Court: District Court, W.D. Texas; May 17, 2016; Federal District Court
Defendants, including the State of Texas and state officials, filed motions to dismiss the claims of twelve individual Plaintiffs with intellectual or developmental disabilities and two advocacy organizations, alleging violations of the ADA, Rehabilitation Act, Medicaid Act, and NHRA due to unnecessary institutionalization and exclusion from community-based services. The United States is also a Plaintiff-Intervenor in the case. Defendants argue that the United States lacks standing to assert its claims and that all Plaintiffs lack standing and have failed to state viable claims. The Court denied Defendants' motions to dismiss, noting that the United States, as an intervenor seeking relief aligned with that of the original Plaintiffs, does not require independent standing under Article III of the Constitution. The Court referenced established circuit law indicating that intervenors do not need separate standing if the relief sought aligns with that of a party with standing.
Texas contends that the key issue is not whether the United States appropriately relied on the Plaintiffs’ standing when it intervened, but rather the source of the Attorney General’s rights to assert claims post-intervention. The court clarifies that the matter of Article III standing is misapplied here, emphasizing that its role is to ensure that only actual disputes are adjudicated, rather than abstract policy issues. The court asserts that the existence of a case or controversy renders irrelevant whether the intervenor could independently meet Article III requirements, as the jurisdiction has already been established by the original parties. Texas's arguments regarding prudential or statutory standing are dismissed for similar reasons; a government agency can intervene and raise claims aligned with the original complaint without needing to independently initiate an action. The amendment to Federal Rule of Civil Procedure 24(b)(2) encourages liberal intervention by government entities advocating for public interests. The court notes that the relief sought by the United States does not exceed that of the original Plaintiffs, and the claims arise from a statutory framework the Attorney General administers. The United States’ pleadings align with those of the Plaintiffs, justifying its intervention. Consequently, the court declines to address Texas’s arguments regarding the Attorney General’s authority under Title II of the ADA or the Rehabilitation Act. Texas’s motion to dismiss the United States’ claims is denied.
Texas's Motion to Dismiss the Plaintiffs’ Second Amended Complaint was addressed by the Court, which noted that the Plaintiffs are no longer pursuing their Medicaid Act 'comparability' claims or claims against the Governor. The Court found the Defendants' arguments for dismissal to be meritless and decided to deny the Motion to Dismiss.
Defendants initially sought dismissal under Fed. R. Civ. P. 12(b)(1), claiming that the Court lacked subject matter jurisdiction due to the Plaintiffs' failure to establish standing. In evaluating this motion, the Court explained that it could determine jurisdiction based solely on the complaint, supplemented by undisputed facts or the resolution of disputed facts. A dismissal for lack of subject matter jurisdiction is only appropriate when it is certain that the plaintiff cannot prove any set of facts to support their claim.
Defendants contended that the Court should disregard the declarations submitted by the Plaintiffs in opposition to the motion to dismiss, asserting that these declarations were invalid as they did not meet the necessary criteria for admissibility under 28 U.S.C. § 1746. The Court countered this argument, clarifying that the declarations contained the required language affirming their truth under penalty of perjury, thus complying with the statute.
The Court distinguished the current case from the precedent cited by Defendants, which involved unsworn statements not adhering to the necessary legal language. It reaffirmed that valid declarations must be made under penalty of perjury to prevent circumvention of perjury penalties, emphasizing that the Plaintiffs' declarations met this standard and were therefore admissible.
The Court rejects Defendants' request to exclude Plaintiffs' declarations and dismiss the complaint for lack of standing. Defendants argue that the remedy sought by Plaintiffs is overly broad and unenforceable, referencing Lewis v. Casey and Fed. R. Civ. P. 65(d). The Court clarifies that these authorities address remedy enforceability, not pleading sufficiency, emphasizing that a remedy cannot be deemed defective based solely on potential enforceability issues.
In assessing the standing of individual Plaintiffs, the Court outlines the three-part test established in Lujan v. Defs. of Wildlife, which requires a concrete injury, traceability to the defendant's actions, and likelihood of redress. Defendants contend that individual Plaintiffs no longer have standing due to the provision of HCS slots and argue that the complaint lacks specificity regarding the rules or policies causing the alleged injuries.
The Court notes that federal jurisdiction is limited to active controversies throughout the legal process. If intervening circumstances eliminate a plaintiff's stake in the outcome, the case may be dismissed as moot. However, a case is only deemed moot if no effective relief can be granted, as articulated in Campbell-Ewald Co. v. Gomez.
The 'relation-back doctrine' asserts that a class action lawsuit should not be dismissed as moot if there is a pending, timely motion for class certification, even if the named plaintiffs have received individual relief. This doctrine prevents defendants from undermining class actions by settling with individual plaintiffs to evade broader accountability. Defendants' argument for dismissal due to lack of standing is flawed; it overlooks that relief provided after the pursuit of class certification cannot negate the standing of the plaintiffs. Plaintiffs have adequately identified specific inadequacies in service assessments related to their needs, alleging violations of the ADA and Rehabilitation Acts due to discriminatory practices against individuals with intellectual and developmental disabilities (IDD).
Regarding organizational plaintiffs, such as the Arc of Texas, Inc. and the Coalition of Texans with Disabilities, standing can be established either directly or through associational standing. The latter requires that the organization's members have standing, the interests are germane to the organization's purpose, and individual member participation is not necessary. Defendants contend that the organizational plaintiffs have not sufficiently demonstrated injury-in-fact, either directly or through their members. While organizations can claim injury through resource diversion, such diversion alone does not automatically constitute injury-in-fact, as clarified by case law.
Expenditures by an organization do not fulfill the injury-in-fact requirement for standing if the organization lacks a legally-protected interest in its spending, particularly if the costs incurred are solely related to a lawsuit (Ass’n for Retarded Citizens of Dallas v. Dallas Cty. Mental Health, Mental Retardation Ctr. Bd. of Trustees; Spann v. Colonial Vill. Inc.). Organizations cannot create an injury necessary for a lawsuit simply through their resource expenditures (Louisiana ACORN Fair Hous. v. LeBlanc). In this case, however, the organizational Plaintiffs, including the Arc of Texas and the Coalition of Texans with Disabilities, have demonstrated standing by providing counseling and referral services to individuals with intellectual and developmental disabilities (IDD) and showing that the alleged discrimination has necessitated a redirection of their resources beyond just litigation costs. They also established that their members are among those harmed by the discrimination claimed. The Plaintiffs' advocacy missions align with the relief sought, showing a community of interest with the injured members. Importantly, individual member participation is not needed for claims seeking declaratory and injunctive relief, as supported by Supreme Court precedent. Consequently, the Court concludes that both organizations have established Article III standing. Additionally, the Federal Rules of Civil Procedure require a clear statement of the claim in complaints, allowing for dismissal if the claim does not warrant relief (Fed. R. Civ. P. 8(a)(2), 12(b)(6)).
In assessing a complaint under Rule 12(b)(6), the Court must first accept the factual allegations as true and differentiate them from legal conclusions, which do not receive this presumption (Ashcroft v. Iqbal). The Court then evaluates whether these factual allegations present a plausible claim for relief, relying on judicial experience and common sense to determine if the facts suggest more than mere possibility of misconduct.
Regarding the Americans with Disabilities Act (ADA) and the Rehabilitation Act, Title II of the ADA aims to eliminate discrimination against individuals with disabilities, specifically in public services (Melton v. Dallas Area Rapid Transit). To establish a prima facie case under Title II, a plaintiff must demonstrate: (1) qualification as an individual under the ADA, (2) exclusion from or denial of benefits related to public entity services due to their disability, and (3) that the discrimination or exclusion is a result of their disability.
The Supreme Court has clarified that Title II's anti-discrimination mandate requires that individuals with mental disabilities be placed in community settings over institutionalization when appropriate, not opposed by the individual, and reasonably accommodated by available state resources (Olmstead v. L.C. ex rel. Zimring). Defendants contend that plaintiffs have not sufficiently shown that Texas offers Medicaid services in institutional settings that are unavailable in community settings. However, this argument is countered by the ADA's language, which identifies “segregation” and “institutionalization” as forms of discrimination. Additionally, regulations under Title II and the Rehabilitation Act prohibit discrimination regarding the lack of community-based services and discrimination in methods that exclude qualified individuals from such services (28 C.F.R. 35.130(b)(8)).
A public entity cannot impose eligibility criteria that exclude individuals with disabilities from services, programs, or activities unless necessary for the service offered (28 C.F.R. 41.51(d)). Recipients of federal funds must provide services in the most integrated settings appropriate for qualified individuals. The existence of community-based services does not remedy exclusion for individuals unable to access them. Plaintiffs assert they are qualified under Title II and the Rehabilitation Act, with Defendants largely not disputing this claim. They allege that individuals with developmental disabilities in nursing facilities are barred from accessing residential assistance or community-based services unless they navigate a lengthy waiting list, which individuals in other facilities do not face. Furthermore, Plaintiffs contend that Texas's chronic underfunding of its service system results in delayed access to community-based services for individuals with mental retardation or related conditions. These allegations support claims of discrimination under Title II and the Rehabilitation Act, as outlined in Olmstead.
Regarding Section 1983 claims, Defendants argue that the Medicaid Act and the Nursing Home Reform Amendments Act lack a private cause of action under 42 U.S.C. 1983. For a private enforcement action under this statute, the federal law must clearly provide enforceable rights. The Supreme Court has established a three-part test to determine if Congress intended to create enforceable rights: (1) the statute must benefit the private plaintiff; (2) the right must be clear enough to avoid judicial strain; and (3) the statute must impose binding obligations on states. The distinction between enforceable rights and broader benefits is crucial, as only the former can support a private action under Section 1983. Additionally, being a Spending Clause statute does not automatically determine a statute's enforceability.
Plaintiffs assert claims under the Medicaid Act, specifically referencing 42 U.S.C. 1396a(a)(8) and 1396n(c), alongside relevant regulations at 42 C.F.R. 435.930(a). Their 'Reasonable Promptness' claim alleges violations of Section 1396a(a)(8), which mandates states to furnish Medicaid benefits to eligible individuals promptly. The Fifth Circuit recognizes this as enforceable under Section 1983, following standards from Supreme Court cases. Defendants argue for dismissal, claiming Plaintiffs lack eligibility for the HCS waiver program due to it being 'full,' thus falling outside the protections of the cited statutes. However, the claim remains valid for those on the waiting list for available slots. The plaintiffs have not been deemed 'eligible', failing to meet the first prong of the Blessing test, which assesses Congressional intent to benefit a particular class. Defendants contradict themselves by suggesting Plaintiffs are both ineligible and already enrolled in the HCS program. Despite Defendants' arguments, members of the Plaintiff organizations retain an interest in fair access to HCS waiver slots, supported by Title II of the Rehabilitation Act and Section 1396a(a)(8). Additionally, Section 1396n(c)(2)(B) and (C) require states to evaluate the need for institutional care and provide information on community-based alternatives for eligible individuals.
The Fifth Circuit has not definitively ruled on whether Section 1396n(c) grants enforceable rights to Medicaid recipients through Section 1983. Defendants assert that Section 1396n(c), which sets state requirements for waiver applications, does not satisfy the first prong of the Blessing test. They reference a conflicting order from Christy McCarthy v. Don A. Gilbert, which lacks alignment with the Fifth Circuit's earlier decision in S.D. ex rel. Dickson v. Hood, where the court determined that a similar Medicaid Act provision created a private right of action under 42 U.S.C. 1320a-2.
Other courts have examined the implications of Section 1320a-2 on the Blessing analysis, indicating that its enactment was intended to address the Supreme Court's ruling in Suter v. Artist M., where a Social Security Act provision was found unenforceable under Section 1983 due to its generalized duties on states. In response, Congress enacted the "Suter fix," clarifying that provisions within the Social Security Chapter, including Section 1396n(c), should not be deemed unenforceable merely because they outline state plan requirements.
Considering Section 1396n(c) alongside Section 1320a-2 and the intent of Congress, it appears that Congress aimed to ensure that Section 1396n(c) remains enforceable under Section 1983 despite its specification of state plan contents. This interpretation aligns with the Dickson ruling and prompts a thorough evaluation of whether Section 1396n(c) meets the Blessing and Gonzaga standards. The Blessing inquiry focuses on whether Congress intended to confer individual rights to beneficiaries. The Fifth Circuit identified that statutory language requiring state plans to provide medical assistance to eligible individuals reflects the "rights-creating" language emphasized in Gonzaga, which is similar to the "No person shall" phrasing deemed critical in establishing congressional intent for new rights.
The excerpt addresses the interpretation of 42 U.S.C. § 1396n(c), emphasizing that it mandates states to provide individual assessments and information regarding community-based alternatives to qualified individuals. This requirement reflects Congress's intent to create enforceable rights for individuals, unlike the broader, aggregate focus of 42 U.S.C. § 1396a(a)(30)(A), which lacks "rights creating" language. The excerpt cites relevant case law, asserting that the rights to evaluations and information are clear and obligatory. Plaintiffs allege violations of these rights, claiming that such breaches led to unnecessary institutionalization in nursing facilities, negatively impacting their health and autonomy. Defendants counter that the HCS waiver program is full, arguing they are not obligated to meet requirements under § 1396n for services deemed unfeasible. However, this argument is challenged as the program has been expanded. Additionally, Defendants dispute claims under the Nursing Home Reform Amendments Act, asserting that the cited provisions do not grant rights to Medicaid recipients but place obligations on nursing facilities, enforceable through a grievance process rather than a direct claim under Section 1983.
Defendants contend that Medicaid recipients cannot enforce certain provisions of the Medicaid Act, specifically those relating to nursing home regulations and state Medicaid Plans, through Section 1983. These arguments do not invalidate the applicability of 42 U.S.C. 1320a-2, nor do they counter the persuasive authority from other jurisdictions and the Court’s evaluation of the Nursing Home Reform Act (NHRA). The Fifth Circuit has not definitively ruled on the NHRA's enforceability by Medicaid recipients against states but has tentatively accepted this premise. Conversely, the First and Third Circuits have upheld that the NHRA is enforceable by Medicaid recipients. The NHRA contains explicit rights-creating language, clearly identifying and protecting the rights of Medicaid beneficiaries. The Second Circuit, in a related case, indicated that the NHRA was not intended to benefit healthcare providers but rather to safeguard Medicaid recipients. This position is supported by several district court rulings. The Court concurs with the prevailing view that the NHRA grants enforceable rights to Medicaid recipients under Section 1983. The specific provisions at issue govern the Preadmission Screening and Annual Resident Review (PASARR) process, mandating that state mental health authorities conduct individualized assessments for individuals with intellectual and developmental disabilities prior to institutional care. The NHRA imposes a clear obligation on states to perform these assessments, ensuring that the need for institutional services is evaluated appropriately and not delegated to nursing facilities.
Section 1396r(b)(3)(F)(i) mandates that a nursing home cannot admit a mentally ill resident without prior determination from the State mental health authority that the individual requires nursing facility services due to their physical and mental condition. This requirement aims to prevent unnecessary nursing home admissions. The cited authorities by Defendants are largely irrelevant, primarily involving claims against private nursing homes rather than state entities, with only two cases addressing provisions not pertinent to the current matter. Defendants argue that Section 1396r imposes no obligations on the state and only regulates nursing facilities, which contradicts the statute's clear language that outlines state responsibilities for preadmission screening and resident review. Additionally, Defendants contend that the state's obligation for specialized services is limited to specific subsections of regulation 42 C.F.R. 483.440, which is rejected based on the broader language of the regulation requiring a comprehensive active treatment program. Consequently, the motion to dismiss from the State of Texas and the motion from Defendants regarding the Plaintiffs' Second Amended Complaint are both denied. Claims related to the Medicaid Act’s "comparability" and those against Governor Abbott are dismissed without prejudice. Texas recognizes the Attorney General's authority to sue under Title II of the ADA and the Rehabilitation Act, affirming the United States' interest in these legal frameworks.
Title II and the Rehabilitation Act permit enforcement through federal funding termination or refusal, as well as "any other means provided by law," which courts interpret to include DOJ enforcement in federal court. The Court will evaluate the Defendants’ claim concerning the Plaintiffs' standing for "freedom of choice" claims under 42 U.S.C. § 1396n(c)(2)(B) and (C) within the context of private right of action. Defendants contest the validity of declarations from Garth Corbett and Marisol McNair, who are affiliated with the Plaintiffs, arguing they violate Texas Disciplinary Rule of Professional Conduct 3.08; however, this claim lacks merit.
Among the twelve individual Plaintiffs, seven are enrolled in the HCS waiver program, one is under medical assessment for community care, one is ineligible for services, and three have indicated a desire to remain in nursing facilities. Plaintiffs dispute Defendants’ assertions regarding Maria Hernandez's transition, Melvin Oatman's eligibility for services, and the adequacy of information provided to the three individuals regarding community-based care options. Plaintiffs assert that those transitioned to community care are at risk of being referred back to nursing facilities. The record does not conclusively support Defendants' claims regarding the sufficiency of relief provided to individual Plaintiffs or their Article III standing. Disputes persist concerning the eligibility of some Plaintiffs for HCS waiver services and the adequacy of information on community alternatives for those still in nursing facilities. Plaintiffs initially sought class certification on January 19, 2011, and updated their motion as the case progressed. The case experienced stays during specified periods from 2011 to 2015.
The individual Plaintiffs transitioned to community-based care after being offered Home and Community-based Services (HCS) waiver slots on September 14, 2012, but did not enroll for services until later. The case references previous legal precedents noting that general allegations may suffice to establish standing for remediation claims, but the Plaintiffs are no longer pursuing their comparability claim under 42 U.S.C. § 1396a(a)(10)(B). Defendants' argument regarding the ineligibility of class members due to a lengthy HCS waitlist is countered by their representation that these members can now bypass the waitlist and directly enroll in HCS from nursing facilities or the community. The excerpt also discusses various legal cases that affirm the lack of a private cause of action against private nursing homes under the Medicaid Act, indicating that Congress did not intend to create rights enforceable under Section 1983 for nursing home residents. The FNHRA does not provide a clear federal cause of action for nursing home residents against private facilities, as evidenced by multiple court rulings that highlight the absence of rights-creating language in the relevant statutes.
