Aegis Medical Systems, Inc. v. Zito
Appellant Aegis Medical Systems, Inc. (Aegis) operates a network of narcotic treatment clinics and directly contracted with the state’s Department of Alcohol and Drug Programs (the Department) to provide methadone maintenance services in Kern, Stanislaus and other counties as a part of the Medi-Cal drug treatment program. In 2010, the Department and its director, Renee Zito, issued Bulletin 10-06 (Bulletin) stating that it would terminate direct contracts with drug treatment providers except in counties that were not otherwise providing or contracting for treatment services as required by federal and state law. After being notified that its state contracts in Kern and Stanislaus Counties would be terminated under this policy, Aegis brought a suit challenging the Bulletin as an unlawful “underground regulation” issued in violation of the Administrative Procedure Act (APA). (See Davenport v. Superior Court (2012) 202 Cal.App.4th 665, 669.)

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