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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

CIVIL NO. 03-1640 (GAG) (Consolidated with Case Nos. 06-1291 and 06-1524).

ORDER

On May 15, 2015, Plaintiffs in the present consolidated case filed a motion for writ of

Attachment with the Court. (Docket No. 653.) On May 27, 2015, the Commonwealth replied to

said motion by moving to quash the motion and requesting from the Court an extension of time to

issue the wraparound payments for the First Quarter of 2015. (See Docket No. 664.) Thereafter,

the Court denied the Commonwealth’s motion to quash and extension of time (Docket No. 670)

and held a status conference on June 3, 2015 to discuss the payment of the past due wraparound

payments, in which both parties were given ample time to flesh out their arguments. (See Docket

No. 673.)

On June 5, 2015, the Court ordered the Commonwealth to deposit with the Clerk of Court

the sum of $9,389,743.00 on or before June 17, 2015 for payment for the First Quarter of 2015.

(Docket No. 674.) The Court noted that it had already given the Commonwealth a final extension

to do so and advanced that the Commonwealth’s non-compliance will result in an immediate

garnishment order for the aforementioned amount that is collectively due to the FHQC plaintiffs in

RIO GRANDE COMMUNITY HEALTH CENTER, INC, et al., Plaintiffs, v. HON. ANA RIUS AREMENDARIZ, Secretary of the Department of Health for the Commonwealth of Puerto Rico, Defendant.

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Civil No. 03-1640 (GAG)

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these three consolidated cases. (Id.) The court further held that it will use the estimated data

agreed upon by the parties, which has been in place and approved by the Court. (Id.) Thereafter,

on June 17, 2015, the Commonwealth filed a motion to deposit $3,676,798.18 based on the

Commonwealth’s calculations of the wraparound payments pursuant to a formula using “real and

reliable data” in direct contravention to the Court’s Order at Docket No. 674. (Docket No. 676.)

Despite this motion for the deposit of funds, the docket indicates that such funds will not be

available until after June 30, 2015.

This deposit of funds does not satisfy the Court’s Order and the due amount.

Accordingly, the Court will garnish the entire sum of $9,389,743.00 immediately.

Rule 69 of the Federal Rules of Civil Procedure provides that “[a] money judgment is

enforced by a writ of execution . . . The procedure on execution . . . must accord with the

procedure of the state in which the court is located.” FED. R. CIV. P. 69. As such, this court looks

to Rule 56 of the Puerto Rico Rules of Civil Procedure. See P.R. LAWS. ANN. tit. 32, Ap. V. Rule

56.1 in turn provides that “[i]n every action, before or after entering judgment, and on motion of

claimant, the court may issue any provisional order that may be necessary to secure satisfaction of

the judgment. The court may order the attachment [or] garnishment . . . of personal property . . . or

it may order any other measure it deems appropriate under the circumstances of the case.” P.R.

LAWS. ANN. tit. 32, Ap. V, Rule 56.1 (official translation). Said rule grants the court ample

discretion in deciding whether to issue an order for provisional remedies. See Cisco Sys. Capital

Corp. v. Global Hotel Mgmt. Inc., 712 F. Supp. 2d 22, 23 (D.P.R. 2010). For example, Rule 56.1

states that “the court may issue any provisional order that may be necessary” and “must consider

the interests of all the parties and adjudicate as substantial justice may require.” P.R. LAWS. ANN.

tit. 32, Ap. V, Rule 56.1 (official translation).

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In light of the Commonwealth’s consistently flagrant failure to comply with this Court’s

clear and unambiguous Orders and the agreement reached between the parties that implemented

the Court’s preliminary injunction at Docket No. 743 in Case No. 06-1260, Plaintiffs’ motion for a

writ of attachment to garnish those funds due, and the parties’ opportunity to be heard on this

matter, the Court has no choice but to enter an order to garnish the unpaid $9,389,743.00 that

is due to Plaintiffs at this time. In addition, the check deposited by the Commonwealth with

the Clerk of Court that does not have funds backing it is hereby rejected by the Court and

shall be returned immediately.

The Commonwealth was and still is not obligated to participate in the Medicaid program.

However, when it opted to participate in the program, it became bound to rigidly comply with the

federally-imposed requirements. See Rio Grande Cmty. Health Ctr., Inc. v. Rullan, 397 F.3d 56,

61 (1st Cir. 2005). Indeed, by participating in this program, the Commonwealth receives millions

of dollars in matching funds from the federal government each year. In a Commonwealth Senate

hearing held yesterday, Treasury Secretary Juan Zaragoza stated that the Treasury Department has

“no work plans and that he is virtually like a captain of a ship navigating by ‘looking at the stars’

instead of charts and a compass.” Eva Llorens Velez, Zaragoza Say Treasury Swamped, Calls for

Autonomous Internal Revenue Office, THE SAN JUAN DAILY STAR, June 19, 2015, at 5. He further

noted that the Treasury currently holds nobody accountable, there are no metrics, and no one

knows how many payment plans are being made. Id. Despite the Commonwealth’s lack of

organization with regards to its financial state, it must nevertheless comply with federal law

when it receives federal benefits from the Medicaid program. The Court’s decision today is

made by considering the utmost interests of justice and is not taken lightly by the

undersigned. Said garnishment order will follow.

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Furthermore, the Court notes that notwithstanding the Commonwealth’s appeal of the

Court’s Orders at Docket Nos. 670, 671, and 674, which appears to be an attempt to further delay

the required payments, the writ of execution to garnish the funds will be ordered. The appeal does

not stay this Order nor has a stay of proceedings been requested from the undersigned. The

Commonwealth cannot take into its own hands to deposit whatever amount it decides is

“lawfully due.”

Finally, the Court posits that it is utterly flabbergasted at the Commonwealth Health

Department’s representation at the June 3, 2015 hearing to the effect that the federal and

state matching funds required to comply with long standing orders and rulings from this

Court, as well as the First Circuit, were not budgeted for the current fiscal year. If so, this is

certainly a gargantuan irresponsibility, as well as an utter failure and misfeasance of

executive branch appointed officials1 to comply with federal law. This case has been litigated

for more than a decade. More so, all Commonwealth officials take an oath upon entering

office to uphold the Constitutions of the United States and the Commonwealth of Puerto

Rico. These officials have thus acted in derelict fashion with respect to their duty, as well as

their responsibilities toward the Governor and Legislative Assembly, who ultimately

approves the budget. Finally, shifting the blame to the Legislative Assembly as was done at

the hearing is unacceptable team play.

SO ORDERED.

In San Juan, Puerto Rico this 19th day of June, 2015.

s/ Gustavo A. Gelpí GUSTAVO A. GELPI United States District Judge

1 The Secretary of Justice is hereby excluded from this remark. The Court notes that he has made every effort

possible to help facilitate compliance in this matter.

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