M.D.Ala.: Partial class cert. in Medicaid HCBS suit under § 1983

An Alabama federal district court partially certified a class action relating to the State’s provision of Medicaid home- and community-based waiver services (HCBS). Susan J. v. Riley, 2008 WL 4708561 (M.D. Ala. Oct. 24, 2008) (No. 2:00-CV-918).

 The court certified subclasses of disabled individuals deemed ineligible or denied services without a hearing, and individuals who did not receive reasonably prompt claims determinations. The court denied certification of a subclass of individuals who were deemed eligible but had not received services with reasonable promptness, citing grounds of numerosity (lack of evidence of empty slots in the waiver program) and adequacy of representation (subclass members were in competition for scarce program slots). The court declined to reconsider circuit precedent holding that Medicaid’s reasonable promptness provision is enforceable under 42 U.S.C. § 1983.

 

42 U.S.C. § 1396a(a)(8)

          The plaintiffs claimed that Alabama was systematically denying disabled individuals reasonably prompt claims determinations, notice and hearings, and actual services, in violation of 42 U.S.C. §§ 1396a(a)(8) (reasonable promptness), (a)(10)(B) (comparability), and (a)(3) (due process). Last year, the district court denied certification because the class included individuals with widely differing claims. Susan J. v. Riley, 2007 WL 2702073 (M.D. Ala. Sep. 12, 2007) (No. 2:00-cv-918) (summary here). Now, the plaintiffs seek certification as a class split into three distinct subclasses, along lines suggested by the court in Prado-Steiman ex rel. Prado v. Bush, 221 F.3d 1266 (11th Cir. 2000).

            The defendants argued that Doe v. Chiles, 136 F.3d 709 (11th Cir. 1998) (8(A) enforceable through § 1983) was effectively overruled by Gonzaga Univ. v. Doe, 536 U.S. 273 (2002). Though the Eleventh Circuit had not had the chance to reexamine Chiles, the district court held Chiles was still good law in light of unanimous post-Gonzaga rulings in other circuits that (a)(8) (and “analogous” provisions such as 10(A)) remain enforceable under § 1983. The defendants also argued that Chiles was distinguishable because it concerned intermediate care facility services rather than HCBS; the court called this “a distinction without a difference,” again citing the unanimous precedents of other circuits “irrespective of whether the plaintiffs sought ICF/MR or HCB Waiver services.”

 
              The court also held that the subclass representatives had standing to assert (a)(8) claims. Notably, the court rejected the argument that, because waiver slots are capped, no one has a right to waiver services. Those who are deemed eligible for waiver services, the court held, have rights under (a)(8). The court also said in a footnote that 42 C.F.R. § 435.911, which sets a number of days for determining eligibility, is enforceable because it merely fleshes out (a)(8).

 

        Other claims

        The court summarily rejected the 10(B) comparability claims, holding that such claims were precluded because Alabama had waived the comparability provision in accordance with federal law. The court also rejected the substantive due process claim, saying there was no authority for plaintiffs’ asserted constitutional right to “habilitation, care and treatment.” The court assumed without discussion the enforceability of Medicaid’s notice and hearing provision, and stated in a lengthy footnote that regulations under the statutory due process provision (a)(3) are also enforceable because they simply “flesh out” the fair hearing right. 42 C.F.R. §§ 431.200 et seq. spell out the required content of notices and form of hearings.

 

          Subclass One: Persons who have not received services with reasonable promptness

          The court denied certification of this subclass because:

Plaintiffs have not provided the Court with sufficient information to make a determination regarding numerosity. It is not clear whether the Waiver programs are full. There are neither allegations nor evidence that there are empty slots, aside from slots that are vacated in the middle of the fiscal year. The Court also lacks information about how many slots are vacated during the fiscal year. In short, if the Waiver programs are full, Plaintiffs' motion to certify Subclass One must be denied, because the class is a null set. … While it is true that the Court could make common sense assumptions to estimate the size of the putative subclass, Plaintiffs have not provided even enough information for the Court to guess if the subclass members are too numerous to join.

While hanging its hat on numerosity, the court also stated in a footnote that the named plaintiffs would not adequately represent the subclass because they would be competing with subclass members for scarce HCBS program slots.

          Subclasses Two and Three: Denied Notice and Hearing/Prompt Determination

          However, the court did certify the other two subclasses. The court found that they presented sufficient numerosity based on some “common-sense assumptions.” With subclass two, the court assumed that of the more than 1,000 persons who had applied for waiver services in recent years but were not on the waiting list, many had been deemed ineligible but had received no notice. In combination with evidence that named plaintiffs were denied notice and a hearing, this established numerosity for subclass two. In particular, the subclass representative had been deemed ineligible after an eight-year wait, and never received notice of how to object to the decision.

        With subclass three, the court assumed since the named plaintiffs waited years for decisions, many of the 2,700 people who had applied in the last decade likely did not receive prompt determinations either. The court also pointed to “the impracticability of joining unknown applicants who likely are mentally retarded” as favoring certification of both subclasses.

          The court found commonality of claims for subclasses two and three, because each sought to force the observance of procedural protections for all applicants. The injunctive relief sought would not require individualized proof. The court rejected the State’s argument that a statewide class was inappropriate because the named plaintiffs’ county “may be doing a particularly bad job of serving people.” The court said that this argument “overlooks the fact that it is the State's Medicaid plan that is required to comply with Federal Law.” The court also found that the subclass representatives were typical of their subclass. The court found no conflict of interest among these subclass members.

          The State argued that class counsel was inadequate because one attorney was a director of the named plaintiffs’ county “310 board,” which serves as an access point for waiver services. In the state’s view, class counsel was therefore linked to the State, and plaintiffs may have waived claims against the county board. The court rejected this argument, stating that the county board’s role “is not the fundamental issue in this case.” Rather, the case centered on the role of the State Department of Mental Health and Mental Retardation.

          Finally, the court found that the State had acted on grounds generally applicable to the remaining subclasses, and therefore certified subclasses two and three.