United States District Court, D. Minnesota
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 Pedrelli, by her guardian Nino Pedrelli, on behalf of other waiver recipients similarly situated, Plaintiffs,
Emily Johnson Piper, in her Official Capacity as Commissioner of the Minnesota Department of Human Services, Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO
Wilhelmina M. Wright United States District Judge
matter is before the Court on Defendant's motion to
dismiss Plaintiffs' amended complaint for lack of
subject-matter jurisdiction and failure to state a claim on
which relief can be granted. (Dkt. 38.) For the reasons
addressed below, Defendant's motion is granted and the
amended complaint is dismissed without prejudice.
case involves 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.
Minnesota, the Department of Human Services (DHS) is the
state agency responsible for licensing, certifying, and
enrolling providers of waiver services. 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,
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.
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 of DHS,
Defendant Emily Johnson Piper (Commissioner), announced that
DHS intends to eliminate the 7% waiver service payment rate
increase. The elimination of this rate increase will occur in
multiple stages. The first funding reduction occurred on July
1, 2018, and the final funding reduction is scheduled to
occur on December 31, 2019.
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 Pedrelli, 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.
sought a temporary restraining order and preliminary
injunction, which this Court denied in a June 28, 2018 Order.
Plaintiffs filed an amended complaint on July 13, 2018. Count
I alleges that the Commissioner's 7% funding reduction
violates the Due Process Clause of the Fourteenth Amendment
to the United States Constitution. Count II alleges that the
Commissioner's 7% funding reduction violates the Equal
Protection Clause of the Fourteenth Amendment. Count III
alleges that the Commissioner's 7% funding reduction
violates Title II of the Americans with Disabilities Act
(ADA), Title 42, United States Code, Sections 12101 et
seq. And Count IV alleges that the Commissioner's 7%
funding reduction violates the Rehabilitation Act, Title 29,
United States Code, Sections 793 et seq. The
Commissioner moves to dismiss, arguing that this Court lacks
subject-matter jurisdiction over Plaintiffs' claims and
that the amended complaint fails to state a claim on which
relief can be granted.
Commissioner moves to dismiss Plaintiffs' amended
complaint in part pursuant to Federal Rule of Civil Procedure
12(b)(1), arguing that this Court lacks subject-matter
jurisdiction over the Individual Plaintiffs' claims
because the Individual Plaintiffs lack standing. The
commissioner also moves to dismiss Plaintiffs' amended
complaint pursuant to Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim.
Rule 12(b)(1), a defendant may challenge a plaintiff's
complaint for lack of subject-matter jurisdiction either on
its face or on the factual truthfulness of its averments.
See Fed. R. Civ. P. 12(b)(1); Titus v.
Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). In a facial
challenge, as presented here, the nonmoving party
“receives the same protections as it would defending
against a motion brought under Rule 12(b)(6).”
Osborn v. United States, 918 F.2d 724, 729 n.6 (8th
Rule 12(b)(6), a complaint must be dismissed if it fails to
state a claim on which relief can be granted. Fed.R.Civ.P.
12(b)(6). To survive a Rule 12(b)(6) motion, the complaint
must allege sufficient facts that, when accepted as true,
state a facially plausible claim to relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). When determining
whether the complaint states such a claim, a district court
accepts as true all factual allegations in the complaint and
draws all reasonable inferences in the plaintiff's favor.
Blankenship v. USA Truck, Inc., 601 F.3d 852, 853
(8th Cir. 2010). The factual allegations need not be
detailed, but they must be sufficient to “raise a right
to relief above the speculative level” and “state
a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570
(2007). A plaintiff, however, must offer more than
“labels and conclusions” or a “formulaic
recitation of the elements of a cause of action.”
Id. at 555. Legal conclusions that are couched as
factual allegations may be disregarded by the district court.
See Iqbal, 556 U.S. at 678-79.
questions of standing implicate the Court's
subject-matter jurisdiction, the Court addresses the
Commissioner's standing arguments first. 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.
Commissioner argues that the Individual Plaintiffs lack
standing as to all of the claims asserted in the amended
complaint and that the Organizational Plaintiffs lack
standing as to the ADA and Rehabilitation Act claims asserted
in the amended complaint. The Court addresses each standing
argument in turn.
the Individual Plaintiffs have not alleged an imminent injury
in fact, the Commissioner argues, the Individual Plaintiffs
lack standing to seek injunctive relief. 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 certainly
impending.” Id. (internal quotation marks
omitted). Allegations of a possible future injury are
insufficient to confer standing. Id.
Clapper, the Supreme Court of the United States held
that the plaintiffs lacked standing because a
“speculative chain of possibilities” could not
establish an injury in fact based on potential future
injuries. Id. at 414. The plaintiffs sought a
declaration that Section 702 of the Foreign Intelligence
Surveillance Act of 1978 is unconstitutional and an
injunction against surveillance authorized by that section.
Id. at 401. They attempted to establish an injury in
fact based on an objectively reasonable likelihood that their
communications would be acquired pursuant to the challenged
law at some point in the future. Id. Rejecting that
argument, the Court observed that the plaintiffs'
possible future injury depended on a “highly
speculative fear” that a lengthy chain of events would
(1) the Government will decide to target the communications
of non-U.S. persons with whom [plaintiffs] communicate; (2)
in doing so, the Government will choose to invoke its
authority under § 1881a rather than utilizing another
method of surveillance; (3) the Article III judges who serve
on the Foreign Intelligence Surveillance Court will conclude
that the Government's proposed surveillance procedures
satisfy § 1881a's many safeguards and are consistent
with the Fourth Amendment; (4) the Government will succeed in
intercepting the ...