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Murphy v. Piper

United States District Court, D. Minnesota

May 4, 2018

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

          Joseph W. Anthony, Esq., Peter McElligott, Esq., and Steven M. Pincus, Esq., Anthony Ostlund Baer & Louwagie PA; Justin H. Perl, Esq., Mid-Minnesota Legal Aid; and Christen Leigh Chapman, Esq., and Steven C. Schmidt, Esq., Mid-Minnesota Legal Aid, Minnesota Disability Law Center, counsel for Plaintiffs.

          Janine Wetzel Kimble, Scott H. Ikeda, and Aaron Winter, Assistant Attorneys General, Minnesota Attorney General's Office, counsel for Defendant.

          Pari I. McGarraugh, Esq., and Samuel D. Orbovich, Esq., Fredrikson & Byron, P.A., counsel for Movant ARRM.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court upon ARRM's motion to intervene pursuant to Federal Rule of Civil Procedure 24(a) or 24(b) or, in the alternative, for leave to serve as amicus curiae. (Doc. No. 138.) Defendant opposes intervention. (Doc. No. 156.) Plaintiffs support intervention. (Doc. No. 157.) For the reasons set forth below, the Court grants ARRM leave to serve as amicus curiae and denies intervention.

         BACKGROUND

         The background of this case is fully detailed in the Court's May 18, 2017 Memorandum Opinion and Order, (Doc. No. 54), and the Court only briefly summarizes the pertinent facts here. For a more complete summary of Plaintiffs' Amended Class Action Complaint and the law underlying Plaintiffs' claims, the Court directs readers to its prior order and otherwise incorporates the relevant background here. See Murphy ex rel. Murphy v. Minn. Dep't of Human Servs., 260 F.Supp.3d 1084 (D. Minn. 2017).

         I. Plaintiffs' Claims and Requested Relief

         The Plaintiffs in this case are individuals with disabilities who reside in Community Residential Setting (“CRS”) facilities-also known as group homes or corporate adult foster care-and who receive Home and Community Based Disability Waivers (“Disability Waivers”) through the State of Minnesota's Medicaid program. The Defendant, Emily Johnson Piper, Commissioner of the Minnesota Department of Human Services (“DHS”) is responsible for overseeing Minnesota's Disability Waiver services system under a federally-approved Medicaid State Plan. Disability Waivers enable individuals with disabilities to access a variety of services that permit them to reside in the community in lieu of an institutional setting. This case centers on Plaintiffs' desire to access individualized housing services available under the Disability Waivers that would allow them to reside in more integrated residential settings.

         Plaintiffs allege that Defendant operates the Disability Waiver services system in a manner that fails to ensure the reasonably prompt provision of individualized housing services. Plaintiffs also contend that Defendant fails to provide adequate notice about available individualized housing services or the denial of such services. According to Plaintiffs, Defendant's overreliance on CRS facilities, mismanagement of the State's Disability Waivers, and improper delegation of discretion to local lead agencies has resulted in Plaintiffs' segregation from their communities in residential settings that are not the most integrated settings appropriate to their needs. Based on this alleged conduct, Plaintiffs assert claims against Defendant under the Medicaid Act, the Due Process Clause, Title II of the Americans with Disabilities Act (“ADA”), and Section 504 of the Rehabilitation Act (“RA”). (See generally Doc. No. 33 (“Am. Compl.”).)

         Plaintiffs seek declaratory relief as well as preliminary and permanent injunctions obligating 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.)

         Corresponding to items (2) and (3), Plaintiffs detail the relief they seek to modify the state's residential service system. (Id. ¶¶ 4(b)-4(c).) Under item (2), Plaintiffs seek:

Access to person-centered planning services that ensure an individual receives a comprehensive personal transition plan with enforceable timelines, identifiable tasks, persons responsible for such tasks, descriptions of the integrated housing options from which to choose, and any other information necessary to facilitate a transition and subsequent life in the most integrated setting.

(Id. ¶ 4(b)(i).) They also seek “[a]ccess to services that ensure creation of and facilitate implementation of the comprehensive moving plan.” (Id. ¶ 4(b)(ii).) Under item (3), Plaintiffs detail the relief they seek, “including, but not limited to” a list of multiple proposed modifications to the state's residential service system. (See Id. at ¶ 4(c).)

         II. ARRM's Complaint in Intervention

         On November 16, 2017, ARRM filed a Motion to Intervene or, in the Alternative, for Leave to Serve as Amicus Curiae (“Motion to Intervene”). (Doc. No. 138.) ARRM also filed a Complaint in Intervention as an attachment to this motion. (Doc. No. 138-1 (“Compl. Int.”).) ARRM seeks to intervene in this litigation based on its role as “a nonprofit association of more than 200 providers, businesses and interested stakeholders . . . dedicated to leading the advancement of Minnesota's home and community-based service programs that support people living with disabilities in their pursuit of meaningful lives.” (Id. ¶ 1.) ARRM members provide services to Disability Waiver recipients throughout the state, both in CRS facilities and individualized housing settings. (See Id. ¶¶ 2-4.) ARRM alleges that “[a]ny order or settlement in this action will impact both the scope and site of services that ARRM members will be allowed to provide to members of the Plaintiff Class.” (Id. ¶ 8.)

         ARRM alleges that its members have protectable rights in the licenses granted to them by Defendant to provide Disability Waiver services, (see Id. ¶ 12), protectable property and contract rights in the CRS facilities they own and operate as well as leases they have co-signed on behalf of individual Disability Waiver recipients residing in their own homes, (see Id. ¶¶ 18, 54, 147-48, 152), and contract rights resulting from their employment relationships with the support professionals who provide direct services to Disability Waiver recipients, (see Id. ¶¶ 13, 54). According to ARRM, Defendant's administration of the Disability Waiver services system and delegation of uncoordinated discretion to county lead agencies unlawfully infringes these rights. (See Id. ¶¶ 36, 53-54, 152, 162, 180, 184-91, 193-96.) ARRM also contends that its “members have the enforceable right to provide services to the Plaintiff Class in a manner and form that complies with the ADA and Section 504” and alleges that Defendant's conduct has inhibited its members from doing so. (Doc. No. 140 at 15; see also Compl. Int. ¶¶ 197-203.) ARRM seeks to assert three claims against Defendant: (1) Denial of Equal Protection of Laws (Count I); (2) Violation of Due Process of Laws (Count II); (3) Violation of Title II of the ADA and Section 504 of the RA (Count III). (Compl. Int. ¶¶ 85-203.) ARRM's request for declaratory and injunctive relief includes specific measures aimed at remedying Defendant's alleged unlawful conduct with respect to the administration of the state's Disability Waiver services system. (See generally Id. at Prayer for Relief.)

         Based on the Court's decision to certify the Plaintiff Class, ARRM contends that “[t]he statewide impact of this injunctive relief and declaratory judgment action is now assured to impact the license and property rights of ARRM members.” (Doc. No. 140 at 5.) Specifically, ARRM points to its allegations regarding Defendant's claimed authorization under Minn. Stat. § 245A.03 to reduce or eliminate the number of licensed beds in a CRS facility after an individual Disability Waiver recipient moves out of the home. (See Id. at 6 (citing Compl. Int. ¶¶ 184, 190).) ARRM also suggests “that the same arbitrary and capricious conduct by county lead agencies” alleged by Plaintiffs has resulted in arbitrary and unlawful distinctions in the manner by which counties approve and bill for Disability Waiver services provided by ARRM members. (See Id. (citing Compl. Int. ¶¶ 85-177).) In addition, ARRM describes “a serious and ongoing workforce crisis” that amplifies their alleged harms. (See Id. at 6-7 (citing Compl. Int. ¶¶ 80-84, 121, 136, 139).) ARRM seeks to intervene in this litigation “to eliminate specific perverse incentives and inconsistent practices of county lead agencies, and instill greater uniformity by enjoining excessive and unnecessary county interference in what is supposed to be a statewide system.” (Id. at 7.) ARRM suggests that the Court can order relief in this action to remedy both the service denials pled by the Plaintiff class and the infringement of its members' protectable rights.

         III. Relevant Procedural History

         Plaintiffs initiated this lawsuit on August 3, 2016. (Doc. No. 1.) The original Defendants, including Commissioner Johnson Piper and DHS, moved to dismiss Plaintiffs' complaint, and the parties submitted briefing on this motion. (Doc. Nos. 10, 12, 22, 24.) After the hearing on Defendants' motion, the parties stipulated to the filing of an amended complaint and agreed that Defendants' original Motion to Dismiss would serve as the response to Plaintiffs' amended pleading. (See Doc. Nos. 29, 31.) On February 23, 2017, Plaintiffs filed their First Amended Class Action Complaint and Request for Injunctive Declaratory Relief. (Doc. No. 33.) On May 18, 2017, the Court granted Defendants' Motion to Dismiss in part, dismissing DHS as a party and otherwise denying the motion. (See Doc. No. 54.)

         On September 29, 2017, the Court granted Plaintiffs' Motion for Class Certification, certifying the following class: “All individuals age 18 and older who are eligible for and have received a Disability Waiver, live in a licensed Community Residential Setting, and have not been given the choice and opportunity to reside in the most integrated residential setting appropriate to their needs.” (Doc. No. 99 at 35.)

         As noted above, ARRM filed the pending Motion to Intervene on November 16, 2017. (Doc. No. 138.) Defendant opposes intervention and does not take a position on ARRM's alternative request for leave to serve as amicus curiae. (See Doc. No. 156.) Plaintiffs support intervention, emphasizing the similarity between ARRM and Plaintiffs' claims. (See Doc. No. 157.) While acknowledging that their interests are not entirely the same, Plaintiffs explain that they “support intervention in this case because ARRM's interests will not only be directly affected by the disposition of this case, but Plaintiffs will also likely need ARRM's members to help implement any ultimate rulings of the Court or agreements reached by the parties.” (Id. at 2.) Plaintiffs contend that “[b]oth Plaintiffs and ARRM seek changes that would require DHS to better centralize its management of the Waiver system and properly oversee and direct lead agencies.” (Id. at 5.) In essence, Plaintiffs suggest that permitting intervention brings “the third ...


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