AHF v LAC 2013-07-18 Ex Parte Application of AHF for TRO and OSC Re Preliminary Injunction Docs 59...

C 2:12-cv-10400-PA-AGR Document 59 Filed 07/18/13 of 4 Page ID #:4589

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Tom Myers (SBN 176008)tom. myers@aadshealth. orgSamantha R. Azulay, SBN 283424samantha.azulay aidshealth.orgAIDS Healthcare oundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450

Andrew F. Kim (SBN 156533)akim plonskerlaw. comPlons er Law, LLP1990 Bundy Drive, Suite 280Los Angeles, CA 90025Telephone: (310) 861-2050Facsimile: (310) 496-2577

Attorneys for PlaintiffsAIDS HEALTHCARE FOUNDATIONand MICHAEL WEINSTEIN

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

AIDS HEALTHCAREFOUNDATION; MICHAELWEINSTEIN

Plaintiffs,

vs.

COUNTY OF LOS ANGELES;MARIO J. PEREZ,

Defendants.

CV 12-10400 PA (AGR~c)

EX PARTE APPLICATION OFPLAINTIFFS AIDS HEALTHCAREFOUNDATION AND MICHAELWEINSTEIN FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Filed concurrently:1. Memorandum of Points and

Authorities;2. Declarations of Samantha

Azulay, Sharon Matland, PatriciaBermudez,Wayne Chen, M.D.,Michael Weinstein

Lod ed concurrently1.[Proposed] Order

Date:Time:Courtroom: 15Hon. Percy AndersonUnited States District Court Judge

PLAINTIFFS' EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND OSC REPRELIMINARY INJUNCTION

2:12-cv-10400-PA-AGR Document 59 Filed 07/18/13 of 4 Page ID #:4590

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EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER

Plaintiffs AIDS Healthcare Foundation and Michael Weinstein hereby request,

pursuant to the Federal Rule of Civil Procedure 65 and Central District Local Rules

7-19, that the Court issue a temporary restraining order as set forth below.

Pursuant to Local Rule 7-19, opposing counsel's contact information is as

follows: Patricia L. Glaser, Esq., Joel N. Klevens, Esq. and John K. Ly, Esq. —Glaser

Weil Find Jacobs Howard Avchen &Shapiro LLP, 10250 Constellation Boulevard,

19`'' Floor, Los Angeles, CA 90067, Telephone 310-553-3000.

I.

NECESSITY FOR TEMPORARY RESTRAINING ORDER

Plaintiffs seek a temporary restraining order to prevent the County of Los

Angeles and Mario Perez (sometimes collectively "Defendants") from commencing

on July 22, 2013 a full financial audit of plaintiff AIDS Healthcare Foundation

("AHF") pertaining to a four year period and compelling Defendants to commence

that audit on or after September 1, 2013.

Defendants have audited various aspects of AHF's business over the last five

months (the "Audits"). The Audits have recently completed, although there is a high

likelihood of follow up and further discussions between the parties concerning the

Audits and the resulting conclusions Defendants have reached. The Audits required

AHF staff to devote significant person hours to gathering and interpreting

information demanded by Defendants. Many of the AHF staff who worked on these

audits are front line patient service providers and/or the supervisory staff overseeing

those providers. The Audits have caused these individuals to devote time away from

the providing of patient services and from supervision and oversight of those

services.

Although there is no time sensitivity from Defendants' perspective or any

compelling reason to commence a full financial audit covering a four year period on

July 22, 2013 and shortly on the heels of the completion of the Audits, Defendants

PLAINTIFFS' EX PARTS APPLICATION FOR TEMPORARY RESTRAINING ORDER AND OSC REPRELIMINARY INJUNCTION

2:12-cv-10400-PA-AGR Document 59 Filed 07/18/13 of 4 Page ID #:4591

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demand that such an audit commence that day and on no other (the "New Audit").

The treatment of HIV/AIDS provided by AHF is uniquely successful because it

involves intensive, highly structured and rigidly scheduled drug regimens and

interaction between patients and AHF service providers (e.g., registered nurses and

physicians). The treatment provided by AHF is, therefore, time consuming and is not

easily subject to "schedule shifting." The Audits caused service providers and their

supervisors to see and interact with fewer patients during the time that the Audits

took place. The Audits also caused departments within AHF, like finance and

accounts payable, to devote time away from providing the administrative support

crucial to AHF's ability to provide superior and economical health care services to its

patients. The Audits left the various departments of AHF, including some of its front

line service providers, playing "catch up" to compensate for time lost in performing

their normal day-to-day functions, and that process is continuing today. The devotion

by AHF staff of additional time during July and August to the New Audit and away

from patient care, and support of patient care, is highly likely to have a deleterious

impact on the health of some AHF patients. There is no satisfactory reason —legal or

otherwise — to force potential harm on AHF patients, and Defendants have stated

none. As shown in the accompanying Memorandum of Points and Authorities, this is

not the first time that Defendants have used audits as a tool to pressure and retaliate

against Plaintiffs. Defendants' insistence on commencing the New Audit on July 22,

2013 is part and parcel of their efforts to retaliate against Defendants, as discussed at

length in the First Amended Complaint (Doc. 32).

An immediate temporary restraining order is necessary to prevent imminent

~ potential harm to AHF's patients.

II.

GROUNDS FOR EX PARTS APPLICATION

Plaintiffs make this ex parte application pursuant to Federal Rule of Civil

Procedure 65 and Central District Local Rules 7-19 and 65-1. Plaintiffs have


Ca~~e 2:12-cv-10400-PA-AGR Document 59 Filed 07/18/13 of 4 Page ID #:4592

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demonstrated that they meet the requirements for the issuance of a temporary

restraining order by establishing the probability of success on the merits and a

possibility of irreparable injury unless relief is granted or a fair chance of success on

the merits and that the balance of interests tip strongly in Plaintiffs' favor. Southwest

Voters Registration Ed. Project v. Shelley, 344 F.3d 914, 917-18 (9th Cir. 2003);

Republic of Philippines v. Marcos, 862 F. 2d 1355, 1362 (9`'' Cir. 1988); Playboy

Enterprises Inc. v. Calvin Designer Label, 985 F.Supp 1218 (N.D. Cal. 1997); see

also Fed. R. Civ. P. 65.

RELIEF SOUGHT

Plaintiffs therefore respectfully request that the Court grant this ex pane

application by:

1. Issuing an immediate temporary restraining order forbidding Defendants

from commencing the New Audit on July 22, 2013 or on any date prior to September

1, 2013; and

2. Issuing an Order to Show Cause setting a schedule and briefing and a

hearing on a preliminary injunction.

Plaintiffs base this ex parte application on this application, the First Amended

Complaint (doc. 32), the accompanying memorandum of points and authorities in

support of this Application, declarations, and [Proposed] Temporary Restraining

Order and Order to Show Cause re Preliminary Injunction, the complete files and

~ records in this action and such other, further matters and evidence as this Court

deems appropriate to consider.

DATED: July 18, 2013 PLONSKER LAW, LLP

By: /s/ Andrew F. Kimn rew .Kim

Attorneys for Plaintiffs AIDSHealthcare Foundation andMichael Weinstein


2:12-cv-10400-PA-AGR Document 59 Filed 07/18/13 Page 1 of 4 Page ID #:4589

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Tom Myers (SBN 176008)tom. myers@aidshealth. orgSamantha R. Azulay, SBN 283424Samantha. azulay aidshealth. orgAIDS Healthcare oundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450

Andrew F. Kim (SBN 156533)akim plonskerlaw. comPlons~er Law, LLP1990 Bundy Drive, Suite 280Los Angeles, CA 90025Telephone: (310) 861-2050Facsimile: (310) 496-2577





Plaintiffs,

vs.


Defendants.

CV 12-10400 PA (AGI~)

EX PARTE APPLICATION OFPLAINTIFFS AIDS HEALTHCAREFOUNDATION AND MICHAELWEINSTEIN FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Filed concurrently:1. Memorandum of Points and


Azulay, Sharon Matland, PatriciaBermudez,Wayne Chen, M.D.,Michael Weinstein


Date:Time:Courtroom: 15Hon. Percy AndersonUnited States District Court Judge



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EX PARTS APPLICATION FOR TEMPORARY RESTRAINING ORDER

Plaintiffs AIDS Healthcare Foundation and Michael Weinstein hereby request,

pursuant to the Federal Rule of Civil Procedure 65 and Central District Local Rules

7-19, that the Court issue a temporary restraining order as set forth below.

Pursuant to Local Rule 7-19, opposing counsel's contact information is as

follows: Patricia L. Glaser, Esq., Joel N. Klevens, Esq. and John K. Ly, Esq. —Glaser

Weil Find Jacobs Howard Avchen &Shapiro LLP, 10250 Constellation Boulevard,

19th Floor, Los Angeles, CA 90067, Telephone 310-553-3000.

I.

NECESSITY FOR TEMPORARY RESTRAINING ORDER

Plaintiffs seek a temporary restraining order to prevent the County of Los

Angeles and Mario Perez (sometimes collectively "Defendants") from commencing

on July 22, 2013 a full financial audit of plaintiff AIDS Healthcare Foundation

("AHF") pertaining to a four year period and compelling Defendants to commence

that audit on or after September 1, 2013.

Defendants have audited various aspects of AHF's business over the last five

months (the "Audits"). The Audits have recently completed, although there is a high

likelihood of follow up and further discussions between the parties concerning the

Audits and the resulting conclusions Defendants have reached. The Audits required

AHF staff to devote significant person hours to gathering and interpreting

information demanded by Defendants. Many of the AHF staff who worked on these

audits are front line patient service providers and/or the supervisory staff overseeing

those providers. The Audits have caused these individuals to devote time away from

the providing of patient services and from supervision and oversight of those

services.

Although there is no time sensitivity from Defendants' perspective or any

compelling reason to commence a full financial audit covering a four year period on

July 22, 2013 and shortly on the heels of the completion of the Audits, Defendants



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demand that such an audit commence that day and on no other (the "New Audit")





easily subject to "schedule shifting." The Audits caused service providers and their

supervisors to see and interact with fewer patients during the time that the Audits

took place. The Audits also caused departments within AHF, like finance and

accounts payable, to devote time away from providing the administrative support

crucial to AHF's ability to provide superior and economical health care services to its

patients. The Audits left the various departments of AHF, including some of its front

line service providers, playing "catch up" to compensate for time lost in performing

their normal day-to-day functions, and that process is continuing today. The devotion

by AHF staff of additional time during July and August to the New Audit and away

from patient care, and support of patient care, is highly likely to have a deleterious

impact on the health of some AHF patients. There is no satisfactory reason —legal or

otherwise — to force potential harm on AHF patients, and Defendants have stated

none. As shown in the accompanying Memorandum of Points and Authorities, this is

not the first time that Defendants have used audits as a tool to pressure and retaliate

against Plaintiffs. Defendants' insistence on commencing the New Audit on July 22,

2013 is part and parcel of their efforts to retaliate against Defendants, as discussed at

length in the First Amended Complaint (Doc. 32).

An immediate temporary restraining order is necessary to prevent imminent

~ potential harm to AHF's patients.

II.

GROUNDS FOR EX PARTS APPLICATION

Plaintiffs make this ex parte application pursuant to Federal Rule of Civil

Procedure 65 and Central District Local Rules 7-19 and 65-1. Plaintiffs have



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demonstrated that they meet the requirements for the issuance of a temporary

restraining order by establishing the probability of success on the merits and a

possibility of irreparable injury unless relief is granted or a fair chance of success on

the merits and that the balance of interests tip strongly in Plaintiffs' favor. Southwest

Voters Registration Ed. Project v. Shelley, 344 F.3d 914, 917-18 (9th Cir. 2003);

Republic of Philippines v. Marcos, 862 F. 2d 1355, 1362 (9th Cir. 1988); Playboy

Enterprises Inc. v. Calvin Designer Label, 985 F.Supp 1218 (N.D. Cal. 1997); see

also Fed. R. Civ. P. 65.

RELIEF SOUGHT

Plaintiffs therefore respectfully request that the Court grant this ex pane

application by:

1. Issuing an immediate temporary restraining order forbidding Defendants

from commencing the New Audit on July 22, 2013 or on any date prior to September

1, 2013; and

2. Issuing an Order to Show Cause setting a schedule and briefing and a

hearing on a preliminary injunction.

Plaintiffs base this ex pane application on this application, the First Amended

Complaint (doc. 32), the accompanying memorandum of points and authorities in

support of this Application, declarations, and [Proposed] Temporary Restraining

Order and Order to Show Cause re Preliminary Injunction, the complete files and

~ records in this action and such other, further matters and evidence as this Court

~ deems appropriate to consider.

~ DATED: July 18, 2013 PLONSKER LAW, LLP

By: /s/ Andrew F. Kimn rew .Kim

Attorneys for Plaintiffs AIDSHealthcare Foundation andMichael Weinstein


12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 1 of 15 Page ID #:4593

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Tom Myers (SBN 176008)tom. myers@aidshealth. orgSamantha R. Azulay, SBN 283424Samantha. azulay aidshealth. orgAIDS Healthcare oundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450

Andrew F. Kim (SBN 156533)akim @plonskerlaw. comPlonsker Law, LLP1990 Bundy Drive, Suite 280Los Angeles, CA 90025Telephone: (310) 861-2050Facsimile: (310) 496-2577





Plaintiffs,

vs.


Defendants.

CV 12-10400 PA (AGI~)

MEMORANDUM OF POINTS ANDAUTHORITIES IN SUPPORT OFEX PARTS APPLICATION OFPLAINTIFFS AIDS HEALTHCAREFOUNDATION AND MICHAELWEINSTEIN FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Filed concurrently1. Ex Parte Application For TRO

and OrderTl'o Show Cause;2. Declarations of Samantha

Azulay, Sharon Matla~d, PatriciaBermudez, Wayne Chen, M.D.,Michael Weinstein

Lod ed concurrently1.Proposed] Order

Courtroom: 15Hon. Percy Anderson

PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF EX PARTS APPLICATIONFOR TEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

Case X2:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 2 of 15 Page ID #:4594

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TABLE OF CONTENTS

I. INTRODUCTION AND SUMMARY OF ARGUMENT ...........................1

II. FACTS ......................................................................................2

III. STANDARD FOR RELIEF .............................................................8

A. Ex Parte Application Requirements .............................................8

B. Temporary Restraining Order .....................................................9

IV. ARGUMENT .............................................................................10

A. Plaintiff Has Shown A Likelihood of Success on the

Merits...............................................................................1 C

B. AHF's Patients Will Suffer Irreparable Harm .................................1 l

C. The Balancing of Hardships Favors The Granting of the Temporary

Restraining Order ..................................................................1~

IV. CONCLUSION ...........................................................................1


'_:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 3 of 15 Page ID #:4595

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TABLE OF AUTHORITIES

CASES:

Alliance for the Wild Rockies v. CotYell,

632 F.3d 1127 (9th Cir. 2011) ............................................................9

Blair v. Bethel School Dist.,.

608 F.3d 540 (9t'' Cir. 2010) ............................................................10

K Clark v. Time Warner Cable,

2007 U.S. Dist. LEXIS 100716 (C.D. Cal. 2007) ..................................8, 9

Lochkeed Missile &Space Co., Inc. v. Hughes Aircraft Co.,

887 F.Supp. 1320 (N.D.CaI. 1995) ......................................................9

Mazurek v. Armstrong,

520 U.S. 968 (1997) .....................................................................10

Mission Power Eng g v. Continental Cas. Co.,

883 F. Supp. 488 (C.D. Cal. 1995) ....................................................9

Playboy Enterprises, Inc. v. Calvin Designer Label,

985 F.Supp.1218 (N.D. Cal. 1987) .....................................................10

Republic of Phillipines v. Marcos,

862 F.2d 1355 (9t'' Cir. 1988) ...........................................................10

Southwest Voters Registration Ed. Project v. Shelley,

344 F.3d 914 (9t" Cir 2003) .........................................................10, 1 l

Winter v. Natural Resources Defense Council,

555 U.S. 7 (2008) .........................................................................9

STATUTES:

Federal Rule of Civil Procedure 65 .......................................................10, 11


~se~12:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 4 of 15 Page ID #:4596

1 MEMORANDUM OF POINTS AND AUTHORITIES

2 I.

3 INTRODUCTION AND SUMMARY OF ARGUMENT

4 Plaintiffs seek a temporary restraining order to prevent the County of Los

5 Angeles and Mario Perez (sometimes collectively "Defendants") from commencing

6 on July 22, 2013 a full financial audit of plaintiff AIDS Healthcare Foundation

7 ("AHF") pertaining to a four year period and compelling Defendants to commence

g that audit on or after September 1, 2013.

9 Defendants have audited various aspects of AHF's business over the last five

l0 months (the "Audits"). The Audits have recently completed, although there is a high

11 likelihood of follow up and further discussions between the parties concerning the

12 Audits and the resulting conclusions Defendants have reached. The Audits required

13 AHF staff to devote significant person hours to gathering and interpreting

14 information demanded by Defendants. Many of the AHF staff who worked on these

15 Audits are front line patient service providers and/or the supervisory staff overseeing

16 those providers. The Audits have caused these individuals to devote time away from

17 the providing of patient services and from supervision and oversight of those

18 services.

19 Although there is no time sensitivity from Defendants' perspective or any

20 compelling reason to commence a full financial audit covering a four year period on

21 July 22, 2013 and shortly on the heels of the completion of the Audits, Defendants

22 demand that such an audit commence that day and on no other (the "New Audit").

23 The treatment of HIV/AIDS provided by AHF is uniquely successful because it

24 involves intensive, highly structured and rigidly scheduled drug regimens and

25 interaction between patients and AHF service providers (e.g., registered nurses and

26 physicians). The treatment provided by AHF is, therefore, time consuming and is not

27 easily subject to "schedule shifting." The Audits caused service providers and their

28 supervisors to see and interact with fewer patients during the time that the Audits

1PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF EX PARTS APPLICATION

FOR TEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

~sel12:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 5 of 15 Page ID #:4597

1 took place. The Audits also caused departments within AHF, like finance and

2 accounts payable, to devote time away from providing the administrative support

3 crucial to AHF's ability to provide superior and economical health care services to its

4 patients. The Audits left the various departments of AHF, including some of its front

5 line service providers, playing "catch up" to compensate for time lost in performing

6 their normal day-to-day functions, and that process is continuing today. The devotion

7 by AHF staff of additional time during July and August to the New Audit and away

g from patient care, and support of patient care, is highly likely to have a deleterious

9 impact on the health of some AHF patients. There is no satisfactory reason —legal or

l0 otherwise — to force potential harm on AHF patients, and Defendants have stated

ii none. As shown in the accompanying Memorandum of Points and Authorities, this is

12 not the first time that Defendants have used audits as a tool to pressure and retaliate

13 against Plaintiffs. Defendants' insistence on commencing the New Audit on July 22,

14 2013 is part and parcel of their efforts to retaliate against Defendants, as discussed at

15 length in the First Amended Complaint (Doc. 32). An immediate temporary

16 restraining order is necessary to prevent imminent potential harm to AHF's patients.

17 II.

18 FACTS

19 Plaintiffs in this action allege that Defendants have initiated a retaliatory

20 campaign against Plaintiffs using, among other tools, unwarranted and unduly

21 burdensome audits and incorrect audit findings, including those discussed above, to

22 punish Plaintiffs for exercising their rights and for taking positions critical of the

23 County. First Amended Complaint ("FAC") (Doc. 32), ¶¶5, 40, 52, 113-115, 118,

24 122-125, 134, 145-147; Weinstein Decl., ¶15. As shown below, Defendants have

25 continued that campaign during the pendency of this action, most recently by

26 insisting that an audit of unprecedented scope commence on July 22, 2013 directly on

27 the heels of the conclusion of the information-gathering portions of the Audits that

28 have been pending for the last several months. FAC, ¶¶145-47 (Doc. 32); Weinstein



isell2:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 6 of 15 Page ID #:4598

1 Decl., ¶15. Defendants have stated no basis for insisting that the contemplated audit

2 commence on the heels of the conclusion of the Audits and, more importantly, have

3 ignored AHF's pleas that Defendants' continued insistence on conducting the

4 contemplated audit would put the health of AHF's patients at risk. Weinstein Decl,

5 ¶15.

6 AHF is a nonprofit corporation. Its mission is to provide cutting edge medicine

7 and advocacy to people with HIV/AIDS, regardless of ability to pay. Declaration of

g Michael Weinstein ("Weinstein Decl."), ¶3. For the past 25 years, AHF's President

9 and co-founder, Michael Weinstein, has dedicated his life to ending this epidemic,

10 and to providing care, comfort, and treatment to those who are infected with it.

11 Weinstein Decl., ¶3. Over the years, AHF has grown to provide HIV/AIDS

12 prevention, testing, and medical care services to over 229,000 people per year, in 28

13 countries and in ten states. Weinstein Decl., ¶5. AHF provides the vast majority of

14 this care for free to people without means of paying for it, and to people of limited

15 means who rely on government programs such as Medicaid, Medicare, and the Ryan

16 White CARE Act to pay for this care. Weinstein Decl., ¶5. AHF has been able to

17 grow in this manner by providing quality, cost effective care to its patients, as well as

18 aggressively and effectively advocating for their rights and interests with

19 governmental bodies, including the government of Los Angeles County. Weinstein

20 Decl., ¶6.

21 As the largest safety net HIV/AIDS care provider in Los Angeles County, AHF

22 has entered into a number of contracts with the County to provide this care to

23 uninsured, and underinsured, County residents. Weinstein Decl., ¶7. These contracts

24 include servicers for psychiatry, medical case management, specialty care, and

25 outpatient medical services. Weinstein Decl., ¶7. In Los Angeles County, AHF has

26 contracted with the County to provide HIV/AIDS outpatient medical services to

27 residents of limited means for 23 years. Weinstein Decl., ¶7. The sources of the

28 funds paid by the County for this care include the State of California, the County, and

3PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF EX PARTE APPLICATION


L isell2:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 7 of 15 Page ID #:4599

1 the federal government through the Ryan White CARE Act, 42 U.S.C. Section 300ff-

2 11 et seq. Weinstein Decl., ¶7. The terms of this contract for outpatient medical

3 care, and the bases for payment under it, were largely unchanged from the original

4 contract through 2012. Weinstein Decl. ¶7.

5 The treatment of HIV/AIDS provided by AHF is uniquely successful because it

6 involves intensive, highly structured and rigidly scheduled drug regimens and

7 interaction between patients and AHF service providers (e.g., registered nurses and

g physicians). Declaration of Wayne Chen ("Chen Decl."), ¶3; Declaration of Sharon

9 Matland ("Matland Decl."), ¶3. The treatment provided by AHF is, therefore, time

l0 consuming and is not easily subject to "schedule shifting." Chen Decl., ¶3; Matland

11 Decl., ¶3. More specifically, in caring for people living with HIV/AIDS, AHF

12 assigns a team of healthcare professionals to monitor members and aggressively

13 manage their treatment. Chen Decl., ¶3; Matland Decl., ¶3. A case management

14 team, consisting of a registered nurse, a licensed vocational nurse and a social

15 worker, is provided to each patient. Chen Decl., ¶3; Matland Decl., ¶3. The case

16 management team monitors the care plan established by each patient's primary care

17 physician, answers healthcare questions the patient might have, and, perhaps most

ig importantly, takes steps to ensure that members remain compliant with their

19 medication regimens and care plan. Chen Decl., ¶3; Matland Decl., ¶3. The

20 registered nurse assigned to each patient further assists the members by acting as a

21 liaison to the patient's primary care physician, by coordinating the various

22 components of care, and by assisting patients in learning to manage their disease.

23 Chen Decl., ¶3; Matland Decl., ¶3. The level of service and care provided by AHF is

24 far above what can be had through the traditional fee-for-service system. Chen

25 Decl., ¶3; Matland Decl., ¶3. This improves health outcomes and reduces the total

26 cost of caring for AHF patients. Chen Decl., ¶3; Matland Decl., ¶3. And it is

27 perhaps needless to say that this level of care saves lives otherwise lost. Chen Decl.,

28 ¶3; Matland Decl, ¶3.



C ise~12:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 8 of 15 Page ID #:4600

1 In the last several months, the County has been conducting the audits, which

2 pertained to different aspects of AHF's business and operations (the "Audits").

3 Declaration of Patricia Bermudez ("Bermudez Decl."), ¶4. The parties began

4 discussing one of those audits in January 2013, and the exit conference for that audit,

5 which occurs once the information gathering portion of the audit is complete, took

6 place on June 19, 2013. Bermudez Decl., ¶4. The parties began discussing another

7 of those audits in February 2013, and the exit conference for that audit took place on

8 July 2, 2013. Bermudez Decl., ¶4. The Audits and the demands for documents and

9 information made in the context of the Audits required AHF staff members, including

to those responsible for patient care, to devote significant time to assisting in the audit

11 process and away from rendering, or supervising the rendering, of patient services.

12 Chen Decl., ¶¶4 and 5; Matland Decl., ¶¶4 and 5; Bermudez Decl., ¶5. There is no

13 dispute as to these facts.

14 In late March 2013, while the Audits were underway, a representative of the

15 Los Angeles County Auditor Controller contacted AHF via telephone and notified it

16 that the County intended to schedule a "contract compliance review" of AHF's

17 contracts with the County (the "New Audit"). Bermudez Decl., ¶6. At that time, the

18 County representative informed AFH that the focus of the New Audit would be fiscal

19 years 2011-2012 and 2012-2013. Bermudez Decl., ¶6. Later, the County Auditor

20 Controller informed AHF that the scope of the audit would be expanded to include

21 two additional fiscal years, 2009-2010 and 2010- 2011. Bermudez Decl., ¶7; Exh.

22 "A „

23 The process of setting up and scheduling Los Angeles County audits usually

24 involves an initial contact from the County notifying AHF of the County's intention

25 to conduct an audit. Bermudez Decl., ¶3. That initial contact almost always comes to

26 AHF's Director of Grants Administration —Patricia Bermudez — or someone on her

27 team. Bermudez Decl., ¶3. The initial contact involves or is shortly followed by

28 discussions concerning the timing of the audit as well as its scope (e.g., time frame



L ise~12:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 9 of 15 Page ID #:4601

1 subject to audit, aspects) of AHF's business to be subject to audit). Bermudez Decl.,

2 ¶3. Usually, the parties discuss permissible dates to commence the audit, and the

3 parties engage in efforts to accommodate the schedules of the individuals to be

4 involved with the audit. Bermudez Decl., ¶3. Once notified of the County's intention

5 to audit and after the parties have some discussions concerning the scope of the audit,

6 AHF staff meets internally to discuss the audit and its scope and to formulate a plan

7 for handling the audit. Bermudez Decl., ¶3. Most often, tentative dates are

g exchanged between the parties and, after a period of discussion, the audit is scheduled

9 and commences. Bermudez Decl., ¶3.

l0 Upon receiving notice of the County's intent to perform the New Audit, AHF

11 began seeking from the County Auditor Controller an accommodation in the

12 commencement time of the New Audit. Bermudez Decl., ¶¶6-14; Exhs. "B" — "H."

13 AHF explained that the Audits, which were in progress for several months prior to

14 the date on which the County intends to commence the New Audit —July 22, 2013 —

15 caused AHF staff, including patient service providers, to devote significant time to

16 assisting with those Audits. Bermudez Decl., ¶¶8, 12, 13 and 14; Exhs. "B," "F,"

17 "G" and "H"; Weinstein Decl., ¶¶16, 17, 18, 19; Exh. "A." AHF also explained the

18 likely impact on patient care and services in the event the New Audit commences on

19 July 22, 2013, on the heels of the conclusion of the information-gathering portion of

20 the Audits. Bermudez Decl., ¶¶8, 12, 13 and 14; Exhs. "B," "F," "G" and "H";

21 Weinstein Decl., ¶¶16, 17, 18, 19; Exh. "A." Although the process of scheduling of

22 audits in the past involved some reasoned discussion of scheduling concerns and

23 conflicts, the County, the County Auditor Controller and the Department of Public

24 Health's Division of HIV and STD Programs ("DHSP") were almost entirely

25 unwilling even to consider delaying the commencement of the New Audit. Weinstein

26 Decl., ¶20, Exh. "B." (At one point, the Auditor Controller actually agreed with AHF

27 that the New Audit could and would commence in September. Bermudez Decl., ¶14;

28 Exh. "H"; Weinstein Decl., ¶17. The Auditor Controller later reneged on that



C se 2:12-cv-10400-PA-AGR Document 59-1 Filed 07/18/13 Page 10 of 15 Page ID#:4602

1 agreement because DHSP refused to agree to move off the July 22, 2013 date, and

2 defendant Mario Perez took the unyielding position that the New Audit must

3 commence on July 22, 2013. Weinstein Decl., ¶¶17 and 20; Exh. "B"). The only

4 purported "justification" advanced by the County Auditor Controller and DHSP for

5 insisting that the New Audit commence on July 22, 2013 is that vacation schedules

6 for Auditor Controller personnel as well as other "agency reviews" prevented the

7 Auditor Controller from accommodating AHF's request. Bermudez Decl., ¶13, Exh.

g «G „

9 The contemplated New Audit involves an enormous scope. Bermudez Decl.,

10 ¶16. It will involve as an initial matter a comprehensive review of all of AHF's

11 financial records pertaining to all of its programs in Los Angeles County. Bermudez

12 Decl., ¶16. Normally, audits reach back 12 months. Bermudez Decl., ¶16. The New

13 Audit is intended to reach back four yeaYs. Bermudez Decl., ¶16. Previously, the

14 financial audits of AHF have involved chiefly an examination of medical outpatient

15 services and the costs, expenses and charges associated with them. Bermudez Decl.,

16 ¶16. In the New Audit, the County intends to review financial documents and

17 information related to medical outpatient services as well as medical case

18 management, the benefits sub specialty program, mental health treatment programs

19 and sexually transmitted disease prevention programs. Bermudez Decl., ¶16.

20 Basically, the County intends to review all of AHF's financial documents pertaining

21 to these programs and activities, which is an audit of unprecedented scope. Bermudez

22 Decl., ¶16.

23 The County contends that the New Audit poses little or no risk of impacting

24 patient services and care because the New Audit seeks as an initial matter financial

25 information pertaining to AHF's programs and activities, information in the custody

26 of AHF's administrative personnel and not in the custody of front line patient service

27 providers. Weinstein Decl., ¶20, Exh. "B." As AHF understands it, however, the

28 point of the New Audit is to review the expenditures, charges and other expenses




1 incurred by AHF in providing patient services and then evaluate that information

2 against patient census information. Bermudez Decl., ¶17. That latter process —the

3 evaluation of the financial information against patient census information —always

4 involves follow up or other involvement of front line patient service providers.

5 Bermudez Decl., ¶17. This is particularly so with AHF because there is no

6 categorization on AHF's general ledger of patient census information. Bermudez

7 Decl., ¶17. All of AHF's programs are reflected on AHF's financial documents in

g program-wide service components. Bermudez Decl., ¶17. To connect up the

9 programs and the service dollars with patient census information, the Auditor

l0 Controller will need to interface with AHF's patient service providers. Bermudez

11 Decl., ¶17. AHF, therefore, anticipates that it will be called upon to interface with

12 AHF's patient service providers in the course of the New Audit and that it will be

13 forced to ask them to spend time —potentially significant time —assisting with the

14 New Audit. Bermudez Decl., ¶17; Weinstein Decl., ¶21. The devoting of this time to

15 assisting with the New Audit by patient service providers and those who supervise

16 and oversee them will without doubt impact patient care, particularly on the heels of

17 the completion of the information-gathering portions of the Audits. Bermudez Decl.,

18 ¶17; Weinstein Decl., ¶21; Matland Decl., ¶6; Chen Decl., ¶6.

19 III.

20 STANDARD FOR RELIEF

21 A. Ex Parte Application Requirements

22 To justify exparte relief, "the evidence must show that the moving party's

23 cause will be irreparably prejudiced if the underlying motion is heard according to

24 regularly noticed motion procedures." See Mission Power Eng'g Co. v. Continental

25 Cas. Co., 883 F. Supp. 488, 492 (C.D. Cal. 1995). Moreover, the moving party must

26 be "without fault" in creating the need for exparte relief or establish that the "crisis

27 [necessitating the ex parte application] occurred as a result of excusable neglect." K.

28 Clark v. Time Warner Cable, 2007 U.S. Dist. LEXIS 100716, at *2 (C.D. Cal. May




1 3, 2007) (citing Mission Power Eng'g Co., 883 F. Supp. at 492).

2 Here, Plaintiffs have established irreparable prejudice and that Plaintiffs are

3 "without fault" in creating the need for ex pane relief. As shown in the

4 accompanying declarations and above, Plaintiffs have sought an accommodation

5 from Defendants — namely, a five week delay in the commencement of the New

6 Audit from July 22, 2013 to September 2013 —virtually from the moment Plaintiffs

7 perceived that the New Audit would likely endanger patient care if it took place on

g the heels of the Audits. Plaintiffs explained their positions on the issues in detail.

9 Although one representative of the Auditor Controller's office stated in late June

10 2013 that the New Audit could commence in September, Defendants later reneged on

11 that agreement at a point in time at which Plaintiffs could not have brought a noticed

12 motion. Now, if the New Audit proceeds as demanded by Defendants, Plaintiffs are

13 likely to be irreparably prejudiced as will Plaintiffs' patients.

14 g, Temporary Restraining Order

15 The standard for issuing a temporary restraining order is identical to the

16 standard for issuing a preliminary injunction. See Lockheed Missile &Space Co..

17 Inc. v. Hughes Aircraft Co., 887 F. Supp. 1320, 1323 (N.D. Cal. 1995). "A plaintiff

ig seeking a preliminary injunction must establish that he is likely to succeed on the

19 merits, that he is likely to suffer irreparable harm in the absence of preliminary relief,

20 that the balance of equities tips in his favor, and that an injunction is in the public

21 interest." Winter v. Natural Resources Defense Council, 555 U.S. 7, 20, 129 S. Ct.

22 365, 172 L. Ed. 2d 249 (2008). The Ninth Circuit employs a "sliding scale" approach

23 to preliminary injunctions as part of this four-element test. Alliance for the Wild

24 Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011). Under this "sliding scale,"

25 a preliminary injunction may issue "when a plaintiff demonstrates ...that serious

26 questions going to the merits were raised and the balance of hardships tips sharply in

27 the plaintiff s favor," as long as the other two Winter factors have also been met. Id.

28 (internal citations omitted). "[A] preliminary injunction is an extraordinary and




1 drastic remedy, one that should not be granted unless the movant, by a clear showing,

2 carries the burden of persuasion." Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.

3 Ct. 1865, 1867, 138 L. Ed. 2d 162 (1997). Ultimately, Plaintiff is entitled to a

4 temporary restraining order and preliminary injunction if either (1) he establishes

5 a "probability" of success on the merits and a "possibility" of irreparable injury

6 unless relief is granted; or (2) he establishes a "fair chance" of success on the

7 merits and the balance of interests "tip strongly" in his favor. Southwest Voters

g Registration Ed. Project v. Shelley, 344 F.3d 914, 917-18 (9th Cir. 2003); Republic of

9 Philippines v. Marcos, 862 F. 2d 1355, 1362 (9th Cir. 1988); Playboy Enterprises Inc.

10 v. Calvin Designer Label, 985 F.Supp 1218 (N.D. Cal. 1997); see also Fed. R. Civ. P.

11 65.

12 IV.

13 ARGUMENT

14 A. Plaintiff Has Shown A Likelihood of Success on the Merits

15 To prevail on a claim pursuant to 42 U.S.C. Section 1983 for retaliation under

16 the First Amendment (Plaintiffs' first claim), Plaintiffs must plead and prove that: (1)

17 they "engaged in constitutionally protected activity; (2) as a result, [they were]

ig subjected to adverse action by the defendant that would chill a person of ordinary

19 firmness from continuing to engage in the protected activity; and (3) there was a

20 substantial causal relationship between the constitutionally protected activity and the

21 adverse action." Blair v. Bethel School Dist., 608 F.3d 540, 543 (9th Cir. 2010).

22 In the accompanying declarations, Plaintiffs have shown that they have been

23 engaged in constitutionally protected activity —criticism of the government and its

24 officials and policies as well as public advocacy for people living with HIV/AIDS.

25 Plaintiffs have also shown that, as a result of their constitutionally protected

26 activities, they have been subjected to a pattern of what Plaintiffs believe to be

27 abusive, burdensome and ultimately inaccurate audits, including the New Audit.

28 Plaintiffs have also shown that Defendants have raised no compelling or even

l0PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF EX PARTS APPLICATION


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reasonable justification for conducting the New Audit on the heels of the Audits or

for refusing to accommodate Plaintiffs' request for a mere five week delay in the

commencement of the New Audits. In fact, there is no arguable time sensitivity

pertaining to the New Audits, and Defendants have never suggested that there is any.

Defendants intend to explore fiscal years that have been closed and reconciled and for

which the County has previously accepted Plaintiffs' performance as proper pursuant

to the contracts between the parties. There can be no time sensitivity for

Defendants in this context.

B. AHF's Patients Will Suffer Irreparable Harm

Because Plaintiffs have established a "probability" of success on the merits of

their first cause of action, they are entitled to a temporary restraining order and

preliminary injunction if they can establish the "possibility" of irreparable injury, loss

or damage. Southwest Voters, 344 F.3d at 917; see also Fed. R. Civ. P. 65(b). If this

Court finds that Plaintiffs have merely established a "fair chance" of success on the

merits, they are still entitled to a temporary restraining order and an order to show

cause re preliminary injunction if the balance of interests "tip strongly in [Plaintiffs]

favor." Southwest Voters, 344 F.3d at 917.

Here, there is no question that there is a possibility of irreparable injury and, in

fact, there is a virtual certainty of such injury to AHF's patients. AHF's

administrative department heads and the individuals at AHF responsible for rendering

patient services as well as supervising and overseeing its patient services staff (e.g.,

physicians and nurses) have declared that they believe that the commencement of the

New Audit directly on the heels of the Audits stands a high likelihood of impacting

patient care and services. In the context of HIV/AIDS and the extraordinarily

regimented treatment courses for them, proper scheduling and adherence to such

treatment and medication schedules are of paramount importance. AHF's success at

treating AHF/HIV stems from its development and adherence to such highly

regimented schedules. The New Audits stand a high likelihood of interfering with

PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF EX PARTE APPLICATIONFOR TEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION


1 those schedules just after the completion of the Audits, which themselves interfered

2 with these schedules, as shown in the accompanying declarations.

3 C. The Balancing of Hardships Favors The Granting Of The Temporary

4 Retraining Order

5 The balance of hardships and equities tips strongly in AHF's favor. In fact,

6 there are no factors militating toward Defendants' interests here. This is not a

7 situation in which the parties are wrangling over the Defendants' right to conduct the

g New Audit at all (although Plaintiffs believe that Defendants intend to use and have

9 improperly used the prospect of the New Audit to put pressure on AHF and to cause

l0 it to devote maximum resources to the audit process). All that Plaintiffs seek here is

11 a five week delay in the commencement of the New Audit so that AHF's staff and

12 personnel may "catch up" and refocus on patient treatment after having a great deal

13 of their time consumed in the Audits. Defendants' contention that the New Audit

14 should go forward because other providers in the County (who have not been

15 subjected to Audits over the past several months and who are not intended to be

16 subject to audits of a similar unprecedented scope as the New Audit) have made

17 themselves available to be audited has nothing to do with Plaintiffs and does not in

ig any way speak to any hardship that the County may claim it will suffer from a mere

19 five week delay in the commencement of the New Audit.

20 V.

21 CONCLUSION

22 For the reasons stated herein, Plaintiff respectfully requests that the Court grant

23 the instant Ex Parte application for temporary restraining order and issue an order to

24 show cause as to why a preliminary injunction should not issue.

25 Dated: July 18, 2013 By: /s/ Samantha R. Azula~

26 Samantha R. AzulayAttorney for Plaintiff

27 AIDS Healthcare Foundation

28



':12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 1 of 20 Page ID #:4608

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Tom Myers (SBN 176008)tom. myers@aidshealth. orgSamantha R. Azulay, SBN 283424samantha. azulay(a~ aidshealth. orgAIDS HealthcareFoundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450






Plaintiffs,

vs.


Defendants.

CV 12-10400 PA (AGl~)

DECLARATION OF MICHAELWEINSTEIN IN SUPPORT OFPLAINTIFFS' EX PARTSAPPLICATION FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Filed concurrently1. Ex Parte Apphcation2. Memorandum of Points and


Azulay, Sharon Matland, PatriciaBermudez, Wayne Chen, M.D.


Date:Time:Courtroom: 15

DECLARATION OF MICHAEL WEINSTEIN IN SUPPORT OF PLAINTIFFS' EXPARTE APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

Case'X2:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 2 of 20 Page ID #:4609

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DECLARATION OF MICHAEL WEINSTEIN

I, Michael Weinstein declare as follows:

1. The facts set forth herein are true of my own personal knowledge, and if

~~ called upon to testify thereto, I could and would competently do so under oath.

2. I am the co-founder and President of the AIDS Healthcare Foundation

(AHF), which position I have held since 1987.

3. AHF is a nonprofit corporation. Its mission is to provide cutting edge

medicine and advocacy to people with HIV/AIDS, regardless of ability to pay. For

the past 25 years, I have dedicated my life to ending this epidemic, and to providing

care, comfort, and treatment to those who are infected with it.

4. When I co-founded AHF, its name was "AIDS Hospice Foundation." At

~~ that time, there was no effective treatment for AIDS, and AHF's mission was to

provide Los Angeles residents afflicted with AIDS a place and means to die with

~ dignity.

5. Since that time, AHF has grown to provide HIV/AIDS prevention,

testing, and medical care services to about 229,000 people per year, in 28 countries

and in ten states. AHF provides the vast majority of this care for free to people

without means of paying for it, and to people of limited means who rely on

government programs such as Medicaid, Medicare, and the Ryan White CARE Act to

pay for this care.

6. AHF has been able to grow in this manner by providing quality, cost

effective care to its clients, as well as aggressively and effectively advocating for

their rights and interests with governmental bodies, including the government of Los

Angeles County.

7. As the largest safety net HIV/AIDS care provider in Los Angeles

County, AHF has entered into a number of contracts with the County to provide this

care to uninsured, and underinsured, County residents. These contracts include

servicers for psychiatry, medical case management, specialty care, and outpatient

DECLARATION OF MICHAEL WEINSTEIN IN SUPPORT OF PLAINTIFFS' EXPARTE APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

~seJ12:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 3 of 20 Page ID #:4610

1 medical services. In Los Angeles County, AHF has contracted with the County to

2 provide HIV/AIDS outpatient medical services to residents of limited means for 23

3 years. The sources of the funds paid by the County for this care include the State of

4 California, the County, and the federal government through the Ryan White CARE

5 Act, 42 U.S.C. Section 300ff-11 et seq.

6 8. The terms of this contract for outpatient medical care, and the bases for

7 payment under it, were largely unchanged from the original contract through 2012.

g Based on the length of time AHF has held this contract, and my familiarity with

9 AHF's operations and AHF's economic relationship with the County, I am familiar

l0 with the terms and workings of this contract, and how it has been understood,

11 operated, and complied with by both AHF and the County.

12 9. Under the contract, services are payable on a "net cost basis," meaning

13 that AHF is compensated for the actual established costs of providing the care. Each

14 contract year, AHF has proposed to the County how many patients it proposes to

15 treat, and the direct costs —the salaries of doctors and medical clinic staff, the rent for

16 the clinic where patients are treated, the costs of medical supplies used to treat the

17 patients, etc. — of treating those patients. Each year, the County and AHF have

18 reached agreement as to how many patients the County will pay for, and the cost of

19 those services. Each year, AHF has treated those patients, incurred those costs, and

20 has been reimbursed by the County.

21 10. In addition to the "direct" costs of care, AHF also incurs "indirect" costs,

22 those necessary to keep AHF operational, and able to provide the direct medical

23 services. These indirect costs are sometimes labeled "administrative" costs, and

24 include maintaining Finance, Human Resources, and Information Technology

25 functions and departments. While these services are ultimately necessary for the

26 delivery of medical care under the contract, they support AHF as a whole, and thus

27 the entire costs of these functions cannot be attributable to the contract with the

28 County. AHF thus allocates these costs, and ascribes only a portion of them to the

2DECLARATION OF MICHAEL WEINSTEIN IN SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FOR

TEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION


1 contract for reimbursement. Again, each year, AHF has proposed a cost allocation

2 plan, showing what indirect costs are attributable to providing care under this

3 contract. And, again, each year, the County and AHF agree to an amount of indirect

4 costs; AHF then incurs these costs, and the County reimburses it.

5 11. As stated above, these have been the contract terms, and this is how the

6 parties have conducted themselves, during the entire term of the contract. Over the

7 many years this contract has been in place, AHF's performance and practices have

g been subject to numerous reviews and audits by the County. In prior audits, the

9 County made no objections to how AHF determined costs, and how much AHF billed

10 under this contract.

11 12. However, this changed in 2010. At that time, the County conducted an

12 audit of this contract for fiscal years 2007-2008 and 2008-2009. During this audit,

13 for the first time, the County made new and different assumptions about the costs in

14 the contract. The County has not pointed to any portion of the contract to justify this

15 change, and there is no language in the contract justifying it. In addition, the

16 County's new and different cost assumptions were different than the assumptions the

17 County had previously made, and pursuant to which the parties acted, without

18 contention between them, under the contract previously. Also during this audit, the

19 County took the new and different position, not supported by the contract, that the

20 direct costs of treatment —the salaries of the doctors, the rent of the clinic, the cost of

21 medical supplies, etc. — should be apportioned between those patients payable by the

22 County under the contract, and those patients either provided free care, or whose cost

23 of care is subsidized by other sources.

24 13. In doing this, the County unilaterally and arbitrarily determined that 64%

25 of AHF's patients at its outpatient clinic in Los Angeles County were covered by this

26 contract. It also unilaterally and arbitrarily determined that each patient was seen the

27 exact same amount of time, for exactly the same type of care, and the exact type and

28 amount of medical supplies and equipment were used for each patient. It also

3DECLARATION OF MICHAEL WEINSTEIN IN SUPPORT OF PLAINTIFFS' EXPARTE APPLICATION FOR


12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 5 of 20 Page ID #:4612

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unilaterally and arbitrarily determined that AHF could pay a doctor and every other

medical professional and staff member for only 64% of their time, could pay a

landlord only 64% of the rent for the use of the clinic space, could pay a utility only

64% of the utility bill, etc.

14. For the first time, the County thus unilaterally and arbitrarily determined

that only 64% of the direct costs of providing medical care at AHF's clinic could be

reimbursed under the contract. For example, for medical supplies, in fiscal year

2008-2009, AHF proposed to spend $45,000 on medical supplies for County patients.

The County determined that AHF spent $50,348 on medical supplies that year;-thus

only 64% or $26,975 of that amount was spent on County patients. Applying that

analysis to other costs, on that basis, the County maintains, and has repeatedly stated,

that AHF improperly billed the County, and the County overpaid AHF, over $1.7

million during those two fiscal years. As stated above, however, AHF's billing and

the County's prior payment practices were the subject of prior audits and had passed

muster as totally appropriate under the contract. The Defendants knew all these facts

— they caused the prior audits to be conducted and applied and interpreted the contract

in the fashion described in the contract —but claimed nevertheless in the audit

described above that AHF and I were involved in various improprieties by acting the

way we had always acted with full County approval.

15. Plaintiffs in this action allege that Defendants have initiated a retaliatory

campaign against Plaintiffs using, among other tools, unwarranted and unduly

burdensome audits and incorrect audit findings, including those discussed above, to

punish Plaintiffs for exercising their rights and for taking positions critical of the

County. Defendants have continued that campaign during the pendency of this

action, most recently by insisting that an audit of unprecedented scope commence on

July 22, 2013 directly on the heels of the conclusion of the information-gathering

portions of prior audits that have been pending for the last several months.

Defendants have stated no basis for insisting that the contemplated audit commence

DECLARATION OF MICHAEL WEINSTEIN IN SUPPORT OF PLAINTIFFS' EX PARTE APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

~sel12:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 6 of 20 Page ID #:4613

1 on the heels of the conclusion of the prior audits and, more importantly, have ignored

2 AHF's pleas that Defendants' continued insistence on conducting the contemplated

3 audit would put the health of AHF's patients at risk.

4 16. Starting in late March 2013, the Department of Public Health's Division

5 of HIV and STD Programs ("DHSP") informed AHF of its intention to conduct an

6 audit of unprecedented scope. The contemplated audit (the "New Audit") would

7 involve a review of all of AHF's financial documents pertaining to a four year period

g and pertaining to virtually all of AHF's programs in Los Angeles County. At this

9 time, AHF was involved in other audits, mentioned above, by Defendants. Those

l0 audits caused a significant expenditure of time by AHF's administrative personnel as

11 well as its front line patient service providers. When Defendants announced their

12 intention to conduct the New Audit (and had informed AHF of its unprecedented

13 scope), AHF responded by requesting that Defendants commence the New Audit

14 after July 2013 and then in September 2013. AHF communicated at length and many

15 times with Defendants to try to push the New Audit off. AHF described in detail the

16 likely impact on patient care and services that would occur if the New Audit

17 proceeded on the heels of the just completed prior audits. AHF sought some

18 breathing room to "catch up." For a time, AHF staff communicated with Defendants

19 on this subject, but Defendants were unwilling to make any accommodations.

20 17. On June 26, 2013, I spoke over the telephone with Katherine

21 Urbanski, Senior Accountant-Auditor at the Los Angeles County Auditor Controller's

22 office. I expressed my concerns about commencing the New Audit fiscal audit in

23 July. Specifically, I told her that AHF had been audited for the past 4 months, we

24 were still being audited at certain facilities, and that our staff needed some time to

25 recover from the administrative overload, and re-focus back on patient services. I

26 asked for the Auditor Controller's cooperation in continuing the New Audit until any

27 date of its choice in September (approximately a five week delay). Ms. Urbanski

28 agreed to delay the New Audit for about five weeks until September and stated that



isell2:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 7 of 20 Page ID #:4614

1 she would be in touch with our staff to coordinate an exact date and time to initiate

2 the audit. Ms. Urbanski later left a voicemail for me stating that DHSP refused to

3 move off the July 22, 2013 audit commencement date.

4 18. On July 9, 2013, I wrote a letter to various County representatives again

5 seeking an accommodation so that the New Audit would commence in September as

6 opposed to July (again, a five week delay). A true and correct copy of that letter is

7 attached hereto as Exhibit "A." In that letter, I noted that AHF perceived the County's

g insistence that the New Audit take place on the heels of the conclusion of the prior

9 audits as part of Defendants' efforts to retaliate against AHF. I discussed the history

10 of Defendants' efforts to use audits, including the prior financial audit, as tools to

11 intimate and retaliate against AHF. I noted that the County appeared to show a lack

12 of concern for "approximately half of the HIV/AIDS patients in Los Angeles that

13 AHF serves." I also pointed to AHF's full cooperation and compliance with the

14 audits the County had initiated and conducted and noted that AHF's resources had

15 been stretched "beyond limits."

16 19. I specifically addressed the impact of the County's continuous audits on

17 patient care: "This constant auditing by DHSP affects patient care as AHF staff is

18 forced to allocate substantial resources to tens to its audit inquiries." I also noted that

19 the County had not stated any valid reasons why the New Audit could not take place

20 just five weeks later in September. In fact, I pointed out that the County intended to

21 audit fiscal years — 2009-2010, 2010-2011 and 2011-2012 —for which the DHSP had

22 accepted AHF's financial close-out cost reports, tendered settlement payments for

23 those fiscal years and closed those years out. There can therefore be no prejudice

24 whatsoever by a five week delay in the commencement of the audit.

25 20. On July 12, 2013, Mario Perez, the Director of Department of Public

26 Health's Division of HIV and STD Programs responded to my July 9letter. A true

2'7 and correct copy of this letter is attached hereto as Exhibit "B." In that letter, Mr.

28 Perez "rejected" AHF's contention that the commencement of the New Audit on the



CaseJl2:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 8 of 20 Page ID #:4615

1 heels of the just concluded audits would impact patient care. Mr. Perez refused to

2 accommodate AHF's request that the New Audit commence in September, just five

3 weeks after July 22, 2013.

4 21. Yam informed by members of AHF's staff that there is a substantial

5 likelihood that the commencement of yet another audit on July 22, 2013 —this one of

6 unprecedented scope —will stretch AHF's personnel to a razor thin margin and

7 ultimately impact patient care and services, which is AHF's reason for being in the

g first place. Given the nature of HIV/AIDS and the treatment protocols and drug

9 regimens used for treatment, the devotion of any meaningful time away from patient

10 care and services after the conclusion of audits that themselves required the devotion

11 of a great deal of time by patient service providers stands a substantial likelihood of

12 impacting the health of AHF patients.

13 22. I should note that AHF seeks only the passage of a five week period

14 prior to the commencement of the New Audit (July 22, 2012 to September 1, 2013).

15 AHF does not take the position that the New Audit may not take place. On the

16 contrary, AHF is more than willing to participate in the New Audit to the fullest

17 extent necessary. AHF is confident that the New Audit will show that AHF has at all

ig times complied with its obligations to the County and AHF's patients. AHF's

19 managers and patient service providers require time to "catch up" from the prior

20 audits and to refocus on patient care in advance of the New Audit. Otherwise, AHF's

21 staff and I are gravely concerned that AHF's patients will suffer from a diminished

22 amount and intensity of care, thereby having a deleterious impact on the health of

23 AHF's patients.

24 I declare under penalty of perjury pursuant to the laws of the State of California

25 that the foregoing facts are true and correct.

26 Executed on July 17, 2013 at Los Angeles, Califo

28 MICHAEL WEINSTEIN



Case 2:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 9 of 20 Page ID #:4616

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Case 2:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 10 of 20 Page ID#:4617

~ x'~' I~~°w~ AI17S HEALTf-TCARE>~~~~`: lOUN17ATI4N

July 9, 2013

Via Facsi~riile and U.S, Mail

William T. FujiokaChief Executive Officer713 Kennet}i Hain Hall of Acitniuistratic~n

S00 West Teiilple StreetLos Angeles, CA 900:12Fax..: (213) 687-7130

Gloria MolinaMack Ridley-ThomasZev YaroslayskyDon KnabeMichael. D. A:ntonovch383 Kenneth Hahn. Hall of Admij~istr~tion

500 West Temple StreetLos Angeles, CA 90012Fax: (213) 633-5100

Jotu~ Ki•lttliCounty Counsel648 Kenneth Hahn Hall of Aciministratioli

SOQ West Temple StreetLos Angeles, CA 900:12Fax: (213) 626-7446

RE.• DfISP al~tl AHFMerliccrl Quf~nti~~lt Ag~•eenretrt, Aertlif sclterltr/e~l fo~~ Jrtly 22, 2Qi3

Dear Sirs and Madam:

I write to discuss tine Coui~iy's, and see fically the Division of HIV and. STD Pro~ranls'

("D~ISP") co~itinuitig effort to retaliate a~auist the SIDS T-~ealthe~re Fouxidatian ("AHF") udder

the pretense of audits related to AHF's Medical Outpatient ("MOP"} conh~act witlY the County.

We understand ttyat under Elie Ryan Wllite CARE Aet, as well as our MOP cont►•act, DHSP,tlu•otigli the Auditor Controller, leas aa~ glut to audit f1T-IF. However, such audits are authorized

for legitimate purposes. 'I'lie actions of DHSP, namely its insistence on audit dig AHF oii a

constant basis, the scope a~'the latest audit dei»and, its i•efii~al to cooperate witk~ oiu• schsd~les,

and its disre~a►•d for our patient care, lave ~7~ade ii evident that DHSP's desire to audit 4 years

ADMiNIS"I`ItATIVE OFFICE; G255 W SUI~ISET BLVD, ~15T PI.~OR LQS ANGELS, 0 9002& USA TAI.323,86Q,5200 PAX 323.962.8513


worth of almost all of AHF's contracts immediately starting July 22, 2013, is for illegitimate and

rather retaliatory puc•poses.

Such retaliatory conduct is transparent from the way DHSP has treated AHI''s cost allocation

plans. Despite its initial contentions that AHF failed to provide a cost allocation plan for fiscal

year 2008/2009 (which tl~e County only recently retracted}, DHSP has always had a costallocation plan on file for AHF. Each contract year, AHF has submitted such a cost allocation

plan to DHSP, and each year AHF has received a confirmation letter from DHSP accepting

AHE's cost allocation plan anti rendering AHP' in compliance with contractual requirements.

See e.g. attached letters from DHSP at Exhibits A and B. In spite of AHF's continuoussubmission of cost allocation plans and DHSP's acceptance of those plans, around 2009/2010

DHSP initiated an audit based on false information—that AHF had no cost allocation plan.

From that audit, DHSP concluded that AHF overcharged the Cowlty in access of $1.7 million for

the fiscal year 2048/2009.

DHSP has more recently made it clear that it intends to audit AHF specifically based on theassumption that AHF has acted improperly since fiscal year 2008/2009. Specifically, DHSP has

admitted in correspondence and court documents that it intends to audit AHF for the specific

purpose of determining hoi~> >rrtrch money it contends AHF overcharged the County in 2009,2010, 2011, and 2012. DHSP insists on auditing for this purpose despite the fact that it has

accepted AHF's cost allocation plan each and every year. In fact, AHF's latest cost allocation

plan for the 2013/2014 contract year, which is identical to past cost allocation plans, was also

recently accepted by DHSP. See Exhibit B.

Finally, DHSP's insistence on starting ttie audit in July also demonstrates its lack of concern for

approximately half of the HIV/AIDS patients in Los Angeles County that AHF serves, We haveexplained to DHSP and to the Auditor Controller that conducting the sort of audit it seeks toconduct (with unprecedented breadth in both the number of contracts and fiscal years reviewed)

after a continuous 4 months of being audited, threatens patient care. For 4 sh~aight months, AHF

has complied with DHSP's series of audits. AHF staff resources have been stretched beyond

limits. AHP staff has not only had to continue program operations and support, but haveundergone DHSP Program Reviews, DHSP Facilities and Operations Reviews, DHSP SiteVisits, DHSP Desk Review and HWLA Site Reviews.

This constant auditing by DHSP affects patient care as AHF staff is forced to allocate substantial

resources to tend to its audit inquiries. AHF respectfully requested that the latest audit be pushed

back until September so that it could focus back on patient care, catch up administratively, and

allow its hardworking staff some personal time off of work. This was a reasonable request, andone that was approved by the Auditor Controller. Yet DHSP refuses to cooperate with suchconsiderations.

We have yet to hear one valid reason why the audit must take place in July and cannot be movedback a little over a month to early September. DHSP's one contention is that allegedly "all other

agencies scheduled for a Fiscal Year 2012/13 audit were able to confirm a start date and begantheir audits before June 30, 2013." Even assumi~ig that is true, AHF is clearly not being auditedlike all other providers. DHSP intends to audit almost all of AHF's contracts for 4 fiscal years —

2


not simply the 2012/2013 fiscal yeas• audit of other ~i~oviders. F'ui~lher, since 3 of the 4 yea~•sDHSP seeks to a~~d t hive already encletl, tli~re seeYns to be no itnininent ne~ci to start ttie audit inJuly versus September. Inciecel, DI-1SP reviewed aritl accepted AHF's f~~iancial close-aizt costiepoi•ts for fiscal years 2009/201Q, 2010/20.11 end 201 l/2012, tendered se~tlen~ents far thosefiscal years,. at~d closed those years oiit. Since DIISP is ah~eacty ~o n~ tack to a~~dit closed-outye~is specially for AHI', certainly them would lie i~o pre{udice to I7I-iSP by continuing the2012/2013 a~idit of l~HF an extra. month.

Again, while we unciei•stanti that i~otttitie audits ire authorized, A~IF will only submit to this]latest audit dem~rid und~t~ protest, as we k► ow it is being nlauutacturecl for illegitimate, purposeswith the end foal of ha~~miilg ~1~-Ir by clnim n~ false finailciai inlpro~riet es. We contrnue tofind I~HSP's actions with i•e~ai•d to this audit i~etaliato~~y. T1ie #'act that we receive excellent1'EV1~W5 FI'011l eV$i~y otfYc~~ ~i~tity that audits A~-IF fui•tl~er ~ieinonstrates t11e County's retaliatal~yintentions,

Fi~7a11y, as explained uiat~y times befo~•e and ~l~ove liege, we ~anriot st~buiit to ~i~ audit in Julywhile conti«uin~ oin• quality patietYt care. We oY~ce main plead with yotii to agree to a start datei« Septer~ beg. If yoti insist on n~ovin~ fot~ward with the audit on J~ily 22, 2013, we will have iiochoice buY to seek legal relief fi~am a count.

Please advise haw you plan to proceed.

Sincerely,`° ~

Micli~el WeiiYstei~iPresit~ent

cc: Joiiatl~an Fielding.M~i•io Perez

3


COUNTY OP L05 ANG~L~S 9' ,

Pub~~C ~~~It~ ~ ~;ti~ .,.. fJONATHAN ~. FIELOINO, Nf.D,, M~I',N,

QOARDOPBUFERVISORSarega End Heallh 01(g9r

JONATHAN ~. ~R~@Dh4AM ~Fiio;~i~i~~ChfelDaputyDirodor A~~rkNldt~y.ttam~~

SemrdOt4kt

Offico of AIDS Programs and PoNCy Z~vY+ro~~+v:ky

Mario J. pbra=, bl~oofor irea IXs~u

600 South Canmonv~aalth Avenue, 10" F{oor f°~,a ~~iLosMgeles, CalUomla 90005 N~mu~~o,AmonrdonT8L (213) 361.8000 •FAX (?.13)X87.0912 ~p;~~

vronv,publlcho allh,iacounty.Qov

March t7, 2004C~SRTfFTGI~ iv1AIL

700$ ! ] 40 0001 098~149G8MicliAel WeitistcIn, PresidentAIDS Henitltcaro Cou~idntion6255 Wesl Sunset ~ioulcv~rd, 21s' FloorLos A~igales, CAllfornta 90028

pent Mr. Weinstein;

rYSCAL X~AR 2008--2009 AbMTNTSTItATIV~ ~tEV~C~V OIL CONTRAC'PS FOR H[VlAIDSI~Y,A'1'~D S~RVXC~S

Thank you for submitting the required doeumontetiou in rosponse to the administrative review conductedon January 22, 2009, by fhc Contract Administration Dlvlsion of the Offico of AIDS Programs nitdPolicy.

Your nga~cy is Gnvently in com~~liauce with the conhaclual rec~gireme~~ts regerdin6 the su~roission ofdocumentation, t'lease ens~n•a continued co~i~plianco by subn~ftting revised documents ~vlienevar cl~engesera made ar documentation is renewed.

1f you have any nuestions or require add[tionat Information, please contnet ~dsa~ M. Mena, ProgramAssistant, of (213) 35l-1102 or p i I c wt ,go_v.

Very tridy yours,

Kavin A. Harvey, CliiefContract Administrat4o~i Division

KA~I:emW.1DtvlslanslConlracl Admtnislrnllon41di111nlslrnliva Rev(nv12008.7Q69r/~genay CorrespondencelCompNance Lcttcr~AHl+ co~oiplfanca.doo

a: Mario J. P~roz {~v/o enolost~ras)Maxine t~renktin (w/o enclosures)Mary Orticke (w/o enclosures)Sopl~la Ran~nnes (w/o enclosures)

Exhibit A


CouNry o~ dos AN~c~~s

Pr~bliC ~e~rt ~ ~ ~ ~`~k ~.~

JONATHAN E, FIELDING, M0, ~dPH ooaRvo~sur~awsoasD1~acto~and Ifeaflh O7ficer

Oloda A(o!InoCYNTHIA /i. Hh~tDINO, hiPH FFe~ohRc►Chlaf DBAvIy ~'ledot 61~rkFUal~~•7t~omasSecond OM1trtlDivlslon of HIV and STD Programs zovY~~os~eveky

rAarioJ. P6roz, Dlrootor Tniausru000 Soulh Commomvoaflh Avonuo, 10~ ~Ioor

~o~u ou,~sa109Ang01o9, CaII~OmIe 00008 n11eAu1n,MtonorlchTBI. (213) 351.8000 ~ I~/1X 1213) 387-O~J12 F,u,p4blq

rnnv,publfCheallh, lacou nly.gov

Apri(l7, 2013

Michnol 1Voi~~steln, ProsEcientA117S ~Tenitlicnrc FoundationG2551VBst Sunset Doulovnrcl, 2l" F1oorLos Augcles, Cnlifor~t3n 90028

De~i~Mr. Wcinstain;

~A~INISTRAT~ T2~'VT~'V~' RISCAL YT~AR 202.2013: CONT1tACT NUMB~TtS I[-20900G,IINIAIDS AMBULATORYlOIJTI'ATILIVT S~R'S~IC~S, IIIV/AIDS ~AYtT.Y II~x,~RVL~iYTIONPROQRAM S~~VICI,S, T-YTV/AIDS ML~DICAL CASE MAIVAG~N1ENx S~R'VXC~S, HIV/AIDSB~iV~i~'IT$ ST'~CIALTX SL~RVIC~S, T~I'V/AIDS NlL~NTALI3'TAL~'I-Y -I'S'SCC~LIAT1tXCx1t~ATN1LNT S~RVIC~Sj ~I.2090.07, HIV/AYDS AMI3US,A'TORY/~U~'~'ATI~N ~' S~Xt'N'IC~S —CIiATIY~ ~-I.21081~F, HIY/AIDS M~NTAY, FI~A~,TH — PSYCHOT~1~ItA~'~Y ST~R"VxC~S; H-701797,S~7{CJAL TRANSNIITT~D DYS~~S~ SCit~~NIiV'G, T~ATML~NT, C~;S~ rINDING ANA~DUCATXON S~~t'VICLS; PI~•000804, I•IN/AIDS COUNSELING ANA~T~STIiV'G S~RVTC~S --SxOTt~I~RONT AND PII-000822, Y~V/AILyS COYINSLLING AlYD T~S'xING S~RVIC~S — MOBXL~TASTING UNX1'

Thn►~k you for your Mtirch 26, 2013, sub~iiissio,ti of rcqulrcd documculs in responso to tlty ndmhifstrntivvrovlcw condnctec! on ~obrunry 5, 2013, by tho Contract Adminisi~at(on staff, of tl~e Uivlsion of IUV andSTD Programs,

Your agency is tiow in coinplinnco tivilh I(ie contrncUinl requiro►nants for riacnl~Ycnr 2012-2013, Tv ensureconllnued compliance, plessb submit any revisecUor updated daciimettts p~it~i~itiug to eho AdminisirntiveRoviaty to Controct Adtnlidstrntion.

Tf you linvo any questions or rcqu'sre acicHtlonnl fnform~tioii, J~lons9 contort Sally Martli~ nt (?.13) 351- 8072or caclinbo~{~r(a~ph.l2coimty.gov.

Very truly yours, ,

Monique oliins, I-T, CI•TL~SContractAdmluis ~tton

ivlC;CM;sntR;lDivlslonslOAblAdminRwMSet1lonW1t1P1' 2012.201~1Agenoy Compllnncc Lsller f Y l2•IJ ANF.Joe

c: Carlos Vagn-Mntos (CSA) • CI►rou (NEC)Sophie R~mtanes (PSD)

Exhibit B


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Case 2:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 16 of 20 Pa e ID

COUNTY OF LOS 14NGELES #:4623

Public Health .~. ~.a ~ ,,,JONATHAN E. FIELDING, MD, MPHDirector and Health Officer

CYNTHIA A. HARDING, MPHChief Deputy Director

Division of HIV and STD ProgramsMario J. Perez, Director600 South Commonwealth Avenue, 10`" FloorLos Angeles, California 90005TEL (213) 351-8000 . FAX (213) 387-0912

www.publichealth.lacounty.gov

July 12, 2013

Michael Weinstein, PresidentAIDS Healthcare Foundation6255 West Sunset Boulevard, Suite 2100Los Angeles, California 90028

Dear Mr. Weinstein:

BOARD OF SUPERVISORS

Gloria MolinaFirst District

Mark Ridley-ThomasSecond District

Zev YaroslayskyThird District

Don KnabeFourth District

Michael D. AntonovichFifth District

This is in response to your July 9, 2013, letter to the County of Los Angeles (County) Board of

Supervisors; William T. Fujioka, Chief Executive Officer; and John F. Krattli, County Counsel, related to

the Auditor-Controller's scheduled July 22, 2013, fiscal audit of AIDS Healthcare Foundation (AHF).

As you know, the Department of Public Health and its Division of HIV and STD Programs (DHSP) are

obligated by the federal government to monitor and verify the appropriate expenditure of resources under

the Ryan White Program (RWP). In order to discharge this federal obligation, DHSP is exercising its audit

rights within the County's contract with AHF. Please reference my May 16, 2013, letter (Attachment A)

sent to all Ambulatory Outpatient Medical (AOM) providers, including AHF, regarding the Health

Resources and Services Administration's (HRSA) expectations for RWP grantees to conduct annual fiscal

audits. Accordingly, your assertion that routine, required audits are being used in a retaliatory manner

against AHF is false.

Further, we reject your assertion that such a required, routine fiscal audit affects patients currently receiving

medical care at AHF facilities, and is a reason to delay the audit. Historically, DPH has not received

indications from its contracted providers, including AHF, that the fiscal audits of those agencies have had

any effect on the delivery of patient care at their RWP-supported clinics. Given that this audit only requires

the involvement of financial and administrative staff, and not AHF clinical and program staff, your claim is

unwarranted.

The Auditor-Controller has now made multiple attempts to accommodate the scheduling of a fiscal audit

with AHF, dating back to the initial contact in Apri12013, and including offering two dates in May (as

referenced in Mr. Dave Young's July 5, 2013, letter to you). For a summary of what the fiscal audit will

entail and a description of the review process, please see Attachment B, which was shared with you by

Sat Avtar Khalsa of the Auditor-Controller's office on July 8, 2013.

With regard to cost allocation, please note the difference between submitting a cost allocation op licX

(which describes a range of methodologies an agency could use to demonstrate how it allocates its costs)

versus submitting a cost allocation plan (which specifically demonstrates how costs are allocated across


Michael WeinsteinJuly 12, 2013Page 2

multiple payer sources). As a reminder, an agency must ultimately adhere to a cost allocation plan tied to

an approved budget, and be able to substantiate such costs through documentation and review by theCounty, hence a fiscal audit by the Auditor-Controller. You will note that the referenced "Exhibit B"

attached to your letter simply confirmed that your agency had submitted cost allocation documentation for

consideration, but was not a confirmation that AHF had submitted an acceptable cost allocation plan, nor a

confirmation that any such plan had been considered and approved in conjunction with AHF's submitted

budget. AHF's first submission of a cost allocation plan that clearly attributes costs among multiple payer

sources was in connection with its current AOM contract in 2013.

While AHF expresses concern over the frequency of audits, AHF has, in fact, seen fewer fiscal audits than

any other community-based provider of AOM services dating back to FY 2006-07. Please note that the

factors influencing the frequency of fiscal audits include, but are not limited to: internal County capacity;federal fiscal audit mandates and expectations; and the scope and nature of previous fiscal audit findings.

Contrary to AHF's assertions, DHSP makes no assumptions as to what, if any, findings may arise from the

currently-scheduled audit, and the County has no way of confirming whether or not funds are being spent

in accordance with RWP requirements without a fiscal audit.

Therefore, the Auditor-Controller expects to continue with the audit scheduled for Monday, July 22, 2013,

at 10:00 AM. We look forward to AHF's compliance with the fiscal audit and with contracted mandates

relating to fiscal oversight of AHF's AOM contract.

If you have any questions or need additional information, please contact me.

V trulyours,

M io J. Perez, Di ectDivision of HIV and S Programs

MJP:kmb

Attachments (2)

Each SupervisorWilliam T. FujiokaJohn F. KrattliJonathan E. Fielding, MD, MPHCynthia A. Harding, MPHDon Chadwick

Case 2:12-cv-10400-PA-AGR Document 59-2 Filed 07/18/13 Page 18 of 20 F e Attachment A

COUNTY OF LOS 14NGELES #:4625

Public Health t ~ }{tIF ~

JONATHAN E. FIELDING, MD, MPHDirector and Health Officer

CYNTHIA A. HARDING, MPHChief Deputy Director

Division of HIV and STD ProgramsMario J. Perez, Director600 South Commonwealth Avenue, 10'" FloorLos Angeles, California 90005TEL (213) 351-8000 •FAX (213) 387-0912

www.publichealth.lacounty.gov

May 16, 2013

Dear Ryan White Program Service Provider:

BOARD OF SUPERVISORS

Gloria MolinaFirst ~isVic[

Mark Ridley-ThomasSecond District

Zev YaroslayskyThird Distrito

Don KnabeFourth District

Michael D. AntonovichFifth District

REQUIItED FISCAL AUDITING SCHEDULE FOR RYAN WHITE-FUNDED CONTRACTS

This is to inform you of the Division of HIV and STD Program's (DHSP) fiscal auditing schedule for Ryan

White-funded contracts.

As you know, the federal Health Resources and Services Administration (HRSA) requires routine fiscal

audits as a condition of its Ryan White Part A award to Los Angeles County. Historically, subcontractors

have been audited once every three years due to multiple factors, including size and complexity of the many

contracts throughout DHSP, and in order to minimize the amount of administrative burden on subcontracted

agencies.

However, as a result of HRSA's January 2013 site visit and subsequent findings, DHSP is being required to

align its fiscal auditing schedule with HRSA's National Monitoring Standards, which require fiscal audits on

an annual basis. Please see Attaclunent I for a copy of HRSA's Site Visit Report that references their

expectations for fiscal monitoring. The specific section can. be found on page 4:

Required Recommendation (F.S.): The Grantee must ensure that each sub-recipient receives an

annual fiscal monitoring visit.

DHSP Response: DHSP has taken steps to move towards conducting annual fiscal audits by the

Auditor-Controller and Contract Monitoring Division (CMD). In the interim, select fiscal monitpring

questions will be incorporated into the DHSP monitoring tools. Additionally, the list of contractors to be

reviewed by the Auditor-Controller and CMD will be prioritized based on previous audit findings.

If you have any questions, please contact Dave Young, Chief, Financial Services at (213) 351-8111.

Thank you in advance for your cooperation.

ery t ly yours

~Iv~ario J. Perez, rectorDivision of H d STD Programs

MJP:KMBH~'~,CorrespondenceWgency LeriersWudit Schedule 2013.05-16.doc

Dave Young


Attachment BPage 1 of 2

DEPARTMENT OF AUDITOR-CONTROLLERCONTRACT COMPLIANCE FISCAL REVIEW

AIDS HEALTHCARE FOUNDATIONJUNE 1, 2009 —PRESENT

REVIEW PROCESS

The purpose of our review is to determine whether the Agency provided the servicesoutlined in their contract with the County. Our monitoring visit includes reviewing asample of the Agency's accounting records and documentation to support the Agency'scompliance with the fiscal requirements. We also select a sample of the Agency'sclients to review the Agency's compliance with program requirements.

We will refer to the following regulations and guidelines for conducting our review:

1) County Department of Public Health's Division of HIV and STD Programs(DHSP -formerly known as Office of AIDS Programs and Policy) Contracts)

2) The Federal Office of Management and Budget Circular A-122, CostPrinciples for Non-Profit Organizations.

3) The Federal Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations.

Preparation

To expedite our review, the Agency should have representatives available to answerprogram and fiscal questions and provide clarification during our monitoring visit. Inaddition, the Agency should have its case files and accounting records available. Theauditors will also need temporary workspace and access to telephones and copymachines.

Entrance Conference

The entrance conference will be held on the first day of the review. At the entranceconference, the auditors will give a brief summary of the review objectives, identify theA-C contact information, and discuss the items listed in the confirmation letter.

Field Work

The field work is an in-depth review of program records, accounting and financialdocuments and transactions. The field work usually takes between five and tenbusiness days to complete, depending on staffing and other variables.

Preliminary findings will be discussed with the Agency's representative during the fieldwork stage of the review. It is important to maintain open communication during thefield work stage so that any disagreements or misunderstandings can be resolved in a


Attachment BPage 2 of 2

timely manner. At the conclusion of our field work, we will meet with Agencymanagement to summarize our field work and preliminary findings.

Exit Conference

The exit conference will take place within two weeks after the issuance of a preliminarydraft report and supporting schedules. The purpose of the exit conference is to discussthe findings and recommendations noted in the draft report with the Agency and toresolve any disagreements or misunderstandings that may have occurred during ourreview.

Agencv Response to Draft Report

After the exit conference, the final draft report will be issued to the Agency. The Agencywill have two weeks to provide a written response, which should include a correctiveaction plan. The response should address each of the findings affecting the Agency'soperations including compliance/internal control issues and identified disallowed costs,and specify agreement/disagreement with each finding and the reasons for such. Thecorrective action plan should include how and by when the Agency will implement therecommendations addressed in our report.

Final Report

If a written response is received, we will attach the Agency's response and correctiveaction plan to the A-C's final report. The report will be issued to the Board ofSupervisors and posted on the Auditor-Controller's website for public viewing.

2:12-cv-10400-PA-AGR Document 59-3 Filed 07/18/13 Page 1 of 27 Page ID #:4628

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Tom Myers (SBN 176008)tom. myers@aidshealth. orgSamantha R. Azulay, SBN 283424samantha.azulay aidshealth.orgAIDS Healthcare oundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450






Plaintiffs,

vs.


Defendants.

CV 12-10400 PA (AGRx)

DECLARATION OF PATRICIABERMUDEZ IN SUPPORT OFPLAINTIFFS' EX PARTEAPPLICATION FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Filed concurrently1. Ex Parte Applacation2. Memorandum of Points and


Azulay, Michael Weinstein,Sharon Matland, Wayne Chen,M.D.



DECLARATION OF PATRICIA BERMUDEZ IN SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

isg12:12-cv-10400-PA-AGR Document 59-3 Filed 07/18/13 Page 2 of 27 Page ID #:4629

1 DECLARATION OF PATRICIA BERMUDEZ

2 I, Patricia Bermudez, declare as follows:

3 1. The facts set forth herein are true of my own personal knowledge, and if

4 called upon to testify thereto, I could and would competently do so under oath.

5 2. I am the Director of Grants Administration for AIDS Healthcare

6 Foundation ("AHF"). I am responsible for managing compliance by AHF with its

7 contractual and regulatory requirements in connection with all of its federally funded

g programs. Part of my responsibility is to deal with contractual audits and to handle

9 and address fonder communications and fonder requirements. I supervise a team of

10 six individuals, all of whom report directly to me.

it 3. The process of setting up and scheduling Los Angeles County audits

12 usually involves an initial contact from the County notifying AHF of the County's

13 intention to conduct an audit. That initial contact almost always comes to me or

14 someone on my team. The initial contact involves or is shortly followed by

15 discussions concerning the timing of the audit as well as its scope (e.g., time frame

16 subject to audit, aspects) of AHF's business to be subject to audit). Usually, the

17 parties discuss permissible dates to commence the audit, and the parties engage in

ig efforts to accommodate the schedules of the individuals to be involved with the audit.

19 Once notified of the County's intention to audit and after the parties have some

20 discussions concerning the scope of the audit, AHF staff, including my team

21 members and me, meet internally to discuss the audit and its scope and to formulate a

22 plan for handling the audit. Most often, tentative dates are exchanged between the

23 parties and, after a period of discussion, the audit is scheduled and commences.

24 4. In the last several months, the County has been conducting various

25 audits of different aspects of AHF's business and operations (the "Audits"). The

26 parties began discussing one of those audits in January 2013, and the exit conference

27 for that audit, which occurs once the information gathering portion of the audit is

28 complete, took place on June 19, 2013. The parties began discussing another of those

1DECLARATION OF PATRICIA BERMUDEZ IN SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FOR



1 audits in February 2013, and the exit conference for that audit took place on July 2,

2 2013.

3 5. My staff members devoted a great deal of their time to handling the

4 Audits. Aside from myself, four of my staff members devoted significant time to the

5 audits. I estimate that one of my staff members devoted approximately 75% of her

6 work time, another devoted about 35% of her work time, another devoted about 40%

7 of her work time and yet another devoted about 20% of her work time to dealing with

g the Audits. In the course of the Audits, I have had to interface with AHF's patient

9 service providers to assist with the Audits, and they have devoted time away from

10 patient care to assisting AHF and the County in the process of the Audits.

11 6. In late March 2013, while the Audits were underway, a representative of

12 the Los Angeles County Auditor Controller contacted me via telephone and notified

13 me that the County intended to schedule a "contract compliance review" of AHF's

14 contracts with the County (the "New Audit"). At that time, the County representative

15 informed me that the focus of the New Audit would be fiscal years 2011-2012 and

16 2012-2013. The County representative asked that I respond so that the parties could

17 confirm the commencement date for the New Audit.

18 7. On April 16, 2013, the County Auditor Controller representative sent me

19 an email, a true and correct copy of which is attached hereto as Exhibit "A." In that

20 email, the County representative confirmed a prior discussion with me in which the

21 scope of the review had expanded to include an examination of contract years 2009-

22 2010 and 2010-2011 in addition to the two contract years previously identified. The

23 County representative asked that I confirm a commencement date for the New Audit.

24 8. On Apri122, 2013, I sent an email to the County representative stating

25 that I had been working to coordinate commencement dates for the New Audit but

26 that the pendency of the Audits, and the demands for information, site visits and the

27 like associated with those Audits, made it difficult to accommodate all requested

28 dates without impacting service to clients. Also, I noted that the scope of the

2DECLARATION OF PATRICIA BERMUDEZ IN SUPPORT OF PLAINTIFFS' EX PARTE APPLICATION FOR



1 intended New Audit had doubled since the initial contacts between the parties, in that

2 the County intended to examine two additional years than they had initially stated. I

3 asked on behalf of AHF that the Auditor Controller push the commencement of the

4 audit until after July 2013. A true and correct copy of this email is attached hereto as

5 Exhibit "B."

6 9. I did not hear from the Auditor Controller or any other County

7 department or representative concerning the scheduling of the New Audit during May

g 2013. In early June, 2013, I had a telephone call with an Auditor Controller

9 representative, who suggested that the New Audit commence on July 8, 2013 or July

l0 15, 2013. I emailed the Auditor Controller representative stating that I would

11 respond concerning whether these dates were workable after concluding internal

12 discussion at AHF. A true and correct copy of this email is attached hereto as Exhibit

13 "C "

14 10. On June 13, 2013, I received an email from an Auditor Controller

15 representative asking that I let the Auditor Controller know by the following week

16 which of the July dates work for the commencement of the New Audit. The Auditor

17 Controller representative stated that the Auditor Controller's staff would need to plan

ig its scheduling. A true and correct copy of this email is attached hereto as Exhibit

19 "D "

20 11. Another Auditor Controller representative emailed me on June 20, 2013

21 asking again if the new audit could commence on July 8 or July 15, 2013. A true and

22 correct copy of this email is attached hereto as Exhibit "E."

23 12. On June 21, 2013, I sent to the Auditor Controller representative a letter

24 (via email attachment) responding to the County's demand to commence the New

25 Audit in July 2013. A true and correct copy of this letter is attached hereto as Exhibit

26 "F." In the letter, I explained that, since January 2013, AHF had been undergoing the

27 Audits which at that time were still in the process of completion. I noted that "AHF

28 staff needs to refocus their attention to patient care after the intense administrative



C isell2:12-cv-10400-PA-AGR Document 59-3 Filed 07/18/13 Page 5 of 27 Page ID #:4632

1 overload they undertook for the first half of the year" associated with the Audits. I

2 noted that AHF "staff has been put on an intense work schedule including overtime

3 and vacation blackout." I asked that the Auditor Controller "[p]lease note that given

4 the expanded scope of your audit review across 11 service components and 4

5 programmatic fiscal years, AHF is faced with administrative challenges in allocating

6 appropriate resources without impacting services to patients at this time." I proposed

7 that the parties discuss the possibility that the audit commence in September 2013 "to

g ensure that AHF is well equipped to support the audit requests and ensure

9 participation of all the required parties."

l0 13. On June 25, 2013, I received an email from an Auditor Controller

11 representative named Katherine Urbanski. A true and correct copy of this email is

12 attached hereto as Exhibit "G." In that email, Ms. Urbanski stated that the Auditor

13 Controller would not accommodate AHF's request for the commencement of the

14 New Audit to take place in September 2013 as a result of "other agency reviews and

15 staff vacations."

16 14. On June 26, 2013, I spoke with Michael Weinstein, the President of

17 AHF. He told me that he had spoken with Ms. Urbanski and that she had agreed that

18 the New Audit could commence in September. I left a voicemail for Ms. Urbanski

19 that day, so that we could coordinate a precise start date, and I sent an email also to

20 Ms. Urbanski on the same subject matter, a true and correct copy of which is attached

21 hereto as Exhibit "H." At some point later, I received a call from Ms. Urbanski in

22 which she confirmed that the New Audit could commence in September, and we

23 agreed to commence discussions about specific dates.

24 15. Notwithstanding these discussions with Ms. Urbanski, it is my current

25 understanding that the County and the Auditor Controller are not willing to move the

26 commencement of the new audit into September.

27 16. The contemplated New Audit involves an enormous scope. It will

28 involve as an initial matter a comprehensive review of all of AHF's financial records



L ise~12:12-cv-10400-PA-AGR Document 59-3 Filed 07/18/13 Page 6 of 27 Page ID #:4633

1 pertaining to all of its programs in Los Angeles County. Normally, audits reach back

2 12 months. The New Audit is intended to reach back four years. Previously, it is my

3 understanding that financial audits of AHF have involved chiefly an examination of

4 medical outpatient services and the costs, expenses and charges associated with them.

5 In the New Audit, the County intends to review financial documents and information

6 related to medical outpatient services as well as medical case management, the

7 benefits sub specialty program, mental health treatment programs and sexually

g transmitted disease prevention programs. Basically, the County intends to review all

9 of AHF's financial documents pertaining to these programs and activities, which is an

l0 audit of unprecedented scope.

11 17. I am informed that the County contends that the New Audit poses little

12 or no risk of impacting patient services and care because the New Audit seeks as an

13 initial matter financial information pertaining to AHF's programs and activities,

14 information in the custody of AHF's administrative personnel and not in the custody

15 of front line patient service providers. As I understand it, the point of the New Audit

16 is to review the expenditures, charges and other expenses incurred by AHF in

17 providing patient services and then evaluate that information against patient census

18 information. That latter process —the evaluation of the financial information against

19 patient census information —always involves follow up or other involvement of front

20 line patient service providers. This is particularly so with AHF because there is no

21 categorization on AHF's general ledger of patient census information. All of AHF's

22 programs are reflected on AHF's financial documents in program-wide service

23 components. To connect up the programs and the service dollars with patient census

24 information, the Auditor Controller will need to interface with AHF's patient service

25 providers. I, therefore, anticipate that I will be called upon to interface with AHF's

26 patient service providers in the course of the New Audit and that I will be forced to

27 //

28 / /



Case x:12-cv-10400-PA-AGR Document 59-3 Filed 07/18/13 Page 7 of 27 Page ID #:4634

1 ask them to spend time —potentially significant time —assisting with the New Audit.

2 I declare under penalty of perjury pursuant to the laws of the United States of

3 America that the foregoing facts are true and correct.

4 Executed on July 17, 2013 at Los Angeles, California.

5,7

6 PATRICIA BERMUDEZ

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6DECLARATION OF PATRICIA BERMUDEZ IN SUPPORT OF PLAINTIFFS' EX PARTE APPLICATION FOR

TEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJiJNCTION


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Thursday, July 18, 2013 9:36:15 AM Pacific Daylight Time

Subject: FW: Scheduling for Review of DHSP Contracts

Date: Thursday, July 18, 2013 9:36:12 AM Pacific Daylight Time

From: Samantha Azulay

Priority: High

From: Khalsa, Sat Avtar jmailto:skhalsaCa~auditor.lacountv.4ov]Sent: Tuesday, April 16, 2013 12:32 PMTo: Patricia BermudezCc: Lyle Honig; Urbanski, KatherineSubject: Scheduling for Review of DHSP Contracts

Good Afternoon Ms. Bermudez.

I'm following up on our previous phone conversation on April 3~d and the voicemail I left for you on Friday April 12th

At the request of DPH, our team from LA County Auditor Controller would like to schedule a contract compliance

review of AHF's DHSP contracts beginning the week of May 13th or May 20th. The primary focus of our review will bea fiscal review of contract years 2011-12 and 2012-13 with more limited review of contract years 2009-10 and 2010-11.Once we agree on a commencement date we will send a formal engagement letter with a list of documentsneeded for the audit and more details on the scope of our review. I would appreciate it if you could get back to meso we can confirm the start of our review. If you have additional questions please contact me either by email or atthe number listed below.

Best regards,

Sat Avtar K. Khalsa, CPA

Countywide Contract Monitoring Division

Los Angeles County Auditor Controller

Phone: 213-253-0311

Fax: 213-897-5963

Page 1 of 1


X 1 It

Case 2:12-cv-10400-PA-AGR Document 59-3 Filed 07/18/13 Page 11 of 27 Page ID

#T~~~tlay, July 18, 2013 937:58 AM Pacific Daylight Time




Priority: High

From: Patricia BermudezSent: Monday, April 22, 2013 11:09 AMTo: 'Khalsa, Sat Avtar'Cc: Lyle Honig; Urbanski, KatherineSubject: RE; Scheduling for Review of DHSP ContractsImportance: High

Hello Sat Avtar,

have been working to coordinate the requested dates for the LA County Auditor Controller compliance reviewhowever, given the multiple audits/reviews/monitoring visits which LA County has requested it is difficult toaccommodate all requested dates without impacting service to clients.

As of Friday, April 12, 2013 the program review to be performed by your office has doubled in scope to include 2additional program years. Given that we have about five other LA County visit between April and May, AHF isrequesting to push back the Auditor Controller review until after July 2013.

Please provide your availability for the new proposed timeframe or let me know if you have any questions

Patricia D. Bermudez

Director of Grants Administration

AIDS Healthcare Foundation

6255 W. Sunset Blvd., 21st Floor

Los Angeles, CA 90028

Office. 323.860.5253

Mobile: 323.203.7381

Fax: 323.962,8513

"Cutting-Edge Medicine and Advocacy Regardless of Ability to Pay"

From: Khalsa, Sat Avtar fmailto:skhalsaC~auditor.lacountv.Qov]Sent: Tuesday, April 16, 2013 12:32 PM

Page 1 of 2


To: Patricia BermudezCc: Lyle Honig; Urbanski, KatherineSubject: Scheduling for Review of DHSP Contracts

Good Afternoon Ms. Bermudez.

I'm following up on our previous phone conversation on April 3rd and the voicemail I left for you on Friday April 12th

At the request of DPH, our team from LA County Auditor Controller would like to schedule a contract compliancereview of AHF's DHSP contracts beginning the week of May 13th or May 20th. The primary focus of our review will bea fiscal review of contract years 2011-12 and 2012-13 with more limited review of contract years 2009-10 and 2010-11.Once we agree on a commencement date we will send a formal engagement letter with a list of documentsneeded for the audit and more details on the scope of our review. I would appreciate it if you could get back to meso we can confirm the start of our review. If you have additional questions please contact me either by email or atthe number listed below,

Best regards,




Phone: 213-253-0311

Fax: 213-897-5963

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~~~lay, July 18, 2013 9:40:13 AM Pacific Daylight Time




From: Patricia BermudezSent: Tuesday, June 11, 2013 10:40 AMTo: 'Khalsa, Sat Avtar'Cc: Lyle Honig; Tom Myers; 'Urbanski, Katherine'Subject: RE: Scheduling for Review of DHSP Contracts

Hello Sat Avtar,

Based on your call last week, I have communicated internally about the dates requested which are July 8th or July

15th to schedule the DHSP program audit. I will fet know our response.

Thanks

Patty






Office: 323.860.5253

Mobile: 323.203.7381

Fax: 323.962.8513


_ __ __

From: Patricia BermudezSent: Monday, April 22, 2013 11.09 AMTo: 'Khalsa, Sat Avtar'Cc: Lyle Honig; Urbanski, KatherineSubject: RE: Scheduling for Review of DHSP ContractsImportance: High

Page 1 of 2


Hello Sat Avtar,

have been working to coordinate the requested dates for the LA County Auditor Controller compliance reviewhowever, given the multiple audits/reviews/monitoring visits which LA County has requested it is difficult toaccommodate all requested dates without impacting service to clients.

As of Friday, April 12, 2013 the program review to be performed by your office has doubled in scope to include 2additional program years. Given that we have about five other LA County visit between April and May, AHF isrequesting to push back the Auditor Controller review until after July 2013.

Please provide your availability for the new proposed timeframe or let me know if you have any questions






Office: 323.860.5253

Mobile: 323.203.7381

Fax: 323.962.8513


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#~~pF~ay, July 18, 2013 9:42:55 AM Pacific Daylight Time




From: Khalsa, Sat AvtarSent: Thursday, June 13, 2013 4:09 PMTo: Patricia BermudezCc: Lyle Honig; Urbanski, KatherineSubject: RE: Scheduling for Review of DHSP Contracts

Good Afternoon Patty.

Thanks for the update on scheduling the audit. Can you let us know which date you prefer by early next week(Monday or Tuesday) so that we can plan our staff scheduling?

Thanks.




Phone: 213-253-0311

Fax: 213-897-5963

Page 1 of 1


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~r5~ay,luly 18, 2013 9:44:28 AM Pacific Daylight Time




__ __

From: Urbanski, Katherine [mailto:kurbanskiCa~auditor.lacounty.4ov1Sent: Thursday, June 20, 2013 10:49 AMTo: Patricia Bermudez; Lyle HonigCc: Khalsa, Sat AvtarSubject: RE: Scheduling for Review of DHSP Contracts

Good morning Patty and Lyle,

Have you reached a decision on whether you would like our audit to start on July 8th or July 15th? Wewould like to send out the commencement documents. Please let me today if possible.

Thank you,

Katherine Urbanski, CPA

Senioi Accountant-Auditoi


Department of Auditor-ContLollei

County of Los Angeles

350 S. Figueroa St., 8th Floor, Los Angeles, CA 90071

T: (213) 253-0332 F: (213) 897-1561

kuibanskinp,auditorlacounty.gov

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#~~~lay, July 18, 2013 9:46:33 AM Pacific Daylight Time




From: Patricia BermudezSent: Friday, June 21, 2013 7:10 PMTo: 'Urbanski, Katherine'; Khalsa, Sat AvtarCc: Lyle Honig; Dhanya HiremathSubject: RE; Scheduling for Review of DHSP Contracts

Hi Katherine and Sat Avtar,

Attached, please find AHF's response to the dates requested for the Auditor Controller review to begin either July8th or 15th

If you have any questions please let me know.

Patty




6255 W. Sunset Blvd,, 21st Floor


Office: 323.860.5253

Mobile; 323.203.7381

Fax: 323.962.8513


Page 1 of 1

Case 2:12-cv-1040.0-PA-AGR Document 59-3 Filed 07/18/13 Page 22 of 27 Page ID#:4649

AIDS 1-[EALTHCAIZEFOU(VDATION

Sent via email on June 21, 2013

Sat Avtar I<. Khalsa,Los Angeles County Auditor Controller500 W Temple Street, Room 525Kenneth Hahn Hall of Ad►ninislrationLos Angeles, CA 90012

Dear Sat Avtar:

This communication is with respect to your communication dated June 10, 2013 aboutrescheduling a financial audit for AIDS HealChcare roundation's (tli-IF) .contracts with DHSP. Uponfurther review of the audit requirements with our i~iteriial program and management teams, Iregret to info►•m you that the aveelcs of July 8~~~ or July 1S~h cannot be accommodated at t1~is time byAFI C.

Since January AHC has undergone a series of audits and is still in the process of completionand our resources have been stretched beyond the optimal level, AFIe staff has not only had tocontinue program operations and support but have undergone DHSP Program Reviews, DHSPFacilities and Operations Reviews, DI-ISP Site Visits, UHSP Deslc Review and 1-[WLA Site Reviews.~1HC staff needs to refocus their attention to patient care after the intense administrative overloadthey undertook for• the first half of the year. Our staff has been put on an intense work scheduleincluding overtime and vacation blackout, Please note tlial given tl~e expanded scope of your auditreview across 11 service components and 4 programmatic fiscal years, AEIP is faced withadministrative challenges in allocating appropriate resources wiChout impacting services topatients at this time.

AHD would lilte to coordinate with your agency to negotiate suitable times for tl~e proposedf3etd work to commence in Septemt~cr 2013, to ensure that AHF is well equipped to support theaudit requests and ensure participation oFall the required parties.

As always, AI-I~ is committed to estaUlishing effective collaboration with your agency andwe look forward to an effective collaboratio~i. IF you leave any questions or requi~•e additionalinformation, please contact me or Dhanya hliremath, Grants Manager at~hanya.l~lirem~th(~aidsh~alrh ~rP at 323.860.5277.

Sincerely,

Patricia D, Bermudez "'"


ADMINISTRATIVE O]'FICG: 6?55 W SUNSET BLVD, 21ST FLOOR LOS ANGGLL•S, CA 90028 USA TEL 323.860.5200 PAX 323.96?.9513


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~f~i~s~ay, July 18, 2013 10:26:12 AM Pacific Daylight Time




From: Urbanski, Katherine [mailto:kurbanskiCa~auditor.lacounty.Qov]Sent: Tuesday, June 25, 2013 7:43 AMTo: Patricia Bermudez; Lyle HonigCc: Dhanya Hiremath; Khalsa, Sat AvtarSubject: RE: Scheduling for Review of DHSP Contracts

Patty and Lyle,

I'm following up on the voicemail I left Patty yesterday morning. Due to other agency reviewsand staff vacations, we are unable to accommodate your September 2013 request. However,as you requested to postpone a May 2013 audit to July 2013, please choose a date in Julythat work best for you and your staff. If you agree to July 8th or 15th, barring any other delays,we should be finished with our review by August 21St. Also, please be reminded that DHSPreviews are required every other year; your last audit was for Fiscal Years 2007-08 and 2008-09.

Please let me know by today what July date you would prefer, and if you have any questions,feel free to call me.

Thank you for your cooperation,

Katherine Uxbanski

T: (213) 253-0332

kurbanski(c~auditoi.lacounty.gov

Page 1 of 1


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~h~a~~y, July 18, 201310:56:58 AM Pacific Daylight Time




From: Patricia BermudezSent: Wednesday, June 26, 2013 1:18 PMTo: 'Urbanski, Katherine'; Lyle HonigCc: Dhanya Hiremath; Khalsa, Sat AvtarSubject: RE; Scheduling for Review of DHSP Contracts

Hi Katherine,

I am following up on the voicemail I le$ this afternoon. I would like to get your agency's availabilityfor September so that we can start scheduling the review.

Please contact me regarding your availability.

Patty




6255 W. Sunset Blvd,, 21st Floor


Office: 323.860.5253

Mobile; 323.203.7381

Fax: 323.962.8513

"Cutting-Edge Medicine and Advocacy Regardless ofAbilrty to Pay"__ _ _ _

From: Urbanski, Katherine [mailto:kurbanskiCa~auditor.lacount~govlSent: Tuesday, June 25, 2013 7:43 AMTo: Patricia Bermudez; Lyle HonigCc: Dhanya Hiremath; Khalsa, Sat AvtarSubject: RE: Scheduling for Review of DHSP Contracts

Page 1 of 2


Patty and Lyle,

I'm following up on the voicemail I left Patty yesterday morning. Due to other agency reviewsand staff vacations, we are unable to accommodate your September 2013 request. However,as you requested to postpone a May 2013 audit to July 2013, please choose a date in Julythat work best for you and your staff. If you agree to July 8th or 15th, barring any other delays,we should be finished with our review by August 21St. Also, please be reminded that DHSPreviews are required every other year; your last audit was for Fiscal Years 2007-08 and 2008-09.

Please let me know by today what July date you would prefer, and if you have any questions,feel free to call me.

Thank you for your cooperation,

Katherine Urbanski

T: (213) 253-0332

kuibanski cnio,auditoi.lacount~gov

Page 2 of 2


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Tom Myers (SBN 176008)tom. myers@ aidshealth. orgSamantha 1~. Azulay, SBN 283424samantha.azulay(a~ aidshealth.orgAIDS Healthcare Foundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450






Plaintiffs,

vs.


Defendants.

CV 12-10400 PA (AGRx)

DECLARATION OF WAYNECHEN, M.D. IN SUPPORT OFPLAINTIFFS' EX PARTSAPPLICATION FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Filed concurrently1. Ex Parte Ap placation2. Memorandum of Points and


Azula~, Michael Weinstein,Patricia Bermudez, SharonMatland



DECLARATION OF WAYNE CHEN IN SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION


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DECLARATION OF WAYNE CHEN, M.D.

I, Wayne Chen, M.D., declare as follows:


called upon to testify thereto, I could and would competently do so under oath.

2. I am a licensed medical doctor. I am the Senior Medical Director of

Managed Care and am the Acting Chief of Medicine for AIDS Healthcare Foundation

(AHF). My day-to-day duties involve leading AHF's healthcare providers, including

physicians and registered nurses, in the providing of quality medical care, among

other tasks. I also am responsible for leading the operations of the Healthcare

Centers operated by AHF. I also directly render patient care.

3. AHF is a nonprofit corporation. Its global mission is to provide cutting

edge medicine and advocacy to people with HIV/AIDS, regardless of ability to pay.





easily subject to "schedule shifting." More specifically, in caring for people living

with HIV/AIDS, AHF assigns a team of healthcare professionals to monitor members

and aggressively manage their treatment. A case management team, consisting of a

registered nurse, a licensed vocational nurse and a social worker, is provided to each

client. The case management team monitors the care plan established by each client's

primary care physician, answers healthcare questions the client might have, and,

perhaps most importantly, takes steps to ensure that members remain compliant with

their medication regimens and care plan. The registered nurse assigned to each client

further assists the members by acting as a liaison to the client's primary care

physician, by coordinating the various components of care, and by assisting members

in learning to manage their disease. The level of service and care provided by AHF is

far above what can be had through the traditional fee-for-service system. This

DECLARATION OF WAYNE CHEN IN SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

Cas~ 2:12-cv-10400-PA-AGR Document 59-4 Filed 07/18/13 Page 3 of 4 Page ID #:4657

1 improves health outcomes and reduces the total cost of caring for AHF patients. And

2 it is perhaps needless to say that this level of care saves lives otherwise lost.

3 4. In the past several months, I have been called upon to assist in

4 connection with audits conducted by Los Angeles County. These audits required that

5 members of AHF's staff and I spend time in preparing for and the actual conduct of

6 the audits. Speaking conservatively, Ispent at least four hours assisting County

7 auditors in navigating AHF's computer and record keeping systems. A psychiatrist

8 on AHF's staff (who reports to me) —Karl Goodkin, M.D. —spent approximately four

9 hours assisting with the audit process, as did a nurse practitioner on my staff,

10 Meaghan Carr. One of our Healthcare Center coordinators —Eugenia Dudley —spent

11 approximately four hours assisting with the audit. Also, I attended what I understood

12 to be entrance and exit meetings with County and AHF personnel (the former

13 conducted at the commencement of the audits and the latter conducted at the

14 conclusion of the information gathering process of the audits) which took

15 approximately 1.5 and 1 hours, respectively. My staff and I spent an additional three

16 to five hours planning for the audit process. Although it is my understanding that the

17 audits are concluded (from the standpoint of information gathering), I also understand

ig that there is a significant likelihood that I will be called upon to analyze and respond

19 to the audit results and conclusions.

20 5. As noted, my department staff, all of whom report directly to me and

21 most of whom render direct patient care and services, spent significant time in

22 connection with the audits in the recent past. Neither my staff nor I can render

23 patient services (or supervise and oversee the rendering of such services, as the case

24 may be) when we are called upon to participate in County audits.

25 6. I am gravely concerned that, if the County is permitted to commence an

26 audit of AHF's overall finances for a four year period, the preparation for that audit,

27 as well as the conducting of the audit itself and any follow up, will require that I or

28 members of my staff devote additional time away from patient services and care on

2DECLARATION OF WAYNE CHEN IN SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FOR


Case :12-cv-10400-PA-AGR Document 59-4 Filed 07/18/13 Page 4 of 4 Page ID #:4658

1 members of my staff devote additional time away from patient services and care on

2 the heels of a massive loss of time in connection with the recently concluded audits.

3 Given the nature of AHF's treatment methods and protocols, any further loss of time

4 (without a period to permit us to "catch up"), will directly impact patient care,

5 services and welfare.

6 I declare under penalty of perjury pursuant to the laws of the United States of

7 America that the foregoing facts are true and correct.

8 Executed on July 17, 2013 at Los Angeles, f~f~ni . ; -~

9 "' ~~ Ntir

i o WAYNE CHEN

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DECLARATION OF WAYNE CI~N IN SUPPORT OF PLAINTIFFS' EX PARTE APPLICATION FORTEMPORARY RESTRAINII~IG ORDER AND OSC RE PRELIMINARY INJUNCTION

C 2:12-cv-10400-PA-AGR Document 59-5 Filed 07/18/13 Page 1 of 4 Page ID #:4659

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Tom Myers (SBN 176008)tom. myers@aadshealth. orgSamantha R. Azulay, SBN 283424Samantha. azulay(a~ aidshealth. orgAIDS Healthcare Foundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450






Plaintiffs,

vs.


Defendants.

CV 12-10400 PA (AGRx)

DECLARATION OF SHARONMATLAND IN SUPPORT OFPLAINTIFFS' EX PARTSAPPLICATION FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Filed concurrently1. Ex Parte Applacation2. Memorandum of Points and


Azulax, Michael Weinstein,Patricia Bermudez, Wayne Chen,M.D.



DECLARATION OF SHARON MATLAND IN SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

Cash 2:12-cv-10400-PA-AGR Document 59-5 Filed 07/18/13 Page 2 of 4 Page ID #:4660

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DECLARATION OF SHARON MATLAND

I, Sharon Matland declare as follows:


called upon to testify thereto, I could and would competently do so under oath.

2. I am a registered nurse. I am the Director of Nursing for the Healthcare

Centers run by AIDS Healthcare Foundation (AHF). Approximately 60 registered

nurses, licensed vocational/practical nurses and medical assistants working for AHF

nationwide report to me. I am responsible for supervising and overseeing these

nurses, all of whom render patient care in their day-to-day jobs. I estimate that I

spend about 10% of my time rendering patient care directly.

3. AHF is a nonprofit corporation. Its global mission is to provide cutting

edge medicine and advocacy to people with HIV/AIDS, regardless of ability to pay.



interaction between patients and AHF service providers (e.g., nursing staff and


easily subject to "schedule shifting." More specifically, in caring for people living

with HIV/AIDS, AHF assigns a team of healthcare professionals to monitor members

and aggressively manage their treatment. A registered nurse is provided to each

client to serve as a case manager. The case manager monitors the care plan

established by each client's primary care physician, answers healthcare questions the

client might have, and, perhaps most importantly, takes steps to ensure that members

remain compliant with their medication schedules. The registered nurse assigned to

each client further assists the members by acting as a liaison to the client's primary

care physician, by coordinating the various components of care, and by assisting

members in learning to manage their disease. The level of service and care provided

by AHF is far above what can be had through the traditional fee-for-service system.

DECLARATION OF SHARON MATLAND 1N SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

Cash 2:12-cv-10400-PA-AGR Document 59-5 Filed 07/18/13 Page 3 of 4 Page ID #:4661

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This improves health outcomes and reduces the total cost of caring for AHF patients.

And it is perhaps needless to say that this level of care saves lives otherwise lost.

4. In the past several months, I have been called upon to assist in

connection with audits conducted by Los Angeles County. These audits required that

I spend a total of more than seven full work days performing tasks in connection with

the audits. I spent approximately five full days visiting the Healthcare Centers run by

AHF in preparation for the audits. I spent approximately nine hours participating in

site visits to the nine Healthcare Centers located in Los Angeles County. I spent

approximately another two full business days dealing with and reviewing policies and

procedures and finalizing other required documentation.

5. My department staff, all of whom report to me and most of whom render

direct patient care and services, also spent time in connection with the audits. Nurse

j managers from the nine discrete Healthcare Centers located in Los Angeles County

each spent approximately 1.5 days preparing for and assisting with the audits.

Another registered nurse who reports to me spent approximately four full days

reviewing policies and procedures and additional required information. These times

do not include travel time between Healthcare Centers.

6. I am gravely concerned that, if the County is permitted to commence an

audit of AHF's overall finances for a four year period, the preparation for that audit,

as well as the conducting of the audit itself and any follow up, will require that I or

members of my staff devote additional time away from patient services and care on

the heels of a massive loss of time in connection with the recently concluded audits.

Given the nature of AHF's treatment methods and protocols, any further loss of time

//

//

//

//

//

DECLARATION OF SHARON MATLAND IN SUPPORT OF PLAINTIFFS' EX PARTS APPLICATION FORTEMPORARY RESTRAINING ORDER AND OSC RE PRELIMINARY INJUNCTION

Case 2:112-cv-10400-PA-AGR Document 59-5 Filed 07/18/13 Page 4 of 4 Page ID #:

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(without a peripd tia hermit us to "catch up"), vvzll directly impact pati~ez~t care,

services and r~elfar~,

I declare under penaXty of perjury pursuant to tk~e laws of the United States of

America ghat the foregoxz~g facts are true and correct.

Executed on July 17, 20 3 at Los Angeles, Cali 'a,

SHARO~t ~,TLAND

TTON OF SHARON MATLANI7 TN SUPPORT OF P~A,~NTZFFS' ~'~PARTE APpLICA'Z'~ON FOTtT~M1~O1tARY KE5TRf1IMIJG Q~2I7~~ t~,NJ7 OSC ~E PRELIMIIVA,RY ~NNNCrION

2:12-cv-10400-PA-AGR Document 59-6 Filed 07/18/13 Page 1 of 10 Page ID #: ~3

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Tom Myers (SBN 176008)tom. myers aidshealth. o~rgSamantha . Azulay, SBN 283424samantha.azulay aidshealth.orgAIDS Healthcare~oundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450

Andrew F. Kim (SBN 156533)akim(~ plonskerlaw. comPlons~cer Law LLP1990 Bundy give Suite 280Los Angeles, CA X0025Telephone: (310) 861-2050Facsimile: (310) 496-2577

Attorn~e~ ys for PlaintiffsAIDS HEALTHCARE FOUNDATIONand MICHAEL WEINSTEIN




Plaintiffs,

vs.


Defendants.

CV 12-10400 PA (AGRx)

DECLARATION OF SAMANTHA RAZULAY IN SUPPORT OFPLAINTIFFS' EX PARTSAPPLICATION FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Filed concurrently1. Ex Parte Ap placation2. Memorandum of Points and

Authorities;3. Declarations of Michael

Weinstein, Patricia Bermudez,Sharon Matland, Wayne Chen,M.D.



DECLARATION OF SAMANTHA AZULAY RE: NOTICE OF APPLICATION FOR TEMPORARYRESTRAINING ORDER

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DECLARATION OF SAMANTHA R. AZULAY

I, SAMANTHA R. AZLTLAY, declare and state as follows:

1. I am an attorney at law duly licensed to practice before all courts of

the State of California. I am one of the attorneys of record for Plaintiff and

Counterdefendant AIDS Healthcare Foundation ("AHF")

2. I make this declaration regarding the Notice of Plaintiffs' Intent to

Seek a Temporary Restraining Order ("TRO"). The facts set forth herein are true

of my own personal knowledge, and if called upon to testify thereto, I could and

would competently do so under oath.

3. Pursuant to Local Rule 7-19.1, on July 16, 2013 at 2:01 p.m., I called

Defendants' counsel, Joel Klevens, and left a detailed message regarding AHF's

concerns over the audit scheduled for July 22, 2013, AHF's request to reschedule

this audit, and AHF's notice of intent to seek a TRO if the County refused to

reschedule the audit. At 2:03 p.m., I called Defendant's counsel John Ly and

spoke to him at length regarding our concerns over the audit scheduled for July 22,

2013, and asked for an extension of the audit until a date after September 1, 2013.

Specifically, I stated that AHF would be forced to seek a TRO if the County

refused to coordinate a workable date with AHF, and I discussed the substance of

~, the Application for TRO. Mr. Ly informed me that he would respond to me by

3:00 p.m. on July 17, 2013.

5. On July 16, 2012 at 5:01 p.m., Mr. Ly sent an e-mail stating that he

had been unable to reach his client, but he would provide a response by 3:00 p.m.

the following day. Attached as Exhibit A is a true and correct copy of this e-mail.

6. On July 16, 2013 at 5:04 p.m., I responded to Mr. Ly's e-mail

confirming that AHF would stand by until 3:00 p.m. on July 17, 2013. Attached a~

Exhibit B is a true and correct copy of this e-mail.

DECLARATION OF SAMANTHA AZULAY RE: NOTICE OF APPLICATION FOR TEMPORARYRESTRAINING ORDER

2

C e 2:12-cv-10400-PA-AGR Document 59-6 Filed 07/18/13 Page 3 of 10 Page ID #: 665

1 7. On July 17, 2013 at 2:48 p.m., Mr. Ly informed me via e-.mail that the

2 County believes the fiscal. audit should take place as scheduled on July 22, 2013.

3 Attached as Exhibit C is a true and correct copy of this e-mail,

4 I declare under penalty of perjury pursuant to the laws of the State of

5 California. that the foregoing facts are true and correct.

6 Executed. on July 17, 2013 in Los Angeles, California.

7~,

8 a ~ ~~ >a~ ~~ ~,~DATED: ~~ly 17, 2013 Bye- ~ ~'- ~:~-~~ ~.--~-;~ ~~

~ ~~m~~SAMANTHA It. AZULAY

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DECLARATION OF SAMANTHA AZULAY RE; NOTICE OF APPLICATION FOR TEMPORARYRCSTRAINING ORDER

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Wednesday, July 17, 2013 3:40:00 PM Pacific Daylight Time

Subject: AHF v. LA County

Date: Tuesday, July 16, 2013 5:01:08 PM Pacific Daylight Time

From: John Ly

To: Samantha Azulay

CC: Joel Klevens

Samantha:

As discussed this afternoon, you asked me whether the County could further reschedule the July 22 audit toSeptember 2013. You stated that, unless the County agrees to reschedule this audit, AHF intends to file aTRO before Judge Anderson. You agreed to provide me until 3:00 p.m. tomorrow to respond to this requestbefore filing any TRO. I have not yet been able to reach my client but will provide you with a responsebefore 3 p.m. tomorrow. Thanks.

user rw~'~ii 1=inl~ ~a~co~sH4vMr~rd Avchen ~ S~rapir~ ~~~

John Ly ~ Attorney10250 Constellation Blvd., 19th Floor, Los Angeles, CA 90067Main: 310.553.3000 ~ Direct: 310.556.7861 ~ Fax: 310.843.2661E-mail: jlyCa~glaserweil.com ~ www.glaserweil.comThis message and any attached documents may contain information from the law firm of Glaser Weil Fink JacobsHoward Avchen &Shapiro LLP that is confidential and/or privileged. If you are not the intended recipient, you maynot read, copy, distribute or use this information. If you have received this transmission in error, please notify thesender immediately by reply E-mail and then delete this message.

Page 1 of 1


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Subject: Re: AHF v. LA County

Date: Tuesday, July 16, 2013 5:04:27 PM Pacific Daylight Time


To: John Ly

CC: Joel Klevens, Andrew Kim

BCC: Tom Myers, Christina Yang

Thank you. We will stand by until 3pm tomorrow.

Samantha R. AzulayAssistant General CounselAIDS Healthcare Foundation6255 W. Sunset Boulevard, 21St FloorLos Angeles, California 90028Tel: (323) 860-5223Fax: (323) 467-8450samantha.azulayC~aidshealth.orgwww.aidshealth.org

From: John Ly <ilvCc~glaserweil.com>Date: Tuesday, July 16, 2013 5:01 PMTo: Samantha Azulay <Samantha.azulayC~aidshealth.or~>Cc:loel Klevens <jklevens glaserweil.com>Subject: AHF v. LA County

Samantha:

As discussed this afternoon, you asked me whether the County could further reschedule the July 22 audit toSeptember 2013. You stated that, unless the County agrees to reschedule this audit, AHF intends to file aTRO before Judge Anderson. You agreed to provide me until 3:00 p.m. tomorrow to respond to this requestbefore filing any TRO. I have not yet been able to reach my client but will provide you with a responsebefore 3 p.m. tomorrow. Thanks.

Maser 1,~eil ~~inl< ~acvbsI~~owv~r~d ~~r~ch~n ~ ~h~pir~ ~.~~

John Ly ~ Attorney10250 Constellation Blvd., 19th Floor, Los Angeles, CA 90067Main: 310.553.3000 ~ Direct: 310.556.7861 ~ Fax: 310.843.2661E-mail: ilvna alaserweil.com ~ www.glaserweil.comThis message and any attached documents may contain information from the law firm of Glaser Weil Fink JacobsHoward Avchen &Shapiro LLP that is confidential and/or privileged. If you are not the intended recipient, you maynot read, copy, distribute or use this information. If you have received this transmission in error, please notify thesender immediately by reply E-mail and then delete this message.

Page 1 of 1


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Subject: RE: AHF v. LA County

Date: Wednesday, July 17, 2013 2:48:28 PM Pacific Daylight Time

From: John Ly

To: Samantha Azulay

CC: Joel Klevens, Andrew Kim

Samantha:

wanted to follow up on our conversation yesterday. As reflected in its correspondence with AHF, the

County believes that the mandatory fiscal audit for AHF's ambulatory outpatient contract should take place,

as scheduled, on July 22, 2013.

John Ly ~ Attorney10250 Constellation Blvd., 19th Floor, Los Angeles, CA 90067Main: 310.553.3000 ~ Direct: 310.556.7861 ~ Fax: 310.843.2661E-mail: llyCa~alaserweil.com ~ www.glaserweil.comThis message and any attached documents may contain information from the law firm of Glaser Weil Fink JacobsHoward Avchen &Shapiro LLP that is confidential and/or privileged. If you are not the intended recipient, you maynot read, copy, distribute or use this information. If you have received this transmission in error, please notify thesender immediately by reply E-mail and then delete this message.

From: Samantha Azulay [mailto:[email protected]]Sent: Tuesday, July 16, 2013 5:04 PMTo: John LyCc: Joel Klevens; Andrew KimSubject: Re: AHF v. LA County

Thank you. We will stand by until 3pm tomorrow.

Samantha R. AzulayAssistant General CounselAIDS Healthcare Foundation

6255 W. Sunset Boulevard, 21St FloorLos Angeles, California 90028Tel: (323) 860-5223Fax: (323) 467-8450samantha.azulay_(alaidshealth.orgwww.aidshealth.org

From: John Ly <ilvC~~laserweil.com>

Date: Tuesday, July 16, 2013 5:01 PM

To: Samantha Azulay <samantha.azulay(c~aidshealth.or~>

Cc: Joel Klevens <jklevensC~glaserweil.com>

Subject: AHF v. LA County

Samantha:

As discussed this afternoon, you asked me whether the County could further reschedule the July 22 audit to

September 2013. You stated that, unless the County agrees to reschedule this audit, AHF intends to file a

Page 1 of 2


TRO before Judge Anderson. You agreed to provide me until 3:00 p.m. tomorrow to respond to this requestbefore filing any TRO. I-have not yet been able to reach my client but will provide you with a responsebefore 3 p.m. tomorrow. Thanks.

~I~ser "~~VV~i~ ~inl< ~~ec~bsH~av+r~rd 14v~ch~n ~ Shapira ~~~

John Ly ~ Attorney10250 Constellation Blvd., 19th Floor, Los Angeles, CA 90067Main: 310.553.3000 ~ Direct: 310.556.7861 ~ Fax: 310.843.2661E-mail: jly anglaserweil.com ~ www.glaserweil.comThis message and any attached documents may contain information from the law firm of Glaser Weil Fink JacobsHoward Avchen &Shapiro LLP that is confidential and/or privileged. If you are not the intended recipient, you maynot read, copy, distribute or use this information. If you have received this transmission in error, please notify thesender immediately by reply E-mail and then delete this message.

Page 2 of 2

C 2:12-cv-10400-PA-AGR Document 59-7 Filed 07/18/13 Page 1 of 2 Page ID #:4673

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Tom Myers (SBN 176008)tom. myeYs@aidshealth. orgSamantha R. Azulay, SBN 283424samantha. azulay aidshealth. orgAIDS Healthcare oundation6255 West Sunset Boulevard, 21st FloorLos Angeles, CA 90028Telephone 323-860-5200Facsimile 323-467-8450

Andrew F. Kim (SBN 156533)akim @plonskerlaw. comPlonsker Law, LLP1990 Bundy Drive, Suite 280Los Angeles, CA 90025Telephone: (310) 861-2050Facsimile: (310) 496-2577





Plaintiffs,

vs.


Defendants.

CV 12-10400 PA (AGl~)

~PROPOSED1 ORDER GRANTINGX PARTE APPLICATION OFPLAINTIFFS AIDS HEALTHCAREFOUNDATION AND MICHAELWEINSTEIN FOR TEMPORARYRESTRAINING ORDER ANDORDER TO SHOW CAUSE REPRELIMINARY INJUNCTION

Date:Time:Courtroom: 15Hon. Percy Anderson

[PROPOSED] ORDER GRANTING EX PARTS APPLICATION FOR TEMPORARY RESTRAINING ORDERAND OSC RE PRELIMINARY INJUNCTION


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The Ex Parte Application for Temporary Restraining Order and Order to Show

Cause Regarding Preliminary Injunction of Plaintiffs AIDS Healthcare Foundation

and Michael Weinstein in the above-captioned action (the "Application") came on for

hearing on July _, 2013 before the Honorable Percy Anderson, United States District

Court Judge.

Andrew F. Kim appeared on behalf of Plaintiffs, unless appearances are

waived and the Court determines the Application without a hearing and on the papers.

All other appearances, if any, are noted in the record.

After review of the moving papers and all documents in support thereof and the

opposition thereto, and hearing the arguments of counsel, and good cause appearing

therefor, it is hereby ORDERED:

1. Plaintiffs' request for an immediate temporary restraining order

prohibiting the Defendants from commencing an audit of AHF's finances on July 22,

2013 (the "New Audit") is GRANTED. Pursuant to Fed. R. Civ. P. 65(b)(2), the

Court further orders that the temporary restraining order is effective for 14 days from

the date of issuance.

2. This Court issues an order to show cause regarding the issuance of a

preliminary injunction prohibiting the Defendants from commencing the New Audit

prior to September 1, 2013 and shall set a briefing and hearing schedule on the

preliminary injunction.

DATED:

Hon. Percy Anderson

United States District Court Judge

[PROPOSED] ORDER GRANTING EX PARTS APPLICATION FOR TEMPORARY RESTRAINING ORDER ANDOSC RE PRELIMINARY INJUNCTION

Gwendolyn Edwards

From: John LySent: Thursday, July 18, 2013 12:27 PMTo: Gwendolyn EdwardsSubject: FW: Activity in Case 2:12-cv-10400-PA-AGR AIDS Healthcare Foundation et al v. Los

Angeles County et al Ex Parte Application for Temporary Restraining Order

user ~i fink acabsHQ~+rar~ ~~r~F~~~ e~ 5f~~pira ~ ~~ ~,

John Ly ~ Attorney10250 Constellation Blvd., 19th Floor, Los Angeles, CA 90067Main: 310.553.3000 ~ Direct: 310.556.7861 ~ Fax: 310.843.2661E-mail: Jly(c~glaserweil.com ~ www.glaserweil.com

This message and any attached documef~ts may contain information from the IaUv firm of Glaser Vlfeil Fink Jacabs Howard

Buchan &Shapira LLP fihat is confidential and/or privileged. If you are not the intended recipient, you may not read, copy,

distribute or use this information. If you have received this transmission in error, please notify the sender immediately by

reply E-mail and then delete this message.

From:[email protected] [mailto:[email protected]]

Sent: Thursday, July 18, 2013 12:24 PMTo: [email protected]: Activity in Case 2:12-cv-10400-PA-AGR AIDS Healthcare Foundation et al v. Los Angeles County et al Ex Parte

Application for Temporary Restraining Order

This is an automatic e-mail message generated by the CM/ECP system. Please DO NOT RESPOND to

this e-mail because the mail box is unattended.

***NOTE TO PUBLIC ACCESS USERS*** Judicial Conference of the United States policy permits

attorneys of record and parties in a case (including pro se litigants) to receive one free electronic copy of

all documents filed electronically, if receipt is required by law or directed by the filer. PACER access fees

apply to all other users. To avoid later charges, download a copy of each document during this first

viewing. However, if the referenced document is a transcript, the free copy and 30 page limit do not

apply.

UNITED STATES DISTRICT COURT for the CENTRAL DISTRICT OF CALIFORNIA

Notice of Electronic Filing

The following transaction was entered by Azulay, Samantha on 7/18/2013 at 12:23 PM PDT and filed on

7/18/2013

Case Name: AIDS Healthcare Foundation et al v. Los Angeles County et al

Case Number: 2:12-cv-10400-PA-AGR

Filer: AIDS Healthcare Foundation

Michael Weinstein

Document Number: 59

Docket Text:EX PARTE APPLICATION for Temporary Restraining Order as to Continue July 22, 2013 Audit .

If this is filed during normal business hours, please contact the courtroom deputy assigned to

the judge. If you are filing this document after 5:00 Monday through Friday, on a weekend or

holiday, and need immediate judicial review, please call 213-894-2485 to advise that a

Temporary Restraining Order has been electronically filed. Failure to call the courtroom

deputy, or the after hours filing contact number, may result in a delay of judicial review. Ex

Parte Application filed by plaintiffs AIDS Healthcare Foundation, Michael Weinstein.

(Attachments: # (1) Memorandum, # (2) Declaration Michael Weinstein, # (3) Declaration

Patricia Bermudez, # (4) Declaration Wayne Chen, M.D., # (5) Declaration Sharon Matland, # (6)

Declaration Samantha R. Azulay, # (7) Proposed Order)(Azulay, Samantha)

2:12-cv-10400-PA-AGR Notice has been electronically mailed to:

Andrew F Kim akim(c~lonskerlaw.com, andrew.kim.esq(a,~mail.com

Christina T Yang christina.~~a,aidshealth.org

Joel N Klevens jklevens ,glaserweil.com

John K Lyjly(a~glaserweil.com, k~ibson(a~glaserweil_.com

Patricia L Glaser p~laser(a~glaserweil.com

Samantha Robin Azulay samantha.azulavC~aidshealth.org, Christina.yang~a~aidshealth.org,

rachel. young~a,aidshealth. ors

Thomas Andrew Myers tom.mvers~a~,aidshealth.org

2:12-cv-10400-PA-AGR Notice has been delivered by First Class U. S. Mail or by other means BY THE

FILER to

The following documents) are associated with this transaction:

Document description:Main DocumentOriginal filename:AHF L A County -- Ex Parte Application for TRO.pdf

Electronic document Stamp:[STAMP cacdStamp_ID=1020290914 [Date=7/18/2013] [FileNumber=15941228-0

] [1770c4ff33ab57aa2e25e1470ae03db3f506f47f323c55f~91336f11f3da68817899d3c7bad404641d829121b5bcaba753c86dd03929bb345d569f49e5f3dca7]]

Document description:MemorandumOriginal filename:AHF L A County -- Memorandum of Points and Authorities re TRO.pdf

Electronic document Stamp:[STAMP cacdStamp_ID=1020290914 [Date=7/18/2013] [FileNumber=15941228-1 ][3de61bf8c6df~c63cd16c523b25c1b9b97ad6fb1a305905a2c582d0395f58b47a61Sbb1a89992e97c590d9ec75e16f1a1434d67dfd2a1bb11d047e9a577320cd]]

Document description:Declaration Michael Weinstein

Original filename:AHF L A County -- Weinstein Declaration re TRO.pdf

Electronic document Stamp:[STAMP cacdStamp_ID=1020290914 [Date=7/18/2013] [FileNumber=15941228-2 ][35a14fef4cbb10060d00dd26205db75e08220ea9889c420a0477e6e3ee4a8f2a66be75ebe847c5f53c811fac38a412199e5c967c0123a6177e7aac7efd09a7ffJ]

Document description:Declaration Patricia BermudezOriginal filename:AHF L A County --Bermudez Declaration re TRO.pdf

Electronic document Stamp:[STAMP cacdStamp_ID=1020290914 [Date=7/18/2013] [FileNumber=-15941228-3 ][Oe178c9ee95769afbOd99b2ce3b3ee5255509a00ecf7d24935c8657480c6dea9663aa3082fabfc652a95672f243aa25d2253708e63ca4ae4f2100d923fe699ed]]

Document description:Declaration Wayne Chen, M.D.Original filename:AHF L A County -- Chen Declaration re TRO.pdf

Electronic document Stamp:[STAMP cacdStamp_ID=1020290914 [Date=7/18/2013] [FileNumber=15941228-4 ][bf~cSccOd5bb1bb17e4e5ca4502c30635b999203fb0a0b2b62696747b1356b67f266b67ce664c2bac8a18547eb15316bdd4f~0aad199f7360~cfdb684f37eb9]]

Document description:Declaration Sharon MatlandOriginal filename:AHF L A County -- Matland Declaration re TRO.pdf

Electronic document Stamp:[STAMP cacdStamp_ID=1020290914 [Date=7/18/2013] [FileNumber=15941228-5 ][95c493ca46d9a91ab18fd53e2ad766c8742452fe734c76d44cfcfdca3b46bc8fa954774f5a6c7d59d255f860f86ca64ecd73d611d15589a9e3635eb8dad7b06c]]

Document description:Declaration Samantha R. AzulayOriginal filename:SRA declaration re TRO.pdfElectronic document Stamp:[STAMP cacdStamp_ID=1020290914 [Date=7/18/2013] [FileNumber=15941228-6 ][4376ec5f783acb053a36de74d62bec68725dfd3de66a45591199b561f6f891414ad57691d41e380672b81c2d426ca44def5d2121bOb2bf5c79fc9211a41b087fJ]

Document description:Proposed OrderOriginal filename:AHF L A County -- Proposed Order re TRO and OSC.pdf

Electronic document Stamp:[STAMP cacdStamp_ID=1020290914 [Date=7/18/2013] [FileNumber=15941228-7 ][b1e8e2fe698ddafgce213f7f7a4749874654695e7a5184ee5dc9039059c499e4f828e904a9614e013c7fc1b5684faee992b0869e8aeda67f75c9bOdc563f0006]]

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AHF v LAC 2013-07-18 Ex Parte Application of AHF for TRO and OSC Re Preliminary Injunction Docs 59...

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Transcript of AHF v LAC 2013-07-18 Ex Parte Application of AHF for TRO and OSC Re Preliminary Injunction Docs 59...