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ARRM v. Piper

United States District Court, D. Minnesota

June 28, 2018

ARRM, a Minnesota non-profit association incorporated under the laws of Minnesota, on behalf of itself and its members; Minnesota Organization for Habilitation and Rehabilitation MOHR, a Minnesota nonprofit association incorporated under the laws of Minnesota, on behalf of itself and its members; and Karla Dee Marder, by her guardian Judy Marder; Robert Clapper, by his guardian James Clapper; Kathryn Smith, by her guardian Gerald Smith; and Cara Pedrille, by her guardian Nino Pedrille, on behalf of other waiver recipients similarly situated, Plaintiffs,
v.
Emily Johnson Piper, in her Official Capacity as Commissioner of the Minnesota Department of Human Services, Defendant.

          ORDER DENYING PLAINTIFFS' MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

          WILHELMINA M. WRIGHT UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Plaintiffs' motion for a temporary restraining order and preliminary injunction. (Dkt. 6.) Plaintiffs seek to enjoin Defendant Emily Johnson Piper, in her official capacity as Commissioner of the Minnesota Department of Human Services (DHS), from taking any action that reverses, circumvents, ignores, violates, avoids, or bypasses certain payment rate increases provided for under Minnesota law. For the reasons addressed below, the Court denies the motion.

         BACKGROUND

         This case involves anticipated funding reductions to Minnesota's “waiver services” payment rates. Waiver services are services for which the federal government agrees, in limited circumstances, to waive certain statutory and regulatory requirements that ordinarily would govern Medicaid assistance funding. See 42 C.F.R. §§ 430.25, 441.300. The state agency that administers a state's Medicaid program may apply to the Centers for Medicare and Medicaid Services (CMS) for authorization to establish home and community-based waiver services, which are designed to enhance the ability of persons with disabilities to live in the community rather than in an institutional setting. Waiver services are administered by states but jointly funded by state and federal governments.

         In Minnesota, DHS is the state agency responsible for licensing, certifying, and enrolling providers of waiver services. Acting through the Commissioner, DHS also computes and approves waiver service payment rates according to Minnesota law. The Minnesota Disability Waiver Rate System (DWRS) provides a mathematical framework for establishing provider payment rates for approved waiver services. See Minn. Stat. § 256B.4914. Enacted by the Minnesota Legislature, DWRS went into effect on January 1, 2014. Pursuant to DWRS, waiver service payment rates adjust automatically every five years to account for inflation. The first automatic inflationary adjustment occurred on July 1, 2017.

         In addition to the DWRS automatic inflationary adjustments, the Minnesota Legislature separately enacted three session laws that increased waiver service payment rates, with effective dates in 2014 and 2015. See 2014 Minn. Laws, Ch. 312, Art. 27, § 75; 2013 Minn. Laws, Ch. 108, Art. 7, §§ 34, 60. These session laws, which cumulatively increased waiver service payment rates by 7%, affected all payment rates for Minnesota waiver service recipients without regard for the type of waiver services received or whether the payment rates had been set by DWRS.

         During the 2018 legislative session, the Minnesota Legislature passed an omnibus bill that, as relevant here, would have repealed the cumulative 7% waiver service payment rate increase and replaced it with different appropriations. However, Minnesota Governor Mark Dayton vetoed that omnibus bill in May 2018. Consequently, the three session laws that provide for the 7% waiver service payment rate increases remain in effect. Shortly thereafter, the Commissioner announced that DHS nonetheless intends to eliminate the 7% waiver service payment rate increase. The elimination of this rate increase will occur in multiple stages, with the first funding reduction scheduled to occur on July 1, 2018, and the final funding reduction scheduled to occur December 31, 2019.

         Plaintiffs ARRM and Minnesota Organization for Habilitation and Rehabilitation (MOHR) (collectively, “Organizational Plaintiffs”) are nonprofit associations incorporated under Minnesota law. ARRM advances Minnesota's home and community-based service programs that support people living with disabilities, and its members include more than 200 service providers, businesses, and stakeholders, including nonprofit and for-profit entities that are certified to provide such services. MOHR is an association with more than 100 members that provide services to persons with disabilities. Plaintiffs Karla Dee Marder, Robert Clapper, Kathryn Smith, and Cara Pedrille, through their respective guardians (collectively, “Individual Plaintiffs”), receive waiver services subject to DWRS. Plaintiffs commenced this action to enjoin the Commissioner from implementing the anticipated 7% funding reduction to Minnesota's waiver service payment rates.

         Plaintiffs now seek a temporary restraining order and preliminary injunction. The Commissioner opposes Plaintiffs' motion, arguing that the Individual Plaintiffs lack standing and that Plaintiffs have not established that they are entitled to preliminary injunctive relief.

         ANALYSIS

         I. Standing

         The Commissioner argues that the Individual Plaintiffs lack standing to seek injunctive relief because they have not alleged an imminent injury in fact. The Court addresses this issue first because questions of standing implicate the Court's subject-matter jurisdiction. Faibisch v. Univ. of Minn., 304 F.3d 797, 801 (8th Cir. 2002).

         The jurisdiction of federal courts extends only to actual cases or controversies. U.S. Const. art. III, § 2, cl. 1; accord Neighborhood Transp. Network, Inc. v. Pena, 42 F.3d 1169, 1172 (8th Cir. 1994). To satisfy the case-or-controversy requirement of Article III of the United States Constitution, a plaintiff must establish standing as an “indispensable part of the plaintiff's case.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992); accord Hargis v. Access Capital Funding, LLC, 674 F.3d 783, 790 (8th Cir. 2012). To meet this standing requirement, the plaintiff must (1) have suffered an injury in fact, (2) establish a causal relationship between the contested conduct and the alleged injury, and (3) show that a favorable decision would redress the injury. Lujan, 504 U.S. at 560-61; accord Hargis, 674 F.3d at 790. Only the injury-in-fact requirement is at issue here.

         To allege an “injury in fact” that confers standing to seek injunctive relief, a plaintiff must face a threat of ongoing or future harm. Park v. Forest Serv. of the U.S., 205 F.3d 1034, 1037 (8th Cir. 2000). An injury in fact “must be concrete, particularized, and actual or imminent.” Clapper v. Amnesty Int'l USA, 568 U.S. 398, 409 (2013) (internal quotation marks omitted). The purpose of the imminence requirement “is to ensure that the alleged injury is not too speculative for Article III purposes-that the injury is ce ...


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