United States District Court, D. Minnesota
Tenner Murphy, by his guardian Kay Murphy; Marrie Bottelson; Dionne Swanson; and on behalf of others similarly situated, Plaintiffs,
v.
Jodi Harpstead, 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; Laura
Farley, Esq., and Steven Andrew Smith, Esq., Nicholas Kaster
PLLP; Barnett I. Rosenfeld, Esq., and Justin H. Perl, Esq.,
Mid-Minnesota Legal Aid; Eren Ernest Sutherland, Esq., Justin
M. Page, Esq., and Steven C. Schmidt, Esq., Mid-Minnesota
Legal Aid, Minnesota Disability Law Center, counsel for
Plaintiffs.
Aaron
Winter, Brandon L. Boese, Janine Wetzel Kimble, and Scott H.
Ikeda, Assistant Attorneys General, Minnesota Attorney
General’s Office, counsel for Defendant.
Pari
McGarraugh, Esq., and Samuel D. Orbovich, Esq., Fredrikson
& Byron, counsel for amicus ARRM.
MEMORANDUM OPINION AND ORDER
Donovan W. Frank, United States District Judge.
INTRODUCTION
This
matter is before the Court on Plaintiffs’ motion for
partial summary judgment (Doc. No. 495), and
Defendant’s motion for summary judgment (Doc. No. 480).
For the reasons set forth below, the Court grants in part and
denies in part Plaintiffs’ motion, and denies
Defendant’s motion.
BACKGROUND
I.
Factual Background
The
Court previously detailed the background of this case in its
May 18, 2017 Memorandum Opinion and Order (Doc. No. 54
(“May 2017 Order”)) and the Court only briefly
summarizes the facts here.[1] In short, Plaintiffs are
individuals with disabilities and Medicaid recipients who
receive Home and Community Based Disability Waivers
(“Disability Waivers”) from the State of
Minnesota under the direction of Defendant Jodi Harpstead
(“Defendant”), Commissioner of the Minnesota
Department of Human Services
(“DHS”).[2] Plaintiffs reside, or did
reside[3], in Community Residential Setting
(“CRS”) facilities, known as corporate adult
foster care (“CFC”)[4]-and wish to access
various individualized housing services available under the
Disability Waivers to pursue more integrated housing options
(“IHO”).[5] Plaintiffs assert that CFC facilities
isolate and segregate them from their communities in
violation of federal law.
Plaintiffs
assert the following claims against Commissioner Jodi
Harpstead in her official capacity: (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); (3)
violation of Title II of the ADA (Count III); and (4)
violation of § 504 of the RA (Count IV). (Doc. No. 33
(“Am. Compl.”) ¶¶ 1-32.)
Plaintiffs
assert their claims on behalf of themselves and a Class of
similarly situated individuals. (See Id .
¶¶ 92-101.) Plaintiffs assert that they and the
Class “have a common remedy: modifications to
Defendant’s residential service system to provide
individuals with choices and prevent needless segregation of
individuals in segregated residential settings.”
(Id. ¶ 101.) Plaintiffs seek “access to
Waiver services that will allow them to plan, explore
options, and ultimately move out of their CFC facilities and
into the most integrated setting appropriate to their
needs.” (Doc. No. 499 (“Pl. Memo.”) at 3-4
(citing Pl. Resp. to Interrog. at 266-269).) 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 Am. Compl. at Prayer
for Relief ¶¶ 2-6.)
Specifically,
Plaintiffs seek declaratory judgment that: (1) Defendant is
violating the Medicaid Act by not providing services with
reasonable promptness and violating Plaintiffs’
Constitutional and Medicaid due process rights; and (2)
Defendant is violating the ADA and 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 Defendant 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).)
Defendant
contends that of the 45, 438 Disability Waiver recipients in
2018, only 31% lived in CFC facilities, and only 1.3% of
those living in CFC facilities are putative class
members.[6] (Def. Memo. at 9, 48.) Accordingly,
she argues that she is not over-relying on CFC facilities,
nor do her policies prevent individuals from moving to their
preferred setting. She further contends that her policies and
practices comply with federal law, and to the extent any
alleged harm has occurred, she may not be held liable in her
official capacity.
II.
Procedural History
Plaintiffs
filed an initial complaint against Defendant and Minnesota
Department of Human Services (“DHS) (collectively,
“Defendants”) on August 3, 2016. (Doc. No. 1.)
Defendants filed a motion to dismiss Plaintiffs’
complaint on September 14, 2016. (Doc. No. 10.) On May 18,
2017, the Court granted Defendants’ motion to dismiss
insofar as it sought dismissal of DHS as a party and denied
the motion in all other respects.[7] (May 2017 Order.)
Plaintiffs
filed an Amended Complaint on February 23, 2017. (Am. Compl.)
On February 27, 2017, Plaintiffs filed a motion for class
certification. (Doc. No. 35.) 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.)
On
November 15, 2018, Plaintiffs moved for partial summary
judgment on Count II of their Amended Complaint, asking the
Court to declare that Defendant’s current notice policy
for Disability Waiver recipients violates federal law.
(See Pl. Memo.) On the same day, Defendant also
moved for summary judgment, asking the Court to grant summary
judgment in her favor on all of Plaintiffs’ claims.
(See Def. Memo.) Also on November 15, 2018,
Defendant filed a motion to decertify the class (Doc. No.
418), and both parties moved to exclude expert testimony
(Doc. Nos. 468, 488). The Court held a hearing on the motions
on January 25, 2019. (Doc. No. 623.) The Court delayed ruling
on the motions pending settlement discussions that ultimately
proved unsuccessful. (Doc. No. 636.)
On July
26, 2019, the Court denied Defendants’ motion to
decertify the class. (Doc. No. 640 (“July 2019
Order”).) On August 6, 2019, Defendants requested
permission for leave to file a motion for reconsideration of
the July 2019 Order. (Doc. No. 642 (“Request”).)
The Court denied Defendant’s Request on August 14,
2019. (Doc. No. 646.)
On
August 7, 2019, the Court granted Plaintiffs’ motion to
exclude the expert testimony of John Patterson, and denied
Defendant’s motion to exclude the expert testimony of
David Michael Mank, Ph.D., and Dennis F. Price. (Doc. No.
644.)
The
Court now considers Plaintiffs’ motion for partial
summary judgment (Doc. No. 495) and Defendant’s motion
for summary judgment (Doc. No. 480).
DISCUSSION
I.
Legal Standard
Summary
judgment is appropriate if the “movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). Courts must view the evidence and all
reasonable inferences in the light most favorable to the
nonmoving party. Weitz Co., LLC v. Lloyd’s of
London, 574 F.3d 885, 892 (8th Cir. 2009). However,
“[s]ummary judgment procedure is properly regarded not
as a disfavored procedural shortcut, but rather as an
integral part of the Federal Rules as a whole, which are
designed ‘to secure the just, speedy, and inexpensive
determination of every action.’” Celotex
Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting
Fed.R.Civ.P. 1).
The
moving party bears the burden of showing that there is no
genuine issue of material fact and that it is entitled to
judgment as a matter of law. Enter. Bank v. Magna Bank of
Mo., 92 F.3d 743, 747 (8th Cir. 1996). The nonmoving
party must demonstrate the existence of specific facts in the
record that create a genuine issue for trial. Krenik v.
Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A
party opposing a properly supported motion for summary
judgment “may not rest upon mere allegation or denials
of his pleading, but must set forth specific facts showing
that there is a genuine issue for trial.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
A.
Plaintiffs’ Motion for Partial Summary
Judgment
Plaintiffs
move for partial summary judgment on Count II of their
Amended Complaint and ask the Court to declare that
Defendant’s current notice policy for Disability Waiver
recipients violates federal law. (Pl. Memo. at 2.)
Specifically, Plaintiffs allege that Defendant’s policy
violates their due process rights under both the Fourteenth
Amendment’s Due Process Clause and the Medicaid
Act’s fair hearing requirements.
Plaintiffs
argue that federal law requires Defendant to provide a
legally sufficient written notice (“Notice of
Action”) to Disability Waiver recipients when Defendant
denies access to Waiver Services or fails to act on a request
for Waiver Services with reasonable promptness.[8] (Id.
at 13-16.) Plaintiffs claim that while Defendant has a formal
written policy that instructs Lead Agencies to send a Notice
of Action Form “each time [the case manager/planer]
takes action in the support plan that denies, terminates, or
reduces the person’s service, ” the policy does
not explain what constitutes an action that denies,
terminates, or reduces the person’s service, nor does
it set forth any instructions that must be sent if a request
for services is not acted upon within a certain timeline or
with reasonable promptness. (Schmidt Aff. 1 ¶ 7, Doc.
No. 503-1, Ex. 6 (“Notice of Action Policy”) at
288.) Plaintiffs contend that because “Defendant has
not provided a clear and objective standard to the Lead
Agencies that she is legally obligated to direct, the denial
process has been handled inconsistently and unlawfully
throughout the State.” (Pl. Memo. at 8.)
Plaintiffs
argue that under Defendant’s current policy, Lead
Agencies are only required to provide a Notice of Action when
they have made a formal, final decision that they will not
authorize specific Disability Waiver services and that no
Notice of Action is required while the Lead Agency
purportedly attempts to assist Disability Waiver recipients
in some way with their request for services, regardless of
how long their attempt lasts. (See Id . at 12.)
Citing Black’s Law Dictionary, Plaintiffs argue that
every time Lead Agencies deprive or withhold individualized
housing services from a Disability Waiver recipient, or fail
to act on a request in a reasonably prompt manner, the
services are effectively “denied” and Notice of
Action is required. (Id. at 15-16.)
Plaintiffs
allege that Defendant’s amorphous policy leaves the
decision of what constitutes a “denial” entirely
within the discretion of individual Lead Agencies, and that
Defendant’s lack of guidance causes Lead Agencies to
believe they are not required to provide Notice of Action as
long as they think that they are working on a Disability
Waiver recipient’s case and believe that progress is
being made. (Id. at 18.)
Plaintiffs
argue that the practical effect of Defendant’s policy
is that Plaintiffs go months and sometimes years without
services or explanatory notice of a denial in violation of
their federal rights.[9] (Id. at 12-14; 19-29.)
Plaintiffs
ask the Court to direct Defendant to issue a new policy that
requires a timely, written Notice of Action to be issued
whenever a Lead Agency denies any individualized housing
services or fails to act on a request for individualized
housing services with reasonable promptness. (Id. at
2.)
Defendant
first contends that Plaintiffs’ claim for violation of
the Medicaid Act must be denied because the Medicaid Act
contains no private right of action.[10] (Doc. No. 550
(“(Def. Opp.”) at 14-15.) Defendant relies on
Does v. Gillespie, 867 F.3d 1034 (8th Cir. 2017), to
argue that “nothing short of an unambiguously conferred
right will support a cause of action under § 1983,
” and that the Medicaid Act is “phrased as a
directive to the federal agency charged with approving state
Medicaid plans, not as a conferral of the right to sue upon
the beneficiaries of the State’s decision to
participate in Medicaid.”[11] (Doc. No. 482
(“Def. Memo.”) at 31 (citing Does, 867
F.3d at 1040-41).) Defendant further contends that Congress
did not intend to create a private right “because other
sections of the [Medicaid] Act provide mechanisms to enforce
the State’s obligation under § 23(A), ” and
“statues with an ‘aggregate’ focus do not
give rise to individual rights.” (Id. (citing
Does, 867 F.3d at 1041-42).)
Defendant
next argues that even if the Medicaid Act was privately
enforceable, her policies comply. (Def. Opp. at 15.)
Defendant contends that the plain language of the Medicaid
Act requires only that an opportunity for a fair hearing must
exist and that she provides such an opportunity through
routine notices about the right to appeal.[12]
(Id. at 1, 14-15.)
Defendant
contends that Plaintiffs misinterpret the notice requirements
imposed by § 431.206(c)(2) of the Medicaid Act by using
an improper definition of “denial, ” and for
failing to recognize that short of denial, Notice of Action
is only available to individuals who specifically ask for it.
(Id. at 15-20.)
Defendant
disputes Plaintiffs’ definition of “denial”
and contends that pursuant to the Medicaid Act,
“[Notice of Action] is triggered by an objectively
verifiable, decisional event: ‘[a]t the time the agency
denies an individual’s claim for eligibility,
benefits or services.’” (Id. at 17
(citing 42. C.F.R. § 431.206(c)(2)).) Defendant argues
that a “claim” for “medical
assistance” requires an individual to “make[]
application for assistance.” (Id.)
Accordingly, Defendant argues that Plaintiffs rely on an
“an inapposite, freestanding concept of
‘denial’ unconnected to a ‘claim,
’” so no denial actually occurs when a simple
request for services is deprived, withheld, or not acted upon
in a reasonable amount of time. (See id at 17-19.)
Defendant
further contends that short of a denial, the plain language
in 42 C.F.R. 431.220(a)(1) triggers Notice of Action only
upon specific request for a hearing by an individual who
believes the agency has denied his or her claim for
eligibility, covered benefits or services, or has not acted
upon the claim with reasonable promptness. (Id. at
19-20 (citing 42 C.F.R. 431.220(a)(1)).) Defendant argues
that because Plaintiffs do not complain of any rejection of,
or failure to act upon, any application for a Disability
Waiver service, Plaintiffs’ actual concern amounts to
allegedly inadequate case manager performance in response to
a general request to explore moving, or external events
allegedly inhibiting a request to move. (Id. at
21-24.)
Moreover,
Defendant contends that her policies already require notice
of the right to challenge allegedly deficient case manager
performance outside of the claim denial context so Disability
Waiver recipients are not “left in limbo” as
Plaintiffs contend. (Id. at 25.) Specifically, she
contends that pursuant to Minn. R. 9525.0024, subp. 3,
Disability Waiver recipients “must be informed-upon
development of their required individual service plan and at
least annually thereafter-of their right to a conciliation
conference under [Minn. Stat.] section 256.045.”
(Id. at 25.)
Defendant
contends that because her policies comply with the Medicaid
Act, any alleged procedural due process violation also fails.
(Id. at 27) Moreover, Defendant argues that
Plaintiffs do not have a property interest in any
“individualized housing service” not actually
applied for, and that Plaintiffs do not identify any actual
Disability Waiver service allegedly denied. (Id. at
28) She further contends that Plaintiffs do not have a
property interest in “a guarantee” that they will
move in response to a request to do so. (Id. at 29.)
Notwithstanding, Defendant argues that the routine notice she
provides related to reasonable promptness and challenges to
case manager performance satisfies procedural due process.
(Id.)
Finally,
Defendant argues that Plaintiffs’ requested injunction
violates Fed.R.Civ.P. 65 as impossibly vague because
Plaintiffs: (1) do not identify which actual services
available under Defendant’s Waivers they believe
qualify as “individualized housing services, ”
leaving Defendant to guess whether a particular serviced
allegedly denied is an “individualized housing
service;” (2) do not explain how Defendant is to know
when a case manager’s assistance with an
individual’s request for moving assistance is
sufficiently delayed or deficient to constitute a deprivation
or withhold; and (3) only request notice related to moves to
“a more integrated setting” which is a highly
individualized determination. (Id. at 33.)
The
Court first observes that it has already addressed
Defendant’s argument that the Medicaid Act does not
provide a private right action. (See May 2017 Order
at 29.) Specifically, the Court concluded that the reasonable
promptness and fair hearing provisions are privately
enforceable under § 1983 for eligible individuals.
(Id. at 22) The Court again incorporates and adopts
its analysis and holding in Guggenberger v.
Minnesota, 198 F.Supp.3d 973, 1006-07, 1022 (D. Minn.
2016), and continues to find that both §§
1396a(a)(8) and 1396a(a)(3) are privately
enforceable.[13] Does does nothing to change
the Court’s analysis. As the Court previously stated,
“[t]he enforceability of a particular Medicaid Act must
be independently assessed by the Court; the fact that one
provision fails to establish a private cause of action does
not govern the enforceability of a separate and distinct
provision.” Guggenberger, 198 F.Supp.3d at
1006. Does addressed only § 23(A) of the
Medicaid Act, the “freedom of choice” provision.
There, the Eighth Circuit stated, “we see significant
difficulties with the contention that § 23(a)
unambiguously creates an enforceable federal right, ”
and ultimately concluded that it did not. Does, 867
F.3d at 1041, 1046. Accordingly, Does has no impact
on the Court’s holding that the “reasonable
promptness” or “the fair hearing” provision
of the Medicaid Act are privately enforceable.
The
Court next addresses Defendant’s interpretation of the
Medicaid Act. In short, the Court finds Defendant’s
narrow reading of the Medicaid Act overly restrictive. 42
U.S.C. §1396a(a)(3) states, “[a] State plan for
medical assistance must provide for granting an opportunity
for a fair hearing before the State agency to any individual
whose claim for medical assistance under the plan is denied
or is not acted upon with reasonable promptness.” 42
U.S.C. §1396a(a)(3). While Defendant contends that
Notice of Action is trigged only when a specific application
for eligibility, benefits, or services is denied, this
interpretation does not follow naturally from the plain
language of the ...