Twyla Leach d/b/a Home Care Staffing v. Minnesota Department of Human Services…
Twyla Leach (Martin) d/b/a Home Care Staffing v. Minnesota Department of Human Services by and through Attorney General Keith Ellison
- Paul Magnuson
- 0:25-cv-03220
- U.S. District Court · District of Minnesota
- 8
In Twyla Leach (Martin) d/b/a Home Care Staffing v. Minnesota Department of Human Services by and through Attorney General Keith Ellison, Judge Magnuson dismissed the case with prejudice because the Eleventh Amendment to the U.S. Constitution bars federal lawsuits against a state and its officials, and imposed filing restrictions on the plaintiff after she submitted fabricated or grossly misrepresented legal citations.
Medicaid providers who are subject to payment withholding during fraud investigations and who seek to challenge that withholding in federal court; pro se litigants who use artificial intelligence tools to draft court filings without verifying sources; and specifically Twyla Leach (Martin), who is now restricted from filing new lawsuits in the District of Minnesota without counsel or prior court approval.
What happened
In Twyla Leach (Martin) d/b/a Home Care Staffing v. Minnesota Department of Human Services by and through Attorney General Keith Ellison, Twyla Leach, who runs a home care staffing business enrolled as a Minnesota Medicaid provider, sued the Minnesota Department of Human Services (DHS) and Attorney General Keith Ellison after DHS froze her Medicaid payments in August 2025 while investigating a credible allegation that she overbilled the program. Federal and state law require DHS to withhold payments to a provider when there is a credible fraud allegation under investigation, and Leach argued the freeze violated the Constitution and federal Medicaid laws, among other claims.
The court found it lacked the power to hear the case at all. Under the Eleventh Amendment to the U.S. Constitution, states and their agencies generally cannot be sued in federal court without their consent, and Minnesota had not consented. Because DHS is a state agency, and because suing Ellison in his official role as Attorney General is legally the same as suing the State of Minnesota itself, both defendants were immune from the lawsuit. The court also noted that neither the State nor Ellison acting in his official capacity qualifies as a 'person' who can be sued under the federal civil rights statute (42 U.S.C. § 1983).
Judge Magnuson granted the defendants' motion to dismiss and dismissed the entire case with prejudice, meaning Leach cannot refile the same claims in federal court. The court also struck Leach's opposition brief after finding it contained a distorted description of a federal regulation and a reference to a government letter that does not exist as described — misconduct the court strongly suspected was the result of unverified artificial-intelligence-generated content. Because the court had previously warned Leach about fabricated citations, it imposed a filing restriction: Leach may not start any new lawsuit in the District of Minnesota unless she is represented by a lawyer or first receives advance permission from a judge of that court. The court also denied Leach's motions to add supplemental materials and for clarification of court rules.
The detailed version
- Twyla Leach (Martin) d/b/a Home Care Staffing v. Minnesota Department of Human Services by and through Attorney General Keith Ellison, Civ. No. 25-3220 (PAM/SGE)
- U.S. District Court, District of Minnesota
- Paul A. Magnuson, United States District Court Judge
- December 24, 2025
Background Plaintiff Twyla Leach (Martin), doing business as Home Care Staffing, is enrolled as a Minnesota Health Care Programs provider approved to provide housing stabilization services under Minn. Stat. § 265B.051. Defendant Minnesota Department of Human Services (DHS) is the state agency that administers Medicaid in Minnesota. In the summer of 2025, DHS determined there was a credible allegation of fraud — specifically overbilling — against Leach and began an investigation. DHS also referred the matter to law enforcement. On August 1, 2025, DHS sent Leach a Notice of Payment Withhold, informing her that payment would be suspended until DHS or a prosecuting authority determined there was insufficient evidence of fraud, or until legal proceedings were complete. Federal law (42 C.F.R. § 455.23(a)(1)) and state law (Minn. Stat. § 256B.064) require DHS to suspend payments upon a credible fraud allegation. Organizations that contract with DHS to administer payments then suspended payments to Leach. Leach filed this lawsuit alleging unjust enrichment, unspecified illegal retaliation, and violations of the Constitution and federal Medicaid laws.
Motion to Dismiss — Subject-Matter Jurisdiction (Rule 12(b)(1)) DHS and Ellison moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) (lack of subject-matter jurisdiction) and 12(b)(6) (failure to state a claim). The court granted the motion on jurisdictional grounds and did not need to reach the merits.
The Eleventh Amendment to the U.S. Constitution provides that federal courts may not hear suits brought against a state by its citizens without the state's consent. The court held that DHS, as a state agency, is immune from suit under the Eleventh Amendment, and Leach provided no evidence that Congress or Minnesota had waived that immunity.
The court also held that Leach's claims against Ellison in his official capacity were barred. Under Will v. Michigan Dep't of State Police, 491 U.S. 58 (1989), a suit against a state official in his official capacity is equivalent to a suit against the state itself. Because Minnesota had not consented to suit, claims against Ellison in his official capacity were equally barred. The court further noted that neither Minnesota nor Ellison in his official capacity qualifies as a 'person' subject to suit under 42 U.S.C. § 1983, the federal civil rights statute. The court noted Leach had not alleged any individual-capacity claims against Ellison, nor had she put him on notice of individual-capacity claims; Ellison did not waive service.
The court dismissed the case for lack of subject-matter jurisdiction and, per the conclusion, dismissed it with prejudice.
Sanctions and Filing Restrictions (Rule 11) The court addressed serious problems with Leach's opposition memorandum. The court had previously warned Leach, in its order denying her motion for a preliminary injunction, that it would strike submissions containing hallucinated (fabricated) citations and might take further action. Leach's opposition brief contained two significant misrepresentations:
1. Leach asserted that 42 C.F.R. § 455.23(a)(1) limits when a state may 'deem an allegation credible.' The actual regulation does not contain such language; it requires state agencies to suspend payments upon a credible allegation of fraud.
2. Leach cited a 'CMS State Medicaid Director Letter (SMD #11-004, Mar. 25, 2011),' claiming it states that data-mining results alone cannot justify withholding without corroborating evidence. The court found no such letter exists as described. Defendants identified a letter with the same designation (SMD #11-004) but issued on May 18, 2011, and that letter is silent on data mining; it addresses administrative funds in a Medicaid incentive program.
The court struck Leach's opposition memorandum. It stated it could not prove but strongly suspected that Leach used artificial intelligence to draft her filings without verifying the generated sources. The court noted that pro se litigants (those representing themselves without a lawyer) are not exempt from the Federal Rules of Civil Procedure.
Pursuant to Rule 11(c) of the Federal Rules of Civil Procedure, which permits sanctions against an attorney or pro se litigant for unwarranted legal contentions or insupportable factual assertions, the court imposed filing restrictions rather than monetary sanctions. Going forward, the District of Minnesota will review any lawsuit filed by Leach before it is accepted. If the court finds her citations are fabricated or grossly misrepresent their sources, she will be prohibited from proceeding with that lawsuit.
Plaintiff's Other Motions - Motion for Leave to File Supplemental Declaration and Supplemental Reply (Docket No. 97): Leach sought to add information about DHS terminating the Housing Stabilization Services program. The court denied this motion, finding the program termination did not bear on the matter and fell outside the scope of Federal Rule of Civil Procedure 15(d), which governs supplemental pleadings. - Motion for Court Clarification (Docket No. 103): Leach asked the court to advise her on how to prosecute her case. The court denied this, noting it would not advise a party on litigating. - Motion to Deny Defendants' Motion (Docket No. 78), construed as an opposition memorandum: Denied. The court also noted that Docket No. 100, filed as a sur-reply, was improper under District of Minnesota Local Rule 7.1 and would not be considered.
Disposition
- Defendants' Motion to Dismiss — GRANTED
- Case — DISMISSED WITH PREJUDICE (bars refiling)
- Plaintiff's Motion to Deny Defendants' Motion — DENIED
- Plaintiff's Motion for Leave to File Supplemental Declaration and Supplemental Reply — DENIED
- Plaintiff's Motion for Court Clarification — DENIED
- Plaintiff RESTRICTED from initiating new litigation in the District of Minnesota unless represented by counsel or granted advance permission by a judicial officer of the District
Reviewer note from the AI+
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.