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Murphy v. Minnesota Department of Human Services

United States District Court, D. Minnesota

May 18, 2017

Tenner Murphy, by his guardians Kay and Richard Murphy; Marrie Bottelson; Dionne Swanson; and on behalf of others similarly situated, Plaintiffs,
v.
The Minnesota Department of Human Services, an agency of the State of Minnesota; and Emily Johnson Piper in her capacity as Commissioner of The Minnesota Department of Human Services, Defendants.

          Joseph W. Anthony, Esq., and Peter McElligott, Esq., Anthony Ostlund Baer & Louwagie PA; Justin H. Perl, Esq., Mid-Minnesota Legal Aid; and Sean B. Burke, Esq., Mid-Minnesota Legal Aid, Minnesota Disability Law Center, counsel for Plaintiffs.

          Ian M. Welsh, Janine Wetzel Kimble, Scott H. Ikeda, Assistant Attorneys General, Minnesota Attorney General's Office, counsel for Defendants.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK United States District Judge

         INTRODUCTION

         This matter is before the Court on the Motion to Dismiss filed by Defendants the Minnesota Department of Human Services (“DHS”) and DHS Commissioner Emily Johnson Piper (“Commissioner Johnson Piper”) (collectively, “Defendants”). (Doc. No. 10.) For the reasons set forth below, the Court grants in part and denies in part the motion.

         BACKGROUND

         This case relates to an alleged denial of services under Minnesota's Medicaid Disability Waivers and the resulting isolation and segregation of individuals with disabilities who seek greater integration into their communities. This case has been designated as related to Jensen v. Minnesota Department of Human Services, Civ. No. 09-1775 (D. Minn.). (Doc. No. 6.) Mikkelson v. Johnson Piper, Civ. No. 15-3439 (D. Minn.) (formerly Guggenberger v. Minnesota), is also related to the Jensen case. (See Order, Mikkelson v. Johnson Piper, Civ. No. 15-3439 (D. Minn. Aug. 31, 2015), Doc. No. 4.) Many of the allegations, claims, and legal issues presented in this case are similar to those previously considered by the Court in its July 28, 2016 Order in Mikkelson. See Guggenberger v. Minnesota, 198 F.Supp.3d 973 (D. Minn. 2016). The Court will analyze the allegations and arguments specific to this case below, but also directs readers to Guggenberger for additional background on the relevant law underlying Plaintiffs' claims.

         I. Minnesota's Residential Service System Under Medicaid Disability Waivers

         Minnesota participates in the federal Medicaid program, a jointly-operated federal and state program that provides “healthcare and related services” to individuals with disabilities. (Doc. No. 33 (“Am. Compl.”) ¶ 32.)[1] In particular, Minnesota offers Medicaid services to individuals with disabilities in the form of Medicaid Home and Community Based Disability Waivers (“Disability Waivers”).[2] (Id. at 2, ¶¶ 21, 25.) According to Plaintiffs, states who participate in Medicaid must do so in accordance with federal law. (Id. ¶ 32.)

         Plaintiffs allege that Disability Waivers in Minnesota “provide a comprehensive, cost-effective, home and community-based package of services, ” including “direct care staffing, vocational skills and employment assistance, environmental modifications and other assistive technology, transitional and housing assistance, and other services designed to help people with disabilities live in his or her own home and interact with the larger nondisabled community.” (Id. ¶¶ 33-34.) Plaintiffs assert that “[t]he Disability Waivers can fund a variety of residential services, including individualized housing services.” (Id. ¶ 25.) According to Plaintiffs, before individuals receive Disability Waiver services, they must be assessed and deemed qualified in order to be offered “Disability Waiver services as an alternative to services in an institution.” (Id. ¶ 68.)

         Plaintiffs allege that Disability Waivers may be used to fund residential services in a number of different settings. (Id. ¶ 64.) One possible setting is a Community Residential Setting (“CRS”) facility. (Id. at 2, ¶ 64.) Plaintiffs explain that “CRS facilities contain up to five persons, all with disabilities, living in a residence that is owned, leased, operated, and/or controlled by the same organization that provides the services.” (Id. ¶ 6.) Defendants oversee the licensure of CRS facilities pursuant to Minnesota Statute Chapter 245D. (Id. ¶ 64.) According to Plaintiffs, as of July 2016, nearly 13, 800 Disability Waiver recipients in Minnesota resided in approximately 3, 457 licensed CRS facilities. (Id. ¶ 65.)

         Plaintiffs allege that an alternative model involving individualized housing services exists under the Disability Waivers that would permit individuals to achieve greater integration in the community. (Id. ¶ 7; see also Id. ¶¶ 80-83.) According to Plaintiffs, “individualized housing uses Disability Waiver services, including person-centered planning, to design and implement a customized setting for the individual to live, work, and enjoy leisure time in the most integrated setting.” (Id. ¶ 7.) Plaintiffs identify examples of services offered under Disability Waivers “that help individuals transition from less integrated settings into homes of their own.” (Id. ¶ 84.) For example, Plaintiffs identify Consumer Training and Education and Family Training and Counseling “which allows individuals to hire trained person-centered planners to help develop self-advocacy skills and create more individualized service plans, including a personal housing transition plan that will lay the foundation for a move into a more integrated setting.” (Id. ¶ 84(a).) Plaintiffs also identify Housing Access Coordination and Transitional Services to assist with moving logistics. (Id. ¶ 84(b).)

         Plaintiffs allege that DHS is the Minnesota state agency responsible for overseeing the state's provision of Medicaid, including “Disability Waivers and residential services for persons with intellectual and developmental disabilities, traumatic brain injury, mental illness, and other disabilities.” (Id. ¶ 21.) Plaintiffs further allege that Commissioner Johnson Piper administers and manages the Disability Waivers along with overseeing residential service providers such as those who operate CRS facilities. (Id. ¶ 23.)

         Plaintiffs assert that “Defendants direct and manage counties, ” otherwise known as “lead agencies, ” to administer Disability Waiver services throughout the state. (Id. ¶ 27.) Lead agencies are involved in the initial assessment for Disability Waiver services and are required by Defendants “to develop a support plan for the individual that identifies his or her needs and the types of services necessary and available to meet those needs.” (Id. ¶¶ 68-69.) According to Plaintiffs, “DHS regulates all individualized housing services for individuals with disabilities while primarily relying on individual counties and private service providers to provide such services.” (Id. ¶ 88.) Plaintiffs assert that Defendants permit counties to exercise discretion over “whether to offer individualized housing services.” (Id. ¶ 27.) According to Plaintiffs, most counties do not offer such services. (Id.)

         II. The Named Plaintiffs

         Plaintiffs' Amended Complaint is brought by three named Plaintiffs representing a putative class including “individuals who are receiving a [Disability Waiver] and are living in a [CRS] facility, but want to live elsewhere and be integrated into their community.” (Id. at 2.) Each named Plaintiff is an individual with one or more physical, developmental, or cognitive disabilities who receives a Disability Waiver. (Id. ¶¶ 1, 2, 29, 30, 31.)

         Plaintiff Tenner Murphy (“Murphy”) alleges he is “stuck in the CRS facility because of Defendants' failure to provide an informed choice of integrated alternatives.” (Id. ¶ 29(m).) Murphy asserts that his living environment is a segregated setting and that he primarily interacts with other individuals with disabilities and staff. (Id. ¶ 29(k).) Murphy alleges he typically “spends most of his time alone, even though he would prefer to interact with other people.” (Id. ¶ 29(g).) He asserts he is not able to control staff hiring or training and cannot decide who he will live with. (Id. ¶ 29(i).) He would prefer to select his own roommates. (Id. ¶ 29(j).) Murphy's guardian “has asked several people at the lead agency about accessing more individualized housing options.” (Id. ¶ 29(k).) However, Murphy asserts that Defendants “have prevented [him] from choosing individualized housing services, such as a live-in caregiver that he can hire and train to help him more fully interact with his community and be as integrated as possible.” (Id. ¶ 29(m).)

         Plaintiff Marrie Bottelson (“Bottelson”) “has lived in a CRS facility for about thirteen years” and “would like to hire her own staff and live in her own apartment.” (Id. ¶¶ 30(c), 30(g).) Bottelson contends that her ability to spend time in the community is “severely limited” due to staffing in her current residential setting. (Id. ¶¶ 30(e), 30(f).) Specifically, Bottelson “does not get out into the community nearly as much as she would if she were able to create her own schedule.” (Id.) According to Bottelson, “[f]or the past several years, she has asked . . . different case managers . . . to help her move into her own apartment.” (Id. ¶ 30(d).) Bottelson alleges she has requested such help from her case managers to access individualized housing options since as early as 2013. (Id. ¶¶ 30(i), 30(j).) She has been told by case managers “that individualized housing is not a possibility for her, ” “that such housing was too hard to find, ” and “that there are no other options for her.” (Id. ¶¶ 30(d), 30(i), 30(j).) Bottelson alleges she “needs person-centered planning to help her develop an individualized moving plan and other individualized housing services” to achieve her goals relating to her preferred living arrangement. (Id. ¶ 30(h).) She asserts that she met with a person-centered planner in July 2016 but “has not received all the necessary individualized housing services to help her find or develop alternatives to her current CRS facility.” (Id. ¶ 30(k).)

         Bottelson's current roommate and best friend, Plaintiff Dionne Swanson (“Swanson”), also alleges a need for “person-centered planning services, and other individualized housing services to help her create and execute a plan to live in the most integrated setting appropriate to her needs.” (Id. ¶¶ 30(h), 31, 31(e).) She has asked for such services “for a long time, ” but “has not received them.” (Id. ¶ 31(f).) Swanson alleges she has been told by case managers that “she is not ‘independent enough' for individualized housing, ” even though Defendants have no such criteria. (Id. ¶ 31(b).)

         As noted above, Plaintiffs assert that they want access to services offered under the Disability Waivers “to help them transition to more integrated settings.” (Id. ¶ 85.) Despite not receiving the requested individualized housing services described above, each Plaintiff alleges he or she “has not received a notice of denial or information regarding [their] due process rights in regards to [their] request for these services.” (Id. ¶ 29(n); see also Id. ¶¶ 30(1), 31(f).)

         III. Plaintiffs' Claims

         Notwithstanding the alleged availability of individualized housing services that would permit greater integration into the community, Plaintiffs state that “Defendants have failed to inform all persons receiving a Disability Waiver of individualized housing service options and have failed to explain how to access such services.” (Id. ¶ 28.) Similarly, Plaintiffs assert that “Defendants have . . . failed to provide transition planning and support for such services.” (Id.) Finally, Plaintiffs contend that “Defendants have further failed to provide notices of denial or information regarding due process rights in regards to requests for these services.” (Id.) These collective failures form the basis of Plaintiffs' claims, outlined below.

         Plaintiffs assert that Defendants disproportionately rely on CRS facilities through their management of Disability Waiver services, leading Plaintiffs to reside in segregated settings. (Id. ¶ 4; see also Id. ¶ 26.) According to Plaintiffs, “Defendants' administration, operation, and oversight (or lack thereof) has led to a pervasive overreliance on segregated CRS facilities.” (Id. ¶ 13.) Plaintiffs allege that many CRS facilities are segregated settings according to DHS's own definition. (Id. ¶¶ 5-6.) Under this definition, a segregated setting is one “populated exclusively or primarily with individuals with disabilities . . . [and] characterized by regimentation in daily activities [and] limits on individuals' ability to engage freely in community activities.” (Id. ¶ 5 (quoting Minnesota Olmstead Plan: Demographic Analysis, Segregated Settings Counts, Targets and Timelines, September 20, 2014, p. 8).) Plaintiffs assert that many CRS facilities sanctioned by Defendants meet this definition because they limit individual choices regarding free time, daily schedules, interaction with individuals outside of the facility, and who to live with. (Id. ¶ 6.) According to Plaintiffs, “staffing patterns, CRS house rules, and other administrative restrictions limit the scope and duration individuals can actually participate in everyday community activities.” (Id. ¶ 76.) In addition, Plaintiffs allege, “[m]any CRS residents are frequently forced to spend their time secluded in CRS facilities, ” separated from their communities. (Id. ¶ 78.) Plaintiffs allege that “[t]his lack of interaction with the larger community can be harmful.” (Id. ¶ 79.) In particular, Plaintiffs allege that “[f]or many residents, an unchanging daily routine causes their social and independent living skills to atrophy, leading to an even lower likelihood that they will ever transition to living and working in the community.” (Id.) According to Plaintiffs, these circumstances “also lead[] to lower self-esteem and lowered expectations of themselves.” (Id.)

         In contrast with these settings, Plaintiffs allege that “[i]ndividuals who develop and live in individualized housing settings are given greater opportunities to interact and integrate themselves in the greater community” based on increased flexibility in schedules, roommate choices, staff hiring, and social opportunities with non-disabled individuals. (Id. ¶ 81.) In particular, Plaintiffs assert that “[p]ersons receiving individualized housing services experience greater opportunities to interact with neighbors, meet and develop relationships with persons without disabilities, and build or maintain basic living skills in a manner that often is not possible in CRS facilities.” (Id. ¶ 83.)

         According to Plaintiffs, “Defendants have created, maintained, and over-relied on a residential service system that limits individual autonomy, choice, and integration” in violation of the integration mandate of the Americans with Disabilities Act (“ADA”). (Id. ¶ 3.) Plaintiffs allege that Defendants have failed “to reasonably modify its residential service system” in a manner that would permit Plaintiffs to live in the most integrated setting. (Id. ¶ 12.) According to Plaintiffs, “Defendants currently approve some limited individualized alternatives for a small number of Disability Waiver recipients.” (Id. ¶ 67.) However, Plaintiffs assert, “they have failed to recognize Plaintiffs' individual choice and circumstances and have thus refused to ensure the residential service system provides services in the most integrated setting.” (Id.) In particular, Plaintiffs assert that “Defendants provide impermissible discretion to each lead agency” instead of “requir[ing] statewide access to individualized housing services.” (Id. ¶ 27.) Plaintiffs also assert that Defendants “have failed to directly inform persons in CRS facilities about person-centered planning services and other individualized housing services that would allow them to move to a more integrated setting.” (Id. ¶ 57.) According to Plaintiffs, they “are capable of and want to live in the most integrated setting appropriate to their needs and Defendant Piper can reasonably accommodate their requests.” (Id. ¶ 121.)

         In 2009, Plaintiffs allege, the number of CRS facility beds available statewide was capped by a legislative moratorium on the development of any new CRS facilities. (Id. ¶ 66.) Thus, Plaintiffs contend that Defendants have been aware since as early as 2009 “that individuals receiving Disability Waiver services need access to individualized housing as an alternative to CRS facilities.” (Id.) Plaintiffs assert that Disability Waiver recipients receive information about available CRS facilities and case managers may take steps to locate CRS facility openings if none are available. (Id. ¶¶ 71-73.) However, Plaintiffs allege, “[c]ase managers rarely discuss integrated alternatives to CRS facilities.” (Id. ¶ 74.) Further, Defendants purportedly fail to inform Disability Waiver recipients “about more integrated alternatives to CRS facilities or information about how to access individualized housing services” or require case managers to provide this information. (Id. ¶¶ 71, 74.) Plaintiffs also contend that “Defendants approve the funding of Disability Waiver services in CRS facilities while failing to ensure that such a setting is the most integrated setting appropriate for the individual.” (Id. ¶ 70.)

         Plaintiffs allege that they are entitled to use Disability Waiver services to hire a person-centered planner “in order to develop a comprehensive individualized transition plan to move to more integrated housing.” (Id. ¶ 10; see also ¶ 106.) According to Plaintiffs, Commissioner Johnson Piper “has failed to establish administrative procedures that ensure individuals who are qualified for and requesting services to help transition to a more integrated setting will actually receive those services.” (Id. ¶ 107.) In particular, Plaintiffs assert, Commissioner Johnson Piper has not required counties “to obtain, respond to, and act upon individual requests to use Disability Waiver services in more integrated settings.” (Id.) Plaintiffs allege that Defendants “have denied [them] the opportunity to find trained person-centered planners, to receive services from a person-centered planner in a timely fashion, or to receive any such services in order to develop and implement comprehensive individualized transition plans.” (Id. ¶ 11.) Plaintiffs assert that “Defendants fail to ensure individuals have notice of, information regarding, or access to” services available under the Disability Waivers to facilitate a transition to a more integrated setting. (Id. ¶¶ 84-85.) Plaintiffs also allege that Commissioner Johnson Piper has not provided or required lead agencies to provide “notice of adverse action and opportunity to challenge the failure to provide . . . individualized housing services.” (Id. ¶ 112.) According to Plaintiffs, “[b]ecause these services are never offered or provided, Plaintiffs have no means of appealing or otherwise challenging DHS's actions.” (Id. ¶ 85.)

         Plaintiffs describe measures undertaken by Defendants in the areas of person-centered planning and integrated residential settings under Minnesota's Olmstead Plan and Defendants' Person-Centered, Informed Choice and Transition Protocols (“Protocols”). (See Id. ¶¶ 53-62.) However, Plaintiffs assert that “[n]othing in the Protocols, the Olmstead Plan, or the [Olmstead] Work Plans indicates how DHS will reduce its overreliance on CRS facilities by providing appropriate services to people entitled to more integrated alternatives than CRS facilities.” (Id. ¶ 61; see also Id. ¶ 53.) In particular, Plaintiffs contend that the Protocols “only provide generalized suggestions, rather than enforceable requirements, ” so they are insufficient to ensure Plaintiffs have access to the individualized housing services they seek. (Id. ¶¶ 58-59; see also Id. ¶ 88.) Plaintiffs also state that prior versions of the Olmstead Plan identified “specific individualized housing services” referred to as Individualized Housing Options, but assert that the current Olmstead Plan contains no such information. (Id. ¶ 60.)

         Plaintiffs further allege that “Defendants have promised . . . to move 5, 547 people into more integrated settings” in the Olmstead Plan, but fail to specify “how or when this will happen, where these persons will come from (including whether or not they will come from CRS settings), or how and if they will be informed of the purported options.” (Id. ¶ 62.) In short, Plaintiffs assert that “Defendants lack a working plan with accurate data, details, and measurable goals to . . . fix its residential service system that over-relies on CRS facilities to the detriment of integrated alternatives such as individualized housing services . . . and . . . [e]nsure [Plaintiffs] are receiving services in the most integrated settings.” (Id. ¶ 63.)

         Plaintiffs allege that Defendants' lack of management, planning, and oversight relating to individualized housing services has denied Plaintiffs access to such services and has resulted in “a severe shortage of individualized housing providers in the state.” (Id. ¶¶ 89-90.) According to Plaintiffs, “Defendants have failed to implement individualized housing services as alternatives to CRS, or to ensure that its current service planning system requires even the consideration of alternatives to CRS.” (Id. ¶ 91.) Relatedly, Plaintiffs assert, Defendants have not “ensure[d] there is a sufficient capacity or planning for individualized housing services to allow persons with disabilities to find individualized housing and support to live in a setting more integrated than CRS facilities.” (Id.)

         Plaintiffs assert the following claims against Commissioner Johnson Piper: (1) failure to furnish Medicaid services with reasonable promptness under 42 U.S.C. § 1396a(a)(8), enforced under 42 U.S.C. § 1983 (Count I); (2) violation of Plaintiffs' Due Process rights under the Fourteenth Amendment and the Medicaid Act's advance notice and fair hearing requirements, enforced under 42 U.S.C. § 1983 (Count II); and (3) violation of Title II of the ADA (Count III). (Id. ¶¶ 102-25.) Plaintiffs assert the following claim against all Defendants: violation of § 504 of the Rehabilitation Act (“RA”) (Count IV). (Id. ¶¶ 126-32.)

         Plaintiffs assert their claims on behalf of themselves and a putative Class of similarly situated individuals. (See Id. ¶¶ 92-101.) Plaintiffs assert that they and the Class “have a common remedy: modifications to Defendants' residential service system to provide individuals with choices and prevent needless segregation of individuals in segregated residential settings.” (Id. ¶ 101.) Plaintiffs seek “an informed choice and realistic opportunity to receive residential services in the most integrated setting.” (Id. ¶ 4.) Plaintiffs seek declaratory and injunctive relief to remedy Defendants' alleged violations of the law, attorney fees and costs, and other relief deemed necessary to protect the rights of Plaintiffs and the Class. (See Id. at Prayer for Relief ¶¶ 2-6.)

         Specifically, Plaintiffs seek a declaratory judgment that: (1) Commissioner Johnson Piper is violating the Medicaid Act by not providing services with reasonable promptness and violating Plaintiffs' Constitutional and Medicaid due process rights; and (2) Commissioner Johnson Piper is violating the ADA and Defendants are violating the RA by segregating Plaintiffs “while failing to provide them with individualized housing services for which they are eligible.” (Id. at Prayer for Relief ¶¶ 2-3.)

         Plaintiffs seek injunctive relief requiring Defendants to: (1) “[p]romptly ensure every Disability Waiver recipient living in a CRS facility receives notice about eligibility for and access to individualized housing services, including person-centered planning;” (2) “[s]pecifically provide access and take prompt steps to make individualized housing services, including person-centered planning, available to Plaintiffs in a reasonable amount of time . . .”; and (3) “[t]ake such other steps as necessary to enable Plaintiffs to receive residential services in the most integrated setting appropriate to their needs . . . .” (Id. at Prayer for Relief ¶ 4.) Under items (2) and (3), above, Plaintiffs identify in detail the proposed relief they seek to modify the state's residential service system. (Id. at Prayer for Relief ¶¶ 4(b)-4(c).) Defendants move to dismiss Plaintiffs' claims under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (See Doc. No. 10.)

         DISCUSSION

         I. Legal Standard

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) challenges the Court's subject matter jurisdiction. To survive a motion to dismiss for lack of subject matter jurisdiction, the party asserting jurisdiction has the burden of proving jurisdiction. V S Ltd. P'ship v. Dep't of Hous. & Urban Dev., 235 F.3d 1109, 1112 (8th Cir. 2000) (citation omitted). “Subject-matter jurisdiction is a threshold requirement which must be assured in every federal case.” Kronholm v. F.D.I.C., 915 F.2d 1171, 1174 (8th Cir. 1990).

         A motion to dismiss for lack of subject matter jurisdiction may challenge a plaintiff's complaint either on its face or on the factual truthfulness of its averments. Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990) (citations omitted). When a defendant brings a facial challenge-a challenge that, even if truthful, the facts alleged in a claim are insufficient to establish jurisdiction-a court reviews the pleadings alone, and the non-moving party receives the same protections as it would defending against a motion brought pursuant to Rule 12(b)(6). Id. (citation omitted). In a factual challenge to jurisdiction, the court may consider matters outside the pleadings, and the non-moving party does not benefit from the safeguards of Rule 12(b)(6). Id. at 728-30 n.4 (citations omitted) (holding that on a Rule 12(b)(1) motion challenging subject-matter jurisdiction, the court “has authority to consider matters outside the pleadings”).

         In deciding a motion to dismiss pursuant to Rule 12(b)(6), a court assumes all facts in the complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court may consider the complaint, matters of public record, orders, materials embraced by the complaint, and exhibits attached to the complaint in deciding a motion to dismiss under Rule 12(b)(6). Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).

         To survive a motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain “detailed factual allegations, ” it must contain facts with enough specificity “to raise a right to relief above the speculative level.” Id. at 555. As the United States Supreme Court reiterated, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.

         II. Justiciability

         Defendants argue that Plaintiffs' claims are non-justiciable for two reasons. First, Defendants assert that Plaintiffs lack standing to bring their claims. Second, with respect to Plaintiffs' claim under the Medicaid Act's reasonable promptness requirement, Defendants argue that this claim is not ripe for review.

         A. Standing

         Defendants argue that Plaintiffs lack standing because they do not have a legally-protected interest in the provision of dedicated, trained, person-centered planners and therefore they fail to allege an injury in fact. Defendants also note that the Medicaid Act does not prohibit the provision of services in a congregate setting. Because the Secretary of the Department of Health and Human Services (“HHS”) has not determined that Plaintiffs' residences are not home and community-based settings under applicable federal regulations, Defendants argue that Plaintiffs cannot establish an imminent injury. In addition, Defendants argue that because one of the plaintiffs did receive person-centered-planning, she has no actual, concrete injury. Finally, Defendants argue that Plaintiffs cannot demonstrate redressability because it is wholly speculative that the services they seek will remedy the harm they allege.

         Plaintiffs, on the other hand, argue that they have alleged a concrete injury- segregation-which is caused by Defendants and which can be redressed by the requested relief. According to Plaintiffs, the relief they seek includes: (1) reasonably prompt payment authorization and provision of services to develop individualized plans to move out of CRS facilities; and (2) reasonable modifications to the state's residential service system so that they will have an opportunity to implement these plans. Plaintiffs contend that Defendants' arguments regarding standing ignore Plaintiffs' fundamental injury of segregation.

         “[S]tanding is a jurisdictional prerequisite that must be resolved before reaching the merits of a suit.” City of Clarkson Valley v. Mineta, 495 F.3d 567, 569 (8th Cir. 2007). “The party invoking federal jurisdiction bears the burden of establishing” standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). The burden corresponds with the degree of evidence required at the relevant stage of litigation. Id. “Where . . . a case is at the pleading stage, the plaintiff must ‘clearly . . . allege facts demonstrating' each element” of standing. Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (quoting Warth v. Seldin, 422 U.S. 490, 518 (1975)). However, at this stage, “general factual allegations of injury . . . may suffice.” Lujan, 504 U.S. at 561; see also Iowa League of Cities v. E.P.A., 711 F.3d 844, 869 (8th Cir. 2013). If a plaintiff lacks standing, a district court has no subject matter jurisdiction over the matter and must dismiss the case. Young Am. Corp. v. Affiliated Comp. Servs., Inc., 424 F.3d 840, 843 (8th Cir. 2005).

         Article III of the Constitution limits the power of the federal courts to deciding only actual “cases” and “controversies.” U.S. Const., art. III, § 2, cl. 1. To establish constitutional Article III standing, a plaintiff must demonstrate: (1) an injury-in-fact; (2) a causal connection between that injury and the challenged conduct; and (3) the likelihood that a favorable decision by the court will redress the alleged injury. Lujan, 504 U.S. at 560. These constitutional requirements of standing limit federal courts to deciding only cases where the plaintiffs can show a “personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief.” Allen v. Wright, 468 U.S. 737, 751 (1984).

         The injury-in-fact requirement requires the plaintiff to demonstrate that he has experienced “an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560 (internal quotation marks and citations omitted). With respect to statutory violations, “Congress may ‘elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.'” Spokeo, Inc., 136 S.Ct. at 1549 (quoting Lujan, 504 U.S. at 578); see also Lujan, 504 U.S. at 578 (noting as an example “injury to an individual's personal interest in living in a racially integrated community”).

         Where the plaintiff alleges a statutory violation, a concrete injury must still be established. Spokeo, Inc., 136 S.Ct. at 1549. However, the Supreme Court has explained that, “[a]lthough tangible injuries are perhaps easier to recognize, . . . intangible injuries can nevertheless be concrete.” Id. A procedural violation may also meet the injury-in-fact requirement “‘so long as the procedures in question are designed to protect some threatened concrete interest of [the petitioner] that is the ultimate basis of his standing.'” Iowa League of Cities, 711 F.3d at 870-71 (quoting Lujan, 504 U.S. at 573 n.8).

         A plaintiff seeking injunctive relief must show that he “faces a threat of ongoing or future harm.” Park v. Forest Serv. of the United States, 205 F.3d 1034, 1037 (8th Cir. 2000). “Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects.” O'Shea v. Littleton, 414 U.S. 488, 495-96 (1974). Likewise, a plaintiff's speculation that a future injury may occur is not sufficient to warrant injunctive relief. Id. at 497. A plaintiff must show that the threat of injury is “real and immediate.” Id. at 496.

         The Supreme Court has explained that “[w]hen the suit is one challenging the legality of government action or inaction” and “the plaintiff is himself an object of the action (or forgone action) at issue . . ., there is ordinarily little question that the action or inaction has caused him injury, and that a judgment preventing or requiring the action will redress it.” Lujan, 504 U.S. 561-62; see also Iowa League of Cities, 711 F.3d at 871. However, establishing redressability requires the plaintiff to show that it is “more than merely speculative that the relief requested would have any effect to redress the harm to the plaintiff.” Young Am. Corp., 424 F.3d at 845 (quoting Hall v. LHACO, Inc., 140 F.3d 1190, 1196 (8th Cir. 1998)).

         The primary injury Plaintiffs allege they are facing is segregation. While perhaps not tangible, this injury is indeed concrete and particular to Plaintiffs. Through the ADA and the RA, Congress has elevated the segregation of individuals with disabilities “to the status of [a] legally cognizable injur[y].” See Spokeo, Inc., 136 S.Ct. at 1549 (quoting Lujan, 504 U.S. at 578); see also Guggenberger, 198 F.Supp.3d at 1023-24 (providing an overview of relevant ADA and RA provisions). In the Amended Complaint, Plaintiffs allege particular and personal examples of segregation. For example, Murphy asserts he “spends most of his time alone, ” despite wishing “to interact with other people.” (Am. Compl. ¶ 29(g).) Bottelson asserts that she “does not get out into the community nearly as much as she would if she were able to create her own schedule.” (Id. ¶ 30(f).) Swanson alleges that she has been told “she is not ‘independent enough' for individualized housing, ” and asserts a need for services so that she can “live in the most integrated setting appropriate to her needs.” (Id. ¶¶ 31(b), 31(e).) Plaintiffs also allege that the injury of segregation can itself result in further harm for many individuals residing in CRS facilities, including diminished “social and independent living skills, ” decreased likelihood of “living and working in the community” in the future, and “lower self-esteem and lowered expectations of themselves.” (Id. 78-79.) These allegations sufficiently establish an injury-in-fact to support Plaintiffs' claims under the ADA and the RA.

         Plaintiffs' concrete injury of segregation also supports standing to pursue their Medicaid Act and Due Process claims. As further discussed below, the Medicaid Act's reasonable promptness and fair hearing requirements create privately enforceable rights that can be asserted in a § 1983 claim. Plaintiffs' Amended Complaint illustrates how the alleged statutory violations of these provisions and the alleged violations of Plaintiffs' Fourteenth Amendment Due Process rights correlate with the concrete injury they are facing through their ongoing segregation. In particular, Plaintiffs allege that they each receive a Disability Waiver to fund certain services. (Id. ¶ 2.) Plaintiffs allege that the services available under the Disability Waivers are “designed to help people with disabilities live in his or her own home and interact with the larger nondisabled community.” (Id. ¶¶ 33-34.) Plaintiffs also allege that specific Disability Waiver services, described as “individualized housing services, ” exist that would permit them “to design and implement a customized setting for [them] to live, work, and enjoy leisure time in the most integrated setting.” (Id. ΒΆΒΆ 7, 82.) According to ...


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