beneficiary files an action or claim that does not seek recovery of expenses for which benefits under the medical assistance program are provided, the beneficiary shall include in the notice to the department a statement that the action or claim does not seek recovery of the expenses. (ii) If a parent files an action or claim that does not seek recovery of a minor’s medical expenses paid by the medical assistance program, the parent shall include in the notice to the department a statement that the action or claim does not seek the recovery of the expenses. (iii) If a beneficiary files an action or claim that seeks the recovery of expenses for which benefits under the medical assistance program are provided and later elects not to seek recovery of the expenses, the beneficiary shall provide reasonable notice to the department by personal service or by certified or registered mail.

Notice shall be reasonable if it allows the department sufficient time to petition to intervene in the action and prosecute its claim. (iv) Notice of any settlement shall be provided to the department by the beneficiary and any third party or insurer within thirty days of the settlement. Where judicial approval of the settlement is required, reasonable notice of the settlement shall be provided to the department before a judicial hearing for approval of the settlement. Notice is reasonable if it allows the department sufficient time to intervene in the action and prosecute its claim. (

v) If an action or claim is brought by either the department or beneficiary, the other may, at any time before trial on the facts, become a party to or shall consolidate his action or claim with the other if brought independently. (vi) The beneficiary may include as part of his claim the amount of benefits that have been or will be provided by the medical assistance program. 62 Pa. Stat. Ann. § 1409(b)(5)(i)-(vi). In light of these statutory revisions, it is clear that Medicaid recipients in Pennsylvania now have two options when they pursue recoveries from liable tortfeasors or insurers.

They can either pursue a comprehensive award, which will be subject to the DPW’s lien up to the amount permitted under Ahlbom, or pursue an award corresponding only with their unassigned rights to recover damages not attributable to payments made by the Medicaid program for medical assistance, which will be free of any liens or encumbrances related to money owed to the DPW. The pending motions for

summary judgment present a plethora of issues to be resolved. Richman and Houstoun move for

summary judgment with respect to all the claims asserted by Tristani and Valenta. (Defs.’ Mot. for Summ. J.) Tristani and Valenta move with respect to the issue of liability for

summary judgment with respect to all claims. (Docket No. 69 at 49.) Thus, Tristani and Valenta implicitly concede that even if liability is established as a matter of law, the amount of damages will need to be determined by a trier of fact. B. Res Judicata and Collateral Estoppel The Full Faith and Credit Clause of the United States Constitution incorporates the doctrines of res judicata and collateral estoppel. Riley v. New York Trust Co., 315 U.S. 343, 349, 62 S.Ct. 608, 86 L.Ed. 885 (1942). That constitutional provision, however, refers only to limitations on “each State.” U.S. Const. art. IV, § 1.

The Constitution does not require a federal court to honor the res judicata or collateral estoppel effects of a judgment rendered by a state court. When a judgment is rendered by a state tribunal, federal courts, however, are statutorily bound by the doctrines of res judicata and collateral estoppel under 28 U.S.C. § 1738, which provides: § 1738.

State and Territorial statutes and judicial proceedings; full faith and credit The Acts of the legislature of any State, Territory, or Possession of the United States, or copies thereof, shall be authenticated by affixing the seal of such State, Territory or Possession thereto.

The records and judicial proceedings of any court of any such State, Territory or Possession, or copies thereof, shall be proved or admitted in other courts within the United States and its Territories and Possessions by the attestation of the clerk and seal of the court annexed, if a seal exists, together with a certificate of a judge of the court that the said attestation is in proper form.

Such Acts, records and judicial proceedings or copies thereof, so authenticated, shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken. 28 U.S.C. § 1738; see Kremer v. Chemical Constr. Corp., 456 U.S. 461, 483 n. 24, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982). “This statute has long been understood to encompass the doctrines of res judicata, or ‘claim preclusion,’ and collateral estoppel, or ‘issue preclusion.’ ” San Remo Hotel, L.P. v.

City & County of San Francisco, 545 U.S. 323, 336, 125 S.Ct. 2491, 162 L.Ed.2d 315 (2005). A federal court must give a judgment rendered by a state court the same preclusive effect that it would be accorded by another state tribunal. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). Riehman and Houstoun contend that Tristani’s action against them is barred by the doctrine of res judicata.

Their argument rests on the premise that the settlement order issued by the Pennsylvania Court of Common Pleas of Washington County, which allocated $148,508.99 for the payment of the DPW’s lien, precludes Tristani from litigating her claims arising out of that payment. (Docket No. 65 at 17-18.) Tristani argues that Rich-man and Houstoun cannot rely on the doctrine of res judicata, since they were not parties to the prior action. In order to resolve this dispute, the court turns to Pennsylvania law. In Balent v.

City of Wilkes-Barre, 542 Pa. 555, 669 A.2d 309 (1995), the Pennsylvania Supreme Court recognized: Res judicata, or claim preclusion, is a doctrine by which a former adjudication bars a later action on all or part of the claim which was the subject of the first action. Any final, valid judgment on the merits by a court of competent jurisdiction precludes any future suit between the parties or their privies on the same cause of action. Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980).

Res judicata applies not only to claims actually litigated, but also to claims which could have been litigated during the first proceeding if they were part of the same cause of action. Id. Balent, 669 A.2d at 313. As this passage clearly states, those in privity with a party to an action can be bound by an adjudication to the same extent as the parties to that adjudication. Two actions are based on the same “cause of action” when it can fairly be said that “the primary right and duty, and delict or wrong, are the same in each action.” Dempsey v.

Cessna Aircraft Co., 439 Pa.Super. 172, 653 A.2d 679, 681 (Pa.Super.Ct.1995) (en banc). Whether two actions involve the same “cause of action” depends upon whether the factual allegations in both actions are the same, whether the same evidence is necessary to prove the allegations in both actions, and whether both actions seek compensation for the same damages. Kelly v. Kelly, 887 A.2d 788, 792 (Pa.Super.Ct.2005). A lack of identity of these facets between two actions supports a conclusion that the actions are not based on the same cause of action. Turner v.

Crawford Square Apartments III, L.P., 449 F.3d 542, 549 (3d Cir.2006). The applicability of res judicata turns not on whether the two actions in question are based upon similar legal theories, but rather on whether there is a “similarity of the underlying events giving-rise to [the] various legal claims” at issue. In re Jones & Laughlin Steel Corp., 328 Pa.Super. 442, 477 A.2d 527, 531 (Pa.Super.Ct.1984). The settlement order issued by the state trial court in Tristani’s medical malpractice case has res judicata effect with respect to her claims against the third parties responsible for her injuries.

See Pennsylvania Human Relations Comm’n v. Graybill, 482 Pa. 143, 393 A.2d 420, 421-23 (1978) (“A consent decree has a Res judicata effect, binding the parties with the same force and effect as a final decree rendered after a full hearing upon the merits.”). What effect, if any, the settlement order has on Tristani’s claims against Richman and Houstoun is a different question. It is undisputed that the DPW did not intervene in Tristani’s action against the liable third parties. (J.S.P. ¶ 42.) Relying on the Pennsylvania Supreme Court’s decision in American Surety Company of New York v.

Dickson, 345 Pa. 328, 28 A.2d 316, 319 (1942), Richman and Houstoun argue that the settlement order precludes Tristani from litigating her claims against them. Under Dickson, if the DPW imposed a lien on Tristani’s settlement proceeds, it would be precluded from pursuing the third parties responsible for Tristani’s injuries in a direct action to recover the costs of medical assistance provided in response to those injuries. Dickson, 28 A.2d at 319. Dickson,'however, does not address the precise issue presented in this case.

The argument advanced by Richman and Houstoun would be stronger if Tristani’s action in the state trial court had been an action in rem. See Venture Eng’g, Inc. v. Tishman Constr. Corp. of S.C., 360 S.C. 156, 600 S.E.2d 547, 550 (S.C.Ct.App.2004). Tristani’s action against the health care providers responsible for her injuries, however, was an action in personam. None of the decisions relied upon by the parties in this case are on point/ The court did not find any decision applying Pennsylvania’s res judicata principles to factual'circumstances comparable to those in this case.

One decision was found which applied the law of New York. In Green v. City of New York, 438 F.Supp.2d 111 (E.D.N.Y.2006), the district court applied New York’s res judicata'principles to a virtually indistinguishable series of facts. In Green, recipients of medical assistance under Title XIX (and the parents of those recipients) had obtained court-approved settlements from liable third parties. Green, 438 F.Supp.2d at 117-18.

The City of New York Department of Social Services Human Resources Administration (“HRA”) had imposed hens on the recipients’ settlement proceeds in order to recoup the costs of services provided under Medicaid, prompting the recipients to make payments to the HRA in order to satisfy the liens. Id.

Believing that the HRA had improperly inflated the amounts of the liens in order to recover the costs of services that were supposed to be provided free of charge under the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. §§ 1400 et seq., the recipients commenced an action seeking both the return of the settlement proceeds that had been wrongfully collected by the HRA and an order enjoining the HRA, the Commissioner of the HRA and the City of New York from attempting to seek reimbursement for IDEA-related expenses in the future. Id. at 115-18.

The defendants raised the defense of res judicata, but the district court determined that the plaintiffs’ claims were not barred due to the lack of privity. Id. at 121-22. The district court explained: The instant matter is not barred by claim preclusion because there is no privity between the parties. Defendants City of New York, HEA, and Commissioner Eggleston were not parties to the personal injury actions as to which the state court settlements were approved. Nor are there allegations that the defendants controlled any parties to the state court personal injury actions.

The defendants’ interests were not represented by the doctors and hospitals sued by the plaintiffs in their personal injury actions. Indeed, as the interests of the defendant hospitals and doctors undoubtedly woujd be to avoid liability altogether or settle for as little as possible, such interests would be adverse to the City of New York and HRA’s interest in satisfying the liens. Id.

The district court held that the plaintiffs’ claims for the recovery of proceeds which had been wrongfully collected by the HRA were “sufficiently separate” from the underlying personal injury actions to defeat the defendants’ res judicata defense. Id. at 122. This court finds the rationale of Green to be persuasive. In various contexts, Pennsylvania courts have recognized that decisions issued by courts in other states can be helpful in ascertaining the applicable law in Pennsylvania. Commonwealth v.

Edmunds, 526 Pa. 374, 586 A.2d 887, 895, 899-901 (1991) (attorneys may discuss relevant precedents from other jurisdictions when briefing the construction of analogous provisions of the Pennsylvania Constitution’s Declaration of Rights); Sabad v. Fessenden, 825 A.2d 682, 695-97 (Pa.Super.Ct.2003). The court here concludes that the Pennsylvania Supreme Court would follow the rationale in Green if it were presented with this issue. With respect to the matters relevant to the issue of res judicata, the factual circumstances presented in Green were similar to those presented in this case.

Here, like in Green, there are no allegations that defendants controlled any party to the state court tort action. Defendants in this case, were not represented by the parties sued in those actions and those parties’ interest in awarding liability were adverse to defendants’ interests. The court holds that Richman and Houstoun were not in privity with the defendants in the state court tort actions and this action is not barred by the doctrine of res judicata.

Section 1738 does not preclude this court from reaching the merits of Tristani’s claims. As noted earlier,

section 1738 incorporates not only the doctrine of res judicata, but also the related doctrine of collateral estoppel. San Remo Hotel, L.P., 545 U.S. at 336, 125 S.Ct. 2491. Tristani and Valenta contend that the superior court’s decision in In re C.S. correctly stated the applicable law in Pennsylvania prior to the enactment of

section 1409(b)(7)(iii) on July 7, 2005. Richman and Houstoun argued that the rationale of In re C.S. must be discredited on the ground that it was an unpublished decision. Regardless whether the decision was “correct,” this court recognizes that would not be treated as precedential by a Pennsylvania court. Turner, 449 F.3d at 548. The court, however, may consider that decision for any insight it provide. See supra note 8.

In Liberto, the state trial court concluded that the DPW was collaterally estopped from asserting a claim for reimbursement for the amount of money spent by an MCO to provide medical assistance to a Medicaid recipient. (Docket No. 71-2 at 2-4.) If the decision in Liberto was correct with respect to the issue of collateral estoppel, the DPW is precluded from arguing that Pennsylvania law allowed it to recoup an MCOs’ expenditures before the enactment of

section 1409(b)(7)(iii). Richman and Houstoun contend that the state trial court’s decision in Liberto was in error, and that collateral estoppel cannot be asserted against a governmental entity. They identified no decision of a Pennsylvania court that supports their position. Id. They urge the court to predict that thb Pennsylvania Supreme Court, if presented with this question, would adopt for. Pennsylvania a rule similar to that adopted for the federal government by the United States Supreme Court in United States v. Mendoza, 464 U.S. 154, 104 S.Ct. 568, 78 L.Ed.2d 379 (1984).

In Mendoza, the Supreme Court held that litigants who were not parties to a prior action cannot avail themselves of offensive collateral estoppel against the federal government. Mendoza, 464 U.S. at 155-64, 104 S.Ct. 568. The Supreme Court reasoned that if one individual could employ another individual’s adjudication against the federal government as a “sword” in future litigation, the federal government would be forced to appeal every adverse judgment, regardless whether it was economically beneficial to do so, in order to avoid the collateral estoppel effects of an adverse judgment in later cases.

Id. at 162-63, 104 S.Ct. 568. Although it was acknowledged that the federal government was bound by the res judicata effects of any prior adverse judgments with respect to subsequent litigation involving parties to the prior adjudications, it was determined that the federal government’s unique status as an uncommonly frequent party to litigation warranted the conclusion that nonparties to the prior adjudications could not use the doctrine of offensive collateral estoppel as a “sword” against the federal government. Id. at 162-64,104 S.Ct. 568.

The Supreme Court’s decision in Mendoza was based on uniquely federal concerns. For instance, the Supreme Court noted that it usually waited for a conflict among the federal courts of appeals to develop before granting a petition for certiorari filed by the federal government. Id. at 160, 104 S.Ct. 568. This practice fostered the “thorough development of legal doctrine by allowing litigation in multiple forums.” Id. at 163, 104 S.Ct. 568. The uniquely federal nature of this interest led the Supreme Court of Alaska to conclude, in Alaska v.

United Cook Inlet Drift Association, 895 P.2d 947, 951-52 (Alaska 1995), that the Mendoza rule was ill-suited for litigation involving state governmental entities. Other' state courts have applied the Mendoza rule, or some version of it, in order to shield state governmental entities from the effects of non-mutual offensive collateral estoppel. See, e.g., First Interstate Bank of Arizona v. State Dept. of Revenue, 185 Ariz. 433, 916 P.2d 1149, 1152 (Ariz.Ct.App.1995); Helene Curtis, Inc. v.

Assessment Appeals Bd. of Los Angeles County, 76 Cal.App.4th 124, 90 Cal.Rptr.2d 31, 36 (Cal.Ct.App.1999); A & H Vending Co. v. Comm’r of Revenue, 608 N.W.2d 544, 547 (Minn.2000); Bd. of Educ. of St. Louis v. City of St. Louis, 879 S.W.2d 530, 532 (Mo.1994); City of Seattle Executive Servs. Dept. v. Visio Corp., 108 Wash.App. 566, 31 P.3d 740, 745-46 (Wash.Ct.App.2001); Teriaca v. Milwaukee Employees’ Ret. System/Annuity and Pension Bd., 265 Wis.2d 829, 667 N.W.2d 791, 796-97 (Wis.Ct.App.2003). The court understands that the DPW, like the federal government, is a frequent party to 'litigation.

The reasoning of the state trial court in Liberto would essentially require the DPW (or any other state governmental entity) to appeal every adverse determination in order to prevent future litigants from availing themselves of nonmutual offensive collateral estoppel. It is not clear, however, whether the Pennsylvania Supreme Court would adopt the rationale of Mendoza in a case such as this. For purposes of this analysis, the court will assume arguendo that the Pennsylvania Supreme Court would adopt the Mendoza rule and reject the reasoning employed by the state trial court in Liberto.

The court need' not determine whether Richman and Houstoun are collaterally estopped from attacking the rationale employed by the superior court in In re C.S. in this case, since this court concludes that the decision in that case is an accurate statement of the applicable law in Pennsylvania prior to the enactment of

section 1409(b)(7)(iii). Like most jurisdictions, Pennsylvania disfavors statutory constructions which would render the language of a given provision superfluous. Triumph Hosiery Mills, Inc. v. Commonwealth, 469 Pa. 92, 364 A.2d 919, 921 (1976). In this case, the construction of

section 1409(b)(7)(

i) proposed by Richman and Houstoun would not only be contrary to In re C.S., but it would also render

section 1409(b)(7)(iii) superfluous. “The Legislature cannot be deemed to intend that its language be superfluous and without import.” Daly v. Hemphill, 411 Pa. 263, 191 A.2d 835, 842 (1963). This principle applies with special force where, as here, the construction proposed by a party to a case would render superfluous an entire amendment to a preexisting statute. Eaton v. Zoning Hearing Bd., 80 Pa. Cmwlth. 392, 471 A.2d 919, 920 (Pa.Commw.Ct.1984). Whatever may be said about the nonprecedential status of In re C.S., it certainly caught the attention of the Pennsylvania legislature. The enactment of

section 1409(b)(7)(iii) cannot be deemed an exercise in futility. Bowmaster v. Clair, 933 A.2d 86, 90 (Pa.Super.Ct.2007) (referring to a presumption that the Pennsylvania legislature “did not intend any statutory language to exist as mere surplusage”). The arguments raised by Richman and Houstoun concerning the status of In re C.S. illustrate that they misperceive the judicial role. When a court construes a constitutional or statutory provision, it does not create law. Instead, it merely declares what the law is (and what the law already was prior to the judicial decision). Danforth v.

Minnesota, — U.S. —, 128 S.Ct. 1029, 1035, 169 L.Ed.2d 859 (2008); Am. Trucking Ass’ns, Inc. v. Smith, 496 U.S. 167, 201, 110 S.Ct. 2323, 110 L.Ed.2d 148 (1990) (Scalia, J., concurring in the judgment).

Section 1409(b)(7)(

i) was enacted before, and

section 1409(b)(7)(iii) was enacted after, the superior court issued its decision in In re C.S. When viewed in the context of the superior court’s decision in In re C.S. and the subsequent action taken by the Pennsylvania legislature in enacting

section 1409(b)(7)(iii) to reverse the effects of that decision,

section 1409(b)(7)(

i) permitted the DPW to recover only its expenditures, and not an MCOs’ expenditures, from third parties liable for the injuries sustained by medical assistance recipients. The court’s analysis of the issues in this case proceeds on the conclusion that the superior court accurately construed

section 1409(b)(7)(

i) in In re C.S., and that the enactment of

section 1409(b)(7)(iii) constituted a “change in” (rather than a “clarification of’) Pennsylvania law. Given the court’s view that the arguments raised by Richman and Houstoun concerning the proper construction of

section 1409(b)(7)(

i) prior to the addition of

section 1409(b)(7)(iii) are not meritorious in any event, there is no need for the court to determine whether Richman and Houstoun are collaterally estopped from raising those arguments in the first place. C.

The Remedies Available Under 42 U.S.C. § 1983 for Violations of Title XIX Tristani and Valenta bring their federal claims pursuant to 42 U.S.C. § 1983, which provides: Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for

an act or omission taken in such officer’s judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia. 42 U.S.C. § 1983. This statute does not create substantive rights. Maher v. Gagne, 448 U.S. 122, 129 n. 11, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980). A plaintiff cannot prevail in an action brought under § 1983 without establishing an underlying violation of federal law.

Collins v. City of Harker Heights, 503 U.S. 115, 119, 112 S.Ct. 1061, 117 L.Ed.2d 261 (1992). “Section 1983 itself contains no state-of-mind requirement independent of that necessary to state a violation of the underlying federal right.” Bd. of County Comm’rs v. Brown, 520 U.S. 397, 405, 117 S.Ct. 1382, 137 L.Ed.2d 626 (1997) (internal quotation marks omitted). Tristani and Valenta allege both constitutional and statutory violations. (Second Am. Compl. ¶¶ 155-64.) The parties do not dispute that the federal constitutional claims at issue, if proven to be meritorious, are actionable under § 1983.

Richman and Houstoun argue that § 1983 does not provide a remedy for the statutory violations alleged by Tristani and Valenta. The statutory claims at issue involve alleged violations of §§ 1396k(b), 1396p(a)(

l) and 1396p(b)(l). The viability of these claims depends upon whether private individuals such as Tristani and Valenta can enforce the relevant provisions of Title XIX in an action under § 1983. The court must approach the resolution of this question with great care. The determination of who can seek a remedy for violations of Title XIX has “significant consequences for the reach of federal power.” Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148, 128 S.Ct. 761, 773, 169 L.Ed.2d 627 (2008).

On some occasions, the Supreme Court has recognized the existence of implied private rights of action under statutes which do not expressly provide for individualized remedies. Cannon v. Univ. of Chicago, 441 U.S. 677, 699-717, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979). An individual suing pursuant to an implied private right of action must show not only that the applicable statute creates a private right, but also that it creates a private remedy. Alexander v. Sandoval, 532 U.S. 275, 286, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001).

Plaintiffs suing under § 1983 need not make an independent showing that the statute in question creates a private remedy, since “§ 1983 generally supplies a remedy for the vindication of rights secured by federal statutes.” Gonzaga Univ. v. Doe, 536 U.S. 273, 284, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002). The language of § 1983 confirms that it was designed to provide a remedy for the deprivation of rights, privileges, or immunities secured by the Constitution and laws of the United States, not to provide a remedy for every violation of federal law. Golden State Transit Corp. v.

Los Angeles, 493 U.S. 103, 106, 110 S.Ct. 444, 107 L.Ed.2d 420 (1989). A plaintiff proceeding under § 1983 must establish not only that the defendant violated federal law, but also that the defendant violated a “right, privilege, or immunit[y]” enjoyed by the plaintiff under that federal law. If Congress wishes to create federal “rights” enforceable under § 1983, “it must do so in clear and unambiguous terms.” Gonzaga Univ., 536 U.S. at 290, 122 S.Ct. 2268. In Blessing v.

Freestone, 520 U.S. 329, 340-11, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997), the Supreme Court explained that a particular statute cannot be deemed to have created a federal “right” enforceable under § 1983 unless it is shown that:

(1) Congress intended for the provision in question to benefit the plaintiff (or the class of persons to which the plaintiff belongs); (2) the “right” allegedly protected under the provision is not so “vague and amorphous” that its enforcement would strain judicial competence; and (3) the provision unambiguously imposes a “binding obligation” on the states. In order to impose a “binding obligation” on the states, “the provision giving rise to the asserted right must be couched in mandatory rather than precatory terms.” Blessing, 520 U.S. at 341, 117 S.Ct. 1353.

Even where a plaintiff is able to make this showing, there is only a “rebuttable presumption” that the right in question is enforceable under § 1983. Id. This presumption can be rebutted by a showing on the part of the defendant that Congress has “specifically foreclosed a remedy under § 1983” for violations of the relevant statutory provision. Smith v. Robinson, 468 U.S. 992, 1005 n. 9, 104 S.Ct. 3457, 82 L.Ed.2d 746 (1984).

Evidence of that kind of foreclosure can be found either directly in the language of the statute or indirectly from an inference drawn from the creation of a distinct, comprehensive enforcement scheme that is incompatible with supplemental enforcement under § 1983. City of Rancho Palos Verdes v. Abrams, 544 U.S. 113, 120-21, 125 S.Ct. 1453, 161 L.Ed.2d 316 (2005). A comprehensive enforcement scheme can be in the form of an enumerated statutory enforcement mechanism or an implied right of action springing from (or incorporated within) the applicable statute. A.W. v. Jersey City Pub.

Sch., 486 F.3d 791, 803-06 (3d Cir.2007). With these standards in mind, the court turns to the particular statutory provisions at issue. Richman and Houstoun contend that violations of §§ 1396k(b), 1396p(a)(

l) and 1396p(b)(

l) are not actionable under § 1983. (Doc. No. 65 at 23-29.) As an initial matter, the Supreme Court has specifically observed that § 1983 provides a remedy for violations of various provisions of the Social Security Act. Maine v. Thiboutot, 448 U.S. 1, 5-6, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980). It cannot be seriously argued that claims arising under the Social Security Act are categorically excluded from the ambit of § 1983’s remedial scheme.

It is equally true, however, that violations of provisions contained within a statutory structure as complex as the Social Security Act cannot be deemed to be categorically actionable under § 1983. The Supreme Court has made it clear that a plaintiff must “identify with particularity the rights” allegedly created by the federal statute in question.

Blessing, 520 U.S. at 342, 117 S.Ct. 1353 (“Only when the complaint is broken down into manageable analytic bites can a court ascertain whether each separate claim satisfies the various criteria we have set forth for determining whether a federal statute creates rights.”). The court’s inquiry must separately consider each of the particular statutory provisions relied upon by Tristani and Valenta.

Section 1396k(

b) provides that: [s]uch part of any amount collected by the State under an assignment made under the provisions of [§ 1396k] shall be retained by the State as is necessary to reimburse it for medical assistance payments made on behalf of an individual with respect to whom such assignment was executed (with appropriate reimbursement of the Federal Government to the extent of its participation in the financing of such medical assistance), and the remainder of such amount collected shall be paid to such individual. 42 U.S.C. § 1396k(b) (emphasis added).

The statute’s use of the word “individual” clearly evinces a congressional intent to confer a “right” on a medical assistance recipient to receive a payment for any excess amounts recovered by a participating state entity from a liable third party. Tristani and Valenta contend that the DPW’s collection practices deprived them (and similarly situated Medicaid recipients) of money to which they were entitled, resulting in a windfall to the DPW. This situation is not unlike that faced by the Supreme Court in Wilder v. Virginia Hospital Association, 496 U.S. 498, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990).

The issue in Wilder was whether the Boren Amendment to Title XIX was enforceable in an action brought by a health care provider under § 1983. Wilder, 496 U.S. at 501, 110 S.Ct. 2510. The Boren Amendment required states participating in the Medicaid program to reimburse health care providers for medical assistance according to rates that were “reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities.” Id. at 501-02, 110 S.Ct. 2510.

The Virginia Hospital Association contended that Virginia’s reimbursement plan violated the Boren Amendment because the applicable reimbursement rates were insufficient “to meet the economically and efficiently incurred cost of providing care to Medicaid patients in hospitals.” Id. at 503.110 S.Ct. 2510. Applying the test that would later be expounded further in Blessing, the Supreme Court held that the Boren Amendment created a “right” of health care providers to reasonable and adequate reimbursement rates, and that this right was enforceable under § 1983. Id. at 509-10.110 S.Ct. 2510.

The arguments raised by Rich-man and Houstoun with respect to this issue are rather generic. They do not attempt to distinguish this case from Wilder. Instead, they focus on the alleged availability of administrative hearings to enforce provisions such as § 1396k(b). The court acknowledges that the availability of distinct individual remedies under a federal statute is a factor that may counsel against a finding that violations of “rights” created thereunder are actionable under § 1983. Gonzaga Univ., 536 U.S. at 289-90, 122 S.Ct. 2268.

The relevant question, however, is not whether administrative or judicial remedies are somehow adequate to vindicate the private interests involved, but rather whether they are sufficiently comprehensive to evince a congressional intent to foreclose a supplemental remedy under § 1988. Wilder, 496 U.S. at 522-23, 110 S.Ct. 2510. A carefully tailored, more restrictive private remedy contained -within a statute has often been the “dividing line” between rights which are enforceable under § 1983 and rights which are not. Abrams, 544 U.S. at 121, 125 S.Ct. 1453.

A carefully crafted remedial scheme, particularly one involving pre-litigation exhaustion requirements that are not applicable to § 1983 claims, may prove to be so incompatible with independent enforcement under § 1983 as to evince a congressional intent to foreclose an alternative, individual remedial option. Alex G. v. Bd. of Trs. of Davis Joint Unified Sch. Dist., 332 F.Supp.2d 1315, 1317-19 (E.D.Cal.2004). Richman and Houstoun base their argument on 42 U.S.C. § 1396a(a)(3). That

section provides that a state plan for medical assistance must “provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness.” 42 U.S.C. § 1396a(a)(3). This provision, however, does not address matters raised by § 1396k(b), which concerns reimbursement for excess proceeds collected by a state agency from a liable third party after a claim for medical assistance has already been honored. 42 U.S.C. § 1396k(b).

Remedies available under the law of a particular state (but not contemplated by Congress) are not relevant to this inquiry, which focuses on whether Congress intended to foreclose a remedy under § 1983. Fitzgerald v. Barnstable Sch. Comm. — U.S. —, 129 S.Ct. 788, 795-96, 172 L.Ed.2d 582 (2009); Blessing, 520 U.S. at 341, 117 S.Ct. 1353. Since § 1396k(

b) is, in all relevant respects, indistinguishable from the provision discussed by the Supreme Court in Wilder, the court holds that the statements under §§ 1396k(b), 1396p(a)(

l) and 1396p(b)(

l) are not sufficiently comprehensive and do not evince a congressional intent to foreclose a supplemental remedy under § 1983 and that § 1983 provides a remedy to vindicate the reimbursement “right” created by § 1396k(b). Newark Parents Ass’n v. Newark Pub. Sch., 547 F.3d 199, 212 (3d Cir.2008).

Section 1396p(a)(l), which is Title XIX’s anti-lien provision, provides that “[n]o lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan ....”42 U.S.C. § 1396p(a)(l) (emphasis added).

Section 1396p(b)(l), which is Title XIX’s anti-recovery provision, provides that “[n]o adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan may be made .... ” 42 U.S.C. § 1396p(b)(l) (emphasis added). These provisions contemplate the protection of an “individual,” making it clear that Congress intended to benefit individual medical assistance recipients such as Tristani and Valenta. Blessing, 520 U.S. at 340, 117 S.Ct. 1353.

Although the parties disagree with respect to the substantive effects of these provisions in this case, it cannot be fairly said that the rights created thereunder are “so ‘vague and amorphous’ that [their] enforcement would strain judicial competence.” Id. at 340 — 41, 117 S.Ct. 1353. The prohibitions are clearly “couched in mandatory rather than precatory terms.” Id. at 341, 117 S.Ct. 1353.

Although the word “may” is often associated with precatory language when it is used to describe an affirmative aspiration or wish, its use in this negative context indicates that it imposes mandatory obligations akin to those more commonly associated with the word “shall.” White v. Engler, 188 F.Supp.2d 730, 745 (E.D.Mich.2001). While statutory language providing that a lien “may” be imposed would differ meaningfully from statutory language providing that a lien “shall” be imposed, the language in § 1396p(a)(

l) stating that “[n]o lien may be imposed” has virtually the same meaning as would language stating that “no lien shall be imposed.” This same principle applies to the anti-recovery provision contained in § 1396p(b)(l). The “text and structure” of these provisions indicate that Congress intended to create individual rights. Gonzaga Univ., 536 U.S. at 286, 122 S.Ct. 2268. Under § 1396a(a)(18), a state plan for medical assistance must “comply with the provisions of [§ 1396p] with respect to liens, adjustments and recoveries of medical assistance correctly paid .... ” 42 U.S.C. § 1396a(a)(18).

The court notes that two district courts within this circuit have held that § 1396a(a)(18) creates individual “rights” that are enforceable under § 1983. Lewis v. Rendell, 501 F.Supp.2d 671, 687-88 (E.D.Pa.2007); Johnson v. Guhl, 91 F.Supp.2d 754, 770 (D.N.J.2000). The United States Court of Appeals for the Third Circuit concluded in Sabree v. Richman, 367 F.3d 180, 192 (3d Cir.2004), that the overall structure of Title XIX was compatible with a determination that “rights-creating language” could be found in some of its provisions. The court of appeals found such language in three of Title XIX’s provisions.

Sabree, 367 F.3d at 192. In addition, the court of appeals determined that Title XIX did not have a “comprehensive remedial scheme” that was incompatible with individual actions under § 1983. Id. at 193. The court already concluded ■ that §§ 1396p(a)(

l) and 1396p(b)(l), like § 1396k(b), create individual rights. These “rights” are “presumptively enforceable” under § 1983. Gonzaga Univ., 536 U.S. at 284, 122 S.Ct. 2268. The burden is on Richman and Houstoun to demonstrate that Congress precluded reliance on § 1983 to remedy violations of those rights. Sabree, 367 F.3d at 193. They did not meet this burden. The arguments advanced in their brief are not materially different from those that were expressly rejected by the court of appeals in Sabree.

Under these circumstances, Tristani and Valenta can invoke the remedies available under § 1983 to redress violations of the “rights” created by Title XIX’s anti-lien and anti-recovery provisions. The court holds that violations of the rights contained in §§ 1396k(b), 1396p(a)(

l) and 1396p(b)(

l) are actionable under § 1983. With that in mind, the court now turns to the merits of the claims asserted by Tristani and Valenta under those statutory provisions. D.

The Merits of the Title XIX Claims The court acknowledges that the parties disagree with respect to whether the relief sought by Tristani and Valenta against Richman and Houstoun in their individual capacities (i.e., reimbursement for money alleged to have been illegally collected by the DPW) constitutes “legal” relief or “equitable” relief. (Docket No. 79 at 47-48.) That issue is relevant to the question whether Richman and Houstoun are entitled to qualified immunity. See Grantham v. Trickey, 21 F.3d 289, 295 (8th Cir.1994).

Richman and Houstoun are “persons” within the meaning of § 1983 to the extent that they are being sued in their individual capacities. Hafer v. Melo, 502 U.S. 21, 25-31, 112 S.Ct. 358, 116 L.Ed.2d 301 (1991). The nature of the relief sought becomes relevant only if Tristani and Valenta can prevail on the merits of their claims. See Cox v. Sugg, 484 F.3d 1062, 1068 (8th Cir.2007). The first step in the qualified immunity analysis is to determine whether an actionable violation of a federal right can be established in the first place. Saucier v. Katz, 533 U.S. 194, 201, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001).

This case is clouded by the question whether Tristani and Valenta have standing (as class representatives or otherwise) to seek injunctive relief under Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), against Richman in her official capacity. In any event, there is no question that Tristani and Valenta have standing to pursue their individual-capacity claims for reimbursement. Consequently, the court can now proceed to address the merits of the claims asserted by Tristani and Valenta under Title XIX. 1.

The Reimbursement Provision Tristani and Valenta argue that the DPW violated § 1396k(b)’s reimbursement provision by collecting th

[…]