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Case 5:10-cv-01025-OLG Document 1 Filed 12/20/10 Page 1 of 58

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend and

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mother, Lillian Minor;

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LINDA ARIZPE, by her next friend and

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guardian, Rudy Arizpe;

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ANDREA PADRON, by her next friend

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and guardian, Rosa Hudecek;

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PATRICIA FERRER, by her next friend and §

mother, Petra Ferrer;

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BENNY HOLMES, by his next friend

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and guardian, Priscilla Holmes;

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ZACKOWITZ MORGAN, by his next

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friend and guardian, Sharon Barker,

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on behalf of themselves and all others

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similarly situated, and

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THE ARC OF TEXAS, INC. and

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COALITION OF TEXANS WITH

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DISABILITIES, INC.

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Plaintiffs,

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v.

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RICK PERRY, Governor of the State of Texas, §

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THOMAS SUEHS, Executive Commissioner §

of the Texas Health and Human Services

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Commission,

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CHRIS TRAYLOR, Commissioner of

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the Texas Department of Aging and Disability §

Services, and

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all in their official capacities, §

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Defendants.

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Case No. 5:10-cv-1025

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I. INTRODUCTION

COMPLAINT

1. Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes, and

Zackowitz Morgan, (hereafter the “Individual Plaintiffs”) are adult persons with mental

retardation or other related conditions (hereafter referred to as “developmental disabilities”).

Each of these individuals is qualified for the Defendants’ system of community-based services

and supports for individuals with developmental disabilities. Each is able and would prefer to

reside in a more integrated, community-based placement. Nevertheless, the Individual Plaintiffs

and thousands of similarly situated individuals in Texas are unnecessarily institutionalized and

segregated in nursing facilities because of the Defendants’ decision to exclude them from any

meaningful access to Texas’s system of community-based services and supports which they need

to be able to reside in the community.

2. The Defendants, by their actions and inactions in violation of federal law, have

caused the Individual Plaintiffs and the class they seek to represent to live in institutional nursing

facilities isolated from their family and friends. The Individual Plaintiffs and the class are not

able to leave the nursing facility to work, attend day habilitation programs or prevocational

activities, and are deprived of the right to attend social, recreational or religious activities outside

of the nursing home. Instead, they have no option but to remain in nursing facilities in order to

receive Medicaid-funded services.

3. Despite their ability to benefit from Texas’s system of community-based supports

that are available to other individuals with disabilities, all of the Individual Plaintiffs and the

class they seek to represent are experiencing or will experience unnecessary and prolonged

institutionalization in violation of the Americans with Disabilities Act (ADA), 42 U.S.C. §

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12132 et seq., and Section 504 of the Rehabilitation Act of 1973 (Rehabilitation Act), 29 U.S.C. § 794 et seq.
4. To avoid the inappropriate institutionalization of individuals with developmental disabilities in nursing facilities, Congress enacted the Nursing Home Reform Amendments (NHRA) to the Medicaid Act, 42 U.S.C. § 1396r(e). These Amendments require that before admission to a nursing facility, an individual with developmental disabilities must be screened by a mental retardation professional to determine whether their needs could be met in the community or other less restrictive placement. These Amendments also require that the Defendants provide individuals with developmental disabilities who are placed in nursing facilities with specialized services and active treatment, designed to enable the individual to function as independently and with as much self determination as possible, and to prevent regression and loss of abilities.
5. Despite the requirements of the NHRA, the Defendants have failed to conduct pre-admission screening and assessments that comply with the requirements of the NHRA and have failed to provide all needed specialized services to the Individual Plaintiffs and the class. As a result, the Individual Plaintiffs and class members have been inappropriately placed in nursing facilities and, while there, have frequently suffered significant regression or stagnation that could have been avoided through the provision of specialized services, required by federal law.
6. Plaintiffs and the class seek declaratory and injunctive relief against the Defendants to require the provision of adequate community-based services and supports to enable them to transition from their current nursing facility placements to more integrated community placements as required by the ADA, 42 U.S.C. § 12101 et seq.; the Rehabilitation
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Act, 29 U.S.C. § 794; the NHRA, 42 U.S.C. § 1396r(e); the federal Medicaid Act and the regulations implementing these statutes. They also seek additional declaratory and injunctive relief requiring the Defendants to comply with the pre-admission screening and resident review (PASARR) requirements of the NHRA, including the provision of specialized services and active treatment to class members while residing in nursing facilities. II. JURISDICTION AND VENUE
7. This is a civil action authorized by 42 U.S.C. § 1983 to redress the deprivation under color of state law of rights, privileges and immunities guaranteed by federal laws and the United States Constitution. This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1343(3) and 1343(4).
8. This action is also brought pursuant to Title II of the ADA, 42 U.S.C. § 12132, and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794. The Defendants are all public entities subject to Title II of the ADA and receive federal financial assistance to operate their Medicaid program and to cover the cost of nursing facility care and the provision of community-based services and supports. This Court has jurisdiction over the claims under the ADA and § 504 pursuant to 42 U.S.C. § 12133 and 29 U.S.C. § 794a.
9. Plaintiffs’ request for declaratory relief is brought pursuant to 28 U.S.C. § 2201 and Rule 57 of the Federal Rules of Civil Procedure. Injunctive relief is authorized by 28 U.S.C. § 2202, 42 U.S.C. § 1983 and Rule 65 of the Federal Rules of Civil Procedure. III. PARTIES
A. Individual Plaintiffs 10. Plaintiff Eric Steward is a 44 year-old man with developmental disabilities including mental retardation and the related condition of infantile cerebral palsy. He resides at
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Buena Vida Nursing & Rehabilitation Center of San Antonio, 5027 Pecan Grove, San Antonio, Texas. He brings this action through his next friend and mother, Lillian Minor.
11. Plaintiff Linda Arizpe is a 40 year-old woman. She has mental retardation. She resides at Meridian Care, a nursing facility located at 8181 Crestway Drive, San Antonio, Texas. She brings this action by and through her father and legal guardian, Rudy Arizpe.
12. Plaintiff Andrea Padron is 26 years old. She has mental retardation and a head injury. She resides at Meridian Care, a nursing facility located at 8181 Crestway Drive, San Antonio, Texas. She brings this action by and through her mother and legal guardian, Rosa Hudecek.
13. Plaintiff Patricia Ferrer is a 46 year-old woman with mental retardation who currently resides at the ManorCare Health Services nursing facility located at 3326 Burgoyne Street, Dallas, Texas 75233. She brings this action through her mother and next friend, Petra Ferrer, who lives at 814 N. Barnett Avenue, Dallas, Texas 75211
14. Plaintiff Benny Holmes is a 31 year-old man with mental retardation and cerebral palsy who currently resides at the Renaissance at Kessler Park nursing facility located at 2428 Bahama Drive, Dallas, Texas. He brings this action through his mother and legal guardian, Priscilla Holmes, who lives at 3404 Bellville Drive, Dallas, Texas.
15. Plaintiff Zackowitz Morgan is a 40 year-old man with a developmental disability who currently resides in the Silver Springs Healthcare Center, a nursing facility located at 12350 Wood Bayou Drive, Houston, Texas. Mr. Morgan also has diagnoses of cerebral palsy, obesity, hypertension, hypothyroidism, glaucoma, and peripheral vascular disease, congestive heart failure and a seizure disorder. He brings this action through his guardian and next-friend, Sharon
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Barker who was appointed his legal guardian by the Harris County Probate Court on August 20, 2008. Sharon Barker lives at 118 St. Finans Way, Houston, Texas.
B. Organizational Plaintiffs 16. The Arc of Texas, Inc. is a statewide non-profit membership organization comprised of persons with mental retardation, their parents and friends, and mental retardation professionals. Members of the Arc of Texas and its local chapters include individuals with developmental disabilities who reside in nursing facilities or the families of such residents. They also include individuals with developmental disabilities who are at risk of placement in nursing facilities due to the Defendants’ failure to provide them access to the supports and services they need to live safely in the community. 17. The Arc of Texas is dedicated to ensuring that all citizens with developmental disabilities in Texas are afforded appropriate services and supports in the most integrated, homelike setting possible, and that all persons with developmental disabilities and their families have meaningful choices about the nature and location of those services. The Arc of Texas, as a statewide advocacy organization, has long monitored the actions of the Defendants in order to ensure that persons with developmental disabilities receive the services to which they are entitled. In this capacity, the Arc of Texas has served as an organizational plaintiff in other federal court litigation against many of the same state agencies. 18. The Arc of Texas brings this action on its own behalf and on behalf of its members who are directly affected by the actions and inactions of the Defendants at issue in this case. 19. The Coalition of Texans with Disabilities, Inc. (CTD) is a statewide crossdisability advocacy organization. CTD is a membership organization with both individual and
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organizational members. Its individual members include persons with developmental disabilities and the parents, guardians and caretakers of such persons. CTD also has over 80 member organizations representing some 3 million unduplicated individuals with all types of disabilities, including developmental disabilities, their families, friends and caretakers.
20. CTD’s mission is to ensure that people with disabilities may live, learn, work, play and participate fully in their community of choice. In line with this mission, CTD advocacy focuses on full inclusion in all aspects of community living.
21. CTD brings this action on behalf of itself and its members with developmental disabilities who are residing or are at risk of residing in a nursing facility based upon the current policies and practices of the Defendants.
C. Defendants 22. Governor Rick Perry is the chief executive officer of the State of Texas. He is responsible for directing, supervising, and controlling the executive departments of state government as well as for seeking funds from the legislature to implement the programs and deliver the services of those executive agencies. Defendant Perry appoints the Executive Commissioner of the Health and Human Services Commission, and approves the appointment of the Commissioner of the Department of Aging and Disability Services. He is sued in his official capacity. 23. Thomas Suehs, Executive Commissioner of the Health and Human Services Commission (“HHSC”), is responsible for the oversight, supervision, and control of the health and human services departments within the executive branch, including the Department of Aging and Disability Services. He is responsible for appointing the Commissioner of the Department of Aging and Disability Services. Defendant Suehs is also responsible for the supervision,
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direction and oversight of the Texas Medicaid Program, including the various waiver programs and other services designed to enable the named plaintiffs and members of the plaintiff class to reside in community-based settings and, if in a nursing facility, to receive specialized services and active treatment. He is sued in his official capacity.
24. Chris Traylor, Commissioner of the Department of Aging and Disability Services (“DADS”), is the chief executive officer of DADS, which is responsible for admissions to, provision of specialized services in, and the funding, licensing, and monitoring of nursing facilities. Defendant Traylor is also charged with the responsibility for ensuring compliance with PASARR requirements of the NHRA, as well as providing information about, and determining eligibility for, an array of home and community-based services that would enable class members to live safely and productively in the community. He is sued in his official capacity. IV. CLASS ACTION ALLEGATIONS
25. Pursuant to Rules 23(a)(1)-(4) and (b)(2) of the Federal Rules of Civil Procedure, plaintiffs bring this action as a class action on behalf of all Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related condition (collectively referred to as persons with developmental disabilities) in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq.
26. The size of the class is so numerous that joinder of all members is impracticable. There are approximately 4,500 adult residents with developmental disabilities in nursing facilities throughout Texas, plus thousands more individuals with developmental disabilities who are at risk of being institutionalized in these nursing facilities. Joinder is also impracticable
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because the class is dynamic and because the absent class members lack the knowledge, sophistication, and financial means to maintain individual actions.
27. There are questions of law and fact common to the class, including inter alia: a. whether Defendants are violating the ADA and Section 504 by: (i) failing to offer and provide community support services to nursing facility residents with developmental disabilities that would enable them to live in the most integrated setting appropriate to their needs; (ii) failing to offer community services to individuals with developmental disabilities who are at risk of admission to nursing facilities, in order to divert the unnecessary admission of those individuals who could be appropriately served in a community or alternative setting; and (iii) utilizing eligibility criteria and methods of administration that have the effect of excluding the named plaintiffs and members of the plaintiff class from access to the services and supports that they need to reside in integrated, community-based settings; b. whether Defendants are violating the NHRA by: (i) failing to establish a screening program that accurately determines if persons with developmental disabilities who apply for admission to a nursing facility can be appropriately served in a less restrictive community setting; (ii) failing to conduct professionally acceptable assessments to determine what specialized services these individuals require; and (iii) failing to provide an array of specialized services to all persons with developmental disabilities in nursing facilities who need them, in a manner that satisfies the federal standard for active treatment; and
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c. whether Defendants are violating the federal Medicaid program by: (i) failing to provide necessary rehabilitative services to the members of the plaintiff class with reasonable promptness; (ii) denying class members a choice between receiving medically necessary supports and services in a segregated nursing facility or an integrated community-based setting, including failing to provide them with relevant information necessary to exercise this choice, and (iii) failing to afford them meaningful access to community-based services.
28. The plaintiffs’ claims are typical of the claims of the class. 29. The representative parties will fairly and adequately protect the interests of the class. Plaintiffs will vigorously represent the interests of the unnamed class members, and all members of the proposed class will benefit by the efforts of the named plaintiffs. The interests of the proposed class and those of the named plaintiffs are identical. 30. Defendants, their agents, employees, and predecessors and successors in office have acted or will act on grounds generally applicable to the plaintiff class, thereby making appropriate injunctive or declaratory relief with respect to the class as a whole. V. STATEMENT OF FACTS A. Texas’s Community Service Programs for Persons with Developmental
Disabilities (1) The Americans with Disabilities Act and the Rehabilitation Act 31. On July 12, 1990, Congress enacted the ADA, 42 U.S.C. § 12101 et seq., (ADA), establishing the most important civil rights laws for persons with disabilities in our nation’s history. 32. Congress stated in its findings that “historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of
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discrimination against individuals with disabilities continue to be a serious and pervasive social problem.” 42 U.S.C. § 12101(a)(2).
33. Congress found that “discrimination against individuals with disabilities persists in . . . institutionalization . . . and access to public services.” 42 U.S.C. § 12101(a)(3). Congress found that “individuals with disabilities continually encounter various forms of discrimination, including outright intentional exclusion . . . , segregation, and relegation to lesser services, programs, activities, benefits, jobs, or other opportunities.” 42 U.S.C. § 12101(a)(5).
34. Congress further concluded that “[i]ndividuals with disabilities are a discrete and insular minority who have been faced with restrictions and limitations, subjected to a history of purposeful unequal treatment, and relegated to a position of political powerlessness in our society, based on characteristics that are beyond the control of such individuals and resulting from stereotypic assumptions not truly indicative of the individual ability of such individuals to participate in, and contribute to, society.” 42 U.S.C. § 12101(a)(7).
35. A major purpose of the ADA is to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities, and to provide clear, strong, consistent and enforceable standards addressing discrimination against individuals with disabilities. 42 U.S.C. § 12101(b)(1)&(2).
36. “Discrimination” under the ADA includes the segregation of persons with disabilities from society as a result of unnecessary institutionalization. As the Supreme Court stated in Olmstead v. L.C., 527 U.S. 581 (1999), “unjustified institutional isolation of persons with disabilities is a form of discrimination” because “[i]n order to receive needed medical services, persons with mental disabilities, because of those disabilities, relinquish participation in community life….” 527 U.S. at 600-601.
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37. The regulations implementing the ADA require that: “a public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.” 28 C.F.R. § 35.130(d).
38. Discrimination on the basis of disability is also prohibited by Section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a). Section 504’s implementing regulations provide that recipients of federal funds “shall administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons.” 28 C.F.R. § 41.51(d).
39. The ADA and § 504 regulations prohibit the differential treatment of individuals with disabilities or any class of individuals with disabilities with respect to their opportunity to participate in or access the full range of aids, benefits or services in any program operated by a public entity. See 28 C.F.R. §§ 35.130(b)(1)(ii) & (b)(1)(iv), 41.51(b)(1)(ii) & (b)(1)(iv); 45 C.F.R. §§ 84.4(b)(1)(ii) & (b)(1)(iv).
40. The ADA and § 504 regulations prohibit public entities from utilizing “criteria or methods of administration” that have the effect of subjecting qualified individuals with disabilities to discrimination, including unnecessary institutionalization or “that have the purpose or effect of substantially impairing accomplishment of the objectives of the public entity’s program with respect to individuals with disabilities.” See 28 C.F.R. §§ 35.130(b)(3), 41.51(b)(3); 45 C.F.R. § 84.4(b)(4).
41. The ADA regulations further specify that “[a] public entity shall not impose or apply eligibility criteria that screen out or tend to screen out an individual with a disability or any class of individuals with disabilities from fully and equally enjoying any service program or activity unless such criteria can be shown to be necessary for the provision of the service, program, or activity being offered.” 28 C.F.R. § 35.130(b)(8).
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42. Both the ADA and § 504 also require that public entities must make reasonable modifications in their policies, practices or procedures when necessary to avoid discrimination on the basis of disability, including the unnecessary segregation or institutionalization of such individuals, unless the public entity can demonstrate that such modifications would fundamentally alter the nature of the service, program or activity. 42 U.S.C. §§ 12131, 12132; 29 U.S.C. § 794; 28 C.F.R. § 35.130(b)(7).
(2) Texas’s Implementation of the ADA’s Integration Mandate 43. Although Texas provides care, treatment and services to persons with developmental disabilities in large state supported living centers, nursing facilities, private intermediate care facilities for individuals with mental retardation (ICF/MR’s), and home and community-based settings, it has enacted laws, promulgated regulations, issued policies, conducted studies, written reports, and developed programs that strongly favor integrated community services and supports. 44. In Texas, the Persons with Mental Retardation Act (“PMRA”) preserves and promotes the rights of individuals with mental retardation “to live in the least restrictive setting appropriate to the person’s individual needs and abilities and in a variety of living situations, including living: (1) alone; (2) in a group home; (3) with a family; or (4) in a supervised, protective environment.” Tex. Health & Safety Code § 592.013(3). 45. The PMRA expressly guarantees an individual’s right to receive services in “(1) the available program or facility that is the least confining for the client’s condition; and (2) … that is provided in the least intrusive manner reasonably and humanely appropriate to the person’s needs.” Id. at § 591.005. Furthermore, “[e]ach client has the right to live in the least
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restrictive habilitation setting and to be treated and served in the least intrusive manner appropriate to the client’s individual’s needs.” Id. at § 592.032.
46. In addition the PMRA ensures that “[e]ach person with mental retardation has the right to receive for mental retardation adequate treatment and habilitative services that: (1) are suited to the person’s individual needs; (2) maximize the person’s capabilities; (3) enhance the person’s ability to cope with the person’s environment; and (4) are administered skillfully, safely, and humanely with full respect for the dignity and personal integrity of the person.” Id. at § 592.017; see also 40 Tex. Admin. Code § 4.107(2).
47. Moreover, in 2001, the Texas legislature, in response to the United States Supreme Court’s Olmstead decision, passed SB 367, which codified one of the earliest “Money Follows the Person” (“MFP”) initiatives in the country that was designed to transition persons in institutional settings to community-based services.
48. Shortly after the Olmstead decision, former Governor George W. Bush issued Executive Order GWB 99-2 (Sept. 28, 1999) declaring that “[t]he State of Texas is committed to providing community-based alternatives for people with disabilities… .”
49. Similarly, Defendant Perry issued Executive Order RP 13 (Apr. 18, 2002); in which he said that “the State of Texas is committed to providing community-based alternatives for people with disabilities and recognize that such services and supports advance the best interests of Texans.” He further proclaimed that “it is imperative that consumers and their families have a choice from among the broadest range of supports to most effectively meet their needs in their homes, community settings, state facilities or other residential settings,” and “that people with disabilities have the opportunity to enjoy full lives of independence, productivity and self-determination.”
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50. Texas agencies and commissions have conducted studies and issued reports and plans that confirm that most individuals with developmental disabilities benefit from living in the community, rather than in institutional settings. The Texas Health and Human Services Commission recently issued the 2008 Revised Texas Promoting Independence Plan. The Plan recognizes that the Olmstead decision “requires states to provide individuals an opportunity to live in the most integrated setting in order to receive their long-term services and supports” and, therefore, establishes as a top priority “full-funding for community-based services and elimination of all interest [waiting] lists.”
51. In its State Plan for Individuals with Developmental Disabilities: Fiscal Years 2002-2006, the Texas Council on Developmental Disabilities noted that “individuals with developmental disabilities should have access to opportunities and the supports needed to be included in community life, have interdependent relationships, live in homes and communities, and make contributions to their families, communities, the state, and the nation.”
52. Texas has developed an array of community-based programs, services and supports that provide habilitation and support to individuals with developmental disabilities in their homes, in adult foster care settings, and in residential homes. These programs are funded through both federal and state resources and implemented through a complex blend of federallyapproved programs. However, these programs, services and supports are largely unavailable to adult individuals with developmental disabilities residing in Texas nursing facilities.
(3) Texas’s Discriminatory Administration of Its Community Programs 53. Despite this statutory, regulatory, and policy commitment to integration, Texas has not created a program for adult persons with developmental disabilities in nursing facilities that will allow them to transition to integrated community settings. Instead, it has developed, implemented, and administered its community service programs in a manner that systemically or
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effectively denies adult nursing facility residents with developmental disabilities access to these community service programs.
54. The Individual Plaintiffs and the majority of the class could reside in integrated, community-based settings if they were able to access the full array of community-based programs, services, and supports that the Defendants provide for other individuals with developmental disabilities who are not in nursing facilities.
55. For persons with developmental disabilities residing in nursing facilities or at risk of nursing home placement, the key services and supports that they need in order to safely transition to the community are residential assistance services and habilitation services.
56. Adult persons with developmental disabilities residing in nursing facilities or at risk of placement in a nursing facility are denied to access residential assistance services or necessary community-based habilitation services by the policies and methods of administration of the Defendants that systemically or effectively restrict access to those services to individuals with developmental disabilities who live in their state-supported living centers and private intermediate care facilities for the developmentally disabled (generally referred to as ICF/MRs). As a result, the named plaintiffs and members of the plaintiff class remain unnecessarily institutionalized in segregated nursing facilities, often for decades.
57. Adult persons with developmental disabilities residing in nursing facilities or at risk of placement in a nursing facility are relegated to placing their names on a Home and Community-Based Services (HCS) waiting list, which, as of July 31, 2010, contained 45,756 individuals.
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58. On the other hand, persons with physical disabilities in nursing facilities are able to access the array of community-based services and supports designed to meet their needs immediately, without having to go on a lengthy, slow moving waiting list.
59. Texas agencies and commissions have conducted studies that confirm that individuals with developmental disabilities are not able to access the community-based services and supports that they require to avoid institutional placements with reasonable promptness and, as a result, are deprived of their right to obtain services in the least restrictive setting appropriate to their individual needs.
60. Pursuant to Section 531.0235 of the Texas Government Code, the Texas Council for Developmental Disabilities and the Office for the Prevention of Developmental Disabilities are required to prepare a joint biennial report on the state of services to persons with disabilities in Texas. In their 2008 Biennial Report, these agencies reported that “Texas ranks 49th out of the 50 states in providing community-based services to individuals with developmental disabilities.” It then concluded that “[p]eople with MR/RC [mental retardation or a related condition] do not have access to services with reasonable promptness” because “Texas significantly and chronically underfunds its service system.” The Report’s second major finding is that “[m]any people with intellectual and developmental disabilities (I/DD) do not receive services within the least restrictive setting appropriate to their needs…. In fact, the discrepancy in Texas’s investment in institutions compared to its investment in community services is extraordinary.”
61. The findings of the 2008 Biennial Report largely mirror the conclusions reached by the Human Services Research Institute in its 2008 report, Closing the Gap in Texas: Improving Services for People with Intellectual and Developmental Disabilities. The “Closing the Gap” report found that “in Texas the gap between present capacity and unmet needs means
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Texas does not operate its system in a manner that ensures that individuals will receive services promptly.” The report also concluded that “Texas relies on large congregate care facilities to serve people with mental retardation and related conditions to an extraordinary extent. Opportunities for individuals to receive services in the most integrated setting are abridged.”
B. Texas’s Nursing Facilities 62. The Medicaid Act defines a nursing facility as an institution which primarily provides: (1) skilled nursing care; (2) rehabilitation services for those who are sick, injured or disabled; and (3) health related care and services to individuals who, because of their mental or physical condition, require care and services which can only be provided in an institutional setting. 42 U.S.C. § 1396r(a)(1)(A-C). 63. Nursing facilities’ services are defined as “services which are ... required to be given an individual who needs ... on a daily basis nursing care (provided by or requiring the supervision of nursing personnel) or other rehabilitation services which as a practical matter can only be provided in a nursing facility on an inpatient basis.” 42 U.S.C. § 1396r(a). 64. A basic condition for state payment and federal reimbursement of Medicaidfunded nursing facilities is that community-based services do not meet the person’s needs and that the care that the individual needs can only be provided in an institutional setting.
(1) The Nursing Home Reform Amendments to the Medicaid Act 65. The Nursing Home Reform Amendments (NHRA) of 1987 to the Medicaid Act, 42 U.S.C.§ 1396r(e), are part of a comprehensive remedial statute designed to address the widespread problem of warehousing people with developmental disabilities in the Nation’s nursing facilities. Congress enacted the Pre-Admission Screening and Resident Review
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(PASARR) provisions of the NHRA to prevent and remedy the unnecessary admission and confinement of people with psychiatric and developmental disabilities in nursing facilities.
66. The PASARR provisions of the NHRA require a careful screening of all individuals being considered for admission to a nursing facility to determine if they may have a developmental disability. This is referred to as the Level I PASARR screen. 42 C.F.R. § 483.128(a).
67. All persons seeking admission to a nursing facility whose Level I PASARR screen indicates that they may have a developmental disability must then be assessed and evaluated to determine if they do in fact have a developmental disability, whether they satisfy the nursing facility level of care criteria, whether their needs could be met in the community through the provision of appropriate services and supports, and whether they could benefit from the provision of specialized services designed to maximize their ability for self-determination and independence. This part of the PASARR process is referred to as the Level II PASARR review. 42 C.F.R. §§ 483.128(a), 483.132.
68. The Level II review must include a psychosocial evaluation, which analyzes current living arrangements and medical and social supports. The review also must include a functional assessment of the individual’s ability to engage in activities of daily living and must document the level of support that would be needed to assist the individual to perform these activities while living in the community. 42 C.F.R. § 483.134(b)(5). The assessment must determine whether it would be possible to meet the individual's needs through the provision of services and supports in the community as an alternative to nursing facility placement.
69. If the Level II PASARR review determines that a resident does not require nursing facility services, but instead requires specialized services in a non-institutional setting,
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Defendants have a mandatory duty to provide or arrange for the provision of these services to the resident in an appropriate community setting. 42 U.S.C. § 1396r(e)(7)C)(i); 42 U.S.C. § 1396r(e)(7)(C)(ii); 42 C.F.R. § 483.118(c); 42 C.F.R. § 483.120(b).
70. The PASARR reviewers are obligated to explain to the individual involved and, where applicable, his or her legal representative the results of the Level II PASARR evaluation, including information regarding the individual’s ability to reside in a less restrictive community placement, and must provide the individual and legal representative with a copy of the PASARR report. 42 CFR §§ 483.128(k), 483.130(l)(3).
71. If the individual is admitted to a nursing facility, periodic reviews must be conducted whenever there is a change in the person’s condition to determine whether the individual continues to need a nursing level of care and to require confinement in a nursing facility. The initial and periodic PASARR Level II evaluations must also determine whether specialized services are necessary to provide habilitation and active treatment. 42 U.S.C. §§ 1396r(b)(3)(F)(i), 1396r(e)(7)(A)&(B); 42 C.F.R. §§ 483.128, 483.132, 483.134, & 483.136.
72. Specialized services consist of an active and continuous treatment program which includes aggressive, consistent implementation of specialized and generic training, treatment, and health services that are aimed at allowing the individual to function as independently and with as much self-determination as possible, and services designed to prevent or decelerate regression and loss of abilities. 42 C.F.R. §§ 483.120, 483.440(a). If the individual requires specialized services, under federal law the state must provide those services with the frequency, intensity, and duration that meet the federal standard for active treatment. 42 C.F.R. §§ 440(a)(f).
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73. If the PASARR review determines that an individual admitted to a nursing facility needs specialized services, it must then be determined if the nursing facility can provide all needed specialized services and active treatment. If the review concludes the facility cannot, the individual cannot be admitted to that nursing facility. 42 C.F.R. § 483.126.
(2) Texas’s Implementation of the NHRA and PASARR Requirements 74. Texas’s PASARR program does not adequately screen applicants to nursing facilities to determine if they may have a developmental disability. As a result, many individuals with developmental disabilities are admitted to nursing facilities without being accurately identified and are never provided a Level II PASARR evaluation and determination, as required by federal law. 75. Texas’s PASARR program does not adequately or appropriately assess whether an individual with a developmental disability can be served in the community prior to admission to a nursing facility, as required by federal law. 76. Texas’s PASARR program does not assess whether the individual who needs an institutional level of services can be served in another specialized facility for persons with developmental disabilities, as required by federal law. 77. Texas’s PASARR program does not adequately or appropriately assess whether an individual needs any specialized habilitative services and, if so, what those specific needs and services are. 78. Texas’s PASARR program does not allow for the delivery of the full scope of specialized services required by federal law. 79. Rather than providing the full array of specialized services necessary to allow class members to function as independently and with as much self-determination as possible, the
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Defendants have, by regulation and in violation of federal law, arbitrarily restricted the scope of specialized services to only “physical, occupational, and speech therapy evaluations and services.” 40 Tex. Admin. Code § 19.1303.
80. Not only does the Texas Administrative Code restrict the scope of specialized services in violation of federal law, but also DADS has even further constrained the scope of such services in its MRA OBRA Handbook (Revision 10-0, Oct. 26, 2009). It has only provided nursing facility residents with developmental disabilities two specialized services – vocational training and alternate placement services – even though it provides similarly situated persons who live in ICF/MRs with a wide range of habilitative services and supports.
81. Without any change to either its regulations or the MRA OBRA Handbook, DADS issued Information Letter 10-50 to nursing facility providers on April 15, 2010. Information Letter 10-50 stated that nursing facility residents who have had a PASARR Level II review that indicates that they need specialized services may qualify for a customized manual wheelchair or other specified durable medical equipment as a specialized services benefit.
82. National experience demonstrates that where PASARR reviews are properly performed, approximately 80% of individuals with developmental disabilities who are referred for or temporarily admitted to a nursing facility placement are determined to be able to reside in the community with appropriate services and supports and should, therefore, be diverted to a more integrated community placement prior to or shortly after admission to the nursing facility.
83. Of the approximately 4,500 class members with developmental disabilities who are confined in nursing facilities, most should have been diverted to a more integrated community placement if their PASARR reviews had been performed properly.
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84. Of these 4,500 class members who remain in nursing facilities, most of them could be appropriately transitioned to the community, with appropriate supports.
85. The overwhelming majority of class members would, if properly assessed during the PASARR review, be identified as needing and qualifying for specialized services.
86. In Massachusetts, where the state was required by court order to conduct comprehensive PASARR reviews of all individuals with developmental disabilities residing in nursing facilities, more than 90% of those individuals were found to need specialized services.
87. Due to the failure of the Defendants to ensure that PASARR reviews are properly and professionally completed, compounded by Defendants’ failure to provide a full array of specialized services, less than 1% of the persons with developmental disabilities who are currently residing in nursing facilities are receiving any specialized services.
88. The Defendants’ failure to conduct PASSAR reviews in a complete, comprehensive and professional manner and their failure to provide the necessary specialized services, including appropriate habilitation services, to persons with developmental disabilities has resulted in their inappropriate placement in institutional nursing facilities where their habilitation needs are largely ignored, all in violation of the NHRA, the ADA and the Rehabilitation Act.
89. DADS licenses nursing facilities in Texas. Because these facilities participate in the federal Medicaid program, DADS is required to review and certify these facilities pursuant to the federal requirements for nursing facilities under 42 C.F.R. §§ 483.1 - 483.75. As part of its responsibility for surveying, inspecting, and certifying nursing facilities, DADS is required to identify and/or correct any lack of compliance with the PASARR provisions of the NHRA and its implementing regulations. 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. §§ 483.100-138.
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90. Given the systemic failure of Texas’s PASARR program to adequately screen, divert, and assess individuals with developmental disabilities, as well as the failure to provide specialized services which meet the federal standard for active treatment, DADS is not fulfilling its responsibilities under federal law.
91. The federal government apparently agrees. In 2007, the Office of the Inspector General (OIG) of the United States Department of Health and Human Services conducted an audit of Texas and four other states to determine the extent of compliance with the PASARR requirements of federal law. The OIG found that Level I PASARR screens to determine whether an applicant or resident has a developmental disability were performed only 88% of the time, and 25% of those that were performed were completed late.
92. Moreover, the OIG found that 52% of the reviewed files did not contain either a Level II PASARR evaluation or a Level II determination. Even when Level II evaluations were performed, 22% of those evaluations did not contain evidence that the evaluator assessed whether the individual’s needs could be met in a community setting.
93. The OIG found that the state agencies responsible for oversight and enforcement of PASARR requirements conducted limited, if any, oversight.
94. Upon information and belief, the Center for Medicare and Medicaid Services (CMS) of the United States Department of Health and Human Services (HHS) has identified deficiencies in DADS design and implementation of its PASARR process. DADS is in the process of developing a proposal to CMS regarding changes to its PASARR process.
95. Upon information and belief, any changes resulting from the redesign of its PASARR process will not take effect until September 2012 and will not remedy the major flaws in its current practices.
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96. Despite being alerted by the attorneys for the plaintiffs and the OIG Report, DADS has not corrected the pervasive problems that exist regarding the timeliness, accuracy and quality of PASARR Level I screens and Level II reviews, the resulting inappropriate admission of class members to nursing facilities, the failure to comprehensively assess class members’ need for specialized services, and the total failure to provide specialized services that meet the federal active treatment standard.
97. DADS also fails to provide or ensure the provision of information to class members regarding the limited options available to them to access services in a less restrictive setting than a nursing facility. As a result, class members who would prefer to reside in a less restrictive, more integrated community placement are not even aware that they may be eligible for community-based services and supports or for a small ICF/MR placement, or how to apply for such services.
98. Not surprisingly, almost no members of the class have applied for communitybased services and supports or for admission to a small ICF/MR.
99. Many persons with developmental disabilities, including the named plaintiffs and members of the plaintiff class, have unnecessarily been admitted to, or remain segregated in, nursing facilities. Many class members who reside in nursing facilities do not need intensive nursing services that can only be provided in a nursing facility, nor do they require an institutional setting. Moreover, virtually all class members do not receive those specialized services or supports which constitute active treatment, as required by the NHRA and its regulations.
100. The plaintiffs and members of the plaintiff class could live and function in an integrated community setting if they were informed of and provided with support services
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appropriate to their needs, such as the habilitative services and residential assistance services

operated and funded by the Defendants through their HCS waiver or their ICF/MR program

described below.

(3)

Conditions in Texas’s Nursing Facilities for Class Members

101. Nursing facilities are largely institutional. They are not real homes and or even

home-like. Nursing facilities are segregated and house large numbers of unrelated persons, most

of whom are either elderly or disabled.

102. Most residents of nursing facilities are neither integrated into nor part of the

communities in which they live. Class members in nursing facilities have limited access to the

community. The vast majority of the plaintiffs and plaintiff class members do not participate in

community activities, nor are they active members of civic clubs and churches.

103. Many class members who are confined in nursing facilities never have the

opportunity to leave the facility — not because their condition precludes it, but simply because

there are few opportunities and limited means to do so.

104. Many nursing facility residents never receive visitors.

105. Class members in nursing facilities are denied access to meaningful employment

and education opportunities by virtue of the environments in which they live and the limited

supports that they are provided.

106. Most nursing facilities resemble hospitals — they have nurses’ stations and

“escape guards” posted at the front doors to monitor persons leaving and entering the facility.

Some have locked doors. There are large common areas or day rooms for congregating.

107. There is little, if any, privacy for class members in nursing facilities. Individuals

often share rooms with up to five other residents whom they did not know previously and with

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whom they did not choose to live. Nursing facility residents are often not free to close the door

to their rooms.

108. Many nursing facilities are stark environments where residents have a minimal

number of personal possessions. Most class members do not have their own telephones,

televisions or furniture.

109. Most class members in nursing facilities have little, if any, choice regarding what

to eat or when to eat.

110. Nursing facilities do not provide active treatment or habilitation designed to meet

the needs of class members with developmental disabilities. The care that the nursing facilities

provide is primarily custodial. There is often a shortage of direct-care staff and trained

professionals.

111. The operating philosophy of most nursing facilities is to care for people rather

than to have them care for themselves. Consequently, individuals with developmental

disabilities in nursing facilities often regress and deteriorate, losing basic skills and competencies

as a result of their inappropriate confinement.

112. As a result of these institutional conditions, class members suffer harm from

unnecessary confinement in these segregated facilities and rarely, if ever, receive the level of

habilitative care and active treatment that is required by federal law.

C. Texas’s Intermediate Care Facilities for the Mentally Retarded (ICF/MR)

(1)

Federal ICF/MR Requirements

113. The ICF/MR Program is an optional Medicaid service authorized by Title XIX of

the Social Security Act. 42 U.S.C. § 1396d(a)(15). The program is also known as Intermediate

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Care Facilities for the Developmentally Disabled. ICF/MRs provide residential, health, and rehabilitative services for individuals with developmental disabilities.
114. In 1971 Congress passed legislation, P.L. 92-223, that provides Medicaid reimbursement for institutions for persons with developmental disabilities who need long term care. An ICF/MR is defined as an institution for four or more persons with mental retardation or related conditions. Its primary purpose is to provide health or rehabilitative services consistent with standards prescribed by the Secretary of HHS. 42 U.S.C. § 1396d(d).
115. Federal law permits, but does not require, a state to provide ICF/MRs as part of its Medicaid program. Once a state elects to provide such optional services, they become part of the state Medicaid plan and are subject to the requirements of federal Medicaid law. These services must be available to any Medicaid recipients for whom they are medically necessary.
116. Persons residing in ICF/MRs must receive “active treatment.” The HHS regulations governing ICF/MRs define active treatment as a continuous active treatment program, which includes aggressive, consistent implementation of specialized and generic training, treatment, health services and related services that is directed at:
a. the acquisition of behaviors necessary for the client to function as independently and with as much self-determination as possible, and
b. the prevention or deceleration of regression or loss of current functional status. 42 C.F.R. § 483.440(a).
117. Active treatment in ICF/MRs means an individualized program of habilitative services and supports that is provided throughout the day – from the time the individual wakes up until the time she retires. It must be provided in a consistent manner across all settings and parts of the facility or other locations where the individual is served. It must be designed by a
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qualified professional and implemented by competent staff trained in developmental disabilities.

It must be based upon a comprehensive assessment of the individual’s needs and delivered

pursuant to an individualized plan of care that includes measurable goals, timelines, and persons

or providers with assigned responsibilities. The plan must be reviewed periodically and

modified as the individual attains the stated goals or when the individual’s needs change.

Finally, the plan must be evaluated for effectiveness and improved when needed. 42 C.F.R. §

483.440(a)-(f).

118. Federal statutes and regulations require that individuals in ICF/MRs receive active

treatment, which includes habilitative services, vocational services, occupational therapy, speech

therapy, physical therapy, speech and language therapy, assistive technology, auxiliary aides,

adaptive equipment, case management, and community integration activities. See 42 U.S.C. §

1396d(d); 42 C.F.R. § 440(a)-(f).

119. The type, level and intensity of services must be individually tailored and

appropriate to meet the individual’s needs, as determined by an Interdisciplinary Team. The

Interdisciplinary Team includes several disability professionals from various disciplines who are

required to conduct an individualized assessment of each individual’s needs and to develop a

habilitation plan to provide each individual the services and supports necessary to meet his/her

identified needs.

(2)

Texas’s ICF/MR Program

120. Texas has chosen to provide the optional ICF/MR service. HHSC has delegated

the operation and administration of Texas’s ICF/MR program to DADS. Texas delivers ICF/MR

services through thirteen state-operated supported living centers and numerous privately run

facilities licensed by DADS.

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121. The thirteen state-operated ICF/MR schools are large institutions serving from 75 to over 600 individuals with developmental disabilities. The average census per state-operated ICF/MR is 498.
122. The privately operated facilities range in size from 4 beds to over 200 beds, with most facilities serving from 6 to 13 residents.
123. All ICF/MRs are required to provide active treatment to their residents. The cost of active treatment is built into their Medicaid payment rate and is a condition of licensure.
124. Thus, while persons with developmental disabilities who reside in the ICF/MR programs which DADS licenses, monitors, and funds receive active treatment through a wide array of habilitative services, persons with the same developmental disabilities who reside in nursing facilities receive almost no habilitative services and no active treatment.
D. Texas’s Medicaid Programs for Persons with Developmental Disabilities (1) The Federal Medicaid Program
125. Medicaid is a jointly funded state and federal program that provides medical services to low-income persons pursuant to Title XIX of the Social Security Act. 42 U.S.C. §§ 1396 et seq.
126. State participation in the Medicaid program is optional. States choosing to receive federal matching funds for their Medicaid program must comply with the requirements of the federal Medicaid Act and with the federal regulations governing state Medicaid programs promulgated by the U.S. Department of Health and Human Services. 42 U.S.C. § 1396, 42 C.F.R. §§ 430 et seq.
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127. As a condition of participating in the federal Medicaid program, states must

submit to HHS a state Medicaid plan that fulfills the requirements of the Medicaid Act. 42

U.S.C. § 1396a(a).

128. Medicaid funded services for persons with developmental disabilities include

mandated and optional state plan services, the PASARR program, the ICF/MR program, and

various community programs funded through federal waivers, pursuant to 42 U.S.C. § 1396n.

(2)

Texas’s Medicaid Program

129. Texas has chosen to participate in the Medicaid program. It has prepared a state

plan which HHS has reviewed and approved.

130. HHSC and its Executive Commissioner, Defendant Suehs, are responsible for the

overall administration of the Medicaid program. They have delegated to DADS and its

Commissioner, Defendant Traylor, responsibility for the delivery of Medicaid and other services

and supports to elderly and disabled Medicaid recipients, including plaintiffs and the class.

Nevertheless, DADS and Defendant Traylor are subject to HHSC’s oversight and control, and

HHSC and Defendant Suehs remain responsible for the actions and inactions of DADS, its

officers and agents.

131. DADS and Defendant Traylor are responsible for ensuring that individuals with

developmental disabilities are appropriately screened prior to or immediately after admission to a

nursing facility to determine whether a nursing facility is an appropriate placement or whether

the individual’s needs could be met in a more integrated community setting.

132. If a community placement is appropriate, DADS and Defendant Traylor are

responsible for ensuring that appropriate habilitative and other services and supports are

provided in the community. If a nursing facility placement is the most appropriate setting for

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meeting the individual’s needs, DADS and Defendant Traylor are responsible for ensuring that the individual is comprehensively assessed to determine his or her need for specialized services. Finally, for persons needing specialized services, DADS and Defendant Traylor are responsible for ensuring that those specialized services are in fact provided at the level, frequency, and intensity necessary to satisfy the federal standard for active treatment.
133. The Governor, Defendant Perry, is responsible for ensuring that the State submits a State Medicaid Plan which conforms to federal law, and that Texas’s Medicaid program is administered consistent with that Plan, relevant federal statutes, and federal regulations.
134. Defendants Perry, Suehs and Traylor have failed to ensure that plaintiff class members, who are categorically eligible for Medicaid services, are provided those medically necessary services to which they are entitled under the Plan and pursuant to Title XIX of the Social Security Act.
135. Defendants Perry, Suehs and Traylor also have failed to develop plans and budgets which are designed to provide class members with developmental disabilities with the services and supports needed to reside safely in the community. These defendants have also failed to offer class members who require care in a nursing facility the specialized services and active treatment necessary to ensure that they reach their full potential for self-determination and independence and do not suffer regression.
E. The Individual Plaintiffs (1) Eric Steward
136. Eric Steward is a 44 year-old man with developmental disabilities including mental retardation and the related condition of infantile cerebral palsy. Since birth, Mr. Steward has also had a diagnosis of quadriplegia. He uses a power scooter for mobility, can stand with
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assistance, is verbal and has receptive language skills. Mr. Steward is very friendly and likes meeting and talking with other people.
137. Mr. Steward has resided at the Buena Vida Nursing & Rehabilitation Center of San Antonio since November 2007. Mr. Steward has lived in nursing facilities since 2002. His first nursing facility admission occurred subsequent to surgery for a seizure disorder. Despite residing in two different nursing facilities, Mr. Steward has never received either a Level I PASARR screen or Level II PASARR assessment.
138. Before his placement in the first nursing facility, Mr. Steward lived in a small community-based ICF/MR for approximately 4 years. Mr. Steward’s ICF/MR provided him, and the other seven individuals with disabilities who resided in the facility, with the opportunity to live in a home-like setting in a residential section of San Antonio.
139. As an ICF/MR resident, Mr. Steward shared a bedroom in a home where he had access to all living and dining areas. Mr. Steward also had opportunities to work and participate in community-based activities, including going to movies, dining out, attending sporting events, engaging in sports related activities such as bowling, and participating in Special Olympics. In addition, Mr. Steward also received active treatment, including the opportunity to engage in skill-based activities, such as day habilitation, vocational training, and employment-related activities. Living in an ICF/MR also helped Mr. Steward develop independent living skills. He learned about meal preparation, money management, and doing laundry.
140. However, in 2002 following surgery and hospitalization for his seizure activity, Mr. Steward lost his ICF/MR placement, resulting in his admission to a nursing facility where he has remained for the past eight years.
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141. According to Mr. Steward’s nursing facility medical records, his mental state has declined. He has increasing periods of what the nursing facility characterizes as “persistent sad mood,” and a decline in functioning. According to Buena Vida’s own professionals, Mr. Steward has deteriorated since his last assessment.
142. Nursing facility notes also indicate that Mr. Steward’s communication deficits adversely affect his ability to interact with others. However, there is no indication in Mr. Steward’s chart that he has been evaluated for any form of assistive communication or speech therapy, even though such supports and services are available under the state Medicaid plan and required as part of a program of active treatment.
143. There is nothing in the Buena Vida medical records indicating that he has ever received a PASARR evaluation. In fact, the nursing facility’s own data indicates that it is unknown whether or not Mr. Steward ever received a PASARR determination. As a result, there has been no determination or assessment from DADS or the local mental health mental retardation authority regarding his need for specialized services or alternate placement options. Consequently, Mr. Steward does not receive any specialized services, any active treatment, or any consideration for community living. Because Mr. Steward lives in a nursing facility, he has very few, if any, meaningful opportunities to go anywhere, to work, or to receive the habilitation and other supportive services he needs to avoid further regression.
144. Mr. Steward wants to live in the community. He very much wants the opportunity to work, develop independent living skills and once again have the opportunity to engage in an array of community-based living activities. Living in a community-based setting would enable him to live and interact with individuals much closer to his age.
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(2)

Linda Arizpe

145. Linda Arizpe is a 41 year-old woman with a significant developmental disability.

She is unable to walk and cannot talk, although she does have good receptive communication

abilities and is particularly responsive to her parents. She also has a significant visual

impairment.

146. Ms. Arizpe was initially admitted to Rosewood Care Center in November 2005

with anoxic brain damage. Ms. Arizpe was admitted to Rosewood from the hospital where,

while being treated for a leg injury, she was overmedicated and stopped breathing, resulting in a

brain injury. Ms. Arizpe has been living at Meridian Care Nursing Facility in San Antonio since

January 2008.

147. Prior to her admission to Rosewood, Ms. Arizpe attended public schools where

she participated in special education classes including pre-vocational activities.

148. When Ms. Arizpe was not in school, she traveled extensively with her family.

She also participated in a variety of community-based activities including shopping, swimming,

hiking and especially dining out.

149. While Ms. Arizpe needs assistance with many of her activities of daily living

including eating, dressing, and hygiene related activities, she is able to follow directions, dress

and care for herself.

150. Ms. Arizpe is considerably younger than most of the other residents at the nursing

facility, and further because of her developmental disability, other nursing facility residents do

not interact with her. For instance, Ms. Arizpe’s roommate is well over 70 and has significant

physical and mental disabilities that result in extremely limited opportunities for social

interaction.

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151. Since living at Meridian, Ms. Arizpe has not participated in any of the

community-based activities she previously enjoyed. Moreover, she receives none of the

habilitation services that would enable her become more independent and socially engaged.

152. Despite her longstanding diagnosis of a developmental disability, Ms. Arizpe’s

Level I PASARR form at the nursing facility indicates that she does not have such a disability.

As a result, she was not identified as requiring a Level II PASARR assessment, and no

evaluation has been made to determine (a) the type of community-based placement she may be

eligible for and/or (b) the type and intensity of specialized services she could benefit from.

153. Ms. Arizpe’s family, and, in particular, her elderly parents, want to ensure that she

is not forced to spend the rest of her life in a nursing facility without the habilitative services she

needs to avoid regression and to be as independent as she can be.

154. Ms. Arizpe and her parents would like very much to have her transferred to a

small community-based setting where she could receive all of the needed services, supports, and

therapies which she needs and also interact with the outside world.

(3)

Andrea Padron

155. Andrea Padron is 26 years old. She has resided at Meridian Care in San Antonio

since 2001.

156. When Ms. Padron was ten years old, she suffered a severe head injury from a car

accident. Since the accident, Ms. Padron has required extensive care and habilitation. Her

diagnosis includes quadriplegia and quadriparesis, esophageal reflux, mental retardation, and

epilepsy. In addition, Ms. Padron is nonverbal, although she appears to have good receptive

language skills. Her treating doctor indicates that her rehabilitation potential is fair.

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157. Until she was 16, Ms. Padron lived at home. There she received a range of habilitative services and therapies. She attended public school. She was able to use a wheelchair and, on occasion, to stand with the use of a standing table. She also participated in aqua-therapy, as well as arts and crafts classes in the community.
158. However in 2000, Ms. Padron had to place Andrea in a nursing facility because the family income just exceeded the income criteria for Andrea’s continued eligibility for the supplemental security income program. Because Ms. Hudecek could no longer afford to care for Andrea at home, she placed her in a nursing facility – believing she would get the care and attention she needed. In December 2004, Ms Hudecek, who was active military with the United State Army, was deployed to Iraq. When Ms. Hudecek returned from her deployment to Iraq in February 2007, Ms. Hudecek reports that Andrea could no longer even sit in her wheelchair. She attributes this to the nursing facility’s failing to get Andrea out of bed regularly. As a result, Andrea has regressed. She is no longer able to stand or use her wheelchair. She no longer receives aqua-therapy or participates in recreational or social activities.
159. Following Ms. Hudecek’s return from Iraq and her re-involvement with her daughter, the nursing facility staff began to assist Andrea into her wheelchair. However, the nursing facility staff often left Andrea sitting in her chair for long periods of time unattended, resulting in skin breakdown and sores.
160. To address both the skin breakdown and sores and to enable Andrea to continue to use her wheelchair, Ms Hudecek purchased Roho cushions. These cushions are designed to more evenly distribute a patient’s body weight, significantly reducing the chances for skin breakdown. However, over the past two years, nursing facility staff have failed to regularly use these cushions. As a result, Ms. Padron is no longer using her wheelchair.
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161. A review of Ms. Padron’s nursing home record at Meridian indicates that her

Level I PASARR screening form was completed incorrectly; erroneously stating that Ms. Padron

does not have a developmental disability. As a result, Ms. Padron was not referred for a Level II

assessment and no assessment of her ability to reside in a community-based setting and/or her

need for specialized services has ever been done by the local mental health mental retardation

authority. Consequently, she receives no specialized services, no active treatment, and no

consideration for community living.

162. Ms. Hudecek wants Andrea moved to an integrated, community-based setting

where she can get the care and habilitation needed to recover lost skills related to mobility,

where she can enhance and further develop the skills needed to maximize her ability to function

with as much self-direction and independence as possible, and where she will have much greater

opportunities to participate in community-based activities.

(4)

Patricia Ferrer

163. Plaintiff Patricia Ferrer is an individual with developmental disabilities,

specifically mental retardation and the related condition of epilepsy.

164. Plaintiff Patricia Ferrer has been residing at ManorCare Health Services nursing

facility since September 2008, when her elderly mother, Petra Ferrer, no longer was able to

provide for her care.

165. Ms. Ferrer has few physical limitations and is quite mobile. In addition to her

intellectual disability, she has epilepsy which is poorly controlled by medication.

166. For the first forty-four years of her life, Ms. Ferrer lived at home with her parents.

She attended public schools, graduating from Adamson High School in Dallas.

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167. After graduation from high school, Ms. Ferrer worked full-time as a chamber maid for a hotel chain for approximately four years. She then obtained a position in the security department at Love Field in Dallas, where she worked for approximately two years.
168. Ms. Ferrer ultimately had to leave her employment at Love Field when her epilepsy became more active and difficult to control. In order to control her epilepsy, Ms. Ferrer must take medication periodically throughout the day.
169. During the more than forty years that Ms. Ferrer lived in the community with her parents she was very independent and active. She required no assistance with activities of daily living. In fact, she sometimes prepared simple meals for the family and would regularly assist in meal preparation.
170. Until her epilepsy became more active and unpredictable, Ms. Ferrer was able to use public transportation and would often go to the mall, movies, or visit a friend. After her epilepsy became more active, Ms. Ferrer was not allowed by her parents to take the bus on her own. Nevertheless, she continued to go out to the movies, shopping, and restaurants, and to visit friends when accompanied by a family member or friend.
171. Approximately three years ago, Ms. Ferrer’s father was diagnosed with Parkinson’s disease. Ms. Ferrer’s mother, who is in her seventies and the sole care provider in the household, then had to provide care for both her husband and her daughter. Ultimately, Mrs. Ferrer realized that she lacked the physical ability to provide both her husband and Patricia with the care and support they needed.
172. Because of her inability to properly care for her daughter, Patricia, while also attending to the medical needs of her husband, Mrs. Ferrer reluctantly decided to place Patricia in a nursing facility.
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173. When Ms. Ferrer was admitted to ManorCare in September 2008, her admitting records indicated that she was a person with mental retardation. Nevertheless, her Level 1 PASARR screen indicated that she did not have mental retardation or any other developmental disability.
174. Because Ms. Ferrer was not identified on the Level 1 PASARR screen as an individual with a developmental disability, she was never evaluated to determine if her needs could appropriately be met in the community or if she could benefit from specialized services.
175. Since being placed in ManorCare, Ms. Ferrer’s condition has deteriorated. She has become less communicative, cries frequently, has developed behavioral issues requiring medication, and spends most of her waking hours sitting in a chair by the nurses’ station.
176. There is no reason for Ms. Ferrer to be confined in a segregated nursing facility. She is very independent and able to take care of most of her daily living needs. She would like to live in an integrated community setting where she could meet new people, go to the movies, go shopping, and otherwise interact with the outside world. She is also interested in obtaining the training and support so that she could go back to work.
(5) Benny Holmes 177. Plaintiff Benny Holmes is an individual with developmental disabilities, specifically mental retardation and the related condition of cerebral palsy. 178. Mr. Holmes has been living at the Renaissance at Kessler Park nursing facility since January 2009 when he was discharged from a local hospital following an admission for treatment related to his epilepsy, weight loss, and hydration issues.
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179. Until Mr. Holmes was a young adult, he lived at home and attended public high school. Not only did he attend school regularly, but he also participated in school-related activities, including frequently going to school athletic events and attending his senior prom.
180. Mr. Holmes continued to receive special educations services from the Dallas Independent School District until he was 21 years old. He lived at home with his mother and legal guardian, Priscilla Holmes, during this period.
181. Mr. Holmes mother, who is a single parent, had to work to support herself and her son. When Mr. Holmes’ special education services terminated, his mother was not able to both work and care for him during the day. As a result, Mr. Holmes was placed at the Dallas Health and Rehabilitation Center, where he remained for approximately one year.
182. After about one year at the Dallas Health and Rehabilitation Center, the local Mental Retardation Authority in Dallas determined that Mr. Holmes’ needs could be more appropriately met in a community-based setting. He was provided with a HCS-waiver slot which enabled him to transfer from the nursing facility to a three bedroom home in the community where he lived for approximately nine years.
183. During the nine years that Mr. Holmes resided in the community, he attended day habilitation programming, went to the movies, and participated in other community outings. While he is unable to talk, he could and did communicate with others using sounds and gestures. He is also not able to walk. While in the community, he had a wheelchair which provided him with the ability to move around.
184. After successfully residing in the community for approximately nine years, Mr. Holmes was admitted to a local hospital because of problems he was having with his epilepsy, hydration, and weight loss. Following his treatment at the hospital, he was not discharged back
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to his community residence, but rather was transferred in January 2009 to the Renaissance at Kessler Park nursing facility, where he continues to reside.
185. Shortly after his admission, a preadmission screening and resident review (PASARR) form was filled out regarding his admission. That Level I PASARR screen indicated that Mr. Holmes did not have a developmental disability, even though the Renaissance’s own admission form indicates that he has a history of mental retardation and cerebral palsy. That PASARR form also indicated that Mr. Holmes did not need specialized services.
186. Because the Level I PASARR screen incorrectly indicated that Mr. Holmes did not have a developmental disability, no Level II PASARR assessment of Mr. Holmes was undertaken by either DADS or the local Mental Retardation Authority to determine his interest in and ability to reside in a less restrictive community setting, or his need for and interest in specialized services.
187. While Mr. Holmes had a HCS-waiver slot when he was admitted to Renaissance and could have used that waiver slot to move back to a community-based setting, Renaissance nursing facility staff repeatedly informed Mr. Holmes’ mother – and legal guardian – that a community-based waiver program would not be appropriate for him.
188. Renaissance staff told Mr. Holmes’ mother that a community-based placement was not appropriate without ever contacting the local mental retardation authority, the agency responsible for determining whether or not a community-based alternative would be appropriate. This was never done in part because Renaissance failed to conduct a Level II PASARR assessment, as required by federal law.
189. The Renaissance nursing facility staff also told Mr. Holmes’ legal representatives from Advocacy, Incorporated that he was not appropriate for a community-based placement.
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When representatives from Advocacy, Incorporated suggested that Mr. Holmes could possibly qualify for and benefit from a HCS Medicaid waiver slot, Renaissance nursing facility staff continued to assert that a community placement was inappropriate, notwithstanding having never contacted a Medicaid waiver provider for information about community-based alternatives.
190. On information and belief, Mr. Holmes’ initial HCS provider, Dallas MetroCare, contacted the Renaissance nursing facility regarding the possibility of Mr. Holmes moving to a small residential home in the community with his HCS-waiver slot, which they were still holding for him. Dallas MetroCare was told by the Renaissance nursing facility that Mr. Holmes was not appropriate for such a setting.
191. On information and belief, Renaissance nursing facility staff told MetroCare that Mr. Holmes’ mother never visited her son, despite the fact that she regularly visited him. In addition, in response to requests from MetroCare for Ms. Holmes’ telephone number, Renaissance never provided Dallas MetroCare with a working phone number for Ms. Holmes.
192. Upon information and belief, these statements regarding Mr. Holmes’ appropriateness for community-based care and the frequency of Ms. Holmes’ visits were made to MetroCare in order to discourage MetroCare from further pursuing the possibility of providing Mr. Holmes with support and services in the community through the HCS waiver.
193. As a result of the statements by Renaissance, Dallas MetroCare planned to give Mr. Holmes’ HCS-waiver slot to another applicant on the interest list. However, before this occurred, Advocacy, Incorporated learned that Mr. Holmes’ had previously resided in the community through the HCS-waiver program and contacted Dallas MetroCare, providing them with Ms. Holmes’ phone number and informing them that, contrary to the nursing facility’s claim, Ms. Holmes frequently visits her son at the nursing facility.
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194. Dallas MetroCare contacted Ms. Holmes and, after being informed of the community-based options that were available for her son, Ms. Holmes advised MetroCare that she would like to retain the HCS-waiver slot for her son and develop a plan to transition him back to the community.
195. To this end, Ms. Holmes recently has had Mr. Holmes evaluated by an HCSwaiver provider in Dallas. That HCS provider states that it can meet all of Mr. Holmes health and habilitation needs in a community setting. The proposed placement is a four bedroom home in a quiet residential neighborhood, where Mr. Holmes will have his own room and live with three other residents. Mr. Holmes’ transition to his new residential placement should be complete in or about January 2011.
196. While Mr. Holmes has not been evaluated by a speech or language pathologist or therapist to determine if he could benefit from any form of assistive augmentative communication device or therapy during his time at the Renaissance nursing facility, he will receive such an evaluation after he moves to his HCS placement.
197. Since being admitted to the Renaissance nursing facility, Mr. Holmes’ condition has deteriorated markedly. At the time Mr. Holmes was admitted to the Renaissance nursing facility, he was described as alert, able to follow commands, and an active participant in treatment. But, after only six months at the nursing facility, medical notes indicated that Mr. Holmes rarely, if ever, understands commands from others and no longer is an active participant in his treatment.
198. During the course of his stay at the Renaissance nursing facility, Mr. Holmes has become withdrawn and depressed. While he used to be active and participate in community
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activities, Mr. Holmes now spends his days confined to his bed or in a wheelchair in front of the

television.

(6)

Zackowitz Morgan

199. Plaintiff Zackowitz Morgan is a 39 year-old man with developmental disabilities.

Mr. Morgan has diagnoses of mental retardation, cerebral palsy, obesity, hypertension,

hypothyroidism, glaucoma, and peripheral vascular disease, congestive heart failure and a

seizure disorder.

200. Mr. Morgan has been in living in a nursing facility since January 2008, following

his discharge from a hospital where he was treated for a leg infection. Mr. Morgan was admitted

into the Katyville Healthcare Center (nursing facility) on January 25, 2008. Upon his admission,

Mr. Morgan did not receive a PASARR screen or a comprehensive assessment for specialized

services.

201. On January 27, 2009, more than a year after being admitted into his nursing

facility placement, Mr. Morgan finally received a PASARR screening. That screening simply

indicated that he was appropriate for specialized services.

202. On March 18, 2009, an Inter-Disciplinary Team (IDT) meeting was held at

Katyville Healthcare Center. Participants included representatives from the nursing facility, Mr.

Morgan’s guardian, and his legal counsel. There was no representative from Harris County

Mental Health and Mental Retardation Authority (MHMRA), the county branch of the state

agency responsible for providing specialized services and community services. The IDT

determined that Katyville Healthcare could not meet Mr. Morgan’s specialized services needs

related to his mental retardation. In addition, the IDT also determined that a nursing facility was

not an appropriate placement for him.

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203. In July 2009, Mr. Morgan was transferred to the Silver Springs Healthcare Center at the request of his guardian.
204. Almost nine months after Mr. Morgan’s IDT meeting, a Harris County Mental Health and Mental Retardation Authority (MHMRA) service coordinator finally visited him at Silver Springs Healthcare Center to perform a needs assessment. That September 16, 2009 assessment determined Mr. Morgan had “…a moderate need for service coordination.” However, there is no indication that Mr. Morgan has ever received any specialized services, and he is not aware of having received any. He clearly does not receive active treatment.
205. Despite the IDT determination that a nursing facility was not an appropriate placement for Mr. Morgan, the Defendants have not undertaken any steps to assist him in locating an alternative, more integrated setting in which his habilitation and residential assistance needs could be met.
206. Upon information and belief, prior to his nursing home placement, Mr. Morgan lived in a small ICF-MR with three other individuals.
207. Mr. Morgan is an individual with an extremely outgoing personality. Living in the community would afford him a variety of opportunities that institutional living precludes, including meeting and socializing with people and pursuing his desire to work. Prior to his nursing home placement, Mr. Morgan participated regularly in a vocational workshop operated by EduCare of Texas.
208. Since moving to a nursing facility placement, Mr. Morgan has regressed. He is no longer participating in EduCare workshops. He has gained a significant amount of weight, and is no longer ambulatory and now uses a wheelchair. In terms of daily living activities, Mr.
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Morgan can no longer self-transfer or self-toilet, tasks that he could perform prior to his nursing facility placement. He now must wear diapers.
209. Mr. Morgan is both frustrated and depressed about the deterioration of his health, his inability to participate in social activities outside of the nursing facility, and his goal of being employed. At the nursing facility he receives no vocational support or training. He spends all of his waking hours in institutional rooms with little to do or engage him. VI. LEGAL CLAIMS
First Claim for Relief The Americans with Disabilities Act A. Violation of the ADA’s Integration Mandate 210. The plaintiffs and the members of the plaintiff class are qualified individuals with disabilities within the meaning of the ADA. 42 U.S.C. § 12131(2). 211. Title II of the ADA requires that “a public entity shall administer services, programs and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.” 28 C.F.R. § 35.130(d). Defendants Suehs and Traylor, acting in their official capacities, are public entities within the meaning of the ADA. 212. The Individual Plaintiffs and plaintiff class members qualify for and would benefit from community support services available from the Texas Medicaid program. Although community programs are the most integrated setting appropriate to meet their needs, the plaintiffs remain institutionalized in nursing or rehabilitation facilities, or at imminent risk of such institutionalization. By denying plaintiffs and the class access to existing community programs, and by requiring them to be confined in segregated institutional settings in order to receive the care they require, Defendants discriminate against the plaintiffs and class on the basis of their disability in violation of 42 U.S.C. § 12132 and 28 C.F.R. § 35.130(d).
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B. Eligibility Criteria 213. Regulations implementing Title II of the ADA specify that “[a] public entity shall not impose or apply eligibility criteria that screen out or tend to screen out an individual with a disability or any class of individuals with disabilities from fully and equally enjoying any service program, or activity, unless such criteria can be shown to be necessary for the provision of the service, program, or activity being offered.” 28 C.F.R. § 35.130(b)(8). 214. The Defendants have developed and implemented eligibility criteria for their community-based support services for individuals with developmental disabilities that screen out or tend to screen out the class of individuals with developmental disabilities who are residing in Texas nursing facilities from gaining access to or enjoying those community-based habilitative services and supports in violation of 42 U.S.C. § 12132 and 28 C.F.R. § 35.130(b)(8). C. Methods of Administration 215. Regulations implementing Title II of the ADA provide that “a public entity may not, directly or through contractual or other arrangements, utilize criteria or other methods of administration: (i) that have the effect of subjecting qualified individuals with disabilities to discrimination on the basis of disability; [or] (ii) that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the entity's program with respect to individuals with disabilities … .” 28 C.F.R. § 35.130(b)(3). 216. The Defendants have developed and utilize criteria and methods of administering Texas’s long-term care system for persons with developmental disabilities that have the tendency and effect of subjecting the plaintiffs and the class to unnecessary and unjustified segregation on the basis of their disability by, inter alia, failing to inform them of the services, supports and programs that would enable them to reside in a less restrictive, more integrated setting, failing to
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assess them for such services, supports and programs, failing to offer them a choice of such community-based services, supports and programs, and failing to afford them equal access to such services, supports and programs with other institutionalized individuals on the basis of the nature of their disability and placement, all in violation of 42 U.S.C. § 12132 and 28 U.S.C. § 35.130(b)(3).
217. It would not fundamentally alter the Defendants’ programs, services, or activities to provide the plaintiffs and the class with the services necessary to allow them to live in the community.
Second Claim for Relief Section 504 of the Rehabilitation Act 218. The plaintiffs are qualified individuals with disabilities under Section 504 of the Rehabilitation Act. 29 U.S.C. § 794(a). 219. Defendants receive federal financial assistance to operate the Medicaid Program and other related programs and services designed to provide medically necessary services and supports to the plaintiff class. 220. The regulations accompanying Section 504 provide that: “[r]ecipients shall administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons.” 28 C.F.R. § 41.51(d). 221. These regulations further prohibit recipients of federal financial assistance from “utiliz[ing] criteria or methods of administration . . . (i) [t]hat have the effect of subjecting handicapped persons to discrimination on the basis of handicap; [or] (ii) that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the recipient’s program with respect to handicapped persons.” 28 C.F.R. § 41.51(b)(3); 45 C.F.R. § 84.4(b).
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222. The Individual Plaintiffs and plaintiff class members qualify for and would benefit from community support services provided by the Defendants. Although the community is the most integrated setting appropriate to meet their needs, the plaintiffs remain institutionalized in nursing and rehabilitation facilities, or at risk of such institutionalization. By denying them access to existing community programs, and by requiring that plaintiffs and class members be confined in segregated institutional settings in order to receive needed rehabilitative services, the Defendants violate Section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a).
223. The Defendants’ criteria and methods of administering their system of long-term services for persons with developmental disabilities subject plaintiffs and the class to illegal discrimination and unnecessary segregation in violation of § 504 of the Rehabilitation Act and its implementing regulations.
224. It would not fundamentally alter the Defendants’ programs, services, or activities to provide the plaintiffs and the class with the services necessary to allow them to live in the community.
Third Claim for Relief Title XIX of the Social Security Act A. Reasonable Promptness 225. Title XIX of the Social Security Act requires states to provide Medicaid benefits to all eligible persons with reasonable promptness and for as long as medically necessary. 42 U.S.C. §§ 1396a(a)(8); 1396a(a)(10)(A). Provision of services must not be delayed by the agencies’ administrative procedures. 42 C.F.R § 435.930(a). 226. The Defendants’ arbitrary policies, which limit the provision of medically necessary community-based services and supports, as well as medically necessary specialized services, result in extended delays and the outright denial of medically necessary care to the
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plaintiffs and members of the plaintiff class. The residential support, habilitation and other specialized services that the plaintiff class needs are not provided with reasonable promptness, in violation of 42 U.S.C. §§ 1396a(a)(8).
B. Freedom of Choice 227. The Defendants have failed to provide residents of nursing facilities with developmental disabilities with: 1) notice of and equal opportunities to apply for and access medically necessary community-based services; 2) an assessment of their eligibility for such services; and 3) meaningful choice between institutional and community-based services, in violation of 42 U.S.C. § 1396n(c)(2)(B) & (C). C. Comparability 228. Under federal Medicaid law, persons, like plaintiffs and the class, who are “categorically eligible” for Medicaid benefits based upon their disability and income must be provided with assistance which shall not be less in amount, duration and scope than the medical assistance made available to another “categorically eligible” recipient and shall not be less in amount, duration and scope than the medical assistance made available to other recipients in the program. 42 U.S.C. § 1396a(a)(10)(B)(i) and (ii); 42 C.F.R. § 440.240. 229. By failing to provide Medicaid services, including specialized services and active treatment, to Individual Plaintiffs and members of the plaintiff class who reside in nursing facilities which are comparable to the services provided to similarly-situated individuals such as categorically needy persons who reside in ICF/MRs, the Defendants violate the comparability requirement of the Social Security Act. 42 U.S.C. § 1396a(a)(10)(B).
Fourth Claim for Relief Nursing Home Reform Amendments A. Screening, Assessment and Placement
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230. The federal NHRA requires that states develop and implement a PASARR program for all applicants to, and residents of, Medicaid-certified nursing facilities. 42 U.S.C. § 1396r(e)(7); 42 C.F.R. § 483.100 to 483.138. Each state’s PASARR program must identify all individuals who are suspected of having mental illness or developmental disabilities and must determine whether nursing facility services and other specialized services are necessary. 42 U.S.C. §§ 1396r(b)(3)(F)(i), 1396r(e)(7)(A)&(B); 42 C.F.R. § 483.128.
231. The Defendants have failed to develop and implement a PASARR program that timely and appropriately screens nursing home applicants for developmental disabilities, assesses whether the needs of individuals with developmental disabilities could be met in an alternative, less restrictive setting than a nursing facility, and advises the applicant or resident of the available alternatives to a nursing home placement in violation of 42 U.S.C. §§ 1396r(b)(3)(F)(i), 1396r(e)(7)(A) & (B) and 42 C.F.R. § 483.128.
232. The Defendants’ failure to appropriately screen all applicants for nursing facility admission for possible developmental disabilities and to then assess whether the needs of those so identified require nursing facility care or, instead, could be met in a more integrated community-based setting has resulted in the inappropriate placement and retention of plaintiffs and many members of the class in nursing facilities in violation of 42 U.S.C. §§ 1396r(e)(7)(B)(ii) & (C) and 42 C.F.R. § 483.132(a).
B. Specialized Services 233. The Level II PASARR assessment must determine whether the applicant or resident requires specialized services and, if so, must provide those specialized services either in the nursing facility or in an alternative appropriate setting. 42 U.S.C. § 1396r(e)(7)(B)(ii)(II) & (C); 42 C.F.R. §§ 483.112(b), 483.114(b)(2), 483.116(b)(2), 483.118, 483.120(b).
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234. Specialized services for individuals with developmental disabilities must include all services which are needed to implement “a continuous active treatment program, which includes aggressive, consistent implementation of a program of specialized and generic training, treatment, health services and related services . . . that is directed toward—(i) The acquisition of the behaviors necessary for the client to function with as much self determination and independence as possible; and (ii) The prevention or deceleration of regression or loss of current optimal functional status.” 42 C.F.R. § 483.440(a)(1), made applicable to nursing facility residents by 42 C.F.R. § 483.120(a)(2).
235. The intensity, duration and frequency of specialized services must be sufficient to provide active treatment, using training and qualified staff, to each individual who needs such services. 42 C.F.R. § 483.440 (c) - (f). The scope and breadth of specialized services cannot be arbitrarily curtailed or limited by the state. 42 C.F.R. § 483.440(c). In addition, the process for planning, providing and monitoring those services must comply with 42 C.F.R. § 483.440 (c) (f).
236. The Defendants have failed to provide a program of active treatment to each resident of a nursing facility who needs specialized services, and have instead arbitrarily and illegally limited these services by regulation to only “physical, occupational, and speech therapy evaluations and services.” 40 Tex. Admin. Code §§ 19.1303, 19.2500(e)(3). Defendants’ limitation of the scope of specialized services that they will authorize violates 42 U.S.C. § 1396r(b)(3)(F), (e)(7)(B)(ii), (f)(8) and 42 C.F.R. §§ 483.120(a)(2), 483.440.
237. In addition to illegally limiting the scope of specialized services available to class members, the Defendants have failed to provide even those limited services to almost all members of the plaintiff class. Contrary to the their obligation to provide specialized services,
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including active treatment, to the class, the Defendants have failed and refused to provide or ensure the provision of needed specialized services to all but 28 members of the class of approximately 4,500 nursing facility residents with developmental disabilities, despite the fact that experience in other states indicates that over 90% of the class are eligible for and in need of such services.
238. The Defendants’ failure to appropriately assess class members’ need for specialized services, their failure to provide the full range of needed specialized services and active treatment to individual class members and members of the plaintiff class, and their failure to ensure that plaintiffs and the class are not inappropriately placed or retained in nursing facilities, violates the NHRA, 42 U.S.C. § 1396r(e)(7) and its implementing regulations, 42 C.F.R. § 483.100 et seq. VII. PRAYERS FOR RELIEF
WHEREFORE, the plaintiffs respectfully request that this Court: 1. Certify this case as a class action pursuant to Fed. R. Civ. P. 23; 2. Issue preliminary and permanent injunctions restraining the Defendants, their successors in office, agents, employees and assigns, and all persons acting in concert with them from:
(a) failing to provide appropriate, integrated community services and supports for all class members, consistent with their individual needs; (b) failing to make reasonable modifications to the rules and requirements regarding the eligibility for and administration of Texas’s community-based services, supports and programs which exclude plaintiffs and the class from the
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services and supports needed to reside safely in more integrated community-based settings; (c) failing to provide equal access to medically necessary community-based habilitative mental retardation and developmental disability services to all eligible class members based on their individual needs and medical necessity, and without regard to arbitrary funding or service caps or waiting list requirements; (d) discriminating against plaintiff class members with developmental disabilities by failing to provide medically necessary habilitation services and supports in the most integrated setting appropriate to their needs; (e) failing to provide medically necessary community-based habilitation services and supports with reasonable promptness and in a comparable manner to all eligible class members; (f) failing to conduct proper, comprehensive PASARR screens and assessments of class members to determine whether their needs could be appropriately met in a less restrictive setting than a nursing facility, and failing to inform class members of the results of their PASARR assessment; (g) failing to assess class members’ needs for specialized services; (h) failing to provide the full array of needed specialized services, at the frequency, level, intensity, and duration needed to constitute active treatment, to class members as required by the NHRA; and (i) arbitrarily restricting the scope of available specialized services. 3. Issue a declaratory judgment declaring that:
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(a) the Defendants have violated the Americans with Disabilities Act and Section 504 of the Rehabilitation Act in their implementation and administration of the state Medicaid program and in their failure to make reasonable modifications to their community programs for persons with developmental disabilities to enable plaintiffs and members of the class to obtain the services and supports they require to reside in the most integrated setting appropriate to their needs; (b) the Defendants have violated the Medicaid Act including the comparability, reasonable promptness, and freedom of choice provisions of the Social Security Act governing Medicaid services; and (c) the Defendants have violated the Nursing Home Reform Amendments by failing to properly screen and assess class members’ ability to reside in a less restrictive, more integrated setting than a nursing facility, by their inappropriate placement of class members in nursing facilities, by their failure to assess class members’ need for specialized services, by their arbitrary restriction on the scope of available specialized services, and by their failure to provide members of the plaintiff class with specialized services, including active treatment; 4. Award plaintiffs their reasonable attorneys’ fees and costs pursuant to 42 U.S.C. §§ 1988 & 12205 and 29 U.S.C. § 794a; and 5. Grant such other relief which is necessary and proper to protect the federal rights of the plaintiffs and the class which they represent.
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Center
Northam (413) (413)

Respectfully submitted,
/s/ Garth Corbett Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Pro Hac Vice Forthcoming Advocacy, Incorporated 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
gcorbett@advocacyinc.org
Yvette Ostolaza State Bar No. 00784703 Robert Velevis State Bar No. 24047032 Pro Hac Vice Forthcoming Casey A. Burton State Bar No. 24058791 Pro Hac Vice Forthcoming Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
yvette.ostolaza@weil.com
Steven J. Schwartz Pro Hac Vice Forthcoming J. Paterson Rae Pro Hac Vice Forthcoming
for Public Representation 22 Green Street
pton, Massachusetts 01060 586-6024 (Telephone) 586-5711 (Facsimile)
Attorneys for Plaintiffs

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CERTIFICATE OF SERVICE I certify that on this 20 th of December, 2010, a true and correct copy of Plaintiff’s Complaint was sent via Facsimile and U.S. Certified Mail, return receipt requested to:
Governor Rick Perry Office of the Governor State Insurance Building 1100 San Jacinto Austin, Texas 78701 Fax (512) 463-1849
Thomas Suehs, Executive Commissioner Texas Health and Human Services Commission 4900 N. Lamar Blvd. Austin, TX 78751-2316 Fax (512) 424-6587
Karen Ray, Assistant General Counsel Texas Health and Human Services Commission 4900 N. Lamar Blvd. Austin, TX 78751-2316 Fax (512) 424-6586
Chris Traylor, Commissioner Texas Department of Aging and Disability Services 701 West 51st Street Austin, Texas 78751 Fax (512) 320-0667
Marianne Reat, Managing Attorney Texas Department of Aging and Disability Services 701 West 51st Street Austin, Texas 78751 Fax (512) 438-4749
Nancy Juren, Assistant Attorney General Office of Attorney General General Litigation 300 W. 15th St. Austin, TX 78701 Fax (512) 320-0667
/s/ Garth Corbett GARTH CORBETT
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 Case 5:10-cv-01025-OLG Document 13 Filed 01/19/11 Page 1 of 7

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

§

and mother, Lillian Minor, et al.,

§

§

Plaintiffs,

§

§

v.

§

CIV. NO. 5:10-CV-1025-OG

§

§

§

RICK PERRY, Governor, et al.,

§

ORAL ARGUMENT REQUESTED

§

Defendants.

§

PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes, and Zackowitz Morgan (collectively, the “Named Plaintiffs”) move this Court to certify this case as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure. In support of their motion,1 the Named Plaintiffs state that: 1. All of the Named Plaintiffs are Medicaid-eligible individuals with mental retardation or a related condition2 (collectively referred to as “developmental disabilities”) who currently are confined in nursing facilities in Texas or at risk of being placed in a nursing facility.3 Each Named Plaintiff is entitled to live in the most integrated setting and prefers to live in the community, with appropriate services and supports. However, each Named Plaintiff (except Mr. Holmes) remains

1 Concurrently with this motion, the Named Plaintiffs are also filing their Memorandum of Law in Support of the Motion for Class Certification, which is expressly incorporated herein.
2 This Motion incorporates the term “mental retardation or a related condition” as defined and used in the federal PASARR regulations. See 42 C.F.R. § 483.102(b)(3).
3 Named Plaintiff, Benny Holmes, recently and subsequent to the filing of the Complaint, moved out of the nursing facility where he had been residing into a small group home in the community. Even though he is now in the community, he remains at risk of readmission to a nursing facility and, therefore, continues to be an appropriate class representative.

Case 5:10-cv-01025-OLG Document 13 Filed 01/19/11 Page 2 of 7
unnecessarily segregated as a result of the defendants’ failure to comply with Title II of the Americans with Disabilities Act (ADA), 42 U.S.C. § 12132 et seq.; 28 C.F.R. § 35.130(d) et seq., and Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 Additionally, each Named Plaintiff has been or is being denied the specialized services in the nursing facility that are necessary to provide them with active treatment, in violation of the Nursing Home Reform Amendments (NHRA) to the Medicaid Act, 42 U.S.C. § 1396r(e)(7) and their implementing regulations, 42 C.F.R. § 483.100 et seq.
2. This action seeks class-wide injunctive relief under Rule 23(b)(2) of the Federal Rules of Procedure to end the harm suffered by the Named Plaintiffs and others similarly situated who are inappropriately institutionalized in nursing facilities and denied active treatment. The Named Plaintiffs seek injunctive relief to require Rick Perry, Governor of the State of Texas, Thomas Suehs, Executive Commissioner of the Texas Health and Human Services Commission, and Chris Trayloer, Commissioner of the Texas Department of Aging and Disability Services (the “Defendants”) to fulfill their obligations to the proposed class under Title II of the ADA, Section 504 of the Rehabilitation Act, and the NHRA by, among other things: (1) implementing an effective screening and assessment process that will accurately identify individuals with developmental disabilities, including whether they can be appropriately served in the community; (2) providing those so identified with the necessary services and supports to enable them to move to community-based settings; and (3) for those who require nursing facility care, determining their need for specialized services and providing them with those services with sufficient frequency, intensity, and duration to constitute active treatment.
3. The Complaint seeks the same relief from Defendants for approximately 4,500 other similarly-situated individuals with developmental disabilities who are living in nursing facilities,
2

Case 5:10-cv-01025-OLG Document 13 Filed 01/19/11 Page 3 of 7
and thousands more who will or should be screened for admission to nursing facilities in the future. Most of these individuals are unnecessarily segregated in nursing facilities and would prefer to live in an integrated community setting with appropriate services and supports. Additionally, all of the proposed class members currently confined to nursing facilities are denied the specialized services and active treatment that the defendants are obligated to provide.
4. The Complaint requests that the Court certify a plaintiff class comprised of all Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related condition4 in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq.
5. The proposed class satisfies the numerosity, commonality, typicality, and adequacy of representation requirements of Rule 23(a) of the Federal Rules of Civil Procedure as more fully set forth in the accompanying Memorandum of Law.
6. Because Defendants have acted or refused to act on grounds generally applicable to the entire class, thereby making final injunctive and declaratory relief appropriate for the whole class, the proposed class satisfies the standards of Rule 23(b)(2) of the Federal Rules of Civil Procedure.
7. There are no other pending actions in any court of which Plaintiffs are aware against Defendants alleging the same or similar causes of action.
8. Counsel for the Named Plaintiffs, Advocacy, Inc., the Center for Public Representation, and Weil, Gotshal & Manges LLP (Plaintiffs’ Counsel), have discussed and thoroughly explained to the Named Plaintiffs the nature of a class action and the potential
4 The class definition utilizes the phrase “mental retardation and/or a related condition,” rather than “developmental disabilities” because this is the current terminology in the federal PASARR regulations. 42 CFR § 483.102(b)(3).
3

Case 5:10-cv-01025-OLG Document 13 Filed 01/19/11 Page 4 of 7
advantages and disadvantages to the Named Plaintiffs of proceeding in a class action rather than individually.
9. Prior to filing this action, Plaintiffs’ Counsel engaged in extensive settlement negotiations with Defendants over a period of seven months in an attempt to resolve the issues raised in this litigation. The settlement negotiations focused exclusively on a systemic resolution of the issues and did not involve negotiations seeking to obtain individual relief for any of the Named Plaintiffs.
10. Plaintiffs’ Counsel are not aware of any person who has relied on the fact that this action was filed as a class action. Plaintiffs’ Counsel intend to pursue this litigation on behalf of the class even if the claims of the current Named Plaintiffs are rendered moot by the actions of Defendants or otherwise, either by continuing to pursue the action through the institutional plaintiffs and/or by intervening additional named plaintiffs.
11. Because this a Rule 23 (b)(2) class action, notice to the class is not required. Rule 23(c)(2)(A). See Newton-Nations v. Rogers, 316 F.Supp.2d 883, 890 (D.Ariz. 2004); Advisory Committee Note on Rule 23, 215 F.R.D. 158, 218 (2003) (“The authority to direct notice to class members in a (b)(1) or (b)(2) class action should be exercised with care. For several reasons, there may be less need for notice than in a (b)(3) class action. There is no right to request exclusion from a (b)(1) or (b)(2) class. The characteristics of the class may reduce the need for formal notice. The cost of providing notice, moreover, could easily cripple actions that do not seek damages. The court may decide not to direct notice after balancing the risk that notice costs may deter the pursuit of class relief against the benefits of notice.”). Consequently, the Named Plaintiffs do not believe that there is any need for notice to the class at this point in the litigation.
4

Case 5:10-cv-01025-OLG Document 13 Filed 01/19/11 Page 5 of 7 12. Plaintiffs’ Counsel have extensive experience in prosecuting class actions, including numerous class actions on behalf of persons with disabilities. They have the skills and resources to adequately represent the plaintiff class in this case as set forth more fully in the attached Memorandum of Law and seek appointment as co-class counsel in this action.
REQUESTED RELIEF WHEREFORE, the Named Plaintiffs respectfully request that, pursuant to Rule 23(c) of the Federal Rules of Civil Procedure, the Court certify a class consisting of all Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related condition in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq. The Named Plaintiffs further request that the Court appoint Advocacy, Inc., Weil, Gotshal & Manges LLP, and the Center for Public Representation as co-class counsel pursuant to Rule 23(g) of the Federal Rules of Civil Procedure.
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Case 5:10-cv-01025-OLG Document 13 Filed 01/19/11 Page 6 of 7
Respectfully submitted,
/s/ Garth A. Corbett Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Advocacy, Incorporated 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile) Yvette Ostolaza State Bar No. 00784703 Robert Velevis State Bar No. 24047032 Casey A. Burton State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile) Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile) Attorneys for Plaintiffs
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Case 5:10-cv-01025-OLG Document 13 Filed 01/19/11 Page 7 of 7 CERTIFICATE OF CONFERENCE
I, Garth A. Corbett, hereby certify that I have conferred with counsel for Defendants on the relief requested in this Motion for Class Certification, and certify that Defendants are opposed to the relief sought herein.
/s/ Garth A. Corbett Garth A. Corbett CERTIFICATE OF SERVICE I, Garth Corbett, hereby certify that all parties have been served through the Court’s ECF system, or if such party does not accept service through the Court’s ECF system, then by first class mail. /s/ Garth A. Corbett Garth A. Corbett
7

 Case 5:10-cv-01025-OLG Document 14 Filed 01/19/11 Page 1 of 23

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

§

and mother, Lilian Minor, et al.,

§

§

Plaintiffs,

§

§

v.

§

CIV. NO. 5:10-CV-1025-OG

§

§

RICK PERRY, Governor, et al.,

§

§

Defendants.

§

PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR CLASS CERTIFICATION
I. INTRODUCTION Eric Steward, Linda Arizpe, Andrew Padron, Patricia Ferrer, Benny Holmes, and
Zackowitz Morgan (collectively, the “Named Plaintiffs”) on behalf of themselves and thousands of similarly-situated Medicaid-eligible individuals with mental retardation and/or other related conditions in Texas who reside or are at risk of residing in nursing facilities, have filed a class action complaint seeking declaratory and injunctive relief under Title II of the Americans with Disabilities Act (ADA), 42 U.S.C. § 12132 et seq., Section 504 of the Rehabilitation Act, 29 U.S.C. § 794a, and the Nursing Home Reform Amendments (NHRA) to the Medicaid Act, 42 U.S.C. § 1396r(e)(7). Rule 23(c)(1) of the Federal Rules of Civil Procedure requires that the court shall determine whether the action is to be maintained as a class action “at an early practicable time” after the commencement of an action. Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261, 267 (5th Cir. 2007). The Named Plaintiffs respectfully submit this brief in support of Plaintiffs’ Motion for Class Certification.1

1 Concurrently with this memorandum, the Named Plaintiffs are also filing their Motion for Class Certification, and

Case 5:10-cv-01025-OLG Document 14 Filed 01/19/11 Page 2 of 23
II. PRELIMINARY STATEMENT Courts commonly certify classes of disabled persons challenging the appropriateness of
government action, as sought here. Without the procedural benefits provided by the class action mechanism, the Named Plaintiffs and others similarly situated would be unable to effectively seek the relief to which they are entitled. Because the members of the plaintiff class are largely unable to challenge the propriety of government action on their own, it is necessary that such relief be sought on a class-wide basis.
The propriety of a class device in cases like this is illustrated by the large number of class actions that have been certified against governmental agencies at both the state and federal levels. See e.g., 7 Newberg on Class Actions § 23:1 (4th ed. 2002); List of Selected ADA Class Action Cases, attached as Exhibit 1; List of 36 Class Actions on behalf of Institutionalized Individuals, attached as Exhibit 2. Because members of this class have developmental disabilities,2 class relief becomes even more important because such class members are less likely to be able to institute legal proceedings on their own behalf. Indeed, a nearly identical class has been certified by federal courts in Massachusetts relating to the treatment of persons with developmental disabilities in nursing homes in that state. In Massachusetts, the court found that the plaintiff class met all of the requirements of Rule 23(a), and found that a Rule 23(b)(2) class action is particularly appropriate for the kind of civil rights action seeking systematic governmental reform such as this action. For the same reasons, this Court should find that the plaintiffs have met the requirements of Rule 23(a) and should certify a Rule 23(b)(2) class as requested herein.
this memorandum is expressly incorporated therein. 2 The term “developmental disabilities” is used to refer to mental retardation or a related condition as those terms are defined in the federal pre-admission screening and resident review regulations of the U.S. Department of Health and Human Services, 42 C.F.R. § 483.102(b)(3).
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Case 5:10-cv-01025-OLG Document 14 Filed 01/19/11 Page 3 of 23
III. STATEMENT OF FACTS
The Named Plaintiffs are all persons with developmental disabilities who live or are at risk of placement in nursing facilities throughout Texas.3 Because of the failure to comply by Rick
Perry, Governor of the State of Texas, Thomas Suehs, Executive Commissioner of the Texas Health
and Human Services Commission, and Chris Trayloer, Commissioner of the Texas Department of
Aging and Disability Services (the “Defendants”) with Title II of the ADA and its implementing
regulations, Section 504 of the Rehabilitation Act and its implementing regulations, and the
NHRA and their implementing regulations, the Named Plaintiffs are unnecessarily segregated in
nursing facilities and are denied the necessary specialized services required to meet the federal
mandate of active treatment.
There are at least 4,500 adult persons with developmental disabilities confined in nursing facilities in Texas.4 In addition, there probably are hundreds of other individuals with
developmental disabilities currently living in nursing facilities who have not been identified due to
inadequacies in Texas’s pre-admission screening and resident review PASARR program. Most of
these individuals could live in integrated community settings with appropriate services and
3 Named Plaintiff, Benny Holmes, recently and subsequent to the filing of the Complaint, moved out of the nursing facility where he had been residing into a small group home in the community. Even though he is now in the community, he remains at risk of readmission to a nursing facility and, therefore, continues to be an appropriate class representative. 4 In response to a Freedom of Information Act Request, the Department of Aging and Disability Services (DADS) stated that there are at least 5,765 persons with developmental disabilities confined in nursing facilities in Texas. (See Response to FOIA request dated Oct. 26, 2009 at ¶ 1, attached hereto as Exhibit 3.) While DADS has subsequently reported that it believes that the 5,765 number overstates the actual population, there is no dispute that the class numbers in the thousands. The United States Department of Health and Human Services collects detailed information on a quarterly basis from all Medicaid-funded nursing facilities in the country regarding the health characteristics of their residents. Based upon the MDS Active Resident Report for the Third Quarter 2010, there are in excess of 4,500 individuals with mental retardation residing in Texas nursing facilities. (See MDS Active Resident Report, attached hereto as Exhibit 4.) Due to the inadequacy of DADS’ current screening process, there are likely hundreds of other persons with developmental disabilities living in nursing facilities who have not been identified. Additionally, there is an even larger, but not precisely known, number of individuals with developmental disabilities who will be or should be screened before admission to a nursing facility in the future.
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Case 5:10-cv-01025-OLG Document 14 Filed 01/19/11 Page 4 of 23
supports, but instead are being subjected to unnecessary and prolonged institutionalization in violation of the ADA and the NHRA. Moreover, almost all of these individuals require and are entitled to receive specialized services appropriate to their individual needs in order to promote independence and growth while they remain confined in nursing facilities. The frequency, intensity, duration, and scope of these specialized services must meet the federal standards for active treatment. Nevertheless, fewer than one percent of adult residents with developmental disabilities in nursing facilities in Texas receive any specialized services at all, much less specialized services that satisfy the criteria to constitute active treatment. See Ex. 3, DADS FOIA Response at ¶ 5.
This case seeks to end the harm suffered by class members who are segregated and inappropriately confined in nursing facilities and denied active treatment. Therefore, Named Plaintiffs seek to require Defendants to fulfill their obligations under Title II of the ADA, Section 504 of the Rehabilitation Act, and the NHRA by, among other things: (1) implementing an effective screening and assessment process that will accurately identify individuals with developmental disabilities, including whether they can be appropriately served in the community; (2) providing those so identified with the necessary services and supports to enable them to move to community-based settings; and (3) for those who require nursing facility care, determining their need for specialized services and providing them with those services with sufficient frequency, intensity, and duration to constitute active treatment.
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Case 5:10-cv-01025-OLG Document 14 Filed 01/19/11 Page 5 of 23
IV. THE PROPOSED CLASS MEETS THE STANDARDS FOR CLASS CERTIFICATION UNDER RULE 23 OF THE FEDERAL RULES OF CIVIL PROCEDURE A. The Proposed Class The proposed class consists of all Medicaid-eligible persons over twenty-one years of age
with mental retardation and/or a related condition5 in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq. A nearly identical class was certified in a similar case raising similar claims under the ADA and NHRA. See Rolland v. Cellucci, 1999 WL 34815562 (D. Mass. Feb. 2, 1999) (certifying class consisting of “all adults with mental retardation and other developmental disabilities, who reside in nursing facilities, who resided in nursing facilities on or after October 24, 1998, or who are or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq.”); Rolland v. Patrick, 2008 WL 4104488 (D. Mass. Aug. 19, 2008) (denying motion to decertify the class). Moreover, an effort to overturn that class certification was rejected on appeal to the First Circuit. Voss v. Rolland, 592 F.3d 242, 247 n.9, 251 (1st Cir. 2010).
B. The Standards for Class Certification In order for one or more members of a class to sue as representative parties on behalf of all members, the party moving for class certification must satisfy all of the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Rule 23(a) has four distinct criteria: (1) the class must be so numerous that joinder of all members is impracticable; (2) the members of the class must share common questions of law or fact; (3) the claims or defenses of the named representatives must be typical of those of the class; and (4) the persons representing the class must be able to fairly and
5 The class definition utilizes the phrase “mental retardation and/or a related condition,” rather than “developmental disabilities” because this is the current terminology in the federal PASARR regulations. 42 CFR § 483.102(b)(3).
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Case 5:10-cv-01025-OLG Document 14 Filed 01/19/11 Page 6 of 23
adequately represent the interests of the class. Fed. R. Civ. P. 23(a); see also Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 623 (5th Cir. 1999).
Once all four elements of Rule 23(a) are established, a class action may be maintained if it satisfies at least one of the three subdivisions of Rule 23(b). In re Enron Corp. Securities, 529 F. Supp. 2d 644, 672 n.40 (S.D. Tex. 2006) (citing Horton v. Goose Creek Independent School District, 690 F.2d 470, 484 n.25 (5th Cir. 1982), cert denied, 463 U.S. 1207 (1983)). For the purpose of this case, the relevant subpart is Rule 23(b)(2), which requires that the defendants act or refuse to act on grounds generally applicable to the class, therefore making declaratory or injunctive relief appropriate. James v. City of Dallas, 254 F.3d 551, 570 (5th Cir. 2001). The Fifth Circuit has recognized that “Rule 23(b)(2) was intended to be used ‘in the civil-rights field where a party is charged with discriminating unlawfully against a class.’” James 254 F.3d at 567 n.16 (quoting Advisory Committee’s Notes to Rule 23); see also Kincade v. General Tire and Rubber Co., 635 F.2d 501, 506 (5th Cir. 1981) (“(S)ubdivision (b)(2) was added to Rule 23 in 1966 primarily to facilitate the bringing of class actions in the civil rights area.”).
In almost every case involving persons who allege noncompliance with Title II of the ADA or the requirements of the Medicaid Act by government officials, such as the case here, courts have certified a class. This is particularly true with respect to cases involving the integration mandate of the ADA. See List of Selected ADA Class Action Cases, attached as Exhibit 1. In addition, in almost every case involving persons with mental disabilities who challenge the lack of appropriate services in a state or private facility, courts throughout the nation have certified classes under Rule 23. See Exhibit 2 (list of 36 disability cases where classes of institutionalized residents have been certified). Finally, courts traditionally certify classes in cases concerning adults and children who allege violations of their federal statutory rights under Title XIX of the Social Security Act, 42 U.S.C.
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§1396(a). See, e.g., Herweg v. Ray, 455 U.S. 265, 271 (1982); Blum v. Yaretsky, 457 U.S. 991, 993 (1982); Rosie D. v. Romney, 410 F. Supp. 2d 18, 22 (D. Mass. 2006).
Thus, there is a virtually unbroken line of decisions granting class certification in cases challenging systemic practices of unnecessarily institutionalizing persons with disabilities in violation of federal statutory and constitutional provisions. Those conclusions and the reasoning of those cases are equally applicable here, and should result in the certification of the plaintiff class.
C. The Proposed Class Meets the Requirements of Rule 23(a) 1. The Class Is So Numerous That Joinder of All Members Is Impractical.
Rule 23(a)(1) of the Federal Rules of Civil Procedure has two components: assessing the number of class members and evaluating the practicability of joining them individually in the case. For the purpose of satisfying the first component, the plaintiffs need not establish the precise number or identity of class members. Phillips v. Joint Legislative Comm., 637 F.2d 1014, 1022 (5th Cir. 1981); Garcia v. Gloor, 618 F.2d 264, 267 (5th Cir. 1980); Carpenter v. Davis, 424 F.2d 257, 260 (5th Cir. 1970). This is particularly true where only declaratory and injunctive relief is sought. McCuin v. Sec’y of Health and Human Servs., 817 F.2d 161, 167 (1st Cir. 1987); Doe v. Charleston Area Med. Ctr., Inc., 529 F.2d 638, 645 (4th Cir. 1975) (size of class can be speculative where only equitable relief is requested); Rolland, 1999 WL 34815562, at *3; Ledet v. Fischer, 548 F. Supp. 775, 781-82 (M.D. La. 1982).
Furthermore, in civil rights cases, the membership of a class is often “incapable of specific enumeration.” Yaffe v. Powers, 454 F.2d 1362, 1366 (1st Cir. 1972). In such circumstances, as in the present matter, a class action may proceed if the plaintiffs “demonstrate some evidence or reasonable estimate of the number of purported class members.” Zeidman v. J. Ray McDermott & Co., Inc., 651 F.2d 1030, 1038 (5th Cir. 1981); see also 7 Newberg on Class Actions § 23.2
7

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(“Courts generally have not required detailed proof of class numerousness in government benefit class actions when challenged statutes or regulations are of general applicability to a class of recipients, because those classes are often inherently very large.”).
The proposed class in this case, which consists of more than 4,500 members is sufficiently numerous to make joinder impracticable. Frequently, proposed classes consisting of only a fraction of this number are certified under Rule 23(a)(1). See Jones v. Diamond, 519 F.2d 1090, 1100 n.18 (5th Cir. 1975) (class of 48 individuals found sufficient); Griffin v. Burns, 570 F.2d 1065, 1072-73 (1st Cir. 1978) (123 voters sufficient to satisfy Rule 23(a)(1)); Korn v. Franchard Corp., 456 F.2d 1206, 1209 (2d Cir. 1972) (class of approximately 212 members sufficient); Rolland, 1999 WL 34815562, at *1-2 (nearly identical class certified with approximately 1500 members).
While the sheer size of this class clearly makes joinder impracticable, other factors also support a finding that joinder is impracticable. Courts have given significant weight to factors such as the geographic distribution of the plaintiffs, the ability of the plaintiffs to bring their own separate actions, and the type of relief sought. Zeidman, 651 F.2d at 1038; Jordan v. Los Angeles, 669 F.2d 1311, 1319 (9th Cir. 1982), vacated on other grounds, 459 U.S. 810 (1982).
In the instant case, the class representatives seek injunctive and declaratory relief on behalf of themselves and thousands of Texans with developmental disabilities who are or will be institutionalized in nursing facilities throughout the state. This geographic dispersion of class members makes joinder impracticable. See Ibarra v. Tex. Employment Comm’n, 598 F. Supp. 104 (E.D. Tex. 1984) (500 member class certified where class members “dispersed throughout Texas”) rev’d on other grounds, 823 F.2d 873 (5th Cir. 1987). Importantly, the combined impact of class members’ poverty and disability severely limits their access to attorneys and their resulting ability to bring individual actions for declaratory or injunctive relief, making class certification particularly
8

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appropriate. See Rolland, 1999 WL 34815562, at *3 (“Considering plaintiffs’ confinement, their economic resources, and their mental handicaps, it is highly unlikely that separate actions would follow if class treatment were denied.” (quoting Armstead v. Pingree, 629 F. Supp. 273, 279 (M.D. Fla. 1986))).
Furthermore, joinder is impracticable in the instant case because the class includes not only current nursing facility residents, but also individuals who will be or should be screened prior to admission to a nursing facility in the future, whose identity cannot be presently determined. Where “[t]he alleged class also includes unnamed, unknown future” class members who will allegedly be harmed by the defendants’ conduct and policies, the Fifth Circuit has held that joinder is “certainly impracticable.” Jack v. Am. Linen Supply Co., 498 F.2d 122, 124 (5th Cir. 1974). See also Phillips, 637 F.2d at 1022 (“the requirement of Rule 23(a)(1) is clearly met, for joinder of unknown individuals is certainly impracticable.” (internal quotations omitted)); San Antonio Hispanic Police Officers’ Ass’n. v. City of San Antonio, 188 F.R.D. 433, 442 (W.D. Tex. 1999). For the above reasons, the proposed class satisfies the numerosity requirement of Rule 23(a)(1).
2. The Members of the Class Share Common Questions of Law and Fact. In order for a class to be certified, Rule 23(a)(2) requires that the proposed class members have at least one factual or legal issue in common, the resolution of which will affect all or a significant number of putative class members. Lightbourn v. County of El Paso, 118 F.3d 421, 426 (5th Cir. 1997); Forbush v. J.C. Penney Co., Inc., 994 F.2d 1101, 1106 (5th Cir. 1993); Rosario v. Livaditis, 963 F.2d 1013, 1017-18 (7th Cir. 1992); City of San Antonio v. Hotels.com, 2008 WL 2486043, at *5 (W.D. Tex. May 23, 2008) (holding that commonality requires that “there is at least one issue that will affect all or a significant number of putative class members” (emphasis in original)). “For this reason, ‘[t]he threshold of ‘commonality’ is not high.’” Forbush, 994 F.2d at
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1106 (quoting Jenkins v. Raymark Industries, 782 F.2d 468, 472 (5th Cir. 1986)); see also Hotels.com, 2008 WL 2486043, at *5.
In order to satisfy the requirement of commonality, Named Plaintiffs must show that there exist “questions of law or fact common to the class.” Mullen, 186 F.3d at 625. However, there is no requirement that “all questions of law and fact involved in the dispute be common to all members of the class.” Arnold v. United Artists Theatre Circuit, Inc., 158 F.R.D. 439, 448-49 (N.D. Cal. 1994). Nor does Rule 23(a)(2) require all putative class members to share identical claims; rather, the rule requires only “that complainants’ claims be common and not in conflict.” Hassine v. Jeffes, 846 F.2d 169, 176-77 (3d Cir. 1988). “[T]hat some of the plaintiffs may have different claims, or claims that may require some individualized analysis, is not fatal to commonality.” James, 254 F.3d at 570. Only where there are no common questions of fact or law should certification be denied. Yaffe, 454 F.2d at 1366.
Similarly, the requirement that there be a substantial question of law or fact common to all class members does not mean that each class member must be identically situated. General Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 155 (1982). Commonality is not defeated by the presence of individual differences among class members. See Lightbourn, 118 F.3d at 426 (class of individuals with different disabilities requiring different accommodations was certified because all were impacted by the same governmental inaction); Adamson v. Bowen, 855 F.2d 668, 676 (10th Cir. 1988) (“Rule 23(b)(2) does not require that common questions of law or fact predominate”); Appleyard v. Wallace, 754 F.2d 955, 958 (11th Cir. 1985); Milonas v. Williams, 691 F.2d 931, 938 (10th Cir. 1982) (factual distinctions among plaintiffs not relevant where legal theories are similar). In fact, “allegations of similar discriminatory practices generally meet the commonality requirement.” Lightbourn, 118 F.3d at 426 (citing Shipes v. Trinity Indus., 987 F.2d 311, 316 (5th Cir. 1993)); see
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also Curtis v. Commissioner, Maine Dep’t. of Human Servs., 159 F.R.D. 339, 341 (D.Me. 1994) (where “a question of law refers to standardized conduct of the defendant towards … the proposed class, commonality is usually met”).
The commonality “requirement has been liberally construed and ‘those courts that have focused on Rule 23(a)(2) have given it permissive application so that common questions have been found to exist in a broad range of contexts.’” Rodriguez v. Carlson, 166 F.R.D. 465, 472 (E.D. Wash. 1996) (citing Haywood v. Barnes, 109 F.R.D. 568, 577 (E.D.N.C. 1986)). Courts have broadly applied the rule to class actions seeking injunctive and declaratory relief to remedy the denial of a legal entitlement or the application of a governmental policy or practice that infringes that right. See Neff v. VIA Metro. Transit Auth., 179 F.R.D. 185, 193 (W.D. Tex. 1998) (“Given that the class members are affected by the general policy and that policy is the focus of this litigation, the Court finds the commonality requirement has been satisfied.”); Anderson v. Dep’t of Public Welfare, 1 F. Supp. 2d 456, 461 (E.D. Pa. 1998) (“Commonality is easily established in cases seeking injunctive relief.”). “[C]lass suits for injunctive or declaratory relief by their very nature often present common questions satisfying Rule 23(a)(2).” 7A Wright, Miller, & Kane, Federal Practice and Procedure § 1763 (3d ed. 2005); Marisol A. v. Guiliani, 929 F. Supp. 662, 691 (S.D.N.Y. 1996). Class actions are particularly appropriate where, as here, governmental policies and practices have a broad impact upon a class of recipients, and the scope of the relief is dictated by the nature of the violation. See Cellophane v. Amnesiac, 442 U.S. 682 (1979).
In this case, as a direct result of Defendants’ actions and inactions, plaintiffs are improperly segregated in nursing facilities when they could live in integrated community settings, and are not being accurately screened or assessed, in violation of their rights under the ADA and the NHRA. Additionally, the plaintiffs are not receiving specialized services and active treatment, as required by
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42 C.F.R. § 483.126 & § 483.440(a)-(f). Any differences between class members’ abilities and

disabilities have no bearing on these claims or on Defendants’ failure to provide class members with the required screening and necessary specialized services.6 See Rolland, 2008 WL 4104488, at *4

(“[A]ny identified factual differences between the named Plaintiffs and some of the class they sought

to represent did not undermine commonality and, in particular, did not preclude certification of a

class of persons with mental retardation who were challenging Defendants’ practices.”). Nor do

factual distinctions between class members impact the systemic nature of the relief requested in the

Complaint, or the prosecution of this case. Risinger, 201 F.R.D. at 20-21.

Specifically, the questions of law and fact that are common to all class members include, but

are not limited to:

(1) whether Defendants are in violation of the NHRA by:

•

failing to establish a screening and assessment program that

accurately determines if individuals with developmental

disabilities can be appropriately placed in a community setting

or should be admitted to a nursing facility;

•

failing to conduct professionally acceptable assessments to

determine what specialized services such individuals require;

and

•

failing to provide an array of specialized services to all

individuals with developmental disabilities in nursing facilities

who need them, in a manner that satisfies the federal standard

for active treatment.;

(2) whether the Defendants are violating the ADA and § 504 of the Rehabilitation Act

by:

6 Like other Medicaid Act and ADA integration cases, this action does not require the Court to engage in individualized determinations of the appropriateness of community placement or the need for particular specialized services. Those determinations are best left to existing or new remedial processes. The failure to utilize an effective screening process and the dearth of specialized services can be established without resort to individual treatment determinations by the Court.
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•

failing to offer alternate community services to all individuals

with developmental disabilities in nursing facilities who can

live safely in a community setting with appropriate supports;

and

•

failing to offer community services to individuals with

developmental disabilities at risk of admission to nursing

facilities, in order to divert the unnecessary admission of those

individuals who can be appropriately served in a community or

alternative setting

The proposed class therefore satisfies the commonality requirement of Rule 23(a)(2).

3. The Claims of the Named Plaintiffs are Typical of Those of the Class. The third component of Rule 23(a) requires that the proposed class representatives’ claims for

relief be typical of the claims of the absent class members. The test for “typicality” asks whether the

class representatives “possess the same interest and suffer the same injury” as other class members,

but it does not require that the claims of the named plaintiffs be identical to the claims of the other

class members. Gen. Tel. Co. of the Sw., 457 U.S. at 156; see also Mullen, 186 F.3d at 625 (the test

for typicality “focuses on the similarity between the named plaintiffs’ legal and remedial theories and

the theories of those whom they purport to represent”). “[T]he critical inquiry is whether the class

representative’s claims have the same essential characteristics of those of the putative class. If the

claims arise from a similar course of conduct and share the same legal theory, factual differences will

not defeat typicality.” James, 254 F.3d at 571 (quoting 5 Moore’s Federal Practice ¶ 23.24[4] (3d ed.

2000)). Additionally, most courts agree that “[l]ike commonality, the test for typicality is not

demanding.” Mullen, 186 F.3d at 625; James, 254 F.3d at 571; Hotels.com, 2008 WL 2486093, at

*6.

For example, in Appleyard, a class action was brought in Alabama challenging the state’s

Medicaid level of care admission criteria on behalf of individuals who were denied Medicaid nursing

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Case 5:10-cv-01025-OLG Document 14 Filed 01/19/11 Page 14 of 23
facility benefits. 754 F.2d. at 956. The district court refused to certify the class based on its findings that the named plaintiffs could not satisfy the typicality requirement due to the “vast factual differences surrounding the medical condition of each of the named Plaintiffs.” Id. at 957. In reversing, the Eleventh Circuit held that these factual differences were irrelevant because they had nothing to do with the injunctive and declaratory relief requested by the plaintiffs on behalf of themselves and the class. Id. at 958. The Eleventh Circuit concluded that “[t]he similarity of the legal theories shared by plaintiffs and the class at large is so strong as to override whatever factual differences might exist and dictate a determination that the named plaintiffs’ claims are typical of those of the members of the putative class.” Id. Similarly, the Rolland court considered the potential differences between the members of a class (nearly identical to the class proposed here) and found that “the fact that class members may have had somewhat different medical needs or placement preferences did not mean the typicality requirement had not been met.” 2008 WL 4104488, at *5.
The Named Plaintiffs satisfy the typicality requirement of Rule 23(a)(3) because their claims and those of the unnamed class members present similar factual situations: (1) they all have mental retardation or a related condition; (2) they all need and are entitled to screening and assessment to determine if they require a nursing level of care, could have their needs met in an appropriate community setting, and could benefit from specialized services; (3) those identified as appropriate for community placement would benefit from being provided access to community-based services; and (4) those identified as needing specialized services would benefit from being provided the opportunity to receive such services in the nursing facility. The fact that class members may have different medical conditions or that they may require a slightly different service array does not justify denying class certification. See Rolland, 2008 WL 4104488, at *5. Instead, the requisite typicality exists because Defendants are needlessly institutionalizing class members and denying necessary
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specialized services in violation of Title II of the ADA and the NHRA. See Curtis, 159 F.R.D. at 341 (typicality is met because “the representative Plaintiff is subject to the same statute and policy as the class members.”); Hotels.com, 2008 WL 2486093, at *6 (“While each putative class member has its own ordinance, the claims arising thereunder, and the legal and remedial theories on which the claims are based, are the same.”)
Finally, the Named Plaintiffs — each of whom is inappropriately confined to a nursing facility and/or denied active treatment — have a personal interest in this litigation which is reasonably related to the harm experienced by all class members. See Risinger, 201 F.R.D. at 22 (finding typicality where plaintiffs invoking same Medicaid Act provisions, allege same systemic deficiencies, and seek same relief). Thus, the Named Plaintiffs satisfy the typicality requirement of Rule 23(a)(3).
4. The Class Representatives Fairly and Adequately Represent the Interest of the Class.
Rule 23(a)(4) requires that the representative plaintiffs in a class action fairly and adequately protect the interests of the entire class. In order to satisfy this requirement, two criteria must be met: (1) the class representatives must not have antagonistic or conflicting interests with the unnamed members of the class, and (2) the attorneys representing the class must be qualified and competent. Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978); Neff, 179 F.R.D. at 194. Both elements of Rule 23(a)(4) are met in this case.
(1) Adequacy of the Named Representatives In order for the named representatives to be deemed adequate to represent the class, their interests must coincide with those of the unnamed class members. Neff, 179 F.R.D. at 195; see generally Gen. Tel. Co., 457 U.S. 147. Additionally, the interests of the named plaintiffs must not be
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antagonistic to the unnamed class members. Andrews v. Bechtel Power Corp., 780 F.2d 124, 130 (1st Cir. 1985).
In the present case, although all members of the plaintiff class may not have exactly the same treatment recommendations or needs, they all have suffered, or are at risk of suffering, the same injuries as a result of the Defendants’ policies and practices: segregation in a nursing facility and the denial of specialized services sufficient to provide active treatment. See Complaint ¶¶ 53-61, 74-100. They all seek the same remedies: a screening and assessment process that accurately identifies individuals whose needs could be appropriately met in the community and that reliably determines the need for specialized services for persons who are admitted to a nursing facility; the provision of integrated community-based services and supports for those identified as appropriate for a community placement; and the provision of specialized services that satisfy the federal standard for active treatment for those who are admitted to a nursing facility. See generally id. None of these claims are unique to any individual plaintiff. Rather, the claims raised and the relief sought operates equally to benefit all class members.
The Named Plaintiffs do not, therefore, have interests divergent from other class members who live in nursing facilities or who are at risk of inappropriate admission to a nursing facility. Consequently, the Named Plaintiffs can fully and adequately represent the legal rights and seek the legal remedies to which all members of the putative class are entitled as required by Rule 23(a)(4).
(2) Adequacy of Counsel The factors that courts consider in determining the adequacy of the counsel in class actions include: the attorneys’ professional skills, experience, and resources. See N. Am. Acceptance Corp. Sec. Cases, 593 F.2d 642, 644 (5th Cir. 1979), cert. denied, 444 U.S. 956 (1979); Rodriguez, 166 F.R.D. at 473. Plaintiffs’ counsel are well qualified to handle this action and will prosecute it
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vigorously on behalf the class. Advocacy, Inc. is the federally-designated Protection and Advocacy agency for persons with disabilities in Texas and is experienced in class action litigation on behalf of individuals with disabilities. The Center for Public Representation has been involved in complex class action litigation on behalf of institutionalized persons with disabilities for over thirty years and has been lead counsel in numerous institutional reform lawsuits throughout the country, including a very similar case in Massachusetts. See Rolland, 2010 WL 157475; Voss v. Rolland, 592 F.3d 247-49 (recounting history of litigation). Weil, Gotshal & Manges LLP is a leading private law firm, internationally, nationally, and in Texas, and has litigated numerous class actions and other complex cases. Finally, plaintiffs’ counsel command the necessary resources to competently represent the class, and they have no other professional commitments which are antagonistic to, or which would detract from, their efforts to seek a favorable decision for the class in this case.
D. This Action Meets the Requirements of Rule 23(b)(2) Courts have recognized that class actions certified under subsection (b)(2) of Rule 23 of the Federal Rules of Civil Procedure are particularly important in civil rights cases where injunctive relief is sought, as in the present case. James, 254 F.3d at 567 n.16 (recognizing that “Rule 23(b)(2) was intended to be used ‘in the civil-rights field where a party is charged with discriminating unlawfully against a class’”); Yaffe, 454 F.2d at 1366 ((b)(2) is “uniquely suited to civil rights actions”); Holmes v. Continental Can Co., 706 F.2d 1144. 1152 (11th Cir. 1983); see also Advisory Committee Note on Rule 23, 39 F.R.D. 69, 102 (1966). Certification of classes has been deemed “an especially appropriate vehicle for civil rights actions” seeking systemic reform. See Coley v. Clinton, 635 F.2d 1364, 1378 (8th Cir. 1980); see also Hoptowit v. Ray, 682 F.2d 1237, 1245 (9th Cir. 1982). In cases seeking only equitable relief, class certification is necessary to make sure that mandatory relief runs
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to benefit all class members. Rolland, 2008 WL 4104488, at *6 (citing Jane B. v. N.Y. Dept. of Social Servs., 177 F.R.D. 64, 72 (S.D.N.Y. 1987)).
The elements of Rule 23(b)(2) are satisfied in this case, and class certification is appropriate, specifically because it is a civil rights class action seeking declaratory and injunctive relief, which is exactly the type of litigation that the Federal Rules Advisory Committee anticipated would be certified under Rule 23(b)(2). See Advisory Committee Notes to Rule 23, 39 F.R.D. at 102; Coley, 635 F.2d at 1378. Defendants’ failure to provide appropriate services in the community and/or placements in integrated settings, their failure to conduct effective screenings to prevent the unnecessary admission of persons with developmental disabilities to nursing facilities, their failure to conduct professionally-acceptable assessments to determine if individuals who are admitted need specialized services, and their failure to provide active treatment to nursing facility residents all violate federal statutory rights common to both the Named Plaintiffs and the unnamed class members. Thus, Defendants are acting or refusing to act in a manner that equally affects and is “generally applicable” to the entire class. Therefore, final injunctive and declaratory relief is appropriate, precisely because it will resolve the legality of the challenged actions and inaction for the class as a whole. In a case such as this, the “proposed class certification is eminently appropriate.” Rolland, 2008 WL 4104488, at *6 (quoting Rolland, 1999 WL 34815562, at *9).
The Fifth Circuit also has recognized the importance of class certification where a defendant governmental agency may voluntarily perform a specific action sought in a lawsuit for an individual plaintiff and, consequently, moot the representative plaintiff’s claim. Zeidman, 651 F.2d at 1051. In Zeidman, the Court of Appeals explained that “refusal to certify the class ‘would mean that the (agency) could avoid judicial scrutiny of its procedures by the simple expedient of granting hearings to plaintiffs who seek, but have not yet obtained, class certification.’” 651 F.2d at 1051 (quoting
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White v. Mathews, 559 F.2d 852, 857 (2d Cir. 1977)). A similar risk exists here; Defendants could provide the Named Plaintiffs with a home and community based waiver slot and/or specialized services, thereby mooting the Named Plaintiffs’ claims, while continuing to deny similar relief to the thousands of other similarly situated persons.
In this case, class certification pursuant to Rule 23(b)(2) is appropriate and necessary to ensure that any mandatory relief will extend to all individuals with developmental disabilities who are confined in, or at a risk of being admitted to, nursing facilities in Texas. V. ADVOCACY, INC., THE CENTER FOR PUBLIC REPRESENTATION, AND
WEIL, GOTSHAL & MANGES LLP SHOULD BE APPOINTED CO-CLASS COUNSEL PURSUANT TO RULE 23(G). The Named Plaintiffs are jointly represented by Advocacy, Inc., the Center For Public Representation, and Weil, Gotshal & Manges LLP, each of which brings unique resources, experience and skills to the case, and those three law firms should be appointed as class co-counsel pursuant to Rule 23(g). Advocacy, Inc. is the federally-designated protection and advocacy organization for the state of Texas and is charged with protecting the rights of individuals with disabilities throughout Texas. It brings to this case a knowledge of and experience with the workings of Texas’s service array and service delivery systems for individuals with disabilities. It is also in direct contact with the Named Plaintiffs and numerous other class members through its ongoing outreach and intake processes. Advocacy, Inc. has five regional offices and eight satellite offices throughout Texas. Garth Corbett, the lead Advocacy, Inc. attorney on this case, has over 27 years of experience representing individuals with disabilities and has litigated 2 class action cases, including Neff., 179 F.R.D. at 195 ( The Court had the opportunity to see counsel [Garth Corbett] in action and review the pleading and other legal memoranda submitted by counsel….The Court is confident
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counsel provided adequate representation for the class.”). He is not counsel in any pending class actions.
The Center for Public Representation is a Massachusetts-based public interest law firm that focuses on systemic advocacy on behalf of individuals with psychiatric and intellectual disabilities. It provides litigation support and assistance to the National Disabilities Rights Network and the protection and advocacy organizations throughout the country. It has litigated dozens of class actions on behalf of institutionalized individuals, raising claims under the Americans with Disabilities Act, the Nursing Home Reform Amendments Act, the Medicaid Act, Section 504 of the Rehabilitation Act, and the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Both attorneys, Mr. Schwartz and Mr. Rae, have been lead counsel in numerous class actions. Mr. Schwartz is a nationally-recognized expert concerning the rights of institutionalized individuals and has over 30 years of experience representing individuals with psychiatric and intellectual disabilities. He is currently counsel in nine ongoing class actions, including the case of Rolland v. Patrick that involves claims virtually identical to those at issue in this case, and has handled more than 15 additional cases involving class claims over the course of his career. Mr. Rae has over 30 years of experience representing low income individuals and has litigated in excess of 15 class actions raising claims under the Americans with Disabilities Act, Section 504 of the Rehabilitation Act, the Medicaid Act, the National Housing Act, the Fair Housing Act, the Food Stamp Act, and the Due Process Clause of the United States Constitution.
Weil, Gotshal & Manges, LLP (“Weil”) is an international law firm with over 1,200 lawyers in 20 offices worldwide. The Dallas office has over 80 attorneys and specializes in complex litigation. Ms. Ostolaza is a partner in the firm and is co-head of the firm’s 160-lawyer complex commercial litigation practice. She concentrates in the trial and supervision of complex civil
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litigation. She has over 18 years of experience and has significant experience litigating class actions. She is supported in this case by several associates in the firm, each of whom also have experience with complex litigation and class actions. Weil adds expertise in the area of class actions, litigation and trial skills, and provides extensive litigation support capabilities.
There is no conflict among counsel. This is a Rule 23(b)(2) class action seeking only declaratory and injunctive relief. Any attorneys’ fees for plaintiffs counsel will be awarded by the Court pursuant to federal fee-shifting statutes based upon the time reasonably expended by plaintiffs’ counsel. Pursuant to Rule 23(g), plaintiffs request that this Court appoint Advocacy, Inc., Weil, Gotshal & Manges LLP, and the Center for Public Representation as co-class counsel in this case. Hamilton v. First Am. Title Ins. Co., 266 F.R.D. 153, 173 (N.D. Tex. 2010) (appointing co-class counsel); Garcia v. Tyson Foods, Inc., 255 F.R.D. 678, 692 (D. Kan. 2009) (same). VI. CONCLUSION AND REQUESTED RELIEF
For the reasons set forth above, Named Plaintiffs respectfully request that the Court certify a plaintiff class consisting of all Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related condition in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq. In addition, Named Plaintiffs respectfully request that this Court appoint Advocacy, Inc., Weil, Gotshal & Manges, LLP, and the Center for Public Representation as co-class counsel in this action pursuant to Rule 23(g).
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Respectfully submitted,
/s/ Garth A. Corbett______________ Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Advocacy, Incorporated 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 Robert Velevis State Bar No. 24047032 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile) Attorneys for Plaintiffs
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Case 5:10-cv-01025-OLG Document 14 Filed 01/19/11 Page 23 of 23 CERTIFICATE OF CONFERENCE
I, Garth Corbett, certify that I contacted Nancy Juren, counsel for Defendants, regarding the requested extension of page limits, and Ms. Juren indicated that Defendants do not oppose this extension.
/s/ Garth A. Corbett Garth A. Corbett CERTIFICATE OF SERVICE I, Garth Corbett, hereby certify that all parties have been served through the Court’s ECF system, or if such party does not accept service through the Court’s ECF system, then by first class mail. /s/ Garth A. Corbett Garth A. Corbett
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 Case 5:10-cv-01025-OLG Document 20 Filed 01/26/11 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

§

v.

§

§

RICK PERRY, Governor of the State of Texas, §

THOMAS SUEHS, Executive Commissioner §

of the Texas Health and Human Services

§

Commission, CHRIS TRAYLOR,

§

Commissioner of the Texas Department

§

of Aging and Disability Services,

§

Defendants

§

Case No. 5:10-CV-1025

_____________________________________________________________________________

DEFENDANTS’ OPPOSED MOTION TO ABATE PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
______________________________________________________________________________ TO THE HONORABLE JUDGE ORLANDO L. GARCIA:

Defendants GOVERNOR RICK PERRY, in his official capacity as Governor of The

State of Texas, THOMAS SUEHS, in his official capacity as Executive Commissioner of the

Texas Health and Human Services Commission, and CHRIS TRAYLOR, in his official

capacity as Commissioner of the Texas Department of Aging and Disability Services

(collectively, “Defendants”), move to abate Plaintiff’s Motion for Class Certification [Dkt. # 13]

until a decision on Defendants’ anticipated motion to dismiss and completion of appropriate

class discovery, if necessary.

I. INTRODUCTION and PROCEDURAL BACKGROUND

Plaintiffs filed their Original Complaint (the “Complaint”) [Dkt. # 1] on December 20,

2010, and served Defendants with the Complaint on or about December 21, 2010. On January 7,

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2011, Defendants filed an unopposed motion to extend the deadline for responding to the Complaint until March 1, 2011, which the Court granted. [Dkt. ## 6, 7.]
On January 19, 2011, Plaintiffs filed their Motion for Class Certification and accompanying memorandum of law. [Dkt. ## 13, 14.] Defendants subsequently requested that Plaintiffs agree to abate a decision on their motion until the Court ruled on Defendants’ anticipated motion to dismiss and completion of class discovery. Plaintiffs’ counsel did not agree to this request.
Plaintiff’s Motion for Class Certification should be abated for at least two reasons. First, Plaintiffs’ motion is premature under Local Rule CV-23, pursuant to which class certification motions are to be filed after a defendant has filed an answer. Second, Plaintiffs’ motion should be abated to allow for completion of the requisite class discovery.
II. ARGUMENT A. Plaintiffs’ Motion For Class Certification Is Premature Under Local Rule CV-23.
Local Rule CV-23 states, “When a class action allegation is made in any pleading, the movant shall file, within 30 days after any defendant’s first pleading, a motion for class certification. … Failure to timely file a motion for class certification shall constitute a waiver of the request for any class action.” W.D. Tex. Local Rule CV-23. Thus, the 30-day period for a class certification to be filed does not begin until a defendant files its first pleading.
The term “pleading,” as defined in Rule 7(a) of the Federal Rules, includes a complaint and an answer. FED. R. CIV. P. 7(a); see also Turner v. Johnson, 106 F.3d 1178, 1185 n.27 (5th Cir. 1997) (“The term ‘pleadings’ is defined by Rule 7(a) to include a complaint and an answer.”). The Fifth Circuit and its district courts have repeatedly held that the filing of a “pleading,” when used in the Federal Rules, means a pleading as defined by Rule 7(a). See, e.g.,

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Turner, 106 F.3d at 1185 n.27 (applying Rule 7(a) definition to Rule 56 as to matters outside the “pleadings”); Frohn v. PCNB Corp., 2010 WL 1416186, at *1 n.1 (S.D. Miss. Apr. 7, 2010) (applying definition to Rule 12(c)); In re Morrison, 421 B.R. 381, 389 (Bnkr. S.D. Tex. 2009) (applying definition to Rule 12(h)(2)); Interam. Quality Foods, Inc. v. Parrot Ice Drink Products of Am., Ltd., 2009 WL 3008295, at *1 (W.D. Tex. Sept. 17, 2009) (applying to Rule 38); Saddler v. Quitman Co. School Dist., 2009 WL 1658114, at *1 (N.D. Miss. June 11, 2009) (applying definition to Rule 15); Groden v. Allen, 2009 WL 1437834, at *3 (N.D. Tex. May 22, 2009) (applying to definition to Rule 12(f)).
Furthermore, a “pleading” does not include a motion, such as a motion to dismiss. See Zaidi v. Ehrlich, 732 F.2d 1218, 1219-20 (5th Cir.1984) (holding that motion to dismiss does not constitute a “pleading” under Rule 15); Lineberry v. U.S., 2009 WL 763052, at *3 (N.D. Tex. Mar. 23, 2009) (same as to Rule 12(f)); Knickerbocker v. Harvey, 2006 WL 3301065, at *1 (W.D. Tex. Nov. 7, 2006) (same as to Rule 12(e)). This holds true when the filing of a “pleading” initiates a deadline period, meaning that the filing of a motion to dismiss will not start a deadline period triggered by the filing of a “pleading.” See Cambridge Integ. Servs. Group, Inc. v. Concentra Integ. Servs., Inc., 2010 WL 4736171, at *1-*2 (W.D. La. Nov. 16, 2010) (holding that deadline for jury trial request under Rule 38 did not begin to run upon filing of a motion to dismiss).
Thus, under Local Rule CV-23, the appropriate time for Plaintiffs to file their Motion for Class Certification will not begin until a Defendant has filed an answer. The period under Local Rule CV-23 did not begin when Defendants filed their motion for an extension to respond to the complaint on January 7, 2011. [Dkt. # 6.] Nor will the period begin to run when Defendants file their anticipated motion to dismiss on or before March 1, 2011. Rather, if that anticipated

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motion is denied, Defendants will file their first pleading in accordance with Rule 12(a), and Plaintiffs may then move for certification. This timeline provided by Local Rule CV-23 provides for a more logical and efficient determination of class certification issues. “Without knowing which of the plaintiffs’ claims will ultimately survive a motion to dismiss, it will be difficult to determine whether there are ‘questions of law and fact common to the class’ and whether the ‘claims or defenses of the representative parties are typical of the claims or defenses of the class.’” Sevin v. Parish of Jefferson, 2009 WL 68880, at *1 (E.D. La. Jan. 9, 2009) (quoting FED. R. CIV. P. 23).
In short, Plaintiffs’ present Motion for Class Certification is premature under Local Rule CV-23 and should be abated on that basis alone. B. Plaintiffs’ Motion for Class Certification Should Be Abated To Allow For Class
Discovery. In addition, Plaintiffs’ Motion for Class Certification should be abated to allow for appropriate class discovery. The Fifth Circuit and the Federal Rules of Civil Procedure recognize the need for class discovery as part of the “rigorous analysis” of the Rule 23 prerequisites to certify a class. See Unger v. Amedisys Inc., 401 F.3d 316, 320-21 (5th Cir. 2005). “District courts are required to take a ‘close look’ at the parties’ claims and evidence in making its Rule 23 decision.” Id. at 321 (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997)). “To assist the court in this process it may sanction controlled discovery at the certification stage. The plain text of Rule 23 requires the court to ‘find,’ not merely assume, the facts favoring class certification.” Unger, 401 F.3d at 421 (citing FED. R. CIV. P. 23). Even prior to the 2003 Amendments to the Federal Rules of Civil Procedure, the Fifth Circuit recognized the need for class discovery. See Stewart v. Winter, 669 F.2d 328, 331 (5th Cir. 1982) (“In light of the mandate of Rule 23(c)(1) that a certification determination be made

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‘(a)s soon as practicable after the commencement of (the) action,’ we think it imperative that the district court be permitted to limit pre-certification discovery to evidence that, in its sound judgment, would be ‘necessary or helpful’ to the certification decision.”). Indeed, the Fifth Circuit held that, under the prior version of Rule 23, failure to allow for adequate class discovery can constitute an abuse of discretion justifying vacating a certification order and remanding the case so that such discovery can be conducted. Duke v. Univ. of Tex. at El Paso, 729 F.2d 994, 996 (5th Cir. 1984).
The 2003 Amendments changed the timing of class certification from “[a]s soon as practicable after the commencement of the action” to “[a]t an early practicable time after a person sues or is sued as a class representative.” FED. R. CIV. P. 23(c). This amendment codified the need to provide sufficient time to develop the record and conduct the necessary discovery before deciding certification issues. See 2003 Notes of Advisory Committee to Rule 23, ¶¶ 3, 48; Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261, 267 (5th Cir. 2007) (“Rule 23(c)(1)(A) no longer demands that the district court rule on class certification ‘as soon as practicable,’ but instead insists only upon a ruling ‘at an early practicable time.’”). Not surprisingly, courts in the Fifth Circuit have since held that class discovery is necessary to develop the evidentiary record before a motion for certification can be decided. See, e.g., Morrow v. City of Tenaha Deputy City, 2010 WL 2721400, at *3 (E.D. Tex. July 8, 2010) (“The purpose of limited discovery before the class certification hearing is to allow the parties to explore the facts that support or counsel against class certification.”); Pinero v. Jackson Hewitt Tax Service Inc., 594 F.Supp.2d 710, 723 (E.D. La. 2009) (“Further, the record is not sufficiently developed to support class certification. Little discovery has been conducted in the matter, and plaintiff's motion for class certification does not attach any evidence to support the motion. The

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parties are ordered to present the Court a schedule for refiling their motion for class certification which incorporates a period for discovery on the class issues.”); Sevin v. Parish of Jefferson, 2009 WL 68880, at *1 (E.D. La. Jan. 9, 2009) (“the current [certification] hearing date does not allow the defendants sufficient time to conduct class discovery and prepare their responsive memoranda.”).
In this case, there are numerous certification issues that require discovery so that appropriate evidence may be presented to the Court. First, Defendants have the right to discover whether the named Plaintiffs actually share common questions of fact. Although Plaintiffs have made allegations of common facts in the complaint, the Court is required to look “beyond the pleadings … in order to make a meaningful determination of the certification issues.” Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th Cir.1996). Second, discovery is appropriate to determine whether Plaintiffs’ claims are typical of the putative class. For example, Plaintiffs have recently disclosed that Plaintiff Holmes allegedly “moved out of the nursing facility where he had been residing into a small group home in the community.” [P.’s Motion for Class Cert. at 1 n.3, Dkt # 13.] This revelation certainly calls into question whether Plaintiff Holmes’s circumstances are typical of the putative class members, and Defendants have the right to discover similar evidence regarding the other named Plaintiffs.
Lastly, and most importantly, Defendants have the right to take discovery regarding the standing of each Plaintiff to seek the requested relief. As recognized in cases cited in support of Plaintiffs’ Motion for Class Certification, “any analysis of class certification must begin with the issue of standing.” Murray v. Auslander, 244 F.3d 807, 810 (11th Cir. 2001) (quotations omitted) (cited in Exhibit 1, ADA Class Certification Cases, Dkt. # 14-1). Murray involved claims similar to those made here challenging the provision of community-based services to

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developmentally disabled individuals. Id. at 809. After the district court had certified a class, the Eleventh Circuit remanded the case and directed the district court to conduct “an evidentiary inquiry to determine whether at least one named representative of the class has standing to bring a non-moot claim.” Id. at 811. The same holds true here. Defendants have the right to conduct discovery into whether the named Plaintiffs have standing to bring non-moot claims, particularly given that at least one of the named Plaintiffs has already admitted to having received the relief requested by this suit.
Thus, Defendants request that, should their anticipated motion to dismiss be denied, Plaintiffs’ Motion for Class Certification be abated to allow for a three-month period of class discovery.
III. CONCLUSION For these reasons, Defendants respectfully request that Plaintiff’s Motion for Class Certification be abated pending a ruling on Defendants’ anticipated motion to dismiss and completion of class discovery, if necessary.
Respectfully submitted, GREG ABBOTT Attorney General of Texas DANIEL T. HODGE First Assistant Attorney General BILL COBB Deputy Attorney General for Civil Litigation DAVID MATTAX Director of Defense Litigation ROBERT B. O’KEEFE Chief, General Litigation Division

Defendants’ Opposed Motion to Abate Plaintiffs’ Motion for Class Certification

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Case 5:10-cv-01025-OLG Document 20 Filed 01/26/11 Page 8 of 9
/s/ Nancy K. Juren NANCY K. JUREN Assistant Attorney General Attorney in Charge Texas Bar No. 11059300 AMANDA J. COCHRAN-MCCALL Assistant Attorney General Texas Bar No. 24069526 General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 Phone No.: (512) 463-2120 Fax No.: (512) 320-0667
Attorneys for Defendants
CERTIFICATE OF CONFERENCE
I certify that I contacted Garth Corbett, counsel for Plaintiffs, regarding abating
Plaintiffs’ Motion for Class Certification pending resolution of Defendants’ anticipated motion
to dismiss and completion of class discovery, as requested in this motion. Mr. Corbett indicated
that Plaintiffs oppose the relief requested in this motion.
/s/ Nancy K. Juren NANCY K. JUREN

Defendants’ Opposed Motion to Abate Plaintiffs’ Motion for Class Certification

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CERTIFICATE OF SERVICE
I certify that a true and correct copy of Defendants’ Opposed Motion to Abate Plaintiffs’ Motion for Class Certification was served by CM/ECF system on January 27, 2011, upon the following individuals at the listed addresses:
Garth A. Corbett Sean A. Jackson Advocacy Inc. 7800 Shoal Creek Blvd., #171-E Austin, Texas 78757
Yvette Ostolaza Robert Velevis Casey A. Burton Weil, Gotshal & Manges 200 Crescent Court- Suite 300 Dallas, Texas 75201
Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060
/s/ Nancy K. Juren___________ NANCY K. JUREN

Defendants’ Opposed Motion to Abate Plaintiffs’ Motion for Class Certification

9

 Case 5:10-cv-01025-OLG Document 21 Filed 02/04/11 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

§

and mother, Lilian Minor, et al.,

§

§

Plaintiffs,

§

§

v.

§

§

§

RICK PERRY, Governor, et al.

§

§

Defendants.

§

CIV. NO. 5:10-CV-1025-OG

PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ OPPOSED MOTION TO ABATE MOTION FOR CLASS CERTIFICATION
Plaintiffs Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes, and Zackowitz Morgan (collectively, “plaintiffs”) hereby file this Response (the “Response”) to Defendants’ Opposed Motion to Abate Plaintiffs’ Motion for Class Certification (the “Motion”), and respectfully request that the Court deny the Motion and refuse to abate proceedings on Plaintiffs’ Motion for Class Certification. In support of their Response, plaintiffs state that:
PRELIMINARY STATEMENT Defendants Rick Perry, Governor of the State of Texas, Thomas Suehs, Executive Commissioner of the Texas Health and Human Services Commission, and Chris Traylor, Commissioner of the Texas Department of Aging and Disability Services (collectively, the “defendants”) seek to indefinitely suspend the decision regarding whether to certify a class in this matter, asserting that plaintiffs’ motion for class certification is “premature” and that defendants need undefined discovery on class issues. Plaintiffs’ class certification motion is not premature and the Motion must be denied because Local Rule CV-23 only states the latest

Case 5:10-cv-01025-OLG Document 21 Filed 02/04/11 Page 2 of 9
possible date on which a motion for class certification may be filed, and says nothing about how early it may be filed. Given Federal Rule 23’s mandate that class certification is to be decided at an “early practicable stage,” plaintiffs’ class certification motion was timely filed. The Motion must also be denied because plaintiffs’ class certification motion is properly before the court, and the defendants’ request for a 90-day class discovery period is both unnecessary and excessive because they already have access to extensive information about the plaintiffs.
ARGUMENT AND AUTHORITIES I. PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION IS PROPERLY FILED IN
CONFORMITY WITH LOCAL RULE CV-23 AND FED. R. CIV. P. 23. A. Defendants’ Interpretation of Local Rule CV-23 is Contrary to the Purpose of Both
Rule 23(c)(1)(A) of the Federal Rules of Civil Procedure and the Local Rule. Pursuant to Rule 23(c)(1)(A) of the Federal Rules of Civil Procedure, “[a]t an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action.” In order to implement the directive to decide class certification “at an early practicable time,” many district courts have, by local rule, required parties seeking class action status to move for class certification within a relatively short time after commencement of the action. See, 8 Newberg on Class Actions § 24:78, Timing of Class Motions and Applicable Local Rules (4th ed.). These local rules exist to implement and provide context to the requirement of Rule 23(c)(1)(A) that class certification be determined early in the case. Douglas G. Smith, The Intersection of Constitutional Law and Civil Procedure: Review of Wholesale Justice--Constitutional Democracy and the Problem of the Class Action Lawsuit (Part II), 104 Nw. U. L. Rev. Colloquy 330, 333-34 & n. 16 (2010). They are designed to ensure, not deter, the prompt filing of class certification motions. The defendants’ interpretation of the Local Rule CV-23 to preclude the filing of a class motion until
2

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after a motion to dismiss has been filed, briefed, and decided – a period that can easily exceed six months or even a year – is contrary to the purpose of both the local rule and Rule 23(c)(1)(A) and should be rejected.
B. Local Rule CV-23 Establishes a Deadline for Filing the Motion for Class Certification, Not a Waiting Period.
Under the local rules, plaintiffs’ motion for class certification must be filed no later than 30 days after defendants file their first pleading. See W.D. Tex. R. CV-23. Fairly read, CV-23 establishes a deadline, after which a motion for class certification is untimely and deemed waived. While plaintiffs need not file a motion for class certification until after the defendants have filed a pleading, there is no reason why plaintiffs should be precluded from filing sooner if, as is the case here, they can establish that all of the criteria for class certification are met. There are, however, several reasons why plaintiffs might be prejudiced if precluded from moving for class certification for a substantial period of time. During the delay, defendants might take steps to moot out the named plaintiffs. If the named plaintiffs’ claims become moot prior to filing the motion for class certification, the motion generally must be denied. See Brunet v. City of Columbus, 12 F.3d 390, 399-400 (6th Cir. 1993) (explaining that where a defendant moots the named plaintiffs’ non-transitory claims before the filing of a class certification motion, the motion cannot be pursued). In addition, if class certification is substantially delayed, plaintiffs’ ability to obtain discovery regarding the defendants’ treatment of absent class members may be also delayed,
In any case, such delay can be prejudical. However, where the rights of individuals with developmental disabilities are at stake, such delay is unconscionable. As the facts of the named plaintiffs demonstrate, the defendants’ failure to provide them with appropriate treatment, including federally-required specialized services sufficient to constitute active treatment, has not
3

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just arrested their development, it has led to significant regression. This is a case that warrants
expeditious prosecution, not foot-dragging and delay. Certainly, the Local Rules do not require
the type of extensive delay that the defendants are attempting to obtain.1
II. DEFENDANTS’ REQUEST TO DELAY THEIR RESPONSE TO THE CLASS CERTIFICATION MOTION TO CONDUCT DISCOVERY SHOULD BE DENIED.
Defendants contend that “there are numerous certification issues that require
discovery….” Def.’s Mot. to Abate at 6. Specifically, defendants want the opportunity to
determine (a) whether the class plaintiffs share common questions of fact, (b) whether plaintiffs’
claims are typical of the proposed class, and (c) whether each plaintiff has standing. Id. at 6. To
develop these certification issues defendants seek an additional 90 days to perform discovery.2
Id. at 7. However, discovery is neither necessary nor appropriate for any of these issues, given
the fact that the plaintiffs are seeking a (b)(2) class and that defendants are in possession of or are
entitled to access much of the relevant material.3
1 Even if the Local Rules led to such an inappropriate result, Local Rule CV-1(e) provides that “[a]ny judge of this Court may waive any requirement of these rules regarding the administration of that judge’s specific docket.”
2 Considering defendants’ argument that plaintiffs’ motion for class certification is not appropriate until defendants file an answer, which will not occur until after their motion to dismiss is decided, plaintiffs’ class motion might very well be delayed for many months, if not longer, depending on the Court's calendar and ability to analyze and resolve the motion in a written decision. Furthermore, in the unlikely event that the disposition of defendant’s motion to dismiss warrants modification of the class certification order, the Court retains the authority to alter or amend the class certification order at any time prior to final judgment. Fed. R. Civ. P. 23(c)(1)(C).
3 Defendants cite to numerous cases to support their right to take discovery. These cases, however, concerned classrelated issues that were considerably more complex, both legally and factually, and usually related to damage claims for a 23(c) class. For example, Unger v. Amedisys, Inc., 401 F.3d 316, 320 (5th Cir. 2005) involved plaintiffs that were solicited over the internet and through newspaper advertisements. The class involved both persons and entities that purchased common stock and the class was seeking money damages. And as the court noted for class actions seeking money damages, the court is obligated to make additional findings of predominance and superiority; requirements the court called “far more demanding” than those required for a (b)(2) class. Castano v. The American Tobacco Company , 84 F.3d 734, 737-738 (5th Cir. 1996) involved a multi-state class action. The plaintiff class initially consisted of all nicotine dependent persons in the United States. Plaintiffs were also asking for compensatory and punitive damages. Pinero v. Jackson Hewitt Tax Service Inc., et al., 594 F.Supp.2d 710 (E.D. La. 2009) involved a class action suit against a tax return preparer where the claims included state law claims of fraud, breach of contract, negligence, invasion of privacy, violation of Louisiana Database Security Breach Notification Law and violation of the Louisiana Unfair Trade Practices Act, as well a federal claim. Again, it was a case seeking monetary damages for the class.
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A. No Discovery is Needed to Address Commonality. Under Fed. R. Civ. P. 23(a)(2), there must be “questions of law or fact common to the class.” “[F]actual differences among plaintiffs are not relevant when their legal theories are similar.” Appleyard v. Wallace, 754 F.2d 955, 958 (11th Cir. 1985); Milonas v. Williams, 691 F.2d 931, 938 (10th Cir. 1982). Here, plaintiffs’ legal theories are indeed similar. Specific questions of law are common to the plaintiffs and the putative class including: (1) whether defendants violated Nursing Home Reform Amendments (NHRA), 42 U.S.C. § 1396r(e)(7) by (a) failing to establish a screening and assessment program that accurately determines if individuals with developmental disabilities can be appropriately placed in a community setting or should be admitted to a nursing facility; (b) failing to conduct professionally acceptable assessments to determine what specialized services such individuals require; (c) failing to provide an array of specialized services to all individuals with developmental disabilities in nursing facilities requiring them and in a manner that satisfies federal standards for active treatment; and (2) whether defendants are violating the Americans with Disabilities Act, 42 U.S.C. § 12131(2), and Section 504 of the Rehabilitation Act, 29 U.S.C § 794(a) by failing to: (a) offer alternate community services to all individuals with developmental disabilities living in nursing facilities but who can safely live in a community-based setting with appropriate supports, and (b) offer community services to individuals with developmental disabilities at risk of admission to nursing facilities, in order to divert the unnecessary admission of those individuals who can be appropriately served in a community-based or alternate setting. Pl. Compl. ¶¶ 210-238.
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Of course, all that is required for class certification is one common legal issue. Because commonality can be determined solely based upon an analysis of the legal claims raised, there is no discovery to be had from plaintiffs regarding commonality
B. Defendants do not need Discovery Regarding Typicality For typicality to be satisfied under Fed. R. Civ. P. 23(a)(3), “the claims . . . of the representative parties [must be] typical of the claims . . . of the class. . . .” That is, under typicality, “the critical inquiry is whether the class representative’s claims have the same essential characteristics of those of the putative class. If the claims arise from a similar course of conduct and share the same legal theory, factual differences will not defeat typicality.” James, 254 F.3d 551, 571 (5th Cir. 2001) (quoting 5 Moore’s Federal Practice § 23.24[4] (3d 3ed. 2000)). In this case, plaintiffs’ claims are not only typical of those of the putative class, they are identical to those brought on behalf of the class. Because the focus of the typicality inquiry, like that of commonality, is on the legal claims raised, there is simply nothing for defendants to seek discovery about. See Curtis v. Comm’r, Maine Dept. Human Servs., 159 F.R.D. 339, 341 (D. Me. 1994) (typicality is met because “representative Plaintiff is subject to the same statute and policy as the class members”); Appleyard v. Wallace, 754 F.2d at 958 (“[t]he similarity of the legal theories shared by plaintiffs and the class at large is so strong as to override whatever factual differences might exist and dictate a determination that the named plaintiffs’ claims are typical of those of the members of the putative class”); Risinger v. Concannon, 201 F.R.D. 16, 22 (D. Me. 2001) (finding typicality where plaintiffs invoking same Medicaid Act provisions, allege same systemic deficiencies, and seek the same relief). Defendants’ assertion that they need time to conduct discovery regarding typicality is simply untenable.
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C. Defendants do not Need Discovery Regarding Plaintiffs’ Standing. Unlike commonality and typicality which can be satisfied by reference to the legal claims raised in the case, standing does focus on the factual posture of the plaintiffs. However, in the context of this case, it is difficult to imagine what information the defendants could seek that they do not already have. Virtually all of the information relevant to the current situation of each named plaintiff is contained in the records of the nursing facilities in which they reside or have resided.4 Not only do defendants have access to these records, they have already formally notified plaintiffs that they are obtaining those records. With those records, defendants will be able to ascertain the named plaintiffs’ current living situation, medical status, treatment regimens, PASARR records, and more. It is difficult to imagine what information plaintiffs may have about their current situation that would be relevant to their standing that is not included in those records. D. Alternatively, Should the Court Determine that Some Limited Discovery
Regarding Class Issues Will be Allowed, the Court Should Establish a Tight Discovery Schedule. Should the Court determine that some limited discovery regarding class issues should be allowed, the defendants should be required to submit their discovery requests forthwith and file their response to plaintiffs’ motion for class certification promptly after receiving the plaintiffs’ responses. Plaintiffs propose the following schedule, should the Court allow defendants’ discovery request: Defendants serve any discovery, limited only to class issues by February 15, 2011; Plaintiffs serve their answers/responses by March 15, 2011;
4 In the case of plaintiff Holmes, who recently transitioned from the nursing facility where he was residing when the complaint was filed to a small community-based group home, the relevant information regarding his situation is available from the nursing home where he resided and group home where he currently lives. Just as defendants have access to nursing facility records of all Medicaid residents, they also have access to similar records of Medicaid residents in community placements provided through the various Medicaid waiver programs. Mr. Holmes’ community placement is through the Home and Community-based Services Waiver program.
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Defendants file their response to plaintiffs’ class certification motion by April 1, 2011; and Plaintiffs file their reply to defendants’ response by April 15, 2011.
III. CONCLUSION
For the foregoing reasons, Defendants’ Opposed Motion to Abate Plaintiffs’ Motion for
Class Certification should be denied. In the alternative, should the Court permit the defendants
limited discovery on issues relating to the class, it should be subject to a very tight schedule so
that the class motion can be fully briefed and ready for argument by the beginning of April,
2011. Finally, plaintiffs respectfully request all other relief to which they may be justly entitled.
Respectfully submitted,
/s/ Garth A. Corbett Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Advocacy, Incorporated 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 Robert Velevis State Bar No. 24047032 Casey A. Burton State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
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Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile) Attorneys for Plaintiffs CERTIFICATE OF SERVICE I, Garth Corbett, hereby certify that all parties have been served through the Court’s ECF system, or if such party does not accept service through the Court’s ECF system, then by first class mail. /s/ Garth A. Corbett Garth A. Corbett
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 Case 5:10-cv-01025-OLG Document 30 Filed 03/08/11 Page 1 of 45

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

§

v.

§

§

RICK PERRY, Governor of the State of Texas, §

THOMAS SUEHS, Executive Commissioner §

of the Texas Health and Human Services

§

Commission, CHRIS TRAYLOR,

§

Commissioner of the Texas Department

§

of Aging and Disability Services,

§

Defendants

§

Case No. 5:10-CV-1025-OG

_____________________________________________________________________________

DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ COMPLAINT ______________________________________________________________________________

GREG ABBOTT Attorney General of Texas
DANIEL T. HODGE First Assistant Attorney General
BILL COBB Deputy Attorney General for Civil Litigation
DAVID MATTAX Director of Defense Litigation
ROBERT B. O’KEEFE Chief, General Litigation Division
March 8, 2011

NANCY K. JUREN Assistant Attorney General Attorney in Charge Texas Bar No. 11059300 DARREN G. GIBSON Assistant Attorney General Texas Bar No. 24068846 AMANDA J. COCHRAN-MCCALL Assistant Attorney General Texas Bar No. 24069526 General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 Phone No.: (512) 463-2120 Fax No.: (512) 320-0667
Attorneys for Defendants

Defendants’ Motion to Dismiss

Case 5:10-cv-01025-OLG Document 30 Filed 03/08/11 Page 2 of 45
TO THE HONORABLE JUDGE ORLANDO L. GARCIA: Defendants, RICK PERRY, in his official capacity as Governor of The State of Texas
(“Governor”), THOMAS SUEHS, in his official capacity as Executive Commissioner of the Texas Health and Human Services Commission (“HHSC”), and CHRIS TRAYLOR, in his official capacity as Commissioner of the Texas Department of Aging and Disability Services (“DADS”) (collectively, “Defendants”), hereby move this Court to dismiss Plaintiffs’ claims pursuant to Rules 12(b)(1) and 12(b)(6), for the reasons stated herein.
INTRODUCTION In this lawsuit, Plaintiffs seek to expand the Medicaid Act and the Texas Medicaid program to require Texas to provide community-based services to all current and potential nursing facility residents who have developmental disabilities. This would require Texas to fundamentally alter its Medicaid program and expand its optional Medicaid waiver program beyond what federal law requires. While Defendants strive to provide all Medicaid recipients with the assistance to which they are entitled under Texas’s Medicaid program, they nevertheless must ask this Court to dismiss Plaintiffs’ claims, as a matter of law, for the reasons stated herein. I. Plaintiffs’ Claims Plaintiffs are six individual named plaintiffs who say they are adult persons with mental retardation or other related conditions (hereinafter referred to as “developmental disabilities”).1 Plaintiffs are suing on behalf of themselves and a purported class, claiming to have been inappropriately and unnecessarily segregated in nursing facilities (“NFs”) because of Defendants’ purported failure to provide services to which Plaintiffs claim entitlement, and to
1 In their Complaint, Plaintiffs refer to “mental retardation or other related conditions” as “developmental disabilities.” Defendants normally use the term “intellectual disability” to refer to mental retardation, and “developmental disability” to refer to “related conditions.” However, for purposes of this motion, Defendants will use the term “developmental disability” to refer to both mental retardation and related conditions. Defendants’ Motion to Dismiss

Case 5:10-cv-01025-OLG Document 30 Filed 03/08/11 Page 3 of 45
provide services in a community-based residential placement. See, e.g., Dkt. #1 (“Complaint”) ¶¶ 1-5. Specifically, Plaintiffs complain that Defendants have failed to: timely and appropriately conduct pre-admission screening and assessments before NF placement; provide all needed specialized services; assess the appropriateness of alternative, less restrictive settings; and advise of and provide a choice of community-based services and supports. See, e.g., Complaint ¶¶ 5, 214, 226, 229, 231, 232, 236-38. Plaintiffs assert that in so doing, Defendants have violated their rights under the Americans with Disabilities Act, 42 U.S.C. § 12132 et seq. (“ADA”), Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (“§ 504” or “Rehab. Act”), several sections of Title XIX of the Social Security Act, 42 U.S.C. § 1396a, et seq. (“Medicaid Act”), and the 1987 Nursing Home Reform Amendments to the Medicaid Act, 42 U.S.C. § 1396r, et seq. (“NHRA”). Plaintiffs bring their claims under 42 U.S.C. § 1983 (“Section 1983”).
As relief, Plaintiffs seek expansive, far-reaching declaratory and injunctive relief touching virtually every aspect of Texas’s Medicaid program for PASRR-eligible persons with developmental disabilities.2 See Complaint pp. 54-56. II. The Defendants and Their Role in the Texas Medicaid Program
The Texas Medicaid Program is a state- and federally funded program that provides health benefits to nearly 3.4 million low-income, elderly, and disabled Texans.3 Thomas Suehs, as the Executive Commissioner of HHSC, and Chris Traylor, as the Commissioner of DADS, are the state officials who head the two state agencies charged with administering those parts of the Texas Medicaid Program targeted by this lawsuit, namely, the provision of Medicaid services to
2 “PASRR” (formerly known as “PASARR”) means “Pre-Admission Screening and Resident Review,” as set out in the NHRA, 42 U.S.C. § 1396r(e)(7). 3 Texas Medicaid Enrollment by Month, July 2010, available at: http://www.hhsc.state.tx.us/research/MedicaidEnrollment/meByMonthCompletedCount.html (last visited March 7, 2011). Defendants’ Motion to Dismiss
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Medicaid-eligible persons meeting the medical necessity requirement for admission to a nursing facility who also have developmental disabilities.
HHSC is the state agency with primary responsibility for ensuring the delivery of health and human services in Texas in a manner that: (1) uses an integrated system to determine client eligibility; (2) maximizes the use of federal, state, and local funds; and (3) emphasizes coordination, flexibility, and decision-making at the local level. TEX. GOV’T CODE § 531.002. In that role, HHSC provides oversight and strategic direction to the state agencies that make up the health and human services system in Texas. TEX. GOV’T CODE § 531.001(4); see generally, TEX. GOV’T CODE § 531.001 et seq. HHSC is governed by an executive commissioner, now Thomas Suehs, who is appointed by the governor with the advice and consent of the senate. Id. § 531.005(a); see Complaint ¶¶ 22, 23. HHSC’s executive commissioner adopts rules and policies for the operation and provision of health and human services by the health and human services agencies, and manages and directs the operations of each health and human services agency. TEX. GOV’T CODE §531.0055(e) and (e)(2); see Complaint ¶ 23.
Specifically, HHSC “supervise[s] the administration and operation of the Medicaid program,” TEX. GOV’T CODE § 531.0055(b)(1), and is the single state agency designated to administer federal medical assistance funds.4 TEX. GOV’T CODE § 531.021(a). Accordingly, HHSC plans and directs the Medicaid program in each agency that operates a portion of the Medicaid program, including DADS. Id. § 531.021(b)(1). HHSC also receives and distributes federal Medicaid funds to the health and human services agencies which administer the Texas Medicaid program. TEX. HUM. RES. CODE § 32.031. As specifically related to this lawsuit,
4 The Medicaid Act and its implementing regulations require the states to designate a “single State agency … to administer or supervise the administration of the [state Medicaid] plan.” 42 C.F.R. § 431.10(b)(1); see 42 U.S.C. § 1396a(5). In Texas, HHSC is that agency. Defendants’ Motion to Dismiss
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HHSC is responsible for the administration of the PASRR program in Texas. HHSC is a “public entity” for purposes of Title II of the ADA. 42 U.S.C.A. § 12131(1)(A) and (B) (2011).
DADS is the state agency responsible for administering human services programs for the aging and disabled, including: (1) administering and coordinating programs to provide community-based care and support services to promote independent living for populations that would otherwise be institutionalized; (2) providing institutional care services, including services through convalescent and nursing homes and related institutions; (3) providing and coordinating programs and services for persons with disabilities, including programs for the treatment, rehabilitation, or benefit of persons with developmental disabilities or mental retardation; and (4) performing all licensing and enforcement activities and functions related to nursing homes and related institutions. TEX. HUM. RES. CODE § 161.071 (1)-(3), (6); see Complaint ¶ 24. The DADS Commissioner, now Chris Traylor, is appointed by the Executive Commissioner of HHSC, with the approval of the Governor, and serves at the pleasure of the Executive Commissioner. TEX. GOV’T CODE § 531.0056; TEX. HUM. RES. CODE § 161.051(a), (b); Complaint ¶ 22, 23, 24. DADS is a “public entity” for purposes of Title II of the ADA. 42 U.S.C.A. § 12131(1)(A) and (B).
The Governor of Texas is the chief executive officer of the State. TEX. CONST. art IV, § 1; see Complaint ¶ 22. However, Texas law does not imbue the Governor with any direct responsibilities for development, administration, or funding of the state’s Medicaid program. Specifically, the Governor is not “responsible for directing, supervising, and controlling” the Texas Medicaid program, as Plaintiffs allege. Complaint ¶ 22. To the contrary, as discussed above, the Texas Legislature has specifically designated HHSC as the state agency to “supervise the administration and operation of the Medicaid program,” TEX. GOV’T CODE § 531.0055(b)(1),
Defendants’ Motion to Dismiss 4

Case 5:10-cv-01025-OLG Document 30 Filed 03/08/11 Page 6 of 45
and as the single state agency designated to administer federal medical assistance funds, TEX. GOV’T CODE § 531.021(a). Nor is the Governor “responsible for … seeking funds from the legislature to implement … programs and deliver … services.” Complaint ¶ 22. While it is true that the Governor is required to submit a biennial budget to the Legislature, TEX. GOV’T CODE § 401.0445, and that he is permitted to submit a proposed general appropriations bill to the Legislature, TEX. GOV’T CODE § 316.009, the Governor has no authority to appropriate state funds for the Texas Medicaid program. Instead, only members of the Legislature are authorized to file a general appropriations bill, and only the Legislature can appropriate state funds. TEX. GOV’T CODE § 316.021. Finally, the Governor’s authority to appoint the Executive Commissioner of HHSC, subject to the advice and consent of the Senate, TEX. GOV’T CODE § 531.005, and to approve the appointment of the Commissioner of DADS, TEX. GOV’T CODE § 531.0056), does not give him the authority to administer or operate Texas’s Medicaid program, which by law is administered and operated by HHSC and other health and human services agencies, including DADS.5 III. Overview of the Medicaid Act and Medicaid Waivers
Congress created the Medicaid program in 1965 by adding Title XIX to the Social Security Act, 42 U.S.C. § 1396, et seq. The program authorizes federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons. In order to participate in the Medicaid program, a State must have a plan for medical assistance that meets certain statutorily defined requirements, 42 U.S.C. § 1396a(a), and that is approved by the Secretary of Health and Human Services (“Secretary”), 42 U.S.C. § 1396a(b). A state plan
5 By contrast, the Governor does have authority to: appoint state and district offices, TEX. CONST., art. IV, § 12; direct homeland security in Texas and develop a statewide homeland security strategy, TEX. GOV’T CODE § 421.002; declare a state of disaster and meet the dangers to the state and people presented by disasters, TEX. GOV’T CODE § 418.001, et seq. Defendants’ Motion to Dismiss
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defines the categories of individuals eligible for benefits, § 1396a(a)(10), and the specific kinds of medical services that are covered, 42 U.S.C. § 1396d(a). States participating in the Medicaid program are required to provide coverage to certain groups, and are given the option to extend coverage to various other groups. The line between mandatory and optional coverage is primarily drawn in § 1396a(a) – mandatory coverage is specified in § 1396a(a)(10)(A)(i), and the state options are set forth in subsection (ii). Skandalis v. Rowe, 14 F.3d 173 (2d Cir. 1994). States participating in the program must provide coverage to the required groups of the “categorically needy”6 and, at the state’s option, may also cover one or more optional “categorically needy” groups. 42 U.S.C. § 1396a(a)(10)(A)(ii). A state, at its option, may also cover the “medically needy.”7 Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 650-51 (2003); Atkins v. Rivera, 477 U.S. 154, 154 (1986). These categories are determined based on financial eligibility standards. 42 U.S.C. § 1396a(a)(10)(A). Federal law, however, does not require participating states to provide all services and devices covered by the statute. Rather, Congress has set a basic minimum standard for any state Medicaid program which requires it to provide financial assistance only for certain specified medical treatment. Id.
In 1981, Congress amended the Medicaid Act by adding 42 U.S.C. § 1396n(c) to allow the Secretary of Health and Human Services, through the Health Care Finance Administration (now the Center for Medicare & Medicaid Services (“CMS”)), to waive certain statutory Medicaid requirements, and to allow participating states, upon the state’s application, to use federal and state funds to provide home- and community-based services as alternatives to placing
6 The required “categorically needy” groups include individuals eligible for cash benefits under the Temporary Assistance for Needy Families (TANF) program; the aged, blind, or disabled individuals who qualify for supplemental security income (SSI) benefits; and other low-income groups such as pregnant women and children entitled to poverty-related coverage. 42 U.S.C. § 1396a(a)(10)(A)(i); see Pharm. Research & Mfrs. of America v. Walsh, 538 U.S. 644, 651 (2003). 7 The “medically needy” are individuals who meet the nonfinancial eligibility requirements for inclusion in one of the groups covered under Medicaid, but whose income or resources exceed the financial eligibility requirements for categorically needy eligibility. § 1396a(a)(10)(C); see Walsh, 538 U.S. at 650-51. Defendants’ Motion to Dismiss
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Medicaid-eligible individuals in hospitals, nursing facilities or intermediate care facilities for individuals with mental retardation (“ICFs-MR”) under the State Plan. 42 U.S.C. § 1396n(c); 42 C.F.R. §440.180; 42 C.F.R. §441.301(b)(1)(iii). As its name suggests, a waiver relieves states from complying with certain federal requirements that ordinarily must be complied with in order to receive federal Medicaid funding under the State Plan.8 The statute specifically provides that the requirements of statewideness, comparability of services, and single standard for income and resource eligibility, may be waived. 42 U.S.C. § 1396n(c)(3); 42 C.F.R. §430.25(d)(2).
Unlike ICF-MR or nursing facility services, which must be made available to all individuals who are categorically eligible for Medicaid services in conformance with the Medicaid Act, there is no statutory entitlement to waiver services. In other words, not all people who are eligible for these “waiver” services are entitled to receive them. A participating state has wide latitude to define the types of services that it will offer under the waiver, to limit the geographical areas where waiver services are offered and the target groups to whom the services are offered, and to make waiver services available in an amount, duration and scope that differs from the amount, duration and scope of services provided to other Medicaid recipients. 42 U.S.C. §§ 1396n(c)(3), 1396n(c)(4), 1396n(c)(9), 1396n(c)(10); 42 C.F.R. §§ 441.301(b)(3) & (6), 430.25(h)(3)(ii), 440.180, 441.303(f)(6), 441.305(a). Finally, the Medicaid Act and applicable regulations expressly require states to place a limit on the number of persons who may
8 The Medicaid regulations describe the purpose of a Medicaid waiver program as follows: Waivers are intended to provide the flexibility needed to enable States to try new or different approaches to the efficient and cost-effective delivery of health care services, or to adapt their programs to the special needs of particular areas or groups of recipients. Waivers allow exceptions to State plan requirements and permit a State to implement innovative programs or activities on a time-limited basis, and subject to specific safeguards for the protection of recipients and the program.
42 C.F.R. §430.25(b). To qualify for a waiver, a state must demonstrate that rendering home and community-based services to qualified individuals would not result in overall expenditures in excess of those that would be incurred if those individuals received services in the traditional institutional program. 42 U.S.C. § 1396n(c)(2). Defendants’ Motion to Dismiss
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receive waiver services. 42 U.S.C. § 1396n(c)(9) & (10); 42 C.F.R. §§ 441.303(f)(6), 441.305(a). Moreover, an approved cap is binding on the state.9
Accordingly, as permitted by 42 U.S.C. § 1396n(c), the State of Texas, through its Medicaid program, has obtained approval from CMS to offer home and community-based services to a specified number of individuals who require the level of care provided in ICFs-MR. As Plaintiffs acknowledge, the Home and Community-Based Services (“HCS”) waiver is one such program. Complaint ¶ 57. The HCS waiver program has a limited number of slots,10 and there is an interest list of approximately 45,756 persons, as of August 31, 2010, who are waiting for HCS waiver services to become available. Id. Defendants are prohibited from increasing the number of waiver slots unless they request amendment to their waiver applications and receive necessary approval from CMS. Nothing in federal Medicaid law or regulation requires a state to increase the number of persons served in its waiver programs.
ARGUMENT AND AUTHORITY I. This Court Lacks Jurisdiction Over Plaintiffs’ Claims
A. Plaintiffs Lack Standing to Bring This Action. 1. Elements of Standing.
A federal court lacks subject-matter jurisdiction over a matter when the plaintiff lacks standing to bring suit. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). To establish his or her own standing to sue, a plaintiff must make a three-pronged showing of:
9 Specifically, the regulations provide that a state seeking a waiver: must indicate the number of unduplicated beneficiaries to which it intends to provide waiver services in each year of its program. This number will constitute a limit on the size of the waiver program unless the State requests and the Secretary approves a greater number of waiver participants in a waiver amendment.
42 C.F.R. § 441.303(f)(6)(emphasis added); see 42 C.F.R. § 441.305(a). In fact, the statute expressly contemplates that waiver programs may be limited to as few as 200 individuals. 42 U.S.C. § 1396n(c)(10). 10 The number of HCS waiver slots approved by CMS for the state fiscal year ending August 31, 2010 is 19,695. See http://www.dads.state.tx.us/providers/HCS/HCSwaiveramendment2.pdf. Defendants’ Motion to Dismiss
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(1) an “injury-in fact” that is concrete and particularized, and actual or imminent, not conjectural or hypothetical; (2) a causal connection between the injury and the conduct complained of that is fairly traceable to the challenged action of the defendant; and (3) redressability—it must be likely, not merely speculative, that the injury will be redressed by a favorable decision. Id. at 560-61. “This triad of injury in fact, causation, and redressability constitutes the core of Article III’s case-or-controversy requirement, and the party invoking federal jurisdiction bears the burden of establishing its existence.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 10304 (1998). Failure to establish any one element deprives the federal courts of jurisdiction to hear the suit. Id. at 103. Standing is a threshold jurisdictional issue that the Court must evaluate before addressing the merits of Plaintiffs’ action.11 See Friends of the Earth, Inc. v. Laidlaw Env’t. Servs. (TOC), 528 U.S. 167, 180 (2000).
2. Plaintiffs Have No Case or Controversy with Governor Perry. In Texas, the portions of the Medicaid Act at issue in this lawsuit are administered by DADS and HHSC. The Governor has no direct control over the running of the Texas Medicaid Program; that function is clearly assigned to HHSC and its health services agencies, including DADS. Therefore, Plaintiffs have no case or controversy with Governor Perry.
a. Governor Perry did not, and could not, cause Plaintiffs’ injuries, if any.
Even assuming, for purposes of a standing analysis here, that Plaintiffs have suffered some injury-in-fact, no injury has been, or could be, caused by the Governor. As discussed above, it is HHSC and DADS that implement the particular aspects of Texas’s Medicaid
11 Furthermore, Plaintiffs must establish their own standing before addressing class certification because “[s]tanding is an inherent prerequisite to the class certification inquiry.” Bertulli v. Indep. Ass’n of Cont. Pilots, 242 F.3d 290, 294 (5th Cir. 2001); see also Rivera v. Wyeth-Ayerst Lab., 283 F.3d 315, 319 (5th Cir. 2002) (“Even though the certification inquiry is more straightforward, we must decide standing first, because it determines the court's fundamental power to hear the suit.”). If a plaintiff fails to establish standing to pursue claims for the named plaintiff's personal injuries, the class claim based on those injuries will also fail. Daughtery v. I-Flow, Inc., No. 3:09-CV-2120-P, 2010 WL 2034835, at *2 (N.D. Tex. April 29, 2010). Defendants’ Motion to Dismiss
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program for persons with developmental disabilities at issue in this lawsuit. The Governor does not. Specifically, the Governor’s role does not encompass the particular actions or failures to act about which Plaintiffs complain. For example, neither the Governor nor his office is charged with: conducting pre-admission screening and assessments, providing specialized services, or providing community-based services and supports. See, e.g., Complaint ¶¶ 5, 226, 229, 231, 232, 236, 237, 238. Article III jurisdiction is simply lacking where Plaintiffs sue a state official who is without power to take the complained-of action, and whose actions have not caused, or could not cause, any injury to them. See Okpalobi v. Foster, 244 F.3d 405, 426 (5th Cir. 2001) (plaintiffs failed to satisfy Article III standing with respect to the Governor, who had no authority to enforce the allegedly-unconstitutional state statute).
b. Plaintiffs’ injuries, if any, are not redressable through Governor Perry.
In Okpalobi v. Foster, the plaintiffs tried to enjoin enforcement of a Louisiana statute that made abortion providers liable in tort for any damages caused by abortion procedures, and named Louisiana’s governor and attorney general as defendants in the lawsuit. In an en banc opinion, the Fifth Circuit held that an injunction against the governor and the attorney general would be “utterly meaningless” because “[t]he governor and the attorney general have no power to redress the asserted injuries … Because these defendants have no powers to redress the injuries alleged, the plaintiffs have no case or controversy with these defendants that will permit them to maintain this action in federal court.” Id. at 427.
The same is true of Plaintiffs’ claims against Governor Perry in this lawsuit. Because the Governor does not administer any of the federal-state programs complained-of in Plaintiffs’ complaint, and therefore has no authority to redress Plaintiffs’ purported injuries, Plaintiffs also fail to satisfy the redressability prerequisite for Article III standing.
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3. Plaintiffs lack standing to assert claims under 42 U.S.C. §§ 1396n(c)(2)(B) and (C).
Plaintiffs lack standing to assert a challenge to Defendants’ compliance with the “freedom of choice” provision of the Medicaid Act, 42 U.S.C. § 1396n(c)(2)(C), because they do not allege an injury-in-fact from Defendants’ alleged failure to comply with that provision. Section 1396n(c)(2)(C) provides that the Secretary of Health and Human Services shall not grant a waiver under the Medicaid Act unless the state seeking the waiver provides assurances that “individuals who are determined to be likely to require the level of care provided in a hospital, nursing facility, or intermediate care facility for the mentally retarded are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to the provision of inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded.” 42 U.S.C. § 1396n(c)(2)(C). Plaintiffs lack standing to assert this claim because—with one exception (Benny Holmes)—Plaintiffs have not pled that they have even applied for one of Texas’s several waiver programs. Complaint ¶¶ 136-176, 199209. The Fifth Circuit has clearly held that in order to have standing to raise a § 1396n(c)(2)(C) claim, an individual must have applied for waiver services. Grant ex rel. Family Eldercare v. Gilbert, 324 F.3d 383, 388 (5th Cir. 2003). As do the Plaintiffs here, the plaintiff in Grant asserted that, during his admittance to nursing facility care some years before, the state failed to provide him sufficient information regarding alternative residential placements, thereby allegedly violating his rights under both NHRA and § 1396n(c)(2)(C). Regarding the latter claim, the Fifth Circuit held that Grant’s failure to allege that he had applied for waiver services then or at any time before the pendency of the appeal deprived him of standing. The same applies to all of the Plaintiffs here (other than Benny Holmes).
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On the other hand, Benny Holmes lacks standing under § 1396n(c)(2)(B) and (C) because he admits that he has twice been placed in the HCS waiver program and currently has an HCS placement. Complaint ¶¶ 177-198, especially ¶ 195. Therefore, as a matter of law, he has suffered no injury-in-fact for purposes of the § 1396n(c)(2) claim.
B. Sovereign Immunity Bars Plaintiffs’ Claims Against Governor Perry. The Eleventh Amendment bars suits by private citizens against a state in federal court, irrespective of the nature of the relief requested, including suits against state officials in their official capacities. Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 102 (1984); Edelman v. Jordan, 415 U.S. 651, 663-69 (1974); McCarthy ex rel. Travis v. Hawkins, 381 F.3d 407, 412 (5th Cir.2004). Under the narrow Ex parte Young exception to this rule, “a federal court, consistent with the Eleventh Amendment, may enjoin state officials to conform their future conduct to the requirements of federal law.” Pennhurst, 465 U.S. at 102-103; Quern v. Jordan, 440 U.S. 332, 337 (1979). However, in order to overcome the Eleventh Amendment bar, the defendant state official must have “‘some connection with the enforcement of the act’ in question or be ‘specially charged with the duty to enforce the statute.’” Okpalobi, 244 F.3d at 414-15 (quoting Ex parte Young). For example, a governor’s general duty to “take care that the laws are faithfully executed” is an insufficient connection under Young “to dissolve the Eleventh Amendment bar.” Id. at 416-17 (quotation marks and citation omitted). Accordingly, since Governor Perry has no connection to the administration of the Medicaid Act, including the delivery of Medicaid assistance or services in nursing facilities or in a community setting, Plaintiffs’ suit against him is barred by sovereign immunity.
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II. Plaintiffs Have Failed to State a Claim Upon Which Relief May Be Granted. A. Standard for Dismissal Under Rule 12(b)(6) Dismissal is proper pursuant to Federal Rule of Civil Procedure 12(b)(6) when a party’s
complaint fails to state a claim upon which relief can be granted. When considering a motion to dismiss under Rule 12(b)(6), the Court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff. Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004). To survive a Rule 12(b)(6) motion, the plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974 (2007). Although a court accepts all well-pleaded facts as true, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, __ U.S. __, 129 S.Ct. 1937, 1949 (2009).
B. Plaintiffs’ Claims Arising Before December 20, 2008 Are Time Barred. Plaintiffs’ claims based on Defendants’ alleged conduct at the time of Plaintiffs’ admission to a nursing facility are time barred to the extent those claims are based on events occurring before December 20, 2008. This lawsuit was filed on December 20, 2010. Applying the two-year statute of limitations applicable here,12 Plaintiffs’ claims that accrued prior to December 20, 2008 are timebarred. The time at which the claim accrues is a matter of federal law. Rodriguez v. Holmes,
12 Because there is no federal statute of limitations for Section 1983 claims, the state statute of limitations from the most analogous state law claim applies, which is the Texas two-year statute of limitations for personal injury claims. See Wallace v. Kato, 549 U.S. 384, 387 (2007) (holding that statute of limitations for Section 1983 claims “is that which the State provides for personal-injury torts.”); Stanley v. Foster, 464 F.3d 565, 568 (5th Cir. 2006) (two-year statute of limitations applies to Section 1983 actions in Texas); TEX. CIV. PRAC. & REM. CODE § 16.003(a). Furthermore, the underlying federal statutes do not specify a statute of limitations, and as a result, Texas’ two-year statute of limitations for personal injury claims applies to cases filed in Texas federal courts. See Holmes v. Texas A&M Univ., 145 F.3d 681, 683-84 (5th Cir. 1998); Hickey v. Irving Indep. Sch. Dist., 976 F.2d 980, 982 (5th Cir. 1992). Defendants’ Motion to Dismiss
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963 F.2d 799, 803 (5th Cir. 1992). Under the Fifth Circuit’s “discovery rule,” a Section 1983 claim accrues when the plaintiff knows or has reason to know of the injury on which his suit is based. Rubin v. O’Koren, 621 F.2d 114, 116 (5th Cir. 1980) (citations omitted). Thus, the limitations period begins to run when the plaintiff is or should be aware of the “critical facts that he has been hurt and who has inflicted the injury.” Lavellee v. Listi, 611 F.2d 1129, 1130 (5th Cir. 1980) (quotation marks omitted).
Plaintiffs assert a number of claims relating to Defendants’ alleged conduct at the time of Plaintiffs’ admission to nursing facility care. These claims include: (1) Defendants applying allegedly discriminatory eligibility requirements to screen out developmentally disabled individuals from community-based care in violation of Title II of the ADA, Complaint ¶¶ 21314; (2) Defendants failing to provide notice of opportunities of community-based services in violation of Title XIX of the Social Security Act, id. ¶ 227; and (3) Defendants failing to appropriately screen and assess and place individuals admitted to nursing facilities under the PASRR program in violation of the NHRA, id. ¶¶ 230-32.13 Presumably, Plaintiffs’ desire for community placement and specialized services existed at the time they were admitted. Accordingly, the Plaintiffs were well aware of the basis of their claims when they were admitted, and any alleged failures by the Defendants were not concealed in any way. Accordingly, each of Plaintiffs’ claims related to Defendants’ alleged actions at the time that Plaintiffs were admitted to nursing facilities accrued at the time of admission.
Here, all but one of the Plaintiffs was placed in nursing facilities prior to December 20, 2008. Complaint ¶¶ 137, 146, 155, 164, 200. Thus, each of these Plaintiffs’ claims regarding
13 For purposes of this motion, Defendants do not challenge the timeliness of Plaintiffs’ claims that their continued placement in nursing facilities violates the integration mandate of the ADA and the Rehabilitation Act, and that they are being currently denied community-based placement and specialized services in violation of the ADA and the Medicaid Act. Complaint ¶¶ 210-12, 215-26, 228-29. Defendants’ Motion to Dismiss
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Defendants’ actions or omissions at the time of admission into the nursing facility is time-barred. See Joseph S. v. Hogan, 561 F. Supp. 2d 280, 312-17 (E.D.N.Y. 2008) (dismissing time-barred NHRA claims based on failure to conduct PASSR evaluations at time of admission). The Joseph S. case is instructive. In that case, the plaintiffs alleged that defendants violated the NHRA by failing to conduct the requisite PASRR evaluations and determinations. Id. at 315. The court held that those claims accrued at the time of admission to the nursing facility and that the “plaintiffs were not otherwise prevented from pursuing their NHRA claims that independent evaluations were not completed or that they were ‘rubber-stamp’ evaluations.” Id. at 316. Furthermore, the court held, “[t]he organizational plaintiffs were or should have been aware at the time of any violations that defendants were not complying with the NHRA.” Id. Therefore, the court dismissed plaintiffs’ NHRA claims based on conduct prior to the limitations period. Id. at 317.
This Court should reach the same decision here. Specifically, the Court should dismiss Plaintiffs’ claims that are premised on Defendants’ alleged conduct at the time of admission to nursing facilities to the extent those claims are based on events occurring before December 20, 2008.
C. Plaintiffs Have Failed To State a Claim Against Governor Perry. For the same reasons set out above under the “standing” arguments, see supra Part I.A.2, Plaintiffs have failed to state a cognizable claim against Governor Perry upon which relief can be granted. Even assuming Plaintiffs’ claims of injury and deprivation to be true, they have not asserted claims establishing any action on the part of Governor Perry that caused, or could cause, their alleged deprivation, and the relief they seek cannot be effectuated through the Governor. Accordingly, Plaintiffs’ claims against Governor Perry should be dismissed under Rule 12(b)(6) as well as under Rule 12(b)(1).
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Furthermore, as a matter of law, Governor Perry is not a “public entity” within the meaning of Title II of the ADA. That statute provides that “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C.A. § 12132 (emphasis added). To establish a claim under this statute, a plaintiff must show that: (1) he is a qualified individual within the meaning of the ADA; (2) he is being excluded from participating in, or being denied benefits of services, programs, or activities for which the public entity is responsible, or is otherwise being discriminated against by the public entity; and (3) that such exclusion, denial of benefits, or discrimination is because of his disability. Melton v. Dallas Area Rapid Transit, 391 F.3d 669, 669 (5th Cir. 2004). The ADA defines a “public entity” as any state or local government, or any department, agency, special purpose district, or other instrumentality of a state’s government. 42 U.S.C.A. §§ 12131(1)(A) & (B) (2011). In Nelson v. Schwarzenegger, No. C 09-04937 JW (PR), 2010 WL 890028 (N.D. Cal. Mar. 8, 2010), the court considered whether the governor of California was a public entity under this definition. The plaintiff claimed that the governor violated the ADA by not providing adequate wheelchair accommodations in state prisons. The district court held that the governor was not a proper plaintiff in this case because he was not a “public entity” for purposes of the ADA. Id. at *2. Likewise, in Texas, the Governor does not qualify as a “public entity.” Plaintiffs acknowledge as much in paragraph 211 of their Complaint, where they identify Defendants Suehs and Traylor as “public entities,” but not the Governor. Complaint ¶ 211.14 Moreover, even were the Governor to be considered a “public entity” for some purpose under the ADA, Plaintiffs’ allegations show they are not being
14 Plaintiffs wrongly generalize that “[t]he Defendants are all public entities subject to Title II of the ADA.” Complaint ¶ 8. Defendants’ Motion to Dismiss
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excluded from participating in, or being denied benefits of services, programs, or activities for which the Office of the Governor is responsible, nor are they otherwise being discriminated against by the Office of the Governor.
Similarly, Governor Perry is not a proper defendant under the Rehabilitation Act because the Act applies to recipients of federal funds and the Governor neither receives nor distributes the Medicaid funds at issue in this lawsuit. Section 504 of the Rehab. Act, which is designed to eliminate discrimination on the basis of handicap in any program or activity receiving federal financial assistance, 29 U.S.C. § 794(a),15 applies to “recipients” of such financial assistance, including “the entity of…State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended….” 29 U.S.C. § 794(b)(1)(B); 28 C.F.R. § 41.3(d) (defining “recipient”);16 see also 28 CFR § 41.51 (b)(1) (applying the prohibitions against discrimination on the basis of handicap to a “recipient” providing an aid, benefit, or service). Specifically, the Act applies to each recipient of federal financial assistance from the Department of Health and Human Services (e.g., Medicaid funds) and to the program or activity that receives such assistance. 45 C.F.R. §§ 84.1, 84.2. None of this implicates the Governor of Texas, who neither receives Medicaid funds, nor distributes those funds. That responsibility falls to HHSC.
15 Section 5 of the Rehab. Act provides: No otherwise qualified individual with a disability in the United States, as defined in section 705(20) of this title, shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance….
29 U.S.C. § 794(a) (emphasis added). See also 28 C.F.R. § 41.51(a) (“No qualified handicapped person, shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity that receives or benefits from federal financial assistance.”). 16 “Recipient” means any State or its political subdivision, any instrumentality of a State or its political subdivision, any public or private agency, institution, organization, or other entity, or any person to which Federal financial assistance is extended directly or through another recipient, including any successor, assignee, or transferee of a recipient, but excluding the ultimate beneficiary of the assistance. 28 C.F.R. § 41.3(d). Defendants’ Motion to Dismiss
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D. Plaintiffs Have No Right of Action Under Section 1983 To Redress Alleged Violations of the Medicaid Act.
Plaintiffs allege that Texas’s Medicaid program departs from the criteria for federal reimbursement specified in the Medicaid Act. See Complaint at 50–54. But the Medicaid statute does not create a private right of action, and Plaintiffs cannot rely on 42 U.S.C. § 1983 because the statutory provisions of the Medicaid Act fail to establish an “unambiguously conferred right.” See Gonzaga Univ. v. Doe, 536 U.S. 273, 823 (2002). Plaintiffs thus fail to state a claim on which relief can be granted.
1. Plaintiffs have no “rights” under the Medicaid Act. Plaintiffs glibly assume that Section 1983 provides a cause of action for their Medicaid Act claims. But Section 1983 applies only when state officials violate a plaintiff’s federal rights; it does not provide a remedy for a mere violation of federal law. See Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103, 106 (1989) (“Section 1983 speaks in terms of ‘rights, privileges, or immunities,’ not violations of federal law.”). And nothing short of an “unambiguously conferred right” can support a cause of action under Section 1983. See Gonzaga, 536 U.S. at 823. The Medicaid statutes that Plaintiffs invoke do not confer any federal “rights” on the Plaintiffs, let alone an “unambiguously conferred” right. The Medicaid statutes impose legal obligations only on the Secretary of Health and Human Services, who may reimburse a State for its Medicaid expenses only if he concludes that the State’s Medicaid program satisfies the criteria enumerated in federal statutes. 42 U.S.C. § 1396c explains how this Spending Clause legislation works: If the Secretary, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of the State plan approved under this subchapter, finds–
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(1) that the plan has been so changed that it no longer complies with the provisions of section 1396a of this title; or (2) that in the administration of the plan there is a failure to comply substantially with any such provision; the Secretary shall notify such State agency that further payments will not be made to the State (or, in his discretion, that payments will be limited to categories under or parts of the State plan not affected by such failure), until the Secretary is satisfied that there will no longer be any such failure to comply. Until he is so satisfied he shall make no further payments to such State (or shall limit payments to categories under or parts of the State plan not affected by such failure). 42 U.S.C. § 1396c. Two features of this statutory scheme have particular relevance for this litigation. First, the statute permits States to establish Medicaid programs that will not qualify for federal funds. Even after accepting federal funds, 42 U.S.C. § 1396c recognizes the State’s continuing prerogative to alter its Medicaid program. Any State that administers a program that deviates from the criteria for federal funding will run the risk that the Secretary will turn off the funding spigot, but this remains a lawful option for the State under the statute. Plaintiffs cannot possibly have a federally protected “right” to state Medicaid services when the statutes do nothing more than supply criteria for federal reimbursement. Second, the statute withdraws funding only after the Secretary has determined that a State’s Medicaid program fails to satisfy the criteria in the federal Medicaid statutes. The Secretary—not the federal courts—determines whether a State’s Medicaid program is worthy of federal funds. The Secretary’s decision is of course subject to judicial review under the arbitrary-and-capricious test. See Walsh, 538 U.S. at 675 (Scalia, J., concurring). But allowing Plaintiffs to pursue a Section 1983 action would empower the federal courts to conduct a de novo review of the State’s Medicaid program, undermining the Administrative Procedure Act’s efforts to protect the decision making autonomy of federal administrative officials.
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We recognize that the Supreme Court has permitted at least one provision of the federal Medicaid Act to be enforced under Section 1983. See Wilder v. Va. Hosp. Assoc., 496 U.S. 498 (1990) (allowing hospitals to sue under Section 1983 to enforce the “Boren Amendment,” which requires participating States’ Medicaid programs to reimburse providers at “reasonable and adequate” rates), superseded by statute as discussed in Evergreen Presbyterian Ministries Inc. v. Hood, 235 F.3d 908, 919 n.12 (5th Cir. 2000) (recognizing Congressional repeal of Boren Amendment to preclude private right of action). But Gonzaga limited Wilder’s holding to provisions in the Medicaid Act that “explicitly confer[] specific monetary entitlements upon the plaintiffs.” 536 U.S. at 280 (emphasis added). It also noted that “[o]ur more recent decisions . . . have rejected attempts to infer enforceable rights from Spending Clause statutes.” Id. at 281. And Gonzaga quoted with approval the following passage from Pennhurst State Sch. & Hosp. v. Halderman:
In legislation enacted pursuant to the spending power, the typical remedy for state noncompliance with federally imposed conditions in not a private cause of action for noncompliance but rather action by the Federal Government to terminate funds to the State. 536 U.S. at 280 (emphasis added). After Gonzaga, Wilder cannot stand for the proposition that any provision of the Medicaid statute can be enforced via Section 1983. If anything, Gonzaga indicates that Wilder and Wright v. Roanoke Redevelopment and Housing Authority, 479 U.S. 418 (1987), represent narrow exceptions to a general principle that excludes spending legislation from judicial enforcement. See Gonzaga, 536 U.S. at 280 (“Since Pennhurst, only twice have we found spending legislation to give rise to enforceable rights.”). The Fifth Circuit has also recognized that Gonzaga limits the ability of Medicaid recipients to bring Section 1983 claims. In Equal Access for El Paso, Inc. v. Hawkins, 509 F.3d 697 (5th Cir. 2007), the court refused to allow Medicaid recipients to sue under Section 1983 to
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enforce the “equal access” provisions of the Medicaid statute—even though an earlier-decided case had allowed such a claim to proceed. Wrote the Court:
We may no longer, as we did in Evergreen [Presbyterian Ministries, Inc. v. Hood, 235 F.3d 908 (5th Cir. 2000)], resolve the ambiguities of Blessing, Wilder, and the Equal Access provision in favor of finding a Congressional intent to authorize Medicaid recipients to bring Equal Access provision suits under § 1983. We are forced by Gonzaga to abjure the notion that anything short of an unambiguously conferred private individual ‘right,’ rather than the broader or vaguer ‘benefits’ or ‘interests,’ may be enforced under § 1983. To the extent that other Fifth Circuit decisions allow Medicaid recipients to sue to enforce provisions other than those that secure specific monetary entitlements to the party bringing suit, those rulings either pre-date Gonzaga or else rely on the now-overruled Evergreen decision. See, e.g., S.D. v. Hood, 391 F.3d 581, 605 (5th Cir. 2004) (relying on Evergreen to permit a Section 1983 lawsuit to enforce provisions in the Medicaid Act); id. at 604 (relying on pre-Gonzaga case law from other circuits); Frazar v. Gilbert, 300 F.3d 530 (5th Cir. 2002) (relying on Evergreen), rev’d on other grounds, Frew v. Hawkins, 540 U.S. 431 (2004). If this Court concludes that either S.D. or some other decision of the Fifth Circuit compels it to permit Plaintiffs to seek judicial enforcement of some of their Medicaid Act claims, then we ask this Court to limit those rulings to the specific provisions of the Medicaid Act found to be judicially enforceable, and we wish to preserve for appeal our contentions that those decisions should be overruled. See Blessing v. Freestone, 520 U.S. 329, 349 (Scalia J., concurring, joined by Kennedy, J.) (questioning the notion that “§ 1983 ever authorizes the beneficiaries of a federal-state funding and spending agreement . . . to bring suit”). The Supreme Court’s ruling in Gonzaga signals a shift away from the Court’s earlier rulings allowing plaintiffs use of Section 1983 to enforce conditions in federal spending legislation.
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Indeed, the Plaintiffs’ Medicaid Act claims have not even alleged that the Defendants have violated federal law, let alone invaded their federally protected “rights.” The Medicaid statutes allow Texas officials to cease complying with the statutory criteria for federal reimbursement at any moment. If this happens, the Secretary must decide whether to cut off federal funds. But no State, and no state official, violates federal law by administering a Medicaid program that fails to qualify for federal reimbursement. Nor do they violate federal law by provoking the Secretary to withhold federal funds. It is impossible for state officials to “violate” the Medicaid Act. Only the Secretary can violate the Act—by approving federal reimbursement for a state program that fails to satisfy the criteria listed in 42 U.S.C. § 1396a.
2. The Wilder/Blessing test. Even applying the Supreme Court’s pre-Gonzaga analysis to the Medicaid Act sections at issue here, there is no right of enforcement conferred upon Plaintiffs either by the Medicaid Act or Section 1983. Blessing applied a three-part test to determine whether legislation creates a private right of action under Section 1983: (1) Congress must have intended the provision in question to benefit the plaintiff, (2) the plaintiff must demonstrate that the right allegedly protected by the statutes is not so “vague and amorphous” that its enforcement would strain judicial competence, and (3) the statute must unambiguously impose a binding obligation on the States. Blessing, 520 U.S. at 340-41; see S.D., 391 F.3d at 603. Basically, “the provision giving rise to the asserted right must be couched in mandatory rather than precatory terms.” Blessing, 520 U.S. at 340-41. The burden rests on the plaintiff to show that the statute created an enforceable right. Id. In Gonzaga, the Supreme Court clarified that nothing short of an “unambiguously conferred right” can support a cause of action under Section 1983. 536 U.S. at
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283.17 Finally, even if a plaintiff demonstrates that a federal statute creates an individual right, there is only a rebuttable presumption that the right is enforceable under Section 1983, and dismissal is nevertheless proper if Congress “specifically foreclosed a remedy under § 1983.” Blessing, 520 U.S. at 341. “Congress may do so expressly, by forbidding recourse to § 1983 in the statute itself, or impliedly, by creating a comprehensive enforcement scheme that is incompatible with individual enforcement under § 1983.” Id.18
3. The NHRA creates no rights enforceable by Plaintiffs under Section 1983. a. Summary of Plaintiffs’ NHRA Claims.
In their Nursing Home Reform Act claims under 42 U.S.C. § 1983, Plaintiffs allege that Texas violates the NHRA and its implementing regulations, 42 C.F.R. § 483.100 et seq., in several ways related to Texas’s PASRR process19 and its administration of specialized services.20 Plaintiffs’ claimed rights relating to specialized services include rights to: (1) a program that assesses whether a person needs specialized services and what those services should include, id. at ¶¶ 77, 236; (2) unlimited specialized services to all persons with developmental disabilities in nursing facilities, id. at ¶¶ 78, 79, 236; (3) the currently available, but limited specialized services, to persons with developmental disabilities in nursing facilities, id. at ¶¶ 87, 237; and (4) a program of specialized services that meets the federal active treatment standard required in an intermediate care facility, id. at ¶¶ 27(b), 72, 96, 238, 235. Plaintiffs’ claimed rights relating to screening, assessment, and placement include rights to: (1) a screening program that timely and
17 The Court noted that some courts had misinterpreted the first Blessing factor as permitting a Section 1983 action whenever the plaintiff fell within the general “zone of interests” protected by the statute at issue. It does not. Id. at 283. 18 A “comprehensive remedial scheme is “a scheme that itself provid[es] for private actions and le[aves] no room for additional private remedies under Section 1983.” Wilder, 496 U.S. at 522-23; see also Middlesex County Sewerage Authority v. Nat. Sea Clammers Assoc., 453 U.S. 1, 14-15 (1981). 19 See Complaint ¶¶ 53, 55, 74-76, 96, 231, 232. 20 See Complaint ¶¶ 27(b), 72, 77-79, 87, 96, 235-38. Defendants’ Motion to Dismiss
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appropriately determines if nursing facility applicants have developmental disabilities, id. at ¶¶ 74, 96, 231; (2) a screening program that, prior to admission to a nursing facility, accurately determines if persons with developmental disabilities can be appropriately served in a less restrictive community setting, id. at ¶¶ 75, 231; (3) a screening program that appropriately screens all nursing facility applicants for developmental disabilities, and a right to those so identified being assessed to determine whether individuals who need nursing facility services can be served in another specialized facility, including ICFs-MR, for persons with developmental disabilities, id. at ¶¶ 76, 232; and (4) a program allowing persons residing in nursing facilities with developmental disabilities to transition into integrated community settings by providing residential assistance services and habilitation services, id. at ¶¶ 53, 55. Plaintiffs attempt to assert their claims under various provisions within three subparts of the NHRA—42 U.S.C. § 1396r(b), (e), and (f). Complaint ¶¶ 231, 232, 236, and 238.
However, neither the statutory provisions within the three subparts of the NHRA nor any of the NHRA’s implementing regulations under which Plaintiffs bring their claims provides any express private right of action. See generally 42 U.S.C. § 1396r(b), (e), (f); 42 C.F.R. 483.112(b), .114(b)(2), .116(b)(2), .118, .120(a)(2) and (b), .128, .132(a), and .440. Therefore, in order for Plaintiffs to bring their NHRA claims under Section 1983, this Court must find that the NHRA confers a federal right to Plaintiffs. See Gonzaga, 536 U.S. at 274.21 Applying the Fifth Circuit’s four-factor test used in determining whether Congress intended a statute to confer a right, while remaining mindful of Gonzaga’s strong limitations on finding privately enforceable
21 Moreover, while Plaintiffs also allege Defendants violate various implementing regulations of the Medicaid Act, these regulations cannot invoke a private right of action where the statute itself does not. “Language in a regulation may invoke a private right of action that Congress through statutory text created, but it may not create a right that Congress has not.... [I]t is most certainly incorrect to say that language in a regulation can conjure up a private cause of action that has not been authorized by Congress.” Alexander v. Sandoval, 532 U.S. 275, 291 (2001). Therefore, the proper inquiry is whether the NHRA creates a privately enforceable right, not whether its implementing regulations do. Casas v. American Airlines Inc., 304 F.3d 517, 520 (5th Cir. 2002). Defendants’ Motion to Dismiss
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rights under federal Spending Clause statutes, shows that Plaintiffs’ cited provisions of the NHRA do not confer any enforceable rights. Here, just like the statute in Gonzaga, the NHRA lacks the necessary “unambiguous intent.”
b. NHRA provisions are not intended to benefit Plaintiffs. First, the context of the cited provisions, coupled with the lack of rights/benefits-granting language, evidences an intent to establish institutional policy and practice, not to benefit the Plaintiffs. See Banks v. Dallas Housing Authority, 271 F.3d 605, 609-10 (5th Cir. 2001) (conditions imposed for receipt of federal funds are focused on the regulated agency and not intended to benefit the Plaintiffs); Alexander v. Sandoval, 532 U.S. 289 (2001) (discussing that “statutes that focus on the person regulated rather than the individuals protected create ‘no implication of an intention to confer rights on a particular class of persons.’”) (citing California v. Sierra Club, 451 U.S. 287, 294 (1981)). The NHRA is entitled “Requirements for nursing facilities.” 42 U.S.C. § 1396r. The subparts of this statute set forth the necessary requirements a nursing facility must meet in providing services and activities for residents in order to maintain funding and certification, 42 U.S.C. § 1396r(b)-(d), the provisions that a State must include in its state plan for administering federal funds to nursing facilities, 42 U.S.C. 1396r(e), and the parameters of the Secretary’s oversight authority and the Secretary and State’s enforcement mechanisms to ensure nursing facilities’ compliance with the NHRA, 42 U.S.C.§ 1369r(f)-(h). “The [NHRA] does not have an ‘unmistakable focus’ on the rights of individual nursing home residents, but instead focuses on requirements that the nursing homes must meet in order to become and remain eligible for funding.” Duncan v. Johnson-Mathers Health Care, Inc., Civ. A. No. 5:09-CV-00417-KKC, 2010 WL 3000718, at *7-8 (E.D. Ky. July 28, 2010) (citing Sandoval, 532 U.S. at 289). Both the text and structure of the NHRA show that the focus of this
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statute is the “nursing homes—not the nursing home residents.” Id. at *8; see 42 U.S.C. § 1369r(b), (c), and (d) (focusing on what the nursing facility must do in return for federal funds); (e) (directing states to establish an appeals process for individuals adversely affected by determinations made as part of their pre-admission screening or resident review; (g) (the “survey and certification” process for nursing facilities provides for both the Secretary and the State to investigate and monitor nursing facilities for compliance with subparts (b), (c), and (d) of the NHRA); (h) (providing for an “enforcement” mechanism authorizing action by the State or the Secretary to deny a nursing facility payments, assess civil penalties, and appoint temporary management to improve or close a facility). For these reasons, Plaintiffs’ cited provisions of the NHRA do not evidence Congressional intent to benefit Plaintiffs. Instead, the intent is to establish institutional policy and practice.
c. The NHRA imposes no binding obligations on Defendants. While Plaintiffs’ cited NHRA sections do contain unambiguous binding obligations on the parties/entities to whom they are directed, not all of the cited sections are unambiguous obligations on the State. For example, Section 1396r(b)(3)(F)(i)-(ii), to which Plaintiffs cite as the basis for their claimed rights related to screening, assessment, and placement and to specialized services, is directed to nursing facilities and sets out which new residents such a facility can admit.22 Complaint at ¶¶ 230, 236; see 42 U.S.C. § 1369r(b)(3)(F). This section actually puts an unambiguous binding obligation on the nursing facilities to not admit residents before certain determinations are made by the state mental retardation or developmental disability authority. 42 U.S.C. § 1396r(b)(3)(F). This is not the same as an unambiguous
22 Plaintiffs allege that Defendants violated 42 U.S.C. § 1396r(b)(3)(F)(i), which dictates to nursing facilities which new residents with mental illness can be admitted to a nursing facility. Defendants construe each citation in the NHRA section of Plaintiffs’ Complaint referencing § 1396r(b)(3)(F)(i) to be intended to reference § 1396r(b)(3)(F)(ii) which is the section that dictates to nursing facilities which new residents with mental retardation can be admitted to a nursing facility. Defendants’ Motion to Dismiss
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binding obligation on the State to make such determinations. Further, precluding States from delegating the making of the specified determinations to nursing facilities also falls short of an unambiguous binding obligation to provide the rights Plaintiffs claim. Id.
Section 1396r(e), which deals with “State requirements relating to nursing facility requirements,” specifies that “[a]s a condition of approval of [a State’s] plan . . . a State must provide” certain enumerated specifications in its state plan for the Secretary’s review. 42 U.S.C. § 1369r(e)(7) (requiring state plan to include requirements for preadmission screening and resident review). This Section does not put an unambiguous obligation upon the State to ensure Plaintiffs’ claimed rights related to screening, assessment, and placement and specialized services. Instead, the statute’s text puts an unambiguous obligation on the State to provide certain specifications in its state plan. Specifically, it dictates that “[a]s a condition of approval of [a State’s] plan . . . a State must provide” certain enumerated specifications related to preadmission screening and resident reviews in its state plan for the Secretary’s review. See 42 U.S.C. § 1396r(e)(7). This subpart of the NHRA obligates the state to develop a plan. Id. The plan is then subject to the Secretary’s approval. Id. In this way, Section 1396r(e) does not unambiguously place on Defendants the obligations alleged by the Plaintiffs.
Section 1396r(f) sets forth the “[r]esponsibilities of the Secretary relating to nursing facility requirements.” 42 U.S.C. § 1396r(f) (emphasis added). Subsection (f)(8) directs the Secretary to develop minimum criteria for states to use in making PASRR determinations and in permitting persons adversely affected to appeal such determinations, and further directs the Secretary to “monitor” states through case reviews for their compliance with NHRA. 42 U.S.C. § 1396r(f)(8). Section 1396r(f)(8) (related to specialized services) actually puts an unambiguous obligation on the Secretary to review states for compliance and to establish minimum criteria for
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states to use in (a) making determinations related to preadmission screening and resident
reviews; and (b) in permitting individuals adversely affected to appeal such determinations. See
42 U.S.C. § 1396r(f)(8); see Complaint at ¶ 236. This provision does not unambiguously impose
a binding obligation on the State because this statutory requirement is solely directed to the
Secretary.
d. NHRA’s remedial scheme precludes individual remedies.
Fourth, the NHRA contains sufficiently comprehensive remedial devices related to
preadmission screening, resident reviews, and specialized services evidencing an intent to
preclude remedies for individuals under Section 1983. The statutory text’s comprehensive
remedial devices contemplate different enforcement mechanisms by different parties. Some
NHRA provisions are directed at actions by individuals. For example, Section 1396r(e)(7)(F)
requires that each state “as a condition of approval of its plan . . . must have in effect an appeals
process for individuals adversely affected by” preadmission screening and resident reviews. 42
U.S.C. § 1396r(e)(7)(F); see also 42 C.F.R. § 483.204 (requiring states to provide an appeal
process to nursing facility residents adversely affected by preadmission screening and resident reviews).23 Other NHRA comprehensive remedial devices are directed to enforcement actions against nursing facilities brought by either the Secretary and/or Texas.24 Moreover, the NHRA
23 In Texas, the appeals process for preadmission screening and resident reviews is set out in the Texas Health and Human Services Commission’s fair hearing rules. See 1 TAC §§ 357.3(a) (fair hearing rules govern Medicaidfunded services), (b)(1)(D) (clients of Medicaid funded services are entitled to appeal adverse determinations regarding preadmission screening and resident reviews), (b)(2)(B) (the client has within 90 days of the later of the date on the notice of agency action, or effective date of agency action to appeal a determination); 357.5(c)(3)(D) (fair hearing officer issues a final order), 357.703 (a)-(c) (providing that client may file a motion for rehearing of fair hearing officer’s final order and then seek judicial review of that final determination); see also see also TEX. GOV’T CODE ANN. § 531.019 (sets out administrative remedies and right to judicial review for a party who is aggrieved by a final order of a fair hearing officer). 24 See 42 U.S.C. § 1396r(h)(1)-(2) (setting forth specified enforcement actions for a state to remedy a nursing facility’s deficiencies), (3) (setting forth the Secretary’s authority and specified enforcement actions to remedy a nursing facility’s deficiencies), (4) (setting forth that nursing facilities must be found in “substantial compliance” before a denial of payment finding shall be terminated), (5) (setting forth grounds for a state or the Secretary to Defendants’ Motion to Dismiss
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specifically provides that the remedial devices available to the State or the Secretary are not limited to the enumerated devices. Id. at § 1369r(h)(8). The NHRA also states that the remedies provided under subsection (h) are “in addition to those otherwise available under State or Federal law and shall not be construed as limiting such other remedies.” Id. While federal and state statutory remedies are not foreclosed to the State and the Secretary, the NHRA only notes that individuals may pursue their common law claims against nursing facilities. 42 U.S.C. § 1369r(h)(8). These different NHRA provisions, directed at different parties and for different purposes, together, evidence Congress’s intent to preclude remedies for individuals under Section 1983.
For all of these reasons, the NHRA confers no federal right to Plaintiffs and their claims should be dismissed under Rule 12(b)(6). A number of courts that have considered whether the NHRA confers an enforceable private right have reached the same conclusion—there is no such right.25 This issue has not been determined in the Fifth Circuit.
4. Sections 1396a(a)(8) and 1396a(a)(10(B) create no rights enforceable under Section 1983.
Section 1396a(a) of the Medicaid Act sets out the requirements for a State Plan for states seeking Medicaid funds. Certainly, the text of § 1396a(a) does not explicitly and unambiguously grant a private right. Gonzaga, 536 U.S. at 282, 283. Rather, the requirements for the contents of the State Plan simply establish criteria the State may choose to satisfy in order to participate in the cost-sharing program. They provide the outline by which the Secretary fulfills his duty under
immediately terminate a nursing facility’s participation), (6) (setting forth special rules where a state and the Secretary do not agree on a nursing facility’s compliance status). 25See Sparr v. Berks County, No. CIV. A. 02-2576, 2002 WL 1608243 (E.D. Pa. July 18, 2002) (post-Gonzaga decision finding no private right of action under Section 1396r); Duncan v. Johnson-Mathers Health Care, Inc., Civ. A. No. 5:09-CV-00417-KKC (E.D. Ky. July 28, 2010) (post-Gonzaga decision finding no privately enforceable right under Section 1396r); Prince v. Dicker, 29 Fed. Appx. 52 (2nd Cir. 2002) (finding no privately enforceable right under Section 1396r); Baum v. Northern Dutchess Hosp., --- F.Supp.2d ---, 2011 WL 240196 (N.D.N.Y. January 24, 2011) (post-Gonzaga decision finding no privately enforceable right under Section 1396r). Defendants’ Motion to Dismiss
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the Act to approve the States’ participation. Thus, the requirements of a State Plan create no rights for a Medicaid beneficiary, and all of Plaintiffs’ claims under these sections should be dismissed. See Complaint ¶¶ 225-229.
The Fifth Circuit has not ruled on the question whether Sections 1396a(a)(8) or 1396a(a)(10(B) create privately-enforceable rights. Its ruling in S.D. v. Hood—that Section 1396a(a)(10)(A) creates a right to enforce the provision of early and periodic screening, diagnostic, and treatment services (EPSDT”) for eligible individuals under the age of twentyone—is not controlling here because S.D. was decided in reliance pre-Gonzaga case law from other circuits and the Evergreen decision, which was later repudiated in Equal Access, 509 F.3d at 704. To the extent this Court would rely on S.D., Defendants wish to preserve for appeal their contention that S.D. must be overturned in light of Gonzaga.
5. No provision of the Medicaid Act confers a right to force provision of waiver services under Sections 1396a(a)(8), 1396a (a)(10), or 1396n(c)(2).
Even were Sections 1396a(a)(8), 1396a (a)(10), or 1396n(c)(2) to confer enforceable rights to Plaintiffs with regard to the provision of specialized services in nursing facilities, they confer no such rights in connection with the provision of community-based waiver services.
a. There is no § 1396a(a)(8) entitlement to reasonable promptness in delivery of waiver services where the waiver cap is met.
It is settled that the Medicaid Act provides no right to enforce Section 1396a(a)(8) with regard to Plaintiffs’ claim that Texas is limiting its waiver programs that provide communitybased services and supports for persons with developmental disabilities, and therefore those waiver services and supports are not being provided with reasonable promptness. See Complaint ¶ 226. In a 2003 decision in a case brought in the Western District of Texas, Austin Division, in which the plaintiffs claimed—as do the Plaintiffs here—that Texas violated their rights under §
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1396a(a)(8) for failing to deliver waiver services in Texas’s HCS (and CLASS) waiver programs with “reasonable promptness” in light of the wait list for such services, the court ruled that Congress did not intend to create in 42 U.S.C. § 1396a(a)(8) an individual right enforceable under § 1983 for individuals who apply for Medicaid waiver services after the waiver ceiling has been met or surpassed. McCarthy, ex rel. Travis v. Hawkins, Cause No. A-03-CA-231-SS, United States District Court for the Western District of Texas, Austin Div., Dkt. #11, pp. 14–16 (unpublished), attached hereto as Exh. 1. The court correctly recognized that “the cap on the number of waiver recipients functions as ‘a constraint on eligibility,’ and ‘[i]ndividuals who apply after the cap has been reached are not eligible.’” Id. at p. 15 (quoting Boulet v. Celucci, 107 F.Supp.2d 61, 76-80 (D.Mass. 2000)). The court found that the plaintiffs therefore failed to satisfy the first prong of Blessing, in that they were not among the class of individuals Congress intended to benefit; therefore, they had no entitlement to reasonable promptness in the delivery of waiver services, and could not enforce Section 1396a(a)(8). Id. The same reasoning applies here.
Moreover, courts that considered the effect of a waiver cap on the enforceability of the Medicaid Act have consistently taken the approach that once the waiver cap is reached, individuals seeking waiver services are not eligible for such services, and therefore have asserted no right enforceable under the Act. See, e.g., Boulet, 107 F.Supp.2d at 76-80 (“As a practical matter, the statute can best be read to mandate that, once a state chooses to implement a waiver program and chooses the eligibility requirements, a cap is simply another eligibility requirement for that program . . . . Individuals who apply after the cap has been reached are not eligible, or alternatively, the waiver services are not “feasible” for them until the cap has risen to include them.); see Bryson v. Shumway, 308 F.3d 79, 88 (1st Cir. 2002) (“[t]hose patients who are on the
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waiting list and for whom slots are available are, we think, ‘eligible’ under the statute such that they are entitled to reasonable promptness”). The Fifth Circuit has not ruled to the contrary.
b. There is no § 1396a(a)(10) comparability requirement for delivery of waiver services.
Section 1396a(a)(10)(B) states that services provided under the State Plan be comparable in amount, duration and scope for all groups covered under the plan. However, this requirement applies only to services provided under the State Plan, and does not apply to waiver programs such as HCS. 42 U.S.C. § 1396a. In fact, the requirements set out in § 1396a(a)(10) are expressly waived under the provisions of the Act relating to waiver programs, which are found in 42 U.S.C. § 1396n(c). 42 U.S.C. § 1396n(c)(3). Therefore, even assuming, arguendo, that Congress intended the provisions of § 1396a(a)(10) to benefit recipients of Medicaid services provided under the State Plan, it is clear that Congress did not intend § 1396a(a)(10) to apply to recipients or applicants for services under a waiver program. Therefore, Plaintiffs cannot satisfy the first element of the Blessing test—that the statute be intended to benefit Plaintiffs. Furthermore, Plaintiffs fail the third element of the Blessing test because they cannot show that § 1396a(a)(10) “unambiguously imposes a binding obligation” on Texas with regard to administration of the Medicaid waiver programs. Blessing, 520 U.S. at 340-41.
c. Sections 1396n(c)(2)(B) and (C) create no rights enforceable under § 1983.
Sections 1396n(c)(2)(B) and (C) of the Medicaid Act provide that the Secretary shall not grant a waiver under the Medicaid Act unless the State seeking the waiver provides the Secretary with certain assurances. Under Gonzaga, the assurances provisions of § 1396n(c)(2), including the “freedom of choice” provision of § 1396n(c)(2)(C), create no privately enforceable rights for waiver applicants. Certainly, the text of § 1396n(c)(2) is not phrased “in terms of the persons
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benefitted.” Gonzaga, 536 U.S. at 283. Rather, § 1396n(c) and the implementing regulations set forth the guidelines by which the Secretary determines whether to grant or deny a state’s request for waiver. § 1396n(c)(2)(B), (C); 42 CFR §441.302. The result of a failure to comply with § 1396n(c)(2)(B) and (C) is that a state’s request for a waiver may be denied, or a waiver already granted may be terminated. § 1396n(c)(2)(B), (C); 42 CFR §441.302.
Nor does § 1396n(c) explicitly and unambiguously grant a private right to the “particular class of persons” that Plaintiffs purport to represent. Id., 536 U.S. at 282, 283. The literal text of § 1396n(c) unquestionably focuses on the duties of the Secretary and of the states—“the person regulated”—rather than “the individuals protected,” and thus demonstrates no intent to confer rights on the beneficiaries of the Act. Id. at 2277 (citing Sandoval, 532 U.S. 289). For example, Section 1396n(c)(2)(C) requires only that states seeking a Medicaid waiver assure the Secretary of Health and Human Services that eligible individuals will be informed of the “feasible alternatives” to ICFs-MR “ if available under the waiver.” 42 U.S.C. § 1396n(c)(2)(C). Based on the plain language of the statute, no requirement is imposed if there are no waiver services available at the time. Thus, when one of Texas’s waiver programs, such as HCS, has reached its enrollment limit, the services under the program are not “available” and do not constitute a “feasible” alternative. Therefore, they need not be offered or provided. Section § 1396n(c)(2)(C) thus imposes no “binding obligation” on Texas when there are no openings for the waiver services, and Plaintiffs cannot satisfy the third prong of the Blessing test.
The district court in McCarthy (discussed above) agreed with this view, ruling that 42 U.S.C. § 1396n(c)(2)(C) did not create an individual right enforceable under Section 1983 for individuals who apply for Medicaid waiver services after the waiver ceiling has been met or surpassed. McCarthy, Cause No. A-03-CA-231-SS, Dkt. #11, pp. 12-14; see Exh. 1. Similarly,
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another district court has ruled that “the freedom of choice provisions do not contain the unambiguous rights-creating language of Gonzaga, and consequently, there is no private right of action based on these provisions.” M.A.C. v. Betit, 284 F.Supp.2d 1298, 1307 (D. Utah 2003). So should the Court rule here.
E. Even if the Medicaid Act Creates Rights Enforceable by Plaintiffs, Plaintiffs Have Failed to State a Cognizable Claim.
In the alternative, should this Court find that the Medicaid Act creates rights enforceable by Plaintiffs under Section 1983, Plaintiffs have failed to state a cognizable claim under the NHRA provisions, 42 U.S.C. § 1396a(a)(8) (the “reasonable promptness” provision); § 1396n(c)(2)(B) and (C) (the “freedom of choice” provision); and § 1396a(a)(10)(B)(i) and (ii) (the “comparability” provision). These claims should be dismissed.
1. Plaintiffs state no cognizable NHRA claim. This Court should dismiss Plaintiffs’ claim that Defendants do not provide specialized services in a manner that meets the federal active treatment standard required in an ICF-MR as measured by 42 C.F.R. § 483.440(a)-(f). See Complaint at ¶¶ 27(b), 72, 96, 235, 238. While Defendants do not dispute that the implementing regulations of the NHRA require specialized services to provide active treatment, active treatment in a nursing facility is measured by 42 C.F.R. § 483.440(a)(1) and not the other subparts of this regulation. Accordingly, this Court should dismiss Plaintiffs’ NHRA claim related to specialized services, to the extent this claim attempts to require that Defendants’ delivery of specialized services to nursing facility residents be measured by all of the same standards applicable to determining what constitutes active treatment in an ICF-MR, for failure to state a claim for which relief can be granted. Specialized services are defined differently for different categories of residents. See 42 C.F.R. § 483.120(a). For nursing home residents with mental retardation, specialized services
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means “the services specified by the State which, combined with services provided by the [nursing facility] or other service providers, result in treatment which meets the requirements of § 483.440(a)(1).” Id. at § 483.120 (a)(2). As such, this regulation related to nursing facilities imports a certain and limited portion of the regulations that are related to ICFs-MR. In this way, Section 483.440(a)(1), and no other subpart of Section 483.440, constitutes the yardstick by which the provision of specialized services in a nursing facility can be measured. Section 483.440(a)(1) provides that
Each client must receive a continuous active treatment program, which includes aggressive, consistent implementation of a program of specialized and generic training, treatment, health service, and related services described in this subpart, that is directed toward--
(i) The acquisition of the behaviors necessary for the client to function with as much self determination and independence as possible; and
(ii) The prevention or deceleration of regression or loss of current optimal functional status.
42 C.F.R. § 483.440(a)(1) (2010). Importantly, the nursing facility regulation at issue does not import the entirety of the provisions used to measure delivery of specialized services to residents in ICFs-MR. Compare 42 C.F.R. § 483.120(a) (only importing one subpart of the ICF-MR regulation) with 42 C.F.R. § 483.440 (containing several subparts that relate to specialized services in an ICF-MR).
Moreover, the United States Court of Appeals for the First Circuit’s decision regarding specialized services in nursing facilities as compared to active treatment in ICFs-MR—the only circuit to have considered whether active treatment is required in NFs—is instructive. In Rolland v. Romney, the appellate court affirmed the district court’s ruling that the defendant state had to comply with the active treatment standard, set out at 42 C.F.R. § 483.440(a)(1), applicable to ICF-MRs in its providing specialized services to mentally retarded NF residents. 318 F.3d 42,
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57 (1st Cir. 2003), affirming Rolland v. Cellucci, 198 F.Supp.2d 25, 46 (D. Mass. 2002) (district court cited only 42 C.F.R. § 483.440(a)(1) and not subparts (b)-(f) in setting forth standard to be met in NF). However, the appellate court clarified that the regulations do not “impose on states, when serving mentally retarded nursing home residents, the considerable onus of complying with every obligation placed on them in their broader role in ICF-MRs.” Id. (emphasis added).
Accordingly, to the extent Plaintiffs attempt to assert a claim for violation of the NHRA based on Defendants’ alleged failure to provide specialized services constituting active treatment as measured by 42 C.F.R. § 483.440(a)-(f), Plaintiffs fail to state a claim for which relief can be granted because, in the NF setting, Defendants are not required to comply with all of the provisions of Plaintiffs’ cited regulations. Instead, Defendants must only provide specialized services, as measured by Section 483.440(a)(1).
2. Plaintiffs state no cognizable § 1396a(a)(8) claim. Plaintiffs claim that Defendants’ limits on community-based services and supports— including residential, habilitation and other specialized services provided in the community through the state’s waiver programs—violate § 1396a(a)(8) of the Medicaid Act. Complaint at ¶ 226. The “reasonable promptness” provision of the Medicaid Act requires that state Medicaid plans “provide that all individuals wishing to make application for medical assistance under the plan shall have opportunity to do so, and that such assistance shall be furnished with reasonable promptness to all eligible individuals.” Prior to the 2010 amendments made by the Patient Protection and Affordable Care Act (“PRACA”),26 “medical assistance,” as defined in the Act, meant “payment of part or all of the cost” of certain specified services. 42 U.S.C. § 1396d(a). Under this definition, the Fifth Circuit
26 Pub. L. No. 111-148, 124 Stat. 119 (March 23, 2010), as amended by Health Care and Education Reconciliation Act of 2010, Pub.L. No. 111-152, 124 Stat. 1029 (March 30, 2010) (collectively (“PPACA”). Defendants’ Motion to Dismiss
36

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had ruled that “medical assistance” refers to payment, not to the actual delivery of medical services, and therefore plaintiff beneficiaries who claimed failure to deliver services promptly failed to state an actionable claim. Equal Access for El Paso, Inc. v. Hawkins, 562 F.3d 724, 727-29 (5th Cir. 2009).27 The 2010 amendments changed the definition of “medical assistance” to include “payment of part or all of the cost of … care and services or the care and services themselves, or both.” 42 U.S.C. § 1396d(a) (2010) (amending 42 U.S.C. § 1396d(a) (2008)) (emphasis added). No courts have yet specifically addressed the effect of the 2010 amendments on the issue of whether Section 1396a(a)(8) confers enforceable rights on Medicaid recipients.
However, a federal district court in Florida has ruled that the 2010 amendments to the Medicaid Act are invalid. See Florida et al. v. U.S. Dept. of Health and Human Services, --- F. Supp. 2d ---, 2011 WL 285683. The district court nullified these amendments because they were enacted as part of a non-severable statute that included an unconstitutional provision requiring Americans to purchase health insurance. This includes any of the 2010 amendments that affect sections of the Medicaid Act under which Plaintiffs bring their claims in this lawsuit—namely, §§ 1396a(8) and (10), § 1396n, and § 1396r (and its subparts), as well as provisions implicated by those claims, such as § 1396d (definitions).
The Florida court’s ruling is not binding in this litigation because Plaintiffs were not parties to those proceedings. The State of Texas, however, is a party to the Florida litigation and agrees with the district court’s reasoning. Fortunately, this Court need not reach these constitutional questions if it concludes that the plaintiffs’ Medicaid Act claims are not judicially enforceable. But if this Court concludes that Plaintiffs have asserted a valid cause of action for their Medicaid Act claims, then Defendants assert in defense that the amended provisions of the
27 The Fifth Circuit’s ruling in Equal Access was consistent with rulings on § 1396a(a)(8) in the Sixth, Seventh, and Tenth Circuits. Id. at 728. Defendants’ Motion to Dismiss
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Medicaid Act under which Plaintiffs assert their claims via 42 U.S.C. § 1983 in this lawsuit are
invalid as non-severable from the unconstitutional individual-mandate provisions in PRACA.
3. Plaintiffs state no cognizable § 1396n(c)(2)(B) or (C) claim.
Even assuming that Plaintiffs have a right to sue under Section 1983 to enforce §
1396n(c)(2)(B) and (C), Plaintiffs’ claims under these sections are not cognizable and should be
dismissed in their entirety under Rule 12(b)(6).
First, there is no doubt that the Court must dismiss the claims based on Defendants’
purported failure to take actions that are not even required under these sections of the Medicaid
Act. Thus, the dismissal must include Plaintiffs’ claims that Defendants violated §
1396n(c)(2)(B) and (C) when they allegedly failed to provide persons with developmental
disabilities residing in nursing facilities with—
• equal opportunities to apply for and access medically necessary community-based services;
• an assessment of their eligibility for such services; and • a meaningful choice between “institutional” and community-based services.
Complaint ¶ 227. The plain wording of Sections 1396n(c)(2)(B) and (C) quite simply contain no such requirements.28
28 Sections 1396n(c)(2)(A) and (B) of the Medicaid Act prohibit the Secretary of Health and Human Services from granting a waiver unless the state provides assurances that—
(B) the State will provide, with respect to individuals who— (i) are entitled to medical assistance for inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded under the State plan, (ii) may require such services, and (iii) may be eligible for such home or community-based care under such waiver, for an evaluation of the need for inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded; (C) such individuals who are determined to be likely to require the level of care provided in a hospital, nursing facility, or intermediate care facility for the mentally retarded are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to the provision of inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded…. 42 U.S.C. § 1396n(c)(2) (emphasis added).
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Second, subpart B prohibits the Secretary of HHS from granting the state a Medicaid waiver unless the state assures the Secretary that persons who are entitled to in-patient hospital services, NF services, and services in an ICF-MR, who may require such services, and who may be eligible for home or community-based care under the waiver program, be given an evaluation of the need for in-patient hospital services, NF services, or services in an ICF-MR. It does not require an assessment of eligibility for waiver services, as Plaintiffs assert. Complaint ¶227, see also ¶¶ 143, 161, 174.
Subpart C is an informational requirement. See Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452, 459 (7th Cir. 2007) (subsection C “does not make any particular option ‘available’ to anyone. It just requires the provision of information about options that are available.”); Grant, 324 F.3d at 388. Literally, it requires only that states assure the Secretary that persons determined to be likely to require the level of care provided in a hospital, NF, or ICF-MR “are informed of the feasible alternatives” to such hospital, NF, or ICF-MR services, “if available under the waiver.” 42 U.S.C. § 1396n(c)(2)(C); see also, 42 C.F.R. § 441.302. It does not require “equal opportunities to apply for and access medically necessary community-based services,” or “a meaningful choice between ‘institutional’ and community-based services.” See Bertand, supra. The individual Plaintiffs have alleged that they failed to be informed of feasible alternatives to NF or ICFs-MR available to them under a Texas waiver. See, e.g., Complaint ¶¶ 143, 161, 174 (complaining of no assessment for community placement). To the contrary, they admit that the HCS waiver—which they prefer because it includes a residential component—has a wait list of approximately 45,756. Complaint ¶ 57. It is well established that when waiver caps have already been met (as here with the HCS waiver), such waiver services are no longer “feasible” or “available.” See, e.g., Makin v. Hawaii, 114 F.Supp.2d 1017, 1027-28 (D. Haw.
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1999). Therefore, Plaintiffs have failed to state a § 1396n(c)(2)(B) or (C) claim for which relief may be granted.
4. Plaintiffs state no cognizable claim under 42 U.S.C. §§ 1396a(a)(10)(B)(i) and (ii).
Plaintiffs assert that § 1396a(a)(10)(B) requires that persons with developmental disabilities residing in nursing facilities be provided the same services as those residing in ICFsMR. Complaint ¶ 229. Plaintiffs’ claim fails to state a cognizable claim for two reasons: first, the Act contains no such requirement, and Plaintiffs’ interpretation would lead to absurd results not contemplated by the Act; and second, Plaintiffs do not allege facts showing they are being deprived of ICF-MR services.
The purpose of the comparability provision of § 1396a(a)(10)(B) is “to ensure that recipients who qualify as categorically needy under one form of federal assistance should receive the same ‘amount, duration, or scope’ of assistance as those who qualify under another federal assistance program.” Greenstein by Horowitz v. Bane, 833 F.Supp 1054, 1073 (S.D. N.Y. 1993) (referring to legislative history of the Act). Section 1396a(a)(10)(B) guarantees that if a state elects to provide Medicaid to the medically needy, it must also provide it to the categorically needy and that it may not provide more assistance to the former group than to the latter. See id. at 39. Moreover, states may not provide benefits to some categorically needy individuals but not to others. 42 U.S.C. § 1396a(a)(10)(B)(i); Rodriguez v. City of New York, 197 F.3d 611, 615 (2d Cir. 1999) (citing Schweiker v. Hogan, 457 U.S. 569, 573 n. 6 (1982) (stating that Section 1396a(a)(10)(B) ensures “that the medical assistance afforded to an individual who qualified under any categorical assistance program could not be different from that afforded to an individual who qualified under any other program”)). “In other words, the amount, duration, and scope of medical assistance provided to an individual who qualified to receive assistance for the
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aged could not be different from the amount, duration, and scope of benefits provided to an
individual who qualified to receive assistance for the blind.” Schweiker, id. Thus, the
comparison is between and among financial eligibility categories. That is, the amount, duration,
and scope of available services cannot differ among Medicaid recipients based on how they
became eligible for Medicaid. Certainly, nothing in Section 1396a(a)(10)(B) requires that all of
the specific services defined in Section 1396d(a) must be provided to every developmentally disabled person receiving services in a nursing facility.29
Again, Section 1396a(a)(10)(A), by reference to Section 1396d(a), establishes the minimum care and services required for categorically needy recipients.30 The services required for the categorically needy are also set out in the regulations at 42 C.F.R. § 440.210.31 In both
the statute and the regulations, nursing facility services and ICF-MR services are listed as
completely separate services. Compare, 42 U.S.C. § 1396d(a)(4) and 42 C.F.R. § 440.40
(nursing facility services) with 42 U.S.C. § 1396d(a)(15) and 42 C.F.R. § 440.150 (ICF-MR
services). Furthermore, NF services are required, but ICF-MR services are optional. See 42
U.S.C. § 1396a(a)(10)(A); see 42 C.F.R. § 440.225 (governing optional services). The
requirements for nursing facilities are completely separate from the requirements for ICFs-MR.
29 Nor is there any such requirement in the implementing regulation, 42 C.F. R. §440.240, which provides: Except as limited in § 440.250(a) The plan must provide that the services available to any categorically needy recipient under the plan are not less in amount, duration, and scope than those services available to a medically needy recipient; and (b) The plan must provide that the services available to any individual in the following groups are equal in amount, duration, and scope for all recipients within the group: (1) The categorically needy. (2) A covered medically needy group.
42 C.F.R. § 440.240. 30 Section 1396a(a)(10)(A) requires state plans to provide for “making medical assistance available, including at least the care and services listed” in § 1396d(a)(1)-(5), (17), (21), and (28). 31 42 C.F.R. § 440.210 states that a state plan must specify that, at a minimum, categorically needy recipients are furnished the services defined in 42 C.F.R. §§ 440.10 - .50, .70, and, if authorized to practice under state law, §§ 440.165 and .166. With the exception of home health services, these are the same services referenced in 42 U.S.C. § 1396a(10)(B) as the minimum required services for participating states. .
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Compare, 42 C.F.R. § 483.1–483.138 (requirements for nursing facilities, including PASRR) with 42 C.F.R. § 483.400–483.480. In fact, ICFs-MR are specifically excluded from the definition of NFs. 42 C.F.R. § 483.5. Significantly, neither specialized services nor active treatment are listed or discussed as independent services in Part 440 of the C.F.R. Plaintiffs’ claim, then, has no basis in law, and must be dismissed.
Moreover, Plaintiffs’ novel view would produce an absurd result. It would mean that every Medicaid recipient in any program and in any type of facility must be provided the same care and services as every other recipient. Were that what Congress or the Secretary intended, then there would be no need for the various specifically- and carefully-defined programs and services. In particular, there would be no need for the specific PASRR requirements for nursing facilities set out in 42 C.F.R. §§ 483.100–.483.138. Finally, Plaintiffs make no claim that they are being denied ICF-MR services in the same amount, duration, or scope as other Medicaid recipients receiving ICF-MR services. They have failed to state a claim under § 1396a(a)(10)(B) for which relief can be granted, and their claims should be dismissed.
CONCLUSION For the foregoing reasons, Plaintiffs’ claims as against Governor Perry should be dismissed in their entirety on the basis of standing, sovereign immunity, and failure to state a claim. Furthermore, all of Plaintiffs’ claims under the Medicaid Act and the NHRA should be dismissed on numerous grounds, including standing, limitations, no private right of action, and failure to state a claim. Finally, Plaintiffs’ claim under Title II of the ADA regarding eligibility criteria is time-barred and should be dismissed. Defendants, therefore, respectfully request that this Court grant this motion, dismiss these claims, and grant such further relief as is just and proper.
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Respectfully submitted, GREG ABBOTT Attorney General of Texas DANIEL T. HODGE First Assistant Attorney General BILL COBB Deputy Attorney General for Civil Litigation DAVID MATTAX Director of Defense Litigation ROBERT B. O’KEEFE Chief, General Litigation Division /s/ Nancy K. Juren NANCY K. JUREN Assistant Attorney General Attorney in Charge Texas Bar No. 11059300 DARREN G. GIBSON Assistant Attorney General Texas Bar No. 24068846 AMANDA J. COCHRAN-MCCALL Assistant Attorney General Texas Bar No. 24069526 General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 Phone No.: (512) 463-2120 Fax No.: (512) 320-0667
Attorneys for Defendants
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CERTIFICATE OF SERVICE I certify that a true and correct copy of Defendants’ Motion to Dismiss Plaintiffs’ Complaint was served by CM/ECF system on March 8, 2011, upon the following individuals at the listed addresses: Garth A. Corbett Sean A. Jackson Advocacy Inc. 7800 Shoal Creek Blvd., #171-E Austin, Texas 78757 Yvette Ostolaza Robert Velevis Casey A. Burton Weil, Gotshal & Manges 200 Crescent Court- Suite 300 Dallas, Texas 75201 Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060
/s/ Nancy K. Juren___________ NANCY K. JUREN
Defendants’ Motion to Dismiss 44

 Case 5:10-cv-01025-OLG Document 40 Filed 04/18/11 Page 1 of 70

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

§

and mother, Lilian Minor, et al.,

§

§

Plaintiffs,

§

§

v.

§

§

RICK PERRY, Governor, et al.

§

§

Defendants.

§

CIV. NO. 5:10-CV-1025-OG

PLAINTIFFS’ RESPONSE IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ COMPLAINT
Garth A. Corbett State Bar No. 04812300 Sean A. Jackson (pro hac vice) State Bar No. 24057550 Disability Rights Texas 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 Robert Velevis (pro hac vice) State Bar No. 24047032 Casey Burton (pro hac vice) State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz (pro hac vice) J. Paterson Rae (pro hac vice) Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)

Case 5:10-cv-01025-OLG Document 40 Filed 04/18/11 Page 2 of 70

TABLE OF CONTENTS

Page

I. INTRODUCTION ............................................................................................................. 1
II. BACKGROUND ............................................................................................................... 1
A. The Legislative History of the Nursing Home Reform Amendments. .................. 2
B. The Nursing Home Reform Amendments to the Medicaid Act ............................ 4
C. Texas‘s Implementation of the NHRA .................................................................. 7
D. Texas‘s Community Service Programs.................................................................. 8
III. ARGUMENT ................................................................................................................... 10
A. Plaintiffs Have Stated Cognizable Claims Under the Medicaid Act ................... 10
1. Plaintiffs Have Stated a Claim Under the NHRA.................................... 10
2. Plaintiffs Have Stated a Claim Under the Reasonable Promptness Provision of the Medicaid Act. ................................................................ 11
a. Congress Clarified that the Medicaid Act Applies to Services, and, Regardless, Plaintiff‘s Claim Is Not Limited to the Provision of Services ......................................................... 11
b. Plaintiffs‘ Reasonable Promptness Claim Is Not Limited to Services and Supports Provided Through the HCS Waiver System.......................................................................................... 13
3. Plaintiffs Have Stated a Claim Under the Comparability Requirement of the Medicaid Act............................................................ 15
4. Plaintiffs Have Stated a Claim under the Freedom of Choice Provision of the Medicaid Act ................................................................. 16
B. Plaintiffs Have a Private Right of Action Under 42 U.S.C. § 1983 to Enforce the Relevant Sections of the Medicaid Act ............................................ 19
1. The Standard for Private Rights of Action .............................................. 19
2. The Medicaid Act Creates Enforceable Rights........................................ 22
3. The Nursing Home Reform Amendments to the Medicaid Act Are Privately Enforceable............................................................................... 27
a. The Language Chosen By Congress Demonstrates that the NHRA Is Privately Enforceable................................................... 27
b. The Secretary‘s Regulations Further Demonstrate that the NHRA Is Privately Enforceable................................................... 30
c. Applicable Caselaw Further Confirms That The NHRA Is Privately Enforceable................................................................... 32
i

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TABLE OF CONTENTS (continued)

Page

4. The Reasonable Promptness Provision of the Medicaid Act Is Privately Enforceable............................................................................... 35
5. The Comparability Provision of the Medicaid Act Is Privately Enforceable. ............................................................................................. 35
6. The Freedom of Choice Provision of the Medicaid Act Is Privately Enforceable. ............................................................................................. 36
C. Plaintiffs Have Standing to Assert a Claim Under the Freedom of Choice Provision of the Medicaid Act ............................................................................. 38
D. The Governor Is a Proper Party In this Case ....................................................... 42
1. Plaintiffs Have Standing to Assert Their Claims Against the Governor. ................................................................................................. 43
2. The Governor Is Not Immune from Suit Under the Eleventh Amendment for Violations of Federal Law. ............................................ 45
3. Plaintiffs Have Stated a Claim Against Governor Rick Perry. ................ 47
a. The Governor is a ―Public Entity‖ for Purposes of Title II of the ADA and Section 504 ........................................................ 47
b. The Governor Is Responsible For, and Has the Authority to Correct, the ADA, § 504, and Medicaid Violations Set Forth in the Complaint ................................................................. 50
E. Plaintiffs‘ Claims Are Not Barred by the Statute of Limitations......................... 52
1. The Statute of Limitations Is Tolled As A Result of Plaintiffs‘ Severe Developmental Disabilities .......................................................... 53
2. The Statute of Limitations Is Also Tolled Because of Defendants‘ Continuing Violations of Federal Law .................................................... 54
IV. CONCLUSION AND REQUESTED RELIEF ............................................................... 57

ii

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TABLE OF AUTHORITIES

CASES

Page(s)

Alexander v. Sandoval, 532 U.S. 275 (2001).....................................................................................................30, 31, 32

Antricam v. Odom, 290 F.3d 178 (4th Cir. 2002) ...................................................................................................25

Appleyard v. Wallace, 754 F.2d. 955 (11th Cir. 1985), rev’d on other grounds sub nom, In re Netbank, Inc. Sec. Litig., 259 F.R.D. 656 (N.D. Ga. 2009) ............................................48

ASW v. Oregon, 424 F.3d 970 (9th Cir. 2005) ...................................................................................................20

Ball v. Rodgers, 492 F.3d 1094 (9th Cir. 2007) ......................................................................................... passim

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).................................................................................................................10

Benjamin H. v. Ohl, No. Civ. A. 3:99-0338, 1999 WL 34783552 (S.D. W.Va. July 15, 1999) ..............................14

Berry v. Bd. of Supervisors of La. State Univ., 715 F.2d 971 (5th Cir. 1983) ...................................................................................................55

Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452 (7th Cir. 2007) ...................................................................................................27

Blanchard v. Forrest, 71 F.3d 1163 (5th Cir. 1996) ...................................................................................................35

Blessing v. Freestone, 520 U.S. 329 (1997)......................................................................................................... passim

Boudreau ex rel. Boudreau v. Ryan, No. 00 C 5392, 2001 WL 840583 (N.D. Ill. May 2, 2001), aff’d in part, and vacated in part on other grounds sub nom, Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906 (7th Cir. 2003) ........................51

Bragg v. Chavez, No. Civ 07-0343 JB/WDS, 2007 WL 6367133 (D.N.M. Nov. 13, 2007) ...............................52

iii

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Bruggeman ex rel. Bruggeman v. Blagojevich, 219 F.R.D. 430 (N.D. Ill. 2004)...............................................................................................48
Bryson v. Shumway, 308 F.3d 79 (1st Cir. 2002) ......................................................................................................35
Cal. State Foster Parent Ass’n, 624 F.3d 974, 980 (9th Cir. 2010) ...........................................................................................21
Cannon v. Univ. of Chicago, 441 U.S. 677 (1979).................................................................................................................21
Carleson v. Remillard, 406 U.S. 598 (1972).................................................................................................................14
Casu v. CBI Na-Con, Inc., 881 S.W.2d 32 (Tex. App.—Houston [14th Dist.] 1994, no writ) ..........................................53
Chishty v. Tex. Dep’t of Aging & Disability Servs., 562 F. Supp. 2d 790 (E.D. Tex. 2006) .....................................................................................53
City of Rancho Palos Verdes v. Abrams, 544 U.S. 113 (2005).................................................................................................................20
Cler v. Illinois Educ. Ass’n, 423 F.3d 726 (7th Cir. 2005) ...................................................................................................11
Cmty. Health Choice, Inc., v. Hawkins, 328 S.W.3d 10 (Tex. App.—Austin 2010, no pet.) .................................................................46
Concourse Rehab. & Nursing Ctr. Inc. v. Whalen, 249 F.3d 136 (2d Cir. 2001).....................................................................................................29
Cramer v. Chiles, 33 F. Supp. 2d 1342 (S.D. Fla. 1999) ................................................................................17, 37
Croft v. Governor of Tex., 562 F.3d 735 (5th Cir. 2009) ...................................................................................................48
Disability Advocates, Inc. v. Paterson, 598 F. Supp. 2d 289 (E.D.N.Y. 2009) .....................................................................................48
Doe v. Chiles, 136 F.3d 709 (11th Cir. 1998) ...........................................................................................14, 35
Doe v. Kidd, 501 F.3d 348 (4th Cir. 2007) .............................................................................................27, 35
iv

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Equal Access for El Paso, Inc. v. Hawkins, 562 F.3d 724 (5th Cir. 2009) .............................................................................................11, 12
Fed. Election Comm’n v. Akins, 524 U.S. 11 (1998)...................................................................................................................39
Florida ex rel. Bondi v. United States Dep’t of Health & Human Servs., --- F. Supp. 2d ---, 2011 WL 285683 (N.D. Fla. Jan. 31, 2011) ..............................................12
Florida ex rel. Bondi v. United States Dep’t of Health & Human Servs., --- F. Supp. 2d ---, 2011 WL 723117 (N.D. Fla. March 3, 2011) ............................................12
Frazar v. Gilbert, 300 F.3d 530, 550 (5th Cir. 2002), rev’d sub nom on other grounds, Frew ex rel. Frew v. Hawkins, 540 U.S. 431 (2004) ...............................................................25
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167 (2000).................................................................................................................39
Gonzaga Univ. v. Doe, 536 U.S. 273 (2002)......................................................................................................... passim
Grammar v. John J. Kane Regional Ctrs.-Glen Hazel, 570 F.3d 520 (3d Cir. 2009), cert. denied, 130 S. Ct. 1524 (2010) ...................................27, 33
Grant ex rel Family Eldercare v. Gilbert, 324 F.3d 383 (5th Cir. 2003) ........................................................................................... passim
Gueli v. United States, No. 806 CV 1080 T27 MSS, 2006 WL 3219272 (M.D. Fla. Nov. 6, 2006) ...........................52
Hardin v. Straub, 490 U.S. 536 (1989).................................................................................................................53
Harris v. James, 883 F. Supp. 1511 (M.D. Ala. 1995), rev’d on other grounds, 127 F.3d 993 (11th Cir. 1997) .................................................................................................48
Johnson v. Housing Authority of Jefferson Parish, 442 F.3d 356 (5th Cir. 2006) .............................................................................................23, 26
Joseph S. v. Hogan, 561 F. Supp. 2d 280 (S.D.N.Y. 2008)................................................................................34, 56
K.P. v. LeBlanc, 627 F.3d 115 (5th Cir. 2010) .......................................................................................45, 46, 47
v

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Kentucky v. Graham, 473 U.S. 159 (1985).................................................................................................................48
King v. Smith, 392 U.S. 309 (1968).................................................................................................................14
Lewis v. New Mexico Dep’t of Health, 261 F.3d 970 (10th Cir. 2001) ...........................................................................................11, 35
Little Rock Family Planning Servs., P.A. v. Dalton, 860 F. Supp. 609 (E.D. Ark. 1994), aff’d, 60 F.3d 497 (8th Cir. 1995) ..................................48
Lividas v. Bradshaw, 512 U.S. 107 (1994).................................................................................................................33
Magee v. Life Ins. Co. of N. Am., 261 F. Supp. 2d 738 (S.D.Tex. 2003) ......................................................................................12
Maher v. Gagne, 448 U.S. 122 (1980).................................................................................................................23
Maine v. Thiboutot, 448 U.S. 1 (1980)...............................................................................................................19, 23
Martin v. Taft, 222 F. Supp. 2d 940 (S.D. Ohio 2002) ....................................................................................48
Martin v. Voinovich, 840 F. Supp. 1175 (S.D. Ohio 1993) ...........................................................................34, 54, 55
Matrixx Initiatives, Inc. v. Siracusano, --- S. Ct. ---, 2011 WL 977060 (Mar. 22, 2011) ......................................................................10
McCarthy el rel. Travis v. Hawkins, 381 F. 3d. 407 (5th Cir. 2004) .................................................................................................48
McCarthy v. Gilbert, Civ. No. 03-CA-231-SS (W.D. Tex. 2003) .................................................................14, 37, 48
Messer v. Meno, 130 F.3d 130 (5th Cir. 1997) .............................................................................................54, 55
Michelle P. ex rel. Deisenroth v. Holsinger, 356 F. Supp. 2d 763 (E.D. Ky. 2005) ......................................................................................37
Miranda B. v. Kitzhaber, 328 F.3d 1181 (9th Cir. 2003) .................................................................................................48
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Nelson v. Schwarzenegger, No. C 09-04937 JW PR, 2010 WL 890028 (N.D. Cal. March 8, 2010)..................................49
Okla. Chapter of Am. Academy of Pediatrics v. Fogarty, 472 F.3d 1208 (10th Cir. 2007) ...............................................................................................27
Okpalobi v. Foster, 244 F.3d 405 (5th Cir. 2001) .......................................................................................44, 45, 46
Pediatric Specialty Care, Inc. v. Ark. Dep’t of Human Servs., 443 F.3d 1015 (8th Cir. 2006), vacated in part, on other grounds sub nom, Selig v. Pediatric Specialty Care, Inc., 551 U.S. 1142 (2007) ................................................27
Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1 (1981).......................................................................................................................2
Poche v. Tex. Air Corps, Inc., 549 F.3d 999 (5th Cir. 2008) ...................................................................................................41
Price v. City of Stockton, 390 F.3d 1105 (9th Cir. 2004) .................................................................................................20
Quern v. Mandley, 436 U.S. 725 (1978).................................................................................................................14
Rabin v. Wilson-Coker, 362 F.3d 190 (2d Cir. 2004).....................................................................................................27
Rolland v. Cellucci, 52 F. Supp. 2d 231 (D. Mass. 1999) ................................................................................ passim
Rolland v. Patrick, 483 F. Supp. 2d 107 (D. Mass. 2007) .............................................................................. passim
Rolland v. Romney, 318 F.3d 42 (1st Cir. 2003) .............................................................................................. passim
Rosado v. Wyman, 397 U.S. 397 (1970)...........................................................................................................19, 24
Rosie D. ex rel. John D. v. Swift, 310 F.3d 230 (1st Cir. 2002) ....................................................................................................25
Ruiz v. Conoco, Inc., 868 S.W.2d 752 (Tex. 1993)..............................................................................................53, 54
S.D. ex rel. Dickson v. Hood, 391 F.3d 581 (5th Cir. 2004) .......................................................................................24, 26, 35
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Case 5:10-cv-01025-OLG Document 40 Filed 04/18/11 Page 9 of 70
Sabree ex rel. Sabree v. Richman, 367 F.3d 180 (3d Cir. 2004).....................................................................................................35
Schweiker v. Gray Panthers, 453 U.S. 34 (1981)...................................................................................................................30
Shotz v. City of Plantation, 344 F.3d 1161 (11th Cir. 2003) ...............................................................................................20
Sobky v. Smoley, 855 F. Supp. 1123 (E.D. Cal. 1994).........................................................................................15
Soto v. Lene, No. 11-CV-0089 SLB LB, 2011 WL 147679 (E.D.N.Y. Jan. 18, 2011).................................34
St. Michael Hosp. of Franciscan Sisters, Milwaukee, Inc., v. Thompson, 725 F. Supp. 1038 (W.D. Wis. 1988) ......................................................................................49
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998).............................................................................................................40, 41
Suter v. Artist M., 503 U.S. 347 (1992).................................................................................................................26
Thomas More Law Ctr. v. Obama, 720 F. Supp. 2d 882 (E.D. Mich. 2010)...................................................................................12
Tinder v. Lewis Cnty. Nursing Home Dist., 207 F. Supp. 2d 951 (E.D. Mo. 2001)......................................................................................34
Townsend v. Swank, 404 U.S. 282 (1971).................................................................................................................14
Tzolov v. Int’l Jet Leasing, Inc., 232 Cal. App. 3d 117 (1991) ...................................................................................................54
United States v. Kavalchuk, No. 09-CR-178-JD, 2011 WL 1236045 (D.N.H. March 31, 2011) .........................................12
United States v. Zannino, 895 F.2d 1 (1st Cir. 1990) ........................................................................................................12
Va. ex rel. Cuccinelli v. Sebelius, 728 F. Supp. 2d 768 (E.D. Va. 2010) ......................................................................................12
Watson v. Weeks, 436 F.3d 1152 (9th Cir. 2006) .................................................................................................27
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Case 5:10-cv-01025-OLG Document 40 Filed 04/18/11 Page 10 of 70
Weiner v. Wasson, 900 S.W.2d 316 (Tex. 1995)....................................................................................................54
Westside Mothers v. Haveman, 289 F.3d 852 (6th Cir. 2002) .............................................................................................25, 35
Westside Mothers v. Olszewski, 454 F.3d 532 (6th Cir. 2006) ...................................................................................................27
Wilder v. Va. Hosp. Ass’n, 496 U.S. 498 (1990)......................................................................................................... passim
Wis. Dep’t of Health & Human Servs. v. Blumer, 534 U.S. 473 (2002).................................................................................................................30
Wood v. Tompkins, 33 F.3d 600 (6th Cir. 1994) ...............................................................................................37, 38
Wright v. City of Roanoke Redevelopment & Housing Auth., 479 U.S. 418 (1987).....................................................................................................22, 23, 24
Ex Parte Young, 209 U.S. 123 (1908)...............................................................................................25, 46, 47, 48 STATUTES/RULES
42 C.F.R. § 430.25 ...........................................................................................................................8 42 C.F.R. § 440.240 .......................................................................................................................15 42 C.F.R. § 441.302 .................................................................................................................17, 19 42 C.F.R. § 483.104 .......................................................................................................................31 42 C.F.R. § 483.112 .......................................................................................................................31 42 C.F.R. § 483.116 .........................................................................................................................6 42 C.F.R. § 483.120 .............................................................................................................6, 16, 31 42 C.F.R. § 483.130 .........................................................................................................................6 42 C.F.R. § 483.132 .........................................................................................................................5 42 C.F.R. § 483.400. .............................................................................................................. passim 29 U.S.C. § 794...................................................................................................................... passim 42 U.S.C. § 657..............................................................................................................................23
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42 U.S.C. § 1320......................................................................................................................26, 38 42 U.S.C. § 1396a .................................................................................................................. passim 42 U.S.C. § 1396d.................................................................................................................. passim 42 U.S.C. § 1396n.................................................................................................................. passim 42 U.S.C. § 1396r .................................................................................................................. passim 42 U.S.C. § 1983.................................................................................................................... passim 42 U.S.C. § 12101............................................................................................................................1 42 U.S.C. § 12131..........................................................................................................................48 Fed. R. Civ. P. 12 ...........................................................................................................................47 Pub. L. No. 100-203, § 4211(c), 101 Stat. 1330-198.......................................................................4 Pub. L. No. 101-508, § 4801(e)(4), 104 Stat. 1388-216 ..................................................................5 Pub. L. No. 104-315.....................................................................................................................5, 6 Tex. Civ. Prac. & Rem. Code Ann. § 16.001 ..........................................................................53, 54 Tex. Govt. Code Ann. § 401.041 ...................................................................................................44 Tex. Govt. Code Ann. § 401.043 ...................................................................................................44 Tex. Govt. Code Ann. § 401.045 .............................................................................................44, 46 Tex. Govt. Code Ann. § 531.005 ...................................................................................................43 Tex. Govt. Code Ann. § 531.007 ...................................................................................................43 Tex. Govt. Code Ann. § 531.056 .............................................................................................43, 46 1 Tex. Admin. Code § 351.15(b) .............................................................................................18, 42 Tex. Const. Art. IV, § 14 ...............................................................................................................44 U.S. Const. amend. XI ...................................................................................................................45
OTHER AUTHORITIES 57 Fed. Reg. 56,477 .........................................................................................................................6 25 Tex. Reg. 1820 ..........................................................................................................................47
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Case 5:10-cv-01025-OLG Document 40 Filed 04/18/11 Page 12 of 70 27 Tex. Reg. 3647 ..........................................................................................................................47 H.R. Conf. Rep. 103-761, reprinted in 1994 U.S.C.C.A.N. 2901 .................................................26 H.R. Rep. 100-391(I) at 459, reprinted in 1987 U.S.C.C.A.N. 2313-1, 2313-279 .....................4, 6 H.R. Rep. No. 104-817, reprinted in 1996 U.S.C.C.A.N. 4198 ......................................................6
MISCELLANEOUS Care of Institutionalized Mentally Disabled Persons: Joint Hearings Before the
Subcomm. on the Handicapped of the Senate Comm. on Labor and Human Resources and the Subcomm. on Labor, Health and Human Services, Educ., and Related Agencies of the Senate Comm. on Appropriations, 99th Cong., S. Hr‘g. 99-50 (1985) .............................................................................................4
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Plaintiffs Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes, and Zackowitz Morgan (collectively, ―plaintiffs‖) hereby file this Response in Opposition to Defendants‘ Motion to Dismiss Plaintiffs‘ Complaint, and respectfully state as follows: I. INTRODUCTION
Defendants have filed a limited Motion to Dismiss (the ―Partial Motion to Dismiss‖) (Dkt. No. 30), which seeks to dismiss one of the three defendants and all of the claims under the Medicaid Act. Significantly, the Partial Motion to Dismiss does not challenge either of the central causes of action in this case, the claim under Title II of the Americans with Disabilities Act (―ADA‖), 42 U.S.C. § 12101 or the claim under § 504 of the Rehabilitation Act of 1973 (―Rehab Act‖), 29 U.S.C. § 794.
Because Governor Perry, as opposed to the State of Texas, has no sovereign immunity, and because he has a central role both in the maintenance and the remediation of the federal law violations alleged in this case, he is an appropriate party and should not be dismissed. Furthermore, numerous federal courts have held, in factual situations similar to this one, that plaintiffs can state a claim under the Pre-Admission Screening and Annual Resident Review (―PASARR‖) provisions of the Nursing Home Reform Amendments (―NHRA‖) to the Medicaid Act, 42 U.S.C. § 1396r(e)(7), as well as the reasonable promptness, comparability, and freedom of choice provisions of the Act, 42 U.S.C. § 1396a(a)(8), § 1396a(a)(10), and § 1396n(c). Therefore, these claims should not be dismissed and the Motion should be denied in its entirety. II. BACKGROUND
Central to the claims at issue in the Partial Motion to Dismiss are the PASARR provisions of the NHRA. In order to lend context and content to the arguments in this Response,

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it is important to understand the conditions which prompted Congress to enact the NHRA, its basic requirements, and Texas‘s response to these statutory mandates.
A. The Legislative History of the Nursing Home Reform Amendments.1 Before the mid-1970s, there were few federal standards for, and little federal
reimbursement of, institutional care for persons with developmental disabilities.2 States provided their own facilities for housing individuals with disabilities. This state-provided care, however, was grossly inadequate and abuse was common. See, e.g., Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 7 (1981) (cataloguing inhumane, unsanitary, and dangerous institutional conditions for individuals with mental retardation).
In 1971, Congress gave States the option of obtaining federal Medicaid reimbursement for care provided in intermediate care facilities for individuals with mental retardation, known as ICF/MRs. 42 U.S.C. §§ 1396a(a)(31)(A) & 1396d(a)(15). Texas and other States chose to provide ICF/MR services in their Medicaid programs. As a condition of receiving federal funds, States are required to ensure that adequate care is provided to persons with developmental disabilities in ICF/MRs specifically including a program of ―active treatment.‖ 3 42 U.S.C. § 1396d(d)(2).
1 Because the Motion does not seek to dismiss either the ADA or Rehab Act claims, this section focuses on the legal context for the NHRA claims. 2 As defined by federal law, the term ―developmental disabilities‖ includes mental retardation and a range of other disabilities, sometimes referred to as ―related conditions,‖ which occur before the age of twenty-two. See 42 U.S.C. § 1396d(d). Plaintiffs‘ Complaint adopts the federal definition and refers generally to ―persons with developmental disabilities.‖ Defendants‘ Partial Motion to Dismiss mirrors this nomenclature. 3 Texas, like most States, has elected to operate and fund ICF/MR facilities, including both large public institutions called State Supported Living Centers (SSLCs) and smaller, private residential programs called ―private ICF/MRs.‖ As a condition of receiving extensive federal funding for these facilities, Texas has agreed to comply with federal ICF/MR regulations that govern the operation, services, resident rights, and environmental standards of these institutions. See 42 C.F.R. §§ 483.400 et seq. The process and standard for providing care to ICF/MR residents is called active treatment, which is described in §§ 483.440(a)-(f).
2

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Federal regulations describe active treatment as an individually tailored series of programs and therapies designed to help an individual with developmental disability reach an optimal level of independence. The care provided is ―directed toward . . . [t]he acquisition of the behaviors necessary for the client to function with as much self determination and independence as possible [and] [t]he prevention or deceleration of regression or loss of current optional functional status.‖ Id. at § 483.440(a)(1). An active treatment program can include training and vocational programs, physical, occupational, and speech therapies, and behavioral and interpersonal counseling. The specific contours of every individual‘s program are based upon that individual‘s needs.
In order to avoid the burden and costs of complying with ICF/MR requirements, but to ensure that they continued to receive federal funding, States soon began to transfer large numbers of persons with developmental disabilities from their ICF/MR institutions to nursing facilities.4 Many nursing facilities, ill-equipped to offer appropriate habilitation or treatment for these conditions, soon became warehouses for persons with developmental disabilities. Because active treatment was not required in nursing facilities, the conditions of individuals with developmental disabilities placed in those facilities deteriorated. As a consequence, Congress found itself subsidizing the nursing facility care of individuals with developmental disabilities that did not meet professional standards—precisely the situation it sought to rectify when it made compliance with active treatment standards a condition for receipt of federal funding for the care of persons with developmental disabilities in ICF/MRs.
In 1985, the Senate convened hearings to investigate the effects of improper institutionalization of individuals with developmental disabilities, including the inappropriate
4 Nursing facility care has long been a required Medicaid service. 42 U.S.C. § 1396d(f).
3

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transfer of these individuals from state-operated institutions to nursing facilities.5 The Senate heard testimony about the warehousing of individuals with developmental disabilities in nursing facilities and the failure to provide proper care in those settings. The widespread practice of dumping individuals with developmental disabilities into nursing facilities was also documented by the General Accounting Office in a 1987 report. See Medicaid: Addressing the Needs of Mentally Retarded Nursing Home Residents, GAO/HRD-87-77 (1987).6 A full two-thirds of the residents evaluated by GAO were determined to require active treatment. Id. at 23. However, not a single one of these residents was receiving this necessary treatment. Id.
B. The Nursing Home Reform Amendments to the Medicaid Act. Congress responded with the Omnibus Budget Reconciliation Act of 1987
(―OBRA ‗87‖), Pub. L. No. 100-203, § 4211(c), 101 Stat. 1330-198 (1987), which included a dramatic reform of nursing facility care for persons with developmental disabilities. OBRA ‗87 incorporates the Nursing Home Reform Amendments (NHRA), 42 U.S.C. § 1396r, which are designed to prevent and remedy the pervasive warehousing and neglect of people with disabilities in nursing facilities. Congress intended the NHRA to end the inappropriate placement of mentally ill or mentally retarded individuals in nursing facilities. H.R. Rep. 100391(I) at 459, reprinted in 1987 U.S.C.C.A.N. 2313-1, 2313-279 (1987).
The NHRA mandates a pre-admission screening and resident review process (―PASARR‖) for all persons with developmental disabilities referred or admitted to nursing
5 Care of Institutionalized Mentally Disabled Persons: Joint Hearings Before the Subcomm. on the Handicapped of the Senate Comm. on Labor and Human Resources and the Subcomm. on Labor, Health and Human Services, Educ., and Related Agencies of the Senate Comm. on Appropriations, 99th Cong., S. Hr‘g. 99-50 (1985) at 352. 6 Available online at http://www.eric.ed.gov/PDFS/ED288331.pdf.
4

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facilities.7 The screening and review must be done by a qualified mental retardation professional. The PASARR review is designed to determine whether an individual is appropriate for admission and retention in a nursing facility because he needs the level of nursing services that can only be provided in a nursing facility, and, if so, whether he needs active treatment. 42 U.S.C. §§ 1396r(b)(3)(F)(ii), 1396r(e)(7)(A)&(B). A basic condition for federal reimbursement of nursing facilities is that the State determine, pursuant to a thorough assessment according to PASARR standards, that available community alternatives cannot meet the person‘s needs, and that the individual must be placed in a nursing facility. 42 C.F.R. § 483.132. If the resident review determines that the resident is inappropriately placed in the nursing facility, the State must arrange for the discharge of the resident. Id.; 42 U.S.C. §§ 1396r(e)(7)(C)(ii)(I), (ii)(II), (iii)(I), & (iii)(II). Congress intended the number of nursing facility residents with developmental disabilities to decline dramatically as a result of the PASARR screening.
The second major change—the mandatory provision of active treatment—was imposed to ensure that individuals with developmental disabilities obtain the care they need to function with as much independence and self-determination as possible. Specifically, as part of the PASARR screening, Congress required that States determine whether nursing facility residents with developmental disabilities require ―specialized services.‖8 Id. § 1396r(e)(7)(B) (ii). Specialized services consist of an active and continuous treatment program, which includes
7 The NHRA initially contained a requirement that an annual review be conducted for each nursing facility resident to determine whether the individual continued to need a nursing facility level of care. In 1996, the NHRA was amended to eliminate the requirement of an annual resident review on the ground that such reviews were duplicative of other annual assessments that were required. See Pub. L. No. 104-315 (1996). However, the NHRA continued to require a preadmission review for all individuals with developmental disabilities and PASARR reviews whenever there was a significant change in an individual‘s condition. 42 U.S.C. § 1396r(e)(7)(B)(iii). 8 In a 1990 amendment to the Medicaid statute, Congress substituted the term ―sepcialized services‖ for ―active treatment,‖ but made it clear the two terms are synonymous in the context of the PASARR requirements. Pub. L. No. 101-508, § 4801(e)(4), 104 Stat. 1388-216 (1990).
5

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aggressive, consistent implementation of specialized and generic training, treatment, and health services that are aimed at allowing the individual to function as independently and with as much self-determination as possible, as well as services designed to prevent or decelerate regression and loss of abilities. See 42 C.F.R. § 483.120(a)(2), citing 42 C.F.R. § 483.440(a)(1) (active treatment). If the individual requires specialized services, the State is required to provide them.9 42 C.F.R. §§ 483.116(b), 483.120(b), 483.130(m) and (n) (requiring assurances that specialized services will, in fact, be provided).
When the Secretary subsequently issued the PASARR regulations, specialized services were defined with specific reference to the federal ICF/MR active treatment regulations. The Secretary‘s definition reflects three distinct duties: (1) the State alone is responsible for the provision of specialized services; (2) the nursing facility is responsible only for traditional nursing services;10 and (3) the State is ultimately and fully responsible for ensuring that all of these services, taken together, constitute a program of active treatment, as defined by 42 C.F.R. § 483.440(a)-(f). This definition has never been challenged, amended, or further refined.11
9 The House Committee on Energy and Commerce, in introducing the bill enacted as the NHRA, plainly stated that ―[i]n the Committee‘s view, the responsibility for providing, or paying for the provision of, active treatment lies with the States.‖ H.R. Rep. 100-391(I) at 462, reprinted in 1987 U.S.C.C.A.N. 2313-282 (emphasis added). 10 The Secretary‘s interpretation of the regulations explicitly relieves nursing facilities from having to provide specialized services:
Response: As noted above, we do not envision holding a facility accountable for deficiencies in the State‘s actions with respect to specialized services. We believe the law would need to be changed for us to do so. Facilities attempting to address a resident‘s needs would not be in jeopardy of sanctions unless they were otherwise out of compliance with the NF requirements. 57 Fed. Reg. 56,477. 11 In subsequent amendments to the statute, Congress left undisturbed the Secretary‘s definition of specialized services as equivalent to active treatment, as well as the interpretation of Congress‘ intent that such services must be provided to all persons with mental retardation who have been determined to need these services by the PASARR process. H.R. Rep. No. 104-817, at 1-4, reprinted in 1996 U.S.C.C.A.N. 4198, 4198-201; Pub. L. No. 104-315, § 1(b), 2(c).
6

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In enacting the NHRA, Congress intended to prevent the inappropriate placement of individuals with developmental disabilities in nursing facilities, a problem highlighted by the 1987 GAO report. Congress also intended to ensure that if the resident requires specialized services, the State actually provides them. See id.; §§ 1396r(e)(7)(C)(i)(IV) & (ii)(III). The Secretary‘s regulations carefully reflected these intentions and mandates, and established screening, diversion, placement and treatment requirements that Texas has ignored.
C. Texas’s Implementation of the NHRA. Texas institutionalizes more than four thousand persons with developmental
disabilities in nursing facilities at any given time.12 Compl. ¶ 26. Thousands more are admitted or at risk of admission each year.13 Id. As more fully described in the Complaint, Texas ignores Congress‘ mandate, the Secretary‘s requirements, and the rights of persons with developmental disabilities in nursing facilities by operating a wholly inadequate PASARR program. Id. ¶¶ 9096. Specifically, in violation of the NHRA and PASARR regulations, Texas‘s PASARR program fails to identify accurately whether a person who seeks admission to a nursing facility has a developmental disability, whether the individual could be served appropriately in another, less restrictive facility, and whether the person needs specialized services. Id. ¶¶ 74-78. Concomitantly, Texas fails to provide an array of specialized services that meet federal active treatment standards to persons with developmental disabilities who are in nursing facilities, to the same extent and in the same manner that it does for persons with developmental disabilities who live in ICF/MRs. Id. ¶¶ 79-80.
12 In fact, the number may be considerably higher than this. As a result of pervasive deficiencies in its PASARR process, defendants do not have an accurate list or even a general estimate of the total number of persons with developmental disabilities who are currently institutionalized in nursing facilities in Texas. 13 The lack of accurate identification makes projections about the number of persons at risk of institutionalization even more problematic.
7

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As a result of these deficiencies, a substantial portion of persons with developmental disabilities who are screened for admission should and could be served in alternative settings. Id. ¶¶ 82-83, 99. Similarly, a substantial portion of persons with developmental disabilities who currently reside in nursing facilities should be and could be served in more integrated community settings. Id. ¶¶ 84, 100. Finally, virtually all of the persons with developmental disabilities who are in nursing facilities qualify for specialized services, but virtually none of them are receiving active treatment, as defined in federal regulations and as required by federal law. Id. ¶¶ 85-87.
D. Texas’s Community Service Programs. Texas operates several distinct community programs for persons with
developmental disabilities, in addition to its private ICF/MR program. All of these other community programs are funded in significant part by the federal government, either through Home and Community-Based Services (―HCBS‖) waiver programs authorized by 42 U.S.C. § 1396n(c), or traditional Medicaid state plan services such as personal care attendants or home health care. The HCBS waiver provision authorizes the Secretary to waive certain other Medicaid provisions in order to encourage States to provide services in the community, provided that the cost of doing so is not greater than the cost of providing similar services in an institution, like a nursing facility. Id.; see also 42 C.F.R. § 430.25(b). States are required to inform persons who seek admission to, or who reside in, a nursing facility about all of its HCBS waiver programs, must offer them a choice of the waiver program, and must administer its waiver programs in a manner that is fair and efficient for all persons, including those institutionalized in nursing facilities. 42 U.S.C. § 1396n(c)(2).
The Secretary has approved several waiver programs in Texas, at least three of which could serve certain nursing facility residents with developmental disabilities. See Texas
8

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Dept. of Aging and Disability Services Reference Guide 2011 at 31-44 (online at http://cfoweb.dads.state.tx.us/ReferenceGuide/guides/FY11ReferenceGuide.pdf). First, Texas‘s Home and Community-based Services (―HCS‖)14 waiver provides a broad range of residential and non-residential services to persons with intellectual disabilities and is the State‘s largest waiver. Second, the Community Living and Assistance Support Services (―CLASS‖) waiver serves persons with disabilities other than intellectual disabilities, but including ―related conditions,‖ and offers a range of services as an alternative to institutionalization. Third, the Community Based Alternatives (―CBA‖) waiver provides many services similar to those in HCS and CLASS for adults with disabilities in order to avoid placement in an institutional facility. While the HCS waiver has a long waiting list, access to the other two waivers is readily available to nursing facility residents through Texas‘s Money Follows the Person (―MFP‖) program.15
Texas neither provides nursing facility residents with developmental disabilities information about these waivers, nor offers them meaningful choices between nursing facility placement and community waiver programs. Compl. ¶¶ 53-54. Instead, it administers these waivers in a manner that is neither fair nor efficient, discriminates against persons with developmental disabilities in nursing facilities, and is inconsistent with the federal statutory and regulatory requirements for operating waiver programs. Compl. ¶ 55-57.
14 Plaintiffs use the acronym HCS to refer to Texas‘s specific waiver program and the acronym HCBS to refer generically to the general category of community-based waivers authorized by 42 U.S.C. § 1396n. 15 The MFP program allows nursing facility residents to gain immediate access to the CBA, CLASS and several other waiver programs without having to go on a waiting list.
9

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III. ARGUMENT A. Plaintiffs Have Stated Cognizable Claims Under the Medicaid Act. 1. Plaintiffs Have Stated a Claim Under the NHRA. ―[T]o survive a motion to dismiss, [plaintiffs] need only allege ‗enough facts to
state a claim to relief that is plausible on its face.‘‖ Matrixx Initiatives, Inc. v. Siracusano, --- S. Ct. ---, 2011 WL 977060, at *12 n.12 (Mar. 22, 2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Significantly, defendants do not contend that plaintiffs have failed to state viable claims as to all alleged violations of the NHRA. Specifically, they do not challenge the claims that Texas: (1) fails to accurately identify persons who have developmental disabilities; (2) fails to screen these individuals to determine if they need a nursing facility level of care; (3) fails to divert individuals from nursing facilities to alternative placements; (4) fails to assess individuals with developmental disabilities to determine if they need specialized services, and, if so, what type and level of such services; and (5) fails to provide an appropriate scope, intensity, and frequency of specialized services. Compare Compl. ¶¶ 230-34, with Partial Motion to Dismiss. Rather, defendants only object to one narrow aspect of one claim—the scope of their obligation to provide specialized services that satisfy federal active treatment requirements. Part. Mot. to Dismiss at 34-36. Specifically, defendants assert that plaintiffs‘ claim that defendants have ―fail[ed] to provide specialized services constituting active treatment as measured by 42 C.F.R. § 483.440(a)-(f)‖ overstates their obligation and that they need ―only provide specialized services, as measured by Section 483.440(a)(1).‖ Part. Mot. to Dismiss at 36.
Defendants‘ concession that plaintiffs have stated a cognizable claim regarding the failure to provide specialized services sufficient to constitute active treatment as required by 42 C.F.R. § 483.440(a)(1) should end the inquiry at this stage of the proceeding. The
10

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determination of the extent of any violation and the scope of relief to which plaintiffs may be entitled is not appropriate at the motion to dismiss stage—determining the precise contours of defendants‘ active treatment obligations is best addressed during the merits or remedial phase of the litigation. See Lewis v. New Mexico Dep’t of Health, 261 F.3d 970, 977 (10th Cir. 2001) (determining the reach of Medicaid statute ―is more appropriately reserved for resolution on the merits of the case‖); Cler v. Illinois Educ. Ass’n, 423 F.3d 726, 729 (7th Cir. 2005) (finding it inappropriate to grant motion to dismiss based on uncertain meaning of statutory term, ―prepaid legal services‖).16
2. Plaintiffs Have Stated a Claim Under the Reasonable Promptness Provision of the Medicaid Act. a. Congress Clarified that the Medicaid Act Applies to Services, and, Regardless, Plaintiff‘s Claim Is Not Limited to the Provision of Services.
In the Complaint, Plaintiffs alleged that Texas violates the reasonable promptness provision of the Medicaid Act by failing to provide appropriate habilitation services in a timely manner, both in the nursing facility and in the community. See Compl. ¶¶ 25-26. Defendants argue that, under a prior version of the Medicaid Act, Plaintiffs‘ claims fail to state a claim under the Fifth Circuit‘s holding in Equal Access for El Paso, Inc. v. Hawkins, 562 F.3d 724, 727-79 (5th Cir. 2009), which construed the term ―medical assistance‖ to mean only payment for and not the actual provision of care and services. Part. Mot. to Dismiss at 36-38. The 2010 amendment to the Medicaid Act, which expanded the definition of ―medical assistance‖ to include ―payment
16 Defendants‘ assertion that the scope of active treatment required by § 483.440(a)(1) does not encompass any of the requirements contained in other subparts of § 483.440 has been rejected by the one court that has addressed the issue. Rolland v. Patrick, 483 F. Supp. 2d 107, 113-14 (D. Mass. 2007). Recognizing that subpart (a) provides the general definition of active treatment and that subparts (b) through (f) provide the specifics, the court easily concluded ―that paragraphs (b) through (f) of section 483.440 apply as well.‖ Id. at 114. Defendants‘ suggestion that the First Circuit decision in Rolland v. Romney, 318 F.3d 42 (1st Cir. 2003) somehow supports their position was also raised in Rolland and rejected by the district court on remand. Rolland, 483 F. Supp. 2d at 113-14.
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of part or all of the cost of [certain delineated] care and services or the care and services
themselves, or both,‖ 42 U.S.C. § 1396d(a) (2010) (emphasis added), effectively abrogates the
holding in Equal Access for El Paso. Congress has expressed its intention that ―medical
assistance‖ should not be limited merely to payment.
In the face of this clear congressional intent, defendants‘ only argument is that the
2010 amendment of the definition of ―medical assistance‖ is not a valid law based on one district
court‘s decision in Florida ex rel. Bondi v. United States Department of Health & Human
Services, --- F. Supp. 2d ---, 2011 WL 285683 (N.D. Fla. Jan. 31, 2011), which involved a
challenge to an entirely different provision of a different health care program than the one at issue here.17 Part. Mot. to Dismiss at 37-38. However, defendants acknowledge that the Florida
ruling is not binding on this Court, and the Florida court has stayed its decision pending appeal.
Florida ex rel. Bondi v. United States Department of Health & Human Services, --- F. Supp. 2d --, 2011 WL 723117, at *10 (N.D. Fla. March 3, 2011).18 Until the Fifth Circuit or Supreme
Court says otherwise, the 2010 amendment to the Medicaid Act, 42 U.S.C. § 1396d(a), remains the law in this circuit.19 Consequently, plaintiffs have stated viable claims under § 1396a(a)(8).
17 This case declared that the Patient Protection and Affordable Care Act (PPACA), Pub. L. Nos. 111-148 & 111152 (2010), of which the Medicaid amendment set forth above is a very small part, is unconstitutional due to the requirement that some individuals must purchase health insurance. Finding that the separate provisions of the PPACA are not severable, the Florida court declared the entire Act to be void. Florida, 2011 WL 285683. 18 This is hardly surprising because at least three other courts have addressed the constitutionality of the PPACA on the merits and concluded, contrary to the Florida court, that the Act is constitutional. Mead v. Holder, --- F. Supp. 2d ---, 2011 WL 611139 (D.D.C. Feb. 22, 2011); Thomas More Law Ctr. v. Obama, 720 F. Supp. 2d 882 (E.D. Mich. 2010); Liberty Univ., Inc. v. Geithner, --- F. Supp. 2d ---, 2010 WL 4860299 (W.D. Va. Nov. 30, 2010). One additional court has concluded that the individual mandate of the PPACA is unconstitutional, but determined that the remainder of the Act, including the Medicaid amendment at issue here, is severable. Va. ex rel. Cuccinelli v. Sebelius, 728 F. Supp. 2d 768 (E.D. Va. 2010). 19 While defendants indicate that they intend to preserve a defense based on the invalidity of the 2010 Medicaid amendment, they do not articulate the basis for such a claim. Part. Mot. to Dismiss at 37-38. For purposes of their Partial Motion to Dismiss, such an argument is, therefore, waived. Magee v. Life Ins. Co. of N. Am., 261 F. Supp. 2d 738, 748 n.10 (S.D.Tex. 2003); United States v. Kavalchuk, No. 09-CR-178-JD, 2011 WL 1236045, at *7 (D.N.H. March 31, 2011) (issues ―nuaccompanied by some effort at developed argumentation‖ are waived (quoting United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990)).
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Moreover, plaintiffs‘ reasonable promptness claim with respect to specialized services in the nursing facility is not limited to just the provision of services. Plaintiffs also allege that defendants fail to authorize and cover under their medical assistance program the full scope of specialized services to which plaintiffs are entitled. Compl. ¶¶ 78-80, 87. Defendants do not dispute that these allegations state a reasonable promptness claim, even under the preexisting definition of medical assistance.
b. Plaintiffs‘ Reasonable Promptness Claim Is Not Limited to Services and Supports Provided Through the HCS Waiver System.
Defendants also argue that plaintiffs‘ reasonable promptness claim fails because plaintiffs allegedly are not entitled to reasonable promptness in the delivery of services where the waiver cap was met and there is a waiting list. Part. Mot. to Dismiss at 30-32. There is a waiting list only with respect to the HCS waiver program, and thus, defendants predicate their entire argument, without support or citation, on the presumption that plaintiffs seek services only under the HCS program. See id. But plaintiffs‘ reasonable promptness claim with respect to community services is not limited to services and supports provided through the HCS waiver program. See Compl. ¶¶ 128, 135, 212-217, 222-24, 228 (not limiting claim to any particular waiver program). Plaintiffs are willing to accept appropriate community services under any of Texas‘s community support programs through which they can obtain the services needed to allow them to live in the most integrated setting. These other programs include the MFP program, the CLASS waiver, the CBA waiver, and other Medicaid-covered state plan services, such as personal care assistance. There is no waiting list for many of these programs and services. Because defendants‘ challenge to the viability of this claim is predicated entirely on the existence of a lengthy waiting list for HCS services, it should be denied.
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Even with respect to community services under the HCS waiver, the claim is viable. Plaintiffs‘ claim does not insist that defendants must increase the size of the HCS waiver. See Compl. ¶¶ 210-27, 231-32.20 Rather, services and the payment for such services must ―be furnished with reasonable promptness to all eligible individuals.‖ 42 U.S.C. § 1396a(a)(8) (emphasis added). While this statutory provision can be violated by unreasonably delaying medical assistance to individuals already determined eligible, see Doe v. Chiles, 136 F.3d 709, 711 (11th Cir. 1998), it can also be violated by denying eligibility pursuant to an illegal eligibility requirement. See, e.g., King v. Smith, 392 U.S. 309, 333 (1968); Quern v. Mandley, 436 U.S. 725, 740 (1978); Carleson v. Remillard, 406 U.S. 598, 600 (1972); Townsend v. Swank, 404 U.S. 282, 285-86 (1971). As the Supreme Court explained in King, applying the analogous reasonable promptness provision of the Aid to Families with Dependent Children program, ―In denying AFDC assistance to appellees on the basis of this invalid regulation, Alabama has breached its federally imposed obligation to furnish ‗aid to families with dependent children‘ . . . with reasonable promptness to all eligible individuals.‖ 392 U.S. at 333; see also Townsend, 404 U.S. at 286; Quern, 436 U.S. at 740.
Plaintiffs have alleged that the restrictive eligibility criteria which effectively exclude individuals with developmental disabilities in nursing facilities from accessing the HCS and other waiver programs violate the Medicaid Act, as well as the ADA and Section 504 of the Rehab Act.21 See Compl. ¶¶ 210-227, 231-232. Just as in King, Quern, Carleson and Townsend,
20 Relying upon McCarthy v. Gilbert, Civ. No. 03-CA-231-SS (W.D. Tex. 2003), see Motion, Ex. 1, defendants assert that the existence of a waiting list for the HCS waiver precludes a promptness claim. Other cases have held to the contrary. See Benjamin H. v. Ohl, No. Civ. A. 3:99-0338, 1999 WL 34783552, at *15 (S.D. W.Va. July 15, 1999) (applying § 1396a(a)(8) to a waiver waiting list claim and finding that long waiting lists and lengthy delays in obtaining waiver services likely violated reasonable promptness). 21 Admittedly, there is a lengthy waiting list for HCS services. Except for certain groups which are provided a priority or are permitted to access the HCS waiver through the MFP program, individuals on the waiting list can expect to wait in excess of six years. But adult nursing facility residents with developmental disabilities are neither
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the allegations that defendants have denied plaintiffs and the class access to medical services, whether in a waiver program or otherwise, pursuant to an invalid eligibility rule, state a claim under the reasonable promptness provision.
3. Plaintiffs Have Stated a Claim Under the Comparability Requirement of the Medicaid Act.
Plaintiffs also allege that defendants are violating the comparability provisions of the Medicaid Act, 42 U.S.C. § 1396a(a)(10)(B), by failing to provide persons with developmental disabilities in nursing facilities with services to which they are entitled under the Medicaid program, while providing similar services to other, similarly-needy persons in ICF/MRs and state supported living centers in Texas. It is defendants‘ failure to offer the same type, level, and intensity of specialized services to plaintiffs as they offer to ICF/MR residents that is the focus of plaintiffs‘ comparability claim.22 Compl. ¶¶ 124, 132, 134, 228-29.
While defendants are correct that the comparability rule requires that ―the amount, duration, and scope of available services cannot differ among Medicaid recipients based on how they became eligible for Medicaid,‖ Part. Mot. to Dismiss at 41, they also cannot differ among Medicaid recipients within a particular categorically or medically needy group. Sobky v. Smoley, 855 F. Supp. 1123, 1140-41 (E.D. Cal. 1994); 42 C.F.R. § 440.240. Plaintiffs are all individuals who qualify for medical assistance under the Texas Medicaid program based upon their disability. Residents of ICF/MRs and state supported living centers also qualify for medical assistance based upon their disability. Residents of nursing facilities with developmental disabilities have the same need for active treatment as residents of ICF/MRs and state supported
provided with a priority nor permitted to access the HCS waiver through the MFP program. This discriminatory and unreasonable exclusion from the HCS program states a viable promptness claim. 22 Plaintiffs‘ comparability claim only addresses the discriminatory denial of specialized services, not waiver services. Compl. ¶¶ 228-29. As a result, defendants‘ discussion regarding comparability for services provided under Texas‘s waiver programs is simply irrelevant to the issues in this case. Part. Mot. to Dismiss at 32.
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living centers. Compl. ¶¶ 85-88, 99. Federal law mandates that defendants make available to both groups those services sufficient to achieve active treatment. 42 U.S.C. §§ 1396r(e)(7)(B) (ii)(II) & (C)(i) (nursing facility residents); 42 C.F.R. § 483.120(a)(2) (nursing facility residents); 42 U.S.C. §1396d(d)(2) (ICF/MR residents); 42 C.F.R. § 483.440 (nursing facility and ICF/MR residents); Rolland, 318 F.3d at 57 (―For individuals with mental retardation, . . . the Secretary crafted a definition of specialized services that incorporated the active treatment standard traditionally applied in ICF/MRs‖). However, defendants make available the services necessary to constitute active treatment only to residents of ICF/MRs, and not to nursing facility residents. Compl. ¶¶ 87-88, 90, 96, 229, 236-38. This differential treatment of similarly-needy Medicaid recipients with respect to the availability of a medical service to which both groups are equally entitled under federal law is precisely what the comparability provision was targeted to prevent.
Not surprisingly, the one court to address this specific issue regarding the disparate availability of specialized services and active treatment between nursing facility and ICF/MR residents had no difficulty in concluding that it stated a claim under § 1396a(a)(10)(B). Rolland v. Cellucci, 52 F. Supp. 2d 231, 238-39 (D. Mass. 1999) (holding that ―Plaintiffs‘ claim that individuals residing in ICF/MRs receive active treatment . . . , while those individuals residing in nursing facilities are not receiving ample services . . . supports a cognizable claim of a violation of the comparability provision‖). Therefore, defendants‘ assertion that plaintiffs have failed to allege a viable violation of the comparability rule must be rejected.
4. Plaintiffs Have Stated a Claim under the Freedom of Choice Provision of the Medicaid Act.
The Medicaid statute requires that recipients be given a choice between Medicaid programs. 42 U.S.C. § 1396n(c)(2)(C).23 Courts have applied this provision to guarantee
23 Specifically, the statute provides that States must ensure that
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persons with developmental disabilities a choice between different Medicaid programs. See Cramer v. Chiles, 33 F. Supp. 2d 1342, 1352 (S.D. Fla. 1999) (state Medicaid plan violated 42 U.S.C. § 1396n(c)(2)(C) because it gave individuals with disabilities ―no real choice‖ between ICF/DDs and HCBW services).
The fundamental purpose of 42 U.S.C. § 1396n(c)(2)(C) is to provide individuals who require an institutional level of care a choice concerning the type of Medicaid services they receive. In order to make this choice meaningful, Medicaid recipients must be informed of all feasible alternatives, including, but not limited to, the various waiver programs, the MFP program, and regular Medicaid state plan services, such as personal care attendant services, home health care services, or private duty nursing services. They also must be allowed to apply for these services and be afforded meaningful access to the application process.24
The Complaint alleges that defendants have, in violation of 42 U.S.C. § 1396n(c)(2)(B) & (C), failed to provide residents of nursing facilities with developmental disabilities with: (1) notice of and equal opportunities to apply for and to have access to community-based services; (2) an assessment of their eligibility for such services; and (3) meaningful choice between institutional and community-based services. Compl. ¶¶ 216, 227. Defendants argue that there is no requirement to inform eligible individuals of a particular
such individuals who are determined to be likely to require the level of care provided in a hospital, nursing facility, or intermediate care facility for the mentally retarded are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to the provision of inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded . . .‖ Id. (emphasis added). 24 States that elect to participate in the HCBS waiver program must comply with additional freedom of choice regulations: HCFA will not grant a waiver under this subpart and may terminate a waiver unless the Medicaid agency . . . (d) Assur(es) that . . . the recipient or his or her legal representative will be (1) informed of any feasible alternative under the waiver; and (2) given the choice of either institutional or home and community based services. 42 C.F.R. § 441.302(d).
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waiver program if that waiver program is full. Part. Mot. to Dismiss at 39. Defendants‘ contention is flawed for several reasons.
First, Medicaid recipients retain their right to be informed of alternatives, regardless of a particular waiver‘s status or capacity. This right is especially critical in Texas, where the waiting list for HCS services is long. It is imperative that individuals be informed about alternatives in a timely manner so that they can exercise their right to be added to the waiting list if they desire.25 The failure to notify persons with developmental disabilities in nursing facilities about each existing waiver program, regardless of the capacity of the program, denies them critical information needed to make a meaningful choice about whether to enter, or remain in, a nursing facility. As a result, it constitutes a denial of freedom of choice and consequently a denial of access, depriving plaintiffs of the opportunity even to join the waiting list.
Second, there are several 1915(c) HCBS waivers in Texas, in addition to HCS, for which class members are eligible, including CBA, CLASS, CWP, TxHmL, and DBMD, some or all of which currently have capacity.26 The fact that one waiver is full, does not relieve defendants from their duty to inform individuals of ―feasible alternative[s]‖ under 42 U.S.C. § 1396n(c)(2)(C). In a similar factual situation, the Rolland court found that individuals with developmental disabilities in nursing homes stated a claim for violation of the freedom of choice provision of 42 U.S.C. U.S.C. § 1396n(c)(2)(C) by alleging that defendants‘ administration of
25 Defendants‘ own regulations implementing this federal requirement require them to provide individuals who are about to enter a nursing facility with information about ―all long-term care and long-term support options appropriate to the clients‘ needs that are currently available.‖ However, defendants recognize that there is a distinction between ―currently available‖ and ―immediately available,‖ for the regulation goes on to specify that ―[i]f the client … selects an option that is not immediately available for any reason, the agency must provide assistance in placing the client‘s name on a waiting list for that option.‖ 1 Tex. Admin. Code § 351.15(b). 26 Nursing facility residents have access to the CBA and CLASS waivers under the MFP program without having to go on any waiting list.
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the Medicaid program failed to inform class members of feasible alternatives to nursing facilities, including ICF/MR, PCA services and HCBS waiver programs. See Rolland, 52 F. Supp. 2d at 241. Likewise, here the universe of feasible alternatives is not narrowly limited to the HCS waiver, but rather properly encompasses all community-based services, supports, and programs available under the Texas Medicaid program, including the other waiver and MFP programs, as well as individual state plan services.
Defendants have failed to inform plaintiffs of the availability of Medicaid services provided through HCS and other waiver programs which has, in effect, denied them access to these programs. Compl. ¶¶ 216, 227. In doing so, defendants have failed to offer plaintiffs a choice about whether to receive community or institutional services. Each of these failures violates plaintiffs‘ rights to be informed of available services and to choose the services they wish to receive under 42 U.S.C. § 1396n(c)(2)(C) and 42 C.F.R. § 441.302(d). Therefore, plaintiffs have stated a claim under the freedom of choice provision, 42 U.S.C. § 1396n(c)(2)(C).
B. Plaintiffs Have a Private Right of Action Under 42 U.S.C. § 1983 to Enforce the Relevant Sections of the Medicaid Act 1. The Standard for Private Rights of Action. Section 1983 authorizes a civil action against any individual who, ―under color of
any statute, ordinance, regulation, custom, or usage of any State‖ deprives an individual ―of any rights, privileges, or immunities secured by the Constitution and laws.‖ 42 U.S.C. § 1983. Rights under federal statutes, as well as the Constitution, may be the basis of a § 1983 action. Maine v. Thiboutot, 448 U.S. 1, 4-5 (1980); see also Rosado v. Wyman, 397 U.S. 397, 422-23 (1970) (enforcing Social Security Act in § 1983 action). The Supreme Court has set forth a three-part test for determining if Congress intended to create a right under § 1983: (i) Congress intended that the provision benefit the plaintiff; (ii) the statute is not vague and amorphous, and
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(iii) a binding obligation is unambiguously imposed on the States by the statute. See Blessing v. Freestone, 520 U.S. 329, 340-41 (1997); Wilder v. Va. Hosp. Ass’n, 496 U.S. 498, 503 (1990) (applying factors to allow enforcement of a Medicaid Act provision requiring state plans to include payment rates that ―the State finds, and makes assurances satisfactory to the Secretary‖ are ―reasonable and adequate‖ to meet the costs of ―efficiently and economically operated facilities‖).27
In Gonzaga University v. Doe, 536 U.S. 273 (2002), the Supreme Court clarified that the first Wilder/Blessing prong is not met merely by showing that ―the plaintiff falls within the general zone of interests that the statute is intended to protect.‖ Id. at 283. Rather, ―it is rights, not the broader or vaguer ‗benefits‘ or ‗interests‘ that may be enforced‖ under § 1983. Id. (reiterating that Blessing, 520 U.S. at 340, ―emphasizes that it is only violations of rights, not laws, which give rise to § 1983 actions‖).
In determining whether Congress intended to confer individual rights, courts must look at whether the text contains ―rights- or duty-creating language;‖ that is, language with an ―unmistakable focus on the benefited class.‖ Gonzaga, 536 U.S. at 284 n.3; see also ASW v. Oregon, 424 F.3d 970, 976 (9th Cir. 2005) (―these particular statutory provisions are unambiguously framed in terms of the specific individuals benefited and contain explicit duty creating language); Price v. City of Stockton, 390 F.3d 1105, 1110 (9th Cir. 2004); Shotz v. City of Plantation, 344 F.3d 1161, 1171 n.16 (11th Cir. 2003) (noting that ―rights are often thought of as necessarily including a correlative duty, compelling behavior respecting that right‖); Rolland,
27 If the Wilder/Blessing factors are met, there is a presumption that the provision is enforceable under § 1983, unless the State can show that Congress specifically foreclosed that remedy, either expressly in the statute or by creating a ―comprehensive enforcement scheme‖ incompatible with enforcement through § 1983. Blessing, 520 U.S at 341. The Supreme Court has repeatedly listed the Medicaid Act in the category of statutes that do not provide such a comprehensive enforcement scheme. City of Rancho Palos Verdes v. Abrams, 544 U.S. 113, 121-22 (2005) (citing Wilder, 496 U.S. at 521).
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318 F.3d at 52 (quoting Cannon v. Univ. of Chicago, 441 U.S. 677, 690 n.13 (1979)) (―the rightor duty-creating language of the statute has generally been the most accurate indicator of the propriety of implication of a cause of action‖).
To illustrate rights-creating language, the Gonzaga Court quoted from Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972 (―no person shall . . . be subjected to discrimination‖). To illustrate duty-creating language, the Court cited to several statutes approved by the Court in Cannon, 441 U.S. at 690 n.13. See Gonzaga, 536 U.S. at 284 n.3. As noted by the Cannon Court, duty-creating language may be enforced by an individual as long as it is a duty that runs ―directly [to] a class of persons that include[s] the plaintiff,‖ rather than to the ―public at large.‖ 441 U.S. at 690 n.13. Indeed, many of the statutes cited by the Cannon Court focus more on the duty of the defendant than on the rights of the plaintiff. See Cannon, 441 U.S. at 690 n. 13 (collecting cases).
In sharp contrast to the provision of the Family Educational Rights and Privacy Act (―FERPA‖) at issue in Gonzaga, which spoke at an aggregate level of policy and practice, 536 U.S. at 289, the Medicaid provisions at issue in this case have a distinct focus on the individual Medicaid recipients who are the intended beneficiaries of the specific rights and duties delineated. As shown below, the text and structure28 of the statutory provisions relied upon by plaintiffs meet the Wilder/Blessing/Gonzaga standard.
28 ―Evidence of congressional intent to create a federal right can be found in a statute‘s language as well as in its overarching structure.‖ Cal. State Foster Parent Ass’n, 624 F.3d 974, 980 (9th Cir. 2010) (quoting Ball v. Rodgers, 492 F.3d 1094, 1105 (9th Cir. 2007)).
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2. The Medicaid Act Creates Enforceable Rights. Defendants boldly assert that none of the provisions of the Medicaid Act create rights which are judicially enforceable. Part. Mot. to Dismiss at 18-22. They support this contention with two arguments, neither of which survive even the most elemental scrutiny. First, defendants assert that the Medicaid Act confers rights solely on the Secretary, who can cut off federal funding if she determines that the State is violating federal law.29 Part. Mot. to Dismiss at 18-20. This argument has been considered and explicitly rejected by both the Supreme Court and the Fifth Circuit. The Supreme Court first addressed this argument in Wright v. City of Roanoke Redevelopment & Housing Auth., 479 U.S. 418, 424-29 (1987), and held that ―HUD‘s authority to audit, enforce annual contributions contracts, and cut off federal funds . . . are insufficient to indicate a congressional intention to foreclose § 1983 remedies.‖ Id. at 428. Similarly, in Wilder, 496 U.S. 498, the State of Virginia argued that the Secretary‘s right to cut off federal reimbursement in the event that a State violates its obligations under the Medicaid Act precludes the existence of a private right of action under § 1983. The Court had little difficulty rejecting this argument, noting that the Secretary‘s authority ―to withhold approval of plans . . . , or to curtail federal funds to States whose plans are not in compliance with the Act . . . cannot be considered sufficiently comprehensive to demonstrate a congressional intent to withdraw the private remedy of § 1983.‖ Id. at 522-23. The Supreme Court addressed and rejected this same argument yet a third time in Blessing, 520 U.S. at 346-48. Relying upon Wright and Wilder, the Court easily concluded that the federal Secretary‘s ―limited powers to audit and cut federal
29 Put in the parlance of § 1983 jurisprudence, defendants are asserting that the Medicaid Act contains a ―comprehensive enforcement scheme‖ that signals Congressional intent to foreclose private enforcement. Blessing, 520 U.S. at 346-47.
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funding‖ were not sufficient to preclude private enforcement of those provisions of Title IV-D of the Social Security Act which might confer federally enforceable rights on plaintiffs.30 Blessing, 520 U.S. at 348.
Despite these three Supreme Court decisions holding that the federal Secretary‘s ability to withhold federal funding does not undermine a private right of action under § 1983,31 defendants cavalierly assert that Gonzaga has overruled or effectively abrogated these holdings. Part. Mot. to Dismiss at 20. However, the Gonzaga Court, citing both Wright and Blessing with approval, explicitly noted that it was not addressing whether the statute ―creat[ed] a comprehensive enforcement scheme that is incompatible with individual enforcement under § 1983.‖ Id. at 284 n.4.
Not surprisingly, in light of the above-cited Supreme Court precedent, the Fifth Circuit, both before and after Gonzaga, has concluded that the authority of a federal agency to cut off federal funds does not preclude private enforcement of specific provisions of the underlying federal law. Most recently, the Fifth Circuit in Johnson v. Housing Authority of Jefferson Parish rejected the argument that HUD‘s authority to cut off funds to a housing authority that was violating the National Housing Act precluded private enforcement of the Act. 442 F.3d 356, 365-66 (5th Cir. 2006).
30 While Blessing held that there was no generalized right to enforce the statutory scheme of Title IV-D, it remanded the case ―ofr the District Court to construe the complaint in the first instance, in order to determine exactly what rights, considered in their most concrete, specific form, respondents are asserting‖ and ―to determine whether any specific claim asserts an individual federal right.‖ Id. at 346. Indeed, contrary to defendants‘ broad assertion that Spending Clause legislation can never confer privately enforceable rights, the Blessing Court specifically noted that ―[42 U.S.C.] § 657 may give [respondent] a federal right to receive a specified portion of the money collected on her behalf by Arizona.‖ Id. 31 In addition to Wright, Wilder, and Blessing, the Supreme Court has also held that § 1983 provides a private cause of action to enforce provisions of the Social Security Act in at least two other cases. Maine, 448 U.S. at 4-6 (holding that § 1983 provided private individuals with a cause of action to enforce provisions of the Social Security Act); Maher v. Gagne, 448 U.S. 122, 128-29 (1980).
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Even more directly on point, the Fifth Circuit in S.D. ex rel. Dickson v. Hood held that the Early and Periodic Screening, Diagnostic and Treatment (―EPSDT‖) provisions of the Medicaid Act, 42 U.S.C. §§ 1396d(a)(4)(B) and 1396d(r)(5), in conjunction with 42 U.S.C. § 1396a(a)(10)(A)(i), are enforceable under § 1983. 391 F.3d 581, 602-04 (5th Cir. 2004). The S.D. court correctly noted that Blessing continues to set forth the test for determining whether a particular federal statute is enforceable pursuant to § 1983 and that Gonzaga simply clarified how the first prong of that test—whether the statute contained sufficient ―rights creating‖ language to demonstrate that Congress ―intended to confer individual rights upon a class of beneficiaries‖—should be applied. Id. at 602 (quoting Gonzaga). With respect to the question of whether the Medicaid Act contains a sufficiently comprehensive enforcement scheme to indicate Congressional intent to foreclose a remedy under § 1983, the Court noted that the defendant had failed to make such a showing. Id. at 606 n.33.32 Therefore, defendants‘ assertion that the Secretary‘s ability to withhold funds for noncompliance precludes a private right of action under § 1983 under any provision of the Medicaid Act is directly contrary to consistent holdings of the Supreme Court and Fifth Circuit.
Second, defendants suggest that Gonzaga established ―a general principle that excludes Spending Clause legislation from judicial enforcement.‖ Part. Mot. to Dismiss at 20. Recognizing that Gonzaga did not overrule either Wilder or Wright, they suggest that these cases
32 Defendants also suggest that the fact that a State could include within the broad confines of its Medicaid program certain services for which federal reimbursement is not available somehow undermines plaintiffs‘ ability to establish a federally-protected right regarding any aspect of the State‘s Medicaid program, including those for which it receives federal funding. While the provision by a State of non-mandatory medical assistance under its Medicaid plan with state-only funds might exempt that portion of its Medicaid program from federal judicial review, see Rosado, 397 U.S. at 420, those provisions of a State‘s Medicaid program, both mandatory and optional, for which it receives federal funds, must comply with the requirements of the Medicaid Act. Wilder, 496 U.S. at 502: S.D., 391 F.3d at 585-86. Because plaintiffs‘ claims only concern Medicaid services for which defendants receive federal financial assistance, defendants‘ assertions regarding solely state-funded services have no bearing on the private cause of action analysis.
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represent ―narrow exceptions‖ to the general rule, implying that they should be limited to their particular facts. However, if Gonzaga had established such a general rule, it would have been unnecessary for that Court to have engaged in the detailed analysis of the specific statutory provision in FERPA to determine if it contained sufficient ―rights creating‖ language.33 Gonzaga, 536 U.S. at 287-89. The Gonzaga Court also would not have cited Blessing with approval, for Blessing explicitly recognized that Spending Clause legislation can be privately enforced pursuant to § 1983. Blessing, 520 U.S. at 345-46.
Not only is this Spending Clause exclusion argument not supported by Supreme Court precedent, it has also been rejected by the Fifth Circuit. In Frazar v. Gilbert the Fifth Circuit was confronted with, and explicitly rejected, the argument that ―the Medicaid Act, as legislation enacted pursuant to the Spending Clause, was not the supreme law of the land under the Supremacy Clause and therefore the Ex Parte Young exception to Eleventh Amendment state immunity was inapplicable.‖ 300 F.3d 530, 550 (5th Cir. 2002), rev’d sub nom on other grounds, Frew ex rel. Frew v. Hawkins, 540 U.S. 431 (2004). Noting that this very argument had been rejected by the Sixth Circuit in Westside Mothers v. Haveman, 289 F.3d 852, 859-60 (6th Cir. 2002), the Frazar Court held that ―[f]or purposes of the Supremacy Clause and Ex Parte Young, the mandates set out in [the] Medicaid statute are more than contractual, they are federal law.‖ Frazar, 300 F.3d at 550. The First and Fourth Circuits also have rejected this same contention. Antricam v. Odom, 290 F.3d 178, 188 (4th Cir. 2002) (noting that this ―novel argument is . . . at odds with binding precedent‖); Rosie D. ex rel. John D. v. Swift, 310 F.3d 230, 235-38 (1st Cir. 2002).
33 There is no question that FERPA is Spending Clause legislation.
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More significantly, in S.D., the Fifth Circuit held that various provisions of the Medicaid Act are privately enforceable. 391 F.3d at 602-06. There is simply no way to reconcile S.D. with defendants‘ assertion that, post-Gonzaga, no provisions of the Medicaid Act (or any other Spending Clause legislation) are privately enforceable. See also Johnson, 442 F.3d at 366 (concluding post-Gonzaga that a provision of the National Housing Act was privately enforceable).
In addition to being foreclosed by binding precedent, defendants‘ argument is also directly contrary to the clearly expressed intent of Congress. As the Supreme Court has made clear, the Blessing test, as clarified by Gonzaga, ―focuses on congressional intent.‖ Blessing, 520 U.S. at 341 Following Suter v. Artist M., 503 U.S. 347, 358-59 (1992), in which the Court suggested that a provision‘s inclusion as a state plan requirement was a factor weighing against a finding that it created an enforceable right, Congress enacted 42 U.S.C. § 1320a-2. This statute provides that ―[i]n an action brought to enforce a provision of [the Social Security Act], such provision is not to be deemed unenforceable because of its inclusion in a section of this chapter requiring a State plan or specifying the required contents of a State plan.‖ Congress explained that ―[t]he intent of this provision is to assure that individuals who have been injured by a State‘s failure to comply with the Federal mandates of the State plan titles of the Social Security Act are able to seek redress in the federal courts to the extent they were able to prior to the decision in Suter v. Artist M.‖ H.R. Conf. Rep. 103-761 at 926, reprinted in 1994 U.S.C.C.A.N. 2901, 3257; see also S.D., 391 F.3d at 603 (relying on § 1320a-2 to find the EPSDT provision of the Medicaid Act created an enforceable right).
Defendants‘ contention that the Medicaid Act does not create rights, thereby insulating their illegal conduct from any judicial review, is not only novel, but contrary to
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established Supreme Court and Circuit Court precedent34 and the expressed intent of Congress.
It must be rejected.
3. The Nursing Home Reform Amendments to the Medicaid Act Are Privately Enforceable.
a. The Language Chosen By Congress Demonstrates that the NHRA Is Privately Enforceable.
In enacting the NHRA, Congress sought to stem the inappropriate placement of
individuals with developmental disabilities into nursing facilities that are unable to provide them
with needed treatment and insisted that States ensure that those admitted to such facilities receive
active treatment. It clearly used ―rights- and duty-creating‖ language in doing so. Gonzaga, 536
U.S. at 284 n.3.
With respect to the preadmission screening and resident review requirements of
the NHRA, Congress explicitly identifies the intended beneficiaries of this provision as
―mentally ill and mentally retarded individuals‖ in nursing facilities. See 42 U.S.C. §
1396r(e)(7)(A)(i). The section imposes a clear duty on ―the State,‖ using the mandatory terms
―must have‖ and ―responsibility to have . . . or to perform‖ to describe the nature of the obligation imposed.35 Id. This subsection creates a right of every person with developmental
34 Rolland, 318 F.3d 42 (§ 1396r(e)(7)); Rabin v. Wilson-Coker, 362 F.3d 190 (2d Cir. 2004) (§ 1396r-6); Grammar v. John J. Kane Regional Ctrs.-Glen Hazel, 570 F.3d 520 (3d Cir. 2009), cert. denied, 130 S. Ct. 1524 (2010) (§§ 1396r(b) & (c)); Doe v. Kidd, 501 F.3d 348 (4th Cir. 2007) (§ 1396a(a)(8)); Westside Mothers v. Olszewski, 454 F.3d 532 (6th Cir. 2006) (§ 1396a(a)(43)); Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452, 457-58 (7th Cir. 2007) (§ 1396a(a)(8)); Pediatric Specialty Care, Inc. v. Ark. Dep’t of Human Servs., 443 F.3d 1015 (8th Cir. 2006), vacated in part, on other grounds sub nom, Selig v. Pediatric Specialty Care, Inc., 551 U.S. 1142 (2007) (§§ 1396a(a)(30)(A) & 1396d(a)(13)); Watson v. Weeks, 436 F.3d 1152 (9th Cir. 2006) (§ 1396a(a)(10)); Ball, 492 F.3d 1094 (§§ 1396n(c)(2)(C) & (d)(2)(C)); Okla. Chapter of Am. Academy of Pediatrics v. Fogarty, 472 F.3d 1208, 1212 (10th Cir. 2007) (assuming that § 1983 provides cause of action to privately enforce §§ 1396a(a)(8), 1396a(a)(10)(A), 1396d(a)(4)(B), and 1396d(r)). 35 Subsection (e)(7)(A)(i) also cross references to subsection (b)(3)(F), which specifically provides that a nursing facility cannot admit an individual with mental retardation ―nuless the State mental retardation or developmental disability authority has determined . . . that, because of the physical and mental condition of the individual, the individual requires the level of services provided by a nursing facility, and, if the individual requires such level of services, whether the individual requires specialized services . . . .‖ 42 U.S.C. § 1396r(b)(3)(F)(ii). The cross
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disabilities to a pre-screening assessment prior to nursing facility admission. Rather than the aggregate focus of the FERPA provision at issue in Gonzaga, these provisions have an unmistakable focus on the individual and use mandatory, not precatory, language to describe the State‘s obligations.
With respect to assessment of the resident‘s need for specialized services, the NHRA creates a similar, individually-focused and mandatory obligation.36 The unmistakably individual focus of this provision is evident from the phrase, ―in the case of each resident of a nursing facility who is mentally retarded.‖ It continues to focus on the individual throughout, referring to ―the resident’s physical and mental condition,‖ ―whether or not the resident requires specialized services,‖ ―with respect to a . . . mentally retarded resident,‖ and ―significant change in the resident’s physical or mental condition.‖ The mandatory nature of the obligation imposed upon the State is equally clear and unambiguous: ―the State mental retardation . . . authority must review and determine . . . ,‖ and ―[a] review and determination . . . must be conducted promptly.‖37
reference to subsection (b)(3)(F) makes clear that it is the State‘s responsibility to ensure that individuals with mental retardation are properly screened prior to admission. 36 Subsection (e)(7)(B), entitled ―State requirement for resident review,‖ mandates:
(ii) For mentally retarded residents … in the case of each resident of a nursing facility who is mentally retarded, the State mental retardation or developmental disability authority must review and determine (using any criteria developed under subsection (f)(8) of this section)--
(I) whether or not the resident, because of the resident‘s physical and mental condition, requires the level of services provided by a nursing facility or …an intermediate care facility . . . ; and
(II) whether or not the resident requires specialized services. . . . 37 That the obligation placed upon the State to conduct such reviews is obligatory is further reinforced by subdivision (iv) which prohibits the ―State mental retardation authority‖ or the ―State‖ from ―delegate[ing] (by subcontract or otherwise) their responsibilities under this subparagraph….‖ (emphasis added).
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Contrary to defendants‘ conclusory assertions that the focus of these provisions is on the ―nursing homes—not the nursing home residents,‖ Part. Mot. to Dismiss at 25-26, a plain reading of the text of the statute reveals the contrary. Indeed, the Second Circuit considered this very issue, and held that ―[i]t is clear from the plain language of this provision that it was not ‗intend[ed] to benefit the putative plaintiff[s]‘—here the health care providers. Rather, the provision is obviously intended to benefit Medicaid beneficiaries.‖ Concourse Rehab. & Nursing Ctr. Inc. v. Whalen, 249 F.3d 136, 143-44 (2d Cir. 2001) (internal citation omitted).
Finally, with respect to the mandatory obligation to provide specialized services, and the corollary right of a nursing facility resident with developmental disabilities to receive specialized services, the NHRA clearly focuses on the individual residents who are the intended beneficiaries of these mandatory services. Section 1396r(e)(7)(C) details the steps that the State must take in response to the preadmission screening and resident review. Like the two sections discussed above, it begins with a mandatory command, ―the State must meet the following requirements.‖ Id. It then requires that ―in the case of a resident . . . who is determined . . . to require specialized services . . . the State must . . . inform the resident [of alternatives] . . . , offer the resident [choices] . . . , and ―regardless of the resident’s choice [of setting], provide for . . . such specialized services.‖ 42 U.S.C. § 1396r(e)(7)(C)(i) (emphasis added); see also § 1396r(e)(7)(C)(ii). The repeated references to ―the resident‖ make clear the individualized focus of the provision. The repeated use of the word ―must‖ to describe the State‘s obligations to inform the resident of his or her alternatives and to provide specialized services again utilizes the mandatory textual language that establishes an enforceable right under the Wilder / Blessing / Gonzaga test.
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b. The Secretary‘s Regulations Further Demonstrate that the NHRA Is Privately Enforceable.
The regulations further confirm that the statute creates enforceable rights in nursing facility residents with developmental disabilities to preadmission screening, resident review, and specialized services. While it is true that regulations, standing alone, cannot create rights enforceable under § 1983, Alexander v. Sandoval, 532 U.S. 275, 291 (2001), it is equally true that where Congress has explicitly delegated substantive authority to the Secretary of an administrative agency to promulgate regulations in a particular area, those regulations are entitled to ―legislative effect.‖ Schweiker v. Gray Panthers, 453 U.S. 34, 44 (1981); Wis. Dep’t of Health & Human Servs. v. Blumer, 534 U.S. 473, 497 n.13 (2002) (―[w]e have long noted Congress‘ delegation of extremely broad regulatory authority to the Secretary in the Medicaid area‖); Sandoval, 532 U.S. at 284 (listing cases in which the Court has enforced validly promulgated regulations interpreting statutory provisions). Congress, at numerous points in section 1396r, explicitly delegated substantive authority to the Secretary regarding preadmission screening, resident review, and specialized services. Section 1396r(e)(7)(A)(i) provides that preadmission screening must be conducted ―using any criteria developed under subsection (f)(8).‖38 Section 1396r(e)(7)(B) similarly requires that resident reviews conform to ―criteria developed under subsection (f)(8).‖ Section 1396r(e)(7)(G)(iii) explicitly provides that ―[t]he term ‗specialized services‘ has the meaning given such term by the Secretary.‖
In reliance upon the specific rulemaking authority conferred by this statute, the Secretary has issued regulations authoritatively construing the provisions of the NHRA at issue here. As instructed by Congress, the PASARR regulations define ―specialized services‖ as the
38 Section 1396r(e)(7)(f)(8) gives the Secretary authority to establish minimum criteria for States to use in making determinations under subsections (b)(3)(F) and (e)(7)(B) and to monitor state compliance with respect to State obligations under (e)(7)(C)(ii).
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equivalent of active treatment in ICF/MRs. 42 C.F.R. § 483.120(a). They establish criteria for preadmission screening and specialized services and require States to comply with them, in fulfillment of the Congressional instruction at §§ 1396r(f)(1) and (8) for the Secretary to establish and enforce criteria that ensure that the care in nursing facilities is adequate to protect the health, safety and welfare of residents. 42 C.F.R. §§ 483.104 - 483.136. Like the regulations favorably referenced by the Supreme Court in Sandoval, 532 U.S. at 284, the Secretary‘s mandate to the State to provide nursing facility residents with developmental disabilities with preadmission screening, resident review, and specialized services both construes Congress‘s intent and enforces Congress‘s purpose to create enforceable rights.
Like the statute, the PASARR regulations use mandatory language to require the provision of screening and resident review, and to guarantee specialized services to all nursing facility residents with developmental disabilities who have been assessed to need them.39 With respect to preadmission screening, they provide that the State mental retardation authority ―must determine‖ whether the individual requires care in a nursing facility and, if so, if he or she requires specialized services. 42 C.F.R. § 483.112(a). The State must ensure that the individual receives written notice of the determination.40 Id. § 483.128(a). The State must use evaluation criteria prescribed by the Secretary. Id. § 483.128(e). The State ―must provide for or arrange for the provision of specialized services . . . to all NF residents with . . . MR‖ who need them. Id. § 483.120(b). The State must give assurances that specialized services are, in fact, provided. Id. § 483.130(n). This regulatory implementation of Congressional intent is entitled to significant
39 As the Sandoval court recognized, ―When a statute has provided a general authorization for private enforcement of regulations, it may perhaps be correct that the intent displayed in each regulation can determine whether or not it is privately enforceable.‖ 532 U.S. at 291. 40 See also § 483.106(a) (―[t]he State PASARR program must require (1) preadmission screening of all individuals with . . . mental retardation who apply as new admissions to Medicaid NFs‖).
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weight, as the Supreme Court emphasized: ―[s]uch regulations, if valid and reasonable, authoritatively construe the statute itself, and it is therefore meaningless to talk about a separate cause of action to enforce the regulations apart from the statute. Sandoval, 532 U.S. at 284 (internal citations omitted).
c. Applicable Caselaw Further Confirms That The NHRA Is Privately Enforceable.
In light of the strong textual and other indicia of congressional intent to create enforceable rights regarding the preadmission screening and resident review provisions of the NHRA, it is hardly surprising that the two Circuit Courts of Appeal that have considered the question have found that the NHRA does contain the requisite mandatory, rights-creating language needed for private enforcement pursuant to § 1983. In a case raising claims virtually identical to those raised here, the First Circuit held, post-Gonzaga, that the provisions of the NHRA provide rights enforceable by § 1983. Rolland, 318 F.3d at 51-56. The First Circuit analyzed the text of the statutory provisions in light of the overall framework of the NHRA, its legislative history, and the Secretary‘s interpretation, as evidenced by the PASARR regulations. Id. at 51-52. The Court then turned to the Wilder / Blessing / Gonzaga test. Noting that the ―[t]he NHRA speaks largely in terms of the persons to be benefited, nursing home residents,‖ the Court easily found that the first prong of the three part test was met. Id. at 53.
Turning to the second prong, whether the right to specialized services is too vague and amorphous to be judicially enforceable, the Court concluded that that the statutory provision, in conjunction with the Secretary‘s regulations, provided ―contextual guidance . . . sufficient to allow residents to understand their rights to services, States to understand their obligations, and
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courts to review the State‘s conduct in fulfilling those obligations.‖41 Id. at 54. The Rolland court also had no difficulty finding that the rights asserted under § 1396r(e)(7) ―unambiguously bind states,‖ noting the frequent and repeated use of the word ―must‖ to denote the State‘s obligations. Id. at 55.
More recently, the Third Circuit also has considered whether the NHRA creates rights enforceable by § 1983. In Grammer, 570 F.3d 520, the Court held that the NHRA creates rights enforceable under § 1983 against a state-operated nursing facility. Contrary to defendants‘ suggestion that nursing facilities, not nursing facility residents, are the focus of the NHRA, the Third Circuit found that ―[t]here is no question that the statutory provisions under which Grammer raises her claims meet the first Blessing factor. As both a Medicaid recipient and a nursing home resident, Grammer‘s mother was an intended beneficiary of 42 U.S.C. § 1396r.‖ Id. at 527. Like the First Circuit, the Third Circuit, in reliance upon the repeated use of such phrases as ―must provide,‖ ―must maintain‖ and ―must conduct,‖ easily concluded that the rights asserted were neither vague and amorphous nor precatory, thereby satisfying the second and third of the Blessing factors. Id. at 528. The Grammer Court also engaged in an extensive analysis of the impact of Gonzaga on its cause of action analysis. Because ―[t]he FNHRA are replete with rights-creating language‖ and ―use the word ‗residents‘ throughout . . . in such a way as to stress that these ‗residents‘ have explicitly identified rights,‖ the Court easily concluded that ―viewing the terms of the FNHRA . . . through the lens of Gonzaga Univ., we hold that Congress did use rights-creating language sufficient to unambiguously confer individually enforceable rights.‖ Id. at 529, 531.
41 The Court relied in part on the Supreme Court‘s decision in Lividas v. Bradshaw, 512 U.S. 107, 134 (1994), holding that even if the right asserted is ―not provided in so many words in the NLRA, [it is] immanent in its structure.‖ Just as the Lividas Court found the right at issue to be inherent in the statutory scheme, so too the Rolland Court found that ―petitioner‘s rights were sufficiently manifest in the statute‘s structure to avoid being vague and amorphous.‖ 318 F.3d at 54.
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While the Fifth Circuit has not directly addressed the issue of whether 42 U.S.C. § 1983 provides a cause of action for claims pursuant to the NHRA, it did ―assume, without deciding‖ that the NHRA is privately enforceable. Grant ex rel Family Eldercare v. Gilbert, 324 F.3d 383, 387 n.5 (5th Cir. 2003) (citing with approval Rolland, 318 F.3d at 51-56, and Martin v. Voinovich, 840 F. Supp. 1175, 1197-1201 (S.D. Ohio 1993)). In addition to Martin, which held that § 1983 provides a cause of action for nursing facility residents to enforce the PASARR provisions of § 1396r against the state officials responsible for compliance, several other district courts have also reached the same conclusion. Joseph S. v. Hogan, 561 F. Supp. 2d 280, 294304 (S.D.N.Y. 2008); Tinder v. Lewis Cnty. Nursing Home Dist., 207 F. Supp. 2d 951, 954-55 (E.D. Mo. 2001); Soto v. Lene, No. 11-CV-0089 SLB LB, 2011 WL 147679, at *2 (E.D.N.Y. Jan. 18, 2011) (―[T]he NHRA creates rights that are presumptively enforceable through § 1983.‖).42
Based upon a careful analysis of the specific provisions of the NHRA at issue in this case, informed by the legislative history and structure of the Act, reinforced by the Secretary‘s authoritative regulatory interpretation, and supported by a consistent and convincing line of judicial authority, plaintiffs have asserted rights under the PASARR provisions of the NHRA that are privately enforceable against defendants pursuant to § 1983.
42 Defendants cite to four district court decisions that found no private right of action for damages under the NHRA to enforce the nursing facility ―quality of care‖ requirements of the Act and regulations. Part. Mot. to Dismiss at 29 n.25. All of these cases involved damage claims against private nursing facilities which were not state actors, and, therefore, not subject to suit under 42 U.S.C. § 1983. They fail to cite, much less discuss, the numerous cases referenced above which have found the provisions of the NHRA enforceable pursuant to § 1983. The one case they do cite, Joseph S., is discussed only as to its statute of limitations analysis, not its holding that the NHRA is privately enforceable.
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4. The Reasonable Promptness Provision of the Medicaid Act Is Privately Enforceable.
Defendants‘ sole argument regarding the enforceability of the reasonable promptness provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(8), is focused not on whether the provision is privately enforceable under 42 U.S.C. § 1983, but rather whether certain waiver services are covered by it.43 It is not surprising that defendants do not dispute that § 1396a(a)(8) is privately enforceable, for every circuit that has considered the question has concluded that it is.44 There is no serious question that § 1396a(a)(8) is privately enforceable, and defendants‘ Partial Motion to Dismiss does not assert otherwise.
5. The Comparability Provision of the Medicaid Act Is Privately Enforceable.
As with the reasonable promptness provision, defendants do not appear to challenge the private enforceability of the comparability provision, § 1396a(a)(10)(B), but rather its applicability to the facts of this case.45 This is understandable because the Fifth Circuit in S.D., 391 F.3d at 602-07, specifically held that § 1396a(a)(10)(A) is privately enforceable, and in Blanchard v. Forrest, 71 F.3d 1163, 1167-69 (5th Cir. 1996), that § 1396a(a)(10)(B) is
43 Of course, the question of whether a particular waiver service is or is not being provided with reasonable promptness to eligible individuals runs to the merits of the claim, not whether plaintiffs have stated a claim, and certainly not whether the provision is privately enforceable under § 1983. 44 Kidd, 501 F.3d at 356-57; Sabree ex rel. Sabree v. Richman, 367 F.3d 180, 183 (3d Cir. 2004) (holding that an analysis based upon Gonzaga, Blessing, and other cases ―compels the conclusion that the provisions invoked by plaintiffs—42 U.S.C. §§ 1396a(a)(8), 1396a(a)(10), and 1396d(a)(15)—unambiguously confer rights vindicable under § 1983‖); Bryson v. Shumway, 308 F.3d 79, 88-89 (1st Cir. 2002); Chiles, 136 F.3d at 714; Haveman, 289 F.3d. at 863; Lewis, 261 F.3d at 976-77. 45 As the Lewis Court explained, the cause of action issue is answered by determining whether plaintiffs may be entitled to relief under the relevant statutory provision. The question of whether they are entitled to relief requires ―a more complicated analysis of the Medicaid statutes . . . more appropriately reserved for resolution on the merits of the case. 261 F.3d at 977.
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enforceable.46 Therefore, the comparability provision of the Medicaid Act provides plaintiffs with rights enforceable pursuant to § 1983.
6. The Freedom of Choice Provision of the Medicaid Act Is Privately Enforceable.
Defendants assert that § 1396n(c)(2)(C) is not phrased in terms of the persons benefited and therefore creates no privately enforceable rights for individuals with developmental disabilities who are at risk of institutionalization. Part. Mot. to Dismiss at 32-33. However, an examination of the actual text of the freedom of choice provision demonstrates that it is indeed individually focused and intended to benefit individuals who are at risk of institutionalization in a nursing facility.
The section‘s repeated references to ―such individuals‖ makes clear that the obligations imposed upon the State are phrased in terms of the persons benefited. As the Ninth Circuit recently explained, in concluding that § 1396n(c)(2)(C) confers rights privately enforceable under § 1983, the language of the provision:
satisfies the ―rights creating‖ standard set forth in Gonzaga, and thus clears the first hurdle of the Blessing framework. . . . [T]he free choice provisions are focused on the rights owed to HCBSeligible Medicaid recipients, as evinced through their repeated use of the word ―individuals‖ and their specific articulations of the entitlements guaranteed—in this instance, the right to be informed of alternatives to traditional, institutional care and the right to choose from among those options. Ball, 492 F.3d at 1109. The Ball Court expressly distinguished § 1396n(c)(2) from statutes at issue in cases such as Blessing and Gonzaga, noting specifically that the freedom of choice provisions
46 The two subsections are very similar and often treated as a unitary statutory provision for § 1983 cause of action purposes. If anything, subsection (B) has a more individualized focus than subdivision (A).
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[s]eek to guarantee that individual patients are informed of noninstitutional care options and that individual patients retain the right to make a choice based on this information. And unlike the plaintiffs seeking to sue under the ―substantial compliance‖ provisions discussed in Blessing and the ―policy or practice‖ provision in Gonzaga, the HCBS-eligible Medicaid recipients who comprise the plaintiff-class here are not simply cogs in a grander statutory scheme. If that were the case, then Congress would have just enacted a barebones HCBS program . . . and stopped there. There would be no need for Congress also to enact provisions mandating that participating states keep each eligible Medicaid recipient apprised of these non-institutional care options and afford each the opportunity to choose how to live.
Id. at 1111 (emphasis in original); see also Wood v. Tompkins, 33 F.3d 600 (6th Cir. 1994) (§
1396n(c)(2) privately enforceable); Michelle P. ex rel. Deisenroth v. Holsinger, 356 F. Supp. 2d
763, 769 (E.D. Ky. 2005) (noting ―individually focused terminology‖); Cramer, 33 F. Supp. 2d
at 1351 (disabled Medicaid recipients are ―intended beneficiaries‖). Indeed, even the one case
that defendants cite recognized that § 1396n(c)(2) creates enforceable rights under § 1983 for
individuals at risk of institutionalization when waiver slots are available. McCarthy, slip op. at 13-14.47
Defendants‘ alternative argument—that the structure of the provision, mandating
that the Secretary not grant a waiver unless the State provides assurances that it will inform all
individuals at risk of institutional care of the feasible alternatives to such a placement, renders it
unenforceable—is equally untenable. The Supreme Court rejected this very argument that
required assurances cannot form the basis of an enforceable obligation. See Wilder, 496 U.S. at
513-14 (―We reject that argument because it would render the statutory requirement of findings
and assurances . . . essentially meaningless).
47 Because nursing facility residents with developmental disabilities are able to access the CLASS and CBA waivers under the MFP program irrespective of the waiting list, even under defendants‘ interpretation of McCarthy they have a cause of action. In any event, the feasibility of alternatives goes to the merits of the claim, not the private enforceability of the statutory provision. Michelle P., 356 F. Supp. 2d at 769.
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The argument also has also been rejected by both the Sixth and Ninth Circuits.
Ball, 492 F.3d at 1112; Wood, 33 F.3d at 608. Relying upon 42 U.S.C. § 1320a-2 and the Fifth
Circuit‘s decision in S.D. applying that provision, the Ninth Circuit explained that
the role § 1396n(c)(2)(C) . . . play[s] in delineating the mandatory contents of a state HCBS plan cannot detract from or override the otherwise clear ―rights-creating‖ language Congress used in enacting the free choice provisions. To do so would be to ignore Congress‘s directive in the ―Suter fix‖ statute [§ 1320a-2] that courts abjure reliance on that consideration. Ball, 492 F.3d at 1112. Similarly, the Sixth Circuit, in reliance on Wilder, stated: as regards § 1396n(c)(2)(A), it would make little sense for Congress to require a participating state to assure in its Medicaid plan that it will protect the health and welfare of home care recipients, without also requiring that the state actually implement the promised safeguards Wood, 33 F.3d at 608. Section 1396n(c)(2)(B) imposes mandatory and enforceable obligations on
defendants both to inform individuals with developmental disabilities who are at risk of
institutionalization in nursing facilities of their alternatives to nursing facility care and to provide them with a choice between care in a nursing facility or in an alternative setting.48 Based upon
the individual focus and mandatory nature of the obligations imposed upon defendants by
§ 1396n(c)(2)(B), as interpreted by two Circuit Courts, this Court should find that the freedom
of choice provision is privately enforceable pursuant to § 1983.
C. Plaintiffs Have Standing to Assert a Claim Under the Freedom of Choice Provision of the Medicaid Act Defendants argue that the named plaintiffs do not have standing to pursue their
claims under 42 U.S.C. § 1396n(c)(2)(C) because most have not applied for waiver services, and
48 Defendants assertion that § 1396n(c)(2)(C) imposes no binding obligation on Texas because there are currently no openings for waiver services in the HCS waiver program does not speak to the enforceability of the provision, but rather whether plaintiffs have stated a claim thereunder. See section II(D), supra.
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the one individual who did, Benny Holmes, had a waiver slot available to him. Part. Mot. to Dismiss at 11-12. The standing of the institutional plaintiffs to pursue this claim is not challenged.
There are three elements to standing: injury in fact; causation, and redressability. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000). Plaintiffs have alleged in the Complaint that they have been denied their right to make a meaningful choice between institutional and community-based services due to defendants‘ failure to inform them of the services, supports and programs that would have enabled them to reside in the most integrated setting. Compl. ¶¶ 143, 152, 161, 174, 186, 205, & 227. All of the individual plaintiffs would prefer to reside in the community. Id. ¶¶ 144, 162, 176, 194, & 207. However, they and other Medicaid-eligible individuals with developmental disabilities clearly cannot apply for a waiver or other services that might provide an alternative to institutionalization if they do not have knowledge of those options. The obvious purpose of § 1396n(c)(2)(C) is to ensure that individuals with developmental disabilities, like plaintiffs, are advised of those options. Because plaintiffs were entitled to receive such information, but did not, they all have satisfied the ―injury in fact‖ prong of the standing test. As the Supreme Court stated, ―a plaintiff suffers an ‗injury in fact‘ when the plaintiff fails to obtain information which must be . . . disclosed pursuant to a statute.‖ Fed. Election Comm’n v. Akins, 524 U.S. 11, 21 (1998); see also Grant, 324 F.3d at 387. Plaintiffs‘ allegations that Texas state officials fail to provide them with information about waiver and other services that might enable them to avoid institutional placement or reduce the time spent in a nursing facility clearly satisfies the ―injury in fact‖ requirement.
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Causation is also satisfied, as plaintiffs allege that, because of defendants‘ failure to provide them with the statutorily-required information, ―class members who would prefer to reside in a . . . more integrated community placement are not even aware that they may be eligible for community-based services . . . or how to apply for such services.‖ Compl. ¶ 97. Redressability is similarly straight forward, as plaintiffs seek injunctive relief requiring defendants to provide them with the required information so that they can make an informed choice among the various alternatives that may be available to them. Id. Prayers for Relief, ¶ 2(f).
Defendants‘ standing argument regarding five of the six named plaintiffs is predicated entirely upon the statements in Grant that only persons who have applied for waiver services are entitled to information about those services. Part. Mot. to Dismiss at 11. However, those statements in Grant were dicta,49 containing little analysis of the structure or purpose of § 1396n(c)(2)(C). 324 F.3d. at 388. They place the proverbial cart before the horse in two distinct respects. First, the interpretation of federal statutory law is distinct from the standing inquiry. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89 (1998) (standing exists if the right to recover ―will be sustained if the Constitution and laws of the United States are given one construction and will be defeated if they are given another‖). ―For a court to pronounce upon the meaning or the constitutionality of a state or federal law when it has no jurisdiction to do so is, by very definition, for a court to act ultra vires.‖ Id. at 101-02. Yet that is precisely what the Grant court did. By pronouncing upon the meaning of § 1396n(c)(2) when it had determined that the underlying controversy was moot, the Grant court acted in excess of its authority, and its interpretation of the statute should not be accorded any precedential effect.
49 The court dismissed Grant‘s appeal as moot because he began receiving waiver services before the appeal was heard. Grant, 324 F.3d at 386.
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Second, because the Grant court‘s interpretation of § 1396n(c)(2)(C) was dicta¸ it does not carry any binding effect. Poche v. Tex. Air Corps, Inc., 549 F.3d 999, 1003 (5th Cir. 2008) (―statements in . . . cases . . . unnecessary to their holdings . . . constitute[ ] only nonbinding dicta‖). Based upon both Steel Co. and Poche, the statements in Grant are non-binding and of no precedential effect.
In addition, the Grant court‘s reading of § 1396n(c)(2) does not stand up to careful analysis. As the text of the freedom of choice provision makes clear, the State must provide ―with respect to individuals who . . . (iii) may be eligible for such home or communitybased care under such waiver, for an evaluation of the need for . . . nursing facility services.‖ § 1396n(c)(2)(B) (emphasis added). Subsection (C) then requires the State to ensure that ―such individuals who are determined to be likely to require the level of care provided in a . . . nursing facility . . . are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals.‖ When the ―may be eligible‖ language of § 1396n(c)(2)(B)(iii) is read in conjunction with the ―such individuals‖ language in § 1396n(c)(2)(C), it becomes clear that the information required to be provided must include information about waivers that an individual may be eligible for, not just those for which the individual has already applied. The notion that only those who already know about and have applied for waiver services can be informed about them simply makes no sense. See Rolland, 52 F. Supp. 2d at 241 (freedom of choice provision encompasses notifying individuals at risk of nursing facility placement of the existence of waiver services for which they may be eligible). The named plaintiffs, none of whom were informed about available alternatives to nursing facility care, all have standing to pursue their claims under § 1396n(c)(2). Indeed, defendants‘ own regulations require them to provide individuals applying for admission to nursing facilities with information about available alternatives to institutional
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care and if the individual selects ―an option that is not immediately available for any reason, the agency must provide assistance in placing the client‘s name on a waiting list for that option.‖ 1 Tex. Admin. Code § 351.15(b).
Furthermore, as defendants acknowledge, one of the named plaintiffs, Benny Holmes, had applied for a HCS waiver and, therefore, falls within even the Grant court‘s position on standing. Defendants assert that because he was twice placed in the HCS waiver program and currently has an HCS placement, as a matter of law he has suffered no injury in fact.50 Part. Mot. to Dismiss at 12. However, as the Complaint makes clear, Mr. Holmes spent two years unnecessarily institutionalized in a nursing facility because he was not advised of the feasible alternatives to that nursing facility admission that were available to him under the waiver, as required by § 1396n(c)(2)(C). Compl. ¶¶ 187-198. Two years of needless and inappropriate institutionalization clearly constitutes a sufficient ―injury in fact‖ for standing purposes.
Finally, defendants‘ standing argument does not challenge the standing of the two institutional plaintiffs, the ARC of Texas and the Coalition of Texans with Disabilities, to raise this claim. These organizations have standing to assert the freedom of choice provision on behalf of their members. Thus, the claim survives regardless of any determination of the standing of any of the individual plaintiffs.
D. The Governor Is a Proper Party In this Case Defendants seek to dismiss Rick Perry, the Governor of the State of Texas, as a
party in this litigation. They argue that dismissal is appropriate because: (1) plaintiffs lack
50 Defendants argue that Mr. Holmes does not have standing because he knew about the HCS waiver and was determined eligible for a slot, while arguing that the other named plaintiffs do not have standing because they did not know about the waiver and did not apply for it. This Catch-22 approach to standing cannot withstand scrutiny.
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standing to assert Medicaid claims against the Governor; (2) the Governor is immune from suit under the Eleventh Amendment to the United States Constitution; and (3) plaintiffs have failed to state a claim against the Governor under the Medicaid Act. Because plaintiffs have standing and have stated claims under the ADA, § 504 of the Rehabilitation Act, as well as under the Medicaid Act, and because the Governor lacks sovereign immunity with respect to these federal claims, he is a proper party in this case.
1. Plaintiffs Have Standing to Assert Their Claims Against the Governor.
Defendants contend that plaintiffs do not have standing because the Governor has no direct control over the implementation of Medicaid program and services, and lacks the power to redress plaintiffs‘ asserted injuries. Part. Mot. to Dismiss at 9-10. However, the Governor is a key player both with respect to control over the Executive Commission of Health and Human Services (―HHSC‖) and the Department of Aging and Disability Services (―DADS‖), the two entities that defendants concede are appropriate parties in this case.
The Governor is the chief executive officer of the State of Texas. Relevant to the issues in this case, he appoints the Executive Commissioner of HHSC. Tex. Govt. Code Ann. § 531.005. The Executive Commissioner, subject to the approval of the Governor, appoints the Commissioner of DADS, who serves at the pleasure of the Executive Commissioner. Tex. Govt. Code Ann. § 531.0056. Furthermore, the Executive Commissioner serves for only a two year term, providing the Governor with the ability to replace him should the Governor disagree with any actions he has taken or failed to take, any policies he has implemented or failed to implement, or personnel he has appointed. Tex. Govt. Code Ann. § 531.007. This biennial appointment authority provides the Governor with substantial control over the operation of
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HHSC and DADS, as well as the ultimate responsibility for ensuring that these agencies comply with federal law.
In addition to being the chief executive officer of the State, the Governor is the chief budget officer. Tex. Govt. Code Ann. § 401.041. In this capacity, he convenes and presides over budget hearings and compiles the biennial appropriations budget. Tex. Govt. Code Ann. §§ 401.043, 401.0045. He has the duty to ensure that his budget requests are adequate to ensure compliance with federal law and the protection of the rights of Texas citizens under those laws. He also has a line item veto over any appropriations bills. Tex. Const. Art. IV, § 14. Both through the budget which he submits to the legislature and his line item veto, the Governor wields substantial power over the budgets of both HHSC and DADS, a power which can be used to facilitate or thwart the provision of compliance with the ADA, § 504, and the Medicaid Act, including the provision of the very community services and supports that are necessary to fulfill Texas‘s obligations under these federal statutes. For defendants to assert that the Governor has no responsibility or ability to provide redress for the injuries that plaintiffs have suffered ignores the broad scope of influence and authority that the Governor possesses.
Defendants‘ reliance on the Fifth Circuit‘s en banc decision in Okpalobi v. Foster, 244 F.3d 405 (5th Cir. 2001) is misplaced. Okpalobi challenged the legality of a law enacted by the Louisiana legislature over which the Governor and Attorney General had no enforcement role or responsibilities. The act created a species of tort liability which patients could assert against providers. Because the two state officials sued did not have ―any duty or ability to do anything . . . to redress the injuries alleged,‖ the sharply divided court found that plaintiffs lacked standing. Id. at 405, 427. However, contrary to the situation in Okpalobi, the injuries alleged here do not flow from the acts of purely private litigants, but rather from the acts of state
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officials—officials whom the Governor has appointed (or whose appointment he has approved), whom he can replace, and who implement budgets that the Governor has submitted to the legislature and signed. The relief that plaintiffs seek will likely necessitate revisions to the budgets of both HHSC and DADS, revisions that the Governor can facilitate or thwart through his line item veto.
The Governor‘s involvement and control over HHSC and DADS, and his responsibility to ensure that these agencies properly fulfill their duties under the ADA, § 504, and the Medicaid Act, are more than sufficient to establish that he is an appropriate party to this action. See K.P. v. LeBlanc, 627 F.3d 115, 123-24 (5th Cir. 2010) (standing established where defendant ―has definite responsibilities relating to‖ the plaintiffs‘ claims); Rolland, 52 F. Supp. 2d at 243 (finding that the Governor‘s role in the budget process and appointment of agency heads was sufficient to establish standing in case raising claims virtually identical to those raised here).
2. The Governor Is Not Immune from Suit Under the Eleventh Amendment for Violations of Federal Law.
Defendants claim that this class action law suit against the Governor for violations of the Medicaid Act is barred by the State‘s Eleventh Amendment immunity. U.S. Const. amend. XI. According to defendants, because the Governor has no connection with or specific responsibility to enforce the Medicaid statute, sovereign immunity bars plaintiffs from holding the Governor liable for Medicaid Act violations.51 Part. Mot. to Dismiss at 12. In support of this claim, defendants rely entirely on the plurality opinion in Okpalobi, 244 F.3d 405. However, on the Eleventh Amendment issue, the Okpalobi Court was evenly split, rendering that aspect of the
51 As discussed more fully below, the Governor has no immunity from suit for claims brought under the ADA or § 504. Thus, defendants‘ sovereign immunity argument could not conceivably result in dismissing the Governor as a party. Moreover, the argument is little more than the standing argument discussed supra recast as an immunity defense.
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decision ―not controlling authority for future Eleventh Amendment questions in this Circuit.‖ Id. at 436 n.6 (Benavides, J, concurring in part and dissenting in part).
In a more recent opinion, K.P., 627 F.3d at 124, the Fifth Circuit again addressed the Eleventh Amendment issue over which the Okpalobi court was unable to garner a majority. The K.P. court first noted that ―[t]he fact that the state officer, by virtue of his office, has ‗some connection‘ with the enforcement of the act is the important and material fact.‖ Id. at 124 (emphasis added) (quoting Ex Parte Young, 209 U.S. 123, 157 (1908)). It then rejected the defendants‘ assertion, based on Okpalobi, that there needs to be a ―s‗pecial‘ relationship – not just ‗some connection‘‖ between the defendants and plaintiffs‘ injury under Ex Parte Young. Concluding that the defendants in K.P. had ―some enforcement authority,‖ the court found that they had ―the requisite connection with [the statute] to fall within the Ex Parte Young exception.‖ 627 F.3d at 125.
Here, the Governor clearly has more than just ―some connection‖ with the implementation and enforcement of the Medicaid statute and a very direct connection with the enforcement of the ADA and § 504, pursuant to which the State of Texas receives considerable federal funding. As described above, Governor Perry is responsible for directing, supervising, and controlling the executive departments of state government, for submitting a Medicaid State Plan and developing Olmstead plans, and for requesting funds from the legislature for executive agencies so that Medicaid and other state programs can be implemented and services provided in a manner that is consistent with federal law.52 Compl. ¶¶ 22 & 133; Tex. Govt. Code Ann.
52 Indeed, this statutory and legislative authority enables the Governor – along with the Legislative Budget Board – to direct the transfer of Medicaid funds when program appropriations are insufficient to meet the expenditure requirements mandated by either state or federal law. See Cmty. Health Choice, Inc., v. Hawkins, 328 S.W.3d 10, 15 (Tex. App.—Austin 2010, no pet.) (funds allocated by the legislature to HHSC for Medicaid are a non-specific appropriation; as a result, when Medicaid appropriations are insufficient to meet expenditures that either state or federal law mandate, the Governor and the Legislative Budget Board are authorized to direct the transfer of sufficient amounts of funds to HHSC from Medicaid appropriations made elsewhere).
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§§ 401.0445 & 531.0056. In fact, the Governor has issued several executive orders specifically designed to promote community integration of persons with disabilities and to enforce the ADA‘s integration mandate. See Tex. Gov. Exec. Order No. RP 13 (Apr. 18, 2002), 27 Tex. Reg. 3647; Tex. Gov. Exec. Order No. GWB 99-2 (Sept. 28, 1999), 25 Tex. Reg. 1820.
Just as in K.P., the Governor has ―the requisite connection [with the Medicaid program, and the implementation of the ADA and § 504] to fall within the Ex Parte Young exception‖ to the Eleventh Amendment. See K.P., 627 F.3d at 125.
3. Plaintiffs Have Stated a Claim Against Governor Rick Perry. Defendants incorrectly claim that plaintiffs have failed to state a claim against Governor Perry under Rule 12 (b)(6). Part. Mot. to Dismiss at 15.53 Defendants‘ argument for dismissing the complaint is based on a general claim: that Governor Perry has no responsibility under federal law for providing the relief that plaintiffs request. Id. However, in light of the fact that courts are obligated to look only at the pleadings and to consider factual allegations in the complaint as true, there is no basis under Rule 12(b)(6) for dismissing the Governor with respect to any of the legal claims asserted in this case.
a. The Governor is a ―Public Entity‖ for Purposes of Title II of the ADA and Section 504.
Defendants claim that ―as a matter of law, Governor Perry is not a ‗public entity‘ within the meaning of Title II of the ADA.‖ Part. Mot. to Dismiss at 16. Defendants acknowledge that the other state officials sued in this case may be appropriate defendants under Title II of the ADA when sued in their official capacities, including the Commissioners of HHSC and DADS. However, without citation of any authority, they assert that: (1) the Governor is not
53 Defendants also contend plaintiffs‘ claims should be dismissed under Rule 12(b)(1) based on their lack of standing. Because plaintiffs address that argument in section III(D)(1), supra, this section will focus on defendants‘ argument for dismissal under Fed. R. Civ. P. 12(b)(6). Further, defendants do not claim that plaintiffs lack standing to sue Governor Perry under either the ADA or Section 504. Part. Mot. to Dismiss at 42.
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a state official under Title II of the ADA; or (2) that a Governor cannot be sued in his or her official capacity for prospective injunctive relief under the ADA. Id. Neither assertion can withstand scrutiny under established federal law.
In McCarthy el rel. Travis v. Hawkins, 381 F. 3d. 407, 414 (5th Cir. 2004), the Fifth Circuit held that an Ex Parte Young suit could be brought under Title II of the ADA against public officials in their official capacity. In reaching this result, the McCarthy Court relied upon Kentucky v. Graham, 473 U.S. 159, 165-66 (1985), in which the Supreme Court explained that ―an official-capacity suit is, in all respects other than name, to be treated as a suit against the entity . . . for the real party in interest is the entity.‖ Because the ADA specifically includes a State as a ―public entity,‖ 42 U.S.C. § 12131(1)(A), and the Governor is the chief executive officer of Texas, a suit against the Governor in his official capacity is ―to be treated as a suit against the entity,‖ in this case the State of Texas.
Although the court in McCarthy did not address the Governor‘s liability within the context of Title II of the ADA, other courts have. For example, in Miranda B. v. Kitzhaber, persons with mental illness sued the Governor of Oregon, as well as other state officials, under Title II of the ADA and Section 504. 328 F.3d 1181 (9th Cir. 2003). The Ninth Circuit held that a suit for prospective injunctive relief against the Governor and other state officials was appropriate and should not be dismissed. Id. at 1188-1189. Indeed, numerous Governors have been sued in their official capacity for Medicaid, ADA, Section 504, and constitutional violations.54 There is nothing in either the ADA or Section 504 that exempts Governors from
54 See, e.g., Croft v. Governor of Tex., 562 F.3d 735 (5th Cir. 2009) (a constitutional claim); Disability Advocates, Inc. v. Paterson, 598 F. Supp. 2d 289 (E.D.N.Y. 2009) (ADA and Section 504 claims); Bruggeman ex rel. Bruggeman v. Blagojevich, 219 F.R.D. 430 (N.D. Ill. 2004) (ADA and Section 504 claims); Martin v. Taft, 222 F. Supp. 2d 940 (S.D. Ohio 2002) (Medicaid and ADA claims); Little Rock Family Planning Servs., P.A. v. Dalton, 860 F. Supp. 609 (E.D. Ark. 1994) (Medicaid claims), aff’d, 60 F.3d 497 (8th Cir. 1995); Harris v. James, 883 F. Supp. 1511 (M.D. Ala. 1995) (Medicaid claims), rev’d on other grounds, 127 F.3d 993 (11th Cir. 1997); Appleyard v. Wallace, 754 F.2d. 955 (11th Cir. 1985) (Medicaid claims), rev’d on other grounds sub nom, In re Netbank, Inc.
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being sued in their official capacity. To the contrary, it is a common practice, and it is perfectly appropriate in this case, given Governor Perry‘s responsibility to ensure compliance with the ADA, § 504, and the Medicaid Act, and his issuance of several executive orders thereunder.55
Next, defendants argue that Governor Perry is not a proper party under the Rehabilitation Act because he is not a recipient of federal funds. Part. Mot. to Dismiss at 17. Specifically, defendants assert that Governor Perry does not receive or distribute Medicaid funds. Id. This argument fails for a number of obvious reasons. First, defendants ignore the reality that when the Governor is sued in his official capacity as the chief executive officer of the State, the question is not whether he personally receives federal financial assistance, but whether the State of Texas does. No one can seriously contend that Texas does not receive federal financial assistance to operate its Medicaid program, including its ICF/MRs, its HCBS waivers, its nursing facilities, and a host of other community-based services. In addition, plaintiffs have alleged that Governor Perry accepts federal financial assistance to operate Texas‘s Medicaid program, but fails to ensure its compliance with federal requirements for that program. Compl. ¶ 218. At the motion to dismiss stage, this allegation must be accepted as true. Defendants‘ effort to exclude the Governor from the reach of the § 504 claim must be rejected.
Sec. Litig., 259 F.R.D. 656 (N.D. Ga. 2009); St. Michael Hosp. of Franciscan Sisters, Milwaukee, Inc., v. Thompson, 725 F. Supp. 1038 (W.D. Wis. 1988) (Medicaid claims). 55 Defendants also cite Nelson v. Schwarzenegger, No. C 09-04937 JW PR, 2010 WL 890028 (N.D. Cal. March 8, 2010) for the proposition ―taht the governor was not a proper plaintiff because he was not a ―public entity‖ for purposes of the ADA.‖ Part. Mot. to Dismiss at 16. The opinion, which is little more than two pages long, does not analyze or discuss this issue in any detail. Moreover, it never refers to the Ninth Circuit‘s opinion in Miranda B. It appears that this pro se litigant did not sue Governor Schwarzenegger in his official capacity. As a result, the Governor would not have been an appropriate party under Title II of the ADA.
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b. The Governor Is Responsible For, and Has the Authority to Correct, the ADA, § 504, and Medicaid Violations Set Forth in the Complaint.
Defendants next maintain that plaintiffs‘ pleadings are insufficient to state a cognizable claim against Governor Perry upon which relief can be granted because (1) the Governor allegedly does not play a significant role in the administration of the Texas Medicaid Program, (2) plaintiffs have not asserted claims that establish any action on the part of Governor Perry that caused, or could cause, their alleged injuries, and (3) the relief being sought cannot be effectuated through the Governor. Part. Mot. to Dismiss at 15. These arguments ignore both the considerable responsibility and significant authority that the Governor has for complying with the ADA, § 504, and the Medicaid Act.56
In a case nearly identical to the one at bar, several individuals with developmental disabilities brought a class action under §1983 against the Governor of Massachusetts and various other state officials for violations of the ADA, § 504 of the Rehabilitation Act, the Medicaid Act, and the PASARR requirements of the NHRA. Rolland, 52 F. Supp. 2d at 243. Defendants filed a motion to dismiss, asserting that plaintiffs failed to state a cognizable claim against the Governor and the Secretary of the Executive Office of Health and Human Services (―EOHHS‖). They argued that neither played a significant enough role in the State‘s Medicaid program to be held liable for plaintiffs‘ injuries. Just like in the instant case, the defendants in Rolland argued that only the single state Medicaid agency was responsible for the administration of Massachusetts‘s Medicaid program, and, therefore, the Governor could not have taken any
56 Certainly Governor Perry believes he has ample authority in all these areas. In Executive Order RP 13, Perry ―order[ed]‖ HHSC to ―direct‖ the Texas Department of Mental Health and Mental Retardation (now DADS) ―to implement‖ a new waiver program to provide community-based services to individuals on the HCS waiver waiting list. In Executive Order RP 65, he ordered HHSC to adopt rules mandating that all girls obtain the HPV vaccine prior to admission to sixth grade. In both cases, HHSC fully complied with his directives.
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action that caused injuries to the plaintiff class. Id. In rejecting this argument, the district court
concluded that:
No case holds the provision which empowers a single state agency to administer a state‘s Medicaid program was in any way promulgated with the intention of exonerating or limiting the liability of other governmental officials who fail to conform their required actions to federal law.
Id. Further, the court noted that the plaintiffs‘ amended complaint contained ―several unfulfilled
administrative duties that may fall outside the DMA‘s mandate‖ including that: (i) the Governor
is responsible for seeking funds from the legislature and to direct, supervise and control the
executive departments of state government; (ii) it is the Governor‘s responsibility to appoint
directors of executive agencies; and (iii) it is the Governor who appoints the EOHHS Secretary
who is responsible for the oversight and control of all of the state‘s Medicaid departments,
including DMA. Id. As a result, the court found that while
it remains to be seen whether the plaintiff can prove the Governor . . . [has] a role in the provision of Medicaid services . . . [t]o the extent that those responsibilities go beyond those enumerated and required in the state Medicaid plan, the Governor . . . may well be [an] appropriate defendant. Id.57 The same responsibilities and duties that the Rolland court held provided a basis for including the Governor as a party are also present here.58 See Compl. ¶ 22.
Many other courts have found that a State‘s governor is an appropriate party for
purposes of ADA, § 504, and Medicaid claims. See Boudreau ex rel. Boudreau v. Ryan, No. 00
57 At the end of its decision, the court comments that ―there appears to be no dispute that the Governor and other state officials are appropriate defendants with regard to the ADA.‖ Rolland, 52 F. Supp. 2d at 243. That is the case here as well. Defendants‘ motion to dismiss does not allege that the Governor is not an appropriate defendant regarding the ADA. Here, of course, Governor Perry is properly sued in his official capacity. 58 The Governor himself has recognized that other agencies over which he has considerable influence and control are critical to the development of an effective community-based service system. See Executive Order RP 13 (ordering ―all affected agencies and public entities [to] cooperate fully with‖ HHSC in the development of the Promoting Independence Plan)
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C 5392, 2001 WL 840583, at *6 (N.D. Ill. May 2, 2001) (refusing to dismiss the Governor in a case involving Medicaid, the ADA and Section 504), aff’d in part, and vacated in part on other grounds sub nom, Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906 (7th Cir. 2003); Gueli v. United States, No. 806 CV 1080 T27 MSS, 2006 WL 3219272 (M.D. Fla. Nov. 6, 2006) (finding Governor to be appropriate party when sued in his official capacity; case dismissed on other grounds); Bragg v. Chavez, No. Civ 07-0343 JB/WDS, 2007 WL 6367133, at *13 (D.N.M. Nov. 13, 2007) (Medicaid and ADA claims). Thus, defendants‘ effort to dismiss the claims against the Governor must be denied.
E. Plaintiffs’ Claims Are Not Barred by the Statute of Limitations Defendants argue that certain aspects of plaintiffs‘ claims relating to their
admission to nursing facilities are barred by the statute of limitations, because some individual plaintiffs were admitted to nursing facilities before December 20, 2008. Part. Mot. to Dismiss at 13-15 (asserting that claims alleged in Complaint ¶¶ 213-14, 227, 230-32 are time barred). It is ironic, to say the least, that state officials who are under a legal obligation to screen and identify individuals with developmental disabilities seeking admission to nursing facilities, in order to alert them to their legal rights and provide them with specialized services, would attempt to assert a limitations defense against the very persons who were not properly screened in the first place. Defendants‘ arguments fail for two reasons: (i) the statute of limitations is tolled in Texas for persons who have severe developmental disabilities, such as plaintiffs here; and (ii) the statute of limitations is tolled due to the continuing violations and present practices. For both of these reasons, defendants‘ statute of limitations argument should be rejected.
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1. The Statute of Limitations Is Tolled As A Result of Plaintiffs’ Severe Developmental Disabilities.
Critically, defendants‘ motion completely ignores a key exception to the statute of limitations: tolling by reason of disability. Here, the statute is tolled due to plaintiffs‘ severe developmental disabilities.
In determining whether a statute of limitations is tolled, federal courts apply the applicable state‘s tolling law. See Hardin v. Straub, 490 U.S. 536, 539 (1989). Under Texas law, if a person entitled to bring a personal action is of ―unsound mind,‖ a legal disability, when the cause of action accrues, then the time of the disability is not included in the limitations period. Tex. Civ. Prac. & Rem. Code Ann. § 16.001 (West 2010). Texas courts have applied the tolling statute to persons with developmental disabilities, such as plaintiffs. See, e.g., Ruiz v. Conoco, Inc., 868 S.W.2d 752, 755-56 (Tex. 1993) (statute of limitations tolled for developmentally disabled plaintiff in suit brought by wife as guardian); Chishty v. Tex. Dep’t of Aging & Disability Servs., 562 F. Supp. 2d 790, 801 (E.D. Tex. 2006) (statute of limitations tolled for developmentally disabled in suit brought by mother as next friend); cf. Casu v. CBI NaCon, Inc., 881 S.W.2d 32, 34-35 (Tex. App.—Houston [14th Dist.] 1994, no writ) (statute of limitations tolled due to plaintiff‘s mental incompetence, ―acute paranoid psychosis,‖ and defective cognitive and memory functioning). In holding that the statute of limitations is tolled for persons with developmental disabilities, the Texas Supreme Court has recognized that ―mentally incompetent persons present a more compelling case for legal protection [than children]. They are frequently less communicative, more vulnerable and dependent than children.‖ Ruiz, 868 S.W.2d at 755. The Texas Supreme Court also held that it was ―aware of the possibility that in a case such as this a limitation period may remain open for the lifetime of the plaintiff.‖ Id. at 756 (internal quotations omitted).
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Here, there is no doubt that the individual plaintiffs are ―mentally incompetent‖ and of ―unsound mind‖ as those phrases are used under Texas law, and were so at the time the cause of action accrued. Plaintiffs have serious and prolonged developmental disabilities that impair their cognitive functioning and render them unable to appreciate the magnitude and consequences of the lawsuit. See Compl. ¶ 1. For this reason, in similar lawsuits on behalf of developmentally disabled individuals under similar state tolling provisions, courts have held that the statute of limitations is tolled. See Martin, 840 F. Supp. at 1189 (―Thus, the Court concludes that because plaintiffs were mentally retarded at the time the action accrued, the limitations period as applied to plaintiffs is tolled.‖). Plaintiffs are quintessential examples of persons with severe developmental disabilities whom section 16.001 of the Texas Civil Practice and Remedies Code was designed to protect. Therefore, defendants‘ motion to dismiss on limitations grounds must be denied.59
2. The Statute of Limitations Is Also Tolled Because of Defendants’ Continuing Violations of Federal Law.
The ―continuing violations‖ doctrine also operates to toll the statute of limitations. In the Fifth Circuit, if a plaintiff shows a series of related acts, one or more of which falls within the limitations period, then the continuing violation theory applies to toll the running of the statute of limitations from the first such act. See Messer v. Meno, 130 F.3d 130, 134-35 (5th Cir. 1997) (reversed and remanded dismissal of discrimination claims where plaintiff successfully
59 Despite completely omitting any discussion of the tolling statute in their Partial Motion to Dismiss, defendants may attempt to revive their statute of limitations argument by claiming that the statute of limitations should not be tolled because certain plaintiffs have guardians appointed for them. However, in Texas, the appointment of a guardian does not affect the tolling of the statute of limitations. See Ruiz, 868 S.W.2d at 755-56 (citing Tzolov v. Int’l Jet Leasing, Inc., 232 Cal. App. 3d 117, 121 (1991) for the proposition that appointment of a guardian did not affect the statute of limitations, which continued to be tolled); Weiner v. Wasson, 900 S.W.2d 316, 320 (Tex. 1995) (citing Ruiz, 868 S.W.2d at 756, and holding that the failure of a parent to bring suit within the statute of limitations on behalf of a minor does not affect the tolling). Moreover, several of the named plaintiffs and countless members of the class do not have guardians, and the statute of limitations is certainly tolled as to those plaintiffs. See Compl. ¶¶ 10, 13.
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raised fact issue regarding a continuing violation). If an event occurs outside of the limitations period and there is a ―persisting and continuing system of discriminatory practices‖ that ―produces effects that may not manifest themselves as individually discriminatory except in cumulation over a period of time,‖ then a continuing violation is established. Id. at 135.
Courts in the Fifth Circuit examine three factors and are more likely to find a continuing violation where: (i) the acts involve the same type of subject matter, (ii) the acts are recurring, and (iii) the acts do not have a degree of permanence. See Berry v. Bd. of Supervisors of La. State Univ., 715 F.2d 971, 981 (5th Cir. 1983). Indeed, applying the same standards, the Court in Martin held that the continuing violations doctrine also tolled the running of the statute of limitations for persons with developmental disabilities bringing claims under the NHRA. See Martin, 840 F. Supp. at 1189. In Martin, the court held that each time a position became available in the community and the plaintiffs were denied a position because of a disability, then there was an alleged violation; therefore, the court held that the claims based on the ongoing and continuous pattern of alleged discrimination were not barred by the statute of limitations. 840 F. Supp. at 1189.
Here, as in Martin, there exists a series of numerous ongoing, related violations of federal law by defendants, many of which fall within the limitations period. For example, defendants failed to conduct the initial PASARR screenings and resident reviews, resulting in the inappropriate institutionalization and segregation of plaintiffs in nursing facilities. See Compl. ¶¶ 212, 222-23, 231-32. Under the NHRA, PASARR reviews are not a one-time obligation; resident reviews are to be conducted whenever there are ―significant changes in the condition of nursing home residents.‖ 42 U.S.C. § 1396r(e)(7)(C)(iii). Defendants have failed to conduct these ongoing reviews, resulting in plaintiffs‘ continued inappropriate placement in nursing
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facilities.60 See Compl. ¶¶ 212, 233, 238. Moreover, defendants‘ failure to conduct the required resident reviews continues to deprive plaintiffs of specialized services. See id. ¶¶ 229, 236, 238. For example, plaintiff Eric Steward received another PASARR evaluation in January 2011— after this lawsuit was filed—and yet Mr. Steward was not identified as having a developmental disability, despite having infantile cerebral palsy – clearly a related condition and, therefore, a developmental disability as defined by federal law. See 42 U.S.C. § 1396d(d). As a result, Mr. Steward‘s appropriateness for community placement has not been assessed, and he continues to be ineligible for specialized services. All of these related violations of the rights of the named plaintiffs and members of the plaintiff class continue to occur and, therefore, constitute an ongoing pattern of continuous discrimination and continuing violations of federal law justifying the tolling of the statute of limitations.
The only case cited by defendants in support of their limitations argument is Joseph S. However, the Joseph S. Court‘s decision to apply the statute of limitations to certain NHRA claims was based on the plaintiffs‘ concession that, although defendants allegedly persisted in their illegal conduct, the plaintiffs had not been subjected to any unlawful practices within the limitations period. 561 F. Supp. 2d at 313-14. Here, because some plaintiffs have never had even the initial PASARR screening and review, and others‘ condition has deteriorated while in nursing facilities and have not been reassessed as required by § 1396r(e)(7)(C)(iii), they all have all been subjected to continuing unlawful practices during the limitations period. Under these facts, Joseph S. supports plaintiffs‘ position that the NHRA claims are ongoing violations and are not barred by the statute of limitations. As a result, defendants statute of limitations argument fails as a matter of law.
60 Plaintiffs have alleged that each has regressed and their condition has deteriorated during their time in the nursing facility. Compl. ¶¶ 141, 151, 158, 175, 197, & 208.
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IV. CONCLUSION AND REQUESTED RELIEF
For the foregoing reasons, plaintiffs respectfully request that this Court enter an
order denying the Partial Motion to Dismiss in its entirety. Plaintiffs request any other relief to
which they may be entitled.
April 18, 2011
Respectfully submitted,
/s/ Garth A. Corbett Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Disability Rights Texas 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 Robert Velevis State Bar No. 24047032 Casey Burton State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Attorneys for Plaintiffs
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Case 5:10-cv-01025-OLG Document 40 Filed 04/18/11 Page 70 of 70 CERTIFICATE OF SERVICE
I, Garth Corbett, hereby certify that all parties have been served through the Court‘s ECF system, or if such party does not accept service through the Court‘s ECF system, then by first class mail.
/s/ Garth A. Corbett Garth A. Corbett
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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et. al., Plaintiffs, v.
RICK PERRY, et. al,

Case No. 5:10-cv-1025-OG

Defendants

STATEMENT OF INTEREST OF THE UNITED STATES OF AMERICA The United States files this Statement of Interest, pursuant to 28 U.S.C. § 517 1, because

this litigation implicates the proper interpretation and application of Title II of the Americans

with Disabilities Act, 42 U.S.C. § 12101 et seq. (“ADA”). In particular, this case involves Title

II’s integration mandate. See Olmstead v. L.C., 527 U.S. 581, 607 (1999). The Department of

Justice has authority to enforce Title II, and to issue regulations implementing the statute. 42

U.S.C. §§ 12133-34. T he United States has a strong interest in the resolution of this matter.

Accordingly, it respectfully submits this Statement of Interest to address three issues raised by

the State in its Motion to Dismiss. F irst, notwithstanding the State’s arguments, Plaintiffs’

claims are timely filed and should not be dismissed pursuant to the statute of limitations.

Second, Governor Perry is appropriately named as a defendant for Plaintiffs’ claims under the

ADA and section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794. Third, enforcement of

1 Under 28 U.S.C. § 517, “[t]he Solicitor General, or any officer of the Department of Justice, may be sent by the Attorney General to any State or district in the United States to attend to the interests of the United States in a suit pending in a court of the United States, or in a court of a State, or to attend to any other interest of the United States.”

Case 5:10-cv-01025-OLG Document 43 Filed 05/18/11 Page 2 of 22
the Medicaid Act is not limited to a federal government action to terminate funds. This suit alleges that the State of Texas unnecessarily institutionalizes individuals with
developmental disabilities in nursing homes, in violation of Title II of the ADA as interpreted by the Supreme Court in Olmstead v. L.C., 527 U.S. 581 ( 1999).2 The proposed plaintiff class consists of approximately 4,500 individuals with developmental disabilities3 who are currently confined to nursing facilities and thousands more who are at risk of placement therein. (Complaint (“Compl.”) ¶ 26, ECF No. 1 ( Dec. 12, 2010).) With appropriate supports, the individually named plaintiffs and plaintiff class members are able to live in the community instead of in nursing facilities. (Id. at ¶ 1.) However, the State effectively denies them access to its existing community-based services and supports by placing insurmountable barriers to their transition from nursing facilities, including decade-long waitlists. (Id. at ¶¶ 57, 87, 100.) Nursing facilities are institutions; they house large numbers of unrelated persons and most individuals within them rarely have the opportunity to leave the facility. Nursing facilities are hospital-like settings, affording residents little to no privacy. (Id. at ¶¶ 101-112.)
Plaintiffs Eric Steward, Linda Arizpe, Andrea Padron and Patricia Ferrer all have developmental disabilities and are currently institutionalized in nursing facilities, but want to leave the nursing facility to enjoy the benefits of community living. (Id. at ¶¶ 10-13, 144, 154,
2 For the purposes of this Statement of Interest, filed in the context of Defendants’ Motion to Dismiss, the United States accepts Plaintiffs’ pleaded facts as true and views them in their most favorable light. EEOC v. Phillips, 635 F.3d 164, 165 (5th Cir. 2011). 3 Throughout this brief, the United States will use the term “developmental disabilities” to refer to individuals with intellectual disabilities or related conditions consistent with Plaintiffs’ use of the term in their complaint. (Compl. ¶ 1.)
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162, 176.) For example, Ms. Ferrer lived at home for 44 years where she worked as a h otel housekeeper and then in the security department at Love Field in Dallas. (Id. at ¶¶ 166-67.) Since being institutionalized, however, Ms. Ferrer has regressed, becoming less communicative and developing behavior issues requiring medication. (Id. at ¶ 175.) Mr. Steward enjoyed going to movies, dining out, attending sporting events, bowling and participating in the Special Olympics while he lived in the community. (Id. at ¶¶ 10, 136.) His mental health has declined since entering the nursing facility. (Id. at ¶ 141.) Mr. Morgan, who has a very outgoing personality, participated regularly in a vocational workshop operated by EduCare of Texas prior to his nursing facility placement. (Id. at ¶ 207.) Since moving to a nursing facility, Mr. Morgan is no l onger participating in EduCare, has gained a significant amount of weight, is no l onger ambulatory and now uses a wheelchair. (Id. at ¶ 208.)
Plaintiffs further allege that the State fails to administer its Preadmission Screening and Resident Review (“PASRR”) program in compliance with the Nursing Home Reform Act (“NHRA”). (Id. at ¶¶ 74-100.) Plaintiffs allege that the State violates PASRR because it fails to properly evaluate individuals with developmental disabilities prior to nursing facility admission to determine whether they are appropriate for nursing facility placement, whether their needs could be met in the community and whether they need specialized services while in the nursing facility to treat their developmental disabilities. (Id. at ¶¶ 74-100.) Plaintiffs further allege that the State fails to provide or arrange for specialized services in nursing facilities as required by PASRR. (Id. at ¶¶ 85-88.)
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Olmstead and the Integration Mandate
Congress enacted the ADA in 1990 “to provide a clear and comprehensive national
mandate for the elimination of discrimination against individuals with disabilities.” 42 U.S.C.
§ 12101(b)(1). It found that “historically, society has tended to isolate and segregate individuals
with disabilities, and, despite some improvements, such forms of discrimination against
individuals with disabilities continue to be a serious and pervasive social problem.” 42 U.S.C.
§ 12101(a)(2). F or those reasons, Congress prohibited discrimination against individuals with
disabilities by public entities.
[N]o qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity. 42 U.S.C. § 12132.
As directed by Congress, the Attorney General issued regulations implementing Title II, which are based on r egulations issued under section 504 of the Rehabilitation Act.4 See 42
4 Title II was modeled closely on section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, which prohibits discrimination on the basis of disability in federally-conducted programs and in all of the operations of certain entities, including public entities, which receive federal financial assistance. Title II provides that “[t]he remedies, procedures, and rights” applicable to section 504 shall be available to any person alleging discrimination in violation of Title II. 42 U.S.C. § 12133; see also 42 U.S.C. § 12201(a) (the ADA must not be construed more narrowly than the Rehabilitation Act). The ADA directs the Attorney General to promulgate regulations to implement Title II, and requires those regulations to be consistent with preexisting federal regulations that coordinated federal agencies’ application of section 504 to recipients of federal financial assistance, and interpreted certain aspects of section 504 as applied to the federal government itself. 42 U.S.C. § 12134(a)-(b). Title II thus extended section 504’s preexisting prohibition against disability-based discrimination in programs and activities (including state and local programs and activities) receiving federal financial assistance or conducted by the federal government itself to all operations of state and local governments, whether or not they receive federal assistance. Claims under the ADA and the Rehabilitation Act are treated identically unless one of the differences in the two statutes is pertinent to a claim. Kemp v. Holder, 610 F.3d 231, 234-35 (5th Cir. 2010). This principle follows from the similar language employed in the two acts. It also derives from the Congressional directive that implementation and interpretation of the two acts “be coordinated to prevent[ ] imposition of inconsistent or conflicting standards for the same requirements under the two statutes.” Baird ex rel. Baird v. Rose, 192 F.3d 462, 468-69 (4th Cir. 1999) (citing 42 U.S.C. § 12117(b)). See also Yeskey v. Com. of Pa. Dep’t of Corr., 118 F.3d 168, 170 (3d Cir. 1997).
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U.S.C. § 12134(a); 28 C .F.R. § 35.190( a); Exec. Order 12250, 45 Fed. Reg. 72995 (1980), reprinted in 42 U.S.C. § 2000d-1. The Title II regulations require public entities to “administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.” 28 C.F.R. § 35.130(d). The preamble discussion of the “integration regulation” explains that “the most integrated setting” is one that “enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible ...” 28 C.F.R. Pt. 35, App. A at 572 (2010) (addressing § 35.130). This mandate advances one of the principal purposes of Title II of the ADA—ending the isolation and segregation of people with disabilities. See Arc of Wash. State Inc. v. Braddock, 427 F.3d 615, 618 (9th Cir. 2005).
Twelve years ago, the Supreme Court applied these authorities and held that Title II prohibits the unjustified segregation of individuals with disabilities. Olmstead, 527 U.S. at 596. The Court held that public entities are required to provide community-based services for persons with disabilities who would otherwise be entitled to institutional services when (1) individuals are appropriate for community placement; (2) the affected persons do not oppose such treatment; and (3) the placement can be reasonably accommodated, taking into account the resources available to the entity and the needs of others who are receiving disability services from the entity. Id. at 607. The Court explained that this holding “reflects two evident judgments.” Id. at 600. “ First, institutional placement of persons who can handle and benefit from community settings perpetuates unwarranted assumptions that persons so isolated are incapable or unworthy of participating in community life.” Id. “Second, confinement in an institution severely
(“[A]ll the leading cases take up the statutes together, as we will.”), aff’d, 524 U.S. 206 (1998).
5

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diminishes the everyday life activities of individuals, including family relations, social contacts, work options, economic independence, educational advancement, and cultural enrichment.” Id. at 601. Olmstead therefore makes clear that the aim of the integration mandate is to eliminate unnecessary institutionalization. A state’s obligation to provide services in the most integrated setting may be excused only where a state can prove that the relief sought would result in a “fundamental alteration” of the state’s service system. Id. at 603-04.
ARGUMENT A. Motion to Dismiss Standard
“[T]o survive a motion to dismiss, [plaintiffs] need only allege ‘enough facts to state a claim to relief that is plausible on its face.’” Matrixx Initiatives v. Siracusano, __ U.S.__; 131 S.Ct. 1309, 1322 n.12 (2011) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)); see also Fed. R. Civ. P. 12(b)(6). So long as the allegations suffice to raise a reasonable expectation that discovery will reveal evidence sufficient “to allo[w] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” plaintiffs have stated a claim. Ashcroft v. Iqbal, __ U .S. __, 129 S.Ct. 1937, 1949 ( 2009). In undertaking this analysis, the court “must accept all well-pleaded facts as true and view them in the light most favorable to the non-moving party.” Southern Scrap Material Co. LLC v. ABC Ins. Co., 541 F.3d 584, 587 (5th Cir. 2008) (internal citation omitted). F urther, the Supreme Court’s “recent emphasis on t he plausibility of a complaint’s allegations does not give district courts license to look behind those allegations and independently assess the likelihood that the plaintiff will be able to prove them at trial.” Id.
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B. Plaintiffs’ Claims Should Not be Dismissed Based on the Statute of Limitations The State urges this Court to dismiss Plaintiffs’ claims under the ADA and PASRR to the
extent that they arose outside the applicable two-year statute of limitations.5 (Defendants’ Motion to Dismiss (“State’s Mot.”) 13-15, ECF No. 30 ( Mar. 3, 2011) .) This argument is without merit because Plaintiffs have pled sufficient facts to establish that the State’s actions constitute continuing violations. See McGregor v. Louisiana State Univ. Bd. of Supervisors, 3 F.3d 850, 867 (5th Cir. 1993) (outlining continuing violation theory).
i. General legal principles governing a motion to dismiss based on limitations A complaint may only be dismissed based on a statute of limitations defense where it is evident from the pleading that the action is untimely and the pleadings “fail to raise some basis for tolling or the like.” Jones v. Alcoa, Inc., 339 F.3d 359, 366 ( 5th Cir. 2003); see also Quantlab Technologies Ltd. (BVI) v. Godlevsky, 719 F . Supp. 2d 766, 774 (S.D. Tex. 2010). Courts generally will not dismiss a claim based on a statute of limitations defense, unless it is clear from the complaint that no factual basis exists for tolling the limitations period. Goodman v. Praxair, Inc., 494 F .3d 458, 464 ( 4th Cir. 2007) (permitting dismissal only where all facts necessary to the [statute of limitations] defense “clearly appear[ ] on the face of the complaint.”) (emphasis in original). See also Clark v. Prudential Ins. Co. of America, 736 F. Supp. 2d. 902, 923 (D. N.J. 2010) (“A statute of limitations defense is affirmative…. [t]herefore, it may only be
5 Congress has set no statute of limitations under the ADA, the Rehabilitation Act or 42 U.S.C. § 1983. Thus, the applicable state statute applies. Wallace v. Kato, 549 US. 384, 387 (2007). However, “federal law determines when a civil rights action accrues and, therefore, when the statute of limitations begins to run.” Perez v. Laredo Junior College, 706 F.2d 731, 733 (5th Cir. 1983). Here, the Texas statute of limitations governing torts is two years. TEX. CIV. PRAC. & REM. CODE § 16.003(a).
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resolved on a motion to dismiss if it is clear from the face of the complaint that the statute of limitations bars the claim.”) (citing Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1385, n.1 (3d Cir. 1994).6
ii. Plaintiffs’ complaint alleges that the State’s actions constitute continuing violations of Title II of the ADA, the Rehabilitation Act and PASRR
“Under the continuing violations doctrine, a plaintiff may complain of otherwise timebarred discriminatory acts if it can be shown that the discrimination manifested itself over time, rather than in a series of discrete acts.” Frank v. Xerox Corp., 347 F.3d 130, 136 (5th Cir. 2003). Once such a showing is made, “a plaintiff is relieved of establishing that all of the alleged discriminatory conduct occurred within the actionable period[.]” Pegram v. Honeywell, Inc., 361 F.3d 272, 279 ( 5th Cir. 2004) (internal citations omitted). Thus, the continuing violation doctrine “preserves claims based on acts outside the prescriptive period if the plaintiff timely files a claim based on a present violation.” McGregor v. Louisiana State Univ. Bd. of Supervisors, 3 F .3d 850, 866 (5th Cir. 1993). Further, if the violation “occurs as a result of a continuing policy, itself illegal, then the statute [of limitations] does not foreclose an action aimed at the [entity’s] enforcement of the policy within the limitations period.” Perez v. Laredo Junior College, 706 F.2d 731, 734 (5th Cir. 1983).
6 See also Hernandez v. City of El Monte, 138 F.3d 393, 402 (9th Cir.1998) (“a complaint cannot be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the claim.”) (internal citations omitted); Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (“courts should hesitate to dismiss a complaint on statute of limitations grounds based solely on the face of the complaint.”); In re South African Apartheid Litigation, 617 F. Supp. 2d 228, 288, n. 368 (S.D.N.Y. 2009) (concluding that the statute of limitations defense remains an affirmative defense requiring court to deny dismissal “unless ‘all assertions of the complaint, as read with required liberality, would not permit the plaintiffs to prove that this statute was tolled.’”) (quoting Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980)) (internal citations omitted).
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In Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982), the Supreme Court held that a Fair Housing Act claim was timely even though four of the five incidents of discrimination occurred outside the limitations period because “[p]lainly the claims . . . are based not solely on isolated incidents[,] . . . but a continuing violation manifested in a number of incidents— including at least one . . . that is asserted to have occurred within the [statutory] period.” Id. at 381. T he Court reasoned that statutes of limitations are meant only to prevent stale claims: “Where the challenged violation is a continuing one, the staleness concern disappears.” Id. at 380. Continuous violations are distinguishable from a “single violation followed by continuing consequences.” McGregor, 3 F.3d at 867 (quoting United Air Lines, Inc. v. Evans, 431 U.S. 553, 558) (1977)).
Plaintiffs’ allegations constitute continuing violations of the ADA. Plaintiffs allege that the State has institutionalized Plaintiffs for many years up to and including the day they filed their complaint. (Compl. ¶ 56.) Plaintiffs’ wrongful institutionalization (including the institutionalization that occurred outside the two-year statutory period) and the State’s continuous failure to make reasonable modifications so that Plaintiffs may access communitybased services must therefore be seen as “part of an ongoing pattern of discrimination,” McGregor, 3 F.3d at 866, a pattern that is repeated each day that Plaintiffs are compelled to live in nursing homes unnecessarily. See Martin v. Voinovich, 840 F . Supp. 1175, 1188 -89 (S.D. Ohio 1993) (applying continuous violations theory to ADA claims that individuals in institutions were denied community placement).
Plaintiffs’ allegations under PASRR also constitute continuing violations. The State
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argues that Plaintiffs’ PASRR claims are stale to the extent that the State’s failure to conduct the preadmission screening for several Plaintiffs occurred outside the statutory limitations period. (State’s Mot. at 13-14.) However, the State’s failure to conduct the necessary preadmission screening to determine Plaintiffs’ need for specialized services while in nursing facilities and the State’s ongoing, daily failure to provide Plaintiffs specialized services are part of the same, continuous violation – much of which occurred during the two years preceding Plaintiffs’ complaint. (Compl. ¶¶ 5, 87-90, 143, 152, 204, 229, 230, 236 -238.) Further, the State’s failure to conduct the preadmission screening to determine whether nursing facility placement is appropriate is part of the same continuing violation. (Id. at ¶¶ 10-15.) Finally, Plaintiffs have alleged significant changes in their physical or mental condition during their stay in the nursing facility sufficient to trigger the State’s duty under PASRR to evaluate Plaintiffs for their changed needs. 42 U.S.C. § 1396r(e)(7)(B)(iii); (Compl. ¶¶ 141, 151, 158, 175 and 208.) Plaintiffs allege that they have yet to receive these evaluations. (Compl. ¶¶ 137, 152, 161, 174, 186.)
The State’s reliance on Joseph S. v . Hogan, 561 F. Supp. 2d 280 ( E.D.N.Y. 2008) is misplaced. (State’s Mot. at 15.) While the court there found that the plaintiffs’ narrow PASRR claims were barred by limitations, the court’s dismissal was premised on the fact that none of the alleged illegal actions fell within the statutory period. Joseph S., 561 F. Supp. at 313-14. In contrast, Plaintiffs here have alleged illegal actions that occurred within the statutory time period that are part of the same continuing violation as illegal actions that occurred beyond the statutory period. Thus, Plaintiffs’ claims constitute an ongoing pattern of discrimination and continuing violations of federal law and should not be dismissed as untimely.
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C. Governor Perry is a Proper Defendant for Plaintiffs’ ADA and Rehabilitation Act Claims i. A suit against a state official in his official capacity meets the Title II “public entity” requirement The State argues that the ADA claim against Governor Perry should be dismissed
because he is not a “public entity” within the meaning of Title II. (State’s Mot. at 16.) Because Plaintiffs sued Governor Perry in his official capacity, however, he is properly considered a public entity under Title II. See Kentucky v. Graham, 473 U.S. 159, 165-66 (1985) (recognizing that “[o]fficial-capacity suits…generally represent only another way of pleading an action against an entity of which an officer is an agent.”) (internal citation omitted). An officialcapacity suit is, in all respects other than name, to be treated as a suit against the entity.7 Brandon v. Holt, 469 U.S. 464, 471-72 (1985).
Courts have repeatedly held that state officials may be sued in their official capacities under Title II of the ADA. See Carten v. Kent State Univ., 282 F.3d 391, 396 (6th Cir. 2002) (internal citation omitted) (A state official “may be held responsible in an official capacity for violating Title II, which by its terms applies only to ‘public entit[ies]’” even though the official does not represent the state for purposes of the Eleventh Amendment); Henrietta D. v. Bloomberg, 331 F .3d 261, 288 ( 2d Cir. 2003) (“We also cannot embrace the state defendant’s statutory claim that an individual sued in his or her official capacity under the doctrine of Ex
7 The State also argues that Governor Perry should be dismissed as to the Rehabilitation Act claim because he is not the recipient of federal financial assistance. (State’s Mot. at 17.) The argument similarly fails because Plaintiffs sued the Governor in his official capacity and there can be no question that the State of Texas receives federal financial assistance for the operation of its Medicaid program. (Compl. ¶ 8.)
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parte Young is not a ‘public entity’ subject to liability under the ADA.”); Glatts v. Lockett, No. 09-29, 2011 WL 772917, at *10 (W.D. Pa. Feb. 28, 2011) (permitting a Title II claim against state officials in their official capacities because “a suit against a [state] employee in his or her official capacity is simply another way of suing the employer, which, in this case . . . indisputably constitutes a ‘public entity’ within the ADA.”).
Congress incorporated the right to sue public officials in their official capacity into the ADA. Title II imposes obligations upon public entities but does not limit the proper defendants against whom a suit for injunctive relief should be brought. 42 U.S.C. § 12131(1). Title II incorporates the "remedies, procedures, and rights" of Section 504 of the Rehabilitation Act, which adopts the "remedies, procedures, and rights set forth in title VI of the Civil Rights Act of 1964." 42 U.S.C. § 12133 (ADA); 29 U.S.C. § 794a(a)(2) (Section 504). By the time Congress enacted Title II, courts had long entertained suits for injunctive relief against public officials in their official capacities to enforce Title VI and Section 504.8 By incorporating into Title II of the ADA the "remedies, procedures, and rights" of Section 504 and Title VI, Congress incorporated the right to sue government officials in their official capacities under Title II. Cf. Lorillard v.
8 For example, the Supreme Court has upheld claims against state officials in their official capacities under Section 504 prior to enactment of the ADA. See, e.g., Alexander v. Choate, 469 U.S. 287 (1985); Honig v. Students of Cat. Sch. for the Blind, 471 U.S. 148 (1985); Smith v. Robinson, 468 U.S. 992 (1984); Campbell v. Kntse, 434 U.S. 808 (1977). Circuit courts of appeals had also held that Ex parte Young suits were available to enforce Section 504. See, e.g., Lussier v. Dagger, 904 F.2d 661, 670 n. 10 (11th Cir. 1990) (“[O]f course, the Eleventh Amendment does not bar Lussier's claims for equitable relief under [§794] against defendants named in this case in their official capacities.” (citing Ex parte Young)); Brennan v. Stewart, 834 F.2d 1248, 1255, 1260 (5th Cir. 1988) (discussing Ex parte Young at length); Miener v. Missouri, 673 F.2d 969, 982 (8th Cir. 1982) (finding Ex parte Young inapplicable because relief sought was not prospective); Helms v. McDaniel, 651 F.2d 800, 806 n.10 (5th Cir. 1981) (citing Ex parte Young), cert denied, 455 U.S. 946 (1982). Other cases, while not making an express holding, routinely adjudicated Section 504 suits brought against government officials in their official capacities. See, e.g, S-l v. Turlington, 635 F.2d 342 (5th Cir. 1981), cert denied, 454 U.S. 1030 (1981); Baker v. Bell, 630 F.2d 1046 (5th Cir. 1980).
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Pons, 434 U .S. 575, 58 0-581 (1978) (Congress is presumed to incorporate existing judicial interpretations when it adopts a preexisting remedial scheme); Bragdon v. Abbott, 524 U.S. 624, 645 (1998) (same).
ii. The Eleventh Amendment does not immunize Governor Perry from Plaintiffs’ suit “[T]he Eleventh Amendment permits suits for prospective injunctive relief against state officials acting in violation of federal law." Frew v. Hawkins, 540 U.S. 431, 437 (2004). For this reason, “state officers, sued in their official capacities for prospective relief, are proper defendants under Title II of the [ADA] and are not immune [from suit] under the Eleventh Amendment.” McCarthy v. Hawkins, 381 F.3d 407, 410 (5th Cir. 2004). This follows from the Ex parte Young exception to the Eleventh Amendment, which provides that, “[i]n making an officer of the State a party defendant in a suit to enjoin the enforcement of an act alleged to be unconstitutional . . . such officer must have some connection with the enforcement of the act.” Ex parte Young, 209 U.S. 123, 157 (1908). While the Supreme Court has not further elaborated on the meaning of the phrase “some connection,” the Court has instructed that, “[i]n determining whether the doctrine of Ex parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a ‘straightforward inquiry into whether the complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.’” Verizon Md., Inc. v. Public Serv. Comm'n of Md., 535 U.S. 635, 645 (2002) (quoting Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 296 (1997)). Meyers v. Texas, 410 F.3d 236, 256 (5th Cir. 2005) (citing Home Telephone & Telegraph Co. v. City of Los Angeles, 227 U.S. 278 (1913); Ex parte Young, 209 U.S. 123 (1908)).
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Other courts have upheld claims against state officials, even if they do not directly administer the statute or program at issue. See Entertainment Software Ass’n v. Blagojevich, 469 F.3d 641, 645 ( 7th Cir. 2006) (rejecting argument that the Ex parte Young exception did not apply because the state official only had a “general connection” to enforcement of the act at issue and not a “specific connection”); Citizens for Equal Protection v. Bruning, 455 F .3d 859, 864 (8th Cir. 2006) (holding that the governor has “some connection” to the enforcement of a particular statute even though the statute does not require any affirmative enforcement by a state official). However, a general duty to uphold the law is not sufficient to establish “some connection” to enforcement of the statute at issue. See 1st Westco Corp. v. School Dist. Of Philadelphia, 6 F.3d 108, 115 (3rd Cir. 1993); Los Angeles County Bar Ass’n v. Eu, 979 F.2d 697, 704 (9th Cir. 1992).
In a case nearly identical to the present, Rolland v. Cellucci involved Massachusetts’ unnecessary institutionalization of individuals with developmental disabilities. 52 F. Supp. 2d 231, 243 (D. Mass. 1999). There, the court refused to dismiss the governor, even though he did not directly administer the State’s Medicaid program, because “[n]o case holds that the provision which empowers a single state agency to administer a state's Medicaid program was in any way promulgated with the intention of exonerating or limiting the liability of other governmental officials who fail to conform their required actions to federal law.” Id.
The State cites the plurality opinion in Okpalobi v. Foster, 244 F.3d 405, 426 (5th Cir. 2001) for the proposition that the Ex parte Young exception only applies if the state official is “specially charged” with the duty to enforce the action. (State’s Mot. at 12.) However, the Fifth
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Circuit Court of Appeals later clarified that the “specially charged” requirement in Okpalobi is not binding precedent and declined to adopt a standard requiring that the state official be “specially charged” with enforcement of the statute at issue. K.P. v. LeBlanc, 627 F.3d 115, 124 (5th Cir. 2010).
Based on the facts alleged in Plaintiffs’ complaint, Governor Perry is not immune from suit because he is sufficiently connected to ensuring the State’s compliance with the integration mandate of Title II of the ADA. (Compl. ¶¶ 22, 49, 133.) For example, in issuing a 2002 executive order, Governor Perry directed the Health and Human Services Commission (“HHSC”) to “review and amend state policies that impede” adults from moving out of institutions, and further charged the agency with implementing the Promoting Independence Plan, the State’s Olmstead plan. Exec. Order. RP 13 (Apr. 28, 2002); (Compl. ¶ 49). Further, Governor Perry is responsible for appointing the Commissioner of HHSC, and approves the appointment of the Commissioner of the Department of Aging and Disability Services (“DADS”), who together oversee the Texas Medicaid program and all services for individuals with developmental disabilities, including institutional services and community-based services. (Compl. ¶¶ 22-24.) He is also responsible for “ensuring that the State submits a State Medicaid Plan which conforms to federal law, and that the State’s Medicaid program is consistent with that plan, relevant federal statutes and regulations”. (Id. at ¶ 133.) Governor Perry serves as “the chief budget officer of the state,” TEX. GOV'T CODE § 401.041, and is responsible for seeking funds from the legislature to implement the programs and services of the executive agencies. (Compl. ¶ 22.) In this role, the Governor compiles the biennial budget appropriation and
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recommends expenditures to the legislature. TEX. GOV’T CODE §§ 401.0445, 316.021. Not permitting Plaintiffs to pursue their claims against Governor Perry in his official capacity when the Governor is necessary in order to obtain complete prospective injunctive relief – which may include particular budget allocations – would conflict with the purpose behind the Ex parte Young exception. See Meyers v. Texas, 410 F.3d 236, 256 ( 5th Cir. 2005) (“the purpose of the doctrine of Ex parte Young is to allow plaintiffs asserting federal law claims to circumvent the state's sovereign immunity from suit by suing state officers instead.” ) The Court should deny Governor Perry’s motion to dismiss, as he has the requisite connection to implementing and enforcing the ADA and the Rehabilitation Act in Texas.
iii. Plaintiffs have Article III standing to sue Governor Perry The State argues that the Governor should be dismissed for lack of Article III jurisdiction because he allegedly has no power to redress Plaintiffs’ asserted injuries, nor, the State alleges, could he have caused Plaintiffs’ injuries. (State’s Mot. at 9-10.) Notwithstanding the State’s claims, just as Governor Perry is not shielded by the Eleventh Amendment, Plaintiffs have alleged sufficient facts to support Article III standing to sue Governor Perry in his official capacity. To establish Article III standing, Plaintiffs must show that “(1) they have suffered an injury in fact, (2) a causal connection exists between the injury and challenged conduct, and (3) a favorable decision is likely to redress the injury.” Adar v. Smith, ___F.3d___, 2011 WL 1367493 (5th Cir. 2011), (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 –61(1992)). Further, the alleged injury must be “fairly ... trace[able] to the challenged action of the defendant,
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and not . . th[e] result [of] the independent action of some third party not before the court.” Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 41-42 (1976).
Plaintiffs’ unnecessary institutionalization (the injury) is “fairly traceable” to the complained-of conduct – failure to provide access to and sufficient community-based services. Injunctive relief against Governor Perry (and not some unnamed third party) will redress the injury. The State’s assertion that the Governor is powerless to redress this injury is erroneous as a matter of law. (See State’s Mot. at 10-12.)
The Governor appoints the Commissioner of HHSC and approves the two-year appointment of the Commissioner of DADS. TX GOV’T CODE §§ 531.005 and 531.007; (Compl. ¶¶ 22-24.). DADS and HHSC oversee the Texas programs and services for individuals with developmental disabilities that are directly at issue in this case. TX GOV’T CODE § 531.0055; (Compl. ¶¶ 22-24). Second, the Governor is responsible for submitting budgetary requests to the legislature that include appropriations for HHSC and DADS, including the community-based services to which Plaintiffs seek access. (Compl. ¶ 22.) Finally, the Governor and his office have taken direct action on the matters at issue in this case. For example, Governor Perry issued Exec. Order RP 13 (Apr. 18, 2002), which requires HHSC to undertake initiatives, including the development of a detailed plan, to increase the availability of community-based services and ordered that HHSC submit this plan to the Office of the Governor. Id.; (Compl. ¶ 49). Governor George W. Bush issued a similar order in 1999. E xec. Order GWB 99-02 (Sept. 28, 1999) ; (Compl. ¶ 48). By the exercise of his authority to control the administrators and to provide for the budget, the Governor has sufficient power to redress Plaintiffs’ injuries. See Rolland v.
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Cellucci, 52 F. Supp. 2d 231, 243 (D. Mass. 1999). The State bases its Article III argument on Okpalobi, where the court found that
Louisiana’s Governor and Attorney General were “impotent” because they had “no power to redress the asserted injuries” such that an injunction issued by the court would be “utterly meaningless”. 244 F.3d at 421, 426-27. The plaintiffs in Okpalobi were abortion providers in Louisiana and sought to enjoin the “operation and effect” of a Louisiana statute that provided unlimited private tort liability against doctors by patients for damages related to abortion procedures. Id. at 409. The court held that the doctors lacked Article III standing against the state officials because “no state official has any duty or ability to do anything” with respect to the statute at issue and thus ordered dismissal of the suit. Id. at 427. Unlike the officials in Okpalobi, Governor Perry is not powerless to redress Plaintiffs’ injuries, which derive from state programs and policies, state-funded nursing facility placements and state-funded communitybased services. These facts stand in stark contrast to the state officials’ total lack of power in Okpalobi over private litigation (medical malpractice) between private parties. Accordingly, this court should not dismiss Governor Perry for lack of Article III jurisdiction.
D. Enforcement of the Medicaid Act is Not Limited to the Secretary of the Department of Health and Human Services Plaintiffs seek, inter alia, to enforce various provisions of the Title XIX of the Social
Security Act (“Medicaid Act”), 42 U.S.C. § 1396, et seq.. (Compl. ¶¶ 225-38.) In response, the State contends that since the Medicaid Act was enacted pursuant to Congress’ spending powers, private actions are categorically foreclosed to potential plaintiffs. (State’s Mot. at 18-22.)
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Moreover, the State asserts that “[o]nly the Secretary9 can violate the Act” by failing to withhold federal funding assistance to a state for their noncompliance. Id. at 22. The State’s analysis is incorrect.
The Supreme Court has made clear that enforcement of legislation enacted pursuant to Congress’ spending powers is not necessarily limited to a federal government action to terminate funds and that individuals may bring an enforcement action through 42 U.S.C. § 1983 under certain circumstances.10 Blessing v. Freestone, 520 U.S. 329, 340-41 (1997) (federal powers to “audit and cut federal funding” are insufficient to foreclose section 1983 remedies); Gonzaga Univ. v. Doe, 536 U.S. 273, 280 (2002). See also Wright et. al. v. Roanoke Redevelopment and Housing Auth., 479 U.S. 418, 428 (1987) (The “authority . . . [to] cut off federal funds . . . [is] insufficient to indicate a co ngressional intention to foreclose § 1983 remedies.”); Wilder v. Virginia Hosp. Ass’n, 496 U .S. 498, 522 (1987) (The authority to curtail federal funds is not “sufficiently comprehensive to demonstrate a congressional intent to withdraw the private remedy of § 1983.”). The Fifth Circuit has similarly addressed this issue. See, e.g., Johnson v. Housing Auth. of Jefferson Parish, 442 F.3d 356, 365-66 (5th Cir. 2006) (holding that HUD’s authority to withhold funds from violators of the National Housing Act did not foreclose a section 1983 private remedy); Cf. S.D. v. Hood, 391 F.3d 581, 602-06 (5th Cir. 2004) (holding
9 The Secretary of the Department of Health and Human Services is authorized to withhold federal financial assistance to states who she finds are not compliant with provisions of the Medicaid Act. See 42 U.S.C. § 1396c. 10 In Blessing, the Supreme Court set forth a three-prong test for determining if Congress intended to create a right under section 1983: (1) “Congress must have intended that the provision in question benefit the plaintiff[,]” (2) the right protected by the provision must not be “so ‘vague and amorphous’ that its enforcement would strain judicial competence[,]” and (3) the provision must “unambiguously impose a binding obligation on the States.” 520 U.S. at 340-41. See also Gonzaga, 536 U.S. at 283.
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that the EPDST provision of the Medicaid Act gives rise to section 1983 remedies). Contrary to the State’s contention that section 1983 actions are unavailable solely
because the Medicaid Act is spending clause legislation, remedies under section 1983 may only be categorically foreclosed if Congress expressly “forb[ids] recourse to § 1983 in the statute itself or impliedly by creating a comprehensive enforcement scheme that is incompatible with individual § 1983 e nforcement . . . .” Blessing, 520 U.S. at 341 (citing Livados v. Bradshaw, 512 U.S. 107, 133 (1994)). Nothing in the Medicaid Act expressly forecloses section 1983 remedies, and the Supreme Court has held that there is no “comprehensive enforcement scheme incompatible with individual enforcement” incorporated therein. See Wilder, 496 U .S. at 521; See generally S.D., 391 F .3d at 602-06 (holding that a private section 1983 right of action is available to enforce provisions of the Medicaid Act).
Since the Medicaid Act neither expressly nor impliedly forbids section 1983 remedies, Plaintiffs have recourse thereto if they can show that their claims satisfy the Blessing/Gonzaga three-factor test.
CONCLUSION For the reasons stated above, the United States respectfully submits that this Court deny Defendants’ motion to dismiss Plaintiffs’ Complaint. Should it be helpful to the Court, counsel for the United States will be present and prepared to argue the present Statement at any upcoming hearings.
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JOHN E. MURPHY U.S. Attorney for the Western District of Texas
/s/ John F. Paniszczyn JOHN F. PANISZCZYN John.paniszczyn@usdoj.gov Texas Bar No. 15443855 Assistant United States Attorney United States Attorney’s Office 601 NW Loop 410, Suite 600 San Antonio, Texas 78216 Telephone: (210) 384-7325 Facsimile: (210) 384-7312

Respectfully submitted,
THOMAS E. PEREZ Assistant Attorney General
SAMUEL R. BAGENSTOS Principal Deputy Assistant Attorney General Civil Rights Division
JOHN WODATCH Acting Deputy Assistant Attorney General Civil Rights Division
ALISON N. BARKOFF, Special Counsel Olmstead Enforcement
/s/ Regan Rush RENEE M. WOHLENHAUS, Acting Chief KATHLEEN WOLFE, Acting Special Legal Counsel REGAN RUSH, Trial Attorney D.C. Bar No. 980252* Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 307-0663 Facsimile: (202) 307-1197 regan.rush@usdoj.gov
Counsel for the United States
*Admission pro hac vice pending

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CERTIFICATE OF SERVICE
I hereby certify that on May 18, 2011, a copy of the foregoing was filed electronically. Notice of this filing will be sent by e-mail to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s CM/ECF System.
/s/ Regan Rush REGAN RUSH Trial Attorney D.C. Bar No. 980252 Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 307-0663 Facsimile: (202) 307-1197 regan.rush@usdoj.gov
Counsel for United States

 Case 5:10-cv-01025-OLG Document 53 Filed 06/22/11 Page 1 of 16

20\\ JUN 22 PH 1,: 40

IN THE UNITED STATES DISTRICT COURT

. ~

FOR T~:;'E~~:~~~~~JO~F TEXAS r";~L~CJ:t;tl-~':;

ERIC STEWARD, by his next friend

)

and mother, Lillian Minor, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

)

)

RICK PERRY, Governor, et al.

)

)

Defendants.

)

----------------------------------------------------------)

CIV. NO. 5:1O-CV-1025-0LG

PARTIAL CONSENT MOTION BY THE UNITED STATES OF AMERICA TO INTERVENE AND MEMORANDUM IN SUPPORT THEREOF

The United States of America respectfully requests that this Court grant its

intervention as of right as a plaintiff in this action, pursuant to Federal Rule of Civil

Procedure 24(a)(2) or, alternatively, permissive intervention pursuant to Federal Rule of

Civil Procedure 24(b). As grounds in support thereof, the United States states as follows:

1. The United States' Motion to hitervene is timely because the litigation is in its

early stages. The Defendants' Partial Motion to Dismiss and the Plaintiffs' Motion for

Class Certification are pending, and the United States' intervention will not create any

delay. Thus, intervention by the United States at this juncture will not prejudice the

existing parties.

2. The United States has a substantial legal interest in the subject matter of the action

because it involves claims asserted under Title II of the Americans with Disabilities Act

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Case 5:10-cv-01025-OLG Document 53 Filed 06/22/11 Page 2 of 16

of 1990 and Section 504 of the Rehabilitation Act of 1973. The United States Department of Justice is the agency with primary regulatory and enforcement responsibilities under Title II of the ADA and,· as such, plays a unique role in enforcing and interpreting the statute and its implementing regulations on behalf of the broad public interest. It also has a significant interest in enforcing the Supreme Court case,
Olmstead v. L. c.; 527 U.S. 58J (1999), which held that unnecessary institutionalization
ofindividuals with disabilities violates the Americans with Disabilities Act and Section 504 of the Rehabilitation Act. 3. Disposition of the action without the United States' participation may impede its enforcement and regulatory interests. Because there are not many cases interpreting Olmstead, the outcome of this case implicates stare decisis concerns that warrant the United States' intervention. 4. The United States' interests are not adequately protected by the existing parties to the litigation. Because the United States represents the public interest on a national scale, its interests differ from those represented by private Plaintiffs. 5. The United States also satisfies the requirements for permissive intervention because the action involves the interpretation of statutes that the Attorney General is entrusted by Congress to administer. See Fed. R. Civ. P. 24(b)(2). 6. Pursuant to Local Rule CV7(h), counsel for the United States conferred with counsel for the parties concerning the United States' Motion to Intervene~ Counsel for Defendants indicated that the Defendants do not consent to the United States' request for

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intervention. Counsel for Plaintiffs indicated that the Plaintiffs consent to the United States' Motion to Intervene. 7. As further support for this Motion, the United States respectfully directs the Court to the following Memorandum of Law, which is attached hereto and incorporated herein by reference.
MEMORANDUM OF LAW IN SUPPORT OF UNITED STATES' MOTION TO INTERVENE
INTRODUCTION The United States files this Memorandum in Support of its Motion to Intervene to remedy violations of the State of Texas' obligations under Title II of the Americans with Disabilities Act ("Title II" and "ADA"), 42 U.S.C. §§ 12131-12134, and Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 et seq.! The proposed Complaint in Intervention alleges that the State of Texas unnecessarily segregates individuals with developmental disabilities in nursing facilities and places them at risk of placement therein. (See United States' Complaint in Intervention, attached as Exhibit 1.) Congress enacted the ADA in 1990 "to provide a clear and comprehensive mandate for the elimination of discrimination against individuals with disabilities." 42
1 Title II was modeled closely on Section 504 ofthe Rehabilitation Act of 1973,29 U.S.C. § 794, which prohibits discrimination on the basis of disability in federally-conducted programs and in all ofthe operations of public entities that receive federal financial assistance. The ADA and Section 504 of the Rehabilitation Act are generally construed to impose the same requirements. See Kemp v. Hdlder,610 F.3d 231,234-35 (5th Cir. 2010). This principle follows from the similar language employed in the two acts. It also derives from the Congressional directive that implementation and interpretation ofthe two acts "be coordinated to prevent [ ] imposition of inconsistent or conflicting standards for the same requirements under the two statutes." Baird ex reI. Bairdv. Rose, 192 F.3d 462, 468-9 (4th Cir. 1999)(citing 42 U.S.C. § 12117(b»(alteration in original). See also Yeskey v. Com. ofPenn. Dep't ofCorrections, 118 FJd 168, 170 (3d Cir. 1997) ("[AlII the leading cases take up the statutes together, as we will."), aff'd, 524 U.S. 206 (1998).
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U.S.C. § 12101(b)(l). As Congress stated in the Findings and Purposes ofthe ADA, "historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvementsj such forms ofdiscrimination against individuals with disabilities continue to be a serious and pervasive social problem." 42 U.S.C. § 12101(a)(2). For these reasons, Congress prohibited discrimination against individuals with disabilities by public entities, including discrimination in the form of segregation.
Olmsteadv. I.e., 527 U.S. 581, 588 (1999).
Congress sought "clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities," 42 U.S.C. § 12101(b)(2), and explicitly stated that one ofthe purposes ofthe ADA was "to ensure that the Federal Government plays a central role in enforcing the standards established [in the Act] on behalf of individuals with disabilities ...." 42 U.S.C. § 12101(b)(3). The United States' prominent enforcement role is reflected in the statutory authorization given the Attorney General to commence a legal action when discrimination prohibited by the ADA takes place. 42 U.S.C. § 12133.
The Department of Justice ("Department") thus has a unique role in enforcing and interpreting Title II and its implementing regulations on behalf of the broad public interest. This case directly implicates the United States' interest in enforcing Title II of the ADA and the Department's goal of ensuring that the integration mandate of Olmstead is met. The United States also has a substantial interest in ensuring that recipients of federal financial assistance, such as the State of Texas, do not violate Section 504 of the Rehabilitation Act's similar prohibition of disability discrimination.
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The private lawsuit was filed on December 20,2010. The individually named plaintiffs seek to represent a statewide class of approximately 4,500 Medicaid-eligible individuals over twenty-one years of age with developmental disabilities who currently or will in the future reside in nursing facilities or who are being, will be, or should be screened for admission to nursing facilities under 42 U.S.C.§ 1396r(e)(7) and 42 C.F.R. § 483.112 et seq. (collectively, "Plaintiffs"). The State's failure to provide services in the most integrated setting appropriate to the individuals' needs leaves Plaintiffs with no choice but to remain unnecessarily in nursing facilities or at risk of such segregation in order to receive necessary services, in violation of the ADA and Section 504 of the Rehabilitation Act. See Olmstead, 527 U.S. at 607. The State, despite having an array of community-based services for individuals with developmental disabilities, has not given nursing facility residents with developmental disabilities a reasonable opportunity to have their needs met for residential and habilitation services in the community rather than in a nursing facility. The United States has a significant interest in this matter and therefore respectfully requests intervention as a plaintiff.
On January 6, 2010, Plaintiffs filed a Motion for Class Certification. On February 23,2011, the parties filed a Joint Motion for Protective Order and on March 8, 2011, Defendants moved for partial dismissal of Plaintiffs' Complaint. These motions remain pending. The Court has not entered a scheduling order and accordingly, discovery has not commenced and the proceedings are at an early stage.
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ARGUMENT Rule 24 of the Federal Rules of Civil Procedure provides for two means by which an applicant may intervene in an action: intervention of right, governed by subsection (a), and permissive intervention, governed by subsection (b). As discussed below, the United States satisfies both standards. A. Intervention of Right Fed. R. Civ. P. 24(a)(2) provides that upon timely application, anyone shall be permitted to intervene in an action: When the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties. As construed by the Fifth Circuit, an applicant for intervention of right is entitled to intervention of right when: (1) the motion to intervene is timely; (2) the potential intervener asserts an interest that is related to the property or transaction that forms the basis of the controversy in the case into which she seeks to intervene; (3) the disposition of the case may impair or impede the potential intervener's ability to prote.ct her interest; and (4) the existing parties do not adequately represent the potential intervener's interest. Doe v. Glickman, 256 F.3d 371,375 (5th Cir. 2001); Sierra Club v. Espy, 18 F.3d 1202, 1204-05 (5th Cir. 1994); Stallworth v. Monsanto Co., 558 F.2d 257, 263 (5th Cir. 1977). The courts apply this standard flexibly, "focus[ing] on the particular facts and circumstances surrounding each application." Edwards v. City ofHouston, 78 F.3d 983, 999 (5th Cir. 1996). The United States' intervention request satisfies the requirements of Rule 24(a)(2).
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1. The United States' Motion for Intervention is Timely The Fifth Circuit Court of Appeals has identified several factors relevant to determining whether a request for intervention is timely:
(1) How long the potential intervener knew or reasonably should have known of her stake in the case into which she seeks to intervene; (2) the prejudice, if any, the existing parties may suffer because the potential intervener failed to intervene when she knew or reasonably should have known of her stake in the case; (3) the prejudice, if any, the potential intervener may suffer if the court does not let her intervene; and (4) any unusual circumstances that weigh in favor of or against a finding of timeliness. Glickman, 256 FJd at 376; Sierra Club, 18 FJd at 1205; Stallworth, 558 F.2d at 264·66. The Supreme Court has emphasized that "[t]imeliness is to be determined from all the circumstances." NAACP v. New York, 413 U.S. 345, 366 (1973); see also Edwards, 78 FJd at 1000; Diaz v. Southern Drilling Corp., 427 F.2d 1118, 1125-26 (5th Cir.1970) (motion to intervene more than a year after the action was commenced was timely when there had been no legally significant proceedings other than the completion of discovery and intervention would not cause any delay in the process of the overall litigation). Timeliness is not based on an absolute measure, nor is it a tool to punish the tardy wouldbe intervenor. Sierra Club,18 FJd at 1205. Where the original parties will not be prejudiced and "greater justice could be attained," federal courts should allow intervention. Id Applying these factors to the instant case, the United States' application for intervention is timely. The United States' intervention will not cause any prejudice through delay of the proceedings. Since the filing of the initial complaint in December 2010, the Court has not entered a scheduling order, discovery has not begun and
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Plaintiffs' Motion for Class Certification, Defendants' Partial Motion to Dismiss and the parties' Joint Motion for a Protective Order are currently pending. The United States already filed a Statement of Interest with regard to the Defendants' Partial Motion to Dismiss and does not seek to participate in the briefing of any other currently pending motion. In addition, the United States' proposed Complaint in Intervention does not expand the. claims already pending in this litigation.2 The parties cannot be prejudiced as a result of the United States' intervention.
While the existing parties to the litigation will not be prejudiced by the United States' intervention, the United States will be prejudiced if its request for intervention is denied. Its interests in enforcing Title II of the ADA and the integration mandate will undoubtedly be impaired if it is not permitted to intervene in this action. Moreover, the Department's extensive experience with the statutes at issue will benefit the existing parties in presenting facts and arguments that will help frame the issues. By avoiding multiple lawsuits and coordinating discovery, intervention will lend efficiency to the proceedings.
2. The United States has a Substantial Legal Interest in this Litigation A party seeking intervention of right must also show a "direct, substantial, legally protectable interest in the proceedings." Edwards, 78 FJd at 1004 (quoting New Orleans Pub. Servo Inc., V. United Gas Pipe Line Co., 732 F. 2d 452, 463 (5th Cir. 1984) (en bane). The Fifth Circuit Court of Appeals has recognized the interest of public entities
2 The United States' Complaint in Intervention names the State of Texas as a Defendant in this case. While not currently a Defendant, there is no question that the State of Texas may be joined as a Defendant by the United States because the right to relief asserted against the State and the existing Defendants (state officials sued in their official capacities) is joint and several and contains common questions oflaw and fact in compliance with Fed. R. Civ. P. 20(a)(2).
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and· government agencies in enforcement of their respective statutes when granting intervention as of right. See, e.g., Heaton v. Monogram Credit Card Bank, 297 FJd 416, 424 (5th Cir. 2002) (allowing intervention as of right to the Federal DepositInsurance Corporation because it has a broader interest in protecting the proper and consistent application of the Federal Deposit Insurance Act); Sierra Club v. City ojSanAntonio, 115 FJd 311, 314 (5th Cir. 1997) (intervention as of right 'granted to State of Texas to protect State's interests in environmental lawsuit in part because the Attorney General has an exclusive right to represent state agencies and the State has an important interest in enforcing the Edwards Aquifer Act); Ceres Gulfv. Cooper, 957 F.2d 1199, 1202-04 (5th Cir. 1992) (allowing intervention as of right to the director of Office of Workers' Compensation Programs because the director has jurisdiction over claims under the Longshore and Harbor Workers' Compensation Act).
The United States has a direct, substantial and legally protectable interest in this litigation. As·the federal agency with primary regulatory and enforcement responsibilities under Title II of the ADA, the Department has significant interests in enforcing and interpreting Title II and ensuring that the integration mandate of Olmstead is met. Olmstead, 527 U.S. at 607. Accordingly, the Department has recently brought, intervened in, or participated as an amicus or an interested party in Olmstead litigation in sixteen different states.
Congress sought "clear, strong, consistent and enforceable standards addressing discrimination against individuals with disabilities,"42 U.S.C. § 12101 (b)(2), and explicitly stated that one of the purposes of the ADA was "to ensure thatthe Federal
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Government plays a central role·in enforcing the standards established [in the Act] on behalf of individuals with disabilities ...." 42 U.S.C. § 12101(b)(3). Similarly, the Department has the authority to coordinate the implementation and enforcement of Section 504 of the Rehabilitation Act. Exec. Order No. 12,250, Leadership and Coordination ojNondiscrimination Laws, 3 C.F;R. 298 (1980), reprinted in 42 U.S.C. § 2000d-l, note. The central issues of this case are critical to the Department's efforts to advance national goals of community integration and enforce the civil rights of persons with disabilities. Thus, the United States' interest in the pending litigation merits intervention as of right.
3. Intervention is Necessary to Protect the United States' Interest The United States' ability to protect its substantial legal interest would be impaired absent intervention. Because the ADA is a relatively young statute, federal decisions interpreting and applying the provisions of the Act are an important enforcement tool. Further, because there has not been significant case law under the Supreme Court's decision in Olmstead, an unfavorable disposition of this case may, as a practical matter, impair the United States' ability to enforce the ADA's integration mandate. The outcome of this case, including the potential for appeals by existing parties, implicates stare decisis concerns that warrant the United States' intervention. See Atlantis Dev. Corp. v. United States, 379 F.2d 818,829 (5th Cir. Fla. 1967) (recognizing that potential for a negative stare decisis effect may "supply that practical disadvantage which warrants intervention of right"); Sierra Club, 18 FJd at 1207 (quoting Ceres Gulf, 957 F.2d at 1204) (impairment of an intervener's interest includes ''the stare decisis
10

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effect of the district court's judgment"); see also United States v. City ofLos Angeles, Cal., 288 FJd 391, 400 (9th Cir. 2002) (holding that amicus curiae status may be insufficient to protectthe rights of an applicant for intervention "because such status does not allow [the applicant] to raise issues or arguments fonnally and gives it no right of appeal"). As such, intervention is necessary to protect the United States' substantial interest in this litigation.
4. The United States' Interest is Inadequately Represented by Existing Parties
The final requirement for intervention as a matter of right is that the interest is inadequately represented by the existing parties to the litigation. The applicant for intervention bears the burden of demonstrating inadequate representation. See Hopwood v. Texas, 21 FJd 603, 605 (5th Cir. 1994). This burden is "minimal," however, and is satisfied ifthe applicant shows that representation of his interest "may be" inadequate. Sierra Club, 18 FJd at 1207 (quoting Trbovich v. United Mine Workers ofAm., 404 U.S. 528,538 n. 10 (1972).
The existing parties to this litigation cannot adequately represent the United States'interests. Only the Attorney General can attend to the interests of the United States. 28 U.S.C. § 517 ("[t]he Solicitor General, or any officer of the Department of Justice, may be sent by the Attorney General to any State or district in the United States to attend to the interests of the United States in a suit pending in a court of the United States, or in a court of a State, or to attend to any other interest of the United States.")
In this case, the United States' interest is in enforcing the ADA and Section 504 of the Rehabilitation Act to advance the public interest in eliminating discrimination in
11

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the form of unjustified institutionalization. The private Plaintiffs cannot and do not represent the United States' views on the proper interpretation and application of Title II and Section 504 of the Rehabilitation Act. As the Ninth Circuit recognized in a case allowing private parties to intervene alongside government agency defendants, "[t]he interest of gpvemment and the private sector may diverge.'; Southwest Center for Biological Diversityv. Berg, 268FJd 810, 82J(9thCir. 2001); see also Sanjuan County v. U.S., 503 FJd 1163, 1228 (10th Cir. 2007); Scotts Valley Band a/Porno Indians ofthe Sugar Bowl Rancharia v. United States, 921 F.2d 924, 926-27 (9th Cir. 1990) (recognizing that city government's interest could not be adequately represented by another entity).
B. Permissive Intervention Rule 24(b) of the Federal Rules of Civil Procedure provides an alternative basis for the United States' intervention in this action. Fed. R. Civ. P. 24(b)(l)(B) states, in relevant part: On timely motion, the court may permit anyone to intervene who ... has a claim or defense that shares with the main action a common question of law or fact. Additionally, the Rule provides that a federal officer or agency may be permitted to intervene, upon timely motion, in an action if an existing party's claim or defense is based upon "a statute or executive order administered by the officer or agency; or ... any regulation, order, requirement or agreement issued or made under the statute or executive order." Fed. R. Civ. P. 24(b)(2). For all requests for permissive intervention, the "court must consider whether the intervention will
12

Case 5:10-cv-01025-OLG Document 53 Filed 06/22/11 Page 13 of 16
unduly delay or prejudice the adjudication of the original parties' rights." Fed. R. Civ. P. 24(b)(3). The United States should be granted permissive intervention pursuant to Rule 24(b)(1) and (2).
As discussed above in conjunction with the Rule 24(a) analysis, the United States' application for intervention in this litigation is timely and the United States' participation would neither unduly delay the proceedings nor prejudice the adjudication of the rights of the original parties. Additionally, the United States' claims against the Stateof Texasnamely, that the State unnecessarily segregates individuals with developmental disabilities in nursing facilities and places them at risk of placement therein-share common questions of law and fact with the private Plaintiffs' claims.
Additionally, Federal Rule of Civil Procedure 24(b)(2) permits intervention by a government agency if a party's claim is based on a statute administered by the agency. See Fed. R. Civ. P. 24 Advisory Committee Notes on the 1946 Amendments (explaining that subsection (b) was amended in 1946 to include explicit reference to governmental agencies and officers in order to avoid exclusionary construction ofthe rule, and citing, with approval, cases in which governmental entities were permitted to intervene). As the agency tasked with enforcing Title II of the ADA, the Department's intervention falls squarely within the language of Rule 24(b)(2). See, e.g., Disability Advocates, Inc. v. Paterson, No. 03-3209, 2009 WL 4506301, at *2 (E.D.N.Y. Nov. 23, 2009) (permitting intervention by the United States under Fed. R. Civ. P. 24(b)(2) in an action based on Title II's integration mandate). Accordingly, the United States meets the requirements for permissive intervention.
13

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CONCLUSION For the foregoing reasons, the Court should grant the United States' Motion to Intervene and order its intervention in this action (i) as a matter of right pursuant to Rule 24(a)(2) of the Federal Rules of Civil Procedure or, in the alternative, (ii) permissively pursuant to Rule 24(b) of the Federal Rules of Civil Procedure. A proposed order and Complaint in Intervention accompany this memorandum.
Local Rule CV-7(b) Certification Pursuant to Local Rule CV-7(h), counsel for the United States conferred with counsel for both parties, who indicated that the Defendants oppose the relief requested in this motion and the Plaintiffs consent to the relief requested in this Motion.
gan Rush, rial tto isability Rights Sectl Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 307-0663 Facsimile: (202) 307-1197 Regan.Rush@usdoj.gov
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Case 5:10-cv-01025-OLG Document 53 Filed 06/22/11 Page 15 of 16

Dated: June 22, 2011

Respectfully submitted,
THOMAS E. PEREZ Assistant Attorney General
SAMUEL R. BAGENSTOS Principal Deputy Assistant Attorney General
JOHN WODATCH Acting Deputy Assistant Attorney General
ALISON BARKOFF Special Counsel for Olmstead Enforcement Civil Rights Division
A ISON NICHOL, CH' f HLEEN WOLFE, Actin
Counsel RENEE M. WOHLENHAUS, Deputy Chief REGAN RUSH, Trial Attorney D.C. Bar No. 980252* Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 305-1321 Facsimile: (202) 307-1197 Regan.Rush@usdoj.gov
Counsel for Plaintiffs-Intervener United States ofAmerica
*Admitted pro hac vice

15

Case 5:10-cv-01025-OLG Document 53 Filed 06/22/11 Page 16 of 16

CERTIFICATE OF SERVICE
I hereby certify that on Junel2, 2011, a copy of the foregoing was sent via U.S. Mail to the following:

Garth A. Corbett Sean A. Jackson Advocacy Inc. 7800 Shoal Creek Blvd., #171~E Austin, Texas 78757
Yvette.Ostolaza Robert Velevis Casey A. Burton Weil, Gotshal & Manges 200 Crescent Court- Suite 300 Dallas, Texas 75201
Steven J. Schwartz 1. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060
Nancy Juren Assistant Attorneys General General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548.

'.
Re an Rush, Trial Atto,.......~ is bility Rights Section
Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 307-0663 Facsimile: (202) 307-1197 Regan.Rush(@,usdoj.gov

16

 Case 5:10-cv-01025-OLG Document 56 Filed 07/19/11 Page 1 of 26

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

§

v.

§

§

RICK PERRY, Governor of the State of Texas, §

THOMAS SUEHS, Executive Commissioner §

of the Texas Health and Human Services

§

Commission, CHRIS TRAYLOR,

§

Commissioner of the Texas Department

§

of Aging and Disability Services,

§

Defendants

§

Case No. 5:10-CV-1025

DEFENDANTS’ RESPONSE IN OPPOSITION TO THE UNITED STATES’ MOTION TO INTERVENE

GREG ABBOTT Attorney General of Texas
DANIEL T. HODGE First Assistant Attorney General
BILL COBB Deputy Attorney General for Civil Litigation
DAVID MATTAX Director of Defense Litigation
ROBERT B. O’KEEFE Chief, General Litigation Division

NANCY K. JUREN Assistant Attorney General Attorney in Charge Texas Bar No. 11059300 DARREN G. GIBSON Assistant Attorney General Texas Bar No. 24068846 AMANDA J. COCHRAN-MCCALL Assistant Attorney General Texas Bar No. 24069526 ERIKA KANE Assistant Attorney General Texas Bar No. 24050850 ERIC VINSON Assistant Attorney General Texas Bar No. 24003115 General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 Phone No.: (512) 463-2120 Fax No.: (512) 320-0667
Attorneys for Defendants

Case 5:10-cv-01025-OLG Document 56 Filed 07/19/11 Page 2 of 26
TABLE OF CONTENTS
INTRODUCTION ...........................................................................................................................1 ARGUMENTS AND AUTHORITIES............................................................................................4 I. The United States May Not Intervene Under Any Part of Rule 24 Because It
Failed to Satisfy Statutory Prerequisites to Suit .................................................................5 A. Prerequisites to DOJ suit to enforce Title II of the ADA and
the Rehab Act.........................................................................................................5 B. DOJ failed to meet the statutory prerequisites to suit ............................................7
1. DOJ failed to give Texas adequate notice..................................................7 2. DOJ’s determination that Texas’s compliance could not be
secured by voluntary means is baseless .....................................................9 II. The United States is Not Entitled to Intervene as a Matter of Right Under Rule 24(a)......10
A. Standard for intervention as a matter of right under Rule 24(a) ..........................10 B. The United States’ “interest” in this matter is not one contemplated by
Rule 24(a).............................................................................................................10 C. The United States’ intervention is not necessary to protect its interest
in this matter ........................................................................................................12 D. The existing parties adequately represent any legitimate DOJ interest ...............13 III. The United States is Not Entitled to Permissive Intervention Under Rule 24(b) ...............16 A. Standard for permissive intervention Under Rule 24(b) ......................................16 B. The Court should deny the United States permissive intervention ......................17 IV. The United States’ Motion to Intervene improperly seeks to join the State of Texas,
a non-party to this suit.....................................................................................................19 CONCLUSION ..............................................................................................................................20

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

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TABLE OF AUTHORITIES
CASES Barnes v. Gorman, 536 U.S. 181 (2002) ........................................................................................ 5 Bush v. Viterna, 740 F.2d 350 (5th Cir. 1984)......................................................................... 13, 16 Ceres Gulf v. Cooper, 957 F.2d 1199 (5th Cir. 1992) ................................................................... 11 Diaz v. So. Drilling Corp., 427 F.2d 1118 (5th Cir. 1970) .............................................................10 Disability Advocates, Inc. v. Paterson , No. 03-CV-3209 (E.D. NY 2009) ................................. 13 Edwards v. City of Houston, 78 F.3d 983 (5th Cir. 1996) ............................................................ 11 EEOC v. Philip Servs. Corp., 635 F.3d 164 (5th Cir. 2011)......................................................... 18 EEOC v. Waffle House, Inc., 534 U.S. 279 (2002)....................................................................... 12 Heaton v. Monogram Credit Card Bank, 297 F.3d 416 (5th Cir. 2002) ....................................... 11 In re Enron Corp. Sec., Derivative & “ERISA” Litig., 229 F.R.D. 126 (S.D. Tex. 2005)........... 17 Ingalls Shipbuilding Div., Litton Sys., Inc., v. White, 681 F.2d 275 (5th Cir. 1982) ..................... 11 Internat’l Tank Terminals, Ltd. v. M/V Acadia Forest, 579 F.2d 964 (5th Cir. 1978) ................. 13 Jones v. Arnold, No. 09-CV-1170 (M.D. Fla. 2010) .................................................................... 13 Kneeland v. Nat’l Collegiate Athletics Ass’n, 806 F.2d 1285 (5th Cir. 1987).............................. 17 New Orleans Pub. Serv., Inc. v. United Gas Pipeline Co., 732 F.2d 452 (5th Cir. 1984)............ 17 Okpalobi v. Foster, 244 F.3d 405 (5th Cir. 2001) -------------------------------------------------------- 19
Olmstead v. L.C., 527 U.S. 581 (1999)........................................................................................... 2 Pennhurst State Sch v. Hosp. v. Halderman, 465 U.S. 89 (1984) .................................................19 San Juan County v. U.S, 503 F.3d 1163 (10th Cir.2007) .............................................................. 16

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

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Scotts Valley Band of Pomo Indians of the Sugar Bowl Rancharia v. U.S 921 F.2d 924 (9th Cir.1990) .................................................................................. 15
SEC v. Stanford Int'l Bank, Ltd., 2011 WL 1758763 (5th Cir. June 20, 2011) ............................ 19 Sierra Club v. City of San Antonio, 115 F.3d 311 (5th Cir. 1997) ................................................ 11 Sierra Club v. Espy, 18 F.3d 1202 (5th Cir. 1994) ........................................................................ 10 Smith v. City of Philadelphia, 345 F.Supp.2d 482 (E.D. Penn. 2004)........................................ 5, 6 Southwest Ctr. for Biological Diversity v. Berg, 268 F.3d 810 (9th Cir. 2001) .............................15 Stallworthv. Monsanto Co., 558 F.2d 257, 269 (5th Cir. 1977) ................................................... 16 Taylor Communs. Group, Inc. v. Southwestern Bell Tel. Co., 172 F.3d 385 (5th Cir. 1999)....... 19 Thompson v. Boggs, 33 F.3d 847 (7th Cir. 1994) ......................................................................... 20 U.S. v. Arkansas, No. 4:10CV00327 JLH,
2011 WL 251107 (E.D. Ark. Jan. 24, 2011)............................................... 5, 6, 7, 9 United States v. Fountain View Apts., Inc., 2009 WL 1905046 (M.D. Fla.) ................................ 12 FEDERAL STATUTES 29 U.S.C. § 794a(a)(2) ................................................................................................................ 1, 5 42 U.S. C. §1396, et seq. .............................................................................................................1, 2 42 U.S.C. §§ 10801-10851 (1994 & Supp. V 1999)..................................................................... 14 42 U.S.C. § 12101, et seq................................................................................................................ 1 42 U.S.C. § 12131, et seq........................................................................................................ 1, 2, 5 42 U.S.C. §§ 15041-15045 ........................................................................................................... 15 42 U.S.C. § 2000d-1 ................................................................................................................. 5, 18 42 U.S.C. 2000d et seq.................................................................................................................... 5 42 U.S.C. 2000e-5........................................................................................................................... 5 45 U.S.C. §§ 1386.19, .20 (DD Act)............................................................................................. 15

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

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FEDERAL RULES
42 C.F.R. § 51.5(a)........................................................................................................................ 14
FED. R. CIV. P. 24(a) ................................................................................................. 4, 5, 10, 11, 12
FED. R. CIV. P. 24(b) ................................................................................................. 4, 5, 16, 17, 18
OTHER AUTHORITIES
Tex. Gov. Exec. Order No. DB-33, 2 Tex Reg. 3713 (1977). ...................................................... 15
WEB LINKS
http://www.ada.gov/olmstead/documents/virginia_findings.pdf (DOJ letter to Governor Robert McDonnell of Virginia dated February 2, 2011)
http://www.ada.gov/olmstead/documents/delaware_findings.pdf (DOJ letter to Delaware Governor Jack Markell dated November 9, 2010).
http://www.ada.gov/olmstead/documents/new_hampshire_findings.pdf (DOJ letter to New Hampshire Attorney General, Michael A. Delaney dated April 7, 2011)
http://www.justice.gov/opa/pr/2011/June/11-crt-825.html (“Announcement [of Steward Intervention] Comes on the 12th Anniversary of the Olmstead Decision”)
http://www.ada.gov/olmstead (“Olmstead: Community Integration for Everyone”)
http://www.ada.gov/ (“Olmstead: Community Integration for Everyone”)
http://www.ada.gov/olmstead/q&a_olmstead.htm (new ADA/Olmstead guidelines)
http://www.ada.gov/olmstead/olmstead_cases_list2.htm#amicus (“Participation by the United States in Olmstead Cases”)
http://www.disabilityrightstx.org/who-we-are (Disability Rights Texas website)
http://www.lrl.state.tx.us/scanned/govdocs/Dolph%20Briscoe/1977/DB-33A.pdf. (Tex. Gov. Exec. Order No. DB-33, 2 Tex. Reg. 3713 (1977)

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

iv

Case 5:10-cv-01025-OLG Document 56 Filed 07/19/11 Page 6 of 26

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

§

v.

§

§

RICK PERRY, Governor of the State of Texas, §

THOMAS SUEHS, Executive Commissioner §

of the Texas Health and Human Services

§

Commission, CHRIS TRAYLOR,

§

Commissioner of the Texas Department

§

of Aging and Disability Services,

§

Defendants

§

Case No. 5:10-CV-1025

DEFENDANTS’ RESPONSE IN OPPOSITION TO THE UNITED STATES’ MOTION TO INTERVENE

TO THE HONORABLE JUDGE ORLANDO L. GARCIA:

Defendants Rick Perry, Governor of The State of Texas, Thomas Suehs, Executive

Commissioner of the Texas Health and Human Services Commission, and Chris Traylor,

Commissioner of the Texas Department of Aging and Disability Services (collectively,

“Defendants”) hereby respond as follows in opposition to the Partial Consent Motion By The

United States Of America To Intervene And Memorandum In Support Thereof [Doc. 53]

(“Motion to Intervene”):

INTRODUCTION

Plaintiffs, six individuals (as parents or guardians) and two organizations, filed this

lawsuit on December 20, 2010, asserting claims under the Title II of the Americans with

Disabilities Act (“ADA” or “Title II”) and the Olmstead Supreme Court decision, Section 504 of

the Rehabilitation Act of 1973 (“Rehab Act”), several sections of Title XIX of the Social

Security Act (“Medicaid Act”), and the 1987 Nursing Home Reform Amendments to the

Case 5:10-cv-01025-OLG Document 56 Filed 07/19/11 Page 7 of 26

Medicaid Act (“NHRA”). [Doc. #1]. On March 8, 2011, Defendants filed a Motion to Dismiss [Doc. ## 30, 32], to which Plaintiffs responded on April 18 [Doc. # 40], and Defendants replied on June 1, 2011. [Doc. # 51]. On May 5, 2011, the United States, through the Department of Justice (“DOJ”), filed a Statement of Interest in the case, notifying the Court of its interest in addressing three issues raised in Defendants’ Motion to Dismiss.1 [Doc. # 43] Defendants responded in opposition on June 8, 2011. [Doc. # 52]. The Motion to Dismiss remains pending.
On June 1, 2011, without any prior discussion with Texas officials to advise the state of the United States’ concerns with Texas’s ADA and Rehab Act compliance, DOJ notified Defendants by letter of its intention to intervene in this lawsuit “to remedy Texas’ violations of [Title II of the ADA and Section 504 of the Rehab Act].” Ex. 1.1, p. 1. In its brief letter, DOJ declared that, based on a review of unspecified “evidence,” the United States had predetermined that “Texas’ administration of its programs results in the unnecessary segregation of individuals with developmental disabilities in nursing facilities in violation of [Title II of the ADA and Section 504 of the Rehab Act],” and that in its intervention, it would allege that “Texas fails to administer services, programs, and activities in the ‘most integrated setting’ appropriate to the needs of individuals with disabilities in violation of the ADA and Section 504 of the Rehabilitation Act (as interpreted in Olmstead v. L.C., 527 U.S. 581 (1999)).” Id. Although the letter made clear DOJ’s intent to intervene, DOJ nevertheless represented it was “open to resolving this case at this juncture through a Consent Order with the State,” the nature and content of which it did not provide. Ex. 1.1, p. 2. DOJ gave the State ten days in which to advise whether the State would consent to the intervention.

1 Only one of the three issues is a live one that relates to the ADA or Rehab Act: whether enforcement of the Medicaid Act is limited to federal action to terminate funds. Doc. # 43, pp. 1–2.

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

2

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On June 10, 2011, Defendants responded by letter, noting that DOJ’s June 1 letter failed to indicate anything specific to which the State could substantively respond. Wishing to explore the matters further and provide a meaningful response, but unable to do so based on the ineffectual letter of June 1, Defendants invited DOJ to provide the draft complaint in intervention and/or more detailed information concerning the alleged violations and the remedies the United States might seek so that the State could substantively evaluate its position on intervention and determine whether there were any grounds for further discussion. Ex. 1.2.
DOJ replied on June 15, offering little more information than the June 1 letter, again providing only generalized, conclusory,2 and redundant statements, such as: “Plaintiffs who are currently confined to nursing homes…want to live in integrated settings and are appropriate for placement in integrated settings….However, they remain confined in institutions.” Ex. 1.3, p. 1. DOJ again advised that it must “promptly move for intervention…and thus will move forward with intervention,” and indicated that although the United States “stands ready to discuss resolution of these issues with the State of Texas,” such discussions were irrelevant for purposes of the decision to intervene; the intervention was going forward.3 Id.
On Friday, June 17, 2011, DOJ’s counsel inquired by email “whether there was anything further that the State would like to discuss at this time” and “whether the State opposes intervention by the United States.” Ex. 1.4. Defendants’ counsel responded immediately that she was consulting with her clients regarding these matters. Ex. 1.4.

2 Such nonspecific and conclusory statements include: “We determined that the State of Texas unnecessarily institutionalizes individuals with developmental disabilities in nursing facilities and places individuals with developmental disabilities who live in the community at risk of placement in nursing facilities” and “The State’s failure to make reasonable modifications to its programs to serve individuals with developmental disabilities in the most integrated setting appropriate to their needs…constitutes discrimination ….” Ex. 1.3, p. 1. 3 That the intervention was a foregone conclusion was confirmed by DOJ counsel in her email of June 21. Ex. 1.5.

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

3

Case 5:10-cv-01025-OLG Document 56 Filed 07/19/11 Page 9 of 26

After close of business on Tuesday, June 21, DOJ’s counsel sent Defendants’ counsel an email advising that “we are moving forward with intervention,” and gave a deadline of noon on June 22 to advise “whether the state consents” to the motion to intervene. Ex. 1.5. When Defendants received that message the morning of June 22, they again asked for the proposed motion to intervene, but the United States refused to provide it. Ex. 1.6; Ex. 1.7. Accordingly, Defendants advised that they did not consent to the intervention. Ex. 1.7. The United States filed its Motion to Intervene on June 22, 2011.
ARGUMENTS and AUTHORITIES This Court should deny DOJ’s Motion to Intervene for the following reasons. First, DOJ is not entitled to intervene under any provision of Rule 24 because it failed to satisfy the statutory prerequisites to suit. Specifically, DOJ failed to give Texas meaningful notice of the basis for its intervention and made no real effort to determine whether Texas’s compliance could be secured by voluntary means before filing its Motion to Intervene. Second, the United States is not entitled to intervene as a matter of right under Rule 24(a). Not only is the United States’ interest in this matter not the type of interest contemplated by Rule 24(a), but its interest is already adequately represented by the existing parties. Third, the Court should deny permissive intervention under Rule 24(b) because the United States’ interests are already adequately represented and an ability to launch a fullscale enforcement action after intervention, unbridled by the statutory requisites of prior notice and a conciliation process, would unduly alter this litigation and greatly prejudice the defendants. Fourth, that intervention should be denied is illustrated by the United States’ attempt to improperly join the State of Texas as a party to this suit, despite the fact that the State has never been served with process or appeared in this matter, and the State of Texas is not a proper party to a section 1983 claim seeking injunctive relief.

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

4

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I. The United States May Not Intervene Under Any Part of Rule 24 Because It Failed to Satisfy Statutory Prerequisites to Suit.
A. Prerequisites to DOJ suit to enforce Title II of the ADA and the Rehab Act.
Title II of the ADA incorporates the remedies, procedures and rights set forth in the
Rehab Act,4 which in turn incorporates the remedies, procedures and rights set forth in Title VI
of the Civil Rights Act of 1964, 42 U.S.C. 2000d, et seq.5 Title VI provides that—
Each Federal department and agency which is empowered to extend Federal financial assistance to any program or activity ... is authorized and directed to effectuate the provisions of section 2000d of this title with respect to such program or activity by issuing rules, regulations, or orders of general applicability .... Compliance with any requirement adopted pursuant to this section may be effected (1) by the termination of or refusal to grant or continue assistance under such program or activity to any recipient as to whom there has been an express finding on the record, after opportunity for hearing, of a failure to comply with such requirement ... or (2) by any other means provided by law: Provided, however, That no such action shall be taken until the department or agency concerned has advised the appropriate person or persons of the failure to comply with the requirement and has determined that compliance cannot be secured by voluntary means.
42 U.S.C. § 2000d-1 (emphasis added). Thus, both Title II and the Rehab Act allow for
enforcement through the termination or refusal to grant federal funding, or by “any other means
provided by law[.]” 42 U.S.C. § 2000d-1. Courts interpret “any other means provided by law”
to authorize DOJ enforcement via federal court action. U.S. v. Arkansas, No. 4:10CV00327
JLH, 2011 WL 251107 at *2 (E.D. Ark. Jan. 24, 2011); Smith v. City of Philadelphia, 345
F.Supp.2d 482, 490 (E.D. Penn. 2004). However, prior to DOJ using “any other means provided

4 See 42 U.S.C. § 12133 (ADA) (“[t]he remedies, procedures, and rights set forth in section 794a of Title 29 shall be the remedies, procedures, and rights this subchapter provides to any person alleging discrimination on the basis of disability in violation of section 12132 of this title.”). 5 29 U.S.C. § 794a(a)(2) (Rehab Act) (“The remedies, procedures, and rights set forth in title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) (and in subsection (e)(3) of section 706 of such Act (42 U.S.C. 2000e-5), applied to claims of discrimination in compensation) shall be available to any person aggrieved by any act or failure to act by any recipient of Federal assistance or Federal provider of such assistance under section 794 of this title.”). Thus, the remedies for violations of § 202 of the ADA and § 504 of the Rehabilitation Act are coextensive with the remedies available in a private cause of action brought under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq. Barnes v. Gorman, 536 U.S. 181, 185 (2002).

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

5

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by law” (such as intervention under Rule 24) to effect compliance with Title II of the ADA, it must first “advise[] the appropriate person or persons of the failure to comply with the requirement and … determine[] that compliance cannot be secured by voluntary means.” 42 U.S.C. § 2000d-1(2). These prerequisites to suit embody both a notice requirement and a determination requirement. See id.
When considering whether DOJ has complied with the notice requirement, a court will consider who made the communication, to whom the communication was made, and what the contents of the communications were. See, e.g., Arkansas, 2011 WL 251107 at *7; see also Smith, 345 F.Supp.2d at 490. Correspondence from DOJ to a state’s governor that indicates it will investigate that state for possible ADA violations and later provides “detailed, written findings and identify[ies] the minimum measures ...” believed to be necessary to remedy any violations is not sufficient to comply with the statutory pre-suit notice requirement. Arkansas, 2011 WL 251107 at *6 (quoting from DOJ letter to Arkansas Governor Beebe).6 On the other hand, a DOJ letter to a state’s governor that indicates that the Civil Rights Division performed an investigation, lists with substantial detail the findings of that investigation in over 50 pages, and describes measures that DOJ recommends the state take to remedy the identified violations of Title II does meet the notice requirement. Id. However, such a letter would constitute notice only in regard to the facility that was subject to the investigation and findings set out in that letter and cannot be used to constitute notice of alleged violations at other facilities. Id. Nor is a state’s mere awareness that DOJ will file a complaint alleging violation of the ADA enough to

6 In Arkansas, the DOJ “concede[d] that it is required to comply with the statutory prerequisites stated in 42 U.S.C. § 2000d-1” prior to bringing an enforcement action under Title II of the ADA. Arkansas, 2011 WL 251107. After the district court dismissed the United States’ suit against Arkansas for failure to demonstrate compliance with these mandatory prerequisites, the DOJ did not appeal. Thus, it is apparent that the instant suit presents the DOJ with the opportunity to blatantly circumvent what it has itself conceded are mandatory prerequisites to enforcement actions. Such an effort should be rejected. The DOJ should not be permitted to conjure up an enforcement action by intervention when it could not—by its own admission—maintain such an action in its own right.

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meet the notice requirement. Id. In order to meet the determination requirement of § 2000d-1, DOJ must put forth a “concerted effort” to secure a violating state’s compliance before determining that such voluntary compliance cannot be secured. Arkansas, 2011 WL 251107 at *7; 28 C.F.R. § 50.3(C). DOJ does not fulfill its obligation by merely making a hollow “determination” that such compliance cannot be voluntarily secured. Arkansas, 2011 WL 251107 at *7.
B. DOJ failed to meet the statutory prerequisites to suit. The United States’ proposed Complaint in Intervention [Doc. # 53-1] makes a point of advising the Court that it “sent notice to counsel for the State … that [the State] has failed to comply with the requirements of the [ADA and the Rehab Act]” and that it “advised the State of its intention to intervene … to remedy the violation.” Doc. #53-1, ¶ 61. The United States further asserts that it “provided the State additional factual information regarding its determination that the State is in violation of the [ADA and the Rehab Act] ….” Id., ¶ 62. Finally, the U.S. announces that DOJ “has determined that the State’s compliance with the [ADA and the Rehab Act] cannot be secured by voluntary means at this point.” Id., ¶ 63. This assertion of compliance with the requirements of 42 U.S.C. § 2000d-1 is baseless and misleading. DOJ’s so-called “notice” was inadequate and its “determination” was after-the-fact and without justification.
1. DOJ failed to give Texas adequate notice. DOJ knows how to give a state “notice” of alleged violations of the ADA and it knows what real “evidence” of a violation is, and how to advise a state of such evidence and perceived violations, as required under 42 U.S.C. § 2000e-1. For example, in letters sent to the Governor

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of Virginia,7 the Governor of Delaware,8 and the Attorney General of New Hampshire,9 DOJ outlined in great detail the specific evidence it asserts shows violations of the ADA, its specific findings, and specific means of remedying such violations, that is, “the steps [the state] needs to take to meet its obligations under the law.”10 Each of those three letters is over 20 pages long, and each addresses only one facility. In contrast, DOJ’s cursory letters of June 1 and June 15— which purport to address the United States’ pursuit of all of Texas’s alleged ADA and Rehab Act violations related to persons with developmental disabilities, statewide, in all nursing facilities, and all issues related to that population’s access to Texas’s “array of community-based . . . residential and habilitation services”11—offer nothing more than generalized assertions and boilerplate language that leave Texas guessing as to exactly what violations of the ADA the United States has found and what precise remedies it seeks. See Ex. 1.1; Ex. 1.3.
Rather than providing a meaningful notice of alleged violations and necessary remedial measures for compliance, DOJ’s pre-intervention communications were nothing more than notices of intent to intervene. This is apparent from the first communication, which made clear that intervention was a foregone conclusion and DOJ simply wanted to know, for certificate of conference purposes, whether Texas would “consent.” See Ex. 1.1.

7 See Ex. 3 http://www.ada.gov/olmstead/documents/virginia_findings.pdf (DOJ letter to Governor Robert McDonnell of Virginia dated 2/10/11). DOJ’s letter to the Governor of Virginia was 20 pages long. 8 See Ex. 4 http://www.ada.gov/olmstead/documents/delaware_findings.pdf (DOJ letter to Delaware Governor Jack Markell dated November 9, 2010). DOJ’s letter to Governor Markell was 21 pages long. 9 See Ex. 5 http://www.ada.gov/olmstead/documents/new_hampshire_findings.pdf (DOJ letter to New Hampshire Attorney General, Michael A. Delaney dated April 7, 2011). DOJ’s letter to Attorney General Delaney was 27 pages long. 10 See, e.g., Ex. 3, p. 1, 18–20 (specific “recommended remedial measures”). 11 Ex. 1.3, p. 2.

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2. DOJ’s determination that Texas’s compliance could not be secured by voluntary means is baseless.
DOJ had no basis for its “determination” that the ADA and the Rehab Act “cannot be secured by voluntary means at this point.” Doc. # 53-1, ¶ 63. First, as discussed above, DOJ has yet to provide Texas adequate notice of any alleged violations. See Ex. 1.1. Second, it refused to provide more detailed information when explicitly asked to do so. See Ex. 1.2; Ex. 1.3. Third, although Defendants advised that they were formulating a response to the June 15 letter, DOJ gave Defendants less than a day’s time to respond regarding consent to the intervention. See Ex. 1.5. In short, DOJ failed to offer anywhere near the level of information sufficient for the State to understand the alleged violations, much less any proposed options for “voluntary compliance.”
In contrast, in communications with other states, DOJ has outlined specific alleged violations and proposed remedial steps and has directly stated—
We are obligated to advise you that, in the unexpected event that we are unable to reach a resolution regarding our concern, the Attorney General may initiate a lawsuit pursuant to the ADA once we have determined that we cannot secure compliance voluntarily, 42 U.S.C. § 2000d-1 …. Ex. 3, p. 20; see also Ex. 4, p. 21. Here, DOJ gave Texas no such notice, warning, or adequate opportunity to remediate prior to initiating its suit. Indeed, DOJ’s pre-suit investigation and conciliation efforts here are just as meager, if not more so, than those recently found to be wholly insufficient by the federal district court in U.S. v. Arkansas—a determination that DOJ did not appeal. Arkansas, 2011 WL 251107. Given its course of conduct, it is obvious that DOJ had no intention of engaging in meaningful discussions with Texas before intervening.12 Under the

12 Rather, the timing of the intervention on June 22, 2011 appears to have been tied to a DOJ media event commemorating the anniversary of the Olmstead decision. See Ex. 2 (http://www.justice.gov/opa/pr/2011/June/11crt-825.html) (subtitled “Announcement [of Steward Intervention] Comes on the 12th Anniversary of the Olmstead

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circumstances of this case, DOJ has failed to satisfy the prerequisites to suit set out in 42 U.S.C. § 2000d-1. II. The United States is Not Entitled to Intervene as a Matter Of Right Under Rule
24(a). A. Standard for intervention as a matter of right under Rule 24(a). A party seeking to intervene as a matter of right must satisfy all four of the following requirements: (1) The application must be timely; (2) the applicant must have an interest relating to the property or transaction that is the subject of the action; (3) the applicant must be so situated that the disposition of the action may, as a practical matter, impair or impede its ability to protect its interest; and (4) the applicant's interest must be inadequately represented by the existing parties to the suit. Sierra Club v. Espy, 18 F.3d 1202, 1204 -1205 (5th Cir. 1994). Here, the United States has failed to satisfy the second, third and fourth elements. B. The United States’ “interest” in this matter is not one contemplated by Rule
24(a). While the United States has an “interest” in Title II of the ADA, Rule 24(a)(2) does not refer to “interests” generally, but instead makes clear that the interest must relate to “the property or transaction that is the subject of the action.” FED. R. CIV. P. 24(a)(2). Generally, a potential intervenor establishes an interest in a “property or transaction” under Rule 24(a) by showing that its interest is “direct, substantial, and legally protectable.” Diaz v. So, Drilling Corp., 427 F.2d 1118, 1124 (5th Cir. 1970). Courts have held that the potential intervenor’s interest must be a “legal interest,” that there must be a tangible threat to that legally cognizable interest, and that

Decision”). The same day, DOJ also launched a new webpage, see http://www.ada.gov/olmstead (“Olmstead: Community Integration for Everyone,” noting the Steward intervention); http://www.ada.gov/ (noting that “Olmstead: Community Integration for Everyone” was new as of June 22, 2011), and introduced its new ADA/Olmstead guidelines, see http://www.ada.gov/olmstead/q&a_olmstead.htm.

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the interest must be recognized as one belonging to the proposed intervenor. See Edwards v. City of Houston, 78 F.3d 983, 1004 (5th Cir. 1996).
The United States’ interest in this litigation does not satisfy Rule 24(a). While the Motion to Intervene makes reference to a general interest in the enforcement of the ADA and Rehab Act and in advancing DOJ’s own interpretation of Olmstead, DOJ has identified no tangible threat to this alleged interest, nor explained how this interest specifically “belongs to” or is “owned by” DOJ. Contra Edwards, 78 F.3d at 1004 (party could intervene to contest consent decree based on showing that its members would be bound by the decree, which had direct, negative effect on its members’ employment opportunities). This litigation does not directly interfere with DOJ’s ability to enforce the ADA as it sees fit, and DOJ has not shown how the fact-specific claims made here will have a preclusive effect on non-parties to this suit.
The cases DOJ cites in support of its claimed “interest” are distinguishable. In Heaton v. Monogram Credit Card Bank, 297 F.3d 416 (5th Cir. 2002), the FDIC was allowed to intervene in a case in which its regulatory decision to grant insurance to a bank was effectively being collaterally attacked by the plaintiff in the suit. Id. at 424. In Sierra Club v. City of San Antonio, 115 F.3d 311, 314 (5th Cir. 1997), the State of Texas was allowed to intervene because the Sierra Club was seeking an injunction that would have materially altered the State’s administration of the Edwards Aquifer Act. Id. Finally, in Ceres Gulf v. Cooper, 957 F.2d 1199, 1202-04 (5th Cir. 1992)—a suit by a private party intended to recoup payments made to a longshoreman after a hearing determined that his injuries were not work related—the court allowed the Director of the Office of Workers’ Compensation Programs to intervene on behalf of the longshoreman because under the governing statute and regulations, the Director was vested with authority ‘‘to ensure the fair and adequate compensation of injured employees.’” Id. at 1201 (citing Ingalls

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Shipbuilding Div., Litton Sys., Inc. v. White, 681 F.2d 275, 286 (5th Cir. 1982)). Thus, intervention was permitted in these matters because—unlike here—the intervening party had a direct, tangible interest that could have been materially affected by the outcome of the litigation.
To the extent the United States’ alleged “interest” in this litigation is the manner in which this Court interprets the “Olmstead integration mandate,” that is an interest so attenuated as to be meaningless. Under such a theory, every party affected in some unspecified manner by the interpretation of a law at issue in a suit would satisfy Rule 24(a)’s “interest” test. Put simply, DOJ has no “interest” sufficient to satisfy Rule 24(a), and its motion to intervene should be denied on this basis alone.
C. The United States’ intervention is not necessary to protect its interest in this matter.
DOJ need not intervene here to protect its interest in enforcing the Olmstead integration mandate. Rather, as the entity with the authority to enforce ADA compliance, DOJ has an unfettered ability to protect this claimed interest by initiating proper, pre-suit enforcement procedures against any state that it believes it is violating the ADA. Nothing about the instant suit precludes DOJ from bringing an enforcement action on the public’s behalf arising out of the same subject matter as this suit.13 Rather, the real obstacle to DOJ’s protecting its claimed interest in the “Olmstead integration mandate” is its own failure to engage in the requisite presuit investigation and conciliation procedures.

13 Cf. EEOC v. Waffle House, Inc., 534 U.S. 279, 297 (2002) (private employee’s mandatory arbitration agreement with employer did not preclude EEOC from invoking enforcement authority to bring suit against employer to vindicate employee’s rights under the ADA); United States v. Fountain View Apts., Inc., 2009 WL 1905046(M.D. Fla.) (in Fair Housing Act case, holding that Attorney General is not “precluded from bringing suit on behalf of victims of discrimination, even if one of those victims could not sustain a private lawsuit”). DOJ’s status as an authority capable of bringing (properly initiated) enforcement actions for broad relief distinguishes the cases concerning stare decisis cited in support of intervention on pages 10 to 11 of the Motion to Intervene because those cases all involved interventions by private parties who had no independent ability—as the DOJ does here—to seek broad relief in a later-filed government enforcement action.

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Further, DOJ’s representations to this Court regarding the necessity of intervention are entirely belied by its own actions in the other, “sixteen different states” in which it admits it has become involved in private-party Olmstead litigation. See Doc. 53, p. 9. In those matters, DOJ has adequately represented its interests at the merits stage by either filing an amicus brief or a “statement of interest,” as it has already done in this matter.14 See Doc. # 43. DOJ can provide no plausible explanation as to why—contrary to its course of action in numerous, other pending Olmstead cases—this suit demands that the United States be allowed to intervene.
D. The existing parties adequately represent any legitimate DOJ interest. A party seeking intervention as of right has the burden of demonstrating its interests are not adequately represented by the existing parties. Espy, 18 F.3d at 1207. While this burden has been called “minimal,” “it cannot be treated as so minimal as to write the requirement completely out of the rule.” Bush v. Viterna, 740 F.2d 350, 355 (5th Cir. 1984). Accordingly, “‘[w]hen the party seeking intervention has the same ultimate objective as a party to the suit, a presumption arises that its interests are adequately represented, against which the petitioner must demonstrate adversity of interest, collusion, or nonfeasance.’” Id. (citing Internat’l Tank Terminals, Ltd. v. M/V Acadia Forest, 579 F.2d 964, 968 (5th Cir. 1978)). DOJ has made no demonstration of inadequate representation that would justify its intervention in this matter. The United States identifies its interest in this lawsuit as “enforcing the ADA and Section 504 of the Rehabilitation Act to advance the public interest in eliminating discrimination in the

14 See “Participation by the United States in Olmstead Cases” available at http://www.ada.gov/olmstead/olmstead_cases_list2.htm#amicus (listing DOJ involvement in other private party Olmstead cases). DOJ intervened at the remedy stage of a matter styled Disability Advocates, Inc. v. Paterson , No. 03-CV-3209 (E.D. NY 2009), which is now pending in the Second Circuit Court of Appeals, and attempted to intervene in a matter in Florida. Jones v. Arnold, No. 09-CV-1170 (M.D. Fla. 2010). However, that latter suit was dismissed by agreement of the parties before the court could rule on the motion to intervene. Accordingly, the instant matter is the only one in the referenced “sixteen different states” in which DOJ is active in which it is attempting to intervene.

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form of unjustified institutionalization.” Dkt. # 53, pp. 11–12. Without saying why it is so, DOJ baldly asserts that “[t]he existing parties to this litigation cannot adequately represent the United States’ interests.” Id., p.11. But the United States cannot demonstrate inadequate representation because both the Plaintiffs and the United States assert the same ultimate broad objective: the State’s compliance with the Olmstead integration mandate with respect to persons with developmental disabilities living in, or about to be placed in, nursing facilities. Indeed, the organizational plaintiffs purport to represent such persons statewide.15 Furthermore, the United States and the Steward party plaintiffs assert parallel claims under the ADA and Rehab Act, compare Doc. #53-1, p. 1, ¶¶ 24–60, 64–68 to Doc. # 1, ¶¶ 74–112, 120–124, 210–224, and seek the same relief . Compare Doc. #53-1, p. 17 to Doc. # 1, p. 54, Prayer at ¶ 1(a), p. 55 at ¶ 1(d).
Further, Disability Rights Texas16 has been Texas’s designated Protection and Advocacy (“P&A”) agency for individuals with developmental disabilities, as provided by federal law,17 since 1977.18 The very purpose of the federal law establishing the P&A system is to “provide for allotments to support a protection and advocacy system ... in each State to protect the legal and

15 The organization plaintiffs represent that they may advocate for this compliance on behalf of all affected Medicaid recipients. Plaintiff Arc of Texas describes itself as a statewide organization “dedicated to ensuring that all citizens with developmental disabilities in Texas are afforded appropriate services and supports in the most integrated, home-like setting possible . . . ,” Doc. # 1, ¶ 17 (emphasis added), and Plaintiff Coalition of Texans with Disabilities, Inc., describes itself as a “statewide cross-disability advocacy organization” having “over 80 member organizations representing some 3 million unduplicated individuals with all types of disabilities, including developmental disabilities . . . .” Id. ¶ 19. See generally id. , ¶¶ 16–21. 16 Advocacy, Inc. adopted the name “Disability Rights Texas” in March 2011, in order to better align itself with the larger National Disability Rights Network, the nonprofit membership organization for the federally mandated P&A systems and client assistance programs. See Doc. #26. 17 The federal government provides funding to states that establish a system to protect and advocate for the rights of persons with mental illness and developmental disabilities. See 42 U.S.C. §§ 10801-10851 (1994 & Supp. V 1999) (the Protection and Advocacy for Mentally Ill Individuals Act, or "PAMII Act"); 42 U.S.C. §§ 15041-15045 (the Developmental Disabilities Assistance and Bill of Rights Act, or "DD Act"). 18 Under both the PAMII Act regulations and the DD Act regulations, a state P&A system is designated by the governor or state legislature. See 42 C.F.R. § 51.5(a) (PSMII Act) (referencing DD Act); 45 U.S.C. §§ 1386.19, .20 (DD Act). Advocacy, Inc. was designated by Governor Dolph Briscoe in 1977 to serve as the state's P&A system. See Tex. Gov. Exec. Order No. DB-33, 2 Tex. Reg. 3713 (1977), which may be found at http://www.lrl.state.tx.us/scanned/govdocs/Dolph%20Briscoe/1977/DB-33A.pdf.

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human rights of individuals with developmental disabilities ….” 42 U.S.C. § 15041.

Accordingly, Disability Rights Texas has federal statutory authority to, among other things—

. . . pursue legal, administrative, and other appropriate remedies or approaches to ensure the protection of, and advocacy for, the rights of such individuals within the State who are or who may be eligible for treatment, services, or habilitation, or who are being considered for a change in living arrangements . . . .

42 U.S.C. § 15043(2)(A)(i). Because of this federally-created scheme designed explicitly for the

protection of persons with developmental disabilities, Disability Rights Texas claims the

authority to carry out the United States’ stated goal of “enforcing the ADA and Section 504 of

the Rehabilitation Act to advance the public interest in eliminating discrimination in the form of

unjustified institutionalization.” Doc. #53, pp. 11–12.

The statute cited by the DOJ in its Motion to Intervene, 28 U.S.C. § 517, which grants it

authority to attend to the interests of the United States, does not exclude the possibility that

another party might have the same interests as the United States in litigation, and DOJ has made

no colorable assertion here that its interests are not aligned with the Plaintiffs. Doc. #53, p. 11.

Nor do the DOJ’s cited cases—none of which are precedential here—support intervention. Id.,

p. 12. Southwest Ctr. for Biological Diversity v. Berg is inapplicable because it concerned a

petition in intervention by a private party who claimed interests that diverged from the government. See 268 F.3d 810, 817, 823 (9th Cir. 2001) (concluding that the municipal and

federal governmental defendants likely would not adequately represent the for-profit

construction entities in a suit to challenge a city’s land management plan). In Scotts Valley Band

of Pomo Indians of the Sugar Bowl Rancharia v. U.S., the Ninth Circuit found that “the City's tax

and regulatory concerns are sufficient ... to establish a protectable interest in the Indian Bands' action and to allow intervention by the City.” 921 F.2d 924, 927 (9th Cir. 1990). Here, the

United States offers no explanation of any such unique protectable interest. The cited Tenth

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Circuit case, San Juan County v. U.S., was a quiet-title action brought by San Juan County, Utah, against the United States and various federal agencies (“federal defendants”). 503 F.3d 1163 (10th Cir. 2007). There, the court held that the interests of the federal defendants and the conservation group seeking intervention as of right as a defendant were sufficiently aligned that the federal defendants would adequately represent the conservation group’s interest. Id. at 1206 (thereby precluding intervention). Rather than citing to the majority opinion in San Juan County, however, DOJ cites only to the dissent, which noted that a conflict of interest existed which permitted intervention. No such conflict of interests has been shown here. See id. at 1230, 1228–31, 1231 (noting the “historical hostility” between the United States and [the conservation group]). Indeed, the United States has shown no “adversity of interest, collusion, or nonfeasance” whatsoever with regard to the Plaintiffs. See Bush v. Viterna, 740 F.2d at 355.
In summary, the United States offers no persuasive argument or authority for the proposition that Plaintiffs—who are represented by a nationally-active organizationand Texas’s P&A agency for persons with developmental disabilities—cannot adequately represent its interests in this lawsuit. Thus, the United States has failed to satisfy the fourth requirement of intervention as of right and its motion should be denied. III. The United States is Not Entitled to Permissive Intervention Under Rule 24(b).
A. Standard for permissive intervention under Rule 24(b). Permissive intervention is a two-stage process. First, the court must determine whether one of the grounds under Rule 24(b) applies. Stallworth v. Monsanto Co., 558 F.2d 257, 269 (5th Cir. 1977). Second, if this threshold is met, the court must exercise its discretion to determine if permissive intervention should be allowed. Id.; FED. R. CIV. P. 24(b)(3). As a

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general matter, however, permissive intervention should be denied if it will “unduly delay or prejudice the adjudication of the original parties’ rights.” Id.
Under Rule 24(b)(1), the intervenor must demonstrate that it has (1) an independent ground for subject matter jurisdiction, (2) a timely motion, and (3) a claim or defense that has a question of law or fact in common with the main action. In re Enron Corp. Sec., Derivative & “ERISA” Litig., 229 F.R.D. 126, 130 (S.D. Tex. 2005). Under Rule 24(b)(2), the intervenor must demonstrate that (1) it has a timely motion, (2) it is a federal agency, and (3) its proposed claim is based on a statute administered by that federal agency. FED. R. CIV. P. 24(b)(2)(A).19 Further, in exercising its general discretion over a permissive intervention motion, the court may consider, among other things, whether the would-be intervenor’s interests are adequately represented by other parties. New Orleans Pub. Serv., Inc. v. United Gas Pipeline Co., 732 F.2d 452, 472 (5th Cir. 1984).
B. The Court should deny the United States permissive intervention. Regardless of whether DOJ can satisfy Rule 24’s permissive intervention requirements, it is wholly within this Court’s discretion to disallow permissive intervention even where those requirements are met. Kneeland v. Nat’l Collegiate Athletics Ass’n, 806 F.2d 1285, 1289 (5th Cir. 1987); FED. R. CIV. P. 24(b)(3). This Court should exercise its discretion to deny DOJ permissive intervention, for several reasons. First, DOJ egregiously failed to comply with the statutory prerequisites to suit, in defiance of express congressional intent. See discussion supra at pp. 2–10. Furthermore, the United States’ interests are adequately represented by the other parties in this litigation. See discussion supra at pp. 13–16.

19 The United States seeks permissive intervention under Rule 24(b)(1)(B) and 24(b)(2(A) only. See Doc. # 53, p. 12. Accordingly, only these two sections of Rule 24(b) are addressed here.

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Most importantly, permitting DOJ to intervene in the instant matter without requiring that it first engage in the requisite pre-suit investigation and conciliation process will prejudice the Defendants. It is well-settled that pre-suit conciliation procedures reflect the legislature’s preference that matters be resolved via voluntary compliance instead of court action. Cf., EEOC v. Philip Servs. Corp., 635 F.3d 164, 168 (5th Cir. 2011) (collecting cases recognizing Congressional preference for voluntary resolution of Title VII claims via similar pre-suit conciliation process). By allowing DOJ to intervene in this action without first engaging in proper, pre-suit conciliation, the State will be deprived of proper notice of alleged ADA violations and an adequate opportunity to voluntarily remedy its alleged noncompliance, as contemplated by 42 U.S.C. § 2000d-1. Once achieving full party status in the lawsuit, the United States could use the discovery process to unleash a wide-ranging government enforcement action of whatever scope it deems necessary to satisfy its stated interest in “advanc[ing] the public interest in eliminating discrimination in the form of unjustified institutionalization,” Doc. # 53, pp. 11–12, without the limitations on scope, and the notice and determination requirements, imposed by the required pre-suit conciliation process. The United States has made clear that this is not a case in which the intervening party seeks to simply “piggyback” on the facts asserted by existing parties. For example, DOJ’s letter of June 15, 2011, hinted at—but offered no concrete details about—the United States’ thirst for launching a frontal attack on Texas’s Medicaid waiver programs. See, e.g., Ex. 3, p. 1. Its proposed Complaint in Intervention also targeted Texas’s waivers, see Doc. 53-1, ¶¶53–56, whereas Plaintiffs’ Complaint lacks this focus, see Doc. #1. Allowing this intervention would prejudice the Defendants by, among other things, allowing DOJ to improperly expand the scope of discovery, the facts in dispute, and the length of any possible trial in violation of the Congressionally-imposed limitations on its enforcement

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powers. Denial of a permissive intervention motion is warranted in such circumstances. See, e.g., SEC v. Stanford Int'l Bank, Ltd., 2011 WL 1758763 (5th Cir. June 20, 2011) (affirming denial of permissive intervention on basis that it would have “add[ed] another layer of litigation” to the matter); Taylor Communs. Group, Inc. v. Southwestern Bell Tel. Co., 172 F.3d 385, 389 (5th Cir. 1999) (possibility that permissive intervention could result in litigation of facts unrelated to underlying suit would cause “undue delay” and justified denial of permissive intervention). IV. The United States’ Motion To Intervene Improperly Seeks To Join Non-Party State
Of Texas To This Suit. This suit is brought against three state officials only. Yet, DOJ’s complaint in intervention seeks to bring suit solely against an entirely new defendant: the State of Texas. See Doc.# 53-1, ¶ 4. DOJ cannot conflate its attempt to intervene in an existing suit with the involuntary joinder of an entirely new party to that suit. Among other things, joinder is governed by completely different rules than intervention, and DOJ has cited to no authority that would permit it—as a non-party to this suit—to seek joinder of the State of Texas to this suit. See, e.g., Thompson v. Boggs, 33 F.3d 847, 858 (7th Cir. 1994) (noting inability to locate any case in which “a court granted a motion to join made by a non-party to the lawsuit”). Further, the proper party to a section 1983 claim seeking injunctive relief is the state official in charge of enforcement of the relevant law, sued in their official capacity, not the State of Texas, in general. See Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 102-03 (1984); Okpalobi v. Foster, 244 F.3d 405, 426 (5th Cir. 2001). DOJ has not cited any authority permitting this Court to exercise personal jurisdiction over the State of Texas, as it is not a party to this suit, has not been served with process, and has not made a voluntary appearance. This attempted sleight-of-

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hand by DOJ is simply another example of why its attempt here to make an end run around its

pre-suit investigation and conciliation process must be rejected.

CONCLUSION

For all of the reasons set forth above, Defendants respectfully request that this Court deny

the United States’ Motion to Intervene.

Respectfully submitted,

GREG ABBOTT Attorney General of Texas

DANIEL T. HODGE First Assistant Attorney General

BILL COBB Deputy Attorney General for Civil Litigation

DAVID C. MATTAX Director of Defense Litigation

ROBERT O’KEEFE General Litigation, Division Chief

Defendants’ Response in Opposition to the United States’ Motion to Intervene

/s/ Nancy K. Juren NANCY K. JUREN Assistant Attorney General Attorney in Charge Texas Bar No. 11059300 DARREN G. GIBSON Assistant Attorney General Texas Bar No. 24068846 AMANDA J. COCHRAN-MCCALL Assistant Attorney General Texas Bar No. 24069526 General Litigation Division ERIKA KANE Assistant Attorney General Texas Bar No. 24050850 ERIC VINSON Assistant Attorney General Texas Bar No. 24003115 P.O. Box 12548, Capitol Station
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Case 5:10-cv-01025-OLG Document 56 Filed 07/19/11 Page 26 of 26

Austin, Texas 78711-2548 Phone No.: (512) 463-2120 Fax No.: (512) 320-0667

Attorneys for Defendants

CERTIFICATE OF SERVICE

I certify that a true and correct copy of Defendants’ Response In Opposition To The United States’ Motion To Intervene was served by CM/ECF system on July 19, 2011, upon the following individuals at the listed addresses:

Garth A. Corbett Sean A. Jackson Disability Rights Texas 7800 Shoal Creek Blvd., #171-E Austin, Texas 78757
Yvette Ostolaza Robert Velevis Casey A. Burton Weil, Gotshal & Manges 200 Crescent Court- Suite 300 Dallas, Texas 75201
Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060

John F. Paniszczyn Texas Bar No. 15443855 Assistant United States Attorney United States’ Attorney’s Office 601 NW Loop 410, Suite 600 San Antonio, TX 78216
Regan Rush Trial Attorney D.C. Bar No. 980252 Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Ave, J.W.-NYA Washington, D.C. 20530

/s/ Nancy K. Juren________________ NANCY K. JUREN

Defendants’ Response in Opposition to

the United States’ Motion to Intervene

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 Case 5:10-cv-01025-OLG Document 57 Filed 08/04/11 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

)

and mother, Lillian Minor, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

)

)

RICK PERRY, Governor, et al.

)

)

Defendants.

)

______________________________________ )

CIV. NO. 5:10-CV-1025-OLG

UNITED STATES’ REPLY IN SUPPORT OF MOTION TO INTERVENE The United States of America respectfully submits this Reply in support of the United States’ Motion to Intervene. The Defendants incorrectly argue that: 1) the Department of Justice (“DOJ”) failed to satisfy the statutory requirements of filing suit under the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12131 et. seq.; 2) despite Congress’s delegation of authority to the Attorney General to enforce the ADA, the United States lacks a direct and substantial interest in the litigation sufficient to warrant intervention as of right; 3) the United States’ interest can be represented by private Plaintiffs’ counsel; 4) the Defendants will be prejudiced if the United States is granted intervention; and 5) the United States attempts, as a nonparty, to improperly join the State of Texas as a Defendant. The Defendants’ arguments lack merit and should be rejected. I. The United States Has Satisfied the ADA Title II Statutory Procedural Requirements Contrary to the Defendants’ assertion, the United States need not satisfy the requirements of 42 U.S.C. § 2000d-1 prior to seeking intervention because Rule 24 of the Federal Rules of

1

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Civil Procedure governs intervention and nothing in the ADA or the Rehabilitation Act restricts the United States’ ability to intervene pursuant to Rule 24. (See Defendants’ Response in Opposition to the United States’ Motion to Intervene (“Def. Mem.”) 5-9, ECF No. 56 (July 19, 2011).) Nevertheless, the United States has satisfied the requirements of 42 U.S.C. § 2000d-1 by providing the Defendants notice of their violations and determining that the Defendants’ compliance cannot be secured by voluntary means.
A. The United States Need Not Satisfy the ADA’s Procedural Requirements to Filing Suit When Seeking to Intervene in an Existing Lawsuit The Defendants’ contention that the United States failed to satisfy the statutory
prerequisites to suit contained within the ADA is not a basis for this Court to deny the United States’ motion to intervene. The statutory prerequisites of providing notice and determining that compliance cannot be secured by voluntary means, see 42 U.S.C. § 2000d-1, apply only when the United States seeks to bring its own, independent enforcement actions and do not apply when the United States seeks to intervene in a pending lawsuit.
Rule 24 governs intervention, including intervention by the United States. Indeed, Rule 24 was supplemented in 1946 to explicitly state that a government agency may seek to intervene in cases where a party relies on a statute or executive order the agency administers. See Fed. R. Civ. P. 24(b)(2). This provision was added to avoid “exclusionary constructions” of the United States’ right to intervene.1 Fed. R. Civ. P. 24 advisory committee’s notes (1946). Thus, if the United States meets the intervention requirements of Rule 24, then it is not constrained in its
1 The Committee Notes reference In re Bender Body Co, 47 F. Supp. 224 (N.D. Ohio 1942) as an example of the “exclusionary construction” that prevented government intervention which the revised Rule 24 sought to remedy. Fed. R. Civ. P. 24, advisory committee’s notes (1946). In In re Bender, the district court denied intervention to the Administrator of the Office of Price Administration, a then federal agency, because the Administrator’s interest was only that of the “public interest”, the Administrator had “no interest that may be bound by the judgment in this action . . . he cannot be adversely affected by the court's decision . . . he has no claim or defense which will be affected by any decision of law or fact by the court.” In re Bender, 47 F. Supp. at 232.
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Case 5:10-cv-01025-OLG Document 57 Filed 08/04/11 Page 3 of 12
ability to intervene by the ADA’s procedural prerequisites required if the United States were to pursue its own, separate action against the Defendants.
Had Congress wanted to limit the authority of the Attorney General to intervene in matters involving the ADA, then Congress would have placed an explicit limitation on this authority as it did in other instances.2 Indeed, in an analogous context, courts have permitted the Equal Opportunity Employment Commission (“EEOC”) to intervene in pending private Title VII actions even if the EEOC did not engage in the statutory prerequisites required before initiating an action of its own. See, e.g., Johnson v. Nekoosa-Edwards Paper Co., 558 F.2d 841, 847 & n.13 (8th Cir. 1977) (permitting EEOC intervention in private Title VII actions even if it had not performed the conciliation required to initiate an action of its own); Sobel v. Yeshiva Univ., 438 F. Supp. 625, 627-28 (S.D.N.Y. 1977) (permitting EEOC intervention “to protect public interests, without those prerequisite proceedings that would justify the initiation of its own action”); Stewart v. Hewlett Packard, 66 F.R.D. 73, 76 (E.D. Mich. 1975) (permitting EEOC intervention based, in part, on a clear reading of Rule 24(b)(1) that “Congress has obviated the need for the Commission to establish an independent jurisdictional basis by satisfying any of the jurisdictional prerequisites which might be required if the EEOC were seeking to initiate an action, instead of to merely intervene.”); see also Association for Community Living in Colorado v. Romer, 992 F.2d 1040, 1044 (10th Cir. 1993) (Individuals with Disabilities Education Act’s administrative requirements need not be exhausted when they would be useless); Snell v. Suffolk County, 782 F.2d 1094, 1101 (2d Cir. 1986) (holding that only one plaintiff needed to comply
2 See, e.g., Title II of the Civil Rights Act of 1964, 42 U.S.C. §2000a-3(a) (Attorney General may intervene in private suits regarding public accommodations upon certification that the case is of general importance); Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(f)(1) (Attorney General may intervene in private suits regarding employment discrimination by public employers upon certification that the case is of general public importance); Title IX of the Civil Rights Act of 1964, 42 U.S.C. § 2000h-2 (Attorney General may intervene in private suits alleging denial of equal protection on account of race, color, national origin, or sex upon certification that the case is of general public importance); Fair Housing Act, 42 U.S.C. § 3613(e) (Attorney General may intervene in private suits regarding discriminatory housing practices upon certification that the case is one of general public importance).
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with the administrative exhaustion requirements of Title VII when the claims arise out of the same discriminatory conduct because the “employer received adequate notice and an opportunity for conciliation” by virtue of the first filing) (citations omitted).
B. DOJ Gave Notice to the Defendants and Determined that Compliance Cannot Be Secured Voluntarily Although it is not required, the United States satisfied the procedural requirements of 42
U.S.C. § 2000d-1 before seeking intervention. The United States has “advised the appropriate person or persons of the failure to comply . . . and has determined that compliance cannot be secured by voluntary means.” 42 U.S.C. § 2000d-1. The United States’ compliance with these requirements is evident from the face of its proposed complaint.3 (See Proposed Complaint in Intervention “Proposed Compl.”, Ex. 1, ¶¶ 61-63, ECF No. 53-1 (June 22, 2011).) The June 1, 2011, and June 15, 2011, letters from DOJ to the Defendants provide unequivocal notice to the Defendants of their violations under the ADA, including the State’s unnecessary institutionalization of individuals with developmental disabilities in nursing facilities; its failure to provide services in the most integrated setting; its failure to offer community-based services to the individually named Plaintiffs even though these services already exist within the State’s service system and that the individually named Plaintiffs exemplify the consequences of a systemic and widespread problem; and its failure to properly screen and evaluate individuals with developmental disabilities seeking admission to nursing facilities to offer them alternatives
3 Whether the United States has complied with statutory prerequisites is an inquiry into the sufficiency of the allegations in the complaint, and thus not proper for consideration of whether the United States meets the requirements of intervention under Rule 24. See United States v. Arkansas, No. 10-327, 2011 WL 251107, at *8 (E.D. Ark. Jan. 24, 2011). Further, the Defendants’ inclusion of documents that were not attached to the proposed complaint and not publically available adds another layer of procedural irregularity. However, under the particular circumstances in this case and in the interest of judicial efficiency, the United States does not object to the Court’s full consideration of the Defendants’ arguments and exhibits so that these matters are fully settled going forward in the litigation.
4

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to institutional placement. (Exhibits to Defendants’ Response in Opposition to the United States’ Motion to Intervene (“Def. Exs.”) 1.1 and 1.3, ECF No. 56-2 (July 18, 2011).)
The Defendants incorrectly argue that by providing more detailed findings letters in some other investigations, DOJ has established a minimum standard for notice pursuant to 42 U.S.C. § 2000d-1. (See Def. Mem. 5-9.) DOJ, as the agency charged with enforcing Title II of the ADA, retains the discretion to determine the form of the notice it provides in a particular circumstance. See Exec. Order No. 12,250, 45 Fed. Reg. 72995 (Nov. 4, 1980) (delegating authority to the Attorney General, inter alia, to “develop standards and procedures for taking enforcement actions and for conducting investigations and compliance reviews” with regard to Title VI of the Civil Rights Act of 1964); see also Federal Exp. Corp. v. Holowecki, 552 U.S. 389, 398-402 (2008) (according deference to the EEOC’s interpretation of procedural requirements of Title VII and noting that it is appropriate to give deference to an agency regarding details on the administration of a statute for which it is charged with enforcing.)
The United States has also “determined that compliance cannot be secured by voluntary means”. 42 U.S.C. § 2000d-1; (Proposed Compl. ¶ 63). The Defendants did not accept the United States’ offer to enter into settlement discussions. (See Def. Exs. 1.1-1.7.) The United States provided, per the Defendants’ request, additional details regarding the violations so that the Defendants could determine whether to engage in settlement discussions. (Id. at 1.3.) Nevertheless, the Defendants still did not accept the United States’ offer to enter into settlement discussions. (See id. at 1.4-1.7.) Further, the Defendants had already been sued for the same violations that the United States seeks to resolve. Indeed, the existing parties have been engaged in adversarial litigation for seven months, yet the ADA violations are ongoing and the
5

Case 5:10-cv-01025-OLG Document 57 Filed 08/04/11 Page 6 of 12
individually named Plaintiffs remain unnecessarily institutionalized in nursing facilities.4 As a result of the Defendants’ actions, the United States made a determination that compliance could not be secured by voluntary means. In nearly identical circumstances, the court in Smith v. City of Philadelphia, 345 F. Supp. 2d 482 (E.D. Pa. 2004), found DOJ in compliance with the statutory prerequisites of Title II of the ADA. Id. at 490. In Smith, DOJ sent a letter to the defendants indicating the United States’ intention to intervene and offered to discuss resolution. Id. After the defendant failed to respond in three weeks, the United States intervened.
The Defendants’ reliance on United States v. Arkansas, No. 10-327, 2011 WL 251107 (E.D. Ark. Jan. 24, 2011), is misplaced. In that case, DOJ brought its own suit against Arkansas; it did not seek to intervene in an existing lawsuit. Id. at *1. Further, the court in United States v. Arkansas found that DOJ’s pre-filing written notice to the defendant merely stated that DOJ had commenced an investigation and that DOJ had not reached a conclusion that the defendant was in violation of the ADA. Id. at *6. In contrast, here DOJ provided clear notice of the State’s ADA violations, described the violations and the scope of the violations, and informed the State that the United States would seek to intervene absent the State’s agreement to remedy the violations through a consent decree. (Def Exs. 1.1 and 1.3.) The Defendants rejected the United States’ offer to enter into settlement discussions. (Id.) The United States has thus complied with the statutory prerequisites contained within 42 U.S.C. § 2000d-1. II. The United States Has Satisfied the Requirements for Intervention Under Fed. R.
Civ. P. 24 The Defendants incorrectly argue that the United States does not have a sufficient interest in the pending litigation to warrant intervention as of right, that the United States’ interest can be
4 Plaintiff Benny Holmes was moved to the community soon after the Plaintiffs’ Complaint was filed, because of circumstances unrelated to the State’s willingness to remedy the ADA violations voluntarily. (Plaintiffs’ Opposition to Defendants’ Opposed Motion to Abate Motion for Class Certification 4, n.4, ECF No. 21 (Feb. 4, 2011).)
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served by participation as amicus, that the United States’ interest can be represented by Plaintiffs’ counsel, and with regard to permissive intervention, that the United States’ intervention would be prejudicial to the Defendants. (See Def. Mem. 10-19.)
A. The United States Meets the Requirements for Intervention as of Right The Defendants incorrectly argue that the United States’ interest in this litigation – the
consistent enforcement of the ADA and remedying systemic and widespread violations of the ADA – is not sufficiently direct to warrant intervention as of right. (See Def. Mem. 10-16.)
The United States’ interest is rooted in DOJ’s unique role as the federal agency with primary regulatory and enforcement authority of Title II of the ADA. See 42 U.S.C. §§ 1213312134. The Defendants misread controlling precedent regarding the requisite “direct” interest required for a public entity to intervene in a case involving a statute that it enforces. For example, in Heaton v. Monogram Credit Card Bank, 297 F.3d 416 (5th Cir. 2002), the Fifth Circuit Court of Appeals reversed the district court’s denial of intervention by the Federal Deposit Insurance Corporation, according significant weight to the agency’s “broader interest in protecting the proper and consistent application of the Congressionally designed framework to ensure the safety and integrity of the federal deposit insurance system.” Id. at 424. Similarly, with respect to Ceres Gulf v. Cooper, 957 F.2d 1199 (5th Cir. 1992), Defendants ignore the Fifth Circuit’s warning to avoid “defin[ing] Rule 24(a)(2) ‘property or transaction’ so narrowly” and noted that the government intervener’s interest “springs from [its] role in administering the [statute].” Id. at 1203. In Ceres Gulf, the Fifth Circuit reversed the district court’s denial of intervention by the Director of the Office of Workers’ Compensation Programs, noting that the Director was “vested with an important ‘watchdog’ role’” that included an overarching interest in ensuring “consistent application of . . . a statutory scheme he is charged with administering.”
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Id. The Attorney General, like the Director at issue in Ceres Gulf, is charged with enforcement of a federal law (Title II of the ADA) and seeks intervention to ensure the consistent application of that federal law and that the present violations are remedied. The Defendants also fail to point to a single case where the United States has been denied intervention due to lack of sufficient interest. Quite the contrary, the United States is routinely granted intervention in civil rights cases involving the civil rights statutes the DOJ is charged with enforcing.5
The Defendants’ argument that the United States’ interests can be represented by the existing parties or through participation by amicus is equally unpersuasive. The Defendants ignore the reality that amicus participation does not protect the United States’ concerns regarding the stare decisis effect of an unfavorable decision. See Atlantis Dev. Corp. v. United States, 379 F.2d 818, 829 (Former 5th Cir. 1967) (recognizing that potential for a negative stare decisis effect may “supply that practical disadvantage which warrants intervention as of right”); see also United States v. City of Los Angeles, 288 F.3d 391, 400 (9th Cir. 2002) (holding that amicus curiae status may be insufficient to protect the rights of an applicant for intervention “because such status does not allow [the applicant] to raise issues or arguments formally and gives it no right of appeal”). That the Plaintiffs are represented by a national organization and the designated protection and advocacy organization does nothing to change the fact that the Attorney General – not Plaintiffs’ counsel – is tasked with primary regulatory and enforcement
5 See generally Bazemore v. Friday, 478 U.S. 385 (1986) (United States granted intervention regarding Titles VI and VII of the Civil Rights Act of 1964); Ayers v. Allain, 914 F.2d 676 (5th Cir. 1990) (United States granted intervention regarding Title VI of the Civil Rights Act of 1964); Halderman v. Pennhurst State School & Hosp., 612 F.2d 84 (3d Cir. 1979) (United States granted intervention involving, inter alia, the Rehabilitation Act); Dilworth v. City of Detroit, No. 4-cv-73152, 2010 U.S. Dist. LEXIS 23199 (E.D. Mich. Mar. 12, 2010) (United States granted intervention regarding Title II of the ADA); Meineker v. Hoyts Cinemas Corp., 325 F. Supp. 2d 157 (N.D.N.Y. 2004) (United States granted intervention regarding Title III of the ADA); Reg'l Econ. Cmty. Action Program Inc. v. City of Middletown, No. 97-cv-8808, 2000 U.S. Dist. LEXIS 22194 (S.D.N.Y. Sept. 25, 2000) (United States granted intervention regarding Title II ADA and Rehabilitation Act claims); Knight v. Ala., No. 83-M-1676-S, 1990 U.S. Dist. LEXIS 19604 (N.D. Ala. Mar. 8, 1990) (United States granted intervention involving Title VI of the Civil Rights Act of 1964).
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authority of Title II of the ADA, and is directly responsible for carrying out Congress’s intent to provide “clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities.” 42 U.S.C. § 12101(b)(2). The United States’ interest in this litigation is not adequately represented by private counsel who owe a specific duty to their clients.
B. The United States Also Meets the Requirements for Permissive Intervention The Defendants do not dispute that the Attorney General administers the statutes at issue
in the litigation and thus meets the requirements of Rule 24(b)(2). (Def. Mem. 17-19.) Instead, the Defendants incorrectly argue that the United States’ intervention will cause them prejudice, primarily from DOJ’s alleged failure to comport with the previously discussed statutory prerequisites and from an alleged desire to expand the litigation.6 The Defendants’ argument that they will be prejudiced by the United States’ intervention due to expansion of the litigation is contradicted by their own assertion that “the United States and the Steward party plaintiffs assert parallel claims . . . .” (Def. Mem. 14.) In fact, had the United States instead brought a separate enforcement action rather than intervene in the present litigation, Defendants’ burden in defending two separate lawsuits would be much greater. See Trbovich v. United Mine Workers, 404 U.S. 528, 536 (1972) (noting that “[i]ntervention . . . in a pending enforcement suit, unlike initiation of a separate suit . . . subjects the [defendant] to relatively little additional burden”); see also Smith v. Pangilinan, 651 F.2d 1320, 1324-25 (9th Cir. 1981) (reversing denial of the United States’ intervention noting that denying intervention would cause the matter to be litigated twice). The United States meets the requirements for permissive intervention.
6 Specifically, the Defendants allege that the United States could “unleash a wide-ranging government enforcement action of whatever scope it deems necessary . . .” apparently motivated in part, due to the United States’ “thirst for launching a frontal attack on Texas’ Medicaid waiver programs”. (Def. Mem. 18.) The United States is bound by the same rules governing scope of discovery as all parties in federal litigation.
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III. IF UNITED STATES IS GRANTED INTERVENTION, JOINDER IS PROPER The Defendants’ arguments that the United States, as a nonparty, cannot join the State of
Texas is fundamentally flawed because the United States seeks to join the State of Texas as a Defendant only if the United States is permitted intervention. Upon intervention, the United States would be a party to the litigation and would be entitled to join the State of Texas as a defendant pursuant to Fed. R. Civ. P. 20(a)(2). Joinder of the State of Texas is proper under Rule 20(a)(2) because there are questions of law or fact common to all Defendants. (Compare Compl. ¶¶ 31-137, ECF No. 1 (Dec. 20, 2010) with Proposed Compl. ¶¶ 8-28 and ¶¶ 50-63.) Following intervention and after the United States’ complaint is formally filed, the United States would then serve the State of Texas with process.
Finally, contrary to the Defendants’ apparent assertion, the Eleventh Amendment does not bar the United States from bringing suit against the State of Texas to remedy violations of the ADA.7 See EEOC v. Bd. of Supervisors for the Univ. of La. Sys., 559 F.3d 270, 272 (5th Cir. 2009) (“[I]t is well-established that sovereign immunity under the Eleventh Amendment operates only to protect States from private lawsuits—not from lawsuits by the federal government.”); see also West Virginia v. United States, 479 U.S. 305, 311 (1987) (“States have no sovereign immunity as against the Federal Government”).
CONCLUSION For the foregoing reasons, the Court should grant the United States’ Motion to Intervene and order its intervention in this action (i) as a matter of right pursuant to Rule 24(a)(2) of the Federal Rules of Civil Procedure or, in the alternative, (ii) permissively pursuant to Rule 24(b) of the Federal Rules of Civil Procedure.
7 The Defendants also make reference to the Eleventh Amendment bar to asserting claims against a public entity pursuant to 42 U.S.C. § 1983. (Def. Mem. 19.) Since the United States is not asserting any claims pursuant to 42 U.S.C. § 1983, the proper defendant under a Section 1983 claim is irrelevant.
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Dated: August 4, 2011

Respectfully submitted,
THOMAS E. PEREZ Assistant Attorney General
SAMUEL R. BAGENSTOS Principal Deputy Assistant Attorney General
ALISON N. BARKOFF Special Counsel for Olmstead Enforcement Civil Rights Division
/s/ Regan Rush ALLISON NICHOL, Chief KATHLEEN WOLFE, Acting Special Legal Counsel RENEE M. WOHLENHAUS, Deputy Chief REGAN RUSH, Trial Attorney D.C. Bar No. 980252* Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. – NYA Washington, D.C. 20530 Telephone: (202) 305-1321 Facsimile: (202) 307-1197 Regan.Rush@usdoj.gov
Counsel for Plaintiffs-Intervener United States of America
*Admitted pro hac vice

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CERTIFICATE OF SERVICE I hereby certify that on August 4, 2011, a copy of the foregoing was sent via the Court’s Electronic Filing System to the following:
Garth A. Corbett Sean A. Jackson Advocacy Inc. 7800 Shoal Creek Blvd., #171-E Austin, Texas 78757
Yvette Ostolaza Robert Velevis Casey A. Burton Weil, Gotshal & Manges 200 Crescent Court- Suite 300 Dallas, Texas 75201
Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060
Nancy Juren Assistant Attorneys General General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548.
/s/ Regan Rush Regan Rush, Trial Attorney Disability Rights Section Civil Rights Division
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 Case 5:10-cv-01025-OLG Document 67 Filed 11/04/11 Page 1 of 62

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

§

v.

§ Case No. 5:10-CV-1025-OG

§

RICK PERRY, Governor of the State of Texas, §

THOMAS SUEHS, Executive Commissioner §

of the Texas Health and Human Services

§

Commission, CHRIS TRAYLOR,

§

Commissioner of the Texas Department

§

of Aging and Disability Services,

§

Defendants

§

_____________________________________________________________________________

DEFENDANTS’ PARTIAL MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT
______________________________________________________________________________

GREG ABBOTT Attorney General of Texas
DANIEL T. HODGE First Assistant Attorney General
BILL COBB Deputy Attorney General for Civil Litigation
DAVID MATTAX Director of Defense Litigation
ROBERT B. O’KEEFE Chief, General Litigation Division

NANCY K. JUREN Assistant Attorney General Attorney in Charge Texas Bar No. 11059300 DARREN G. GIBSON Assistant Attorney General Texas Bar No. 24068846 AMANDA J. COCHRAN-MCCALL Assistant Attorney General Texas Bar No. 24069526 ERIKA M. KANE Assistant Attorney General Texas Bar No. 24050850 ERIC L. VINSON Assistant Attorney General Texas Bar No. 24003115 KAY T. CRISP Assistant Attorney General Texas Bar No. 24057368 General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 Phone No.: (512) 463-2120 Fax No.: (512) 320-0667

November 4, 2011
Defendants’ Partial Motion to Dismiss Plaintiffs’ Amended Complaint

Attorneys for Defendants

Case 5:10-cv-01025-OLG Document 67 Filed 11/04/11 Page 2 of 62

TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 1 I. Plaintiffs’ Claims ................................................................................................................ 1 II. The Defendants and Their Roles in the Texas Medicaid Program ..................................... 2 III. Overview of the Medicaid Act and Medicaid Waivers ...................................................... 5 SUMMARY OF ARGUMENT ...................................................................................................... 9 ARGUMENT AND AUTHORITY .............................................................................................. 11 I. This Court Lacks Jurisdiction Over Claims For Which Plaintiffs Lack Standing............ 11
A. Elements Of Standing. ...................................................................................................... 11 B. Plaintiffs Lack Standing For 42 U.S.C. §§ 139 (C)(2)(B) and (C) Claims. ....................... 12 C. Organizational Plaintiffs Lack Standing. .......................................................................... 14 II. The Governor Is Not A Proper Party. ............................................................................... 16 A. Plaintiffs Lack Standing To Sue The Governor................................................................ 16
1. The Governor did not, and could not, cause Plaintiffs any injury. .......................... 16 2. Plaintiffs’ injuries, if any, are not redressable through the Governor...................... 18 B. The Governor Is Immune From Suit Under The Eleventh Amendment. ......................... 20

C. Plaintiffs Have Failed To State A Claim Against The Governor. .................................... 22

III. Plaintiffs Have Failed to State a Claim Upon Which Relief May Be Granted..................23

A. Standard For Dismissal Under Rule 12(B)(6) .................................................................. 23

B. Plaintiffs Have No Right Of Action Under Section 1983 To Redress Alleged Violations Of The Medicaid Act....................................................................................... 24

1. Plaintiffs have no “rights” under any section of the Medicaid Act. ....................... 24

2. The Wilder/Blessing test.......................................................................................... 29

Defendants’ Partial Motion to Dismiss

Plaintiffs’ Amended Complaint

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3. The NHRA creates no rights enforceable by Plaintiffs. .......................................... 31
a. Summary of Plaintiffs’ NHRA claims. ............................................................ 31
b. NHRA provisions are not intended to benefit Plaintiffs. ................................. 32
c. The NHRA imposes no binding obligations on Defendants. ........................... 33
d. NHRA’s remedial scheme precludes individual judicial remedies against the State. ............................................................................... 34
4. Sections 1396a(a)(8) and 1396a(a)(10)(B) create no rights enforceable under Section 1983............................................................................................................. 36
5. Sections 1396n(C)(2)(B) and (C), relating to state waiver applications, confer no private rights enforceable under Section 1983......................................................... 38
C. Even If The Medicaid Act Creates Rights Enforceable By Plaintiffs, Plaintiffs Have Failed To State A Cognizable Claim. ...................................................... 40
1. Plaintiffs state no cognizable NHRA claim. ............................................................ 40
a. Plaintiffs state no § 1396r(b)(3)(F) or § 1396r(e) claim. ................................. 40
b. Plaintiffs state no violation of the “active treatment” regulations.................... 41
2. Plaintiffs state no cognizable § 1396a(a)(8) claim. ................................................. 42
a. Plaintiffs have failed to state a cognizable § 1396a(a)(8) specialized services” claim for alleged delay in providing services not required under the NHRA. . 42
b. Plaintiffs have failed to state a cognizable § 1396a(a)(8) “community placement” claim where, as here, the waiver is full and plaintiffs have not been determined to be eligible. ................................................................................. 43
c. Plaintiffs have no § 1396a(a)(8) claim under the pre-2010 definition of “medical assistance.” ...................................................................................... 45
3. Plaintiffs state no cognizable § 1396n(c)(2)(B) or (C) claim. ................................. 46
4. Plaintiffs state no cognizable claim under 42 U.S.C.§§ 1396a(a)(10)(B)(i) and (ii). ..................................................................................................................... 48
CONCLUSION............................................................................................................................. 52

Defendants’ Partial Motion to Dismiss

Plaintiffs’ Amended Complaint

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TABLE OF AUTHORITIES

Cases 1st Westo Corp. v. School Dist. of Philadelphia, 6 F.3d 108 (3d Cir. 1993)................................ 20 Abbey v. Rowland, 359 F.Supp.2d 94 (D. Conn. 2005) ................................................................ 22 Alexander v. Sandoval, 532 U.S. 275 (2001)................................................................................ 32 Anderson v. Jackson, 556 F.3d 351 (5th Cir. 2009) ..................................................................... 33 Arc of Wash. State Inc. v. Braddock, 427 F.3d 615 (9th Cir. 2005) ............................................. 44 Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (2009) ............................................................... 23 Assoc. of Cmty. Orgs. For Reform Now v. Fowler, 178 F.3d 350 (5th Cir. 1999) ................. 14, 15 Atkins v. Rivera, 477 U.S. 154, 154 (1986) .................................................................................... 6 Bagley v. Blagojevich, 646 F.3d 378 (7th Cir. 2011), cert. denied, 2011 WL 4534022 (Oct. 3,
2011) ......................................................................................................................................... 21 Banks v. Dallas Housing Authority, 271 F.3d 605 (5th Cir. 2001)............................................... 33 Baum v. Northern Dutchess Hosp., --- F.Supp.2d ---, 2011 WL 240196 (N.D.N.Y. January 24,
2011) ......................................................................................................................................... 36 Beckwith v. Kizer, 912 F.2d 1139 (9th Cir. 1990). ................................................................. 43, 44 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................. 23 Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452 (7th Cir. 2007) .............................................. 47 Bertulli v. Indep. Ass’n of Cont. Pilots, 242 F.3d 290 (5th Cir. 2001) ......................................... 11 Blancahrd v. Forrest, 71 F.3d 1163 (5th Cir. 1996)...................................................................... 36 Blessing v. Freestone, 520 U.S. 329 (1997) ............................................................... 26, 27, 29, 30 Boudreau ex rel. Boudreau v. Ryan, No. 00-C-5392,
2001 WL 840583 (N.D. Ill. May 2, 2001) ................................................................................ 45 Boulet v. Celucci, 107 F.Supp.2d 61 (D.Mass. 2000)............................................................. 38, 44 Bruggerman ex rel. Bruggerman, 324 F.3d 906 (7th Cir. 2003) .................................................. 45 Bryson v. Shumway, 308 F.3d 79 (1st Cir. 2002) ................................................................... 38, 45 Casas v. American Airlines Inc., 304 F.3d 517 (5th Cir. 2002..................................................... 30 Children’s Healthcare Is A Legal Duty, Inc. v. Deters, 92 F.3d 1412 (6th Cir. 1996)................. 21 Confederated Tribes & Bands of the Yakama Indian Nation v. Locke, 176 F.3d 467 (9th Cir.
1999) ......................................................................................................................................... 21 Daughtery v. I-Flow, Inc., No. 3:09-CV-2120-P, 2010 WL 2034835, (N.D. Tex. April 29, 2010)
.................................................................................................................................................. 11 Duncan v. Johnson-Mathers Health Care, Inc., Civ. A. No. 5:09-CV-00417-KKC, 2010 WL
3000718, at (E.D. Ky. July 28, 2010) ................................................................................. 32, 36 Edelman v. Jordan, 415 U.S. 651 (1974) ..................................................................................... 20 Equal Access for El Paso, Inc. v. Hawkins, 509 F.3d 697 (5th Cir. 2007)............................. 27, 36

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Ex parte Young, 209 U.S. 123 (1908) ................................................................................20, 21, 22 Evergreen Presbyterian Ministries Inc. v. Hood, 235 F.3d 908 (5th Cir. 2000) .................... 26, 27 Fitts v. McGhee, 172 U.S. 516 (1899) .......................................................................................... 20 Florida et al. v. U.S. Dept. of Health and Human Services,
780 F.Supp.2d 1256 (N.D. Fla. 2011) .......................................................................................28 Florida ex rel. Bondi v. U.S. Dept. of Health and Human Services, 780 F.Supp.2d 1307, aff’d in
part, rev’d in part, 648 F.3d 1235 (11th Cir.), pet. cert. filed (2011)....................................... 29 Florida, et al., v. Department of Health and Human Services, et al., No. 11-400 (U.S. pet. filed
Sept. 27, 2011) .......................................................................................................................... 29 Frazar v. Gilbert, 300 F.3d 530 (5th Cir. 2002) ..................................................................... 27, 39 Friends of the Earth, Inc. v. Laidlaw Env’t. Servs. (TOC), 528 U.S. 167 (2000) ........................ 11 Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103 (1989) .................................... 24 Gonzaga Univ. v. Doe, 536 U.S. 273 (2002) .................................................................... 24, 26, 31 Grammer v. John J. Kane Reg’l Ctrs-Glen Hazel., 570 F.3d 520 (3rd Cir. 2009) ....................... 33 Greenstein by Horowitz v. Bane, 833 F.Supp 1054 (S.D. N.Y. 1993) ......................................... 49 Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982) ......................................................... 14, 15 Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333 (1977) ............................................... 15 Lewis v. N.M. Dept. of Health, 275 F. Supp. 2d 1319 (D.N.M. 2003) ......................................... 45 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ............................................................. 11, 14 M.A.C. v. Betit, 284 F.Supp.2d 1298 (D. Utah 2003) ............................................................. 38, 40 Makin v. Hawaii, 114 F.Supp.2d 1017 (D. Haw. 1999) ............................................................... 48 Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464 (5th Cir. 2004)............. 23 McCarthy ex rel. Travis v. Hawkins, 381 F.3d 407 (5th Cir.2004) .............................................. 20 McCarthy, ex rel. Travis v. Hawkins, Cause No. A-03-CA-231-SS, United States District Court
for the Western District of Texas, Austin Div., pp. 14–16 (“slip op.”) .................................... 37 Middlesex County Sewerage Authority v. Nat. Sea Clammers Assoc., 453 U.S. 1 (1981). .......... 30 Okpalobi v. Foster, 244 F.3d 405, 426 (5th Cir. 2001) (en banc) ......................................... passim Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89 (1984) ............................................... 20 Pharm. Research & Mfrs. of America v. Walsh, 538 U.S. 644 (2003) .................................... 6, 25 Prince v. Dicker, 29 Fed. Appx. 52 (2nd Cir. 2002)..................................................................... 36 Quern v. Jordan, 440 U.S. 332 (1979) ......................................................................................... 20 Rivera v. Wyeth-Ayerst Lab., 283 F.3d 315, 319 (5th Cir. 2002) ................................................. 11 Rodriguez v. City of New York, 197 F.3d 611 (2d Cir. 1999)....................................................... 49 Rolland v. Cellucci, 198 F.Supp.2d 25 (D. Mass. 2002) .............................................................. 42 Rolland v. Romney, 318 F.3d 42 (1st Cir. 2003) ........................................................................... 42 S.D. v. Hood, 391 F.3d 581 (5th Cir. 2004).................................................................................. 27

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Schweiker v. Hogan, 457 U.S. 569 (1982).............................................................................. 49, 51 Scott v. Taylor, 405 F.3d 1251 (11th Cir. 2005) ........................................................................... 22 Skandalis v. Rowe, 14 F.3d 173 (2d Cir. 1994) ........................................................................ 6, 43 Sparr v. Berks County, No. CIV. A. 02-2576, 2002 WL 1608243 (E.D. Pa. July 18, 2002) ....... 36 State Employees Bargaining Agent Coalition v. Rowland, 494 F.3d 71 (2d Cir. 2007)............... 22 Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103–04 (1998)........................................... 11 Susan J. v. Riley, 254 F.R.D. 439 (M.D. Ala. 2008)..................................................................... 44 Susan J. v. Riley, 616 F. Supp.2d 1219 (M.D. Ala. 2009) .............................................................45 Suter v. Artist M., 503 U.S. 347 (1992) ........................................................................................ 26 Waste Mgmt. Holdings, Inc. v. Gilmore, 252 F.3d 316 (4th Cir. 2001) ....................................... 21 Wilder v. Va. Hosp. Assoc., 496 U.S. 498 (1990) ......................................................................... 26 Women’s Emergency Network v. Bush, 323 F.3d 937 (11th Cir. 2003) ................................. 19, 21 Wright v. Roanoke Redevelopment and Housing Authority, 479 U.S. 418 (1987)....................... 26
Texas Statutes and Regulations 1 TEX. ADMIN. CODE § 353.601 – 603............................................................................................ 8 1 TEX. ADMIN. CODE § 357.3(a) ................................................................................................... 35 40 TEX. ADMIN. CODE § 9.155...................................................................................................... 44 TEX. GOV’T CODE § 531.0056 ........................................................................................................ 4 TEX. GOV’T CODE § 418.001 ......................................................................................................... 5 TEX. GOV’T CODE § 316.009 .......................................................................................................... 5 TEX. GOV’T CODE § 316.021 .......................................................................................................... 5 TEX. GOV’T CODE § 401.0045 ...................................................................................................... 17 TEX. GOV’T CODE § 401.041 ........................................................................................................ 17 TEX. GOV’T CODE § 401.043 ........................................................................................................ 17 TEX. GOV’T CODE § 401.0445 ........................................................................................................ 5 TEX. GOV’T CODE § 421.002 .......................................................................................................... 5 TEX. GOV’T CODE § 531.001(4)...................................................................................................... 3 TEX. GOV’T CODE § 531.002 .......................................................................................................... 3 TEX. GOV’T CODE § 531.005 .................................................................................................... 5, 17 TEX. GOV’T CODE § 531.0055 .................................................................................................... 3, 4 TEX. GOV’T CODE § 531.0056 .................................................................................................. 5, 17 TEX. GOV’T CODE § 531.019 ........................................................................................................ 35 TEX. GOV’T CODE § 531.021(a) .................................................................................................. 3, 4

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TEX. HUM. RES. CODE § 32.031 .................................................................................................3, 23 TEX. HUM. RES. CODE § 161.051(a), (b) ......................................................................................... 4 TEX. HUM. RES. CODE § 161.071 .................................................................................................... 4

Other Authorities
Ron Beal, Power of the Governor: Did the Court Unconstitutionally Tell the Governor to Shut Up?, 62 BAYLOR L. REV. 72, 81-88 (2010) .............................................................................. 18

Constitutional Provisions TEX. CONST. art IV, § 1................................................................................................................... 5 TEX. CONST. art. IV, § 14.............................................................................................................. 20 TEX. CONST., art. IV, § 12;.............................................................................................................. 6

Federal Statutes and Regulations

28 C.F.R. § 41.3(d) ....................................................................................................................... 23

28 C.F.R. § 41.51(b)(1)................................................................................................................. 23

28 C.F.R. § 41.51(a)...................................................................................................................... 23

29 U.S.C. § 794....................................................................................................................... 22, 23

42 C.F.R. § 430.25 ...................................................................................................................... 7, 8

42 C.F.R. § 431.10(e)(1)(ii) .......................................................................................................... 19

42 C.F.R. § 440.1, et seq............................................................................................................... 50

42 C.F.R. § 440.10 ........................................................................................................................ 50

42 C.F.R. § 440.40 .................................................................................................................... 8, 50

42 C.F.R. § 440.50 ........................................................................................................................ 50

42 C.F.R. § 440.70 ........................................................................................................................ 50

42 C.F.R. § 440.155 ........................................................................................................................ 8

42 C.F.R. § 440.165 ...................................................................................................................... 50

42 C.F.R. § 440.166 .......................................................................................................................50

42 C.F.R. § 440.180 .................................................................................................................... 7, 8

42 C.F.R. § 440.210 ...................................................................................................................... 50

42 C.F.R. § 440.225 ...................................................................................................................... 50

42 C.F.R. § 440.240 ................................................................................................................ 49, 50

42 C.F.R. § 440.250 .................................................................................................................. 8, 49

42 C.F.R. § 441.301 .................................................................................................................... 7, 8

42 C.F.R. § 441.302 ...................................................................................................................... 39

42 C.F.R. § 441.303(f)(6) ........................................................................................................... 7, 8

42 C.F.R. § 441.305(a)................................................................................................................ 7, 8

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42 C.F.R. § 483.100, et seq........................................................................................................... 31 42 C.F.R. § 483.100–.138 ............................................................................................................. 51 42 C.F.R. § 483.112(b) ................................................................................................................. 31 42 C.F.R. § 483.114(b)(2)............................................................................................................. 31 42 C.F.R. § 483.116(b)(2)............................................................................................................. 31 42 C.F.R. § 483.118 ...................................................................................................................... 31 42 C.F.R. § 483.120(a)................................................................................................ 10, 41, 43, 51 42 C.F.R. § 483.120(a)(2) ........................................................................................... 10, 43, 31, 51 42 C.F.R. § 483.120(b) ................................................................................................................. 31 42 C.F.R. § 483.128 ...................................................................................................................... 31 42 C.F.R. § 483.132(a).................................................................................................................. 31 42 C.F.R. § 483.1–483.138 ........................................................................................................... 50 42 C.F.R. § 483.400–.480 ............................................................................................................. 50 42 C.F.R. § 483.440 ........................................................................................ 10, 31, 41, 42, 43, 51 42 C.F.R. § 483.5 .......................................................................................................................... 50 45 C.F.R. § 84.1 ............................................................................................................................ 23 45 C.F.R. § 84.2 ............................................................................................................................ 23 42 U.S.C. § 12132 et seq................................................................................................................. 2 42 U.S.C. § 1369r(g)..................................................................................................................... 32 42 U.S.C. § 1396, et seq........................................................................................................ 5, 6, 50 42 U.S.C. § 1396a .................................................................................................................. passim 42 U.S.C. § 1396a(a)(10)(A) ........................................................................................................ 50 42 U.S.C. § 1396a(a)(10)(B)....................................................................................... 10, 48, 49, 51 42 U.S.C. § 1396a(a)(10)(B)(i)..................................................................................................... 49 42 U.S.C. § 1396a(a)(8) ......................................................................................................... passim 42 U.S.C. § 1396a(b) ...................................................................................................................... 5 42 U.S.C. § 1396c ......................................................................................................................... 25 442 U.S.C. § 1396d(a). ..................................................................................................... 43, 49, 50 42 U.S.C. § 1396n(c) .................................................................................................................... 38 42 U.S.C. § 1396n(c)(10).......................................................................................................... 8, 44 42 U.S.C. § 1396n(c)(2)................................................................................................................ 38 42 U.S.C. § 1396n(c)(2)(B) .................................................................................... 9, 10, 12, 15, 39 42 U.S.C. § 1396n(c)(2)(C) ................................................................................................... passim 42 U.S.C. § 1396n(c)(3).............................................................................................................. 7, 8 42 U.S.C. § 1396n(c)(4).................................................................................................................. 8

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42 U.S.C. § 1396n(c)(9).............................................................................................................. 7, 8 42 U.S.C. § 1396n(c)(10)................................................................................................................ 7 42 U.S.C. § 1396r .................................................................................................................. passim 42 U.S.C. § 1396r(b)(3)(F) ..................................................................................................... 31, 40 42 U.S.C. § 1396r(e) ................................................................................................................. 2, 31 42 U.S.C. § 1396r(f) ..................................................................................................................... 31 42 U.S.C. § 1396r(h)..................................................................................................................... 35 42 U.S.C. § 1396r, et seq .................................................................................................... 2, 34, 40 42 U.S.C. § 1437f(e) ..................................................................................................................... 33 42 U.S.C. § 1983.................................................................................................................... passim
Federal Rules Fed. R. Civ. P. 12(b)(1)..............................................................................................................9, 22 Fed. R. Civ. P. 12(b)(6)..........................................................................................10, 22, 23, 40, 46

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TO THE HONORABLE JUDGE ORLANDO L. GARCIA: Defendants Rick Perry, in his official capacity as Governor of The State of Texas
(“Governor”), Thomas Suehs, in his official capacity as Executive Commissioner of the Texas Health and Human Services Commission (“HHSC”), and Chris Traylor, in his official capacity as Commissioner of the Texas Department of Aging and Disability Services (“DADS”) (collectively, “Defendants”), move this Court pursuant to Rules 12(b)(1) and 12(b)(6) to dismiss Governor Perry and all of Plaintiffs’ Medicaid Act claims, for the reasons stated herein.
INTRODUCTION Plaintiffs filed their original Complaint on December 20, 2010. Dkt. # 1. On March 8, 2011, Defendants filed a motion to dismiss. Dkt. ## 30, 32. Plaintiffs responded on April 18, Dkt. # 40, and Defendants replied on June 1, 2011. Dkt. # 51. On October 4, 2011, Plaintiffs were granted leave to file an Amended and Supplemental Complaint” (“Amended Complaint” or “Am. Complt.”). Dkt. # 63. Notwithstanding the newly-asserted allegations, however, Plaintiffs have failed to cure the deficiencies in their original Complaint. Governor Perry and all of Plaintiffs’ Medicaid Act claims should be dismissed entirely. I. Plaintiffs’ Claims Plaintiffs are six individual named plaintiffs (“Individual Plaintiffs”) who claim they are adult persons with mental retardation or other related conditions (hereinafter referred to as “developmental disabilities”),1 and two organizational plaintiffs (“Organizational Plaintiffs”). Plaintiffs are suing on behalf of themselves and a purported class,2 claiming to have been inappropriately and unnecessarily segregated in nursing facilities (“NFs”) because of
1 In their Amended Complaint, Plaintiffs refer to “mental retardation or other related conditions” as “developmental disabilities.” Defendants normally use the term “intellectual disability” to refer to mental retardation, and “developmental disability” to refer to “related conditions.” However, for purposes of this motion, Defendants will use the term “developmental disability” to refer to both mental retardation and related conditions. 2 The Organizational Plaintiffs also sue on behalf of their members. Am. Complt. ¶¶ 18, 21. Defendants’ Partial Motion to Dismiss Plaintiffs’ Amended Complaint

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Defendants’ purported failure to provide certain services, and to provide services in a community-based residential placement. Am. Complt. ¶¶ 1–5. Specifically, Plaintiffs complain that Defendants have failed to: timely and appropriately conduct pre-admission screening and assessments before NF placement; provide all needed specialized services; assess the appropriateness of alternative, less restrictive settings; and advise of and timely provide a choice of community-based services and supports. Am. Complt. ¶¶ 5, 234, 246, 249, 251, 252, 256-58. Plaintiffs assert that in so doing, Defendants have violated their rights under the Americans with Disabilities Act, 42 U.S.C. § 12132 et seq. (“ADA”), Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (“§ 504” or “Rehab. Act”), and several sections of Title XIX of the Social Security Act, 42 U.S.C. § 1396a, et seq. (“Medicaid Act”), including the 1987 Nursing Home Reform Amendments to the Medicaid Act, 42 U.S.C. § 1396r, et seq. (“NHRA”). Plaintiffs bring their claims under 42 U.S.C. § 1983 (“Section 1983”). As relief, Plaintiffs seek expansive, far-reaching declaratory and injunctive relief touching virtually every aspect of Texas’s Medicaid program for PASRR-eligible persons with developmental disabilities.3 Am. Complt. pp. 58–60. II. The Defendants and Their Roles in the Texas Medicaid Program
The Texas Medicaid Program is a state and federally funded program that provides health benefits to nearly 3.4 million low-income, elderly, and disabled Texans.4 Thomas Suehs, as the Executive Commissioner of HHSC, and Chris Traylor, as the Commissioner of DADS, are the state officials who head the two state agencies responsible for administering those parts of the Texas Medicaid Program targeted by this lawsuit, namely, the provision of Medicaid services to

3 “PASRR” (formerly known as “PASARR”) means “Pre-Admission Screening and Resident Review,” as set out in the NHRA, 42 U.S.C. § 1396r(e)(7). 4 Texas Medicaid Enrollment by Month, July 2010, available at: http://www.hhsc.state.tx.us/research/MedicaidEnrollment/meByMonthCompletedCount.html.

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Medicaid-eligible persons meeting the medical necessity requirement for admission to a nursing facility who also have developmental disabilities.
HHSC is the state agency with primary responsibility for ensuring the delivery of health and human services in Texas in a manner that: (1) uses an integrated system to determine client eligibility; (2) maximizes the use of federal, state, and local funds; and (3) emphasizes coordination, flexibility, and decision-making at the local level. TEX. GOV’T CODE § 531.002. In that role, HHSC provides oversight and strategic direction to the state agencies that make up the health and human services system in Texas. TEX. GOV’T CODE § 531.001(4); see generally TEX. GOV’T CODE § 531.001, et seq. HHSC is governed by an executive commissioner, now Thomas Suehs, who is appointed by the Governor with the advice and consent of the Senate. Id. § 531.005(a); see Am. Complt. ¶¶ 22, 23. HHSC’s executive commissioner adopts rules and policies for the operation and provision of health and human services by the health and human services agencies, and manages and directs the operations of each health and human services agency. TEX. GOV’T CODE §§ 531.0055(e) and (e)(2); see Am. Complt. ¶ 23.
Specifically, HHSC “supervise[s] the administration and operation of the Medicaid program,” TEX. GOV’T CODE § 531.0055(b)(1), and is the single state agency designated to administer federal medical assistance funds.5 TEX. GOV’T CODE § 531.021(a). Accordingly, HHSC plans and directs the Medicaid program in each agency that operates a portion of the Medicaid program, including DADS. Id. § 531.021(b)(1). HHSC also receives and distributes federal Medicaid funds to the health and human services agencies which administer the Texas Medicaid program. TEX. HUM. RES. CODE § 32.031. As specifically related to this lawsuit, HHSC is responsible for the administration of the PASRR program in Texas.

5 The Medicaid Act and its implementing regulations allow States to receive Medicaid funding only it they designate a “single State agency … to administer or supervise the administration of the [state Medicaid] plan.” 42 C.F.R. § 431.10(b)(1); see 42 U.S.C. § 1396a(5). In Texas, HHSC is that agency.

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DADS is the state agency responsible for administering human services programs for the aging and disabled, including: (1) administering and coordinating programs to provide community-based care and support services to promote independent living for populations that would otherwise be institutionalized; (2) providing institutional care services, including services through convalescent and nursing homes and related institutions; (3) providing and coordinating programs and services for persons with disabilities, including programs for the treatment, rehabilitation, or benefit of persons with developmental disabilities or mental retardation; and (4) performing all licensing and enforcement activities and functions related to nursing homes and related institutions. TEX. HUM. RES. CODE § 161.071 (1)–(3), (6); see Am. Complt. ¶ 24. The DADS Commissioner, now Chris Traylor, is appointed by the Executive Commissioner of HHSC, with the approval of the Governor, and serves at the pleasure of the Executive Commissioner. TEX. GOV’T CODE § 531.0056; TEX. HUM. RES. CODE § 161.051(a), (b); see Am. Complt. ¶ 22, 23, 24.
The Governor of Texas is the chief executive officer of the State. TEX. CONST. art IV, § 1; see Am. Complt. ¶ 22. However, Texas law does not imbue the Governor with any direct responsibilities for development, administration, or funding of the state’s Medicaid program. Specifically, the Governor is not “responsible for directing, supervising, and controlling” the Texas Medicaid program, as Plaintiffs allege. Am. Complt. ¶ 22. To the contrary, the Texas Legislature has specifically designated HHSC as the state agency to “supervise the administration and operation of the Medicaid program,” TEX. GOV’T CODE § 531.0055(b)(1), and as the single state agency designated to administer federal medical assistance funds, TEX. GOV’T CODE § 531.021(a). Nor is the Governor “responsible for … seeking funds from the legislature to implement … programs and deliver … services.” Am. Complt. ¶ 22. While it is true that the

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Governor is required to submit a biennial budget to the Legislature, TEX. GOV’T CODE § 401.0445, and that he is permitted to submit a proposed general appropriations bill to the Legislature, TEX. GOV’T CODE § 316.009, the Governor has no authority to appropriate state funds for the Texas Medicaid program. Instead, only members of the Legislature are authorized to file a general appropriations bill, and only the Legislature can appropriate state funds. TEX. GOV’T CODE § 316.021. Finally, the Governor’s authority to appoint the Executive Commissioner of HHSC, subject to the advice and consent of the Senate, TEX. GOV’T CODE § 531.005, and to approve the appointment of the Commissioner of DADS, TEX. GOV’T CODE § 531.0056), does not give him the authority to administer or operate Texas’s Medicaid program, which by law is administered and operated by HHSC and other health and human services agencies, including DADS.6 III. Overview of the Medicaid Act and Medicaid Waivers
Congress created the Medicaid program in 1965 by adding Title XIX to the Social Security Act, 42 U.S.C. § 1396, et seq. The program authorizes federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons. In order to qualify for federal reimbursement under Medicaid, a State must have a plan for medical assistance that meets certain statutorily defined requirements, 42 U.S.C. § 1396a(a), and that is approved by the Secretary of Health and Human Services (“Secretary”), 42 U.S.C. § 1396a(b). A “State Plan” defines the categories of individuals eligible for benefits, 42 U.S.C. § 1396a(a)(10), and the specific kinds of medical services that are covered, 42 U.S.C. § 1396d(a). States cannot qualify for federal Medicaid funds unless they provide coverage to

6 By contrast, the Governor does have authority to: appoint state and district offices, TEX. CONST., art. IV, § 12; direct homeland security in Texas and develop a statewide homeland security strategy, TEX. GOV’T CODE § 421.002; declare a state of disaster and meet the dangers to the state and people presented by disasters, TEX. GOV’T CODE § 418.001, et seq.

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certain groups, and are given the option to extend coverage to various other groups. The line between mandatory and optional coverage is primarily drawn in § 1396a(a): mandatory coverage is specified in § 1396a(a)(10)(A)(i), and the state options are set forth in subsection 1396a(a)(10)(A)(ii). Skandalis v. Rowe, 14 F.3d 173 (2d Cir. 1994). States receive federal Medicaid funds only if they provide coverage to the required groups of the “categorically needy”7 and, at the state’s option, may also cover one or more optional “categorically needy” groups. 42 U.S.C. § 1396a(a)(10)(A)(ii).8 These categories are determined based on financial eligibility standards. 42 U.S.C. § 1396a(a)(10)(A). Federal law, however, does not condition federal reimbursement on a State’s decision to provide all services and devices covered by the statute. Rather, Congress has set a basic minimum standard for any state Medicaid program; a state need only provide financial assistance for certain specified medical treatment to receive Medicaid funds. Id.
In 1981, Congress amended the Medicaid Act by adding 42 U.S.C. § 1396n(c) to allow the Secretary of Health and Human Services, through the Health Care Finance Administration (now the Centers for Medicare & Medicaid Services (“CMS”)), to waive certain statutory criteria for Medicaid reimbursement, and to allow participating states, upon the state’s application, to use federal and state funds to provide home and community-based services as alternatives to funding

7 The required “categorically needy” groups include individuals eligible for cash benefits under the Temporary Assistance for Needy Families (TANF) program; the aged, blind, or disabled individuals who qualify for supplemental security income (SSI) benefits; and other low-income groups such as pregnant women and children entitled to poverty-related coverage. 42 U.S.C. § 1396a(a)(10)(A)(i); see Pharm. Research & Mfrs. of America v. Walsh, 538 U.S. 644, 651 (2003). 8 A state, at its option, may also cover the “medically needy.” Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 650–51 (2003); Atkins v. Rivera, 477 U.S. 154, 154 (1986). The “medically needy” are individuals who meet the nonfinancial eligibility requirements for inclusion in one of the groups covered under Medicaid, but whose income or resources exceed the financial eligibility requirements for categorically needy eligibility. § 1396a(a)(10)(C); see id. at 650-51. Texas has a program for the “medically needy,” but that program does not include the aged, blind, or disabled. See http://www.hhsc.state.tx.us/medicaid/StatePlanDocs/BasicStatePlanAttachments.pdf, p. 79 (State Plan).

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care for Medicaid-eligible individuals in hospitals, nursing facilities or intermediate care facilities for individuals with mental retardation (“ICFs-MR”) under the State Plan. 42 U.S.C. § 1396n(c); 42 C.F.R. § 440.180; § 441.301(b)(1)(iii). As its name suggests, a waiver relieves states from complying with certain federal reimbursement criteria that ordinarily must be met to receive federal Medicaid funding under the State Plan.9 The statute specifically provides that the criteria of statewideness, comparability of services, and single standard for income and resource eligibility may be waived. 42 U.S.C. § 1396n(c)(3); 42 C.F.R. § 430.25(d)(2).
Unlike ICF-MR or nursing facility services, which must be made available to all individuals who are categorically eligible for Medicaid services in conformance with the Medicaid Act, there is no statutory entitlement to waiver services. In other words, not all people who are eligible for these “waiver” services are entitled to receive them. In fact, the Medicaid Act and applicable regulations expressly require participating states to limit the number of persons who may receive waiver services. 42 U.S.C. §§ 1396n(c)(9), (10); 42 C.F.R. §§ 441.303(f)(6), 441.305(a). Moreover, an approved cap is binding on the state.10 Defendants are prohibited from increasing the number of waiver slots unless they request amendment to their waiver applications and receive necessary approval from CMS. Nothing in federal Medicaid law

9 The Medicaid regulations describe the purpose of a Medicaid waiver program as follows: Waivers are intended to provide the flexibility needed to enable States to try new or different approaches to the efficient and cost-effective delivery of health care services, or to adapt their programs to the special needs of particular areas or groups of recipients. Waivers allow exceptions to State plan requirements and permit a State to implement innovative programs or activities on a time-limited basis, and subject to specific safeguards for the protection of recipients and the program.
42 C.F.R. § 430.25(b). To qualify for a waiver, a state must demonstrate that rendering home and community-based services to qualified individuals would not result in overall expenditures in excess of those that would be incurred if those individuals received services in the traditional institutional program. 42 U.S.C. § 1396n(c)(2). 10 Specifically, the regulations provide that a state seeking a waiver:
must indicate the number of unduplicated beneficiaries to which it intends to provide waiver services in each year of its program. This number will constitute a limit on the size of the waiver program unless the State requests and the Secretary approves a greater number of waiver participants in a waiver amendment. 42 C.F.R. § 441.303(f)(6); see 42 C.F.R. § 441.305(a). In fact, the statute expressly contemplates that waiver programs may be limited to as few as 200 individuals. 42 U.S.C. § 1396n(c)(10).

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or regulation requires a participating state to increase the number of persons served in its waiver programs. Additionally, a participating state has wide latitude to define the types of services that it will offer under the waiver, to limit the geographical areas where waiver services are offered and the target groups to whom the services are offered, and to make waiver services available in an amount, duration and scope that differs from the amount, duration, and scope of services provided to other Medicaid recipients. 42 U.S.C. §§ 1396n(c)(3), (4), (9), 1396n(c)(10); 42 C.F.R. §§ 430.25(h)(3)(ii), 440.180, 441.301(b)(3), (6), 441.303(f)(6), 440.250(j), (k), (l), 441.305(a).
As permitted by 42 U.S.C. § 1396n(c), HHSC has obtained approval from CMS to offer home and community-based services to a specified number of individuals who require the level of care provided in ICFs-MR. As Plaintiffs acknowledge, the Home and Community-Based Services (“HCS”) waiver is one such program. Am. Complt. ¶ 57. The HCS waiver program has a limited number of slots,11 and, as Plaintiffs’ acknowledge, there is an interest list of approximately 45,756 persons, as of August 31, 2010, who are waiting for HCS waiver services to become available. Am. Complt. ¶ 57.
Texas also offers a statewide community-based alternative for persons age 21 and over requiring a nursing facility level of care. Such care is provided through the Community Based Alternatives (“CBA”) waiver,12 and the managed-care equivalent to CBA, the “STAR+PLUS”

11 The number of unduplicated individuals approved by CMS for the HCS waiver for the state fiscal year ending August 31, 2011 is 22,756. See http://www.dads.state.tx.us/providers/HCS/HCSwaiveramendment2.pdf (CMS approval letter); see also http://www.cms.gov/MedicaidStWaivProgDemoPGI/MWDL/itemdetail.asp?filterType=none&filterByDID=99&sortByDID=2&sortOrder=ascending&itemID=CMS1216924&intNumPerPage=10 (CMS website containing the original approved HSC waiver (2008) and three subsequent amendments. The current amendment (6/1/2010) is TX 0110.R05.03). 12 See http://cfoweb.dads.state.tx.us/ReferenceGuide/guides/FY11ReferenceGuide.pdf p. 32 (CBA is alternative to NF); see http://www.dads.state.tx.us/providers/CBA/CBAWaiver.pdf (CBA waiver application) pp. 3 (showing waiver as alternative to care in a NF as described in 42 C.F.R. § 440.40 and 42 C.F.R. § 440.155), 4 (describing waiver as alternative to NF care).

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waiver.13 No Plaintiff has pleaded facts showing she has even attempted to apply for a CBA or STAR+PLUS waiver slot, or any other waiver other than HCS. Am. Complt. ¶¶ 147, 157, 167, 185, 194, 223, 224.

SUMMARY OF ARGUMENT The Individual Plaintiffs lack standing to assert claims under 42 U.S.C. § 1396n(c)(2)(B) because they have asserted no injury in connection with that section’s requirement to evaluate whether they require the level of care provided in a nursing facility. They also lack standing under § 1396n(c)(2)(C) because that section’s informational requirement arises at the time the individual is actually being offered a waiver slot, and there are no “feasible alternatives” under the waiver when, as Plaintiffs here admit, the waiver is full. Thus, they have suffered no § 1396n(c)(2)(C) injury, either. For these same reasons, the Organizational Plaintiffs lack standing to assert § 1396n(c)(2)(B) or (C) claims on behalf of their members. The Organizational Plaintiffs also lack standing to assert claims on their own behalf because they have failed to plead facts showing any injury whatsoever to the organizations per se. This Court should dismiss Governor Perry under Rule 12(b)(1) for lack of standing because Plaintiffs pled no facts showing that the Governor caused Plaintiffs’ injuries or that he could redress those injuries. Similarly, the Governor of Texas is entitled to Eleventh Amendment immunity because the Governor lacks the requisite “connection” to the Texas Medicaid Program. Alternatively, Plaintiffs’ claims against the Governor should be dismissed under Rule 12(b)(6) for failure to state a viable claim, since the Governor did not cause any deprivation of Plaintiffs' rights and cannot provide the relief Plaintiffs seek.

13 STAR+PLUS is available in only certain defined service areas. See 1 TEX. ADMIN. CODE § 353.601 – 603 (showing STAR+PLUS as alternative to NF care).

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All of Plaintiffs’ Medicaid Act claims should be dismissed under Rule 12(b)(6) for the following reasons. First, Section 1983 is not available to enforce a federal law where there is no violation of that law, and Defendants cannot violate the Medicaid Act because the Medicaid Act, as spending legislation, does not require state officials to do anything. Second, even under a traditional section-by-section analysis, Plaintiffs’ Medicaid Act claims also fail because these statutes create no individual “rights” that can be vindicated under Section 1983. Third, even if this Court finds that the Medicaid Act provisions at issue confer federal rights enforceable through Section 1983, this Court should still dismiss these claims because Plaintiffs’ allegations fail to state viable Medicaid Act claims. Specifically, Plaintiffs have failed to state a claim under the NHRA and 42 U.S.C. § 1396a(a)(8) (“Reasonable Promptness”) to the extent they seek redress for an alleged failure to provide specialized services other than to the limited extent required by 42 C.F.R. § 483.120(a)(2) and 42 C.F.R. § 483.440(a)(1). Next, Plaintiffs’ § 1396a(a)(8) claim regarding “community placement” fails to state a viable claim because a state may properly limit a waiver program’s size and scope, and ”reasonable promptness” does not apply to community placement when, as here, the community-based waiver they seek is full. Plaintiffs’ claims under 42 U.S.C. § 1396a(a)(10)(B) (“Comparability”) should be dismissed because the Medicaid Act outlines distinct programs and services, and does not require that all services provided to categorically needy recipients in an ICF-MR must also be provided in the same amount, duration, and scope to categorically needy recipients in a NF; moreover, Plaintiffs seek to impose a duty under § 1396a(a)(10)(B) to provide specialized services, active treatment, or other services to individuals in a NF that exceed the requirements of the NHRA. Lastly, Plaintiffs fail to state a claim under 42 U.S.C. §§ 1396n(c)(2)(B) and (C) (“Freedom of Choice”) because the statutory text contains none of the requirements that Plaintiffs create from whole

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cloth and then claim Defendants fail to satisfy. Instead, these statutory provisions afford a right of information only for waiver applicants at the time the individual is actually being assessed for and offered a waiver placement, and Plaintiffs acknowledge that the HCS waiver is full and there is no slot available for them at this time. In short, Plaintiffs have failed to plead any actionable Medicaid Act claim.
ARGUMENT AND AUTHORITY I. This Court Lacks Jurisdiction Over Claims for Which Plaintiffs Lack Standing.
A. Elements of Standing A federal court lacks subject-matter jurisdiction over a matter when the plaintiff lacks standing to bring suit. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). To establish his or her own standing to sue, a plaintiff must make a three-pronged showing of: (1) an “injury in fact” that is concrete and particularized, and actual or imminent, not conjectural or hypothetical; (2) a causal connection between the injury and the conduct complained of that is fairly traceable to the challenged action of the defendant; and (3) redressability—it must be likely, not merely speculative, that the injury will be redressed by a favorable decision. Id. at 560–61. “This triad of injury in fact, causation, and redressability constitutes the core of Article III’s case-or-controversy requirement, and the party invoking federal jurisdiction bears the burden of establishing its existence.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103– 04 (1998). Failure to establish any one element deprives the federal courts of jurisdiction to hear the suit. Id. at 103. Standing is a threshold jurisdictional issue that the Court must evaluate before addressing the merits of Plaintiffs’ action.14 See Friends of the Earth, Inc. v. Laidlaw Env’t. Servs. (TOC), 528 U.S. 167, 180 (2000).

14 Furthermore, Plaintiffs must establish their own standing before addressing class certification because “[s]tanding is an inherent prerequisite to the class certification inquiry.” Bertulli v. Indep. Ass’n of Cont. Pilots, 242 F.3d 290,

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B. Plaintiffs Lack Standing for 42 U.S.C. §§ 1396n(c)(2)(B) and (C) Claims. Plaintiffs lack standing to assert a challenge to Defendants’ compliance with the “freedom of choice” provision of the Medicaid Act, 42 U.S.C. § 1396n(c)(2)(B) or (C), because they do not allege an injury-in-fact from Defendants’ alleged failure to comply with those provisions. Section 1396n(c)(2)(B) requires a state to give assurances that certain persons will be given an evaluation of the need for in-patient hospital services, NF services, or services in an ICF-MR. 42 U.S.C. § 1396n(c)(2)(B). According to CMS, such an evaluation is for the purpose of determining whether the individual may be eligible for a particular waiver program because “[o]nly individuals who are determined to require an institutional level of care specified for the waiver may be enrolled in the waiver.” CMS Instructions, Technical Guide and Review Criteria (“CMS Technical Guide”), Version 3.5, p. 99.15 Specifically, for persons such as Plaintiffs, entering a NF, a nursing home assessment tool (known as the “MDS 3.0”) is used to determine whether the individual meets the medical necessity standard for a NF.16 Here, no Plaintiff has claimed that s/he does not require a level of care provided by a nursing facility, or that s/he was not administered an MDS 3.0. Instead, Plaintiffs assert that their medical needs could and should be met elsewhere than in a nursing facility. Accordingly, Plaintiffs have no standing to bring a

294 (5th Cir. 2001); see also Rivera v. Wyeth-Ayerst Lab., 283 F.3d 315, 319 (5th Cir. 2002) (“Even though the certification inquiry is more straightforward, we must decide standing first, because it determines the court's fundamental power to hear the suit.”). If a plaintiff fails to establish standing to pursue claims for the named plaintiff's personal injuries, the class claim based on those injuries will also fail. Daughtery v. I-Flow, Inc., No. 3:09-CV-2120-P, 2010 WL 2034835, at *2 (N.D. Tex. April 29, 2010). 15 See http://www.dads.state.tx.us/providers/waiver_instructions/index.html. 16 The MDS (“Minimum Data Set”) 3.0 is a “standardized collection of demographic and clinical information that describes a person's overall condition. All licensed nursing facilities in Texas are required to submit MDS assessments for all residents admitted into their facility.” See http://www.dads.state.tx.us/providers/MDS/index.cfm. The MDS 3.0 was the result of a CMS-initiated a national project developed by a joint RAND/Harvard team. See http://www.cms.gov/NursingHomeQualityInits/25_NHQIMDS30.asp (RAND MDS 3.0 Final Study Report and Appendices 2008, MDS Final Report, p. ix).

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claim under § 1396n(c)(2)(B) because they have asserted no injury in connection with that

section’s requirement to evaluate whether they need the level of care provided in a nursing

facility.

Section 1396n(c)(2)(C) provides that the Secretary of Health and Human Services shall

not grant a waiver under the Medicaid Act unless the state seeking the waiver provides

assurances that “individuals who are determined to be likely to require the level of care provided

in a . . . nursing facility . . . are informed of the feasible alternatives, if available under the

waiver, at the choice of such individuals, to the provision of . . . nursing facility services . . . .”

42 U.S.C. § 1396n(c)(2)(C) (emphasis added). According to CMS—which provides the criteria

for evaluating states’ waiver applications—the informational requirement for which the state

must give § 1396n(c)(2)(C) assurances arises at the time the individual is actually being offered a waiver slot and being assessed for the waiver program. CMS Technical Guide, p. 106.17

Specifically, CMS requires that the “individual’s choice must be documented during entrance

into the waiver program.” Id. The “feasible alternatives” under the waiver mean the services

within a waiver program that could meet the needs of the individual, and are determined during

consideration for entrance into the waiver program. Id. Accordingly, CMS’s State Medicaid

Manual reflects that—“Feasible alternatives may only be determined after the assessment of an individual's care needs and an evaluation of level of care.”18

In this case, neither Eric Steward nor Andrea Padron even alleges a failure to inform

them of the “feasible alternatives” under the waiver. See id. ¶¶ 139–48, 161–72. In addition,

17 See also http://www.cms.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=99&sortByDID=1&sortOrder=ascending&itemID=CMS021927&intNumPerPage=10 (State Medicaid Manual), Ch. 4, p. 4–456, § 4442.7. The State Medicaid Manual “makes available to all State Medicaid agencies, in a form suitable for ready reference, informational and procedural material needed by the States to administer the Medicaid program. It is an official medium by which the Health Care Financing Administration (HCFA) (now CMS) issues mandatory, advisory, and optional Medicaid policies and procedures to the Medicaid State agencies.” Id. Ch. 1 (Forward). 18 See id. (State Medicaid Manual), pp. 4-456.

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two Plaintiffs—Andrea Padron and Benny Holmes19—have been offered HCS waiver slots and therefore, as a matter of law, they have suffered no injury-in-fact for purposes of the § 1396n(c)(2) claim. Am. Complt. ¶¶ 166, 194, 209. Finally, of the five plaintiffs not currently participating in the HCS waiver, all of them acknowledge that the waiver is full and there is no spot for them at this time. See id., ¶¶ 147, 157, 167, 185, 224. In other words, although they are on the HCS interest list, there is currently no “feasible alternative” available to them under the waiver. Accordingly, the obligation to inform them of the waiver alternatives is not triggered, but even if it were, they can have suffered no injury from any failure to inform them of alternatives “available under the waiver” because there are none.
C. Organizational Plaintiffs Lack Standing. Organizational Plaintiffs Arc of Texas and Coalition of Texans with Disabilities, Inc. have asserted claims on behalf of both themselves and their members. Am. Compl. ¶¶ 18, 21. However, they do not have standing to assert all of their claims in both capacities. “An organization has standing to sue on its own behalf if it meets the same standing test that applies to individuals.” Assoc. of Cmty. Orgs. For Reform Now v. Fowler, 178 F.3d 350, 356 (5th Cir. 1999) (citing Havens Realty Corp. v. Coleman, 455 U.S. 363, 378-79 (1982)). Accordingly, an organization must show that it has suffered a direct injury-in-fact that is fairly traceable to the actions of the defendant, and that the injury will likely be redressed by a favorable judgment. Id.; see Lujan, 560 U.S. at 560-61. Both Organizational Plaintiffs assert they are comprised of numerous individual members with developmental disabilities. Am. Complt. ¶¶ 16, 19. Yet while the Amended Complaint asserts claims stemming from injuries that allegedly affect such individual members, it wholly

19 Benny Holmes admits that he has twice been placed in the HCS waiver program and currently has an HCS placement. Am. Complt. ¶¶ 194 (nine years in 3-bedroom home provided in HCS), 208-09 (current HCS placement is in 4-bedroom residential home).

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fails to allege any injury directly suffered by the Organizational Plaintiffs. See id. ¶¶ 53–54, 56–

57, 59, 74–80, 83–85, 87–88, 90, 96, 100–103, 115, 127, 137–38, 230, 232, 234, 236, 242–43,

246–47, 249, 251–52, 256–58. For example, the Organizational Plaintiffs’ assertions that they

operate to ensure that “persons with developmental disabilities receive the services to which they

are entitled” and that “people with disabilities may live, learn, work, play and fully participate in

their community of choice” fail to describe any injury whatsoever. See Am. Complt. ¶¶ 17, 20.

Moreover, allegations of a mere setback to an organization’s social interests—had the

Organizational Plaintiffs pled such facts, which they did not—are insufficient to establish the

organization’s standing on its own behalf. Assoc. of Cmty. Orgs. For Reform Now, 178 F.3d at

357-58 (quoting Havens Realty, 455 U.S. at 379). Thus, having failed to show an injury-in-fact

of their own, the Organizational Plaintiffs lack standing to assert claims on their own behalf, and all claims brought by the Organizational Plaintiffs on their own behalf should be dismissed.20

Alternatively, for an organization to maintain associational standing on behalf of its

members, the organization must satisfy a three-pronged standing test:

[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.

Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977). In the instant case, the

Organizational Plaintiffs’ members have no standing in their own rights with regard to certain of

their claims. Specifically, Plaintiffs’ Amended Complaint fails to show that the Organizational

Plaintiffs’ members have standing to assert claims under the so-called “freedom of choice”

provisions of the Medicaid Act, 42 U.S.C. §§ 1396n(c)(2)(B) or (C), just as it fails to establish

such standing with regard to the Individual Plaintiffs. Plaintiffs’ Amended Complaint fails to

20 This would include the ADA and Rehabilitation Act claims as well as the Medicaid Act claims.

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allege that any member of the Organizational Plaintiffs does not require a level of care provided by a nursing facility and/or was not administered an MDS 3.0, and fails to allege that a waiver spot is a “feasible alternative” currently available to any member of the Organizational Plaintiffs or that any member has failed to receive the assurances guaranteed under § 1396n(c)(2)(C) upon actually being offered a waiver slot. Accordingly, under the same line of reasoning applied to the Individual Plaintiffs’ claims, the Organizational Plaintiffs have failed to show that their members have suffered any injury-in-fact with regard to sections 1396n(c)(2)(B) and (C).21 Therefore, the Organizational Plaintiffs lack standing to maintain such claims on their members’ behalf, and such claims should also be dismissed. II. The Governor Is Not A Proper Party.
A. Plaintiffs Lack Standing to Sue the Governor. To establish standing against the Governor for any of the claims asserted in this case, Plaintiffs must allege how the Governor “has caused, will cause, or could possibly cause any injury to them.” Okpalobi v. Foster, 244 F.3d 405, 426 (5th Cir. 2001) (en banc). In addition, if the Governor does not have the power “to redress the injuries alleged, [Plaintiffs] have no case or controversy with [the Governor] that will permit them to maintain this action in federal court.” See id. at 427. Here, Plaintiffs have established neither.
1. The Governor did not, and could not, cause Plaintiffs any injury. Even assuming for purposes of this standing analysis that Plaintiffs have suffered some injury-in-fact, no injury has been, or could be, caused by the Governor. As discussed above, the portions of the Medicaid Act at issue in this lawsuit are administered by DADS and HHSC. See
21 Furthermore, as noted below with regard to the Individual Plaintiffs, Governor Perry does not possess the authority either to have caused the injuries alleged by the Organizational Plaintiffs’ members, or to redress any such injuries. See infra pp. 16−20. Thus, under the same reasoning applied to the Individual Plaintiffs’ claims against Governor Perry, the Organizational Plaintiffs’ members have no case or controversy with Governor Perry, and therefore, the Organizational Plaintiffs lack standing to assert such claims on their members’ behalf.

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supra, pp. 3−4. The Governor has no direct control over the running of the Texas Medicaid Program; that function is clearly assigned to HHSC and its health services agencies, including DADS.
Rather, the powers of the Governor with respect to HHSC and DADS are limited to appointing the HHSC Executive Commissioner and approving the DADS commissioner. See Am. Complt. ¶ 22.22 Plaintiffs do not allege that any of the Governor’s acts in connection with those powers have caused Plaintiffs’ injuries. Nor do Plaintiffs allege that the Governor caused them injury by exercising his more general executive powers, such as holding budget hearings, compiling a proposed biennial appropriations budget, or using his line-item veto authority.23 Indeed, Plaintiffs make no allegation that the Governor has any direct control over how the State administers Medicaid “services, programs and activities,” such that he would have any responsibility for satisfying the integration mandate of the ADA or the Rehabilitation Act. See Am. Complt. ¶¶ 231, 240. Similarly, Plaintiffs make no allegation that the Governor has any involvement in developing policies and procedures to ensure that the various statutory and regulatory requirements of the Medicaid Act and the NHRA are satisfied. For example, neither the Governor nor his office is alleged to be responsible for: conducting pre-admission screening and assessments, providing specialized services, or providing community-based services and supports. See, e.g., Am. Complt. ¶¶ 5, 246, 249, 251, 252, 256–58. In short, Plaintiffs do not allege that the Governor has done anything (or failed to do anything) that is within his constitutional power to do that has caused the injuries that Plaintiffs allege.
Article III jurisdiction is simply lacking where Plaintiffs sue a state official who is without power to take the complained-of action, and whose actions have not caused, or could not

22 See also TEX. GOV’T CODE §§ 531.005, 531.0056. 23 See TEX. GOV’T CODE § 401.041, 401.043, 401.0045, TEX. CONST. art. IV, § 14.

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cause, any injury to them. See Okpalobi, 244 F.3d at 426 (plaintiffs failed to satisfy Article III standing with respect to the Governor, who had no authority to enforce the allegedlyunconstitutional state statute).
2. Plaintiffs’ injuries, if any, are not redressable through the Governor. In addition, the Governor cannot grant Plaintiffs any of the relief they seek regarding the provision of community-based Medicaid services, supports and programs. See Am. Complt. ¶¶ 54-56. As described above, the Governor’s powers with regard to management and oversight of HHSC and DADS are extremely limited. Plaintiffs are not requesting injunctive relief requiring the Governor to appoint an HHSC Executive Commissioner, approve an agency director for DADS, compile the biennial appropriations budget, or use the line-item veto. Indeed, the Governor does not adopt policies or procedures regarding the provision of Medicaid services, nor does he have any direct control over such services.24 Consequently, the relief Plaintiffs seek cannot be obtained by enjoining the Governor. See Okpalobi, 244 F.3d at 427 (“a state official cannot be enjoined to act in any way that is beyond his authority to act in the first place.”).

24 Plaintiffs’ complaint refers to two executive orders that the Governor issued in 1999 and 2002 regarding community-based services for people with disabilities. Am. Complt. ¶¶ 48-49. Under Article IV section 10 of the Texas Constitution, the Governor has power to give direction in all branches of the executive department in the form of executive orders. But the Governor’s power to enforce those orders is limited and is based primarily on his constitutional appointment power. Concomitant with his authority to appoint, the Governor has the power to refuse to reappoint the person as agency head. However, unlike the federal President, he has no power to force the removal of the agency head prior to the termination of the agency head’s appointed term, nor does he have absolute power to force an appointed agency head to carry out his orders. See Ron Beal, Power of the Governor: Did the Court Unconstitutionally Tell the Governor to Shut Up?, 62 BAYLOR L. REV. 72, 81-88 (2010). Undoubtedly, the Governor has the power to issue executive orders and may exert his influence to see that they are carried out, but he has no constitutional or statutory (that is, no judicially-enforceable) duty to do either. The limitations on his ability to enforce executive orders preclude the Governor from providing the relief that Plaintiffs seek in this case. The Governor can refuse to reappoint the HHSC Executive Commissioner or refuse to approve the reappointment of the Commissioner of DADS in the event an executive order is not followed. But Plaintiffs are not seeking an injunction requiring the Governor to refuse to reappoint the HHSC Executive Commissioner or the DADS Commissioner due to failure to follow executive orders. Rather, they are seeking an injunction requiring actions that only HHSC and DADS (or, in the case of appropriations, the Legislature) can perform. Am. Complt. ¶¶ 54-56.

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In Okpalobi v. Foster, the plaintiffs tried to enjoin enforcement of a Louisiana statute that made abortion providers liable in tort for any damages caused by abortion procedures, and named Louisiana’s governor and attorney general as defendants in the lawsuit. In an en banc opinion, the Fifth Circuit held that an injunction against the governor and the attorney general would be “utterly meaningless” because “[t]he governor and the attorney general have no power to redress the asserted injuries … Because these defendants have no powers to redress the injuries alleged, the plaintiffs have no case or controversy with these defendants that will permit them to maintain this action in federal court.” Id. at 427.
The same is true of Plaintiffs’ claims against Governor Perry in this lawsuit. Because the Governor does not administer any of the federal-state programs complained of in Plaintiffs’ complaint, and therefore, has no authority to redress Plaintiffs’ purported injuries, Plaintiffs also fail to satisfy the redressability prerequisite for Article III standing.
Without causation or redressability, all Plaintiffs have left is their conclusory assertion that the Governor “is responsible for ensuring that the State submits a State Medicaid Plan which conforms to federal law, and that Texas’s Medicaid program is administered consistent with that Plan, relevant federal statutes, and federal regulations.” Am. Complt. ¶ 136. As an initial matter, this allegation is incorrect as a matter of law, since federal law mandates that a single state agency (not the governor) be responsible for “exercis[ing] administrative discretion in the administration or supervision of the [Medicaid state] plan” and for “issu[ing] policies, rules, and regulations on program matters.” 42 C.F.R. § 431.10(e)(1)(ii); see also 42 U.S.C. § 1396a(a)(5) (establishing single agency mandate for Medicaid).
Moreover, such allegations of generalized executive enforcement powers are insufficient to establish standing over a governor or other state officer. See Women’s Emergency Network v.

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Bush, 323 F.3d 937, 949 (11th Cir. 2003) (“Where the enforcement of a statute is the responsibility of parties other than the governor … the governor’s general executive power is insufficient to confer jurisdiction.”) (affirming dismissal of governor); 1st Westo Corp. v. School Dist. of Philadelphia, 6 F.3d 108, 113 (3d Cir. 1993) (dismissing claims against Secretary of Education and Attorney General; “General authority to enforce the laws of the state is not sufficient to make government officials the proper parties to litigation challenging the law.”); see also Okpalobi, 244 F.3d at 416 (plurality op.) (“it is not merely the general duty to see that the laws of the state are implemented that substantiates the required ‘connection,’ but the particular duty to enforce the statute in question and a demonstrated willingness to exercise that duty.”).
In short, Plaintiffs have failed to establish Article III standing for their claims against the Governor.
B. The Governor is Immune From Suit Under the Eleventh Amendment. Plaintiffs’ claims against the Governor fail for the additional reason that he is immune from suit. The Eleventh Amendment bars suits by private citizens against a state in federal court, irrespective of the nature of the relief requested, including suits against state officials in their official capacities. Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 102 (1984); Edelman v. Jordan, 415 U.S. 651, 663-69 (1974); McCarthy ex rel. Travis v. Hawkins, 381 F.3d 407, 412 (5th Cir.2004). Under the narrow Ex parte Young exception to this rule, “a federal court, consistent with the Eleventh Amendment, may enjoin state officials to conform their future conduct to the requirements of federal law.” Pennhurst, 465 U.S. at 102-103; Quern v. Jordan, 440 U.S. 332, 337 (1979). However, as the Supreme Court made clear in Ex parte Young, a state officer named in suit seeking injunctive relief “must have some connection with the enforcement of the act” for sovereign immunity to be waived. 209 U.S. 123, 153 (1908); see

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also Fitts v. McGhee, 172 U.S. 516, 530 (1899) (“neither of the state officers named held any special relation to the particular statute alleged to be unconstitutional.”).
The precise contours of this requirement have been subject to some debate, including whether a “special charge” of enforcement must be found in the statute. See Okpalobi, 244 F.3d at 416-21 (plurality op.).25 However, what is clear is that to establish the connection required by Ex parte Young, there must be more than a general duty upon the state officer to enforce the laws of the state in order to dissolve the Eleventh Amendment bar. See Women’s Emergency Network, 323 F.3d at 949 (“A governor’s ‘general executive power’ is not a basis for jurisdiction in most instances.”); Waste Mgmt. Holdings, Inc. v. Gilmore, 252 F.3d 316, 331 (4th Cir. 2001) (dismissing governor); Confederated Tribes & Bands of the Yakama Indian Nation v. Locke, 176 F.3d 467, 469-70 (9th Cir. 1999) (dismissing governor); Children’s Healthcare Is A Legal Duty, Inc. v. Deters, 92 F.3d 1412, 1416-18 (6th Cir. 1996) (dismissing attorney general); Okpalobi, 244 F.3d at 419 (plurality opinion); Day v. Sebelius, 376 F.Supp.2d 1022, 1031 (D. Kan. 2005) (dismissing governor).
Here, the Governor has no connection to the administration of the Medicaid Act, including the delivery of Medicaid assistance or services in nursing facilities or in a community setting. Rather, the Governor appoints the HHSC Executive Commissioner, approves the DADS commissioner, and submits a biennial budget. See Am. Complt. ¶ 22. Those separate state agencies (and their commissioners, for purposes of Ex parte Young) are responsible for the direction and oversight of the Texas Medicaid Program and ensuring that program complies with federal law. See Am. Complt. ¶¶ 23-24. Furthermore, the Legislature (not the Governor)

25 The sovereign immunity holding in Okpalobi failed to garner sufficient votes to be a majority opinion not because the majority disagreed with its holding, but rather because two judges who joined in the holding on standing determined that the immunity issue need not have been addressed since the standing issue was determinative in any event. See Okpalobi, 244 F.3d at 429 (Higginbotham, J., concurring, joined by King, J.).

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appropriates funds, and the Governor enjoys legislative immunity for his actions in connection with the budgeting process and the use of line-item veto powers. See Bagley v. Blagojevich, 646 F.3d 378, 394-95 (7th Cir. 2011), cert. denied, 2011 WL 4534022 (Oct. 3, 2011) (applying legislative immunity to claims against governor related to line-item veto); Abbey v. Rowland, 359 F.Supp.2d 94, 100 (D. Conn. 2005) (applying legislative immunity to claims against governor related to budget process).26
In short, the Governor of Texas lacks the requisite connection to the provision of Medicaid services to individuals with developmental disabilities to be a proper party under Ex parte Young, and therefore, is protected by sovereign immunity from Plaintiffs’ claims.
C. Plaintiffs Have Failed to State a Claim Against the Governor. For the same reasons set out above under the “standing” arguments, see supra at pp. 16−20, Plaintiffs have failed to state a cognizable claim against the Governor upon which relief can be granted. Even assuming Plaintiffs’ claims of injury and deprivation to be true, they have not asserted claims establishing any action on the part of the Governor that caused, or could cause, their alleged deprivation, and the relief they seek cannot be effectuated through the Governor. Accordingly, Plaintiffs’ claims against the Governor should be dismissed under Rule 12(b)(6), as well as under Rule 12(b)(1). Similarly, the Governor is not a proper defendant under the Rehabilitation Act because the Act applies to recipients of federal funds and the Governor neither receives nor distributes the Medicaid funds at issue in this lawsuit. Section 504 of the Rehabilitation Act, which is designed to eliminate discrimination on the basis of handicap in any program or activity

26 This is true even for claims seeking prospective injunctive relief. See State Employees Bargaining Agent Coalition v. Rowland, 494 F.3d 71, 88 (2d Cir. 2007) (applying legislative immunity to claims for injunctive relief against state officials sued in their official capacity); Scott v. Taylor, 405 F.3d 1251, 1257 (11th Cir. 2005) (same).

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receiving federal financial assistance, 29 U.S.C. § 794(a),27 applies to “recipients” of such financial assistance, including “the entity of…State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended….” 29 U.S.C. § 794(b)(1)(B); 28 C.F.R. § 41.3(d) (defining “recipient”);28 see also 28 C.F.R. § 41.51 (b)(1) (applying the prohibitions against discrimination on the basis of handicap to a “recipient” providing an aid, benefit, or service). Specifically, the Act applies to each recipient of federal financial assistance from the Department of Health and Human Services (e.g., Medicaid funds) and to the program or activity that receives such assistance. 45 C.F.R. §§ 84.1, 84.2. None of this implicates the Governor of Texas, who neither receives Medicaid funds, nor distributes those funds. That responsibility falls to HHSC. TEX. GOV’T CODE § 531.021(b)(1); TEX. HUM. RES. CODE § 32.031.

III. Plaintiffs Have Failed to State a Claim Upon Which Relief May Be Granted.

A. Standard for Dismissal Under Rule 12(b)(6) Dismissal is proper pursuant to Federal Rule of Civil Procedure 12(b)(6) when a party’s

complaint fails to state a claim upon which relief can be granted. When considering a motion to

dismiss under Rule 12(b)(6), the Court accepts all well-pleaded facts as true, viewing them in the

light most favorable to the plaintiff. Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit,

369 F.3d 464, 467 (5th Cir. 2004). To survive a Rule 12(b)(6) motion, the plaintiff must plead

27 Section 5 of the Rehab. Act provides: No otherwise qualified individual with a disability in the United States, as defined in section 705(20) of this title, shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance….
29 U.S.C. § 794(a) (emphasis added). See also 28 C.F.R. § 41.51(a) (“No qualified handicapped person, shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity that receives or benefits from federal financial assistance.”). 28 “Recipient” means any State or its political subdivision, any instrumentality of a State or its political subdivision, any public or private agency, institution, organization, or other entity, or any person to which Federal financial assistance is extended directly or through another recipient, including any successor, assignee, or transferee of a recipient, but excluding the ultimate beneficiary of the assistance. 28 C.F.R. § 41.3(d).

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“enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a court accepts all well-pleaded facts as true, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009).
B. Plaintiffs Have No Right of Action Under Section 1983 to Redress Alleged Violations of the Medicaid Act.
Plaintiffs allege that Texas’s Medicaid program departs from the criteria for federal reimbursement specified in the Medicaid Act. See Am. Complt. pp. 53–57. But the Medicaid statute does not create a private right of action, and Plaintiffs cannot rely on 42 U.S.C. § 1983 because the statutory provisions of the Medicaid Act fail to establish an “unambiguously conferred right.” See Gonzaga Univ. v. Doe, 536 U.S. 273, 823 (2002). Plaintiffs thus fail to state a claim on which relief can be granted with respect to all of their Medicaid Act claims.
1. Plaintiffs have no “rights” under any section of the Medicaid Act. Plaintiffs glibly assume that Section 1983 provides a cause of action for their Medicaid Act claims. But Section 1983 applies only when state officials violate a plaintiff’s federal rights; it does not provide a remedy for a mere violation of federal law. See Golden State Transit Corp. v. City of Los Angeles, 493 U.S. 103, 106 (1989) (“Section 1983 speaks in terms of ‘rights, privileges, or immunities,’ not violations of federal law.”). And nothing short of an “unambiguously conferred right” can support a cause of action under Section 1983. See Gonzaga, 536 U.S. at 823. The Medicaid statutes that Plaintiffs invoke do not confer any federal “rights” on the Plaintiffs, let alone an “unambiguously conferred” right. The Medicaid statutes impose legal obligations only on the Secretary of Health and Human Services, who may reimburse a State for its Medicaid expenses only if he concludes that the State’s Medicaid program satisfies the

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criteria enumerated in federal statutes. 42 U.S.C. § 1396c explains how this Spending Clause
legislation works:
If the Secretary, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of the State plan approved under this subchapter, finds–
(1) that the plan has been so changed that it no longer complies with the provisions of section 1396a of this title; or
(2) that in the administration of the plan there is a failure to comply substantially with any such provision;
the Secretary shall notify such State agency that further payments will not be made to the State (or, in his discretion, that payments will be limited to categories under or parts of the State plan not affected by such failure), until the Secretary is satisfied that there will no longer be any such failure to comply. Until he is so satisfied he shall make no further payments to such State (or shall limit payments to categories under or parts of the State plan not affected by such failure).
42 U.S.C. § 1396c. Two features of this statutory scheme have particular relevance for this
litigation. First, the statute permits States to establish Medicaid programs that will not qualify
for federal funds. Even after accepting federal funds, 42 U.S.C. § 1396c recognizes the State’s
continuing prerogative to alter its Medicaid program. Any State that administers a program that
deviates from the criteria for federal funding will run the risk that the Secretary will turn off the
funding spigot, but this remains a lawful option for the State under the statute. Plaintiffs cannot
possibly have a federally protected “right” to state Medicaid services when the statutes do
nothing more than supply criteria for federal reimbursement.
Second, the statute withdraws funding only after the Secretary has determined that a
State’s Medicaid program fails to satisfy the criteria in the federal Medicaid statutes. The
Secretary—not the federal courts—determines whether a State’s Medicaid program is worthy of
federal funds. The Secretary’s decision is of course subject to judicial review under the
arbitrary-and-capricious test. See Walsh, 538 U.S. at 675 (Scalia, J., concurring). But allowing

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Plaintiffs to pursue a Section 1983 action would empower the federal courts to conduct a de novo review of the State’s Medicaid program, undermining the Administrative Procedure Act’s efforts to protect the decision making autonomy of federal administrative officials.
We recognize that the Supreme Court has permitted at least one provision of the federal Medicaid Act to be enforced under Section 1983. See Wilder v. Va. Hosp. Assoc., 496 U.S. 498 (1990) (allowing hospitals to sue under Section 1983 to enforce the “Boren Amendment,” which requires participating States’ Medicaid programs to reimburse providers at “reasonable and adequate” rates), superseded by statute as discussed in Evergreen Presbyterian Ministries Inc. v. Hood, 235 F.3d 908, 919 n.12 (5th Cir. 2000) (recognizing Congressional repeal of Boren Amendment to preclude private right of action). But Gonzaga limited Wilder’s holding to provisions in the Medicaid Act that “explicitly confer[] specific monetary entitlements upon the plaintiffs.” 536 U.S. at 280 (emphasis added). It also noted that “[o]ur more recent decisions . . . have rejected attempts to infer enforceable rights from Spending Clause statutes.” Id. at 281 (noting that in Suter v. Artist M., 503 U.S. 347 (1992) and Blessing v. Freestone, 520 U.S. 329 (1997), the Court rejected attempts to infer enforceable rights from Spending Clause statutes analyzed in those suits). And Gonzaga quoted with approval the following passage from Pennhurst:
In legislation enacted pursuant to the spending power, the typical remedy for state noncompliance with federally imposed conditions in not a private cause of action for noncompliance but rather action by the Federal Government to terminate funds to the State. 536 U.S. at 280 (emphasis added). After Gonzaga, Wilder cannot stand for the proposition that any provision of the Medicaid statute can be enforced via Section 1983. If anything, Gonzaga indicates that Wilder and Wright v. Roanoke Redevelopment and Housing Authority, 479 U.S. 418 (1987), represent narrow exceptions to a general principle that excludes spending legislation

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from judicial enforcement. See Gonzaga, 536 U.S. at 280 (“Since Pennhurst, only twice have
we found spending legislation to give rise to enforceable rights.”).
The Fifth Circuit has also recognized that Gonzaga limits the ability of Medicaid
recipients to bring Section 1983 claims. In Equal Access for El Paso, Inc. v. Hawkins, 509 F.3d
697 (5th Cir. 2007), the court refused to allow Medicaid recipients to sue under Section 1983 to
enforce the “equal access” provisions of the Medicaid statute—even though an earlier-decided
case had allowed such a claim to proceed. Wrote the Court:
We may no longer, as we did in Evergreen [Presbyterian Ministries, Inc. v. Hood, 235 F.3d 908 (5th Cir. 2000)], resolve the ambiguities of Blessing, Wilder, and the Equal Access provision in favor of finding a Congressional intent to authorize Medicaid recipients to bring Equal Access provision suits under § 1983. We are forced by Gonzaga to abjure the notion that anything short of an unambiguously conferred private individual ‘right,’ rather than the broader or vaguer ‘benefits’ or ‘interests,’ may be enforced under § 1983.
Equal Access, 509 F.3d at 704. To the extent that other Fifth Circuit decisions allow Medicaid
recipients to sue to enforce provisions other than those that secure specific monetary entitlements
to the party bringing suit, those rulings either pre-date Gonzaga or else rely on the now-overruled
Evergreen decision. See, e.g., S.D. v. Hood, 391 F.3d 581, 605 (5th Cir. 2004) (relying on
Evergreen to permit a Section 1983 lawsuit to enforce provisions in the Medicaid Act); id. at 604
(relying on pre-Gonzaga case law from other circuits); Frazar v. Gilbert, 300 F.3d 530 (5th Cir.
2002) (relying on Evergreen), rev’d on other grounds, Frew v. Hawkins, 540 U.S. 431 (2004).
If this Court concludes that either S.D. or some other decision of the Fifth Circuit
compels it to permit Plaintiffs to seek judicial enforcement of some of their Medicaid Act claims,
then we ask this Court to limit those rulings to the specific provisions of the Medicaid Act found
to be judicially enforceable, and we wish to preserve for appeal our contentions that those
decisions should be overruled. See Blessing, 520 U.S. at 349 (Scalia J., concurring, joined by

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Kennedy, J.) (questioning the notion that “§ 1983 ever authorizes the beneficiaries of a federalstate funding and spending agreement . . . to bring suit”). The Supreme Court’s ruling in Gonzaga signals a shift away from the Court’s earlier rulings allowing plaintiffs use of Section 1983 to enforce conditions in federal spending legislation.
Moreover, the claims Plaintiffs bring under the Medicaid Act fail to state a claim that the Defendants have violated federal law, let alone invaded their federally protected “rights.” State officials cannot violate the Medicaid statutes cited by Plaintiffs because they impose no affirmative obligation on States that accept federal reimbursement money to preserve their Medicaid programs in any particular manner. More specifically, the Medicaid statutes allow Texas officials to cease complying with the statutory criteria for federal reimbursement at any moment. If this happens, the Secretary must decide whether to cut off the State’s federal funds. But no State, and no state official, violates federal law by administering a Medicaid program that fails to qualify for federal reimbursement. Nor do they violate federal law by provoking the Secretary to withhold federal funds. It is impossible for state officials to “violate” the Medicaid Act. Only the Secretary can violate the Act—by approving federal reimbursement for a state program that fails to satisfy the criteria listed in 42 U.S.C. § 1396a.
Further, it is uncertain whether the Medicaid statutes Plaintiffs rely upon are even good law. Amendments to the Medicaid Act, including the statutes under which Plaintiffs bring their claims in this lawsuit—namely, §§ 1396a(8) and (10), § 1396n, and § 1396r (and its subparts), as well as provisions implicated by those claims, such as § 1396d (definitions)—were enacted in 2010 as part of the Patient Protection and Affordable Care Act (PPACA).29 In January 2011, a federal district court in Florida struck down the entirety of the PPACA, including the 2010

29 See Pub. L. No. 111-148, 124 Stat. 119 (March 23, 2010), as amended by Health Care and Education Reconciliation Act of 2010, Pub.L. No. 111-152, 124 Stat. 1029 (March 30, 2010) (collectively (“PPACA”).

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amendments to the Medicaid Act. See Florida et al. v. U.S. Dept. of Health and Human Services, 780 F. Supp. 2d 1256 (N.D. Fla.), clarified by Florida ex rel. Bondi v. U.S. Dept. of Health and Human Services, 780 F.Supp.2d 1307, aff’d in part, rev’d in part, 648 F.3d 1235 (11th Cir.), pet. cert. filed (2011). The court did so after holding that the “individual mandate” provision in the PPACA, which requires all individuals to purchase health insurance, was unconstitutional and could not be severed from the rest of the act. Id. Although the Eleventh Circuit later reversed the district court on the issue of severability, see 648 F.3d at 1328, that issue is now pending before the U.S. Supreme Court via the petition for writ of certiori filed by the state plaintiffs, which include Texas. See Florida, et al., v. Department of Health and Human Services, et al., No. 11-400 (U.S. pet. filed Sept. 27, 2011). Accordingly, it remains to be seen whether the amended statutes relied on by Plaintiff will be struck down.
Fortunately, this Court need not concern itself with whether constitutional questions the amended statutes relied on by plaitniffs are unconstitutional if it concludes that the Plaintiffs’ Medicaid Act claims are not judicially enforceable. But, if this Court concludes that Plaintiffs have asserted a valid cause of action for their Medicaid Act claims, then Defendants assert in defense that the amended provisions of the Medicaid Act under which Plaintiffs assert their claims via 42 U.S.C. § 1983 in this lawsuit are invalid as non-severable from the unconstitutional individual-mandate provisions in PPACA.
2. The Wilder/Blessing test. Even applying the Supreme Court’s three-pronged analysis to the Medicaid Act sections at issue here, there is no right of enforcement conferred upon Plaintiffs either by the Medicaid Act or Section 1983. In Blessing v. Freestone, the Supreme Court applied a three-part test to determine whether legislation creates a federal right redressable under Section 1983: (1)

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Congress must have intended the provision in question to benefit the plaintiff, (2) the plaintiff must demonstrate that the right allegedly protected by the statutes is not so “vague and amorphous” that its enforcement would strain judicial competence, and (3) the statute must unambiguously impose a binding obligation on the States. 520 U.S. at 340–41; see also Wilder, 496 U.S. at 509–10; S.D., 391 F.3d at 602. Basically, “the provision giving rise to the asserted right must be couched in mandatory rather than precatory terms.” Blessing, 520 U.S. at 341. The burden rests on the plaintiff to show that the statute created an enforceable right. Id. In Gonzaga, the Supreme Court clarified that nothing short of an “unambiguously conferred right” can support a cause of action under Section 1983. 536 U.S. at 283.30 Finally, even if a plaintiff demonstrates that a federal statute creates an individual right, there is only a rebuttable presumption that the right is enforceable under Section 1983, and dismissal is nevertheless proper if Congress “specifically foreclosed a remedy under § 1983.” Blessing, 520 U.S. at 341. “Congress may do so expressly, by forbidding recourse to § 1983 in the statute itself, or impliedly, by creating a comprehensive enforcement scheme that is incompatible with individual enforcement under § 1983.” Id.31
Plaintiffs assert claims under various provisions of the Medicaid Act and accompanying regulations. Am. Complt. ¶¶ 245–58. Unquestionably, neither these statutory provisions nor any of the Act’s implementing regulations provides any express private right of action for these Plaintiffs to enforce the Act.32 Therefore, if this Court considers Plaintiffs’ Medicaid Act claims

30 The Court noted that some courts had misinterpreted the first Blessing factor as permitting a Section 1983 action whenever the plaintiff fell within the general “zone of interests” protected by the statute at issue. It does not. Id. at 283. 31 A “comprehensive remedial scheme is “a scheme that itself provid[es] for private actions and le[aves] no room for additional private remedies under Section 1983.” Wilder, 496 U.S. at 522–23; see also Middlesex County Sewerage Authority v. Nat. Sea Clammers Assoc., 453 U.S. 1, 14-15 (1981). 32 Medicaid Act regulations cannot invoke a private right of action where the statute itself does not. “Language in a regulation may invoke a private right of action that Congress through statutory text created, but it may not create a right that Congress has not.... [I]t is most certainly incorrect to say that language in a regulation can conjure up a

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at all, it must find that each section of the Act under which Plaintiffs claim unambiguously confers a federal right enforceable by these Plaintiffs. See Gonzaga, 536 U.S. at 274. Certainly, the Medicaid Act does not unambiguously confer rights on associational plaintiffs to assert claims on their own behalf. For this reason alone, the Organizational Plaintiffs’ Medicaid Act claims brought on behalf of themselves should be dismissed.
3. The NHRA creates no rights enforceable by Plaintiffs. a. Summary of Plaintiffs’ NHRA claims.

Plaintiffs allege that Texas violates the NHRA and its implementing regulations, 42 C.F.R. § 483.100, et seq., in several ways related to Texas’s PASRR process33 and its administration of specialized services.34 Plaintiffs attempt to assert their claims under various provisions within three subparts of the NHRA—42 U.S.C. §§ 1396r(b), (e), and (f)35—none of which provides any express private right of action. Am. Complt. ¶¶ 251, 252, 256, 258. Applying the three-factor test used in determining whether Congress intended a statute to confer a right, while remaining mindful of Gonzaga’s strong limitation on finding privately enforceable

private cause of action that has not been authorized by Congress.” Alexander v. Sandoval, 532 U.S. 275, 291 (2001). Therefore, the proper inquiry is whether a particular statory provision creates a privately enforceable right, not whether its implementing regulations do. Casas v. American Airlines Inc., 304 F.3d 517, 520 (5th Cir. 2002). 33 See Am. Complt. ¶¶ 53, 55, 74-76, 96, 251-252. Plaintiffs’ claimed rights relating to screening, assessment, and placement include rights to: (1) a screening program that timely and appropriately determines if nursing facility applicants have developmental disabilities, id. ¶¶ 74, 96, 251; (2) a screening program that, prior to admission to a nursing facility, accurately determines if persons with developmental disabilities can be appropriately served in a less restrictive community setting, id. ¶¶ 75, 251; (3) a screening program that appropriately screens all nursing facility applicants for developmental disabilities, and a right to those so identified being assessed to determine whether individuals who need nursing facility services can be served in another specialized facility, including ICFsMR, for persons with developmental disabilities, id. ¶¶ 76, 252; and (4) a program allowing persons residing in nursing facilities with developmental disabilities to transition into integrated community settings by providing residential assistance services and habilitation services, id. ¶¶ 53, 55. 34 See Am. Complt. ¶¶ 27(b), 72, 77-79, 87, 96,255-58. Plaintiffs’ claimed rights relating to specialized services include rights to: (1) a program that assesses whether a person needs specialized services and what those services should include, id. ¶¶ 77, 256; (2) unlimited specialized services to all persons with developmental disabilities in nursing facilities, id. ¶¶ 78, 79, 256; (3) the currently available, but limited specialized services, to persons with developmental disabilities in nursing facilities, id. ¶¶ 87, 257; and (4) a program of specialized services that meets the federal active treatment standard required in an intermediate care facility, id. ¶¶ 27(b), 72, 96, 258, 255. 35 Specifically, Plaintiffs assert claims under 42 U.S,C. §§ 1396r(b)(3)(F), 1396r(e)(7)(A) and (B), and 1396r(f)(8). Am. Complt. ¶¶ 250–58. Plaintiffs also cite the following regulations: 42 C.F.R. §§ 483.112(b), .114(b)(2), .116(b)(2), .118, .120(a)(2) and (b), .128, .132(a), and .440. Am. Complt. ¶¶ 250–58.

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rights under federal Spending Clause statutes, shows that Plaintiffs’ cited provisions of the NHRA do not confer any enforceable rights. Here, as with the statute in Gonzaga, the NHRA lacks the necessary “unambiguous intent.”
b. NHRA provisions are not intended to benefit Plaintiffs. The context of the cited NHRA provisions, coupled with the absence of rights/benefitsgranting language, evidences intent to establish institutional policy and practice, not to benefit the Plaintiffs. The NHRA is entitled “Requirements for nursing facilities.” 42 U.S.C. § 1396r. Subparts (b)–(d) set forth requirements a nursing facility must meet in providing services and activities for NF residents in order to maintain funding and certification. 42 U.S.C. § 1396r(b)– (d). Subpart (e) sets out the provisions a State must include in its state plan in order to secure the Secretary’s approval of the plan for administering federal funds to nursing facilities. 42 U.S.C. 1396r(e). Subpart (f) outlines the Secretary’s duties and responsibilities for developing and enforcing requirements for provision of care in nursing facilities. 42 U.S.C.§ 1369r(f). Subpart (g), containing the “survey and certification” process for nursing facilities, provides for both the Secretary and the State to investigate and monitor nursing facilities for compliance with subparts (b), (c), and (d). 42 U.S.C. § 1369r(g). Subpart (h) provides for an “enforcement” mechanism authorizing action by the State or the Secretary to deny nursing facility payments, assess civil penalties, and appoint temporary management to improve or close a facility. 42 U.S.C. § 1369r(h). “The [NHRA] does not have an ‘unmistakable focus’ on the rights of individual nursing home residents, but instead focuses on requirements that the nursing homes must meet in order to become and remain eligible for funding.” Duncan v. Johnson-Mathers Health Care, Inc., Civ. A. No. 5:09-CV-00417-KKC, 2010 WL 3000718, at *7–8 (E.D. Ky. July 28, 2010) (citing Alexander v. Sandoval, 532 U.S. 275, 289 (2001). Both the text and structure of the

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NHRA show that the focus of this statute is the “nursing homes—not the nursing home residents.” Id. at *8. “[S]tatutes that focus on the person regulated rather than the individuals protected create ‘no implication of an intention to confer rights on a particular class of persons.’” Sandoval, 532 U.S. at 289.36 For these reasons, Plaintiffs’ cited provisions of the NHRA do not evidence Congressional intent to benefit Plaintiffs.
c. The NHRA imposes no binding obligations on Defendants. While Plaintiffs’ cited NHRA sections do contain requirements for the parties/entities to whom they are directed, not all of the cited sections contain requirements directed to the states. For example, § 1396r(b)(3)(F)—to which Plaintiffs cite as the basis for their claimed rights related to specialized services and to screening, assessment, and placement—is directed to nursing facilities and sets out which new residents such a facility can admit.37 Am. Complt. ¶¶ 250, 251, 256. This section puts an unambiguous binding obligation on the nursing facility—not on the State—not to admit residents before certain determinations are made by the state mental retardation or developmental disability authority. 42 U.S.C. § 1396r(b)(3)(F). Similarly, § 1396r(e), which deals with “State requirements relating to nursing facility requirements,” does not put an unambiguous obligation upon the State to ensure Plaintiffs’ claimed rights related to specialized services or screening, assessment, and placement. See Am.

36 Fifth Circuit precedent establishes that when a statute imposes conditions on a regulated entity for its receipt of federal funds, those conditions are focused on the regulated entity and do not evidence congressional intent to confer rights on individuals. See Anderson v. Jackson, 556 F.3d 351, (5th Cir. 2009) (applying Gonzaga to find that the United States Housing Act, 42 U.S.C. § 1437p, does not unambiguously confer a federal right); Banks v. Dallas Housing Authority, 271 F.3d 605, 609-10 (5th Cir. 2001) (conditions imposed for receipt of federal funds under the United States Housing Act, 42 U.S.C. § 1437f(e), are focused on the regulated agency and were not intended to benefit the plaintiff residents); see also Grammer v. John J. Kane Reg’l Ctrs-Glen Hazel., 570 F.3d 520, 532 (3rd Cir. 2009) (Stafford, J., dissenting) (noting that the NHRA is Spending Clause legislation, and concluding that the NHRA does not evidence any intent of Congress to confer federal right on nursing home residents). 37 Plaintiffs allege that Defendants violated 42 U.S.C. § 1396r(b)(3)(F)(i), which dictates to nursing facilities which new residents with mental illness can be admitted to a NF. Am. Complt. ¶¶ 250, 251. Because Plaintiffs make no claims in this lawsuit on behalf of persons with mental illness, Defendants construe each citation referencing § 1396r(b)(3)(F)(i) to be intended to reference § 1396r(b)(3)(F)(ii), which is the section that dictates to nursing facilities which new residents with mental retardation can be admitted to a NF.

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Complt. ¶¶ 250, 251, 252, 253, 256, 258 (referencing 42 U.S.C. § 1396r(e)(7)(A), (B), (C)). Instead, the statute’s text dictates that “[a]s a condition of approval of [a State’s] plan . . . a State must provide” for certain enumerated requirements related to preadmission screening and resident reviews in its state plan. See 42 U.S.C. § 1396r(e). Thus, § 1396r(e) contains requirements for obtaining the Secretary’s approval for a state plan; it does not unambiguously place on Defendants the obligations alleged by the Plaintiffs.
Section 1396r(f) sets forth the “[r]esponsibilities of the Secretary relating to nursing facility requirements.” 42 U.S.C. § 1396r(f) (emphasis added). Subsection (f)(8)—cited by Plaintiffs as one of the NHRA provisions Defendants allegedly violate by limiting specialized services—specifically directs the Secretary to develop minimum criteria for states to use in making determinations related to preadmission screening and resident reviews, and in permitting individuals adversely affected to appeal such determinations. See 42 U.S.C. § 1396r(f)(8); see also Am. Complt. ¶ 256. It further directs the Secretary to “monitor” states through case reviews for their compliance with NHRA. 42 U.S.C. § 1396r(f)(8)(B). This provision does not unambiguously impose a binding obligation on the State because this statutory requirement is solely directed to the Secretary.
d. NHRA’s remedial scheme precludes individual judicial remedies against the State.
The NHRA’s comprehensive remedial scheme related to preadmission screening, resident reviews, and specialized services—which contemplates actions taken by recipients, States, and the Secretary— evidences clear intent to preclude remedies for individuals under Section 1983. For example, the remedy for failure to conduct a PASRR review under § 1396r(b)(3)(F) is that no payment may be made with respect to NF services furnished without a PASRR determination. 42 U.S.C. § 1396r(e)(7)(D). The statute could have, but did not, confer upon Medicaid

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recipients the right to judicially enforce § 1396r(b)(3)(F) directly. Instead, the only remedy provided for “individuals adversely affected by” a PASRR reviews described under §§ 1396r(e)((7)(A) or (B) (which references § 1396r(b)(3)(F)) is an appeals process which a State must develop “as a condition of approval of its plan.” 42 U.S.C. § 1396r(e)(7)(F); see also 42 C.F.R. § 483.204 (requiring states to provide an appeal process to nursing facility residents adversely affected by preadmission screening and resident reviews).38 The “enforcement” subpart of the NHRA, 42 U.S.C. § 1396r(h), provides for enforcement actions against nursing facilities brought by the Secretary, the States, or both, including both specifically-enumerated remedies and remedies otherwise available against nursing facilities under state or federal law. 42 U.S.C. § 1396r(h)(8).39 The NHRA also states that the remedies provided under subsection (h)—all of which are directed against nursing facilities—are “in addition to those otherwise available under State or Federal law and shall not be construed as limiting such other remedies, including any remedy available to an individual at common law.” 42 U.S.C. § 1396r (h)(8). Thus, apart from the ability to appeal the results of a PASRR review, the only remedies contemplated for individuals under the NHRA are those otherwise available to the individual as against a nursing facility. The remedies specified in the NHRA, directed at different parties and

38 In Texas, the appeals process for preadmission screening and resident reviews is set out in the Texas Health and Human Services Commission’s fair hearing rules. See 1 TAC §§ 357.3(a) (fair hearing rules govern Medicaidfunded services), (b)(1)(D) (clients of Medicaid funded services are entitled to appeal adverse determinations regarding preadmission screening and resident reviews), (b)(2)(B) (the client has within 90 days of the later of the date on the notice of agency action or the effective date of agency action to appeal a determination); 357.5(c)(3)(D) (fair hearing officer issues a final order), 357.703 (a)-(c) (client may file a motion for rehearing of fair hearing officer’s final order and then seek judicial review of that final determination); see also TEX. GOV’T CODE ANN. § 531.019 (setting out administrative remedies and right to judicial review for a party who is aggrieved by a final order of a fair hearing officer). 39 See 42 U.S.C. § 1396r(h)(1)–(2) (specifying state enforcement actions for remedying a NF’s deficiencies), (3) (outlining the Secretary’s authority and specified enforcement actions for remedying a NF’s deficiencies), (4) (the Secretary or the state must find a NF in “substantial compliance” before a finding to deny payment may be terminated), (5) (grounds for a state or the Secretary to immediately terminate a NF’s participation), and (6) (special rules to apply when a state and the Secretary do not agree on a NF’s compliance status).

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for different purposes, together, evidence Congress’s intent to preclude judicial remedies for individuals under Section 1983.
For all of these reasons, the NHRA confers no federal right on Plaintiffs, and their NHRA claims should be dismissed. A number of courts that have considered whether the NHRA confers an enforceable private right have reached the same conclusion—there is no such right.40 This issue has not been determined in the Fifth Circuit.
4. Sections 1396a(a)(8) and 1396a(a)(10)(B) create no rights enforceable under Section 1983.
Plaintiffs claim that Defendants’ limits on specialized services and community-based services violate the “reasonable promptness” provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(8), and that Defendants violate the “comparability” requirement of § 1396a(a)(10)(B) by failing to provide the same level of “active treatment” in NFs as is provided in ICFs-MR. Am. Complt. ¶¶ 245–46, 248–49. The Fifth Circuit has not ruled on the question whether §§ 1396a(a)(8) or 1396a(a)(10)(B) create privately-enforceable rights.41 Its ruling in S.D. v. Hood—that section 1396a(a)(10)(A) creates a right to enforce the provision of early and periodic screening, diagnostic, and treatment services (EPSDT”) for eligible individuals under the age of twenty-one—is not controlling here because S.D. was decided in reliance on pre-Gonzaga case law from other circuits and the Evergreen decision, which was later repudiated in Equal Access, 509 F.3d at 704. To the extent this Court would rely on S.D., Defendants wish to preserve for

40 See Sparr v. Berks County, No. CIV. A. 02-2576, 2002 WL 1608243 (E.D. Pa. July 18, 2002) (post-Gonzaga decision finding no private right of action under Section 1396r against a nursing facility); Duncan v. JohnsonMathers Health Care, Inc., Civ. A. No. 5:09-CV-00417-KKC, 2010 WL 3000718 (E.D. Ky. July 28, 2010) (postGonzaga decision finding no privately enforceable right against a nursing home under Section 1396r); Prince v. Dicker, 29 Fed. Appx. 52 (2nd Cir. 2002) (finding no privately enforceable right under Section 1396r against a private nursing home); Baum v. Northern Dutchess Hosp., --- F.Supp.2d ---, 2011 WL 240196 (N.D.N.Y. January 24, 2011) (post-Gonzaga decision finding no privately enforceable right under Section 1396r because the NHRA does not articulate a clear and unambiguous intent to confer individual federal rights on nursing home residents). 41 In Blancahrd v. Forrest, 71 F.3d 1163 (5th Cir. 1996), the Fifth Circuit analyzed a Section 1396a(10)(B) claim against Louisiana, but did not address whether that section of the Act provides a private right of action.

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appeal their contention that S.D. must be overturned in light of Gonzaga. But even were sections 1396a(a)(8) and 1396a(a)(10)(B) to be determined to create rights enforceable rights by Plaintiffs with regard to the provision of specialized services in nursing facilities, they confer no such rights in connection with the provision of community-based waiver services, such as the HCS waiver, through which all Plaintiffs purport to seek services. Am. Complt. ¶¶ 139–229.
Moreover, § 1396a(a)(8) confers no right to reasonable promptness in the delivery of community-based waiver services where, as here, the desired waiver is full. It is settled that the Medicaid Act provides no right to enforce § 1396a(a)(8) with regard to Plaintiffs’ claim that Texas is limiting its waiver programs that provide community-based services and supports for persons with developmental disabilities, and therefore, those waiver services and supports are not being provided with reasonable promptness. See Am. Complt. ¶ 246. In a 2003 decision in a case brought in the Western District of Texas, Austin Division, in which the plaintiffs claimed— as do the Plaintiffs here—that Texas violated their rights under § 1396a(a)(8) for failing to deliver waiver services in Texas’s HCS waiver programs with “reasonable promptness” in light of the wait list for such services, the court ruled that Congress did not intend to create in 42 U.S.C. § 1396a(a)(8) an individual right enforceable under § 1983 for individuals who apply for Medicaid waiver services after the waiver ceiling has been met or surpassed. McCarthy, ex rel. Travis v. Hawkins, Cause No. A-03-CA-231-SS, United States District Court for the Western District of Texas, Austin Div., pp. 14–16 (“slip op.”), attached hereto as Exh. 1. The McCarthy court correctly recognized that “the cap on the number of waiver recipients functions as ‘a constraint on eligibility,’ and ‘[i]ndividuals who apply after the cap has been reached are not eligible.’” Id. at p. 15 (quoting Boulet v. Celucci, 107 F.Supp.2d 61, 76–80 (D.Mass. 2000)).42

42 See also M.A.C. v. Betit, 284 F.Supp.2d 1298, 1308 (D. Utah 2003) (plaintiffs had no private right of action to enforce § 1396a(a)(8) because they were not “eligible individuals” under that provision where waiver slots were not

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The court found that the plaintiffs failed to satisfy the first prong of Blessing, in that they were not among the class of individuals Congress intended to benefit; therefore, they had no entitlement to reasonable promptness in the delivery of waiver services, and could not enforce § 1396a(a)(8). McCarthy, slip op. at 15; see also M.A.C., 284 F.Supp.2d at 1308 (“… because [section 1396a(a)(8) does not contain] the unambiguous rights-creating language required by Gonzaga, this court finds that Plaintiffs do not have a private right of action to enforce the Medicaid Act”). The same reasoning applies here, and the Fifth Circuit has not ruled to the contrary.
5. Sections 1396n(c)(2)(B) and (C), relating to state waiver applications, confer no private rights enforceable under Section 1983.
Plaintiffs claim that Defendants violate 42 U.S.C. §§ 1396n(c)(2)(B) and (C) by failing to provide NF residents with DD with notice and opportunity to access community-based services, an assessment of their eligibility for such services, and a meaningful choice between institutional and community-based services. Am. Complt. ¶ 247. Sections 1396n(c)(2)(B) and (C) provide that the Secretary shall not grant a waiver under the Medicaid Act unless the State seeking the waiver provides the Secretary with certain assurances. Under Blessing and Gonzaga, the assurances provisions of § 1396n(c)(2), including the “freedom of choice” provision of § 1396n(c)(2)(C), create no privately enforceable rights for waiver applicants. Certainly, the text of § 1396n(c)(2) is not phrased “in terms of the persons benefitted.” Gonzaga, 536 U.S. at 283. Rather, § 1396n(c) and the implementing regulations set forth the guidelines by which the

available); Boulet, 107 F.Supp.2d at 76–80 (“As a practical matter, the statute can best be read to mandate that, once a state chooses to implement a waiver program and chooses the eligibility requirements, a cap is simply another eligibility requirement for that program …. Individuals who apply after the cap has been reached are not eligible, or alternatively, the waiver services are not “feasible” for them until the cap has risen to include them.); Bryson v. Shumway, 308 F.3d 79, 88 (1st Cir. 2002) (“[t]hose patients who are on the waiting list and for whom slots are available are, we think, ‘eligible’ under the statute such that they are entitled to reasonable promptness”) (emphasis added).

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Secretary determines whether to grant or deny a state’s request for waiver. §§ 1396n(c)(2)(B), (C); 42 C.F.R. § 441.302. Nor does § 1396n(c) explicitly and unambiguously grant a private right to the “particular class of persons” that Plaintiffs purport to represent. Id., 536 U.S. at 282, 283. The literal text of § 1396n(c) unquestionably focuses on the duties of the Secretary and of the states—“the person regulated”—rather than “the individuals protected,” and thus demonstrates no intent to confer rights on the beneficiaries of the Act. Id. at 2277 (citing Sandoval, 532 U.S. 289). The result of a failure to comply with §§ 1396n(c)(2)(B) and (C) is that a state’s request for a waiver may be denied, or a waiver already granted may be terminated. §§ 1396n(c)(2)(B), (C); 42 CFR § 441.302.
Furthermore, the assurance required under § 1396n(c)(2)(B) (referencing an evaluation of the need for NF level of services), arising as it does in the context of the requirements for approval of a state’s waiver application, and taking into account the high costs of care of persons with medical needs requiring a NF level of care, may be considered as much a focus on general cost-saving measures as a focus on the individual. That is, a state applying for a NF waiver must assure the Secretary that only persons confirmed to require a NF level of care will be eligible for a home or community-based NF waiver. Thus, this section creates no right of enforcement for Plaintiffs. See Frazar, 300 F.3d at 545 (state’s failure to meet a systemwide performance standard does not give rise to individual rights actionable under § 1983).
Section 1396n(c)(2)(C) requires only that states seeking a Medicaid waiver assure the Secretary that eligible individuals will be informed of the “feasible alternatives” to ICFs-MR “if available under the waiver.” 42 U.S.C. § 1396n(c)(2)(C). Based on the plain language of the statute, no requirement is imposed if there are no waiver services available. At the very least, section 1396n(c)(2)(C) imposes no “binding obligation” on Texas when—as Plaintiffs here

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admit—there are no openings for the HCS waiver services. Consequently, Plaintiffs cannot satisfy the third prong of the Blessing test. The district court in McCarthy agreed with this view, ruling that 42 U.S.C. § 1396n(c)(2)(C) did not create an individual right enforceable under Section 1983 for individuals who apply for Medicaid waiver services after the waiver ceiling has been met or surpassed. See McCarthy, slip op. at 12-14. Similarly, another district court has ruled that “the freedom of choice provisions do not contain the unambiguous rights-creating language of Gonzaga, and consequently, there is no private right of action based on these provisions.” M.A.C. v. Betit, 284 F.Supp.2d 1298, 1307 (D. Utah 2003). So should the Court rule here. The Fifth Circuit has not ruled on the private enforceability of sections 1396n(c)(2)(B) or (C).
C. Even if the Medicaid Act Creates Rights Enforceable by Plaintiffs, Plaintiffs Have Failed to State a Cognizable Claim.
Should this Court find that the Medicaid Act creates rights enforceable by Plaintiffs under Section 1983, Plaintiffs’ Medicaid Act claims should nevertheless be dismissed for failure to state a legally cognizable claim.
1. Plaintiffs state no cognizable NHRA claim. a. Plaintiffs state no § 1396r(b)(3)(F) or § 1396r(e) claim.
Plaintiffs’ claims for violations of screening, assessment, placement, and specialized services requirements are brought under 42 U.S.C. §§ 1396r(b)(3)(F) and 1396r(e)(7)(A), (B)(ii), and (C). Am. Complt. ¶¶ 250–53, 256, 258. However, as discussed above, § 1396r(b)(3)(F) imposes a requirement on nursing facilities, not on the states. Accordingly, Plaintiffs’ claims, which are directed against the defendant state governmental entities, fail under Rule 12(b)(6). Further, sections 1396r(b)(3)(F) and 1396r(e)(A), (B), and (C) simply do not contain the

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requirements Plaintiffs attribute to them. See Am. Complt. ¶¶ 250–53, 256, 258. Therefore,

Plaintiffs’ related allegations of Defendants’ failures under these sections state no viable claim.

b. Plaintiffs state no violation of the “active treatment” regulations.

This Court should dismiss Plaintiffs’ claim that Defendants do not provide specialized

services in a manner that meets the federal active treatment standard required in an ICF-MR as

measured by 42 C.F.R. § 483.440(a)–(f). See Am. Complt. ¶¶ 27(b), 72, 96, 255–58. While

Defendants do not dispute that the implementing regulations of the NHRA require specialized

services to provide active treatment, active treatment in a nursing facility is measured by 42

C.F.R. § 483.440(a)(1) and not the other subparts of § 483.440.

Specialized services are defined differently for different categories of residents. See 42

C.F.R. § 483.120(a). For NF residents with mental retardation, specialized services means “the

services specified by the State which, combined with services provided by the [nursing facility]

or other service providers, result in treatment which meets the requirements of § 483.440(a)(1).”43 42 C.F.R. § 483.120 (a)(2). Accordingly, § 483.440(a)(1), and no other

subpart of § 483.440, constitutes the yardstick by which the provision of specialized services in a

nursing facility can be measured.

The First Circuit Court of Appeals—the only circuit court to have considered whether

active treatment is required in NFs—agrees. In Rolland v. Romney, the appellate court affirmed

the district court’s ruling that the defendant state had only to comply with the active treatment

43 Section 483.440(a)(1) provides that

Each client must receive a continuous active treatment program, which includes aggressive,

consistent implementation of a program of specialized and generic training, treatment, health

service, and related services described in this subpart, that is directed toward--

(i)

The acquisition of the behaviors necessary for the client to function with as

much self determination and independence as possible; and

(ii) The prevention or deceleration of regression or loss of current optimal

functional status.

42 C.F.R. § 483.440(a)(1).

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standard set out at 42 C.F.R. § 483.440(a)(1) in providing specialized services to mentally retarded NF residents. 318 F.3d 42, 57 (1st Cir. 2003).44 In so doing, the appellate court clarified that the regulations do not “impose on states, when serving mentally retarded nursing home residents, the considerable onus of complying with every obligation placed on them in their broader role in ICF-MRs.” Id. (emphasis added).
Accordingly, Plaintiffs claim for violation of the NHRA based on Defendants’ alleged failure to provide specialized services constituting active treatment as measured by 42 C.F.R. § 483.440(a)–(f), fails to state a claim for which relief can be granted and should be dismissed.
2. Plaintiffs state no cognizable § 1396a(a)(8) claim. Plaintiffs’ twofold Section 1396a(a)(8) claim is that Defendants’ limits on communitybased services and supports, as well as Defendants’ limits on specialized services, violate the “reasonable promptness” provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(8). Am. Complt. ¶¶ 245–46. The “reasonable promptness” provision requires that state Medicaid plans “provide that all individuals wishing to make application for medical assistance under the plan shall have opportunity to do so, and that such assistance shall be furnished with reasonable promptness to all eligible individuals.” 42 U.S.C. § 1396a(a)(8).
a. Plaintiffs have failed to state a cognizable § 1396a(a)(8) “specialized services” claim for alleged delay in providing services not required under the NHRA.
The “specialized services” prong of Plaintiffs’ “reasonable promptness” claim is that Defendants “limit … medically necessary specialized services, result[ing] in extended delays and the outright denial of medically necessary care.” Am. Complt. ¶ 246. To the extent Plaintiffs assert delay or denial of specialized services that are not required to be provided as part of NF

44 The appeals court affirmed Rolland v. Cellucci, 198 F.Supp.2d 25, 46 (D. Mass. 2002) (citing only 42 C.F.R. § 483.440(a)(1) and not subparts (b)–(f) in setting forth standard to be met in NF).

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care, they fail to state a cognizable claim under § 1396a(a)(8). Thus, Plaintiffs’ § 1396a(a)(8) claims relating to anything but the failure to provide the specialized services required by 42 C.F.R. § 483.120(a)(2) and 42 C.F.R. § 483.440(a)(1) must be dismissed for failure to state a claim. See discussion supra at pp. 41−42.
b. Plaintiffs have failed to state a cognizable § 1396a(a)(8) “community placement” claim where, as here, the waiver is full and Plaintiffs have not been determined to be eligible.
The “community placement” prong of Plaintiffs’ “reasonable promptness” claim is that Defendants “limit the provision of medically necessary community-based services and supports, … result[ing] in extended delays and the outright denial of medically necessary care.” Am. Complt. ¶ 246. This claim fails for several reasons.
First, Plaintiffs’ claim that Defendants’ limit on the provision of community-based waiver programs (as compared to state plan entitlement programs) results in delays and denials of care, this claim is untenable because the very nature of a Medicaid waiver program is that the state may limit its scope and size. See 42 U.S.C. § 1396n; 42 C.F.R. § 441.301(b)(3); Skandalis v. Rowe, 14 F.3d 173, 181 (2nd Cir. 1994); Beckwith v. Kizer, 912 F.2d 1139, 1143-44 (9th Cir. 1990).45 “Congress intended for states to have maximum flexibility in operating their waiver programs,” Skandalis, 14 F.3d at 180 (quoting the Department of Health and Human Services at 50 Fed. Reg. 10,013, 10,021 (Mar. 13, 1985)), and States are permitted to make seemingly harsh distinctions when offering waiver services, even if those distinctions appear to result in disparate treatment, id. at 181. Section 1396n(c) does not expressly guarantee waiver slots or the availability of a waiver at all to any group of individuals, id. (“Certainly no broad or categorical

45 Under the Act, states are specifically allowed to set their own eligibility requirements for waiver services. See 42 U.S.C. § 1396n(c); Skandalis, 14 F.3d at 181; Beckwith, 912 F.2d at 1143-44. States have the option to provide waiver services to “any group or groups of individuals” who qualify for medical assistance under 42 U.S.C. § 1396d(a). 42 U.S.C. §§ 1396a(a)(10)(A)(ii)(VI), 1396n(c); Skandalis, 14 F.3d at 179-81.

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entitlement can be deemed secured under a program that allows a state to impose a limit of as

few as 200 people on the total number of participants.”), and the “reasonable promptness”

section of the Medicaid Act is not a tool for forcing a state to expand its waiver program. See

Arc of Wash. State Inc. v. Braddock, 427 F.3d 615, 619 (9th Cir. 2005). Specifically, Texas is

permitted under federal law to place a limitation on the number of waiver slots that are available and to set additional eligibility requirements.46 42 U.S.C. § 1396n(c)(10); 42 C.F.R.

§ 441.301(b)(3) (permits states to define groups or subgroups who can receive waiver services);

42 C.F.R. § 441.303(b); see also Skandalis, 14 F.3d at 181-82; Beckwith, 912 F.2d at 1143-44.

Consequently, Plaintiffs’ argument that the State violates § 1396a(a)(8) when it creates waivers

with specific eligibility criteria that may not include Plaintiffs, or that waiver services are

delayed because of the limited number of waiver slots available, fails to state a cognizable

§ 1396a(a)(8) claim.

Second, § 1396a(a)(8)’s “reasonable promptness” provision applies only to “eligible

individuals.” 42 U.S.C. § 1396a(a)(8) (emphasis added). Courts have recognized that “the cap

on the number of waiver recipients functions as ‘a constraint on eligibility,’ and ‘[i]ndividuals

who apply after the cap has been reached are not eligible.’” McCarthy, slip op. at 15 (quoting

Boulet v. Celucci, 107 F.Supp.2d 61, 76–80 (D.Mass. 2000)). In fact, the overwhelming body of

case law addressing the “reasonable promptness” provision has held that where a waiver is full, there can be no § 1396a(a)(8) claim.47 Only those individuals who are eligible for waiver

services have a § 1396a(a)(8) claim, and one is not eligible for waiver services until all

46 Each Medicaid waiver has its own eligibility criteria. See 42 CFR § 441.301(b)(3) (waiver request must describe groups to be served); 40 TEX. ADMIN. CODE §§ 9.155 (eligibility requirements for HCS), 45.201 (eligibility requirements for CLASS), and 48.6003 (eligibility requirements for CBA). 47 The cap is essentially an additional eligibility requirement to fully qualify for waiver services because it establishes an additional subclassification and thus limits the number of individuals who are eligible for waiver services. Boulet, 107 F.Supp. 2d at 77; Susan J. v. Riley, 254 F.R.D. 439, 454 (M.D. Ala. 2008). The cap on the number of individuals who may receive a waiver slot is also considered a constraint on eligibility for waiver services. Boulet, 107 F. Supp. 2d at 76-77.

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requirements for the waiver program are met and an open spot in a waiver program is available. Id.; see also Lewis v. N.M. Dept. of Health, 275 F. Supp. 2d 1319, 1340 (D.N.M. 2003); McCarthy, slip op. at 15–16. “Plaintiffs who are not either actually in a Waiver slot or entitled to one have no legal basis to support their claim for the provision of assistance with reasonable promptness.” Susan J. v. Riley, 616 F.Supp.2d 1219, 1241 (M.D. Ala. 2009). No court has held that reasonable promptness applies to waiver slots when, as with the HSC waiver, the waiver is full.48
In this case, Benny Holmes is receiving HCS waiver services, and the other five individual plaintiffs are only on the interest list for the HCS waiver and they admit that there is no waiver slot available for them. Am. Complt. ¶¶ 147, 157, 167, 185, 209, 224. Accordingly, these Plaintiffs have failed to state an actionable claim under § 1396a(a)(8).
c. Plaintiffs have no § 1396a(a)(8) claim under the pre-2010 definition of “medical assistance.”
As noted above, currently pending before the U.S. Supreme Court is a challenge to the Patient Protection and Affordable Care Act (PPACA) that may result in the 2010 amendments to the Medicaid statutes at issue here being invalidated in full. See supra pp. 28−29. Whether or not these amendments remain effective impacts greatly the viability of the Plaintiffs’ claim under § 1396a(a)(8). More specifically, prior to the 2010 amendments,49 “medical assistance,” as defined in the Act, meant “payment of part or all of the cost” of certain specified services. 42 U.S.C. § 1396d(a). Under this pre-2010 definition, the Fifth Circuit ruled that “medical

48 A claim under section 1396a(a)(8) has only been recognized in a waiver context with individuals on waiting lists when there are remaining waiver slots that are unfilled. See Bryson v. Shumway, 308 F.3d 79, 88-89 (1st Cir. 2002); Boudreau ex rel. Boudreau v. Ryan, No. 00-C-5392, 2001 WL 840583, at *10 (N.D. Ill. May 2, 2001), vacated in part on other grounds sub nom. Bruggerman ex rel. Bruggerman, 324 F.3d 906 (7th Cir. 2003). 49 The 2010 amendments changed the definition of “medical assistance” to include “payment of part or all of the cost of … care and services or the care and services themselves, or both.” 42 U.S.C. § 1396d(a) (2010) (amending 42 U.S.C. § 1396d(a) (2008)) (emphasis added). No courts have yet specifically addressed the effect of the 2010 amendments on the issue of whether Section 1396a(a)(8) confers enforceable rights on Medicaid recipients.

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assistance” refers to payment, not to the actual delivery of medical services, and therefore, plaintiff beneficiaries who claimed failure to deliver services promptly failed to state an actionable claim. Equal Access for El Paso, Inc., 562 F.3d 724, 727-29 (5th Cir. 2009).50 Here, Plaintiffs have claimed only a failure to promptly deliver services; they have not claimed failure to provide financial assistance with reasonable promptness. Am. Complt. ¶¶ 245–46. Accordingly, should the Supreme Court declare the entirety of the PPACA invalid, thereby invalidating the 2010 amendments, Plaintiffs’ § 1396a(a)(8) claims must be dismissed in accordance with the pre-2010 law.
3. Plaintiffs state no cognizable § 1396n(c)(2)(B) or (C) claim. Even assuming that Plaintiffs have a right to sue under Section 1983 to enforce §§ 1396n(c)(2)(B) and (C),51 Plaintiffs’ claims under these sections are not cognizable and should be dismissed in their entirety under Rule 12(b)(6). Specifically, Plaintiffs assert that Defendants have violated these provisions of the Medicaid Act by failing to provide residents of nursing facilities with—(1) notice of and equal opportunities to apply for and access medically necessary community-based services; (2) an assessment of their eligibility for such services; and

50 The Fifth Circuit’s ruling in Equal Access was consistent with rulings on § 1396a(a)(8) in the Sixth, Seventh, and Tenth Circuits. Id. at 728. 51 Sections 1396n(c)(2)(B) and (C) of the Medicaid Act prohibit the Secretary of Health and Human Services from
granting a waiver unless the state provides assurances that— (B) the State will provide, with respect to individuals who— (i) are entitled to medical assistance for inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded under the State plan, (ii) may require such services, and (iii) may be eligible for such home or community-based care under such waiver, for an evaluation of the need for inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded; (C) such individuals who are determined to be likely to require the level of care provided in a hospital, nursing facility, or intermediate care facility for the mentally retarded are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to the provision of inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded….
42 U.S.C. § 1396n(c)(2) (emphasis added).

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(3) meaningful choice between institutional and community-based services. Am. Complt. ¶ 247. But the focus of § 1396n(c)(2) is much narrower than Plaintiffs’ claim, and the plain wording of §§ 1396n(c)(2)(B) and (C) contain none of these requirements.
To begin with, section 1396n(c) falls within the portion of the Act that sets out the requirements for applying for and obtaining approval for home and community-based waivers. In particular, subsection 1396n(c)(2) “prescribes what states must include in their waiver applications to receive approval by the Secretary of Health and Human Services.” McCarthy, slip op. at 13.
Subpart B prohibits the Secretary of HHS from granting the state a Medicaid waiver unless the state assures the Secretary that persons who are entitled to in-patient hospital services, NF services, and services in an ICF-MR, who may require such services, and who may be eligible for home or community-based care under the waiver program, be given an evaluation of the need for in-patient hospital services, NF services, or services in an ICF-MR. It does not require an assessment of eligibility for waiver services, as Plaintiffs assert. Am. Complt. ¶247.
Subpart C is an informational requirement. See Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452, 459 (7th Cir. 2007) (subsection C “does not make any particular option ‘available’ to anyone. It just requires the provision of information about options that are available.”); Grant, 324 F.3d at 388. Specifically, it says that the Secretary may not grant a waiver—that is, the particular waiver for which the state is applying—unless the state assures that individuals who are determined to be likely to require the level of care provided in a nursing facility “are informed of the feasible alternatives to such services, if available under the waiver.” 42 U.S.C. § 1396n(c)(2)(C) (emphasis added); see also 42 C.F.R. § 441.302. In this context, “the waiver” means the specific waiver program for which the state is submitting an application seeking

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approval from the Secretary.52 Contrary to Plaintiffs’ embellished interpretation, it does not require “equal opportunities to apply for and access medically necessary community-based services,” or “a meaningful choice between ‘institutional’ and community-based services.” See Bertand, supra. Moreover, Plaintiffs here admit that the HCS waiver—the only waiver they say they have applied for—has a wait list of approximately 45,756. Am. Complt. ¶ 57. It is well established that when waiver caps have already been met, waiver services are no longer “feasible” or “available” for purposes of § 1396n(c)(2)(C). See, e.g., Makin v. Hawaii, 114 F.Supp.2d 1017, 1027–28 (D. Haw. 1999).
Finally, only three of the individual Plaintiffs have alleged that they were not informed of feasible alternatives to NF or ICFs-MR available to them under a Texas waiver. See, e.g., Am. Complt. ¶¶ 158, 186, 199, 226. Plaintiffs Steward and Padron make no such allegation, and therefore, have stated no § 1396n(c)(2)(B) claim. Id. §§ 139–48, 160–72.
For all of these reasons, Plaintiffs’ have failed to state a § 1396n(c)(2) claim. 4. Plaintiffs state no cognizable claim under 42 U.S.C. §§ 1396a(a)(10)(B)(i) and (ii).
Plaintiffs assert that § 1396a(a)(10)(B) requires that persons with developmental disabilities residing in nursing facilities be provided the same services as those residing in ICFsMR. Am. Complt. ¶¶ 229–30. Plaintiffs’ claim fails to state a cognizable claim for four reasons: first, the Act contains no such requirement, and Plaintiffs’ interpretation would lead to absurd results not contemplated by the Act; second, Plaintiffs do not allege facts showing they are being deprived of ICF-MR services or that they are receiving NF services in an amount, duration or scope less than other NF residents; third, even if Plaintiffs have otherwise stated a

52 In the case of a person “determined to be likely to require the level of care provided in a…nursing facility,” the referenced “waiver” would be the state’s waiver program providing a community-based alternative to services and care in a NF.

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§ 1396a(a)(10)(B) claim, there is no cognizable claim for failure to provide specialized services that are not required to be provided to NF residents; and fourth, Texas has no program for the “medically needy” that covers disabled persons,53 and Plaintiffs do not compare themselves to the “medically needy,” so § 1396a(10)(B)(ii) simply does not apply to the facts as plead in this case.
The purpose of the comparability provision of § 1396a(a)(10)(B) is “to ensure that recipients who qualify as categorically needy under one form of federal assistance should receive the same ‘amount, duration, or scope’ of assistance as those who qualify under another federal assistance program.” Greenstein by Horowitz v. Bane, 833 F.Supp 1054, 1073 (S.D. N.Y. 1993) (referring to legislative history of the Act). Moreover, states may not provide benefits to some categorically needy individuals but not to others. 42 U.S.C. § 1396a(a)(10)(B)(i); Rodriguez v. City of New York, 197 F.3d 611, 615 (2d Cir. 1999) (citing Schweiker v. Hogan, 457 U.S. 569, 573 n. 6 (1982)(“In other words, the amount, duration, and scope of medical assistance provided to an individual who qualified to receive assistance for the aged could not be different from the amount, duration, and scope of benefits provided to an individual who qualified to receive assistance for the blind.”). Thus, the comparison is between and among financial eligibility categories. That is, the amount, duration, and scope of available services cannot differ among Medicaid recipients based on how they became eligible for Medicaid. Nothing in § 1396a(a)(10)(B) requires that all of the specific services defined in § 1396d(a) must be provided to every developmentally disabled person receiving services in a nursing facility.54

53See http://www.hhsc.state.tx.us/medicaid/StatePlanDocs/BasicStatePlanAttachments.pdf, p. 79. 54 Nor is there any such requirement in the implementing regulation, 42 C.F. R. § 440.240, which provides:
Except as limited in § 440.250.
(a) The plan must provide that the services available to any categorically needy recipient under the plan are not less in amount, duration, and scope than those services available to a medically needy
recipient; and

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Section 1396a(a)(10)(A), by reference to § 1396d(a), establishes the minimum care and services required for categorically needy recipients.55 The services required for the categorically needy are also set out in the regulations at 42 C.F.R. § 440.210.56 In both the statute and the regulations, nursing facility services and ICF-MR services are listed as completely separate services. Compare, 42 U.S.C. § 1396d(a)(4) and 42 C.F.R. § 440.40 (nursing facility services) with 42 U.S.C. § 1396d(a)(15) and 42 C.F.R. § 440.150 (ICF-MR services). Furthermore, NF services are required, but ICF-MR services are optional. See 42 U.S.C. § 1396a(a)(10)(A); 42 C.F.R. § 440.225 (governing optional services). The requirements for nursing facilities are completely separate from the requirements for ICFs-MR.57 Compare, 42 C.F.R. § 483.1– 483.138 (requirements for nursing facilities, including PASRR) with 42 C.F.R. § 483.400–.480. In fact, ICFs-MR are specifically excluded from the definition of NFs. 42 C.F.R. § 483.5. Plaintiffs’ claim that care provided through one program’s services (ICF-MR services) must necessarily be provided through another program’s services (NF services), then, has no basis in law.
Moreover, Plaintiffs’ novel view would produce an absurd result. It would mean that every Medicaid recipient in any program and in any type of facility must be provided the same care and services as every other recipient. Were that what Congress or the Secretary intended,

(b) The plan must provide that the services available to any individual in the following groups are equal in amount, duration, and scope for all recipients within the group:
(1) The categorically needy. (2) A covered medically needy group. 42 C.F.R. § 440.240. 55 Section 1396a(a)(10)(A) requires state plans to provide for “making medical assistance available, including at least the care and services listed” in § 1396d(a)(1)-(5), (17), (21), and (28). 56 42 C.F.R. § 440.210 states that a state plan must specify that, at a minimum, categorically needy recipients are furnished the services defined in 42 C.F.R. §§ 440.10 - .50, .70, and, if authorized to practice under state law, §§ 440.165 and .166. With the exception of home health services, these are the same services referenced in 42 U.S.C. § 1396a(10)(B) as the minimum required services for participating states; ICFs-MR are not required. 57 Significantly, neither specialized services nor active treatment is listed or discussed as an independent service. See 42 C.F.R. Part 440, § 440.1, et seq. Therefore, these services need only be provided to the extent outlined in the requirements for other defined programs, e.g., in NFs or ICFs-MR.

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then there would be no need for the various specifically- and carefully-defined programs and

services. In particular, there would be no need for the specific PASRR requirements for nursing

facilities set out in 42 C.F.R. §§ 483.100–.138.

Plaintiffs also fail to state an actionable claim because they make no claim that they are

being denied ICF-MR services in the same amount, duration, or scope as other Medicaid

recipients receiving ICF-MR services (or that they are being denied NF services in the same

amount, duration, or scope as other Medicaid recipients receiving NF services). And, for the

same reasons discussed above at pages 41−42, Plaintiffs’ § 1396a(a)(10)(B) claims relating to

the alleged failure to provide the specialized services required by 42 C.F.R. § 483.120(a)(2) and

42 C.F.R. § 483.440(a)–(f) must be dismissed for failure to state a cognizable claim.

Plaintiffs state no claim under § 1396a(a)(10)(B)(ii)—which requires that the assistance

provided to the “medically needy” cannot not be greater in amount, duration, or scope than the assistance provided to the “categorically needy”58—fails for two reasons. First, Plaintiffs—who

describe themselves as “categorically eligible” individuals, based on their disability and

income—do not complain that they have received medical assistance different in amount,

duration, or scope than “medically needy” individuals. See Am. Complt. ¶¶ 248, 249.

Furthermore, Texas has no program for the “medically needy” with which Plaintiffs can compare

the provision of medical assistance.

Finally, as discussed in relation to § 1396a (a)(8), see supra pp. 45−46, should the

Supreme Court declare the entirety of the PPACA invalid, thereby invalidating the 2010

amendment to the definition of “medical assistance,” Plaintiffs’ § 1396a(a)(10)(B) claims must

be dismissed because they have not claimed that they have been denied financial assistance in

violation of § 1396a(a)(10)(B).

58 42 U.S.C. § 1396a(a)(10)(B)(ii); Schweiker, 457 U.S. at 573 n. 6.

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CONCLUSION
For the foregoing reasons, Plaintiffs’ claims as against Governor Perry should be
dismissed in their entirety on the basis of standing, sovereign immunity, and failure to state a
claim. Furthermore, all of Plaintiffs’ claims under the Medicaid Act and the NHRA should be
dismissed on numerous grounds, including standing, no private right of action, and failure to
state a claim. Defendants, therefore, respectfully request that this Court grant this motion,
dismiss these claims, and grant such further relief as is just and proper.
Respectfully submitted,
GREG ABBOTT Attorney General of Texas
DANIEL T. HODGE First Assistant Attorney General
BILL COBB Deputy Attorney General for Civil Litigation
DAVID MATTAX Director of Defense Litigation ROBERT B. O’KEEFE Chief, General Litigation Division
/s/ Nancy K. Juren NANCY K. JUREN Assistant Attorney General Attorney in Charge Texas Bar No. 11059300 DARREN G. GIBSON Assistant Attorney General Texas Bar No. 24068846 AMANDA J. COCHRAN-MCCALL Assistant Attorney General Texas Bar No. 24069526 ERIKA M. KANE Assistant Attorney General Texas Bar No. 24050850

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ERIC L. VINSON Assistant Attorney General Texas Bar No. 24003115 KAY T. CRISP Assistant Attorney General Texas Bar No. 24057368 General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 Phone No.: (512) 463-2120 Fax No.: (512) 320-0667
Attorneys for Defendants

CERTIFICATE OF SERVICE
I certify that a true and correct copy of Defendants’ Partial Motion to Dismiss Plaintiffs’ Amended Complaint was served by CM/ECF system on November 4, 2011, upon the following individuals at the listed addresses:
Garth A. Corbett Sean A. Jackson Advocacy Inc. 7800 Shoal Creek Blvd., #171-E Austin, Texas 78757
Yvette Ostolaza Robert Velevis Casey A. Burton Weil, Gotshal & Manges 200 Crescent Court, Suite 300 Dallas, Texas 75201
Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060
/s/ Nancy K. Juren___________ NANCY K. JUREN

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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

§

and mother, Lilian Minor, et al.,

§

§

Plaintiffs,

§

§

v.

§

§

RICK PERRY, Governor, et al.

§

§

Defendants.

§

CIV. NO. 5:10-CV-1025-OG

PLAINTIFFS’ RESPONSE IN OPPOSITION TO DEFENDANTS’ PARTIAL MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT

Garth A. Corbett State Bar No. 04812300 Sean A. Jackson (pro hac vice) State Bar No. 24057550 Disability Rights Texas 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 Robert Velevis (pro hac vice) State Bar No. 24047032 Casey Burton (pro hac vice) State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz (pro hac vice) J. Paterson Rae (pro hac vice) Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)

Case 5:10-cv-01025-OLG Document 70 Filed 11/23/11 Page 2 of 72

TABLE OF CONTENTS

Page

I. INTRODUCTION ...........................................................................................................1

II. BACKGROUND .............................................................................................................1

A. The Legislative History of the Nursing Home Reform Amendments. ................2

B. The Nursing Home Reform Amendments to the Medicaid Act ..........................4

C. Texas‘s Implementation of the NHRA ................................................................7

D. Texas‘s Community Service Programs................................................................8

III. ARGUMENT

9

A. Plaintiffs Have Stated Cognizable Claims Under the Medicaid Act ...................9

1. Plaintiffs Have Stated a Claim Under the NHRA....................................9

2. Plaintiffs Have Stated a Claim Under the Reasonable Promptness Provision of the Medicaid Act. ................................................................12

a. Plaintiffs Have Stated a Claim that the Defendants Fail to Provide Specialized Services with Reasonable Promptness ........12

b. Plaintiffs Have Stated a Claim that Community-Based Services and Supports Are Not Provided with Reasonable Promptness. ..................................................................................12

3. Plaintiffs Have Stated a Claim Under the Comparability Requirement of the Medicaid Act............................................................16

4. Plaintiffs Have Stated a Claim under the Freedom of Choice Provision of the Medicaid Act .................................................................18

B. Plaintiffs Have a Private Right of Action Under 42 U.S.C. § 1983 to Enforce the Relevant Sections of the Medicaid Act ............................................22

1. The Standard for Private Rights of Action ..............................................22

2. The Medicaid Act Creates Enforceable Rights........................................24

3. The Nursing Home Reform Amendments to the Medicaid Act Are Privately Enforceable...............................................................................30

a. The Language Chosen By Congress Demonstrates that the NHRA Is Privately Enforceable...................................................30

b. The Secretary‘s Regulations Further Demonstrate that the NHRA Is Privately Enforceable...................................................33

c. Applicable Caselaw Further Confirms That The NHRA Is Privately Enforceable...................................................................35

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TABLE OF CONTENTS (continued)

Page

4. The Reasonable Promptness Provision of the Medicaid Act Is Privately Enforceable...............................................................................38
5. The Comparability Provision of the Medicaid Act Is Privately Enforceable. .............................................................................................38
6. The Freedom of Choice Provision of the Medicaid Act Is Privately Enforceable. .............................................................................................39
C. Plaintiffs Have Standing to Assert a Claim Under the Freedom of Choice Provision of the Medicaid Act .............................................................................41
D. The Arc of Texas and the Coalition of Texans with Disabilities Both Have Standing to Assert the Claims Raised in this Case ..............................................45
1. The Arc of Texas and CTD Have Standing to Sue in their Own Right .........................................................................................................47
2. The ARC of Texas Has Standing As a Representative of Its Members ..................................................................................................49
E. The Governor Is a Proper Party In this Case .......................................................50
1. Plaintiffs Have Standing to Assert Their Claims Against the Governor. .................................................................................................50
2. The Governor Is Not Immune from Suit Under the Eleventh Amendment for Violations of Federal Law. ............................................53
3. Plaintiffs Have Stated a Claim Against Governor Rick Perry. ................55
a. The Governor is a Recipient of Federal Funds for Purposes of Plaintiffs‘ Section 504 Claim.......................................................55
b. The Governor Is Responsible For, and Has the Authority to Correct, the ADA, § 504, and Medicaid Violations Set Forth in the Complaint .................................................................56
IV. CONCLUSION AND REQUESTED RELIEF ...............................................................58

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TABLE OF AUTHORITIES
Cases Alexander v. Choate,
469 U.S. 287 (1984).................................................................................................................. 55
Alexander v. Sandoval, 532 U.S. 275 (2001)...................................................................................................... 33, 34, 35
Antricam v. Odom, 290 F.3d 178 (4th Cir. 2002) .................................................................................................... 28
Arc of Washington v. Braddock, 129 Fed. Appx. 348 (9th Cir. 2005).......................................................................................... 15
Arc of Washington v. Braddock, 403 F.3d. 641(9th Cir. 2005) .................................................................................................... 15
Arc of Washington v. Braddock, 427 F.3d 615 (9th Cir. 2005) .............................................................................................. 14, 15
Assoc. of Cmty. Orgs. For Reform Now v Fowler, 178 F.3d 350 (5th Cir. 1999) .................................................................................................... 48
Association for Retarded Citizens of Texas v. Kavanagh, et al., 483 U.S. 1057 (1987)............................................................................................................... 47
ASW v. Oregon, 424 F.3d 970 (9th Cir. 2005) .................................................................................................... 23
Ball v. Rodgers, 492 F.3d 1094 (9th Cir. 2007) ................................................................................ 24, 30, 39, 41
Beckwith v. Kizer, 912 F.2d 1139 (2d Cir. 1990).................................................................................................... 14
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).................................................................................................................. 10
Benjamin H. v. Ohl, No. Civ. A. 3:99-0338, 1999 WL 34783552, at *15 (S.D. W.Va. July 15, 1999).................... 13
Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452 (7th Cir. 2007) .................................................................................................... 30
iii

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Blanchard v. Forrest, 71 F.3d 1163 (5th Cir. 1996) .................................................................................................... 38
Blessing v. Freestone, 520 U.S. 329 (1997)........................................................................................................... passim
Boudreau ex rel. Boudreau v. Ryan, No. 00 C 5392, 2001 WL 840583, at *6 (N.D. Ill. May 2, 2001)............................................. 58
Bragg v. Chavez, No. Civ 07-0343 JB/WDS, 2007 WL 6367133, at *13 (D.N.M. Nov. 13, 2007) .................... 58
Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906 (7th Cir. 2003) .................................................................................................... 58
Bryson v. Shumway, 308 F.3d 79 (1st Cir. 2002) ....................................................................................................... 38
Cal. State Foster Parent Ass’n, 624 F.3d 974 (9th Cir. 2010) .................................................................................................... 24
Cannon v. Univ. of Chicago, 441 U.S. 677 (1979).................................................................................................................. 23
Carleson v. Remillard, 406 U.S. 598 (1972)............................................................................................................ 13, 14
City of Rancho Palos Verdes v. Abrams, 544 U.S. 113 (2005).................................................................................................................. 22
Cleburne Living Center v. City of Cleburne, Texas, 726 F.2d 191 (5th Cir. 1984), aff’d in part, vacated in part on other grounds 473 U.S. 432 (1985) ........................................................................................................................................ 48
Cler v. Illinois Educ. Ass’n, 423 F.3d 726 (7th Cir. 2005) .................................................................................................... 11
Cmty. Health Choice, Inc., v. Hawkins, 328 S.W.3d 10 (Tex. App.—Austin 2010, no pet.) .................................................................. 54
Concourse Rehab. & Nursing Ctr. Inc. v. Whalen, 249 F.3d 136 (2d Cir. 2001)...................................................................................................... 32
Cramer v. Chiles, 33 F. Supp. 2d 1342 (S.D. Fla. 1999) ................................................................................. 18, 40
iv

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Doe v. Chiles, 136 F.3d 709 (11th Cir. 1998) ............................................................................................ 13, 38
Doe v. Kidd, 501 F.3d 348 (4th Cir. 2007) .............................................................................................. 30, 38
Eliserio v. Floydada Housing Authority, et al., 455 F.Supp.2d 648 (S.D. Tex. 2006) ........................................................................................ 46
Ex Parte Young, 209 U.S. 123 (1908).................................................................................................................. 53
Fed. Election Comm’n v. Akins, 524 U.S. 11 (1998).................................................................................................................... 45
Frazar v. Gilbert, 300 F.3d 530 (5th Cir. 2002), rev’d sub nom on other grounds ......................................... 27, 28
Frew ex rel. Frew v. Hawkins, 540 U.S. 431 (2004).................................................................................................................. 27
Friends of the Earth v. Laidlaw Environmental Svcs., 528 U.S. 167 (2000).................................................................................................................. 41
Gonzaga University v. Doe, 536 U.S. 273 (2002)........................................................................................................... passim
Grammer v. John J. Kane Regional Ctrs.-Glen Hazel, 570 F.3d 520 (3d Cir. 2009) cert. denied, 130 S. Ct. 1524 (2010) .................................................................................................. 30, 36, 37
Grant ex rel Family Eldercare v. Gilbert, 324 F.3d 383 (5th Cir. 2003) .............................................................................................. 37, 45
Gueli v. United States, No. 806 CV 1080 T27 MSS, 2006 WL 3219272 (M.D. Fla. Nov. 6, 2006) ............................ 58
Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982)...................................................................................................... 47, 48, 49
Hunt v. Washington Apple Advertising Comm’n, 432 U.S. 333 (1977)............................................................................................................ 49, 50
Johnson v. Housing Authority of Jefferson Parish, 442 F.3d 356 (5th Cir. 2006) .............................................................................................. 26, 28
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Joseph S. v. Hogan, 561 F. Supp. 2d 280 (S.D.N.Y. 2008) ...................................................................................... 37
K.P. v. LeBlanc, 627 F.3d 115 (5th Cir. 2010) ........................................................................................ 52, 53, 54
Kentucky v. Graham, 473 U.S. 159 (1985).................................................................................................................. 56
King v. Smith, 392 U.S. 309 (1968)............................................................................................................ 13, 14
Lelsz, et al. v. Kavanagh, et al 807 F.2d 1243 (5th Cir. 1987) .................................................................................................. 47
Lewis v. New Mexico Dep’t of Health, 261 F.3d 970 (10th Cir. 2001) ............................................................................................ 11, 38
Lividas v. Bradshaw, 512 U.S. 107 (1994).................................................................................................................. 36
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).................................................................................................................. 47
Maher v. Gagne, 448 U.S. 122 (1980).................................................................................................................. 25
Maine v. Thiboutot, 448 U.S. 1 (1980)................................................................................................................ 22, 25
Makin v. State of Hawaii, 114 F.Supp.2d 1017 (D. Haw. 1999) ........................................................................................ 15
Martin v. Voinovich, 840 F. Supp. 1175 (S.D. Ohio 1993) ........................................................................................ 37
Matrixx Initiatives, Inc. v. Siracusano, 131 S. Ct. 1309 (2011) .......................................................................................................... 9, 10
McCarthy v. Gilbert, Civ. No. 03-CA-231-SS (W.D. Tex. 2003) .............................................................................. 13
McCarthy v. Hawkins, Civ. No. A-03-CA-231-SS (W.D. Tex 2003) ..................................................................... 40, 47
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Michelle P. ex rel. Deisenroth v. Holsinger, 356 F. Supp. 2d 763 (E.D. Ky. 2005) ....................................................................................... 40
Noah v. Government Employees Insurance Company, 2001 WL 36199119 (W.D. Tex. 2001)..................................................................................... 46
Okla. Chapter of Am. Academy of Pediatrics v. Fogarty, 472 F.3d 1208 (10th Cir. 2007) ................................................................................................ 30
Okpalobi v. Foster, 244 F.3d 405 (5th Cir. 2001) .............................................................................................. 52, 53
Olmstead v. L.C., 527 U.S. 581 (1999).................................................................................................................. 14
Pediatric Specialty Care, Inc. v. Ark. Dep’t of Human Servs., 443 F.3d 1015 (8th Cir. 2006) .................................................................................................. 30
Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1 (1981)........................................................................................................................ 2
Price v. City of Stockton, 390 F.3d 1105 (9th Cir. 2004) .................................................................................................. 23
Quern v. Mandley, 436 U.S. 725 (1978)............................................................................................................ 13, 14
Rabin v. Wilson-Coker, 362 F.3d 190 (2d Cir. 2004)...................................................................................................... 30
Rodriguez v. City of New York, 197 F.3d 611 (2d Cir. 1999)................................................................................................ 16, 17
Rolland v. Cellucci, 52 F. Supp. 2d 231 (D. Mass. 1999) .................................................................................. passim
Rolland v. Patrick, 483 F. Supp. 2d 107 (D. Mass. 2007) ....................................................................................... 11
Rolland v. Romney, 318 F.3d 42 (1st Cir. 2003) ................................................................................................ passim
Rosado v. Wyman, 397 U.S. 397 (1970)............................................................................................................ 22, 26
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Rosie D. ex rel. John D. v. Swift, 310 F.3d 230 (1st Cir. 2002)..................................................................................................... 28
S.D. ex rel. Dickson v. Hood, 391 F.3d 581(5th Cir. 2004) .............................................................................................. passim
Sabree ex rel. Sabree v. Richman, 367 F.3d 180 (3d Cir. 2004)...................................................................................................... 38
Schweiker v. Gray Panthers, 453 U.S. 34 (1981).................................................................................................................... 33
Shotz v. City of Plantation, 344 F.3d 1161 (11th Cir. 2003) ................................................................................................ 23
Skandalis v. Rowe, 14 F.3d 173 (2d Cir. 1994)........................................................................................................ 14
Sobky v. Smoley, 855 F. Supp. 1123 (E.D. Cal. 1994).......................................................................................... 16
Soto v. Lene, No. 11-CV-0089 SLB LB, 2011 WL 147679 (E.D.N.Y. Jan. 18, 2011).................................. 37
Spann v. Colonial Vill., Inc., 899 F.2d 24 (D.C. Cir. 1990) .................................................................................................... 48
Suter v. Artist M., 503 U.S. 347 (1992)............................................................................................................ 28, 29
Tinder v. Lewis Cnty. Nursing Home Dist., 207 F. Supp. 2d 951 (E.D. Mo. 2001)....................................................................................... 37
Townsend v. Quasim, 328 F.3d 511 (9th Cir. 2003) .................................................................................................... 14
Townsend v. Swank, 404 U.S. 282 (1971)............................................................................................................ 13, 14
Watson v. Weeks, 436 F.3d 1152 (9th Cir. 2006) .................................................................................................. 30
Westside Mothers v. Haveman, 289 F.3d 852 (6th Cir. 2002) .............................................................................................. 27, 38
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Westside Mothers v. Olszewski, 454 F.3d 532 (6th Cir. 2006) .................................................................................................... 30
Wilder v. Va. Hosp. Ass’n, 496 U.S. 498 (1990)........................................................................................................... passim
Wis. Dep’t of Health & Human Servs. v. Blumer, 534 U.S. 473 (2002).................................................................................................................. 33
Wood v. Tompkins, 33 F.3d 600 (6th Cir. 1994) ................................................................................................ 40, 41
Wright v. City of Roanoke Redevelopment & Housing Auth., 479 U.S. 418 (1987)...................................................................................................... 24, 25, 27
Statutes and Regulations
28 C.F.R. § 35.130 ........................................................................................................................ 14 42 C.F.R. § 430.25 .......................................................................................................................... 8 42 C.F.R. § 440.240 ...................................................................................................................... 16 42 C.F.R. § 441.302 ...................................................................................................................... 21 42 C.F.R. § 483.104 - 483.136...................................................................................................... 34 42 C.F.R. § 483.106 ................................................................................................................ 35, 42 42 C.F.R. § 483.112 ................................................................................................................ 34, 42 42 C.F.R. § 483.116 .................................................................................................................. 6, 10 42 C.F.R. § 483.120 ...................................................................................................... 5, 17, 34, 35 42 C.F.R. § 483.128 ...................................................................................................................... 35 42 C.F.R. § 483.130 .................................................................................................................. 6, 35 42 C.F.R. § 483.132 ........................................................................................................................ 5 42 C.F.R. §§ 483.400 et seq............................................................................................................ 2 42 C.F.R. § 483.440 ............................................................................................................... passim 29 U.S.C. § 794...................................................................................................................... passim
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42 U.S.C. § 12101.................................................................................................................. passim 42 U.S.C. § 12132......................................................................................................................... 14 42 U.S.C. § 1320a-2.......................................................................................................... 28, 29, 41 42 U.S.C. § 1396a .................................................................................................................. passim 42 U.S.C. § 1396d................................................................................................. 2,3,17, 18, 26, 38 42 U.S.C. § 1396n.................................................................................................................. passim 42 U.S.C. § 1396r .................................................................................................................. passim 42 U.S.C. § 1983.................................................................................................................... passim Fed. R.Civ. P. 12 ........................................................................................................................... 55 Pub. L. No. 100-203, § 4211(c), 101 Stat. 1330-198 (1987) .......................................................... 4 Pub. L. No. 101-508, § 4801(e)(4), 104 Stat. 1388-216 (1990) ..................................................... 5 Pub. L. No. 104-315 (1996) ........................................................................................................ 4, 6 1 Tex. Admin. Code § 351.15(b). ................................................................................................. 20 1 Tex. Admin. Code § 358.107..................................................................................................... 17 Tex. Govt. Code Ann. § 401.0045 ................................................................................................ 51 Tex. Govt. Code Ann. § 401.041 .................................................................................................. 51 Tex. Govt. Code Ann. § 401.043 .................................................................................................. 51 Tex. Govt. Code Ann. § 531.005 .................................................................................................. 51 Tex. Govt. Code Ann. § 531.0056 .......................................................................................... 51, 54 Tex. Govt. Code Ann. § 531.007 .................................................................................................. 51 Tex. Govt. Code Ann. § 401.0445 ................................................................................................ 54
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Constitutional Provisions
U.S. Const. amend. X.................................................................................................................... 53 Tex. Const. Art. IV, § 14 .............................................................................................................. 51
Other Authorities
46 Fed. Reg. 48,532, 48,535-36 (Oct. 1, 1981) ............................................................................ 44 57 Fed. Reg. 56,477 ........................................................................................................................ 6 Care of Institutionalized Mentally Disabled Persons: Joint Hearings Before the Subcomm. on the
Handicapped of the Senate Comm. on Labor and Human Resources and the Subcomm. on Labor, Health and Human Services, Educ., and Related Agencies of the Senate Comm. on Appropriations, 99th Cong., S. Hr‘g. 99-50 (1985) at 352......................................................... 3
Elliott Schwalb, Reconsidering Makin v. Hawaii: The Right of Medicaid Beneficiaries to HomeBased Services As an Alternative to Institutionalization, 26 Ga. St. U. L. Rev. 803, 823-849 (2010)............................................................................................................................ 13, 15, 45
H.R. Conf. Rep. 103-761 at 926, reprinted in 1994 U.S.C.C.A.N. 2901 ..................................... 29 H.R. Rep. 100-391(I) at 459, reprinted in 1987 U.S.C.C.A.N. 2313-1 (1987) .............................. 4 H.R. Rep. 100-391(I) at 462, reprinted in 1987 U.S.C.C.A.N. 2313-282...................................... 6 H.R. Rep. No. 104-817, at 1-4, reprinted in 1996 U.S.C.C.A.N. 4198 .......................................... 6 Tex. Gov. Exec. Order No. GWB 99-2 (Sept. 28, 1999), 25 Tex. Reg. 1820 .............................. 54 Tex. Gov. Exec. Order No. RP 13 (Apr. 18, 2002), 27 Tex. Reg. 3647........................... 54, 56, 58 Tex. Gov. Exec. Order No.RP 65 (Feb. 2, 2007).......................................................................... 57
Exhibits Exhibit A: Affidavit of Mike Bright Exhibit B: Affidavit of Dennis Borel
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Plaintiffs Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes, and Zackowitz Morgan (collectively, ―individual plaintiffs‖) and the Arc of Texas and the Coalition of Texans with Disabilities (organizational plaintiffs) hereby file this Response in Opposition to Defendants‘ Partial Motion to Dismiss Plaintiffs‘ Amended Complaint, and respectfully state as follows: II. INTRODUCTION
Defendants have filed a Partial Motion to Dismiss Plaintiffs‘ Amended Complaint (the ―Part. MTD 2‖) (Dkt. No.67), which seeks to dismiss one of the three defendants and all of the claims under the Medicaid Act. Significantly, the Partial Motion to Dismiss does not challenge either of the central causes of action in this case, the claim under Title II of the Americans with Disabilities Act (―ADA‖), 42 U.S.C. § 12101 or the claim under § 504 of the Rehabilitation Act of 1973 (―Rehab Act‖), 29 U.S.C. § 794.
Because Governor Perry, as opposed to the State of Texas, has no sovereign immunity, and because he has a central role both in the maintenance and the remediation of the federal law violations alleged in this case, he is an appropriate party and should not be dismissed. Furthermore, numerous federal courts have held, in factual situations similar to this one, that plaintiffs can state a claim under the Pre-Admission Screening and Resident Review (―PASARR‖) provisions of the Nursing Home Reform Amendments (―NHRA‖) to the Medicaid Act, 42 U.S.C. § 1396r(e)(7), as well as the reasonable promptness, comparability, and freedom of choice provisions of the Act, 42 U.S.C. § 1396a(a)(8), § 1396a(a)(10), and § 1396n(c). Therefore, these claims should not be dismissed and the Motion should be denied in its entirety. III. BACKGROUND
Central to the claims at issue in the Partial Motion to Dismiss are the PASARR provisions of the NHRA. In order to lend context and content to the arguments in this Response,
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it is important to understand the conditions which prompted Congress to enact the NHRA, its
basic requirements, and Texas‘s response to these statutory mandates. A. The Legislative History of the Nursing Home Reform Amendments.1 Before the mid-1970s, there were few federal standards for, and little federal
reimbursement of, institutional care for persons with developmental disabilities.2 States
provided their own facilities for housing individuals with disabilities. This state-provided care,
however, was grossly inadequate and abuse was common. See, e.g., Pennhurst State Sch. &
Hosp. v. Halderman, 451 U.S. 1, 7 (1981) (cataloguing inhumane, unsanitary, and dangerous
institutional conditions for individuals with mental retardation).
In 1971, Congress gave States the option of obtaining federal Medicaid reimbursement
for care provided in intermediate care facilities for individuals with mental retardation, known as
ICF/MRs. 42 U.S.C. §§ 1396a(a)(31)(A) & 1396d(a)(15). Texas and other States chose to
provide ICF/MR services in their Medicaid programs. As a condition of receiving federal funds,
States are required to ensure that adequate care is provided to persons with developmental disabilities in ICF/MRs, specifically including a program of ―active treatment.‖ 3 42 U.S.C. §
1396d(d)(2).
Federal regulations describe active treatment as an individually tailored series of
programs and therapies designed to help an individual with developmental disability reach an
1 Because the Motion does not seek to dismiss either the ADA or Rehabilitation Act claims, this section focuses on the legal context for the NHRA claims. 2 As defined by federal law, the term ―developmental disabilities‖ includes mental retardation and a range of other disabilities, sometimes referred to as ―related conditions,‖ which occur before the age of twenty-two. See 42 U.S.C. § 1396d(d). Plaintiffs‘ Amended Complaint adopts the federal definition and refers generally to ―persons with developmental disabilities.‖ Defendants‘ Partial Motion to Dismiss mirrors this nomenclature. 3 Texas, like most States, has elected to operate and fund ICF/MR facilities, including both large public institutions called State Supported Living Centers (SSLCs) and smaller, private residential programs called ―private ICF/MRs.‖ As a condition of receiving extensive federal funding for these facilities, Texas has agreed to comply with federal ICF/MR regulations that govern the operation, services, resident rights, and environmental standards of these institutions. See 42 C.F.R. §§ 483.400 et seq. The process and standard for providing care to ICF/MR residents is called active treatment, which is described in §§ 483.440(a)-(f).
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optimal level of independence. The care provided is ―directed toward . . . [t]he acquisition of the behaviors necessary for the client to function with as much self determination and independence as possible [and] [t]he prevention or deceleration of regression or loss of current optional functional status.‖ Id. at § 483.440(a)(1). An active treatment program can include training and vocational programs, physical, occupational, and speech therapies, and behavioral and interpersonal counseling. The specific contours of every individual‘s program are based upon that individual‘s needs.
In order to avoid the burden and costs of complying with ICF/MR requirements, but to ensure that they continued to receive federal funding, States soon began to transfer large numbers of persons with developmental disabilities from their ICF/MR institutions to nursing facilities (NFs).4 Many nursing facilities, ill-equipped to offer appropriate habilitation or treatment for these conditions, soon became warehouses for persons with developmental disabilities. Because active treatment was not required in nursing facilities, the conditions of individuals with developmental disabilities placed in those facilities deteriorated. As a consequence, Congress found itself subsidizing the nursing facility care of individuals with developmental disabilities that did not meet professional standards—precisely the situation it sought to rectify when it made compliance with active treatment standards a condition for receipt of federal funding for the care of persons with developmental disabilities in ICF/MRs.
In 1985, the Senate convened hearings to investigate the effects of improper institutionalization of individuals with developmental disabilities, including the inappropriate transfer of these individuals from state-operated institutions to nursing facilities.5 The Senate
4 Nursing facility care has long been a required Medicaid service. 42 U.S.C. § 1396d(f). 5 Care of Institutionalized Mentally Disabled Persons: Joint Hearings Before the Subcomm. on the Handicapped of the Senate Comm. on Labor and Human Resources and the Subcomm. on Labor, Health and Human Services, Educ., and Related Agencies of the Senate Comm. on Appropriations, 99th Cong., S. Hr‘g. 99-50 (1985) at 352.
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heard testimony about the warehousing of individuals with developmental disabilities in nursing facilities and the failure to provide proper care in those settings. The widespread practice of dumping individuals with developmental disabilities into nursing facilities was also documented by the General Accounting Office in a 1987 report. See Medicaid: Addressing the Needs of Mentally Retarded Nursing Home Residents, GAO/HRD-87-77 (1987).6 A full two-thirds of the residents evaluated by GAO were determined to require active treatment. Id. at 23. However, not a single one of these residents was receiving this necessary treatment. Id.
B. The Nursing Home Reform Amendments to the Medicaid Act. Congress responded with the Omnibus Budget Reconciliation Act of 1987 (―OBRA ‗87‖), Pub. L. No. 100-203, § 4211(c), 101 Stat. 1330-198 (1987), which included a dramatic reform of nursing facility care for persons with developmental disabilities. OBRA ‗87 incorporates the Nursing Home Reform Amendments (NHRA), 42 U.S.C. § 1396r, which are designed to prevent and remedy the pervasive warehousing and neglect of people with disabilities in nursing facilities. Congress intended the NHRA to end the inappropriate placement of mentally ill or mentally retarded individuals in nursing facilities. H.R. Rep. 100391(I) at 459, reprinted in 1987 U.S.C.C.A.N. 2313-1, 2313-279 (1987). The NHRA mandates a pre-admission screening and resident review process (―PASARR‖) for all persons with developmental disabilities referred or admitted to nursing facilities.7 The screening and review must be done by a qualified mental retardation professional. The PASARR review is designed to determine whether an individual is appropriate
6 Available online at http://www.eric.ed.gov/PDFS/ED288331.pdf. 7 The NHRA initially contained a requirement that an annual review be conducted for each nursing facility resident to determine whether the individual continued to need a nursing facility level of care. In 1996, the NHRA was amended to eliminate the requirement of an annual resident review on the ground that such reviews were duplicative of other annual assessments that were required. See Pub. L. No. 104-315 (1996). However, the NHRA continued to require a preadmission review for all individuals with developmental disabilities and PASARR reviews whenever there was a significant change in an individual‘s condition. 42 U.S.C. § 1396r(e)(7)(B)(iii).
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for admission and retention in a nursing facility because he needs the level of nursing services that can only be provided in a nursing facility, and, if so, whether he needs active treatment. 42 U.S.C. §§ 1396r(b)(3)(F)(ii), 1396r(e)(7)(A)&(B). A basic condition for federal reimbursement of nursing facilities is that the State determine, pursuant to a thorough assessment according to PASARR standards, that available community alternatives cannot meet the person‘s needs, and that the individual must be placed in a nursing facility. 42 C.F.R. § 483.132. If the resident review determines that the resident is inappropriately placed in the nursing facility, the State must arrange for the discharge of the resident. Id.; 42 U.S.C. §§ 1396r(e)(7)(C)(ii)(I), (ii)(II), (iii)(I), & (iii)(II). Congress intended the number of nursing facility residents with developmental disabilities to decline dramatically as a result of the PASARR screening.
The second major change—the mandatory provision of active treatment—was imposed to ensure that individuals with developmental disabilities obtain the care they need to function with as much independence and self-determination as possible. Specifically, as part of the PASARR screening, Congress required that States determine whether nursing facility residents with developmental disabilities require ―specialized services.‖8 Id. § 1396r(e)(7)(B) (ii). Specialized services consist of an active and continuous treatment program, which includes aggressive, consistent implementation of specialized and generic training, treatment, and health services that are aimed at allowing the individual to function as independently and with as much selfdetermination as possible, as well as services designed to prevent or decelerate regression and loss of abilities. See 42 C.F.R. § 483.120(a)(2), citing 42 C.F.R. § 483.440(a)(1) (active
8 In a 1990 amendment to the Medicaid statute, Congress substituted the term ―sepcialized services‖ for ―active treatment,‖ but made it clear the two terms are synonymous in the context of the PASARR requirements. Pub. L. No. 101-508, § 4801(e)(4), 104 Stat. 1388-216 (1990).
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treatment). If the individual requires specialized services, the State is required to provide them.9
42 C.F.R. §§ 483.116(b), 483.120(b), 483.130(m) and (n) (requiring assurances that specialized
services will, in fact, be provided).
When the Secretary subsequently issued the PASARR regulations, specialized services
were defined with specific reference to the federal ICF/MR active treatment regulations. The
Secretary‘s definition reflects three distinct duties: (1) the State alone is responsible for the
provision of specialized services; (2) the nursing facility is responsible only for traditional nursing services;10 and (3) the State is ultimately and fully responsible for ensuring that all of
these services, taken together, constitute a program of active treatment, as defined by 42 C.F.R. § 483.440(a)-(f). This definition has never been challenged, amended, or further refined.11
In enacting the NHRA, Congress intended to prevent the inappropriate placement of
individuals with developmental disabilities in nursing facilities, a problem highlighted by the
1987 GAO report. Congress also intended to ensure that if the resident requires specialized
services, the State actually provides them. See id.; §§ 1396r(e)(7)(C)(i)(IV) & (ii)(III). The
Secretary‘s regulations carefully reflected these intentions and mandates, and established
screening, diversion, placement and treatment requirements that Texas has ignored.
9 The House Committee on Energy and Commerce, in introducing the bill enacted as the NHRA, plainly stated that ―[i]n the Committee‘s view, the responsibility for providing, or paying for the provision of, active treatment lies with the States.‖ H.R. Rep. 100-391(I) at 462, reprinted in 1987 U.S.C.C.A.N. 2313-282 (emphasis added). 10 The Secretary‘s interpretation of the regulations explicitly relieves nursing facilities from having to provide specialized services:
Response: As noted above, we do not envision holding a facility accountable for deficiencies in the State‘s actions with respect to specialized services. We believe the law would need to be changed for us to do so. Facilities attempting to address a resident‘s needs would not be in jeopardy of sanctions unless they were otherwise out of compliance with the NF requirements. 57 Fed. Reg. 56,477. 11 In subsequent amendments to the statute, Congress left undisturbed the Secretary‘s definition of specialized services as equivalent to active treatment, as well as the interpretation of Congress‘ intent that such services must be provided to all persons with mental retardation who have been determined to need these services by the PASARR process. H.R. Rep. No. 104-817, at 1-4, reprinted in 1996 U.S.C.C.A.N. 4198, 4198-201; Pub. L. No. 104-315, § 1(b), 2(c).
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C. Texas’s Implementation of the NHRA. Texas institutionalizes more than four thousand persons with developmental disabilities in nursing facilities at any given time.12 Am. Compl. ¶ 26. Thousands more are admitted or at risk of admission each year.13 Id. As more fully described in the Amended Complaint, Texas ignores Congress‘ mandate, the Secretary‘s requirements, and the rights of persons with developmental disabilities in nursing facilities by operating a wholly inadequate PASARR program. Id. ¶¶ 74-103. Specifically, in violation of the NHRA and PASARR regulations, Texas‘s PASARR program fails to identify accurately whether a person who seeks admission to a nursing facility has a developmental disability, whether the individual could be served appropriately in another, less restrictive facility, and whether the person needs specialized services. Id. ¶¶ 74-78. Concomitantly, Texas fails to provide an array of specialized services that meet federal active treatment standards to persons with developmental disabilities who are in nursing facilities, to the same extent and in the same manner that it does for persons with developmental disabilities who live in ICF/MRs. Id. ¶¶ 79-80, 85-90. As a result of these deficiencies, a substantial portion of persons with developmental disabilities who are screened for admission should and could be served in alternative settings. Id. ¶¶ 82-83, 102. Similarly, a substantial portion of persons with developmental disabilities who currently reside in nursing facilities should be and could be served in more integrated community settings. Id. ¶¶ 84, 103. Finally, virtually all of the persons with developmental disabilities who are in nursing facilities qualify for specialized services, but virtually none of
12 In fact, the number may be considerably higher than this. As a result of pervasive deficiencies in its PASARR process, defendants do not have an accurate list or even a general estimate of the total number of persons with developmental disabilities who are currently institutionalized in nursing facilities in Texas. 13 The lack of accurate identification makes projections about the number of persons at risk of institutionalization even more problematic.
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them are receiving active treatment, as defined in federal regulations and as required by federal law. Id. ¶¶ 85-87, 102.
D. Texas’s Community Service Programs. Texas operates several distinct community programs for persons with developmental disabilities, in addition to its private ICF/MR program. All of these other community programs are funded in significant part by the federal government, either through Home and CommunityBased Services (―HCBS‖) waiver programs authorized by 42 U.S.C. § 1396n(c), or traditional Medicaid state plan services such as personal care attendants or home health care. The HCBS waiver provision authorizes the Secretary to waive certain other Medicaid provisions in order to encourage States to provide services in the community, provided that the cost of doing so is not greater than the cost of providing similar services in an institution, like a nursing facility or ICF/MR. Id.; see also 42 C.F.R. § 430.25(b). States are required to inform persons who seek admission to, or who reside in, a nursing facility about all of its HCBS waiver programs, must offer them a choice of the waiver program, and must administer its waiver programs in a manner that is fair and efficient for all persons, including those institutionalized in nursing facilities. 42 U.S.C. § 1396n(c)(2). The Secretary has approved several waiver programs in Texas, at least four of which could serve certain nursing facility residents with developmental disabilities. See Texas Dept. of Aging and Disability Services Reference Guide 2011 at 31-44 (online at http://cfoweb.dads.state.tx.us/ReferenceGuide/guides/FY11ReferenceGuide.pdf). First, Texas‘s Home and Community-based Services (―HCS‖)14 waiver provides a broad range of residential and non-residential services to persons with intellectual disabilities and is the State‘s largest
14 Plaintiffs use the acronym HCS to refer to Texas‘s specific waiver program and the acronym HCBS to refer generically to the general category of community-based waivers authorized by 42 U.S.C. § 1396n.
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waiver. Second, the Community Living and Assistance Support Services (―CLASS‖) waiver serves persons with disabilities other than intellectual disabilities, but including ―related conditions,‖ and offers a range of services as an alternative to institutionalization. Third, the Community Based Alternatives (―CBA‖) waiver provides many services similar to those in HCS and CLASS for adults with disabilities in order to avoid placement in an institutional facility. Fourth, the Star+Plus waiver is the managed-care equivalent of the CBA waiver and provides a similar array of services.15 While the HCS waiver has a long waiting list, access to the other three waivers is readily available to nursing facility residents through Texas‘s Money Follows the Person (―MFP‖) program.16
Texas neither provides nursing facility residents with developmental disabilities information about these waivers, nor offers them meaningful choices between nursing facility placement and community waiver programs. Am. Compl. ¶¶ 53-54, 98-100, 103. Instead, it administers these waivers in a manner that is neither fair nor efficient, discriminates against persons with developmental disabilities in nursing facilities, and is inconsistent with the federal statutory and regulatory requirements for operating waiver programs. Am. Compl. ¶ 53-61. IV. ARGUMENT
A. Plaintiffs Have Stated Cognizable Claims Under the Medicaid Act. 1. Plaintiffs Have Stated a Claim Under the NHRA.
―[T]o survive a motion to dismiss, [plaintiffs] need only allege ‗enough facts to state a claim to relief that is plausible on its face.‘‖ Matrixx Initiatives, Inc. v. Siracusano, 131 S. Ct.
15 The Star+Plus waiver is administered by HHSC. A description of the waiver is available at http://www.hhsc.state.tx.us/starplus/Overview.htm. 16 The MFP program allows nursing facility residents to gain immediate access to the CBA, CLASS, Star+Plus and several other waiver programs without having to go on a waiting list. Texas DADS, Money Follows the Person to Community Living at 2-3 (April 2007) available online at http://www.dads.state.tx.us/news_info/publications/brochures/DADS200_mfp.pdf.
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1309, 1322 n.12 (2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Defendants‘ argument that plaintiffs have failed to state a cognizable NHRA claim is based entirely upon its conclusory assertion that the provisions of the NHRA relied upon by plaintiffs do not impose any responsibilities on them.17 Part. MTD 2 at 40-41. However, contrary to defendants‘ contention, 42 U.S.C. §§ 1396r(e)(7)(A), (B), & (C) do indeed impose specific obligations on the State. Section 1396r(e)(7)(A)(i) requires ―the State … ―to have a preadmission screening program under this subparagraph [and] to perform resident reviews under subparagraph (B).‖18 Section 1396r(e)(7)(B)(ii) mandates that ―the State mental retardation or developmental disability authority must review and determine … (I) whether or not the resident … requires the level of services provided by a nursing facility …; and (II) whether or not the resident requires specialized services….‖ Finally § 1396r(e)(7)(C) makes clear that ―the State must … provide for (or arrange for the provision of) such specialized services for … mental retardation.‖ See also 42 C.F.R. § 483.116(b)(2) (―The State must provide or arrange for the provision of the specialized services needed by the individual while he or she resides in the NF‖). It is difficult to envision how Congress could have more clearly indicated that these various responsibilities were those of the State.19 Plaintiffs' allegations that the defendants fail to comply with all of these obligations certainly states a claim for relief ―that is plausible on its face.‖ Matrixx, 131 S.Ct at 1322 n.12.
17 This may very well explain why the defendants have failed so completely to ensure that plaintiffs and the class they seek to represent were: 1) screened prior to their nursing facility admission; 2) assessed to determine whether admission to a nursing facility was appropriate and, if so, if they needed specialized services; and 3) actually provided with the specialized services they required. 18 Plaintiffs cite § 1396r(b)(3)(F) in their claim for relief because § 1396r(e)(7)(A)(i) cross references to that section in order to fully define and clarify the nature and extent of the preadmission screening program that ―teh State must have in effect.‖ 19 Indeed, the heading of subdivision (7) of § 1396r(e) is ―Staterequirements for preadmission screening and resident review.‖ The defendants contention that the provisions in §1396r(e) are not directed at them ignores the clear statutory language and intent.
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Contrary to their generalized attack on all of plaintiffs‘ NHRA claims, defendants immediately thereafter concede that plaintiffs have stated a claim with respect to their failure to provide specialized services that satisfy federal active treatment requirements, although disputing the scope of that obligation. Part. MTD 2 at 41-42. Specifically, defendants assert that plaintiffs‘ claim that defendants have ―fail[ed] to provide specialized services constituting active treatment as measured by 42 C.F.R. § 483.440(a)-(f)‖ overstates their obligation and that they need only provide specialized services, as measured by Section 483.440(a)(1). Id.
Defendants‘ concession that plaintiffs have stated a cognizable claim regarding the failure to provide specialized services sufficient to constitute active treatment as required by 42 C.F.R. § 483.440(a)(1) should end the inquiry at this stage of the proceeding. The determination of the extent of any violation and the scope of relief to which plaintiffs may be entitled is not appropriate at the motion to dismiss stage—determining the precise contours of defendants‘ active treatment obligations is best addressed during the merits or remedial phase of the litigation. See Lewis v. New Mexico Dep’t of Health, 261 F.3d 970, 977 (10th Cir. 2001) (determining the reach of Medicaid statute ―is more appropriately reserved for resolution on the merits of the case‖); Cler v. Illinois Educ. Ass’n, 423 F.3d 726, 729 (7th Cir. 2005) (finding it inappropriate to grant motion to dismiss based on uncertain meaning of statutory term, ―prepaid legal services‖).20
20 Defendants‘ assertion that the scope of active treatment required by § 483.440(a)(1) does not encompass any of the requirements contained in other subparts of § 483.440 has been rejected by the one court that has addressed the issue. Rolland v. Patrick, 483 F. Supp. 2d 107, 113-14 (D. Mass. 2007). Recognizing that subpart (a) provides the general definition of active treatment and that subparts (b) through (f) provide the specifics, the Court easily concluded ―that paragraphs (b) through (f) of section 483.440 apply as well.‖ Id. at 114. Defendants‘ suggestion that the First Circuit decision in Rolland v. Romney, 318 F.3d 42 (1st Cir. 2003) somehow supports their position was also raised in Rolland and rejected by the district court on remand. Rolland, 483 F. Supp. 2d at 113-14.
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2. Plaintiffs Have Stated a Claim Under the Reasonable Promptness Provision of the Medicaid Act. a. Plaintiffs Have Stated a Claim that the Defendants Fail to Provide Specialized Services with Reasonable Promptness.
In the Amended Complaint, plaintiffs allege that Texas violates the reasonable promptness provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(8), by failing to provide appropriate specialized services in a timely manner to nursing facility residents with DD. See Am. Compl. ¶¶ 245-246. Defendants concede that this states a claim under 42 U.S.C. § 1396a(a)(8) to the extent that they are not providing specialized services as measured by 42 C.F.R. § 483.440(a)(1).21 Part. MTD 2 at 43. As a result, Defendants‘ challenge to this claim must be rejected.
b. Plaintiffs Have Stated a Claim that Community-Based Services and Supports Are Not Provided with Reasonable Promptness.
Defendants also argue that plaintiffs‘ reasonable promptness claim regarding the provision of community-based services and supports fails because plaintiffs allegedly are not entitled to prompt waiver services where the Home and Community Based Services (HCS) waiver program is full and has a waiting list. Part. MTD 2 at 43-45.
There are two problems with defendants‘ argument. First, it erroneously assumes that the HCS waiver cap, as applied to nursing facility residents with DD, is legal. Second, the defendants ignore the fact that nursing facility residents with DD are eligibile for and could benefit from community services provided through other programs than HCS, including CLASS, CBA and Star+Plus.
Plaintiffs‘ do not insist that the reasonable promptness provision of the Medicaid Act requires defendants to increase the size of the HCS waiver. See Am. Compl. ¶¶ 230-37, 251-
21 The scope of specialized services required by 42 C.F.R. § 483.440(a)(1) is neither necessary nor appropriate for determination at the motion to dismiss stage. See fn. 20 supra and related text.
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52.22 Rather, they merely insist that existing community services must ―be furnished with
reasonable promptness to all eligible individuals.‖ 42 U.S.C. § 1396a(a)(8) (emphasis added).
This statutory requirement can be violated by unreasonably delaying medical assistance to
individuals already determined eligible, see Doe v. Chiles, 136 F.3d 709, 711 (11th Cir. 1998), or
by denying eligibility pursuant to an illegal eligibility requirement. See, e.g., King v. Smith, 392
U.S. 309, 333 (1968); Quern v. Mandley, 436 U.S. 725, 740 (1978); Carleson v. Remillard, 406
U.S. 598, 600 (1972); Townsend v. Swank, 404 U.S. 282, 285-86 (1971). As the Supreme Court
explained in King, applying the analogous reasonable promptness provision of the Aid to
Families with Dependent Children program, ―In denying AFDC assistance to appellees on the
basis of this invalid regulation, Alabama has breached its federally imposed obligation to furnish
‗aid to families with dependent children‘ . . . with reasonable promptness to all eligible
individuals.‖ 392 U.S. at 333; see also Townsend, 404 U.S. at 286; Quern, 436 U.S. at 740.
Plaintiffs have alleged that the HCS waiver‘s restrictive eligibility criteria, which
effectively exclude individuals with developmental disabilities in nursing facilities from
accessing the HCS and other waiver programs, violate the Medicaid Act, as well as the ADA and Section 504 of the Rehab Act.23 See Am. Compl. ¶¶ 230-237, 251-252. The relief available
under the integration mandate of the ADA or Section 504 is the reasonable modification of the
22 Relying upon McCarthy v. Gilbert, Civ. No. 03-CA-231-SS (W.D. Tex. 2003), see Motion, Ex. 1, defendants assert that the existence of a waiting list for the HCS waiver precludes a promptness claim. Other cases have held to the contrary. See Benjamin H. v. Ohl, No. Civ. A. 3:99-0338, 1999 WL 34783552, at *15 (S.D. W.Va. July 15, 1999) (applying § 1396a(a)(8) to a waiver waiting list claim and finding that long waiting lists and lengthy delays in obtaining waiver services likely violated reasonable promptness); see also Elliott Schwalb, Reconsidering Makin v. Hawaii: The Right of Medicaid Beneficiaries to Home-Based Services As an Alternative to Institutionalization, 26 Ga. St. U. L. Rev. 803, 823-849 (2010) (analyzing the statutory and regulatory text and history and concluding that the reasonable promptness provision should apply to home and community-based waiver services). 23 Admittedly, there is a lengthy waiting list for HCS services. However, certain groups are provided a priority or are permitted to access the HCS waiver through the MFP program. But adult nursing facility residents with developmental disabilities are neither provided with a priority nor permitted to access the HCS waiver through the MFP program. As a result, they can expect to wait for six years or more for an HCS waiver slot to open up. This discriminatory and unreasonable exclusion from the HCS program states a viable promptness claim.
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underlying program to eliminate its discriminatory application and to accommodate the needs of the excluded individuals with disabilities. 42 U.S.C. § 12132; 28 C.F.R. § 35.130(b)(7); Olmstead v. L.C., 527 U.S. 581, 592, 607 (1999). This relief does not create a new program, but simply brings the existing program‘s eligibility criteria into compliance with the law. Just as in King, Quern, Carleson and Townsend, the allegations here that defendants have denied plaintiffs and the class access to medical services, whether in a waiver program or otherwise, pursuant to an invalid eligibility rule, state a claim under the reasonable promptness provision.24
The defendants‘ reliance on Skandalis v. Rowe, 14 F.3d 173 (2d Cir. 1994) and Beckwith v. Kizer, 912 F.2d 1139 (2d Cir. 1990) is misplaced. Both Skandalis and Beckwith involved claims seeking to require States to increase the size or scope of their HCBS waivers. Skandalis, 14 F.3d at 177 (waiver limited to individuals with incomes less than 300% of poverty); Beckwith, 912 F.2d at 1141 (waiver limited to individuals who were hospitalized for at least 90 days). The challenges in both of these cases were based on a violation of § 1396n of the Medicaid Act, not § 1396a(8), and were rejected because § 1396n provides States with considerable flexibility regarding the categories or groups of recipients that it may elect to cover.25 Skandalis, 14 F.3d at 1143; Beckwith, 912 F.2d at 181-82. Neither case referred to the reasonable promptness provision of the Medicaid Act, and neither case involved challenges to the legality of the waiver‘s exclusion based upon disability, as a violation of the ADA, § 504, or the NHRA.
Similarly, Arc of Washington v. Braddock, 427 F.3d 615 (9th Cir. 2005) does not support dismissal of the plaintiffs‘ reasonable promptness claim. The Arc of Washington plaintiffs challenged the waiver's numerical cap – not the exclusion of a class of persons with disabilities –
24 See, Townsend v. Quasim, 328 F.3d 511, 516-18 (9th Cir. 2003) (holding that excluding one category of disabled persons, there medically-needy nursing facility residents, from access to home and community-based Medicaid services violates the ADA, subject to state‘s right to prove fundamental alteration defense). 25 It is important to note that neither Beckwith nor Skandalis challenged the legality of the classifications under the ADA or the NHRA.
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in Washington‘s HCBS waiver program, While one appellate decision disposed of the
plaintiffs‘ ADA claim,26 a separate opinion reversed and remanded the district court‘s dismissal
of the Medicaid Act reasonable promptness claim. Arc of Washington v. Braddock, 129 Fed.
Appx. 348, 351-52 (9th Cir. 2005).27 Thus, Braddock as well as other decisions actually support
the reasonable promptness claim here.28
Furthermore, there is a waiting list only with respect to the HCS waiver program, and not
for the other waiver programs offered by the defendants but ignored in their motion. See Part.
MTD 2 at 43-45. Plaintiffs‘ reasonable promptness claim with respect to community services is
not limited to services and supports provided through the HCS waiver program. See Am. Compl.
¶¶ 131, 138, 232-237, 242-44, 247 (not limiting claim to any particular waiver program).
Plaintiffs are willing to accept appropriate community services under any of Texas‘s community
support programs through which they can obtain the services needed to allow them to live in the
most integrated setting. These other programs include the MFP program, the CLASS waiver, the
CBA waiver, the Star+Plus waiver and other Medicaid-covered state plan services, such as
personal care assistance. There is no waiting list for many of these programs and services for
26 Significantly, this decision was issued pursuant to a request for rehearing and superceded an earlier decision by the panel reported at 403 F.3d. 641. The superceded opinion had concluded that where there was a conflict between the waiver provisions of the Medicaid Act and the ADA, the waiver provisions controlled. 403 F.3d at 643-44. The decision on rehearing excised that analysis and holding from the final decision and simply concluded that Washington State‘s waiver complied with the ADA because the State demonstrated that ―it has a ‗comprehensive, effectively working plan…‘‖ Arc of Washington, 427 F.3d at 621 (internal citation omitted). 27 That the plaintiffs raised a reasonable promptness claim which was remanded for further consideration by the Ninth Circuit is made evident by reference to plaintiffs‘ appellate brief, which is available at 2003 WL 23004532. 28 In Makin v. State of Hawaii, 114 F.Supp.2d 1017 (D. Haw. 1999) the plaintiffs raised both a reasonable promptness and ADA challenge to the cap on the number of waiver slots in Hawaii‘s HCBS waiver. The Makin Court analyzed the Medicaid Act claims independent of the ADA claim and concluded that plaintiffs‘ reasonable promptness claim failed because the Medicaid statute specifically permitted states to place limits on the number of individuals served under a waiver. 114 F.Supp.2d at 1030-31. However, the Makin Court then addressed the ADA and § 504 integration mandate claims and concluded that both were viable claims. 114 F.Supp.2d at 1033-36. By failing to consider whether the waiver cap needed to be modified to comply with the ADA and § 504 before addressing the reasonable promptness claim, the Court put the proverbial cart before the horse. See, Schwalb, Reconsidering Makin v. Hawaii, 26 Ga. St. U. L. Rev. at 823-849 (criticizing court for its treatment of the reasonable promptness claim).
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individuals in NFs.29 Because defendants‘ challenge to the viability of this claim is predicated entirely on the existence of a lengthy waiting list for HCS services, it should be denied.
3. Plaintiffs Have Stated a Claim Under the Comparability Requirement of the Medicaid Act.
Plaintiffs also allege that defendants are violating the comparability provisions of the Medicaid Act, 42 U.S.C. § 1396a(a)(10)(B), by failing to provide persons with developmental disabilities in nursing facilities with services to which they are entitled under the Medicaid program, while providing similar services to other, similarly-needy persons in ICF/MRs and state supported living centers in Texas. It is defendants‘ failure to offer the same type, level, and intensity of specialized services to plaintiffs as they offer to ICF/MR residents that is the focus of plaintiffs‘ comparability claim. Am Compl. ¶¶ 127, 135, 137, 248-49.
While defendants are correct that the comparability rule requires that ―the amount, duration, and scope of available services cannot differ among Medicaid recipients based on how they became eligible for Medicaid,‖ Part. MTD 2 at 49, they also cannot differ among Medicaid recipients within a particular categorically or medically needy group. Sobky v. Smoley, 855 F. Supp. 1123, 1140-41 (E.D. Cal. 1994); Rodriguez v. City of New York, 197 F.3d 611, 615 (2d Cir. 1999) (―Section 1396a(a)(10)(B) thus precludes states from discriminating against or among the categorically needy‖); 42 C.F.R. § 440.240(b)(1).30 Plaintiffs are all individuals who qualify for medical assistance under the Texas Medicaid program based upon their disability. Residents of ICF/MRs and state supported living centers also qualify for medical assistance based upon their disability. See 1 Tex. Admin. Code § 358.107. As a result, the comparability rule requires
29 Under the MFP program, residents of NFs are able to bypass the waiting lists for the CLASS, CBA and Star+Plus waivers and access the services and supports immediately. 30 Because Medicaid residents of both NFs and ICF/MRs fall within the categorically needy eligibility group, it is § 1396a(a)(10)(i), not § 1396a(a)(10)(ii) which controls. To the extent that defendants object to that part of the comparability claim predication on subdivision (ii), Part. MTD 2 at 51, they are correct. Plaintiffs assert their comparability claim solely based upon subdivision (i).
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that ―the services available to any individual in [either group be] equal in amount, duration, and
scope….‖ 42 C.F.R. 440.240(b).
Defendants are, of course, correct when they state that ―[n]othing … requires that all of
the specific services defined in § 1396d(a) must be provided to every developmentally disabled
person … in a nursing facility.‖ However, all of the services that are covered under the state Medicaid plan31 must be made equally available to all recipients without discrimination against or among the categorically needy.32 Rodriguez, 197 F.3d at 615. Residents of nursing facilities
with developmental disabilities have the same need for active treatment as residents of ICF/MRs
and state supported living centers. Am. Compl. ¶¶ 85-88, 102. Federal law mandates that
defendants make available to both groups those services sufficient to achieve active treatment.
42 U.S.C. §§ 1396r(e)(7)(B) (ii)(II) & (C)(i) (nursing facility residents); 42 C.F.R. §
483.120(a)(2) (nursing facility residents); 42 U.S.C. §1396d(d)(2) (ICF/MR residents); 42 C.F.R.
§ 483.440 (nursing facility and ICF/MR residents); Rolland, 318 F.3d at 57 (―For individuals
with mental retardation, . . . the Secretary crafted a definition of specialized services that
incorporated the active treatment standard traditionally applied in ICF/MRs‖). However,
defendants make available the services necessary to constitute active treatment only to residents
of ICF/MRs, and not to nursing facility residents. Am. Compl. ¶¶ 87-88, 90, 96, 102, 249, 256-
58. This differential treatment of similarly-needy Medicaid recipients with respect to the
31 As defendants acknowledge, Texas covers ICF/MR services under its state Medicaid plan. The fact that this is an optional, rather than a mandatory, service does not in any way diminish their obligations under § 1396a(a)(10)(B) regarding its availability. If anything, providing required specialized services sufficient to achieve active treatment as part of the optional ICF/MR service, while failing to provide it as part of the mandatory nursing facility service, renders the disparate treatment even more inappropriate. 32 Defendants‘ suggestion that plaintiffs‘ comparability claim necessitates that ―every Medicaid recipient in any program and in any type of facility must be provided the same care and services‖ totally misstates the claim. Part. MTD 2 at 50. Plaintiffs do not contend that everyone should receive the same care and services, simply that everyone who meets the eligibility criteria for a specific service should have equal access to it. Because residents of NFs with DD and residents of ICF/MRs both are entitled to receive needed specialized services in an amount, duration and scope sufficient to constitute active treatment under 42 C.F.R. § 483.440, it is discriminatory and a violation of the comparability provision to make these services available to one group, but not to the other.
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availability of a medical service to which both groups are equally entitled under federal law is
precisely what the comparability provision was targeted to prevent.
Not surprisingly, the one court to address this specific issue regarding the disparate
availability of specialized services and active treatment between nursing facility and ICF/MR
residents had no difficulty in concluding that it stated a claim under § 1396a(a)(10)(B). Rolland
v. Cellucci, 52 F. Supp. 2d 231, 238-39 (D. Mass. 1999) (holding that ―Plaintiffs‘ claim that
individuals residing in ICF/MRs receive active treatment . . . , while those individuals residing in
nursing facilities are not receiving ample services . . . supports a cognizable claim of a violation
of the comparability provision‖). Defendants‘ assertion that plaintiffs have failed to allege a viable violation of the comparability rule must be rejected.33
4. Plaintiffs Have Stated a Claim under the Freedom of Choice Provision of the Medicaid Act.
The Medicaid statute requires that recipients at risk of institutional care be given a choice between Medicaid programs. 42 U.S.C. § 1396n(c)(2)(C).34 Courts have applied this provision
to guarantee persons with developmental disabilities a choice between different Medicaid
programs. See Cramer v. Chiles, 33 F. Supp. 2d 1342, 1352 (S.D. Fla. 1999) (state Medicaid
plan violated 42 U.S.C. § 1396n(c)(2)(C) because it gave individuals with disabilities ―no real
choice‖ between ICF/DDs and HCBW services).
33 Defendants also assert that should the Supreme Court invalidate the entirety of the PPACA, including the revised definition of medical assistance in 42 U.S.C. § 1396d(a), that plaintiffs comparability claim must be dismissed. Plaintiffs disagree that their comparability claim is dependent upon the amendments to the definition of medical assistance in the PPACA. However, this is a question for another day, to be reached if, and only if, the Supreme Court does what no operative decision addressing the legality of the PPACA has yet done, and finds that the Medicaid provisions are not severable from the individual mandate provision. 34 Specifically, the statute provides that States must ensure that
such individuals who are determined to be likely to require the level of care provided in a hospital, nursing facility, or intermediate care facility for the mentally retarded are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to the provision of inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded . . .‖ Id. (emphasis added).
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The fundamental purpose of 42 U.S.C. § 1396n(c)(2)(C) is to provide individuals who require an institutional level of care a choice concerning the type of Medicaid services they receive. In order to make this choice meaningful, Medicaid recipients must be informed of all feasible alternatives, including, but not limited to, the various waiver programs, the MFP program, and regular Medicaid state plan services, such as personal care attendant services, home health care services, or private duty nursing services. They also must be allowed to apply for these services and be afforded meaningful access to the application process.35 Defendants assert that § 1396n(c)(2)(C) is solely an informational provision and does not provide individuals with any choice of community-based alternatives to institutional care. Part. MTD 2 at 47. To support this contention, defendants quote the first half of § 1396n(c)(2)(C), but neglect to include the second half of the provision, which provides the specific language specifying that the individual, after being informed of the available alternatives to institutional care, has ―the choice‖ of accepting those alternatives ―to the provision of inpatient hospital services, nursing facility services, or services in an intermediate care facility for the mentally retarded.‖
The Amended Complaint alleges that defendants have, in violation of 42 U.S.C. § 1396n(c)(2)(B) & (C), failed to provide residents of nursing facilities with developmental disabilities with: (1) notice of and equal opportunities to apply for and to have access to community-based services; (2) an assessment of their eligibility for such services; and (3) meaningful choice between institutional and community-based services. Am. Compl. ¶¶ 236, 247. Defendants argue that there is no requirement to inform eligible individuals of a particular
35 States that elect to participate in the HCBS waiver program must comply with additional freedom of choice regulations:
HCFA will not grant a waiver under this subpart and may terminate a waiver unless the Medicaid agency . . . (d) Assur(es) that . . . the recipient or his or her legal representative will be (1) informed of any feasible alternative under the waiver; and (2) given the choice of either institutional or home and community based services. 42 C.F.R. § 441.302(d).
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waiver program if that waiver program is full. Part. MTD 2 at 48. Defendants‘ contention is flawed for several reasons.
First, Medicaid recipients retain their right to be informed of alternatives, regardless of a particular waiver‘s status or capacity. This right is especially critical in Texas, where the waiting list for HCS services is long. It is imperative that individuals be informed about alternatives in a timely manner so that they can exercise their right to be added to the waiting list if they desire.36 The failure to notify persons with developmental disabilities in nursing facilities about each existing waiver program, regardless of the current capacity of the program, denies them critical information needed to make a meaningful choice about whether to enter, or remain in, a nursing facility. Knowing that waiver services, although not currently available, may be available in the future certainly could impact an individual‘s decision about whether to enter a NF or remain in the community. As a result, it constitutes a violation of § 1396n(c)(2)(C) to fail to inform the individual of this information. Without this information, the individual cannot make an informed choice regarding whether to enter the NF or to join the waiting list and remain in the community until a slot opens up.
Second, there are several HCBS waivers in Texas, in addition to HCS, for which class members are eligible, including CBA, CLASS, CWP, TxHmL, Star+Plus and DBMD, some or all of which currently have capacity.37 The fact that one waiver is full, does not relieve defendants from their duty to inform individuals of other ―feasible alternative[s]‖ under 42
36 Defendants‘ own regulations implementing this federal requirement require them to provide individuals who are about to enter a nursing facility with information about ―all long-term care and long-term support options appropriate to the clients‘ needs that are currently available.‖ However, defendants recognize that there is a distinction between ―currently available‖ and ―immediately available,‖ for the regulation goes on to specify that ―[i]f the client … selects an option that is not immediately available for any reason, the agency must provide assistance in placing the client‘s name on a waiting list for that option.‖ 1 Tex. Admin. Code § 351.15(b). 37 Nursing facility residents have access to the CBA, CLASS and Star+Plus waivers under the MFP program without having to go on any waiting list.
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U.S.C. § 1396n(c)(2)(C). In a similar factual situation, the Rolland Court found that individuals with developmental disabilities in nursing homes stated a claim for violation of the freedom of choice provision of 42 U.S.C. U.S.C. § 1396n(c)(2)(C) by alleging that defendants‘ administration of the Medicaid program failed to inform class members of feasible alternatives to nursing facilities, including ICF/MR, PCA services and HCBS waiver programs. See Rolland, 52 F. Supp. 2d at 241. Likewise, here the universe of feasible alternatives is not narrowly limited to the HCS waiver, but rather properly encompasses all community-based services, supports, and programs available under the Texas Medicaid program, including the other waiver and MFP programs, as well as individual state plan services. Defendants provide none of this information to individuals with DD about to enter NFs.
Defendants have failed to inform plaintiffs of the availability of feasible alternatives to NF care under the various waiver programs which Texas operates and other services and supports available under the State Medicaid Program. By failing to provide this necessary and required information, defendants have deprived plaintiffs of the ability to make an informed choice of whether to enter a NF or remain in the community, utilizing the services to which they are currently entitled or may in the future be entiltled to receive Am. Compl. ¶¶ 236, 247. In doing so, defendants have failed to offer plaintiffs a choice about whether to receive community or institutional services. Each of these failures violates plaintiffs‘ rights under 42 U.S.C. § 1396n(c)(2)(C) and 42 C.F.R. § 441.302(d) to be informed of available alternatives to institutional care and, armed with that information, to choose whether to enter an institution or remain in the community. Therefore, plaintiffs have stated a claim under the freedom of choice provision, 42 U.S.C. § 1396n(c)(2)(C).
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B. Plaintiffs Have a Private Right of Action Under 42 U.S.C. § 1983 to Enforce the Relevant Sections of the Medicaid Act 1. The Standard for Private Rights of Action.
Section 1983 authorizes a civil action against any individual who, ―under color of any statute, ordinance, regulation, custom, or usage of any State‖ deprives an individual ―of any rights, privileges, or immunities secured by the Constitution and laws.‖ 42 U.S.C. § 1983. Rights under federal statutes, as well as the Constitution, may be the basis of a § 1983 action. Maine v. Thiboutot, 448 U.S. 1, 4-5 (1980); see also Rosado v. Wyman, 397 U.S. 397, 422-23 (1970) (enforcing Social Security Act in § 1983 action). The Supreme Court has set forth a three-part test for determining if Congress intended to create a right under § 1983: (i) Congress intended that the provision benefit the plaintiff; (ii) the statute is not vague and amorphous, and (iii) a binding obligation is unambiguously imposed on the States by the statute. See Blessing v. Freestone, 520 U.S. 329, 340-41 (1997); Wilder v. Va. Hosp. Ass’n, 496 U.S. 498, 503 (1990) (applying factors to allow enforcement of a Medicaid Act provision requiring state plans to include payment rates that ―the State finds, and makes assurances satisfactory to the Secretary‖ are ―reasonable and adequate‖ to meet the costs of ―efficiently and economically operated facilities‖).38
In Gonzaga University v. Doe, 536 U.S. 273 (2002), the Supreme Court clarified that the first Wilder/Blessing prong is not met merely by showing that ―the plaintiff falls within the general zone of interests that the statute is intended to protect.‖ Id. at 283. Rather, ―it is rights, not the broader or vaguer ‗benefits‘ or ‗interests‘ that may be enforced‖ under § 1983. Id.
38 If the Wilder/Blessing factors are met, there is a presumption that the provision is enforceable under § 1983, unless the State can show that Congress specifically foreclosed that remedy, either expressly in the statute or by creating a ―comprehensive enforcement scheme‖ incompatible with enforcement through § 1983. Blessing, 520 U.S at 341. The Supreme Court has repeatedly listed the Medicaid Act in the category of statutes that do not provide such a comprehensive enforcement scheme. City of Rancho Palos Verdes v. Abrams, 544 U.S. 113, 121-22 (2005) (citing Wilder, 496 U.S. at 521).
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(reiterating that Blessing, 520 U.S. at 340, ―emphasizes that it is only violations of rights, not laws, which give rise to § 1983 actions‖).
In determining whether Congress intended to confer individual rights, courts must look at whether the text contains ―rights- or duty-creating language;‖ that is, language with an ―unmistakable focus on the benefited class.‖ Gonzaga, 536 U.S. at 284 n.3; see also ASW v. Oregon, 424 F.3d 970, 976 (9th Cir. 2005) (―these particular statutory provisions are unambiguously framed in terms of the specific individuals benefited and contain explicit duty creating language); Price v. City of Stockton, 390 F.3d 1105, 1110 (9th Cir. 2004); Shotz v. City of Plantation, 344 F.3d 1161, 1171 n.16 (11th Cir. 2003) (noting that ―rights are often thought of as necessarily including a correlative duty, compelling behavior respecting that right‖); Rolland, 318 F.3d at 52 (quoting Cannon v. Univ. of Chicago, 441 U.S. 677, 690 n.13 (1979)) (―the rightor duty-creating language of the statute has generally been the most accurate indicator of the propriety of implication of a cause of action‖).
To illustrate rights-creating language, the Gonzaga Court quoted from Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972 (―no person shall . . . be subjected to discrimination‖). To illustrate duty-creating language, the Court cited to several statutes approved by the Court in Cannon, 441 U.S. at 690 n.13. See Gonzaga, 536 U.S. at 284 n.3. As noted by the Cannon Court, duty-creating language may be enforced by an individual as long as it is a duty that runs ―directly [to] a class of persons that include[s] the plaintiff,‖ rather than to the ―public at large.‖ 441 U.S. at 690 n.13. Indeed, many of the statutes cited by the Cannon Court focus more on the duty of the defendant than on the rights of the plaintiff. See Cannon, 441 U.S. at 690 n. 13 (collecting cases).
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In sharp contrast to the provision of the Family Educational Rights and Privacy Act (―FERPA‖) at issue in Gonzaga, which spoke at an aggregate level of policy and practice, 536 U.S. at 289, the Medicaid provisions at issue in this case have a distinct focus on the individual Medicaid recipients who are the intended beneficiaries of the specific rights and duties delineated. As shown below, the text and structure39 of the statutory provisions relied upon by plaintiffs meet the Wilder/Blessing/Gonzaga standard.
2. The Medicaid Act Creates Enforceable Rights. Defendants boldly assert that none of the provisions of the Medicaid Act create rights which are judicially enforceable. Part. MTD 2 at 24-29. They support this contention with two arguments, neither of which survive even the most elemental scrutiny. First, defendants assert that the Medicaid Act confers rights solely on the Secretary, who can cut off federal funding if she determines that the State is violating federal law.40 Part. MTD 2 at 24-26. This argument has been considered and explicitly rejected by both the Supreme Court and the Fifth Circuit. The Supreme Court first addressed this argument in Wright v. City of Roanoke Redevelopment & Housing Auth., 479 U.S. 418, 424-29 (1987), and held that ―HUD‘s authority to audit, enforce annual contributions contracts, and cut off federal funds . . . are insufficient to indicate a congressional intention to foreclose § 1983 remedies.‖ Id. at 428. Similarly, in Wilder, 496 U.S. 498, the State of Virginia argued that the Secretary‘s right to cut off federal reimbursement in the event that a State violates its obligations under the Medicaid Act precludes
39 ―Evidence of congressional intent to create a federal right can be found in a statute‘s language as well as in its overarching structure.‖ Cal. State Foster Parent Ass’n, 624 F.3d 974, 980 (9th Cir. 2010) (quoting Ball v. Rodgers, 492 F.3d 1094, 1105 (9th Cir. 2007)). 40 Put in the parlance of § 1983 jurisprudence, defendants are asserting that the Medicaid Act contains a ―comprehensive enforcement scheme‖ that signals Congressional intent to foreclose private enforcement. Blessing, 520 U.S. at 346-47.
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the existence of a private right of action under § 1983. The Court had little difficulty rejecting this argument, noting that the Secretary‘s authority ―to withhold approval of plans . . . , or to curtail federal funds to States whose plans are not in compliance with the Act . . . cannot be considered sufficiently comprehensive to demonstrate a congressional intent to withdraw the private remedy of § 1983.‖ Id. at 522-23. The Supreme Court addressed and rejected this same argument yet a third time in Blessing, 520 U.S. at 346-48. Relying upon Wright and Wilder, the Court easily concluded that the federal Secretary‘s ―limited powers to audit and cut federal funding‖ were not sufficient to preclude private enforcement of those provisions of Title IV-D of the Social Security Act which might confer federally enforceable rights on plaintiffs.41 Blessing, 520 U.S. at 348.
Despite these three Supreme Court decisions holding that the federal Secretary‘s ability to withhold federal funding does not undermine a private right of action under § 1983,42 defendants cavalierly assert that Gonzaga has overruled or effectively abrogated these holdings. Part. MTD 2 at 26. However, the Gonzaga Court, citing both Wright and Blessing with approval, explicitly noted that it was not addressing whether the statute ―creat[ed] a comprehensive enforcement scheme that is incompatible with individual enforcement under § 1983.‖ Id. at 284 n.4.
41 While Blessing held that there was no generalized right to enforce the statutory scheme of Title IV-D, it remanded the case ―for the District Court to construe the complaint in the first instance, in order to determine exactly what rights, considered in their most concrete, specific form, respondents are asserting‖ and ―to determine whether any specific claim asserts an individual federal right.‖ Id. at 346. Indeed, contrary to defendants‘ broad assertion that Spending Clause legislation can never confer privately enforceable rights, the Blessing Court specifically noted that ―[42 U.S.C.] § 657 may give [respondent] a federal right to receive a specified portion of the money collected on her behalf by Arizona.‖ Id. 42 In addition to Wright, Wilder, and Blessing, the Supreme Court has also held that § 1983 provides a private cause of action to enforce provisions of the Social Security Act in at least two other cases. Maine, 448 U.S. at 4-6 (holding that § 1983 provided private individuals with a cause of action to enforce provisions of the Social Security Act); Maher v. Gagne, 448 U.S. 122, 128-29 (1980).
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Not surprisingly, in light of the above-cited Supreme Court precedent, the Fifth Circuit, both before and after Gonzaga, has concluded that the authority of a federal agency to cut off federal funds does not preclude private enforcement of specific provisions of the underlying federal law. Most recently, the Fifth Circuit in Johnson v. Housing Authority of Jefferson Parish rejected the argument that HUD‘s authority to cut off funds to a housing authority that was violating the National Housing Act precluded private enforcement of the Act. 442 F.3d 356, 365-66 (5th Cir. 2006).
Even more directly on point, the Fifth Circuit in S.D. ex rel. Dickson v. Hood held that the Early and Periodic Screening, Diagnostic and Treatment (―EPSDT‖) provisions of the Medicaid Act, 42 U.S.C. §§ 1396d(a)(4)(B) and 1396d(r)(5), in conjunction with 42 U.S.C. § 1396a(a)(10)(A)(i), are enforceable under § 1983. 391 F.3d 581, 602-04 (5th Cir. 2004). The S.D. Court correctly noted that Blessing continues to set forth the test for determining whether a particular federal statute is enforceable pursuant to § 1983 and that Gonzaga simply clarified how the first prong of that test—whether the statute contained sufficient ―rights creating‖ language to demonstrate that Congress ―intended to confer individual rights upon a class of beneficiaries‖—should be applied. Id. at 602 (quoting Gonzaga). With respect to the question of whether the Medicaid Act contains a sufficiently comprehensive enforcement scheme to indicate Congressional intent to foreclose a remedy under § 1983, the Court noted that the defendant had failed to make such a showing. Id. at 606 n.33.43 Therefore, defendants‘ assertion
43 Defendants also suggest that the fact that a State could include within the broad confines of its Medicaid program certain services for which federal reimbursement is not available somehow undermines plaintiffs‘ ability to establish a federally-protected right regarding any aspect of the State‘s Medicaid program, including those for which it receives federal funding. While the provision by a State of non-mandatory medical assistance under its Medicaid plan with state-only funds might exempt that portion of its Medicaid program from federal judicial review, see Rosado, 397 U.S. at 420, those provisions of a State‘s Medicaid program, both mandatory and optional, for which it receives federal funds, must comply with the requirements of the Medicaid Act. Wilder, 496 U.S. at 502: S.D., 391 F.3d at 585-86. Because plaintiffs‘ claims only concern Medicaid services for which defendants receive federal
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that the Secretary‘s ability to withhold funds for noncompliance precludes a private right of action under § 1983 under any provision of the Medicaid Act is directly contrary to consistent holdings of the Supreme Court and Fifth Circuit.
Second, defendants suggest that Gonzaga established ―a general principle that excludes Spending Clause legislation from judicial enforcement.‖ Part. MTD 2 at 26. Recognizing that Gonzaga did not overrule either Wilder or Wright, they suggest that these cases represent ―narrow exceptions‖ to the general rule, implying that they should be limited to their particular facts. However, if Gonzaga had established such a general rule, it would have been unnecessary for that Court to have engaged in the detailed analysis of the specific statutory provision in FERPA to determine if it contained sufficient ―rights creating‖ language.44 Gonzaga, 536 U.S. at 287-89. The Gonzaga Court also would not have cited Blessing with approval, for Blessing explicitly recognized that Spending Clause legislation can be privately enforced pursuant to § 1983. Blessing, 520 U.S. at 345-46.
Not only is this Spending Clause exclusion argument not supported by Supreme Court precedent, it has also been rejected by the Fifth Circuit. In Frazar v. Gilbert, the Fifth Circuit was confronted with, and explicitly rejected, the argument that ―the Medicaid Act, as legislation enacted pursuant to the Spending Clause, was not the supreme law of the land under the Supremacy Clause and therefore the Ex Parte Young exception to Eleventh Amendment state immunity was inapplicable.‖ 300 F.3d 530, 550 (5th Cir. 2002), rev’d sub nom on other grounds, Frew ex rel. Frew v. Hawkins, 540 U.S. 431 (2004). Noting that this very argument had been rejected by the Sixth Circuit in Westside Mothers v. Haveman, 289 F.3d 852, 859-60
financial assistance, defendants‘ assertions regarding solely state-funded services have no bearing on the private cause of action analysis. 44 There is no question that FERPA is Spending Clause legislation.
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(6th Cir. 2002), the Frazar Court held that ―[f]or purposes of the Supremacy Clause and Ex Parte Young, the mandates set out in [the] Medicaid statute are more than contractual, they are federal law.‖ Frazar, 300 F.3d at 550. The First and Fourth Circuits also have rejected this same contention. Antricam v. Odom, 290 F.3d 178, 188 (4th Cir. 2002) (noting that this ―novel argument is . . . at odds with binding precedent‖); Rosie D. ex rel. John D. v. Swift, 310 F.3d 230, 235-38 (1st Cir. 2002).
More significantly, in S.D., the Fifth Circuit held that various provisions of the Medicaid Act are privately enforceable. 391 F.3d at 602-06. There is simply no way to reconcile S.D. with defendants‘ assertion that, post-Gonzaga, no provisions of the Medicaid Act (or any other Spending Clause legislation) are privately enforceable. See also Johnson, 442 F.3d at 366 (concluding post-Gonzaga that a provision of the National Housing Act was privately enforceable).
In addition to being foreclosed by binding precedent, defendants‘ argument is also directly contrary to the clearly expressed intent of Congress. As the Supreme Court has made clear, the Blessing test, as clarified by Gonzaga, ―focuses on congressional intent.‖ Blessing, 520 U.S. at 341 Following Suter v. Artist M., 503 U.S. 347, 358-59 (1992), in which the Court suggested that a provision‘s inclusion as a state plan requirement was a factor weighing against a finding that it created an enforceable right, Congress enacted 42 U.S.C. § 1320a-2. This statute provides that ―[i]n an action brought to enforce a provision of [the Social Security Act], such provision is not to be deemed unenforceable because of its inclusion in a section of this chapter requiring a State plan or specifying the required contents of a State plan.‖ Congress explained that ―[t]he intent of this provision is to assure that individuals who have been injured by a State‘s failure to comply with the Federal mandates of the State plan titles of the Social Security Act are
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able to seek redress in the federal courts to the extent they were able to prior to the decision in
Suter v. Artist M.‖ H.R. Conf. Rep. 103-761 at 926, reprinted in 1994 U.S.C.C.A.N. 2901, 3257;
see also S.D., 391 F.3d at 603 (relying on § 1320a-2 to find the EPSDT provision of the
Medicaid Act created an enforceable right).
Finally, in a somewhat desperate effort to support this untenable argument, defendants
assert that ―State officials cannot violate the Medicaid statutes … because they impose no
affirmative obligation on States that accept federal reimbursement money to preserve their
Medicaid programs in any particular manner.‖ Part. MTD 2 at 28. Rather the defendants assert
that they can ignore at will the requirements that Congress has imposed and to which they have
explicitly agreed in exchange for billions of dollars in federal reimbursement because it is up to
the Secretary to decide whether to cut off the flow of federal dollars. Id. This is nothing more
than a restatement of the earlier argument that the Medicaid Act imposes obligations only on the
Secretary based on her ability to cut off federal funds. See, supra at 24-27. As the Supreme
Court appropriately noted in Wilder:
Any argument that the requirements of findings and assurances {by the State] are procedural requirements only and do not require the State to adopt rates that are actually reasonable and adequate is nothing more than an argument that the State's findings and assurances need not be correct. We reject that argument because it would render the statutory requirements of findings and assurances, and thus the entire reimbursement provision, essentially meaningless. 496 U.S. at 513-14.45
45 Defendants‘ final assertion, that the pending cases challenging the constitutionality of the PPACA may result in the invalidation of all of the Medicaid statutes upon which plaintiffs rely, is simply wrong. Even if the Supreme Court were to invalidate the entire PPACA, something that no operative decision has done, that would not affect any of the statutory provisions upon which plaintiffs‘ base their Medicaid claims. All of those provisions pre-date the PPACA, were not altered by the PPACA, and, were the PPACA invalidated in its entirety, would remain operative. The one provision that could be affected, the definition of ―medical assistance,‖ is not a provision upon which plaintiffs assert a claim for relief. Indeed the defendants‘ repeated references to the pending litigation regarding the PPACA are simply a distraction.
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Defendants‘ contention that the Medicaid Act does not create rights, thereby insulating
their illegal conduct from any judicial review, is not only novel, but contrary to established Supreme Court and Circuit Court precedent46 and the expressed intent of Congress. It must be
rejected.
3. The Nursing Home Reform Amendments to the Medicaid Act Are Privately Enforceable.
a. The Language Chosen By Congress Demonstrates that the NHRA Is Privately Enforceable.
In enacting the NHRA, Congress sought to stem the inappropriate placement of
individuals with developmental disabilities into nursing facilities that are unable to provide them
with needed treatment and insisted that States ensure that those admitted to such facilities receive
active treatment. It clearly used ―rights- and duty-creating‖ language in doing so. Gonzaga, 536
U.S. at 284 n.3.
With respect to the preadmission screening and resident review requirements of the
NHRA, Congress explicitly identifies the intended beneficiaries of this provision as ―mentally ill
and mentally retarded individuals‖ in nursing facilities. See 42 U.S.C. § 1396r(e)(7)(A)(i). The
section imposes a clear duty on ―the State,‖ using the mandatory terms ―must have‖ and ―responsibility to have . . . or to perform‖ to describe the nature of the obligation imposed.47 Id.
46 Rolland, 318 F.3d 42 (§ 1396r(e)(7)); Rabin v. Wilson-Coker, 362 F.3d 190 (2d Cir. 2004) (§ 1396r-6); Grammar v. John J. Kane Regional Ctrs.-Glen Hazel, 570 F.3d 520 (3d Cir. 2009), cert. denied, 130 S. Ct. 1524 (2010) (§§ 1396r(b) & (c)); Doe v. Kidd, 501 F.3d 348 (4th Cir. 2007) (§ 1396a(a)(8)); Westside Mothers v. Olszewski, 454 F.3d 532 (6th Cir. 2006) (§ 1396a(a)(43)); Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452, 457-58 (7th Cir. 2007) (§ 1396a(a)(8)); Pediatric Specialty Care, Inc. v. Ark. Dep’t of Human Servs., 443 F.3d 1015 (8th Cir. 2006), vacated in part, on other grounds sub nom, Selig v. Pediatric Specialty Care, Inc., 551 U.S. 1142 (2007) (§§ 1396a(a)(30)(A) & 1396d(a)(13)); Watson v. Weeks, 436 F.3d 1152 (9th Cir. 2006) (§ 1396a(a)(10)); Ball, 492 F.3d 1094 (§§ 1396n(c)(2)(C) & (d)(2)(C)); Okla. Chapter of Am. Academy of Pediatrics v. Fogarty, 472 F.3d 1208, 1212 (10th Cir. 2007) (assuming that § 1983 provides cause of action to privately enforce §§ 1396a(a)(8), 1396a(a)(10)(A), 1396d(a)(4)(B), and 1396d(r)). 47 Subsection (e)(7)(A)(i) also cross references to subsection (b)(3)(F), which specifically provides that a nursing facility cannot admit an individual with mental retardation ―nuless the State mental retardation or developmental disability authority has determined . . . that, because of the physical and mental condition of the individual, the individual requires the level of services provided by a nursing facility, and, if the individual requires such level of
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This subsection creates a right of every person with developmental disabilities to a PASARR
assessment prior to nursing facility admission. Rather than the aggregate focus of the FERPA
provision at issue in Gonzaga, these provisions have an unmistakable focus on the individual and
use mandatory, not precatory, language to describe the State‘s obligations.48
With respect to assessment of the resident‘s need for specialized services, §
1396r(e)(7)(B) of the NHRA creates a similar, individually-focused and mandatory obligation.49
The unmistakably individual focus of this provision is evident from the phrase, ―in the case of
each resident of a nursing facility who is mentally retarded.‖ It continues to focus on the
individual throughout, referring to ―the resident’s physical and mental condition,‖ ―whether or
not the resident requires specialized services,‖ ―with respect to a . . . mentally retarded resident,‖
and ―significant change in the resident’s physical or mental condition.‖ The mandatory nature of
the obligation imposed upon the State is equally clear and unambiguous: ―the State mental
retardation . . . authority must review and determine . . . ,‖ and ―[a] review and determination . . .
must be conducted promptly.‖50
services, whether the individual requires specialized services . . . .‖ 42 U.S.C. § 1396r(b)(3)(F)(ii). The cross reference to subsection (b)(3)(F) makes clear that it is the State‘s responsibility to ensure that individuals with mental retardation are properly screened prior to admission. 48 The defendants‘ assertion that the placement of these obligations in a provision specifying the required components of a state plan renders them unenforceable under § 1983 was rejected first by the Supreme Court in Wilder, 496 U.S. at 513-14, and then by Congress when it enacted 42 U.S.C. § 1320a-2 (―[i]n an action brought to enforce a provision of [the Social Security Act], such provision is not to be deemed unenforceable because of its inclusion in a section of this chapter requiring a State plan or specifying the required contents of a State plan‖). 49 Subsection (e)(7)(B), entitled ―State requirement for resident review,‖ mandates:
(ii) For mentally retarded residents … in the case of each resident of a nursing facility who is mentally retarded, the State mental retardation or developmental disability authority must review and determine (using any criteria developed under subsection (f)(8) of this section)--
(I) whether or not the resident, because of the resident‘s physical and mental condition, requires the level of services provided by a nursing facility or …an intermediate care facility . . . ; and
(II) whether or not the resident requires specialized services. . . . 50 That the obligation placed upon the State to conduct such reviews is obligatory is further reinforced by subdivision (iv) which prohibits the ―State mental retardation authority‖ or the ―Stat‖e from ―delegate[ing] (by subcontract or otherwise) their responsibilities under this subparagraph….‖ (emphasis added).
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Contrary to defendants‘ conclusory assertions that the focus of these provisions is on the ―nursing homes—not the nursing home residents,‖ Part. MTD 2 at 32-33, a plain reading of the text of the statute reveals that the residents are indeed both the focus and intended beneficiaries of the preadmission screening, resident review and specialized services provisions of § 1396r(e). Indeed, the Second Circuit considered this very issue, and held that ―[i]t is clear from the plain language of this provision that it was not ‗intend[ed] to benefit the putative plaintiff[s]‘—here the health care providers. Rather, the provision is obviously intended to benefit Medicaid beneficiaries.‖ Concourse Rehab. & Nursing Ctr. Inc. v. Whalen, 249 F.3d 136, 143-44 (2d Cir. 2001) (internal citation omitted).
Finally, with respect to the mandatory obligation to provide specialized services, and the corollary right of a nursing facility resident with developmental disabilities to receive specialized services, the NHRA clearly focuses on the individual residents who are the intended beneficiaries of these mandatory services. Section 1396r(e)(7)(C) details the steps that the State must take in response to the preadmission screening and resident review. Like the two sections discussed above, it begins with a mandatory command, ―the State must meet the following requirements.‖ Id. It then requires that ―in the case of a resident . . . who is determined . . . to require specialized services . . . the State must . . . inform the resident [of alternatives] . . . , offer the resident [choices] . . . , and ―regardless of the resident’s choice [of setting], provide for . . . such specialized services.‖ 42 U.S.C. § 1396r(e)(7)(C)(i) (emphasis added); see also § 1396r(e)(7)(C)(ii). The repeated references to ―the resident‖ make clear the individualized focus of the provision. The repeated use of the word ―must‖ to describe the State‘s obligations to inform the resident of his or her alternatives and to provide specialized services again utilizes the
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mandatory textual language that establishes an enforceable right under the Wilder / Blessing / Gonzaga test.
b. The Secretary‘s Regulations Further Demonstrate that the NHRA Is Privately Enforceable.
The regulations further confirm that the statute creates enforceable rights in nursing facility residents with developmental disabilities to preadmission screening, resident review, and specialized services. While it is true that regulations, standing alone, cannot create rights enforceable under § 1983, Alexander v. Sandoval, 532 U.S. 275, 291 (2001), it is equally true that where Congress has explicitly delegated substantive authority to the Secretary of an administrative agency to promulgate regulations in a particular area, those regulations are entitled to ―legislative effect.‖ Schweiker v. Gray Panthers, 453 U.S. 34, 44 (1981); Wis. Dep’t of Health & Human Servs. v. Blumer, 534 U.S. 473, 497 n.13 (2002) (―[w]e have long noted Congress‘ delegation of extremely broad regulatory authority to the Secretary in the Medicaid area‖); Sandoval, 532 U.S. at 284 (listing cases in which the Court has enforced validly promulgated regulations interpreting statutory provisions). Congress, at numerous points in section 1396r, explicitly delegated substantive authority to the Secretary regarding preadmission screening, resident review, and specialized services. Section 1396r(e)(7)(A)(i) provides that preadmission screening must be conducted ―using any criteria developed under subsection (f)(8).‖51 Section 1396r(e)(7)(B) similarly requires that resident reviews conform to ―criteria developed under subsection (f)(8).‖ Section 1396r(e)(7)(G)(iii) explicitly provides that ―[t]he term ‗specialized services‘ has the meaning given such term by the Secretary.‖
51 Section 1396r(f)(8) gives the Secretary authority to establish minimum criteria for States to use in making determinations under subsections (b)(3)(F) and (e)(7)(B) and to monitor state compliance with respect to State obligations under (e)(7)(C)(ii). The citations to subsections (b)(3)(F) and (f)(8) in plaintiffs‘ claim for relief are included to further clarify and delineate the scope of the State‘s responsibilities under subsection (e)(7).
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In reliance upon the specific rulemaking authority conferred by this statute, the Secretary has issued regulations authoritatively construing the provisions of the NHRA at issue here. As instructed by Congress, the PASARR regulations define ―specialized services‖ as the equivalent of active treatment in ICF/MRs. 42 C.F.R. § 483.120(a). They establish criteria for preadmission screening and specialized services and require States to comply with them, in fulfillment of the Congressional instruction at §§ 1396r(f)(1) and (8) for the Secretary to establish and enforce criteria that ensure that the care in nursing facilities is adequate to protect the health, safety and welfare of residents. 42 C.F.R. §§ 483.104 - 483.136. Like the regulations favorably referenced by the Supreme Court in Sandoval, 532 U.S. at 284, the Secretary‘s mandate to the State to provide nursing facility residents with developmental disabilities with preadmission screening, resident review, and specialized services both construes Congress‘s intent and enforces Congress‘s purpose to create enforceable rights.
Like the statute, the PASARR regulations use mandatory language to require the provision of screening and resident review, and to guarantee specialized services to all nursing facility residents with developmental disabilities who have been assessed to need them.52 With respect to preadmission screening, they provide that the State mental retardation authority ―must determine‖ whether the individual requires care in a nursing facility and, if so, if he or she requires specialized services. 42 C.F.R. § 483.112(a). The State must ensure that the individual receives written notice of the determination.53 Id. § 483.128(a). The State must use evaluation criteria prescribed by the Secretary. Id. § 483.128(e). The State ―must provide for or arrange for the provision of specialized services . . . to all NF residents with . . . MR‖ who need them. Id.
52 As the Sandoval Court recognized, ―When a statute has provided a general authorization for private enforcement of regulations, it may perhaps be correct that the intent displayed in each regulation can determine whether or not it is privately enforceable.‖ 532 U.S. at 291. 53 See also § 483.106(a) (―[t]he State PASARR program must require (1) preadmission screening of all individuals with . . . mental retardation who apply as new admissions to Medicaid NFs‖).
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§ 483.120(b). The State must give assurances that specialized services are, in fact, provided. Id. § 483.130(n). This regulatory implementation of Congressional intent is entitled to significant weight, as the Supreme Court emphasized: ―[s]uch regulations, if valid and reasonable, authoritatively construe the statute itself, and it is therefore meaningless to talk about a separate cause of action to enforce the regulations apart from the statute. Sandoval, 532 U.S. at 284 (internal citations omitted).
c. Applicable Case Law Further Confirms That The NHRA Is Privately Enforceable.
In light of the strong textual and other indicia of congressional intent to create enforceable rights regarding the preadmission screening and resident review provisions of the NHRA, it is hardly surprising that the two Circuit Courts of Appeal that have considered the question have found that the NHRA does contain the requisite mandatory, rights-creating language needed for private enforcement pursuant to § 1983. In a case raising claims virtually identical to those raised here, the First Circuit held, post-Gonzaga, that the provisions of the NHRA provide rights enforceable by § 1983. Rolland, 318 F.3d at 51-56. The First Circuit analyzed the text of the statutory provisions in light of the overall framework of the NHRA, its legislative history, and the Secretary‘s interpretation, as evidenced by the PASARR regulations. Id. at 51-52. The Court then turned to the Wilder / Blessing / Gonzaga test. Noting that the ―[t]he NHRA speaks largely in terms of the persons to be benefited, nursing home residents,‖ the Court easily found that the first prong of the three part test was met. Id. at 53.
Turning to the second prong, whether the right to specialized services is too vague and amorphous to be judicially enforceable, the Court concluded that that the statutory provision, in conjunction with the Secretary‘s regulations, provided ―contextual guidance . . . sufficient to allow residents to understand their rights to services, States to understand their obligations, and
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courts to review the State‘s conduct in fulfilling those obligations.‖54 Id. at 54. The Rolland Court also had no difficulty finding that the rights asserted under §1396r(e)(7) ―unambiguously bind states,‖ noting the frequent and repeated use of the word ―must‖ to denote the State‘s obligations. Id. at 55.
More recently, the Third Circuit also has considered whether the NHRA creates rights enforceable by § 1983. In Grammer, 570 F.3d 520, the Court held that the NHRA creates rights enforceable under § 1983 against a state-operated nursing facility. Contrary to defendants‘ suggestion that nursing facilities, not nursing facility residents, are the focus of the NHRA, the Third Circuit found that ―[t]here is no question that the statutory provisions under which Grammer raises her claims meet the first Blessing factor. As both a Medicaid recipient and a nursing home resident, Grammer‘s mother was an intended beneficiary of 42 U.S.C. § 1396r.‖ Id. at 527. Like the First Circuit, the Third Circuit, in reliance upon the repeated use of such phrases as ―must provide,‖ ―must maintain‖ and ―must conduct,‖ easily concluded that the rights asserted were neither vague and amorphous nor precatory, thereby satisfying the second and third of the Blessing factors. Id. at 528. The Grammer Court also engaged in an extensive analysis of the impact of Gonzaga on its cause of action analysis. Because ―[t]he FNHRA are replete with rights-creating language‖ and ―use the word ‗residents‘ throughout . . . in such a way as to stress that these ‗residents‘ have explicitly identified rights,‖ the Court easily concluded that ―viewing the terms of the FNHRA . . . through the lens of Gonzaga Univ., we hold that Congress did use rights-creating language sufficient to unambiguously confer individually enforceable rights.‖ Id. at 529, 531.
54 The Court relied in part on the Supreme Court‘s decision in Lividas v. Bradshaw, 512 U.S. 107, 134 (1994), holding that even if the right asserted is ―ont provided in so many words in the NLRA, [it is] immanent in its structure.‖ Just as the Lividas Court found the right at issue to be inherent in the statutory scheme, so too the Rolland Court found that ―petitioner‘s rights were sufficiently manifest in the statute‘s structure to avoid being vague and amorphous.‖ 318 F.3d at 54.
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While the Fifth Circuit has not directly addressed the issue of whether 42 U.S.C. § 1983 provides a cause of action for claims pursuant to the NHRA, it did ―assume, without deciding‖ that the NHRA is privately enforceable. Grant ex rel Family Eldercare v. Gilbert, 324 F.3d 383, 387 n.5 (5th Cir. 2003) (citing with approval Rolland, 318 F.3d at 51-56, and Martin v. Voinovich, 840 F. Supp. 1175, 1197-1201 (S.D. Ohio 1993)). In addition to Martin, which held that § 1983 provides a cause of action for nursing facility residents to enforce the PASARR provisions of § 1396r against the state officials responsible for compliance, several other district courts have also reached the same conclusion. Joseph S. v. Hogan, 561 F. Supp. 2d 280, 294304 (S.D.N.Y. 2008); Tinder v. Lewis Cnty. Nursing Home Dist., 207 F. Supp. 2d 951, 954-55 (E.D. Mo. 2001); Soto v. Lene, No. 11-CV-0089 SLB LB, 2011 WL 147679, at *2 (E.D.N.Y. Jan. 18, 2011) (―[T]he NHRA creates rights that are presumptively enforceable through § 1983.‖).55
Based upon a careful analysis of the specific provisions of the NHRA at issue in this case, informed by the legislative history and structure of the Act, reinforced by the Secretary‘s authoritative regulatory interpretation, and supported by a consistent and convincing line of judicial authority, plaintiffs have asserted rights under the PASARR provisions of the NHRA that are privately enforceable against defendants pursuant to § 1983.
55 Defendants cite to four district court decisions that found no private right of action for damages under the NHRA to enforce the nursing facility ―quality of care‖ requirements of the Act and regulations, not the preadmission screening, resident review and specialized services requirements of the NHRA. Part. MTD 2 at 36 n.40. All of these cases involved damage claims against private nursing facilities which were not state actors, and, therefore, not subject to suit under 42 U.S.C. § 1983. They fail to cite, much less discuss, the numerous cases referenced above which have found the provisions of the NHRA enforceable pursuant to § 1983. The one case they do cite, Grammer, is cited not for its holding, but rather for the dissent.
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4. The Reasonable Promptness Provision of the Medicaid Act Is Privately Enforceable.
Defendants‘ sole argument regarding the enforceability of the reasonable promptness
provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(8), is focused not on whether the provision
is privately enforceable under 42 U.S.C. § 1983, but rather whether certain waiver services are covered by it.56 It is not surprising that defendants do not dispute that § 1396a(a)(8) is privately enforceable, for every circuit that has considered the question has concluded that it is.57 There is
no serious question that § 1396a(a)(8) is privately enforceable, and defendants‘ Part. MTD 2
does not assert otherwise.
5. The Comparability Provision of the Medicaid Act Is Privately Enforceable.
As with the reasonable promptness provision, defendants do not appear to challenge the
private enforceability of the comparability provision, § 1396a(a)(10)(B), but rather its applicability to the facts of this case.58 This is understandable because the Fifth Circuit in S.D.,
391 F.3d at 602-07, specifically held that § 1396a(a)(10)(A) is privately enforceable, and in
Blanchard v. Forrest, 71 F.3d 1163, 1167-69 (5th Cir. 1996), that § 1396a(a)(10)(B) is
56 Of course, the question of whether a particular waiver service is or is not being provided with reasonable promptness to eligible individuals runs to the merits of the claim, not whether the provision is privately enforceable under § 1983. The defendants‘ argument regarding whether § 1396a(a)(8) provides a cause of action with respect to the delivery of community-based waiver services does not speak to whether the reasonable promptness provision is privately enforceable under § 1983, which it clearly is, but rather to whether plaintiffs have stated a claim for relief under it, which they have. See supra at 12-16. 57 Kidd, 501 F.3d at 356-57; Sabree ex rel. Sabree v. Richman, 367 F.3d 180, 183 (3d Cir. 2004) (holding that an analysis based upon Gonzaga, Blessing, and other cases ―ocmpels the conclusion that the provisions invoked by plaintiffs—42 U.S.C. §§ 1396a(a)(8), 1396a(a)(10), and 1396d(a)(15)—unambiguously confer rights vindicable under § 1983‖); Bryson v. Shumway, 308 F.3d 79, 88-89 (1st Cir. 2002); Chiles, 136 F.3d at 714; Haveman, 289 F.3d. at 863; Lewis, 261 F.3d at 976-77. 58 As the Lewis Court explained, the cause of action issue is answered by determining whether plaintiffs may be entitled to relief under the relevant statutory provision. The question of whether they are entitled to relief requires ―a more complicated analysis of the Medicaid statutes . . . more appropriately reserved for resolution on the merits of the case. 261 F.3d at 977.
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enforceable.59 Therefore, the comparability provision of the Medicaid Act provides plaintiffs
with rights enforceable pursuant to § 1983.
6. The Freedom of Choice Provision of the Medicaid Act Is Privately Enforceable.
The defendants assert that § 1396n(c)(2)(C) is not phrased in terms of the persons
benefited and therefore creates no privately enforceable rights for individuals with
developmental disabilities who are at risk of institutionalization. Part. MTD 2 at 38-40.
However, an examination of the actual text of the freedom of choice provision demonstrates that
it is indeed individually focused and intended to benefit individuals who are at risk of
institutionalization in a nursing facility. The section‘s repeated references to ―such individuals‖ makes clear that the obligations
imposed upon the State are phrased in terms of the persons benefited. As the Ninth Circuit
recently explained, in concluding that § 1396n(c)(2)(C) confers rights privately enforceable
under § 1983, the language of the provision:. satisfies the ―rights creating‖ standard set forth in Gonzaga, and thus clears the first hurdle of the Blessing framework. . . . The free choice provisions are focused on the rights owed to HCBS-eligible Medicaid recipients, as evinced through their repeated use of the word ―individuals‖ and their specific articulations of the entitlements guaranteed—in this instance, the right to be informed of alternatives to traditional, institutional care and the right to choose from among those options.
Ball v. Rodgers, 492 F.3d 1094, 1109 (9th Cir. 2007). The Ball Court expressly distinguished §
1396n(c)(2) from statutes at issue in cases such as Blessing and Gonzaga, noting specifically that
the freedom of choice provisions
[s]eek to guarantee that individual patients are informed of noninstitutional care options and that individual patients retain the right to make a choice based on this information. And unlike the plaintiffs seeking to sue under the ―substantial compliance‖ provisions discussed in Blessing and the ―policy or practice‖
59 The two subsections are very similar and often treated as a unitary statutory provision for § 1983 cause of action purposes. If anything, subsection (B) has a more individualized focus than subdivision (A).
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provision in Gonzaga, the HCBS-eligible Medicaid recipients who comprise the plaintiff-class here are not simply cogs in a grander statutory scheme. If that were the case, then Congress would have just enacted a barebones HCBS program, … and stopped there. There would be no need for Congress also to enact provisions mandating that participating states keep each eligible Medicaid recipient apprised of these non-institutional care options and afford each the opportunity to choose how to live. Id. at 1111 (emphasis in original); see also Wood v. Tompkins, 33 F.3d 600 (6th Cir. 1994) (§ 1396n(c)(2) privately enforceable); Michelle P. ex rel. Deisenroth v. Holsinger, 356 F. Supp. 2d 763, 769 (E.D. Ky. 2005) (noting ―individually focused terminology‖); Cramer v. Chiles, 33 F .Supp. 2d 1342, 1351 (S.D. Fla. 1999)(disabled Medicaid recipients are ―intended beneficiaries‖); but, c.f., McCarthy v. Hawkins, Civ. No. A-03CA-231-SS, slip op. at 13-14 (W.D. Tex 2003) (recipients are intended beneficiaries if waiver services available, but not if the waiver cap has been reached).60 The defendants‘ alternative argument -- that the structure of the provision, mandating that the Secretary not grant a waiver unless the State provides assurances that it will inform all individuals at risk of institutional care of the feasible alternatives to such a placement, renders it unenforceable -- is equally untenable. The Supreme Court rejected this very argument that required assurances cannot form the basis of an enforceable obligation. See Wilder, 496 U.S. at 513-54 ("the argument …would render the statutory requirement of findings and assurances … essentially meaningless).
60 The defendants assertion that § 1396n(c)(2)(C) imposes no binding obligation on Texas because there are currently no openings for waiver services in the HCS waiver program does not speak to the enforceability of the provision itself, but rather whether plaintiffs have stated a claim thereunder. See section III(A)(4), supra at 18-22. In addition, there are other waivers which plaintiffs can access with without going on a waiting list, and the defendants have not apprised plaintiffs of the services available under those waivers either. As to those waiver services, even the McCarthy Court would find a private right of action under § 1396n(c)(2)(C).
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The argument also has also been explicitly rejected by both the Sixth and Ninth Circuits. Ball, 492 F.3d at 1112; Wood, 33 F.3d at 608. Relying upon 42 U.S.C. § 1320a-2 and the Fifth Circuit‘s decision in S.D. applying that provision, the Ninth Circuit explained that
the role § 1396n(c)(2)(C) … play[s] in delineating the mandatory contents of a state HCBS plan cannot detract from or override the otherwise clear ―rights-creating‖ language Congress used in enacting the free choice provisions. To do so would be to ignore Congress's directive in the ―Suter fix‖ statute [§ 1320a-2] that courts abjure reliance on that consideration. Ball, 492 F.3d at 1112. Similarly, the Sixth Circuit, in reliance on Wilder, stated: as regards § 1396n(c)(2)(A), it would make little sense for Congress to require a participating state to assure in its Medicaid plan that it will protect the health and welfare of home care recipients, without also requiring that the state actually implement the promised safeguards Wood, 33 F.3d at 608. Section 1396n(c)(2) imposes mandatory and enforceable obligations on the defendants both to inform individuals with developmental disabilities who are at risk of institutionalization in nursing facilities of their alternatives to nursing facility care and to provide them with a choice between care in a nursing facility or in an alternative setting. Based upon the individual focus and mandatory nature of the obligations imposed upon the defendants by § 1396n(c)(2), as interpreted and applied by two courts of appeals, this Court should find that the freedom of choice provision is privately enforceable pursuant to § 1983. C. Plaintiffs Have Standing to Assert a Claim Under the Freedom of Choice
Provision of the Medicaid Act. There are three elements to standing: injury in fact; causation, and redressability. Friends of the Earth v. Laidlaw Environmental Svcs., 528 U.S. 167, 180-81 (2000). Defendants assert that the plaintiffs lack standing solely because they have not alleged an injury-in-fact due to defendants‘ failure to advise them of the feasible alternatives to institutional care as required by
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42 U.S.C. § 1396n(c)(2)(C). Part. MTD 2 at 12. They make two primary arguments in support
of this contention, neither of which stands up to careful scrutiny.
First, defendants contend that because plaintiffs were evaluated and determined eligible
for nursing facility care, they have no claim predicated upon § 1396n(c)(2)(B).61
The defendants' argument fails to recognize that subsections (B) and (C) of § 1396n(c)(2)
are interrelated. Subsection (B) requires the State to evaluate whether individuals who may
require NF services in fact need them; subsection (C) mandates, for those individuals who are
likely to require the level of care in a NF (i.e. those who pass the subsection (B) evaluation), that
the State inform them of feasible alternatives to NF care under the State‘s home and community-
based waiver programs. Because the two subsections are inextricably interrelated, the standing
analysis under § 1396n properly considers both sections.62 Defendants‘ attempt to analyze each
subsection as a separate, rather than one indivisible, claim, and then to argue that the plaintiffs'
standing requires an independent showing for both subsections, should be rejected.
Second, defendants contend that their obligation under subsection (C) to provide
information about waiver services arises at the time the individual is actually being offered a
61 Plaintiffs have alleged that the defendants have failed to properly evaluate and assess their need for NF services, as required by the PASARR provisions of the Medicaid Act. Indeed, this is one of their central claims regarding the defendants‘ failure to undertake their required preadmission screening and resident review functions required by § 1396r(e)(7). Am. Compl. at ¶¶ 74-77, 146, 171, 183-84, 197-98, 216, 247, 251-52, 258. Contrary to defendants‘ assertion, see Part. MTD 2 at 12 & n.16, a proper evaluation must conform to the pre-admission screening and resident review procedures required by §§ 1396r(b)(3)(F) and (e)(7)(A) for assessing eligibility and appropriateness for NF admission of an individual with DD. See also 42 C.F.R. § 483.112 (specifically providing that determination of whether a NF applicant with MI or MR requires the level of services provided by a NF is made as part of the preadmission resident review process). These requirements, and the mandated process, are not satisfied simply by completing a standardized form called the Multiple Data Set or MDS. The MDS (version 3.0) data collection process is performed by nursing facility staff. The PASARR process is undertaken by the State mental retardation authority. As both the federal statute and regulations mandate, the State mental retardation or developmental disability authority may not delegate its responsibilities for determining whether a NF applicant with DD requires the level of services provided by a NF to a nursing facility or any entity which has a direct or indirect affiliation or relationship with a NF. 42 U.S.C. § 1396r(e)(7)(B)(iv); 42 C.F.R. § 483.106(d)(2) & (e)(1)(iii). To the extent that the defendants suggest that the nursing facility MDS 3.0 data determines the eligibility of an individual with DD for NF admission, this is but another example of how the defendants have ignored their federally mandated responsibilities to plaintiffs and the class they seek to represent. 62 In any event, as set forth above, plaintiffs have amply alleged that defendants fail to properly evaluate the plaintiffs‘ eligibility and appropriateness for NF care.
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waiver slot, not at the time the individual is being considered for an institutional placement. Part. MTD 2 at 13. They then assert that those plaintiffs who have applied and been accepted into the waiver program, those who have applied but remain on the waiting list for the program, and those who have not yet applied all lack standing because the HCS ―is full and there is no spot for them at this time.‖ Id. at 14. Under this contorted interpretation of § 1396n, virtually no one who is admitted to the waiver, no one who is waiting for the waiver, and no one who has just applied to the waiver can ever have standing to claim that they were not provided information and choices, as required by law.63
This argument both emasculates the import of the State's obligation to offer Medicaid recipients a choice of institutional or waiver programs, and ignores Texas' fundamental failing to provide Medicaid recipients with relevant information to make an informed choice. Since none of the individual plaintiffs were advised by the defendants of the feasible alternatives to institutional care at the time they applied for NF admission, all have standing to assert a violation of § 1396n.. Am. Compl. ¶¶ 146, 158, 171, 184, 186, 198, 199, 225, 226. Had Congress intended to make the offer of waiver services – as opposed to the decision whether or not to accept institutionalization – the trigger for the requirement to provide individuals with information about the choice between institutional care and the waiver program, it would not have described those persons entitled to such information as individuals who ―may require‖services in a NF, ICF/MR or hospital. 42 U.S.C. § 1396n(c)(2)(B)(ii). The plain language of the statute, its obvious purpose of avoiding unnecessary institutional placements, and
63 Defendants assert that because Mr. Holmes and Ms. Padron have been offered HCS waiver slots, as a matter of law, they have suffered no injury in fact. However, as the complaint makes clear, Mr. Holmes spent two years unnecessarily institutionalized in nursing facilities because he was not advised of feasible alternatives to nursing facility admission that were available to him under the waiver as required by § 1396n(c)(2)(C). Am. Compl. ¶¶ 200212. Because of the nature of his medical condition, he also remains at risk of future NF admissions. Am. Compl. at ¶ 214. Ms. Padron has been in a nursing facility for ten years and continues to remain there. Id at ¶¶ 165, 171-71. Years of needless and inappropriate institutionalization clearly constitutes a sufficient ―nijury in fact‖ for standing purposes.
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commonsense all confirm that it is the likelihood of admission to a NF or other institution that triggers the obligation to inform regarding potential community alternatives.
The only authority that the defendants cite for their convoluted interpretation of § 1396n(c)(2)(C) is the CMS Technical Guide at p. 106.64 But the CMS Technical Guide simply requires that ―individuals [be] provided information about the services that are available under the waiver and that they have the choice of institutional or home and community-based services prior to the enrollment into the waiver program.‖ CMS Technical Manual at 107. Not only has the Department of Health and Human Services (HHS) made clear in its Technical Guide that information must be provided prior to waiver enrollment, it has also made clear that the time when the information must be provided is when a Medicaid beneficiary is making the choice between an institutional or community setting, including the choice to wait for a community setting to become available. In the Commentary to the regulations implementing § 1396n(c)(2), HHS explained that:
Beneficiaries determined likely to require an SNF or ICF level of care must be informed of the feasible alternatives and given a choice as to which type of services to receive . . . . As with other services under Medicaid, a beneficiary who is not given the choice of home or community-based services as an alternative to SNF or ICF services may request a fair hearing under 42 C.F.R. Part 431, Subpart E…. 46 Fed. Reg. 48,532, 48,535-36 (Oct. 1, 1981)(emphasis added). Only if the information is required to be provided to applicants for NF or ICF care prior to their admission to the institution does the provision of a right to a hearing to challenge the failure to provide the information ―as an alternative to SNF or ICF services‖ make sense. The Guide also provides that feasible alternatives ―may only be determined after the assessment of an individual‘s needs and an evaluation of level of care.‖ CMS Technical Guide,
64 A copy of the Manual is available online at http://www.dads.state.tx.us/providers/waiver_instructions/cms_waiver_instructions.pdf.
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p. 106. For applicants for NF services with DD, this occurs as part of preadmission screening and review just prior to admission to the NF, which is also when the information regarding alternatives to NF care should be provided. See Elliott Schwalb, Reconsidering Makin v. Hawaii: The Right of Medicaid Beneficiaries to Home-Based Services As an Alternative to Institutionalization, 26 Ga. St. U. L. Rev. 803, 831 (2010) (the emphasis on ―individual determinations, without reference to ‗quotas‘, ‗caps‘, or ‗resource limitations‘ in CMS‘ interpretation of the freedom of choice provision suggests that these are not proper justifications for denying individual choice‖).
Because all of the plaintiffs were entitled to receive such information prior to their NF admission, but did not, they all have satisfied the ―injury in fact‖ prong of the standing test. As the Supreme Court held in Fed. Election Comm’n v. Akins, 524 U.S. 11, 21 (1998), ―a plaintiff suffers an ―injury in fact‖ when the plaintiff fails to obtain information which must be … disclosed pursuant to a statute‖; see also Grant, 324 F.3d at 387. The plaintiffs allegations that Texas state officials fail to provide them with information about waiver and other services that might enable them to avoid institutional placement or reduce the time spent in a nursing facility clearly satisfies the ―injury in fact‖ requirement. Defendants‘ motion to dismiss the § 1396n(c)(2) claim based upon standing should be denied.
D. The Arc of Texas and the Coalition of Texans with Disabilities Both Have Standing to Assert the Claims Raised in this Case
The Arc of Texas is a nonprofit, volunteer organization in the State of Texas that for over 60 years has committed itself to expanding opportunities for people with intellectual and developmental disabilities and to include persons with DD in our communities. Am. Compl. ¶¶ 16-18. The Arc of Texas expends agency resources to (a) support individuals, families and other disability organizations in advancing public policies, (b) provide training programs, and (c) build
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a statewide network of advocates so that persons with disabilities are able to more fully participate in their community. Id; See Affidavit of Mike Bright (―Bright Aff.‖), at ¶ 2, 3 (copy appended as Ex. 1).65
Similarly for more than 33 years the Coalition of Texans with Disabilities (CTD) has played an important role in ensuring that persons with DD are fully included in all aspects of community living. Am. Compl. ¶¶ 19-21. CTD has expended it resources so that persons with DD are able to live, work, learn, and more fully participate in all aspects of community living. Id. at ¶ 20. CTD has specifically worked to get the State of Texas to restructure its PASARR program so that persons with DD who are capable of living in the community with appropriate supports are able to do so, rather than being confined to NFs and other institutional settings. See Affidavit of Dennis Borel (―Borel Aff.‖) at ¶¶ 2,3 (copy appended as Ex. 2). CTD will continue to devote its resources to ensure that eligible individuals with DD who either apply for or live in Texas nursing facilities receive the services, supports and alternative placement options that they may be entitled to through the Preadmission Screening and Resident Review (PASRR) program. See Borel Aff. at ¶ 3.
Both the Arc of Texas and CTD continue to advocate for the inclusion of people with DD in all aspects of society, including persons who are members and supporters of each organization. On behalf of its members, The Arc of Texas, along with CTD, has worked to address the problems associated with the lack of community-based services for persons with DD in institutional settings, including nursing facilities. See Bright Aff. at ¶¶ 2,3 and Borel Aff. at ¶¶
65 ―Fro purposes of ruling on a motion to dismiss for lack of standing, the Court must both accept as true all material allegations of the complaint and construe the complaint in favor of the complaining party, but may also consider … affidavits submitted by the parties and further particularized allegations of fact deemed supportive of the plaintiff‘s standing, in order to illuminate the allegations in the complaint and aid the Court in resolving the standing question.‖ Eliserio v. Floydada Housing Authority, et al., 455 F.Supp.2d 648, 658 n.8 (S.D. Tex. 2006); see also, Noah v. Government Employees Insurance Company, 2001 WL 36199119 * 3 (W.D. Tex. 2001).
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2,3. Both the Arc of Texas and CTD have worked with the Texas State Legislature and the appropriate state agencies in efforts to address the problems associated with the lack of funding for more community-based waiver programs and services so that individuals with DD can avoid institutionalization in nursing facilities and other settings. See Bright Aff. at ¶ 3 and Borel Aff. at ¶ 3,4.
It was only after a concerted effort on the part of individual and organizational plaintiffs, including direct discussions with the defendants, failed to secure reasonable access to appropriate services and community-based waiver services, that the board of directors of both the Arc of Texas66 and CTD decided to authorize their Executive Directors to file this suit, in an effort to secure reasonable access to appropriate nursing facility services and community-based supports for eligible nursing facility applicants and residents with DD. Bright Aff. at ¶ 3 and Borel Aff. at ¶ 3.
1. The Arc of Texas and CTD Have Standing to Sue in their Own Right. In order to establish Article III standing the plaintiff must have (1) suffered an ―injury in fact,‖ (2) there must be a causal connection between the injury and the conduct complained of and (3) the injury must likely be redressable by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992); Havens Realty Corp. v. Coleman, 455 U.S. 363, 378-79 (1982) (organizational plaintiff suing on its own behalf must meet same standing requirement as an individual). Both the Arc of Texas and CTD clearly satisfy the first prong of the Lujan test since they have suffered an ―injury in fact.‖ The defendants‘ discriminatory and illegal actions in violation
66 The Arc of Texas has participated in much of the groundbreaking litigation in Texas involving the rights of individuals with mental retardation and related conditions. For over twenty years, the Arc of Texas participated in the Lelsz, et al. v. Kavanagh, et al. litigation, and for much of that time it was a party to the litigation with full Article III standing. See Association for Retarded Citizens of Texas v. Kavanagh, et al., 483 U.S. 1057 (1987) and McCarthy v. Hawkins, 381 F.3d 407 (5th Cir. 2004).
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of federal law have resulted in, among other things, (a) the denial of appropriate, integrated community services and supports for individuals with DD in nursing facilities, including the failure to reasonably modify rules and requirements regarding eligibility for and administration of Texas‘s community-based services, supports and programs and (b) the failure to conduct proper PASARR screens and assessments so that the needs of persons with DD could be appropriately met in a less restrictive setting than a nursing facility. See Am. Compl., passim. As a result, both organizational plaintiffs have expended organizational resources in an effort to remedy the deficiencies in the defendants‘ PASARR process and the concomitant failure to provide individuals with DD in nursing facilities access to needed community-based services. See Bright Aff. at ¶¶2, 3 and Borel Aff. at ¶¶ 2, 3. It is well established that the expenditure of organizational resources constitutes an injury-in-fact. Havens Realty, 455 U.S. at 379; Cleburne Living Center v. City of Cleburne, Texas, 726 F.2d 191, 203 (5th Cir. 1984), aff’d in part, vacated in part on other grounds 473 U.S. 432 (1985).
The injury-in-fact must also be causally related to defendants‘ allegedly illegal conduct. Here that requirement is easily met for, as the affidavits of Bright and Borel demonstrate, their organizations‘ resources have been expended in efforts to remedy the defendants‘ PASARR deficiencies, inappropriate NF placements, and inadequate community-based resources. As the Cleburne Court made clear, if the organization‘s resources are expended in ―combating the the [defendants‘] discrimination,‖ the causal connection is met. Cleburne, 726 F.2d at 203; see also Assoc. of Cmty. Orgs. For Reform Now v Fowler, 178 F.3d 350, 357 (5th Cir. 1999); Spann v. Colonial Vill., Inc., 899 F.2d 24, 29 (D.C. Cir. 1990).
The third part of the standing test, redressability, is satisfied since correcting the violations of federal law, as sought in this litigation, would advance the organizations' goals of
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securing compliance with the PASARR requirements of the NHRA and the Medicaid Act, and obtaining community-based services and supports for NF residents with DD.
The Arc of Texas and CTD have amply demonstrated ―such a personal stake in the outcome of the controversy as to warrant [the] invocation of federal-court jurisdiction.‖ Havens, 455 U.S. at 378-79.
2. Both The Arc of Texas and CTD Have Standing As Representatives of Their Members.
An organization has standing to sue in a representational capacity when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted, nor the relief requested, requires the participation of individual members in the lawsuit. Hunt v. Washington Apple Advertising Comm’n, 432 U.S. 333, 343-44 (1977).
Both the Arc of Texas and CTD have alleged that they have members who have standing to sue in their own right because they are individuals with DD who reside, or are at risk of residing, in NFs; do not have access to needed community-based services and supports; and are not provided with specialized services in the NF necessary for them to become more independent and self sufficient. Bright Aff. at ¶¶ 2 & 3; Borel Aff. at ¶ 2, 4; Am. Compl. ¶ 17. The first prong of the Hunt test is met.
Second, the interests which the Arc of Texas and CTD seek to protect and advance in this litigation are relevant to their respective missions of advocating for services and supports that enable people with DD to live safely and productively in integrated community settings, as opposed to being isolated in an institution. Bright Aff. at ¶ 3; Borel Aff. at ¶ 3.
Finally, the Arc of Texas and CTD‘s claims for declaratory and injunctive relief do not require individual members to participate in the lawsuit. As the Hunt Court explained, ―[i]f in a
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proper case the association seeks a declaration, injunction, or some other form of prospective relief, it can reasonably be supposed that the remedy, if granted, will inure to the benefit of those members of the association actually injured.‖ 432 U.S. at 343.
Having satisfied the criteria established by the Supreme Court for representational standing, both the Arc of Texas and CTD are appropriate parties to pursue all of the claims raised in this action.
E. The Governor Is a Proper Party In this Case Defendants seek to dismiss Rick Perry, the Governor of the State of Texas, as a party in this litigation. They argue that dismissal is appropriate because: (1) plaintiffs lack standing to assert Medicaid claims against the Governor; (2) the Governor is immune from suit under the Eleventh Amendment to the United States Constitution; and (3) plaintiffs have failed to state a claim against the Governor under the Medicaid Act. Because plaintiffs have standing and have stated claims under the ADA, § 504 of the Rehabilitation Act, as well as under the Medicaid Act, and because the Governor lacks sovereign immunity with respect to these federal claims, he is a proper party in this case.
1. Plaintiffs Have Standing to Assert Their Claims Against the Governor.
Defendants contend that plaintiffs do not have standing because the Governor has no direct control over the implementation of Medicaid program and services, and lacks the power to redress plaintiffs‘ asserted injuries. Part. MTD 2 at 16-18. However, the Governor is a key player both with respect to control over the Executive Commission of Health and Human Services (―HHSC‖) and the Department of Aging and Disability Services (―DADS‖), the two entities that defendants concede are appropriate parties in this case.
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The Governor is the chief executive officer of the State of Texas. Relevant to the issues in this case, he appoints the Executive Commissioner of HHSC. Tex. Govt. Code Ann. § 531.005. The Executive Commissioner, subject to the approval of the Governor, appoints the Commissioner of DADS, who serves at the pleasure of the Executive Commissioner. Tex. Govt. Code Ann. § 531.0056. Furthermore, the Executive Commissioner serves for only a two year term, providing the Governor with the ability to replace him should the Governor disagree with any actions he has taken or failed to take, any policies he has implemented or failed to implement, or personnel he has appointed. Tex. Govt. Code Ann. § 531.007. This biennial appointment authority provides the Governor with substantial control over the operation of HHSC and DADS, as well as the ultimate responsibility for ensuring that these agencies comply with federal law.
In addition to being the chief executive officer of the State, the Governor is the chief budget officer. Tex. Govt. Code Ann. § 401.041. In this capacity, he convenes and presides over budget hearings and compiles the biennial appropriations budget. Tex. Govt. Code Ann. §§ 401.043, 401.0045. He has the duty to ensure that his budget requests are adequate to ensure compliance with federal law and the protection of the rights of Texas citizens under those laws. He also has a line item veto over any appropriations bills. Tex. Const. Art. IV, § 14. Both through the budget which he submits to the legislature and his line item veto, the Governor wields substantial power over the budgets of both HHSC and DADS, a power which can be used to facilitate or thwart the provision of compliance with the ADA, § 504, and the Medicaid Act, including the provision of the very community services and supports that are necessary to fulfill Texas‘s obligations under these federal statutes. For defendants to assert that the Governor has
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no responsibility or ability to provide redress for the injuries that plaintiffs have suffered ignores the broad scope of influence and authority that the Governor possesses.
Defendants‘ reliance on the Fifth Circuit‘s en banc decision in Okpalobi v. Foster, 244 F.3d 405 (5th Cir. 2001) is misplaced. Okpalobi challenged the legality of a law enacted by the Louisiana legislature over which the Governor and Attorney General had no enforcement role or responsibilities. The act created a species of tort liability which patients could assert against providers. Because the two state officials sued did not have ―any duty or ability to do anything . . . to redress the injuries alleged,‖ the sharply divided court found that plaintiffs lacked standing. Id. at 405, 427. However, contrary to the situation in Okpalobi, the injuries alleged here do not flow from the acts of purely private litigants, but rather from the acts of state officials—officials whom the Governor has appointed (or whose appointment he has approved), whom he can replace, and who implement budgets that the Governor has submitted to the legislature and signed. The relief that plaintiffs seek will likely necessitate revisions to the budgets of both HHSC and DADS, revisions that the Governor can facilitate or thwart through his line item veto.
The Governor‘s involvement and control over HHSC and DADS, and his responsibility to ensure that these agencies properly fulfill their duties under the ADA, § 504, and the Medicaid Act, are more than sufficient to establish that he is an appropriate party to this action. See K.P. v. LeBlanc, 627 F.3d 115, 123-24 (5th Cir. 2010) (standing established where defendant ―has definite responsibilities relating to‖ the plaintiffs‘ claims); Rolland, 52 F. Supp. 2d at 243 (finding that the Governor‘s role in the budget process and appointment of agency heads was sufficient to establish standing in case raising claims virtually identical to those raised here).
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2. The Governor Is Not Immune from Suit Under the Eleventh Amendment for Violations of Federal Law.
Defendants claim that this class action law suit against the Governor for violations of the Medicaid Act is barred by the State‘s Eleventh Amendment immunity. U.S. Const. amend. XI. According to defendants, because the Governor has no connection with or specific responsibility to enforce the Medicaid statute, sovereign immunity bars plaintiffs from holding the Governor liable for Medicaid Act violations.67 Part. MTD 2 at 20-21. In support of this claim, defendants rely entirely on the several decisions from other circuits which dismissed the Governor or state officers from a case because they had no connection with or control over the issues which were the subject of the case. Id. However, in the one Fifth Circuit case defendants cite on the Eleventh Amendment issue, Okpalobi, the Court was evenly split, rendering that aspect of the decision ―not controlling authority for future Eleventh Amendment questions in this Circuit.‖ 244 F.3d at 436 n.6 (Benavides, J, concurring in part and dissenting in part).
In a more recent opinion, K.P., 627 F.3d at 124, the Fifth Circuit again addressed the Eleventh Amendment issue over which the Okpalobi Court was unable to garner a majority. The K.P. Court first noted that ―[t]he fact that the state officer, by virtue of his office, has ‗some connection‘ with the enforcement of the act is the important and material fact.‖ Id. at 124 (emphasis added) (quoting Ex Parte Young, 209 U.S. 123, 157 (1908)). It then rejected the defendants‘ assertion, based on Okpalobi, that there needs to be a ―s‗pecial‘ relationship – not just ‗some connection‘‖ between the defendants and plaintiffs‘ injury under Ex Parte Young. Concluding that the defendants in K.P. had ―some enforcement authority,‖ the Court found that
67 As discussed more fully below, the Governor has no immunity from suit for claims brought under the ADA or § 504. Thus, defendants‘ sovereign immunity argument could not conceivably result in dismissing the Governor as a party. Moreover, the argument is little more than the standing argument discussed supra recast as an immunity defense.
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they had ―the requisite connection with [the statute] to fall within the Ex Parte Young exception.‖ 627 F.3d at 125.
Here, the Governor clearly has more than just ―some connection‖ with the implementation and enforcement of the Medicaid statute and a very direct connection with the enforcement of the ADA and § 504, pursuant to which the State of Texas receives considerable federal funding. As described above, Governor Perry is responsible for directing, supervising, and controlling the executive departments of state government, for submitting a Medicaid State Plan and developing Olmstead plans, and for requesting funds from the legislature for executive agencies so that Medicaid and other state programs can be implemented and services provided in a manner that is consistent with federal law.68 Am. Compl. ¶¶ 22 & 136; Tex. Govt. Code Ann. §§ 401.0445 & 531.0056. In fact, the Governor has issued several executive orders specifically designed to promote community integration of persons with disabilities and to enforce the ADA‘s integration mandate. See Tex. Gov. Exec. Order No. RP 13 (Apr. 18, 2002), 27 Tex. Reg. 3647; Tex. Gov. Exec. Order No. GWB 99-2 (Sept. 28, 1999), 25 Tex. Reg. 1820.
Just as in K.P., the Governor has ―the requisite connection [with the Medicaid program, and the implementation of the ADA and § 504] to fall within the Ex Parte Young exception‖ to the Eleventh Amendment. See K.P., 627 F.3d at 125.
68 Indeed, this statutory and legislative authority enables the Governor – along with the Legislative Budget Board – to direct the transfer of Medicaid funds when program appropriations are insufficient to meet the expenditure requirements mandated by either state or federal law. See Cmty. Health Choice, Inc., v. Hawkins, 328 S.W.3d 10, 15 (Tex. App.—Austin 2010, no pet.) (funds allocated by the legislature to HHSC for Medicaid are a non-specific appropriation; as a result, when Medicaid appropriations are insufficient to meet expenditures that either state or federal law mandate, the Governor and the Legislative Budget Board are authorized to direct the transfer of sufficient amounts of funds to HHSC from Medicaid appropriations made elsewhere).
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3. Plaintiffs Have Stated a Claim Against Governor Rick Perry. Defendants incorrectly claim that plaintiffs have failed to state a claim against Governor Perry under Rule 12 (b)(6). Part. MTD 2 at 22-23.69 Defendants‘ argument for dismissing the complaint is based on a general claim: that Governor Perry has no responsibility under federal law for providing the relief that plaintiffs request. Id. However, as set forth above, the Governor plays a significant role in the budget process, issues Executive Orders, appoints the Executive Commissioner of HHSC, and approves the appointment of the DADS Commissioner, among other duties. Based upon the Governor‘s significant involvement in these various areas, and in light of the fact that courts are obligated to look only at the pleadings and to consider factual allegations in the complaint as true, there is no basis under Rule 12(b)(6) for dismissing the Governor with respect to any of the legal claims asserted in this case.
a. The Governor is a Recipient of Federal Funds for Purposes of Plaintiffs‘ Section 504 Claim.
Defendants argue that Governor Perry is not a proper party under the Rehabilitation Act because he is not a recipient of federal funds. Part. MTD 2 at 22-23. Specifically, defendants assert that Governor Perry does not receive or distribute Medicaid funds. Id. This argument fails for a number of obvious reasons. First, defendants ignore the reality that when the Governor is sued in his official capacity as the chief executive officer of the State, the question is not whether he personally receives federal financial assistance, but whether the State of Texas does. No one can seriously contend that Texas does not receive federal financial assistance to operate its Medicaid program, including its ICF/MRs, its HCBS waivers, its nursing facilities, and a host of other community-based services. Just as it was appropriate for the plaintiffs in Alexander v.
69 Defendants also contend plaintiffs‘ claims should be dismissed under Rule 12(b)(1) based on their lack of standing to sue the Governor. Because plaintiffs address that argument in section III(D)(1), supra, this section will focus on defendants‘ argument for dismissal under Fed. R. Civ. P. 12(b)(6). Further, defendants do not claim that plaintiffs lack standing to sue Governor Perry under either the ADA or Section 504. Part. MTD 2 at 16-20.
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Choate, 469 U.S. 287 (1984) to sue the Governor of Tennessee in their § 504 case challenging Medicaid cutbacks because the Governor in his official capacity is a recipient of federal funds for the State of Tennessee, so too it is appropriate to bring the § 504 claim in this case against Governor Perry in his official capacity. As the Supreme Court explained in Kentucky v. Graham, 473 U.S. 159, 165-66 (1985):
Official-capacity suits … ―generally represent only another way of pleading an action against an entity of which an officer is an agent.‖ Monell v. New York City Dept. of Social Services, 436 U.S. 658, 690, n. 55, 98 S.Ct. 2018, 2035, n. 55, 56 L.Ed.2d 611 1978). As long as the government entity receives notice and an opportunity to respond, an official-capacity suit is, in all respects other than name, to be treated as a suit against the entity. In addition, plaintiffs have alleged that Governor Perry accepts federal financial assistance to operate Texas‘s Medicaid program, but fails to ensure its compliance with federal requirements for that program. Am. Compl. ¶ 239. At the motion to dismiss stage, this allegation must be accepted as true. Defendants‘ effort to exclude the Governor from the reach of the § 504 claim must be rejected.
b. The Governor Is Responsible For, and Has the Authority to Correct, the ADA, § 504, and Medicaid Violations Set Forth in the Complaint.
Defendants also maintain that plaintiffs‘ pleadings are insufficient to state a cognizable claim against Governor Perry upon which relief can be granted because the Governor did not cause and cannot provide provide any relief which might remedy their alleged injuries. Part. MTD 2 at 22. These arguments ignore both the considerable responsibility and significant authority that the Governor has for complying with the ADA, § 504, and the Medicaid Act.70
70 Certainly Governor Perry believes he has ample authority in all these areas. In Executive Order RP 13, Perry ―order[ed]‖ HHSC to ―direct‖ the Texas Department of Mental Health and Mental Retardation (now DADS) ―to implement‖ a new waiver program to provide community-based services to individuals on the HCS waiver waiting
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In a case nearly identical to the one at bar, several individuals with developmental disabilities brought a class action under §1983 against the Governor of Massachusetts and various other state officials for violations of the ADA, § 504 of the Rehabilitation Act, the Medicaid Act, and the PASARR requirements of the NHRA. Rolland, 52 F. Supp. 2d at 243. Defendants filed a motion to dismiss, asserting that plaintiffs failed to state a cognizable claim against the Governor and the Secretary of the Executive Office of Health and Human Services (―EOHHS‖). They argued that neither played a significant enough role in the State‘s Medicaid program to be held liable for plaintiffs‘ injuries. Just like in the instant case, the defendants in Rolland argued that only the single state Medicaid agency was responsible for the administration of Massachusetts‘s Medicaid program, and, therefore, the Governor could not have taken any action that caused injuries to the plaintiff class. Id. In rejecting this argument, the district court concluded that:
No case holds the provision which empowers a single state agency to administer a state‘s Medicaid program was in any way promulgated with the intention of exonerating or limiting the liability of other governmental officials who fail to conform their required actions to federal law. Id. Further, the Court noted that the plaintiffs‘ amended complaint contained ―several unfulfilled administrative duties that may fall outside the DMA‘s mandate‖ including that: (i) the Governor is responsible for seeking funds from the legislature and to direct, supervise and control the executive departments of state government; (ii) it is the Governor‘s responsibility to appoint directors of executive agencies; and (iii) it is the Governor who appoints the EOHHS Secretary who is responsible for the oversight and control of all of the state‘s Medicaid departments, including DMA. Id. As a result, the Court found that while
list. In Executive Order RP 65, he ordered HHSC to adopt rules mandating that all girls obtain the HPV vaccine prior to admission to sixth grade. In both cases, HHSC fully complied with his directives.
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it remains to be seen whether the plaintiff can prove the Governor . . . [has] a role in the provision of Medicaid services . . . [t]o the extent that those responsibilities go beyond those enumerated and required in the state Medicaid plan, the Governor . . . may well be [an] appropriate defendant. Id.71 The same responsibilities and duties that the Rolland Court held provided a basis for including the Governor as a party are also present here.72 See Am. Compl. ¶ 22. Many other courts have found that a State‘s governor is an appropriate party for purposes of ADA, § 504, and Medicaid claims. See Boudreau ex rel. Boudreau v. Ryan, No. 00 C 5392, 2001 WL 840583, at *6 (N.D. Ill. May 2, 2001) (refusing to dismiss the Governor in a case involving Medicaid, the ADA and Section 504), aff’d in part, and vacated in part on other grounds sub nom, Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906 (7th Cir. 2003); Gueli v. United States, No. 806 CV 1080 T27 MSS, 2006 WL 3219272 (M.D. Fla. Nov. 6, 2006) (finding Governor to be appropriate party when sued in his official capacity; case dismissed on other grounds); Bragg v. Chavez, No. Civ 07-0343 JB/WDS, 2007 WL 6367133, at *13 (D.N.M. Nov. 13, 2007) (Medicaid and ADA claims). Thus, defendants‘ effort to dismiss the claims against the Governor must be denied.
V. CONCLUSION AND REQUESTED RELIEF For the foregoing reasons, plaintiffs respectfully request that this Court enter an order
denying the Partial Motion to Dismiss in its entirety. Plaintiffs request any other relief to which they may be entitled.
71 At the end of its decision, the Court comments that ―there appears to be no dispute that the Governor and other state officials are appropriate defendants with regard to the ADA.‖ Rolland, 52 F. Supp. 2d at 243. That is the case here as well. Defendants‘ motion to dismiss does not allege that the Governor is not an appropriate defendant regarding the ADA. Here, of course, Governor Perry is properly sued in his official capacity. 72 The Governor himself has recognized that other agencies over which he has considerable influence and control are critical to the development of an effective community-based service system. See Executive Order RP 13 (ordering ―all affected agencies and public entities [to] cooperate fully with‖ HHSC in the development of the Promoting Independence Plan)
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November 23, 2011

Respectfully submitted,
/s/ Garth A. Corbett Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Disability Rights Texas 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 Robert Velevis State Bar No. 24047032 Casey Burton State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Attorneys for Plaintiffs

59

Case 5:10-cv-01025-OLG Document 70 Filed 11/23/11 Page 72 of 72 CERTIFICATE OF SERVICE
I, Garth Corbett, hereby certify that all parties have been served through the Court‘s ECF system, or if such party does not accept service through the Court‘s ECF system, then by first class mail.
/s/ Garth A. Corbett Garth A. Corbett
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 Case 5:10-cv-01025-OLG Document 71 Filed 11/30/11 Page 1 of 4

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

Hon. Orlando Garcia

ERIC STEWARD, et al., Plaintiffs,
RICK PERRY, et al.,

Case No. 5:10-cv-1025-OG v.

Defendants.

SUPPLEMENTAL STATEMENT OF INTEREST OF THE UNITED STATES OF AMERICA
The United States files this Statement of Interest, pursuant to 28 U.S.C. § 5171, because this litigation implicates the proper interpretation and application of title II of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. (“ADA”). In particular, this case involves title II’s integration mandate. See Olmstead v. L.C., 527 U.S. 581, 607 (1999). The Department of Justice has authority to enforce title II, and to issue regulations implementing the statute. 42 U.S.C. §§ 12133-34. The United States has a strong interest in the resolution of this matter; accordingly, it respectfully submits this Supplemental Statement of Interest in opposition to Defendants’ Partial Motion to Dismiss Plaintiffs’ Amended Complaint.
The initial Complaint was filed on December 20, 2010 and on March 8, 2011, Defendants filed a partial Motion to Dismiss. (Defs.’ Mot. to Dismiss Pls.’ Compl., ECF No. 30.) On May 18, 2011, the United States filed a Statement of Interest and addressed three issues raised in Defendants’ Motion to Dismiss. (Statement of Interest of the United States of America (“US
1 Under 28 U.S.C. § 517, “[t]he Solicitor General, or any officer of the Department of Justice, may be sent by the Attorney General to any State or district in the United States to attend to the interests of the United States in a suit pending in a court of the United States, or in a court of a State, or to attend to any other interest of the United States.”

Case 5:10-cv-01025-OLG Document 71 Filed 11/30/11 Page 2 of 4
SOI I”), ECF No. 43.) The United States contended: 1) Plaintiffs’ claims were timely filed and not time-barred by any statute of limitation; 2) Governor Rick Perry is a proper party to the action; and 3) enforcement of the Medicaid Act is not limited to the Secretary of the Department of Health and Human Services’ authority to withhold federal financial assistance. (Id. at 7-20.)
With the Motion to Dismiss still pending, Plaintiffs filed an Amended Complaint, (ECF No. 63, Oct. 4, 2011), to which Defendants responded with another fully-briefed Partial Motion to Dismiss. (Defs.’ Partial Mot. to Dismiss Pls.’ Amend. Compl., ECF No. 67, Nov. 4, 2011.) The United States now submits this Supplemental Statement of Interest, incorporating by reference the second and third arguments in its initial filing2: 1) Governor Perry is a proper party to the litigation; and 2) enforcement of the Medicaid Act is not limited to the Secretary of the Department of Health and Human Services’ authority to withhold federal financial assistance. (US SOI I at 10-20.)
CONCLUSION For the reasons stated in its first Statement of Interest, and incorporated herein by reference, the United States respectfully requests that this Court deny Defendants’ Partial Motion to Dismiss Plaintiffs’ Amended Complaint.
2 In earlier filings, Defendants withdrew the statute of limitations argument and they have not raised it in their present Motion to Dismiss. (See Defs.’ Reply to Pls.’ Response to Defs.’ Mot. to Dismiss Pls.’ Compl. at 3, ECF No. 51, June 1, 2011.)
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DATED: November 30, 2011
Respectfully submitted,
THOMAS E. PEREZ Assistant Attorney General EVE L. HILL Senior Counselor to the Assistant Attorney General ALISON N. BARKOFF, Special Counsel for Olmstead Enforcement Civil Rights Division /s/ Regan Rush ALLISON J. NICHOL, Chief RENEE M. WOHLENHAUS, Deputy Chief SHEILA M. FORAN, Special Legal Counsel REGAN RUSH, Trial Attorney Admitted pro hac vice D.C. Bar No. 980252 Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 307-0663 Facsimile: (202) 307-1197 regan.rush@usdoj.gov Counsel for the United States
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CERTIFICATE OF SERVICE I hereby certify that on November 30, 2011, a copy of the foregoing was filed electronically. Notice of this filing will be sent by e-mail to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s CM/ECF System.
/s/ Regan Rush REGAN RUSH Trial Attorney D.C. Bar No. 980252 Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 307-0663 Facsimile: (202) 307-1197 regan.rush@usdoj.gov Counsel for United States
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 Case 5:10-cv-01025-OLG Document 96 Filed 07/09/12 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend and mother, Lilian Minor, et aI.,
Plaintiffs, v.
RICK PERRY, Governor, et al.,
Defendants

§

§

§

§

§

CIV. NO. 5:10-CV-1025-0LG

§

§

§

§

DECLARATION OF MIKE BRIGHT

I am Mike Bright, being over 18 years of age, and of sound mind state the following of my own person knowledge:

1. I graduated from Angelo State University in 1974 with a Bachelor's degree III Elementary Education and certification in Special Education.
2. I am the executive director of The Arc of Texas ("The Arc"). I have held this position since June 1995. I have been employed by The ARC for 37 years. In my 37 years with The Arc or an ARC affiliate, I have served in a variety of leadership positions including Executive Director of The Arc of San Angelo as well as in the following programmatic areas: organizational development, grants management, programmatic plamring, volunteer and consumer training and government affairs.
3. The Arc has approximately 3500 members. Members, including persons with developmental disabilities, families of persons with developmental disabilities, friends and advocates of persons with developmental disabilities, and professionals who serve persons with developmental disabilities. Several Arc members live in nursing facilities in Texas, or are family members or friends of nursing facility residents with developmental

Case 5:10-cv-01025-OLG Document 96 Filed 07/09/12 Page 2 of 5
disabilities. Thus, in my role as the executive director, I have learned first hand about the situations of many persons with developmental disabilities in nursing facilities. 4. I have been part of working groups and committees that have made recommendations to state agency directors and administrators regarding programs and services for persons with disabilities. On numerous occasions, I have testified before Texas House and Senate committees, House and Senate subcommittees, and been on agency Commissioner appointed task forces charged with looking at how various programs and policies affect persons with disabilities in terms of accessing services that will enable them to either move to, or remain in, the community. I have been asked by various legislators and senior state officials for my professional opinions on the design and delivery of services for persons with developmental disabilities in Texas, including the adequacy of community services that allow persons with developmental disabilities to live in the most integrated setting. 5. In my various roles with The Arc, I have become acutely aware of the critical need for significantly more community-based alternatives that would allow persons with developmental disabilities to live in the community, and particularly for persons who are institutionalized or in segregated settings like nursing facilities. I have spent a considerable amount of my 37 year career advocating on behalf of persons with developmental disabilities regarding their right to live in less restrictive community-based settings, including advocating more than 30 years ago on behalf of The Arc and its members that Texas establish the HCS waiver program so that persons with developmental disabilities can live in their least restrictive environment.

Declaration ofMike Bright

2

Cause No. 5:1O-CV-J025-0LG

Case 5:10-cv-01025-OLG Document 96 Filed 07/09/12 Page 3 of 5

6. Over the past several years, I have also been a member of the Money Follows the Person Demonstration Advisory Committee (MFPDAC). As a result of the Supreme Court's decision in Olmstead, the State of Texas through the Texas Health and Human Services Commission ("HHSC") and the Texas Department of Aging and Disability Services ("DADS") provides money to help persons receiving long term care supports in a nursing facility be eligible for a nursing home waiver. The MFPDAC is the entity authorized by DADS with advising the agency in efforts to help nursing facility residents successfully transition in to the community.
7. Based upon information provided to me by Arc members, information from HHSC and DADS provided to me in my role on various tasks forces including the MFPDAC, and other data, I am aware that thousands of persons with intellectual and developmental disabilities currently reside in nursing facilities in Texas and that a significant number of additional persons are admitted each year.
8. For persons with intellectual and developmental disabilities, access to the nursing home waiver has had little to no impact on their ability to access less restrictive communitybased services. For this group, the Home. and Community-based Services ("HCS") waiver is the appropriate program waiver. The RCS waiver is specifically designed to enable persons with developmental disabilities move from a nursing facility to the community with the support and services needed to succeed. Accordingly, the 2012 Promoting Independence Advisory Committee ("Committee") to which HHSC's Executive Director appointed me, recently recommended in its Stake Holder Report that funding for HCS waiver slots currently available to persons living in State Supported Living Centers and large Intermediate Care Facilities for Persons with Mental

Declaration ofMike Bright

3

Cause No. 5:10-CV-I025-0LG

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Retardation also be made available to persons with developmental disabilities living in nursing facilities. 9. Individuals with intellectual and developmental disabilities who had been institutionalized for years have successfully transitioned from nursing facilities to the community, utilizing the HCS waiver program. Many individuals who formerly lived in a nursing facility now live either in small community-based homes or in their own home or apartment because of the supports and services available through the HCS waiver program. In fact, I am aware of former nursing facility residents with intellectual disabilities who not only live independently in the community because of HCS program and the support services available through the waiver, but are working as well. 10. In the past, at least some individuals with intellectual and developmental disabilities were able to leave nursing facilities with HCS program services because HHSC funded several thousand slots each year. Currently, HCS waiver services are frozen for persons on the HCS waiting/interest list. Although there are some priority groups able to access HCS waiver services, including those living in State Supported Living Centers and Large Intermediate Care Facilities for Persons with Intellectual Disabilities, persons living in nursing facilities with intellectual and developmental disabilities have absolutely no chance of accessing HCS waiver services, whether or not they are on the HCS waiting/interest. II. As I noted in '1[8 above, I am a member of the Committee that just this past June recommended funding HCS waiver slots for nursing facility residents with intellectual and developmental disabilities. Although neither HHSC nor DADS is bound by any of the Committee's recommendations, at this point, HHSC has submitted an exceptional

Declaration ofMike Bright

4

Cause No. 5:10-CV-I025-0LG

Case 5:10-cv-01025-OLG Document 96 Filed 07/09/12 Page 5 of 5
budget item to the Texas Legislature to fund a total of 360 HCS waiver slots for the next fiscal biennium - 2014-2015, for persons with intellectual and developmental disabilities residing in nursing facilities in order to move to less restrictive community-based settings. While I do not believe this adequately addresses the number of individuals with intellectual and developmental disabilities living in nursing facilities that qualify for or could benefit from HCS waiver services, I fully support this exceptional item. 12. I am also aware of serious and persistent deficiencies in the way Texas operates is Preadmission Screening and Annual Resident Review (PASARR) program, including problems in accurately identifying persons with intellectual and developmental disabilities, appropriately assessing their need for nursing facility admission, determining their need for specialized services, and providing the specialized services that they reqUIre. l3. Based upon information available to me in my various professional roles, I believe there are a significant number - at least hundreds - of persons with intellectual and developmental disabilities in nursing facilities who could benefit from community services, who are qualified for DADS' community and waiver services, and who would prefer to live in the community. In my opinion, the primary reason these individuals remain segregated in nursing facilities is because of the way that Texas and its relevant state agencies administer and fund the community services and waiver programs.
In accordance with 28 U.S.C. 1746, I declare under penalty ofpeljury that the foregoing is true and correct. Executed on July 5, 2012.

Declaration ofMike Bright

5

Cause No. 5:10-CV-I025-0LG

 Case 5:10-cv-01025-OLG Document 97 Filed 07/09/12 Page 1 of 4

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend and mother, Lillian Minor, et al.,
Plaintiffs, v. RICK PERRY, Governor, et al.,
Defendants.

CIV. NO. 5:10-CV-1025-OG

________________________________________________________________________
DECLARATION OF GARTH CORBETT REGARDING EXHIBITS IN SUPPORT OF PLAINTIFFS' AMENDED MOTION FOR CLASS CERTIFICATION ________________________________________________________________________

I, GARTH CORBETT, hereby declare: 1. I am an attorney with Disability Rights Texas, and one of the attorneys of record
for Plaintiffs in this case. I make this declaration in support of Plaintiffs' Amended Motion for Class Certification. I am competent to testify to the matters stated herein and either have personal knowledge of the facts set forth below or they are from sources deemed reliable.
2. This declaration has been prepared to authenticate the pertinent exhibits attached to Plaintiffs' Amended Motion for Class Certification.
3. Attached hereto as Exhibit 1 is a true and correct copy of an Open Records Request Response entitled Request for Information, DADS No. 2009SOLEG0199 made by the Texas Department of Aging and Disability Service (“DADS”), dated October 26, 2009, in

Case 5:10-cv-01025-OLG Document 97 Filed 07/09/12 Page 2 of 4
response to Disability Rights Texas's Open Records Request regarding DADS’ administration of Texas’ Preadmission Screening And Resident Review (PASARR) program, individuals served and services provided in the program.
4. Attached hereto as Exhibit 2 is a true and correct copy of the United States Department of Health and Human Services’ Center for Medicare and Medicaid Services (“CMS”) quarterly MDS Active Resident Information Report: Third Quarter 2010 available at http://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-andSystems/MDSPubQIandResRep/activeresreport.html (last visited July 6, 2012). This quarterly report provides aggregate data regarding health characteristics of admitted to Medicaid-funded nursing facilities. The data from the report indicates that during the Third Quarter of 2010, there were over 4,500 individuals with developmental disabilities or related conditions living in Texas nursing facilities.
5. Attached hereto as Exhibit 3 is a true and correct copy of a report issued by the United States Department of Health and Human Services, Office of Inspector General, entitled Preadmission Screening And Resident Review For Younger Nursing Facility Residents With Mental Retardation, dated January 2007, available at: http://oig.hhs.gov/oei/reports/oei-07-0500230.pdf (last visited July 6, 2012). This report examines the extent to which Preadmission Screening and Resident Review (PASRR) requirements were addressed for Medicaid nursing facility residents who are between the ages 22 to 64 in Texas and four other selected States.
6. Attached hereto as Exhibit 4 is a true and correct copy of the biennial disability report entitled Texas Biennial Disability Report, dated December 1, 2010, prepared by the Texas Council for Developmental Disabilities (“TCDD”) available at:

Declaration of Garth Corbett

2

Case 5:10-cv-01025-OLG Document 97 Filed 07/09/12 Page 3 of 4
http://www.txddc.state.tx.us/resources/publications/biennial_report/2010biennial/2010biennialre port.pdf (last visited July 6, 2012). Each biennial report discusses the state of services to individuals with disabilities in Texas. The report is mandated by legislation passed by the 76th Legislature (1999) and requires the TCDD and the Texas Office for Prevention of Developmental Disabilities (“TOPDD”) to prepare such reports to the Legislature biennially.
7. Attached hereto as Exhibit 5 is a true and correct copy of the Interim 2012 Promoting Independence Advisory Committee Stakeholder Report, June 2012 available at: http://www.dads.state.tx.us/providers/pi/piac_reports/piac-2012-interimstakeholder.pdf (last visited July 6, 2012). On page 13 of this report, the Advisory Committee recommends that efforts be made to accommodate the needs of individuals with developmental disabilities who reside in nursing facilities and transition them to community living arrangements.
8. Attached hereto as Exhibit 6 is a true and correct copy of the DADS 2012 Summary Table of Exceptional Items LAR FY 2014-15 and Attachment 1 thereto. On page 20 of Attachment 1 is a section entitled “Initiative Promoting Independence Diversion of IDD from Nursing Homes” that sets forth information regarding DADS’ 2012 legislative request as an exceptional item for 360 Home and Community-based Services (“HCS”) waiver slots for persons with intellectual and developmental disabilities who are residing in Texas nursing facilities.
9. Attached hereto as Exhibit 7 is a true and correct copy of the Texas DADS Interest List Reduction Report Summary Fiscal Years 2012-2013 available at: http://www.dads.state.tx.us/services/interestlist/index.html (last visited July 6, 2012). This report indicates that no individuals have been enrolled into Texas’ Home and Community-based Services waiver (“HCS”) program, that none are in the “pipeline” for enrollment into the

Declaration of Garth Corbett

3

Case 5:10-cv-01025-OLG Document 97 Filed 07/09/12 Page 4 of 4
program during fiscal year 2011-2012, and that there are over 52,000 persons in the HCS waiting list.
10. Attached hereto as Exhibit 8 is a true and correct copy of Home and Communitybased Services Program compared to Community Based Alternatives Program available at: http://www.dads.state.tx.us/providers/waiver_comparisons/hcs-cba.pdf (last visited on July 6, 2012). This document sets forth the eligibility requirements for Texas’s HCS waiver and shows that with developmental disabilities whose Full Scale IQ exceeds 75 are excluded from the HCS waiver.
11. Attached hereto Exhibit 9 is a true and correct copy of the Third Quarter 2012 MDS Q1a Report issued by CMS which summarizes by state, the number residents living in nursing facilities who have expressed a preference for returning to the community to live.
12. Attached hereto as Exhibit 10 is a true and correct copy of a Findings Letter from the United States Department of Justice, Civil Rights Division, dated June 15, 2011, to Nancy Jurgen, Assistant Attorney General of the Texas Office of the Attorney General regarding the DOJ’s investigative finding that Texas violates the rights of people with developmental disabilities by unnecessarily institutionalizing them in nursing facilities and places persons with developmental disabilities living in the community at risk of institutionalization in nursing facilities.
Pursuant to 28 USC § 1746, I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge.
Executed on this 6th day of July 9, 2012, at Austin Texas.

Garth A. Corbett

Declaration of Garth Corbett

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IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

§

and mother, Lilian Minor, et aI.,

§

§

Plaintiffs,

§

§

v.

§

CIV. NO. 5:10-CV-I025-0G

§

RICK PERRY, Governor, et al.

§

§

Defendants.

§

DECLARATION OF KAREN GREEN MCGOWAN, RN, CDDN, IN SUPPORT OF PLAINTIFFS' MOTIONS FOR PRELIMINARY INJUNCTION AND CLASS CERTIFICATION

I, Karen Green McGowan, declare as follows: 1. I am an expert witness for the Plaintiffs in the above-captioned action. I am over

the age of eighteen, competent to testify about the matters stated herein, and make this

declaration based on my own personal knowledge.

2. I make this declaration in support ofthe Plaintiffs' Motion for Preliminary

Injunction and Motion for Class Certification in the above-captioned case.

3. Attached hereto as Exhibit A is a true and accurate copy of my July 3,2012

Amended Report of my findings, conclusions and opinions regarding the conditions of care and

provision of habilitative specialized services provided to Eric Steward, Linda Arizpe, and Andrea

Padron. 4.

The facts, findings, conclusions and opinions set forth in my Amended Report

referenced herein and attached hereto are true and accurate to the best of my knowledge.

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 2 of 49

I declare under penalty of perjury ofthe laws ofthe United States that the foregoing is

true and correct to the best of my knowledge.

¥£ ~ Executed in

on this ~ day of July, 2012.

Declaration of Karen Green McGowan in Support of Plaintiffs' Motions for Preliminary Injunction & Class Certification

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CERTIFICATE OF SERVICE I, Garth Corbett, hereby certify that all parties have been served through the Court's ECF system, or if such party does not accept service through the Court's ECF system, then by first class mail.
/s/ Garth A. Corbett Garth A. Corbett

Declaration of Karen Green McGowan in Support of Plaintiffs ' Motions for Preliminary Injunction & Class Certification

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Exhibit A

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 5 of 49
AMENDED EXPERT CLIENT REVIEW REPORT
Steward, et al. v. Perry, et al.
Prepared by: Karen Green Mc Gowan, RN, CDDN
Date: July 3, 2012
I. Introduction
I have been retained by the plaintiffs as an expert witness in this class action lawsuit that challenges the lack of community-based services for Texas residents with developmental disabilities who currently are segregated in nursing facilities and the lack of adequate treatment to these institutionalized individuals. Specifically, I was asked to determine whether three of the named plaintiffs, Eric Steward, Linda Arizpe and Andrea Padron, were appropriately evaluated in compliance with federal Pre-admission Screening and Resident Review (“PASRR”) regulations at the time of their admission to a nursing facility, whether each has been received an appropriate evaluation of their service needs, and whether each is being provided the level of specialized services necessary to meet their basic needs and to prevent regression, in accordance with PASRR regulations. Since the time that I completed my initial report dated April 25, 2012, I received and reviewed additional records for Eric, Linda, and Andrea. These records included medical, Long Term Care (“LTC”) Portal, and the local Mental Health/Mental Retardation Authority (“MH/MRA”) records for each individual. As a result of my review of these records, I have made some amendments to my initial Report that are set forth in this amended Report.
II. Background and Experience
I am a registered nurse with advanced education and over 45 years of experience working in the field of developmental disabilities providing training, technical assistance, and consultation to agencies and organizations that serve individuals with developmental disabilities with complex medical needs and serious health problems. The focus of my work is preparing and assisting interdisciplinary treatment teams and families with identifying and reducing health barriers and ensuring the provision of appropriate habilitative services, including professionally-acceptable health care.
I have provided numerous consultations to public and private-sector organizations pertaining to the process of assessing service needs and providing health care services to individuals with developmental disabilities. Currently, I serve as a consultant to the state of Wisconsin assisting the State with the implementation of a CMS grant involving the downsizing of community Intermediate Care Facilities (“ICFs”). In that role, I provided
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consultation concerning the assessment and provision of clinical service needs to individuals who are moving from ICFs to more individualized settings.
I have also participated as an expert or consultant in numerous cases in state and federal courts throughout the country concerning the assessment of health and safety needs and the provision of habilitation services for individuals with developmental disabilities. I currently serve as a court-appointed member of a Quality Review Panel for the United States District Court in the case of People First of Tennessee v. Clover Bottom Developmental Center, et al. Additionally, I served as the Independent Expert in Rolland v. Celluci, a U.S. District Court case in Massachusetts concerning the provision of specialized services to individuals with developmental disabilities residing in nursing facilities.
My education, training and employment history are described in detail in the attached curriculum vitae.1
III. Materials Reviewed
In the preparation of this report, I reviewed several documents related to the process for conducting PASRR screens and reviews, assessing service needs, and providing specialized services to individuals with developmental disabilities who reside in nursing facilities in Texas. These documents described the PASRR Level I and Level II regulations, forms, instructions and provider materials utilized or published by the state of Texas Division of Aging and Disability Services (“DADS”). I also conducted a limited review of the nursing facility medical records for Andrea, Linda and Eric. Additionally, I reviewed records from the LTC Portal and from the local MH/MRA for Andrea Linda and Eric A complete list of materials reviewed is provided as Attachment 2 to this report.2
IV. Methodology
1. PASRR Level I Screening and Level II Review
Based upon my experience, it is my understanding that federal PASRR regulations require that each individual admitted to a nursing facility be carefully screened to determine whether or not he or she has mental retardation or a related condition (together referred to as a "developmental disability"). If a person is determined to have a developmental disability pursuant to this Level I PASRR screening process, then a second assessment, known as a Level II PASRR review, must be conducted to determine (1) if the individual requires a nursing facility level of care or if their needs could be met
1 See Attachment 1, CV for Karen Green McGowan. 2 See Attachment 2, List of Materials Reviewed.
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in the community; (2) whether, based upon a comprehensive assessment of specific domains, the individual could benefit from the provision of specialized services; and (3) the type and amount of specialized services that the individual needs. A Level II review must be conducted periodically and in particular, any time there is a change in an individual’s condition. Based upon that understanding, as part of my review, I undertook a limited examination and review of the medical records of the above three named plaintiffs to determine whether Level I PASRR screens or Level II PASRR reviews were conducted for each individual and whether, in my professional opinion, those reviews were adequate and consistent with professional judgment and federal standards of care.
2. Provision of Specialized Services.
In order to evaluate whether the three named plaintiffs reviewed received an adequate assessment of their service needs and whether they are receiving specialized services at a level designed to meet their basic needs and to prevent or decelerate regression, I conducted a limited review of the nursing facility records as well as LTC Portal and the local MH/MRA records for each individual. I did not attempt to assess every service need they might have in order to ensure that they are provided active treatment, as required by federal regulations. I focused, instead, on the services each individual required to meet their basic care needs and to avoid regression, especially in light of any complex medical conditions. Additionally, I interviewed each client and spent time observing their level of functioning in the nursing facility in which they reside. As part of my review for Andrea, I also interviewed the nursing facility’s Director of Nursing, Ms. Veronica Benitas. As part of my review for Linda, I spoke with Linda’s parents, Mr. and Mrs. Rudy Arizpe. Pursuant to my review for Eric, I interviewed Eric’s mother, Mrs. Lillian Minor, and interviewed direct care staff onsite at the nursing facility where Eric resides.
My independent review of medical records, State regulations concerning PASRR Level I screenings and Level II reviews, along with interviews with the three individuals and nursing facility staff and family members, where possible, allowed me to form my own professional judgment concerning the adequacy of the assessment of individual service needs and the provision of specialized services, including those services designed to address their health care needs, for those individuals.
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V. Individual Client Findings
Andrea Pedron
On March 27, 2012, I visited with Andrea at the Meridian Nursing Home (“Meridian”) to complete a brief medical assessment. During my assessment, Andrea remained idle in her bed, virtually unresponsive, and could not be aroused.
Andrea’s condition on March 27th was in stark contrast to the person I saw in pictures taken at the time of her admission to Meridian. In these pictures, which hang on the bulletin board in her room, Andrea was awake, smiling and alert. She was standing upright in a supported stander. Her ankles were bent sufficiently to support her full weight and her back was straight and in midline. This is no longer the case.
As discussed more extensively in this report, Andrea is in immediate need of a continuous 24-hour physical management program, which includes therapies to prevent further spinal and joint deterioration as well as to help prevent the further decline in her respiratory functioning, pneumonia, and other lung infections, among other serious medical conditions. Moreover, Andrea also needs an appropriate community placement in a smaller setting with an appropriate day program to meet her treatment and habilitation needs.
Currently, Andrea’s strength is that when her mother visits, she reportedly smiles and can recognize her mother’s voice.
A. History
When she was ten-years old, Andrea, who is now 27, was diagnosed with a closed head injury as a result of a car accident. She also sustained serious physical injuries that required her to be hospitalized for severe respiratory issues and other life-saving measures. She required a tracheostomy that since has been discontinued. Andrea also has post-traumatic quadriplegia and a seizure disorder.
On February 25, 2002, at the age of 18, Andrea was admitted to Meridian and has continuously resided there for the past ten years. Upon review of her records, I could find little narrative history regarding the circumstance leading up to and resulting in her admission to Meridian or other relevant history regarding Andrea. In addition, the Director of Nursing, Veronica Benitas, whom I interviewed, was unable to provide me on any details of her history.
Despite the limited information regarding her history in her medical records, LTC Portal and MH/MRA records, there is some indication in the notes that following her discharge from the acute care hospital where she received treatment for her injuries resulting from the accident, Andrea may have lived at home with her family. Further, the records state
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that Andrea received special education services for a number of years following her accident and subsequent to her admission to Meridian, where she continued to receive special education services from public school therapists. The records also indicate that several years after her admission to Meridian, these services ended. The reason for their discontinuation is not stated.
B. The PASRR Process
In my review of her records, I found that although Andrea had a number of PASRR Level I screening assessments, virtually all of these assessments, with the exception of one, inaccurately stated that Andrea did not have mental retardation or a related condition and that specialized services were not indicated. Additionally, in this one instance where Andrea’s PASRR Level I screen indicated that she had mental retardation and needed specialized services, the screen also erroneously stated that she had a mental illness, although there is nothing in her records to support such a determination.
Additionally, I found no indication in her records that Andrea received a PASRR Level II review to determine her need for specialized services to meet her habilitative needs and to prevent regression. There was a psychological assessment, dated September 2009, in Andrea’s records that confirmed her diagnoses of having intellectual and developmental disabilities, and certified her as being eligible for receiving mental retardation services from the state, including ICF/MR services. There was, however, nothing to indicate that this assessment was a Level II review, as it did not include an assessment of Andrea’s need for specialized services such as occupational therapy, physical therapy, and alternative placement. In my review of Andrea’s records, I could find no other evaluations of Andrea that identify her specialized service needs
C. Necessary Specialized Services to Prevent Further Harm/Regression
Because Andrea has not received adequate PASRR assessments to identify her need for specialized services, she has been deprived of the specialized services that she desperately needs. As a result, Andrea’s physical condition has significantly and irreparably deteriorated since her admission to Meridian. She now requires certain specialized services to prevent her from experiencing further regression.
Based on a review of Andrea’s records, as well as information that I obtained from my interview with the Meridian Director of Nursing, Andrea is, and continues to remain, confined to her bed for excessive periods of time. She is only removed from her bed for one or two hours a week, at most. There are a number of serious medical conditions, some of which are life-threatening, that commonly result from continuously confining an individual in their bed for an extended period of time. Specifically, a person will experience physical deterioration in a number of ways, such as hardening of the joints and muscles, spinal problems that impair breathing, and pneumonia, among other
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conditions. As explained below, Andrea has already developed a number of these serious conditions, causing her to both regress significantly and be at serious risk of death.
1. Impairment of Breathing and Related Medical Complications
Based upon my record review and assessment of Andrea, I determined that as a result being continuously in bed for extended periods without the necessary physical and other therapies, Andrea has lost significant range of motion in her spine. It appears that she is developing kyphoscoliosis, which is a condition that results in excessive forward and sideward bending of the spine. As the spine continues to bend forward and to one side, over time, it applies weight to the diaphragm. Since the diaphragm is a muscle used for breathing, the more weight that is applied to it, the harder it becomes for a person to breathe and the person’s breathing becomes shallow and constricted. As a result, individuals with this condition are unable to clear out the secretions that get into their lungs. Thus, people often get pneumonia or other serious lung infections, which can result in further loss of lung function and death.
Without the appropriate specialized services, including physical therapies and treatment interventions, other serious medical conditions can develop as a result of excessive periods of time lying in bed. For example, when a person lies down for extended periods of time, they can develop problems such as gastro-esophageal reflux disease (“GERD”) and urinary tract infections, among other problems. According to Andrea’s medical records, in addition to requiring hospitalization for treatment of respiratory failure resulting from bilateral pneumonia, she also has developed “severe deconditioning,” and gastro-esophageal reflux disease. Also, according to her medical records, Andrea had to be fed through a percutaneous enteral gastrostomy (“PEG”) tube for an undetermined amount of time.
As Andrea continues to remain idle in bed for extended periods of time, all of the medical conditions she has developed are continually exacerbated. The longer she continues to lie on either side folded into her deformity pattern, the more her deformities increase due to the force of gravity.
2. Flexion Contracture and Related Physical Complications
Due to excessive periods of lying in bed without the requisite specialized services, including physical therapies, Andrea has also developed flexion contractures and is now no longer able to straighten her wrists, ankles, or shoulders. She also can no longer straighten her legs or hips.
Flexion contracture is a condition that causes a person to be unable to straighten their joints. It develops as a result of a person having their joints bent for extended periods of time due to lack of activity. In addition, since her admission to Meridian, Andrea
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developed severe deterioration of her feet and ankles, and now has what is referred to as “foot drop.” “Foot drop” is a condition whereby an individual cannot stand normally, since the toes curl up tightly under the feet and cannot be straightened.
To illustrate the severity of her deterioration, when Andrea was admitted to Meridian, she could stand upright in a stander. Now, due to not getting the necessary specialized services and lying idle in bed almost continuously, Andrea can no longer stand upright with the assistance of a stander or other device. During my assessment of Andrea, I found that her ankles lay flat and could not be brought to a neutral position. Her toes were curled under and approximating the bottom of her feet. Because the regression in her feet and ankles is so severe, even if she were now provided with the appropriate physical therapy to help to straighten her spine and joints, she would only be able to stand on her knees.
In order to address the kyphoscoliosis and related conditions and prevent flexion contractures, foot-drop, and prevent premature death, Andrea needs specialized services that include a 24-hour physical management program. This type of intervention is designed to minimize the deformity-producing effects of gravity and facilitate active movement. Additionally, if she is afforded such a program, her risk of other serious medical complications such as GERD, urinary tract infections and respiratory pneumonia, which can lead to death, will also significantly be reduced.
Andrea also needs to have her medication regime reviewed by a Doctor of Pharmacy.
D. Community Placement
Andrea is not thriving at Meridian and is in fact regressing. Meridian serves mostly as a custodial care environment for her, as she is receives almost no services and mostly only receives custodial care. Andrea needs to move to a community-based setting such as a small group home and to attend a day program in the community.
E. Consequences if Andrea’s Basic Treatment Needs Are Not Met
In my professional opinion, Andrea will likely die of preventable conditions, as described in this report, associated with her lying in bed continuously for 164-166 hours per week. The deformity patterns that she has developed while at Meridian, as a result of the cessation of active therapy provided via special education services, were entirely preventable. These patterns will continue to progress if nothing is done to immediately intervene. Similarly, absent immediate intervention, the likelihood that her Gastrointestinal problems such as GERD, urinary tract infections and respiratory pneumonia will persist and worsen, remains extremely high. If these serious conditions go unabated, there is a serious risk that she will die prematurely.
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Linda Arizpe
Linda is a 43-year-old woman who lived at home with her family until she experienced a brain injury following a cardiac arrest in about 2005. On March 27, 2012, I visited with Linda in her bedroom at the Meridian Nursing Home (“Meridian”) to complete a brief health status assessment. Both of Linda’s elderly parents were present during this evaluation. When I met with Linda, I found her to be a charming young woman with a ready smile who interacted with her family and caretakers who have been hired by her family. She engaged with familiar caretakers and was able to get their loyalty without difficulty. Linda’s parents are deeply involved in her care and her mother visits her daily and her father also visits her regularly.
Linda needs an appropriate physical therapy program and the necessary therapeutic equipment to address a deformity in her legs that she has acquired since her cardiac arrest in 2005. She also needs a medical assessment, medical treatment and physical therapy to address the deterioration of her hips that has developed since her admission to Meridian. Additionally, Linda needs a review of her medications and a small community living arrangement with an appropriate day program that includes physical position of her body.
A. History
Linda was admitted to Rosewood Nursing Home (“Rosewood”) in about 2005 and was there until she was admitted to Meridian on January 30, 2008. She was discharged from Rosewood after her parents learned that she had been sexually assaulted. At the time of her discharge from Rosewood, she had developed decubitus ulcers (commonly known as bed sores) and other medical issues. She has resided continuously at Meridian since her admission in 2008.
Linda’s active diagnoses include: Anoxic brain damage; seizure disorder; anxiety, anemia associated with nutritional deficit, and asthma. According to her medical records, Linda was diagnosed with a developmental disability in childhood, but was able to function at home with her family until she suffered a brain injury in 2005. Linda’s records indicate that following her injury, she was unable to walk, and her cognitive abilities declined. Linda’s records state that she was deemed eligible for mental retardation services from the Texas Division of Aging and Disabilities and Service Coordination Services in 2003.
B. The PASRR Process
Although I found Level I screens in Linda’s records, virtually all of these screening assessments stated that Linda did not have mental retardation or a related condition and that she did not need specialized services. This was in spite of the documentation in Linda’s records that DADS determined that she qualified for mental retardation services
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in 2003, as well as documentation that Linda was diagnosed with mental retardation when she was a child. I found only one PASRR Level I screening assessment that indicated that Linda had mental retardation or a related condition and that specialized services were indicated.
Additionally, Linda’s PASRR Level I screening assessments had inconsistent determinations of her rehabilitative potential without any explanation or documented basis upon which to justify this change. Specifically, out of three possible determinations or rehabilitative potential—good, fair, or minimal—some of the Level I screening assessments found that she a fair potential for rehabilitation while others stated she had poor potential.
There were no PASRR Level II reviews in Linda’s records. The only documents in Linda’s records that referenced PASRR specialized services were MH/MRA documents entitled “Alamo Local Authority (ALA); Direct Service: Encounter Single Client and Single Server Data Entr[ies]” (“ALA Entry”) for the period December 2, 2011 through May 8, 2012 and a Service Coordination Assessment for Mental Retardation Service. In terms of actual evaluations of Linda’s need for specialized services, there was only documentation of an appointment to see a doctor who specializes in rehabilitative, occupational, and physical therapy that was scheduled by Linda’s parents and that Linda would receive an evaluation for a new wheelchair. There was, however, no documentation in her records demonstrating that this evaluation has occurred or that there has been any follow-up on it. I could find no other documentation in her records, that Linda received any other evaluations of her need for specialized services.
C. Necessary Specialized Services to Prevent Further Harm/Regression
Based on my review, I have determined that Linda has not had timely and appropriate evaluations to identify her service needs. She has therefore, not been provided with the necessary specialized services to meet her needs and to prevent regression. Consequently, since her admission to Meridian in 2008, she has developed severe medical conditions that require immediate therapeutic intervention and treatment.
1. Deterioration of Legs: Acquisition of “Frog-Leg” Deformity
Based on my review of her records and my evaluation, I found that Linda spends most of her time in her bed and does not receive necessary therapeutic physical management interventions, particularly for her legs. As a result, she has developed what is known as a severe “frog-leg” deformity pattern, which means that both of her thighs lie off to the side and she is not able bring them together at the midline of her body. This deformity interferes with Linda’s ability to sit in a traditional sitting position.
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Linda’s parents informed me that Linda developed this deformity subsequent to her cardiac arrest, but it was not clear if the deformity developed in this facility or whether it developed while she was at her previous nursing facility, Rosewood. Although Linda has a wheelchair that has been modified to allow her to sit with her legs lying off to the sides, it is not, at this time possible for her to fit through most standard doors or to be accommodated in most bathing facilities because her legs cannot come together sufficiently to get through most doors. These physical barriers further impair her ability to leave her room and contribute to her inactivity.
The development of this deformity, in my opinion, was preventable had Linda been afforded the appropriate physical therapy with the appropriate equipment. There are physical positioning techniques that alter the way gravity works, which, if applied consistently and appropriately to Linda’s legs using the proper equipment, could bring them back to midline in a relatively short period of time. This needed therapy would require having Linda lie prone over a supporting surface so that her legs hang free, allowing gravity to pull down on her thighs for 30 minute intervals for two times a day. In order to implement this therapy properly, Linda would need access to special equipment and to a therapist familiar with the process of physical management.
If Linda is afforded this therapy with the necessary equipment and trained staff, her legs will likely be able to come back to the center in a relatively short time. If successful, she will no longer have problems passing through doors and getting into bathtubs. This would in turn allow her to more readily leave her bedroom and have access to activities within the nursing facility, as well as in the community.
2. Severe Hip Deterioration
Linda’s hips have lost their range of motion as result of her continuous confinement to her bed for an extended period of time and not receiving the necessary specialized services including physical management techniques.
During my evaluation of Linda, I manipulated Linda’s hips and legs to assess their condition and range of motion. As a result of my assessment, I found that Linda’s right hip had a range of movement of about 20 degrees although it should have been 90 degrees. Her left hip had little mobility and I was only able to move it about 5-10 degrees toward the midline of her body due to extreme deterioration. In order to assess the full extent of the damage done to her left hip, Linda requires an x-ray to make sure that one or both hips have not dislocated. This should be done by an orthopedist to assure that neither hip is dislocated. This has contributed to her mobility problems, lack of activity, and the development of her deformities and related medical problems.
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D. Community Placement and Day Programming
Linda needs to live in a less restrictive setting, perhaps in her own home with staff support, where she can move about and participate in community activities on a daily basis. She could also do well in a day program with active and consistent programming, at least part of which should be aimed at increasing her positioning options, as discussed above. Her parents would like her to come home, but they need support staff as they are both in their 80’s. Her family would also be comfortable with a very small group home. Their primary concern is that she be safe and secure after they are gone.
E. Consequences to Linda If Her Basic Treatment Needs Are Not Met
As discussed above, Linda has significantly physically deteriorated since being admitted to Meridian. If her treatment and therapy needs are not immediately addressed, she is likely to continue to regress. If there is no immediate intervention to address the frog-leg deformity that Linda has developed while at Meridian, her legs are likely to get stuck in the current position, making it difficult, if not impossible to remedy absent invasive surgical intervention.
If Linda does not receive the appropriate medical and other therapeutic interventions to address the degeneration of her hips, they are likely to harden, making it difficult, if not impossible, to reverse absent major surgery.
If Linda’s service needs are not properly identified and if she is not afforded needed specialized services, Linda is at serious risk of further regressing, both physically and psychologically. This is particularly true given that she does not receive services and supports from the nursing home, other than a place to live and her meals. There is a very serious risk that, absent the provision of the necessary specialized services, Linda will be vulnerable to further physical deterioration and exacerbation of her already existing deformity, as well as social withdrawal.
Eric Steward
Eric is a 44-year-old man who lives in the Buena Vida Nursing and Rehabilitation Facility (“Buena Vida”) in San Antonio, Texas. Eric was born with cerebral palsy. He has a right hemiplegia that is often associated with a severe seizure disorder.
I met with Eric in his room at the Buena Vida on March 27, 2012. At the time that I visited him he had recently had a significant seizure and was resting in his bed. I also spoke with his mother, Lillian Minor on April 24, 2012. Mrs. Minor told me that Eric began having seizures at about six years of age, and she considers his seizure disorder the major issue in his life. She does not feel that his seizures are adequately controlled and that is the biggest reason why he is living in the nursing home.
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A. History
For the period of 1998 until 2002, Eric lived in a group home in the community. In 2002, Eric had surgery for his seizure disorder to limit the number and intensity of his seizures. Following his surgery, Eric was transferred for a short period of time a medical rehabilitation center. He was then admitted to his current nursing facility in September of 2002.
At the time he entered the hospital for his brain surgery to abate his almost continuous seizures, Eric was able to walk independently. Eric’s mother reported to me that the neurologist told her that the chance of helping his seizures was quite high with the surgery, but that he would still require seizure management for the rest of his life. She was also informed that the surgery would result in some loss of skills for which he would need rehabilitation. She was informed that he would be transferred to a rehabilitation facility temporarily to regain whatever functional skills might have lost.
After his surgery, Eric lost his ability to walk and initially had to use a wheelchair. He subsequently began using a walker purchased for him by his mother when he was transferred to Buena Vida in 2002. His mother reports, however, that since being at this nursing facility, Eric has lost considerable mobility, has had to stop using his walker, and now depends on a recently acquired motorized wheelchair. Overall, Eric’s mobility is quite limited, although he has some ability to transfer from his bed to a chair or toilet and back.
Eric is personable, charismatic and social and according to his mother. Social interaction is the primary motivator in his life. He has a good relationship with his mother who visits him at least once a week. She has recently been ill and Eric has been very worried about her health. During her recent illness, Eric reported to me that he had a number of seizures due to his level of anxiety and concern about her health.
B. The PASRR Process
In reviewing Eric’s records, I found that his PASRR Level I screens were inaccurately completed as they consistently stated that Eric does not have a developmental or intellectual disability and that specialized services are not indicated. For example, on the screening assessment dated December 1, 2010, the form incorrectly stated that Eric did not have any developmental or intellectual disability, although attached to this same form was a document entitled “Alamo Local Authority for Intellectual and Developmental Disabilities-Intake and Eligibility,” dated 9/23/11, that specifically stated that Eric was “determined to be a Person with Mental Retardation as defined by the Persons with Mental Retardation Act.” There was also a psychological report in Eric’s records that states that Eric has quadriplegia and cerebral palsy and that he is qualified to receive intellectual and developmental disability services from the state. Additionally, Eric’s records clearly indicated that he has been
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diagnosed with cerebral palsy, that he has mild mental retardation, and that he was enrolled in special education as child.
Eric’s PASRR Level I screens also contained other inaccuracies and inconsistencies. For example, several of his PASRR Level I screens stated that he had “psychosis,” yet there is no documentation in his medical records to suggest that he has psychosis. Eric’s PASRR Level I screens have inconsistent determinations of his rehabilitative potential. Specifically, some of the Level I screens indicate that he only minimal potential for rehabilitation and others says he has a fair potential. There is no explanation or justification documented anywhere in the records that I reviewed for Eric for these inconsistencies.
My review of Eric’s records revealed no completed PASRR Level II reviews. There was an intake and eligibility assessment done for Eric in September 2011 regarding his eligibility for intellectual and developmental disability services that stated that he needed meaningful day activities as well as alternative residential services and supports for his medical issues. There is nothing on this assessment to indicate that it was a Level II review, and it does not identify the specific specialized services that he needs as a Level II is required to do.
C. Needed Specialized Services
Not withstanding an assessment for mental retardation services completed by the local authority that provides services to people with intellectual disabilities, Eric has received no adequate PASRR screening assessments or evaluations, and consequently the services that Eric needs have not been properly identified. Therefore, he has not been provided the specialized services that he requires to meet his habilitative needs or prevent regression.
1. Seizure Management and Treatment
Eric is not receiving necessary specialized services to prevent regression in his seizure disorder. Although Eric had surgery to alleviate the number and intensity of his seizures, his records indicate that he nevertheless continues to have some seizure activity that is occasionally intense. While Eric’s records indicate that he has received an assessment by a neurologist, his seizures remain improperly managed and they remain a significant issue that has an impact on his mobility, as well as on his ability to engage in vocational and other programming. Eric needs an assessment by epileptologist, which is a doctor who specializes in seizure management, to assess his medication needs as well as to determine whether and how his seizures might be better managed.
In order for such assessment to be effective, however, there must be better data made available to the specialist who does the assessment. This data should include information about the type, frequency, and duration of Eric’s seizures. In order to gather this data, the nursing home staff must start documenting Eric's seizure activity on a seizure flow sheet and maintaining detailed and accurate data about the level, intensity, duration, and
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nature of his seizures in a format that will allow the physician to determine if he has more than one seizure type, and if he can be managed with fewer drugs.
A review of his records revealed that because of these ongoing seizures, his seizures are not being properly monitored and tracked. My record review and interviews with Buena Vida staff revealed that the staff at Buena Vida merely document the occurrence of a seizure in a nurse's note, but do not track the seizures consistent with accepted practices. Consequently, there is a dearth of accurate information to identify and provide the appropriate treatment for Eric’s seizures.
2. Mobility
Eric’s ability to be physically mobile has declined while at the nursing facility, as he has no longer uses his walker or stander, and, instead, has been allowed to sit down or lie down most of the time. Because his motorized wheelchair is so efficient at moving him around, he is not standing and walking as often as he should. Moreover, he is not receiving the necessary specialized services necessary to encourage or support him in the use of his walker and stander. Eric needs better seizure management and physical management activities to keep him as mobile as possible. Specifically, Eric needs to be moving and weight bearing over more hours of his waking day. He should be standing and ambulating at least some time every day. This is not happening for him at this time. Eric also needs an appropriate assessment of his mobility to identify all of the specialized services needed to address his mobility impairments, in order to meet his habilitative needs and to prevent regression in this area.
3. Untreated Medical Conditions and Needed Assessments
Eric also has other medical conditions for which he has not been adequately assessed and for which he is not being provided specialized services. One of these conditions is Eric’s weight. Specifically, since his admission to Buena Vida, Eric has gained 35 pounds since February of 2010. Although Eric was depressed and losing weight at one point about two years ago, he has now gained weight to the point where the extra weight places him at risk of developing serious medical conditions, such as metabolic disorder, which includes conditions such as Type II diabetes, and other serious medical problems. He has already developed gastro-esophageal reflux disease (“GERD”), which is also associated with excessive weight.
Eric’s records also state that he has “dementia,” but I could find no documentation in his records or indication in his presentation to support such a diagnosis. Additionally, Eric’s mother told me that she had not been informed that Eric had been diagnosed with dementia. An appropriate medical assessment by a qualified physician is necessary to determine whether this diagnosis is warranted, and if so, what specialized services he needs to address this condition and then to be provided with such services.
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Eric needs a comprehensive assessment to determine the necessary treatment interventions for these medical conditions and then needs to be provided with the appropriate specialized services to address these conditions, in order to meet his basic habilitative needs and avoid regression.
4. Vocational Services
Eric needs vocational training and supported employment services, in order to allow him to work. Supported employment services are a type of specialized services that would enable Eric to regain some of his independence and participate in the community. He also needs a physical therapy assessment by a clinician familiar with the needs of persons with his type of disability.
D. Community Placement
Eric’s current placement at Buena Vida is inappropriate and harmful to him because he has not received the necessary specialized services to enable him to function independently and with self-determination and to prevent or decelerate regression. Eric needs a community-based placement such as an apartment where he can live with some staff support.
E. Consequences to Eric If His Basic Needs Are Not Met
If Eric’s needs are not properly assessed and identified, and he is not immediately provided with the appropriate services and treatment, he will continue to physically deteriorate in a number of ways.
First, if Eric’s seizure disorder is not appropriately assessed and managed, it will continue to impede his mobility and his ability to participate in supported employment or in vocational and other programming.
In addition, if Eric continues to remain inactive, does not receive the necessary assessments of his mobility, and is not provided the necessary specialized services to address his mobility problems, he will soon likely lose what limited mobility abilities he has. If this happens, his other body systems will suffer as a result. For example, he is a serious risk of rapidly losing range of motion in his knees and hips.
If Eric’s weight is not assessed and he is not given the necessary specialized services to address his weight problem, he is a high risk of developing metabolic syndrome, which is a cluster of medical conditions including high blood sugar, increased body fat, and increased blood pressure that can increase risk of diabetes, heart disease, and stroke. In addition, his GERD is likely to be exacerbated, and he is at risk of acquiring other gastro-intestinal problems. His weight gain also may compromise his already limited ability to transfer on his own from his bed to his chair and his overall mobility.
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If Eric’s diagnosis of dementia is not further evaluated and he does no receive a proper assessment, he will not have the necessary treatment and specialized services needed to address this condition identified or provided. This, in turn, will prevent him from getting the necessary services to decelerate any deterioration or prevent regression from the dementia if it is confirmed that he has such a condition. Finally, placement of Eric at Buena Vida or any nursing facility is not appropriate. It cannot meet his needs, he has physically deteriorated, and there is a risk of further deterioration if he continues to reside there. He will also continue to be needlessly segregated if he remains institutionalized. Regardless of whether his seizures can be modified, he should be able to live in the community.
VI. Systemic Issues for Andrea, Linda and Eric In my review of Andrea, Linda and Eric’s cases, I determined that the PASRR process was entirely inadequate for all three individuals. Virtually all of the PASRR Level I screens for Andrea, Linda and Eric were inaccurately and inconsistently completed. For example, with few exceptions, these screens consistently stated that they did not have developmental or intellectual disabilities and that specialized services were not indicated, although all three had documentation of having mental retardation and being eligible to receive services from the MH/MRA. Additionally, Andrea, Linda, and Eric all did not have adequate PASRR Level II reviews. As a result of these failures, the specialized services that these individuals need have not been identified or provided, even though they have been residing in their nursing facilities for a number of years. I also found that the absence of specialized services for these individuals has directly caused them not only to be denied the opportunity to live as independently as possible and denied them the basic habilitative services that they need, but has also caused them to physically regress as result of developing avoidable, serious medical conditions. In Linda and Andrea’s case, these preventable conditions are now difficult to reverse.
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Attachment 1

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VITA
KAREN M. GREEN MC GOWAN, RN, CDDN
McGowan Consultants, Inc. 6437 Azalea Garden Road.
Norfolk, VA 23518 Office: (770) 490-7705 Email: karengreen1959@aol.com
FAX: 757-961-9932
President, McGowan Consultants, Inc since 1981
Ms. McGowan provides training and technical assistance to agencies and organizations serving individuals with complex developmental disabilities and serious health problems. Focus is on preparing interdisciplinary teams and families to identify and reduce health barriers to development. McGowan Consultants is a certified provider of continuing education for nurses, Florida Provider #27L1O58- nine courses are currently available that are specifically designed for health care practitioners working with individuals with complex developmental disabilities.
Member Executive Board of McGowan Risk Screening Tool (HRST}, Inc. which market a web-base electronic instrument that determines health risk of individuals with a wide range of Disabilities.
PROFESSIONAL HISTORY
President Elect, Developmental Disabilities Nurses Association, a national DD Specialty association of I/DD nurses. This nursing specialty organization for nurses providing advanced certification in I/DD and provide continuing education in this area of practice.
1977-Present. Independent Consultant, specializing in training, evaluation and technical assistance for the management of human service programs, particularly mental retardation programs serving persons with severe to profound retardation and physical disabilities.
2009 to present: Appointed as member of Quality Review Panel for the United States District Court for the Middle District of Tennessee Nashville Division-People First of Tennessee v Clover Bottom Developmental Center, et. Al

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2011: Member of Death Investigation group for the DD Administration for DD Services in conjunction with Liberty Health Care Services, Bala Cynwyd, PA.
2010 : Participated in the Disability Rights International investigation of mental health and developmental disability institutions throughout Mexico and the preparation of a report regarding their status ten years following a 2000 investigation.
2005-2010: Expert Consultant US Department of Justice for class action litigation in Texas and Iowa.
2006-2011: Conducted series of training workshops for the State of Georgia to prepare licensed clinicians, support coordinators and state and community providers to implement the web-based version of the Health Risk Screening Tool. These trainings have involved more than 1200 individuals to date. Currently 14000 consumers in the state of Georgia have been screened on the web-based version of this instrument.
2008 to present: Expert consultant for the Olmstead agreement between state of Georgia and the Office of Civil Rights. Providing assessment and recommendations regarding needs and appropriateness of placement of complex individuals referred for community placement.
2007-2008: Provided training and consultation to the state of George in the area of Preventing Aspiration and Bowel Obstruction in state MI/MR facilities and the Community.
2007-2008: Consultant to Consortium on Quality Practices for mock surveys in the state of California.
2007: Accompanied Mental Disability Rights International (MDRI) staff to Serbia to review a 650 bed facility in Kulina, Serbia.
2006 Assisted in an investigative report with American Broadcast Company (ABC news) for expose of treatment of children with disabilities in Romania in May of 2006. Story was broadcast on Good Morning America, World News Tonight and Nightline on April 10, 2007.
2005-2008. Consultant in Physical and Nutritional Management for the State of Indiana and Liberty Health Care of Indiana assisting in the closure of the Fort Wayne Developmental Center in Fort Wayne, Indiana. Provided follow-up consultation as part of the FAST (follow along support team) for class members placed in the community through January of 2008.
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2005 to present. Consultant to the state of Wisconsin for a CMS grant involving downsizing of community Intermediate Care Facilities in service and clinical needs of persons moving to more individualized settings. Currently assisting with the assessment and provision of clinical services to persons with complex health issues throughout Wisconsin.
2005-2006. Consultant, Montana Department of Developmental Disabilities. Provided assessment and technical assistance to community providers across the state of Montana, focusing on persons with physical and medical issues.
2005. Consultant to the World Health Care Organization, UNICEF and Mental Disability Rights International in Romania. Assessed 33 children at the Hospital Chronica in Braila, Romania in preparation to move them to alternative residential options. Member Advisory Board, Mental Disabilities Rights International.
2001-2005. Independent Expert selected jointly by the plaintiffs and defendents for Rolland v. Cellucci, a Settlement Agreement in the United States District Court in Massachusetts regarding adults with mental retardation and other developmental disabilities in Massachusetts who reside in nursing facilities, and are potentially in need of specialized services and residential supports in other settings.
2001-2004. Served as a consultant to the Florida Department of Family and Children’s Services regarding development of curriculum for community providers and their direct contact staff in the area of health and medication training.
2000-2006. Consultant to Advocacy, Incorporated, Austin, Texas in the Albert N., et al. v. Don A. Gilbert, et al., Case No. 6:99CV459 regarding waiver services to medically dependent children in the state of Texas.
1999-2000. Conducted comprehensive reviews of 11 state-operated facilities in the state of Illinois to evaluate compliance with health and safety regulations of funding sources, such as state and federal requirements. Reviewed both current medical records and policy and procedures for physical and nutritional management, including reviews of all persons who died within the past calendar year.
1999 to 2003 Consultant to the Louisiana Office for Citizens with Developmental Disabilities to assist with the development of health and medical services for individuals transitioning to the community from Developmental Centers throughout the state.
1990-2001. Appointed by Federal Judge James Ellison of the Northern District of Oklahoma to the Homeward Bound Review panel. Responsible with co-panel members Ed Skarnulis and Pat Wear II for the oversight of the Hissom Memorial Center Class
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currently being transferred into community based services across the state of Oklahoma and the development of community services to approximately 1000 class members. Responsibilities included assisting in the development of health care policy as well as other health related processes, such as death reviews.
1995 - 2005. Served as a Developmental Disabilities Expert Nurse Consultant to the State of Tennessee as required by a Remedial Order in the Western District of Tennessee. Responsible for assuring that Nursing Services at the Arlington Developmental Center meet State and Federal Guidelines as well as the conditions outlined in the Remedial Order. Responsibilities included review of individual class members identified as high risk and mortality reviews for individuals who died at selected state operated facilities.
1994-1998 Appointed as the Health Care Advisor to the Kope Advisory Committee, part of the consent agreement for Kope v. Watkins, a class action suit against the Michigan Department of Mental Health. Committee assesses the adherence of the Department to the tenants of the decree in the areas of health and safety, growth and development, access to technology and community integration for approximately 500 class members transferred from specialized nursing homes into community based settings.
1994-1996. Appointed to the Howe expert review panel as the physical management representative for a consent decree in the United States District Court for the Northern District of Illinois. Responsible for assessing compliance with the adequacy of implementation of the consent decree with regard to provisions for managing the physical and health care management needs of members of the class currently residing at the Howe Developmental Center.
1986-94 Conducted annual 5-day training seminars for nurses in Florida in "Assessing Health Risks in Developmental Disabilities", a 35 hour course certified by the Florida Board of Nursing.
1994. Participated as a member of Developmental Disabilities Nurses Association Certification Committee, and participated in the development of the certification examination as part of a contract with the National League for Nursing. Wrote the clinical portions of the Study Guide jointly with Ms. Mary Kay Moore. This manual was published in January, 1995 and is used to assist nurses sitting for the first DD certification exam in April, 1995.
1993-2007 Developed a series of home study courses for nurses in developmental disabilities:
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1. Assessing Health Risk in Developmental Disabilities: 35 contact hours. 2. Preventing Constipation and Bowel Obstruction: 7 hours. 3. Functional Life Planning: 24 contact hours. 4. Bacon and Eggs*-a home accessibility guide: 5 contact hours. 5. A license Doesn't Make You Smart (working with the helping professions):
5 contact hours. 6. Nursing Implications in Seizure Management: 8 contact hours. 7. Epilepsy Management for the Person with Mental Retardation: 5 contact hours. 8. Problems with Mealtimes: 15 contact hours. 9. Gastroesophageal Reflux Disease: 8 contact hours. 10. Drugs and Disabilities: 24 contact hours. 11. Health Risk Screening Tool- A Rater’s Guide. 24 contact hours. 12. The Bottom Line: Preventing Constipation and Bowel Obstruction.
1987-1993. Provided Gastrostomy Reviews for Sunland Orlando Class members as part of Federal Court ordered review process, including reviews of certain class members who died to determine if the deaths were preventable.
1992. Developed a training of trainers curriculum and training manual for community providers under contract to the Minnesota Association of Rehabilitation Facilities (MARF) and the Minnesota Developmental Achievement Center Association (MnDACA) as part of a collaborative grant from the Bush Foundation.
1992. Under contract to the Developmental Services Program of the Health and Rehabilitative Services Department for Florida, developed a medication training manual and training of trainers curriculum.
1989-1991. Under contract to Florida Department of Health and Rehabilitative Services Developmental Program Office, conducted training to certify 18 clinicians for court certification to continue court ordered Gastrostomy Review Process.
1985 -1994. Consultant to the Office of the Special Master for the Willowbrook Consent Decree. Previously (1979-1984) worked for the Willowbrook Review Panel, specifically to assess, train and evaluate placements for those labeled "medically complex”. Included in this work were reviews of 10-12 individuals who died in the first several weeks following transfer from the state-operated facility to the Flower and Fifth Avenue Hospital in 1978.
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1989-1992. Under contract to the Michigan Department of Mental Health, provided training and clinical consultation to specialized nursing care facilities in the areas of functional positioning, safe transferring and handling, therapeutic equipment and safe eating techniques. This was work was done to meet the terms of an emergency injunction against the Department in the Kope litigation.
1986-1990. Under contract to the Michigan Department of Mental Health, trained 16 employees of the Department of Mental Health as instructors in Functional Life Planning, and conducted training of trainer workshops for approximately 650 employees of the Department.
1987-1990. Director of Quality Assurance for Medical Services Corporation. Conducted quality Assurance audits and training of nursing and professional staff to meet state and federal standards in Florida, Tennessee, Louisiana, and North Carolina.
1981-1986. Consultant to the Office of the Special Master for the Gary W. case in Louisiana. Provided training and evaluation for services to Gary W. class members. This included an audit of 300 records to determine issues in health care to the class, and included a review of all deaths during this period.
1982-1985. Served as a member of the Nutritional Management Team for the Sunland Orlando Class. Mission was to return class members to eating by mouth. Provided consultation, technical assistance and training for 500 class members in 29 Facilities throughout Florida. Participated in the development of State Standards For Physical and Nutritional Management of Developmental-Medical individuals and the development of the Physical and Nutritional Management Curriculum.
1982. Adapted the Values Based Community Skills Training Curriculum, Medications Module for the Commonwealth of Pennsylvania and trained 180 Pennsylvania Trainers.
1979 to 1981. Content consultant to Title XX Project, a program designing training curriculum For community based mental retardation staff through the University of Nebraska Medical Center, Meyer Children's Rehabilitation Institute, Omaha, Nebraska. Participated in the development of 8 modules including Positioning, Turning and Transferring, seizures, Team Process and Individual Habilitation Programming.
1980-1998. Associate of the National Institute on Mental Retardation in Toronto, Ontario. Conducted a 4 year series of training workshops in 9 Canadian provinces on 24 hour planning, and providing services to individuals with complex needs.
1976-1977. Community Service Specialist, Institute For the Development of Community Alternative Service Systems, Meyer Children's Rehabilitation Institute. Responsible for
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technical assistance and training on de-institutionalization to Developm6ntal Disability Councils and service programs in HEW Region VII.
1977-1981. Consultant to the Department of Mental Health in Massachusetts. Conducted multiple training events in the areas of Normalization, Program Analysis of Service Systems (PASS), and working with persons with complex disabilities.
1972-1976. Director of Developmental Maximation Services, Eastern Nebraska Community Office of Retardation, Omaha, Nebraska. Administered two Transdisciplinary Teams, and Adaptive Equipment Services for a program serving 1800clients in five counties.
1976. Director of Planning, Eastern Nebraska Community Office of Retardation. Responsible For coordination and development of the One-year Eastern Nebraska Community Office of Retardation Plan and the Five-year Community Plan.
1975-1976. Director of Developmental Training Team Services, responsible for the establishment and coordination of two trans-disciplinary, cross-modality teams to provide client assessment, treatment and coordinated staff training. Teams consisted of physical therapists, nurses, occupational therapists, behavior therapists, speech clinicians and psychologists.
1972-1975. Director, Developmental Maximation Programs. In addition to administering the Developmental Maximation Unit, established 'Motor Development Services'. This program provided prescriptive and non-prescriptive equipment and physical and occupational therapy evaluation and treatment services to all physically handicapped and motor-delayed children throughout the agency. Established adaptive equipment services throughout the State of Nebraska and to local generic agencies.
1972-1973. Director, Developmental Maximation Unit. Designed, established and administered a community based developmental treatment facility for severely and profoundly retarded, medically complex children. Unit was designed as a 'prototype' for delivery of normalization based service delivery to individuals traditionally cared for in residential institutions. Responsible for evaluating developmental needs, locating and coordinating delivery of required medical services and preparing clients for movement to less restrictive residential and educational environments. Supervised 30 professional and para-professional staff members including consulting medical specialists.
1969-1972. Glenwood State Hospital School, Glenwood, Iowa. Area Administrator, Team v (Treatment Team Leader). Responsible for administration management professional services and programing for 240 multi-handicapped individuals from
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infancy through adulthood. Administratively responsible for 100 personnel including a multi-disciplinary team and a medical staff.
1967-1968. Glenwood State Hospital. Director, Foster Grandparent Program. Organized and administered a Federally funded project to employ 75 senior citizens to work with severely and profoundly retarded children in a state institution.
1965-1967. Glenwood State Hospital. Nursing Representative, Diagnostic and Evaluation Team. Participated in an inter-disciplinary team responsible for evaluating all mentally retarded persons referred from a 49 county area in Iowa. Also provided management, counseling and staff supervision for a training program preparing young adults for independent community placements.
1964-1965. United States Air Force. Second Lieutenant, USAF Nurse Corps. Stationed at Malmstrom AFB, Great Falls, Montana. Worked as a Staff Nurse in Labor, Delivery and Newborn Nursery.
1963-1964. Nebraska Methodist Hospital, Omaha, Nebraska. Charge Nurse from 11:00 PM to 7:00 am on 65 bed medical/surgical unit. Supervised 6-8 professional and paraprofessional nursing staff in addition to general nursing duties.
PROFESSIONAL PRESENTATIONS AND CONSULTATIONS
2008: Presentation “Persons with Complex Disabilities: We are more than we seem” at the Fifth Annual Best Practices Conference sponsored by the State of Illinois Department of Human Services, September 8, 2008.
2004-2005: Conducted series of trainings for Federal CMS surveyors on meeting needs of persons with complex disabilities. 1994-2001 Conducted multiple training sessions in Tennessee, Florida, Louisiana and Illinois for physicians, nurses and therapists in Assessing Health Risk, the KMG Fragility Scale, Health Risk Screening and Drugs and Disabilities. Included were several Training of Trainer sessions.
1987-1994. Conducted annual 5 day workshop for nurses in Florida District 5 and 6 entitled Assessment and Planning for Health Professionals, sponsored by Smith Consultant Group, Pinellas Park, FL.
1990-1995. Consultant to the Michigan Department of Mental Health for the "Kope" case concerning the placement of persons with severe disabilities in nursing homes.
1987-1995. Expert Consultant, United States Department of Justice for cases in Oregon, Washington State and Pennsylvania.
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1985-1986. Conducted workshop series entitled, Growth Strategies Design, for the Case Managers of the Connecticut Department of Mental Retardation.
1985-1986. Developed and presented, for the Connecticut Department of Mental Retardation, Assessment and Planning for the Health Professionals. Conducted basic and advanced training in this area for nurses and physicians.
1985-1988. Developed and presented, in a series of workshops for the Michigan Department of Mental Health, entitled Functional Life Planning. This series included a training of trainers section. Over 250 staff participated.
1982-1985. Clinical Team Leader, Nutrition Team, Department of Health and Rehabilitative Services, Florida. Responsible for improving the nutritional and oralmotor status of 97 clients at Sunland, Orlando and in the Florida Cluster Program.
1983. Member, Third Party Review Team, reviewing nutritional and oral feeding programs for clients living in Sunland Orlando, Florida.
1983. Expert Witness before the Sub-committee on family and human services of the US Senate Committee on Labor and Human Resources concerning the reauthorization of Child Abuse Prevention and Adoption Opportunities Act: Withholding of Care from Handicapped Infants in Hospitals.
1982-Present. 24-Hour Planning for Persons with Complex Needs. A five day workshop devoted to transdisciplinary methods and applications. This program has been presented in Toronto, Van Couver, Saskatoon and other locations throughout Canada.
1982. Principal Instructor and Course Director. Trained 140 instructor personnel in Medications Training Curriculum for Pennsylvania Community Living Arrangements (CLA) Programs. 1982. Member, Task Force on Staffing Programs and Services; Methodology for Staffing State Schools, Massachusetts Department of Mental Health, Department of Mental Rehabilitation.
1982. Content Consultant, Kellogg Model Curriculum Project; Seizure Curriculum.
1981. Consultant, Development of Standards and Guidelines, Individual Program and Planning for Developmentally Handicapped People; ABT Associates of Canada for the Ontario Ministry of Community and social services.
1981. Expert Witness. ARC of North Dakota vs. Olsen, et al.
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1981. Expert Witness. Schlieninger vs. Questor Corporation, Kings County, CA.
1981. Member, Evaluation Team of the Southeastern Alberta Community Living Association, Lethbridge, Alberta.
1981. Expert Witness. Weicker Hearings for the Senate Subcommittee on the Handicapped, Hartford, CT.
1980. Consultant. Connecticut Association for Retarded Citizens, 1980.
Training of Trainers workshops on Positioning, Turning and Transferring for the Michigan Department of Mental Health.
1980. Consultant. office of the Master for the Plymouth, Michigan consent decree.
1980. Expert Witness. Welsche, Minnesota.
1980. Expert Witness. Garrity vs. Galen, New Hampshire.
1980-1984. Consultant. Ceci's Homes for Children, Toronto, Ontario, Canada.
1980-1984. Consultant, Community Resource Center for the Developmentally Disabled, South Bronx and Harlem, NYC, NY.
1979. Principal Instructor. Three day training course for nurses on, Developmental Nursing, Central State Hospital, Milledgeville, GA.
1979 Consultant. J.F.Kennedy Institute Baltimore, MD. writing the training manual for Title XIX Surveyors on, Nature and Needs of Persons with Developmental Disabilities.
1981--1995. Associate. National Institute on Mental Retardation, Toronto, Canada. Conducted a series of workshops on Community Integration of the Severely Handicapped in Toronto, Nova Scotia, Saskatchewan and British Columbia.
1979. Consultant. Arizona Office of Economic Security, Phoenix, Arizona. Conducted workshop on Prosthetics.
1978-1981. Consultant. Massachusetts Department of Mental Health, Division of Mental Retardation, Boston,
1978-79. Consultant to Willowbrook Review Panel and New York City Office of MR/DD. Office of the Special Master of Pennhurst, Federal District Court, Philadelphia, Pennsylvania.
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1978. Expert Witness, Kentucl:y Association for Retarded citizens vs. Conn.
1977-78. Conducted Workshop series Community Service Provision for Multihandicapped Citizens. Ten workshops, 3-4 days each in Massachusetts and Pennsylvania.
1977-78. Program Analysis of Service systems, 5 day workshop on evaluation of human service systems based on the 'normalization principle' in Omaha, Nebraska; Worcester, Massachusetts and Atlanta, Georgia.
1976. Consultant for United States Justice Department. Gary W and the United States vs Stewart. Civil rights suit challenging the practice of the State of Louisiana in placing children in private care facilities in the State of Texas.
1975. Program Analysis of Service Systems (PASS). Workshop instructor and field evaluation team leader, Eastern Nebraska Community Office of Retardation.
1975. Using the Transdisciplinary model in Programming for Severely/Profoundly Handicapped Pupils. Presentation to the State Council for Exceptional Children, Cedar Falls, Iowa.
1975. Ideology and Human Service Underdevelopment presented at conference Decision Making and the Defective Newborn a conference on Spina Bifida and ethics, Skytop, Pennsylvania sponsored by Ilew York University Medical Center.
1974. Facilitating Growth of Severely and Profoundly Retarded Children in the Community. RRMD Conference Toronto, Canada.
1974. Team Leader, PASS workshops in Syracuse, New York; Lawrence, Kansas and Omaha, Nebraska.
SELECTED PAPERS, PUBLICATIONS AND REPORTS
Assessing Health Risk in Developmental Disabilities, 322 pages, McGowan Consultants. Peachtree City, GA, 1994.
A Clinical Resource Guide for Case Managers,, developed for SKIP of NY by McGowan Consultants, 120 pages, 1993.
Functional Life Planning, 277 pgs, KMG Corp. Peachtree City, Georg4.a, 1985.
Growth Strategies Design, 178 pgs, KMG Corporation, Peachtree City, Georgia, 1985.
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Assessment and Planning for Health Professionals with Lelia Barks, 182 pgs, KMG Corporation, Peachtree City, Georgia, 1985.
Screening for Health Risk: 288 pages developed by Karen Green McGowan, RN, CDDN and Carolyn J. Smith, RN, CDDN for the State of Tennessee
Working with Multihandicapped Citizens. Vols I and 11, with Emily Hoeffel, Boston, MA, Massachusetts Department of Mental Health, Office of Staff Training, Manpower Planning and Development, 1983.
Nature and Needs of Persons with Developmental Disabilities, in Gardner, Long and Iagulli, eds., in Issues In Developmental Disabilities, Baltimore, MD and London: Paul F. Brooks, 1980.
The First Steps to Development--Everyone Needs Help, with Linda Carlson, in Perske,R., ed. New Directions for Mealtime for the Proi-oundly Handicapped, Baltimore, MD, University Park Press, 1977.
A Tough Decision For Tony, in Perske et al, eds. in New Directions for Mealtimes for the Profoundly Handicapped, Baltimore, MD, University Park Press, 1977.
Approximating the Norm Through Environmental and Child Centered Prosthetics and Adaptive Equipment with Linda Carlson in, Educational Programming for The Severely and Profoundly Handicapped, E. Sontag, Ed. Reston, VA: Council for Exceptional Children, 1977.
Effects of Supplemental Security Income on Deinstitutionalization of Severely Handicapped Children, Paper presented at National Symposium sponsored by National council of Organizations for Children , Washington, D.C,, November, 1976.
A Foster Grandparent Program for Severely and Profoundly Retarded childr6n, in Hospital and Community Psychiatry, May, 1968.
Film: Not if, But How. consultant and script development of 30 minute training film for teachers working with severely handicapped children in regular classrooms. By Scene III and National Media Materials Center for the Severely Handicapped, Nashville, TN, 1979.
1979-81. Content Consultant. Value Based Skills Training Curriculum, Meyer Children's Rehabilitation Institute.
I. Positioning, Turning and Transferring
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II. Medications III. Introduction to Team Planning IV. Introduction to Individual Program Planning V. Writing Behavioral Objectives and Measuring Behavior VI. Foundation Principles
1982-85. Content Consultant. MCRI - Kellogg Curriculum, University of Nebraska Medical Center.
I. Introduction to Serving Persons with Developmental Disabilities II. Seizures III. Behavior: Practical Strategies for Human Service Workers
1985. Content Consultant. Nutritional management: A Training Program for All Staff, developed by O'Neill and Associates, Ltd. For the Florida Department of Health and Rehabilitative Services.
1985. Content Consultant. Nutritional Management,. A Training Program for Nurses and Occupational Therapists developed by ONeall and Associates, Ltd. for the Florida Department of health and Rehabilitative Services.
1985. Serving Persons with Complex Needs in the Community, in, Human Life and Health Care Ethics, Bopp, James, Ed. Washington, D.C.: University Publication of America, Inc.
CURRENT PROFESSIONAL MEMBERSHIPS
President Elect: Develomental Disablities Nurses Association, a national organization of nurses working in facilities and organizations serving persons with Developmental Disabilities with 1500 members.
Advisory Committee Member, Disability Rights International.
Charter Member, Developmental Disabilites Nurses Association. Member, credentials committee, DDNA.
Member, National Advisory Committee, "Technical Assistance For Community Integration Program For Persons with The Most Severe Disabilities," Center on Human Syracuse University.
Fellow, Institute for the Study of Disability Law, Medicine and Ethics, Washington, DC.
13

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 35 of 49 Associate of the Canadian National Association on Mental Retardation (now the Rohrer Institute in Toronto, Ontario, Canada Consulting Editor, AAMR publication Mental Retardation. EDUCATION AND CERTIFICATION 1960-1963. Graduate of the Nebraska Hospital School of Nursing (now the Nebraska Methodist College of Nursing)
19591961 and 1966-67 University of Nebraska. Omaha, Nebraska 1995-2001. Certification in Developmental Disabilities Nursing (CDDN) from the Developmental Disabilities Nurses Association. LICENSURE: RN-Virginia License #0001215951
14

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 36 of 49
Attachment 2

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 37 of 49

Amended Expert Client Review Report by Karen Green McGowan, RN, CDDN Attachment 2

A. PASRR Documents [Non-Client Records]

Document Name DRAFT PASARR Level I DRAFT PASARR Level II DRAFT Specialized Service Plan HHS Expedited Admissions to NF Form DADS Item by Item Guide for Completing PASARR Screening Form PASARR Current NF Screening Form PASARR Redesign Project Materials PASARR T.A.C. Provisions Resources for DADS Service Providers Resources for DADS Service Providers (FAQ) THHSC Guidance

Bates No. StewardNR000001-3 StewardNR000004-10 StewardNR000011 StewardNR000012-13 StewardNR000014-41
StewardNR000042-50 StewardNR000051-68 StewardNR000069-79 StewardNR000080-82 StewardNR000083-84 StewardNR000085-89

1

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 38 of 49

Letter for NF Administrators 4/23/01

DADS Provider Manual; Sect 6200 Specialized Services Standards PASARR Screening 2.0 V.4

StewardNR000090-92 StewardNR000093-98

B. Plaintiff Medical Records*

Doc Name
Arizpe - Fax from Alamo Local Authority Progress Notes
ES MR Service Coordination Assessment 9 13 11 AP Meridian Admission MDS LTC Info 1.11.12 MDS 12.19.11 CAA Trigger Summary 1.10.12 MDS LTC Info 11.2.11 MDS 10.5.11 MDS 7.8.11 Order 3.1.12 Dr's Progress Note 3.1.12 Dr's Progress Note 12.2.11 Dr's Progress Note 9.11.11 Dr's Progress Note 6.12.11 Rehab Screening Form 1.2.12 Rehab Screening Form 4.11.11 Physicians Orders 4.20.11 Physician's Progress Notes 3.6.11 MDS 4.11.11 Buena Vida Face Sheet 3.17.10 MDS 11.28.09 Initial Social History 2.19.98

Bates No.
StewardR000001-04
StewardR000005-06 StewardR000007 StewardR000008 StewardR000009-20 StewardR000021-26 StewardR000027 StewardR000028-36 StewardR000037-45 StewardR000046-47 StewardR000048 StewardR000049 StewardR000050 StewardR000051 StewardR000052 StewardR000053 StewardR000054-55
StewardR000056 StewardR000056-88 StewardR000089 StewardR000090-97 StewardR000098-99

Plaintiff
LA
ES AP AP AP AP AP AP AP AP AP AP AP AP AP AP AP
AP AP ES ES ES

2

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 39 of 49

Physicians Notes 12.15.09 Physician's Orders 2.27.10 Face Sheet 2.9.11 MDS 11.29.10 MDS 5.27.10 MDS 8.26.10 Physicians Orders

StewardR000100

ES

StewardR000101-102

ES

StewardR000103

ES

StewardR000104-148

ES

StewardR000149-157

ES

StewardR000158-166

ES

StewardR000167-208

ES

Physician Notes 3.25.10-11.5.11 StewardR000209-216

ES

SS Eligibility Determination

StewardR000217-225

ES

ALA PASAR Progress Note 6.29-6.30.11

StewardR000226-229 LA

Care Plan 1.13.11 MHMR Diagnostic Form 11.15.04

StewardR000230-231 LA StewardR000232

DMR 7.25.03 Meridian Admission Record 8.4.09

StewardR000233-236 LA

StewardR000237

LA

Admission MDS 6.17.09

StewardR000238-242 LA

Doctors Progress Notes 5.09 -

7.09

StewardR000243-245 LA

Doctor's Orders 7.2.09

StewardR000246-247 LA

MDS 1.14.11

StewardR000248-285 LA

Doctors Orders 12.18.10

StewardR000286-287 LA

Care Plan 1.14.11

StewardR000288-291 LA

Doctor's Progress Notes 8.10-

12.10

StewardR000292-295 LA

Admission Record 1.16.12

StewardR000296

LA

Orders 3.04 .11

StewardR000297-298 LA

MDS 7.04.11

StewardR000299-307 LA

MDS 12.20.11

StewardR000308-316 LA

CAA Triggers Summary 1.9.12 StewardR000317-320 LA

CAA Trigger 1.12.12

StewardR000321-322 LA

MDS 9.28.11

StewardR000323-332 LA

MDS 7.04.11

StewardR000333-341 LA

Dr. Progress Note 2.6.12

StewardR000342

LA

Dr. Progress Notes 4.17.11

StewardR000343

LA

Labs 2.16.12

StewardR000344

LA

Labs 2.3.12

StewardR000345

LA

Labs 2.2.12

StewardR000346

LA

Rehab Screening Form 12.22.11 StewardR000350

LA

Therapy Progress Note 12/9/11 StewardR000351

LA

Therapy Progress Note 11.14.11 StewardR000352

LA

3

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 40 of 49

Therapy Progress Note 10.16.11 StewardR000343

LA

Therapy Progress Note 3.19.11 StewardR000354

LA

Rehab Screening Form 1.12.11 StewardR000355

LA

Care Plan 10.28.10

StewardR000356

AP

MDS 1.17.11

StewardR000357-394 AP

Nurses Progress Notes 12.13.11-

3.14.12

StewardR000395-417 AP

Orders 12.15.10

StewardR000418-419 AP

Therapy Progress Notes 1.17.11 StewardR000420-422 AP

Meridian Admission Record

8.5.08

StewardR000423

MDS 10.22.09

StewardR000424-429 AP

Northeast Hospital Admission

5.17.07 -5.29.07

StewardR000430-436 AP

Orders 2.12.10

StewardR000437-439 AP

Physician Progress Note 9.1.09 StewardR000440

AP

Physician Progress Note 7.11.09 StewardR000441

AP

Physician Progress Note 5.13.09 StewardR000442

AP

Labs 1.26.10

StewardR000443

AP

Labs 1.26.09

StewardR000444

AP

Labs 12.26.09

StewardR000445

AP

Labs 11.26.09

StewardR000446

AP

MDS 6.2.10

StewardR000447-455

ES

Baptist Health Discharge 1.30.08 StewardR000457-459 LA

Social Progress Note 4.13.09 -

7.12.10

StewardR000460-463 LA

Physician Exam 4.26.10

StewardR000464

LA

Breast Exam 7.7.10 - abscess

StewardR000465-466

LA

Physician's Progress Notes 8.28.09 - 7.10.10

StewardR000467-470 LA

Social Progress Note 11.15.11-

12.20.11

StewardR000471

LA

Hill Country MHMR Admission

Form 11.15.04

StewardR000472

LA

Meridian Admissions 8.4.09

StewardR000477

LA

MDS 6.17.09

StewardR000478-482 LA

Physician's Progress Note 7.8.09 StewardR000483

LA

Orders 7.2.09 Physician's Progress Notes 5.20.09 Physician's Progress Notes 5.13.09

StewardR000484-485 LA

StewardR000486

LA

StewardR000487

LA

4

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 41 of 49

Resident Transaction Notice -

Discharge to Hospital 9.14.09 StewardR000488

ES

Resident Transaction Notice -

Admission from Hospital 9.14.09 StewardR000489

ES

TMHP CPWC Approval 10.8.10 StewardR000490

ES

MDS - Annual 11.29.08

Steward000491-501

ES

MDS - Change in Status 2.28.09 StewardR000512-523

ES

MDS - Annual 2.27.10

StewardR000524-534

ES

MDS - Quarterly 8.29.08

StewardR000535-541

ES

MDS - Quarterly 9.16.08

StewardR000542-548

ES

MDS - Quarterly 5.30.09

StewardR000549-555

ES

MDS - Quarterly 8.29.09

StewardR000556-562

ES

MDS - Quarterly 11.28.09 MDS - Correction Request 11.28.09

StewardR000563-576

ES

StewardR000577

ES

MDS - Quarterly 5.27.10

StewardR000578-584

ES

MDS - Annual 3.11.11

StewardR000585-633

ES

MDS - Annual 3.13.12

StewardR000634-675

ES

MDS - Quarterly 12.16.10

StewardR676-712

ES

MDS - Quarterly 6.7.11

StewardR000713-749

ES

MDS - Quarterly 9.2.10

StewardR000750-786

ES

MDS - Quarterly 12.8.11

StewardR000787-823

ES

PASARR Screening 4.27.11

StewardR000824-832

ES

Resident Transaction Notice -

Discharge to Hospital 5.16.12 StewardR000833

AP

Resident Transaction Notice -

Admission from Hospital 5.17.12 StewardR000834

AP

MDS - Annual 2.09.09

StewardR000835-845 AP

MDS - Annual 1.22.10

StewardR000846-856 AP

MDS - Quarterly 9.4.08

StewardR000857-863 AP

MDS - Quarterly 11.10.08

StewardR000864-870 AP

MDS - Quarterly 5.8.09

StewardR000871-877 AP

MDS - Quarterly 8.7.09

StewardR000878-884 AP

MDS - Quarterly 10.22.09

StewardR000885-891 AP

MDS - Quarterly 4.21.10

StewardR000892-898 AP

MDS - Annual 7.23.10

StewardR000899-905 AP

MDS - Annual 2.15.11

StewardR000906-947 AP

MDS - Annual 1.11.12 MDS - Quarterly 11.29.10 MDS - Quarterly 5.23.11

StewardR000948-989 AP

StewardR000990-

1026

AP

StewardR001027-

1063

AP

MDS - Quarterly 8.18.11

StewardR001064-

AP

5

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 42 of 49

1100

StewardR001101-

MDS - Quarterly 11.11.11

1137

AP

StewardR001138-

MDS- Quarterly 4.2.12

1174

AP

StewardR001175-

PASARR Screening 5.4.11

1183

AP

Resident Transaction Notice -

Discharge to Hospital 8.23.09 StewardR001184

LA

Resident Transaction Notice -

Admission from Hospital 8.31.09 StewardR001185

LA

Resident Transaction Notice -

Discharge to Hospital 9.20.10 StewardR001186

LA

Resident Transaction Notice -

Admission from Hospital

10.15.10

StewardR001187

LA

Resident Transaction Notice -

Discharge to Hospital 12.13.10 StewardR001188

LA

Resident Transaction Notice -

Admission from Hospital

12.21.10

StewardR001189

LA

Resident Transaction Notice -

Discharge to Hospital 3.29.11 StewardR001190

LA

Resident Transaction Notice -

Admission from Hospital 4.12.11 StewardR001191

LA

Client Assessment, Review and

Evaluation (CARE) 1.9.09

StewardR001192

LA

StewardR001193-

MDS - Annual 1.13.09

1203

LA

StewardR001204-

MDS - Annual 1.12.10

1214

LA

StewardR001215-

MDS - Quarterly 10.20.08

1221

LA

StewardR001222-

MDS - Quarterly 4.13.09

1228

LA

StewardR001229-

MDS - Quarterly 4.14.109

1235

LA

StewardR001236-

MDS - Quarterly 6.17.09

1242

LA

StewardR001243-

MDS - Quarterly 8.10.09

1249

LA

LA

StewardR001250-

MDS - Quarterly 10.30.09

1256

MDS - Quarterly 4.8.10

StewardR001257-

LA

6

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 43 of 49

1263

StewardR001264-

MDS - Quarterly 7.12.10

1270

LA

StewardR001271-

MDS - Annual 1.26.11

1312

LA

StewardR001313-

MDS - Annual 1.10.12

1354

LA

StewardR001355-

MDS - Quarterly 11.15.10

1391

LA

StewardR001392-

MDS - Quarterly 5.3.11

1428

LA

StewardR001429-

MDS - Quarterly 8.3.11

1465

LA

StewardR001466-

MDS - Quarterly 11.4.11

1502

LA

StewardR001502-

MDS - Quarterly 4.10.12

1539

LA

StewardR001540-

PASARR Screening 4.28.11

1548

LA

Face Sheet 3.19.12

StewardR001549

ES

Admission & Interval History & StewardR001550-

Physical 2.21.11

1552

ES

StewardR001553-

Physician's Orders 6.1.11

1556

ES

StewardR001557-

Telephone Orders 6.3.11-7.10.11 1559

ES

StewardR001560-

Physician's Orders 7.1.11

1563

ES

StewardR001564-

Physician's Orders 8.1.11

1567

ES

StewardR001568-

Physician's Orders 9.1.11

1571

ES

StewardR001572-

Physician's Orders 10.1.11

1575

ES

Telephone Orders 11.17.11-

11.18.11

StewardR001576

ES

StewardR001577-

Physician's Orders 11.1.11

1580

ES

Telephone Orders 11.18.11 - StewardR001581-

12.2.11

1582

ES

StewardR001583-

Physician's Orders 12.1.11

1586

ES

StewardR001587-

Physician's Orders 1.1.11

1590

ES

Telephone Orders 1.18.12

StewardR001591

ES

Physician's Orders 2.1.12

StewardR001592-

ES

7

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 44 of 49

1595

Telephone Orders 2.2.12

StewardR001596

ES

StewardR001597-

Physician's Orders 3.1.12

1600

ES

Psychotherapy Progress Note StewardR001601-

3.29.12

1602

ES

Psychotherapy Progress Note StewardR001603-

3.27.12

1604

ES

Psychotherapy Progress Note StewardR001605-

3.15.12

1606

ES

Psychotherapy Progress Note StewardR001607-

2.21.12

1608

ES

StewardR001608-

MARS 6.1.11

1612

ES

StewardR001613-

Treatment Records 6.1.11

1616

ES

StewardR001617-

Medication Records 6.1.11

1618

ES

StewardR001619-

MARS 7.1.11

1623

ES

StewardR001624-

Treatments 7.1.11

1626

ES

StewardR001627-

MARS 8.1.11

1629

ES

StewardR001630-

Treatments 8.1.11

1632

ES

StewardR001633-

MARS 9.1.11

1635

ES

StewardR001636-

Treatments 9.1.11

1638

ES

StewardR001639-

MARS 10.1.11

1641

ES

StewardR001642-

Treatments 10.1.11

1644

ES

StewardR001645-

MARS 11.1.11

1647

ES

StewardR001648-

Treatments 11.1.11

1650

ES

StewardR001651-

MARS 12.1.11

1653

ES

StewardR001654-

Treatments 12.1.11

1656

ES

StewardR001657-

ES

MARS 1.1.12

1660

Behavior Intervention Flow

Records 1.1.12

StewardR001661

ES

8

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 45 of 49

StewardR001662-

Treatments 1.1.12

1664

ES

StewardR001665-

MARS 2.1.12

1667

ES

StewardR001668-

Treatments 2.1.12

1669

ES

Weekly Skin Assessments

StewardR001670-

5.13.11-10.21.11

1673

ES

Long Term Care Follow Ups

StewardR001674-

6.9.11-11.17.11

1677

ES

Psychotherapy Progress Note StewardR001678

ES

Long Term Care Follow Up

StewardR001679

ES

StewardR001680-

Nurses Notes 5.23.11-3.28.12 1695

ES

MDS ADL Flow Sheet 2.18.12-

2.24.12

StewardR001696

ES

Mood and Behavior Monitoring

Sheet 2.18.12-2.24.12

StewardR001697

ES

StewardR001698-

Nursing Summary 11.27.11

1701

ES

MDS ADL Flow Sheet 11.21.11-

11.27.11

StewardR001702

ES

Mood and Behavior Monitoring

Sheet 11.21.11-11.27.11

StewardR001703

ES

MDS ADL Flow Sheet 8.22.11-

8.28.11

StewardR001704

ES

StewardR001705-

Nursing Summary 5.29.11

1708

ES

MDS ADL Flow Sheets 5.23.11- StewardR001709-

8.26.10

1712

ES

StewardR001713-

AIMS Scales 1.10.12-1.12.11 1715

ES

Dehydration Risk Assessment StewardR001716-

12.10-1.12

1717

ES

ADL Functional/Restorative

StewardR001718-

Assessment 2.27.11-1.21.12

1719

ES

Fall Risk Assessment 2.5.11-

StewardR001720-

1.21.12

1721

ES

Pressure Ulcer Risk Assessment

1.21.12

StewardR001722

ES

Pressure Ulcer Risk Assessment

Undated

StewardR001723

ES

Pressure Ulcer Risk Assessment

11.24.09-8.26.10

StewardR001724

ES

9

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 46 of 49

Pressure Ulcer Risk Assessment

11.26.10-9.15.11

StewardR001725

ES

StewardR001726-

Pain Assessment 3.3.10

1727

ES

Dental Records 4.25.09

StewardR001728

ES

Dental Care Notes 4.25.09-

1.21.12

StewardR001729

ES

StewardR001730-

Side Rail Assessment 1.17.12 1731

ES

Side Rail Assessment 6.1.09-

StewardR001732-

5.26.11

1734

ES

Physical Restraint Elimination StewardR001734-

Assessment 1.26.10-1.21.12

1737

ES

StewardR001738-

Labs 3.14.12-10.19.11

1755

ES

Social Service Progress Notes StewardR001756-

4.27.11-2.24.12

1759

ES

Nursing Rehab/Restorative Plan StewardR001759-

of Care 2.12-7.11

1772

ES

MDS for Nursing Home

Residency Assessment & Care StewardR001772-

Screening 5.29.11

1783

ES

MDS for Nursing Home

Residency Assessment & Care StewardR001784-

Screening 8.28.11

1792

ES

MDS for Nursing Home

Residency Assessment & Care StewardR001793-

Screening 11.27.11

1801

ES

Itemized ADL Coding Report StewardR001802-

2.18.12-2.24.12

1806

ES

Monthly ADL Coding

StewardR001807-

Summaries 5/11-4/12

1860

ES

Itemized ADL Coding Report StewardR001861-

5.1.11-4.5.12

2012

ES

Service Coordination

StewardR002013-

Assessment 4.25.12

2014

AP

StewardR002015-

Direct Service Data 5.14.12

2016

AP

StewardR002017-

Direct Service Data 4.24.12

2018

AP

Direct Service Data 12.8.11

StewardR002019

AP

Direct Service Data 12.7.11

StewardR002020

AP

Direct Service Data 7.13.11

StewardR002021

AP

Direct Service Data 7.1.11

StewardR002022

AP

Direct Service Data 6.30.11

StewardR002023

AP

Direct Service Data 6.29.11

StewardR002024-

AP

10

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 47 of 49

2025

DMR 4.20.96 Service Coordination Assessment 9.13.11

StewardR002026-

2032

AP

StewardR002033-

2034

ES

Eligibility Determination

StewardR002035-

Assessment Report 9.1.11

2043

ES

StewardR002044-

Direct Service Data 4.3.12

2045

ES

StewardR002046-

Direct Service Data 2.22.12

2047

ES

StewardR002048-

Direct Service Data 2.14.12

2049

ES

StewardR002050-

Direct Service Data 2.8.12

2053

ES

StewardR002054-

Direct Service Data 2.2.12

2058

ES

StewardR002059-

Direct Service Data 2.1.12

2060

ES

Email from Garth Corbett re voc

services 2.1.12

StewardR002061

ES

Direct Service Data 1.30.12

StewardR002062

ES

Direct Service Data 1.25.12

StewardR002063

ES

Direct Service Data 1.17.12

StewardR002064

ES

StewardR002065-

Direct Service Data 1.11.12

2067

ES

Direct Service Data 1.9.12

StewardR002068

ES

Direct Service Data 12.8.11

StewardR002069

ES

StewardR002070-

Direct Service Data 12.7.11

2071

ES

Direct Service Data 12.8.11

StewardR002072

ES

Direct Service Data 9.16.11

StewardR002073

ES

Direct Service Data 9.13.11

StewardR002074

ES

Direct Service Data 7.25.11

StewardR002075

ES

StewardR002076-

Direct Service Data 6.29.11

2077

ES

Service Coordination

StewardR002978-

Assessment 6.30.11

2079

LA

Direct Service Data 6.30.11

StewardR002080

LA

Direct Service Data 5.14.12

StewardR002081

LA

HHS Enterprise Portal Entry

StewardR002082-

5.11.12

2084

LA

Direct Service Data 5.10.12

StewardR002085

LA

Direct Service Data 5.8.12

StewardR002086

LA

Direct Service Data 4.24.12

StewardR002087-

LA

11

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 48 of 49

2088

StewardR002089-

Direct Service Data 4.19.12

2090

LA

Direct Service Data 4.18.12

StewardR002091

LA

Direct Service Data 4.16.12

StewardR002092

LA

StewardR002093-

Direct Service Data 4.2.12

2096

LA

Direct Service Data 1.30.12

StewardR002097

LA

StewardR002098-

Direct Service Data 1.12.12

2099

LA

StewardR002100-

Direct Service Data 12.21.11

2101

LA

StewardR002102-

Direct Service Data 12.5.11

2103

LA

StewardR002104-

Direct Service Data 12.7.11

2105

LA

Direct Service Data 12.8.11

StewardR002106

LA

Direct Service Data 12.5.11

StewardR002107

LA

Direct Service Data 11.29.11

StewardR002108

LA

Direct Service Data 11.15.11

StewardR002109

LA

Direct Service Data 11.14.11

StewardR002111

LA

Direct Service Data 10.28.11

StewardR002112

LA

StewardR002113-

Direct Service Data 10.13.11

2114

LA

Direct Service Data 9.15.11

StewardR002115

LA

Direct Service Data 9.7.11

StewardR002116

LA

Direct Service Data 9.6.11

StewardR002117

LA

StewardR002118-

Direct Service Data 8.31.11

2120

LA

StewardR002121-

Direct Service Data 8.30.11

2122

LA

Direct Service Data 8.19.11

StewardR002123

LA

StewardR002124-

Direct Service Data 8.18.11

2125

LA

Direct Service Data 8.17.11

StewardR002126

LA

Direct Service Data 7.25.11

StewardR002127

LA

Direct Service Data 7.19.11

StewardR002128

LA

Direct Service Data 7.18.11

StewardR002129

LA

Direct Service Data 7.4.11

StewardR002130

LA

StewardR002131-

Direct Service Data 7.12.11

2134

LA

StewardR002135-

Direct Service Data 6.30.11

2136

LA

StewardR002137-

Direct Service Data 6.29.11

2138

LA

12

Case 5:10-cv-01025-OLG Document 98 Filed 07/09/12 Page 49 of 49

StewardR002139-

Direct Service Data 6.28.11

2140

LA

*“LA”- Linda Arizpe “AP”- Andrea Padron “ES”- Eric Steward

13

 Case 5:10-cv-01025-OLG Document 107 Filed 07/23/12 Page 1 of 3

IN THE UNITED ST ATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION
BV
ERIC STEWARD, by his next friend and mother, Lillian Minor, et. al.

JUL 2 3 ZO1Z

U S

DISTRICT COUR pFTEXAS

DEPtTV CLERK

Plaintiffs

V
RICK PERRY, Governor of the State of Texas, et. al.

CIVIL ACTION NO. SA- 10-CA-i 025-OG

Defendants

ORDER

Pending before the Court is Plaintiffs' Motion to Lift Stay and Schedule Hearing on

Plaintiffs' Motion for Preliminary Injunction (Dkt. # 86). The Court previously ordered that this case

be stayed pending a ruling on various motions that should be resolved, if possible, prior to

considering whether to certify this case as a class action. A hearing will be held on September 12,

2012, and the Court will consider all pending motions at that time. The Court is not inclined to make

a determination on class certification until after ruling on other pending motions. However, the

Court will entertain oral argument on the class certification issues with the understanding that

discovery and supplemental briefing on the class certification issues may be necessary.

In light of the current status of the case, the Court finds that the stay should be lifted so that

Plaintiffs may pursue temporary injunctive relief and the Court may hear arguments and/or evidence

in support of all pending motions and move forward accordingly.

Case 5:10-cv-01025-OLG Document 107 Filed 07/23/12 Page 2 of 3
The parties have indicated that they will need to conduct limited, expedited discovery on the issues raised in the motion for preliminary injunction. The parties must confer on whatever discovery is needed and attempt to complete such discovery prior to the hearing on September 12,
2012. If the parties wish to submit aj oint abbreviated scheduling order pertaining only to discovery
and briefing on the preliminary injunction issues, they may do so. The parties shall notify the Court
two days in advance of the hearing whether they will present live witnesses or they intend to rely on
deposition testimony, medical records, etc. The parties should expect to present oral argument (and, to the extent necessary, supporting
evidence) on the following motions at the time ofthe hearing: (1) Plaintiffs' Motion for Preliminary
Injunction (Dkt. # J; (2) Defendants' Partial Motion to Dismiss Plaintiffs' Amended Complaint
(Dkt. # 67); (3) the United States' Motion to Intervene (Dkt. # 53); and (4) Plaintiffs' Amended Motion to Certify Class (Dkt. # 94).
It is therefore ORDERED that Plaintiffs' Motion to Lift Stay and Schedule Hearing on Plaintiffs' Motion for Preliminary Injunction (Dkt. # 86) is GRANTED, and Plaintiffs' Motion for Preliminary Injunction and supporting memorandum and exhibits, attached as Exhibit 1 to their Motion to Lift Stay, may be filed of record herein. Plaintiffs' Unopposed Motion for Leave to Exceed Page Limitation on Plaintiffs' Memorandum of Law in Support of their Amended Motion for Class Certification (Dkt. # 95) is also GRANTED.
It is further ORDERED that Defendants' Motion to Dismiss claims in the original complaint (Dkt. # 30) is DENIED as moot as Plaintiffs' have amended their complaint and Defendants have amended their motion; Plaintiffs' [original] Motion to Certify Class (Dkt. # 13) is also moot as Plaintiffs' have amended their motion; Plaintiffs' Motion to Schedule a Pretrial Conference and for
2

Case 5:10-cv-01025-OLG Document 107 Filed 07/23/12 Page 3 of 3

Entry of a Scheduling Order (Dkt. # 33) is also DENIED as moot.

SIGNED and ENTERED this

day of July, 2012.

ORLANDO L. GARCIA UNITED STATES DISTRICT JUDGE

 Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 1 of 184

1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

2

SAN ANTONIO DIVISION

3

ERIC STEWARD, et. al.,

)

4

)

Plaintiffs, )

5

)

VERSUS

)

6

)

RICK PERRY, et. al.,

)

7

)

Defendants. )

8 _______________________________)

Case No. SA-10-CV-1025-OG
San Antonio, Texas September 12, 2012

9

Oral Argument Hearing

10

BEFORE THE HONORABLE ORLANDO L. GARCIA

UNITED STATES DISTRICT COURT JUDGE

11

12
TRANSCRIPT ORDERED BY:
13

Nancy K. Juren

14 APPEARANCES:

15 For the Plaintiff Disability Rights of Texas
16
17

HONORABLE GARTH A. CORBETT HONORABLE SEAN JACKSON Advocacy, Inc. 7800 Shoal Creek Blvd., 171-E Austin, Texas 78757-1024

18
For the Plaintiff 19 Center for Public
Representation
20
21
22
23

HONORABLE STEVEN SCHWARTZ HONORABLE DEBBIE DORFMAN 22 Green Street Northampton, Massachusetts 01060
-andHONORABLE CASEY A. BURTON Weil, Gotshal & Manges, LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201

24

25

Captured and transcribed by computer - Xscribe

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 2 of 184

1 APPEARANCES CONT’D:
2
For the Plaintiff 3 United States of America
4 5
6 For the Defendant State of Texas
7 8 9 10 11 12
Court Reporter
13 14 15 16 17 18 19 20 21 22 23 24 25

HONORABLE REGAN RUSH HONORABLE ROBERT A. KOCH U.S. Department of Justice 950 Pennsylvania Avenue NW-PHB Washington, D. C. 20530
HONORABLE NANCY JUREN HONORABLE DARREN GIBSON HONORABLE ERIC VINSON Attorney General of Texas Office 300 W. 15th Street Austin, Texas 78701
-andHONORABLE ANDREW OLDHAM Deputy Solicitor General P. O. Box 12548 Austin, Texas 78711-2548
MAURICE D. WEST Official Court Reporter 655 E. Durango Blvd., Suite 316 San Antonio, Texas 78206
*- *- *- *- *-

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 3 of 184

1

1

(September 12, 2012)

2

THE COURT: I’ll call Steward and others versus

3 Governor Perry and others, Cause No. 10-CV-1025. I'll have

4 some announcements, please.

5

MR. CORBETT: Your Honor, my name is Garth Corbett.

6 I am an attorney with Disability Rights Texas. I am

7 accompanied by my colleague Sean Jackson with Disability

8 Rights Texas; Steven Schwartz from the Center for Public

9 Representation along with Debbie Dorfman from the Center for

10 Public Representation and a representative from the law firm

11 of Weil Gotshal, Casey Burton.

12

THE COURT: Okay. Anyone else present on this side?

13

MS. RUSH: Good morning, Your Honor, Regan Rush on

14 behalf of the United States, and I'm also here with my

15 colleague Robert Koch on behalf of the United States.

16

THE COURT: All right. Any other person representing

17 the plaintiffs?

18

MR. CORBETT: No, Your Honor.

19

THE COURT: Okay. Let me hear from the State of

20 Texas.

21

MS. JUREN: Yes, Your Honor. I'm Nancy Juren from

22 the Attorney General's Office representing the defendants in

23 this lawsuit, and here with me today from the Attorney

24 General's Office is Darren Gibson and Eric Vinson, who will be

25 arguing some of the motions. I also have representatives of

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 4 of 184

2

1 the client here if you would like their names.

2

THE COURT: No, that won't be necessary at this time.

3

MS. JUREN: And also we have from the Office of the

4 Solicitor General, we have Andrew Oldham, who will also be

5 arguing. Thank you.

6

THE COURT: All right, thank you.

7

MR. CORBETT: Thank you, Your Honor. What I'd like

8 to do is to give a brief, ten-minute overview of the case and

9 will start with the motions from there.

10

THE COURT: All right, that would be helpful. Go

11 ahead.

12

MR. CORBETT: Congress enacted the National Home

13 Reform Amendments and its PASRR, that's Preadmission Screening

14 Resident Review provisions of that act as part of the Omnibus

15 Reconciliation Act of 1987 because Congress recognized that

16 the states were under pressure to close and downsize

17 mental-retardation facilities in order to save money, and they

18 were transferring individuals with intellectual and

19 developmental disabilities from these facilities to nursing

20 facilities where they rarely receive the level of services

21 that they need and they were placed in inappropriate

22 residential placements.

23

Now what our case is about is about the core

24 deficiencies in both the Texas PASRR and Community Services

25 Program. And when I refer to PASRR, that's the Preadmission

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 5 of 184

3

1 Screening Resident Review program.

2

More than 20 years after the enactment of PASRR,

3 Texas still, unjustifiably, segregates individuals with

4 intellectual and developmental disabilities in nursing

5 facilities resulting in deficit PASRR -- PASRR and Community

6 Service programs.

7

For many years, in spite of the passage of the

8 Americans with Disabilities Act and the Nursing Home Reform

9 Amendments, which is what PASRR is part of, it's called the

10 NHRA, continues to engage in policies and practices of

11 relegating individuals with intellectual and developmental

12 disabilities to nursing homes, a placement that cannot meet

13 their needs and prevents them from living in their most

14 integrated setting.

15

Now in terms of the overall deficiencies of Texas’

16 PASRR system, the Texas nursing home facility system includes

17 policies and practices that fail to do the following:

18

One, they fail to properly screen individuals being

19 admitted to nursing facilities to determine whether they have

20 an intellectual or developmental disability, and for those

21 that are determined to have an intellectual and developmental

22 disability, the State fails to assess them in order to

23 determine their need for specialized services such as

24 occupational therapy, speech therapy, vocational and

25 habilitative [sic] programming.

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4

1

In addition, Texas fails to provide a range of

2 specialized services in an amount, intensity and frequency to

3 meet federal standards for active treatment, and Texas fails

4 to provide the same range of specialized services to persons

5 in nursing facilities that Texas provides to persons with

6 intellectual and developmental disabilities who happen to live

7 in intermediate-care facilities for persons --

8

THE COURT: Are you saying that Texas, the State does

9 not do any of these things any of the times or they don't do

10 enough of these things?

11

MR. CORBETT: The former, Your Honor. I think the

12 evidence that we have been able to get up to this point, for

13 example, indicates that of the individuals -- we're alleging

14 that 4500 people are in the class. The State acknowledged in

15 an open-letters request to us that only 28 people, less than a

16 half a percent, or less than one percent of one -- one-tenth

17 of one percent actually receive specialized services. And

18 they acknowledge that none of the individuals that fall within

19 the intellectual and developmental disability group have been

20 found appropriate for -- or, rather, that a nursing facility

21 is not considered to be their inappropriate placement. They

22 have not moved from a nursing facility into a less restricted

23 community-based program.

24

So Texas Community Service system for individuals

25 with intellectual and developmental disabilities is

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 7 of 184

5

1 insufficient.

2

Texas administers funds and plans their Community

3 Services program that cause individuals with developmental and

4 intellectual disabilities to be confined to nursing homes.

5 Additionally, the manner in which Texas administers its

6 community programs are the result of policies and procedures

7 and practices that exclude people with intellectual and

8 developmental disabilities from its Community Service system.

9

And, finally, Texas policies and practices establish

10 discriminatory eligibility criteria for community services

11 that result in unnecessary institutionalization of

12 individuals, again with intellectual and developmental

13 disabilities.

14

As a result, these persons remain segregated in

15 nursing facilities and those that are being admitted to

16 nursing facilities who could be better served in the community

17 remain at a very high risk of being institutionalized in a

18 nursing home.

19

Texas also has an inadequate PASRR community service

20 system and this has an adverse impact on the plaintiffs as

21 well as members of the plaintiff class. As a result of Texas

22 failing to identify and -- accurately identify people with

23 intellectual and development disabilities, their needs for

24 specialized services and alternate placement community options

25 cannot be assessed.

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 8 of 184

6

1

Under the law, Texas has an obligation to identify

2 whether a person has an intellectual disability. As the six

3 plaintiffs in our case indicate Texas, for example, failed to

4 identify any of those individuals.

5

In terms of people with intellectual and

6 developmental disabilities in nursing facilities, they’re

7 neither diverted to the appropriate community placement nor do

8 they get the specialized services that they need. As a

9 result, they are unnecessarily institutionalized and very

10 often their condition deteriorates.

11

Now while the defendants following the initiation of

12 this litigation have made some changes to the PASRR system,

13 these changes, while necessary, are still insufficient and

14 they have not resulted in individuals either getting

15 identified or provided specialized services and it has not

16 resulted in individuals leaving nursing facilities and moving

17 to community-based placements. Because individuals with

18 intellectual and developmental disabilities do not have

19 meaningful access to Texas community-based services, they're

20 admitted to nursing facilities, remain unnecessarily

21 institutionalized, isolated and segregated.

22

Now prior to filing this lawsuit we undertook a

23 fairly extensive effort to meet with the State and discuss the

24 issues that we're talking about here today. Prior to filing

25 the case, we went to great effort to resolve these issues in

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 9 of 184

7

1 the hope of averting litigation. Following an extensive

2 investigation of these issues -- and we looked at this issue

3 probably for ten months to close to a year before we contacted

4 defendants initially, and following our extensive

5 investigation, as well as assistance from the Center for

6 Disability -- Center for Public Representation, we sent --

7 Center for Public Representation, along with Disability Rights

8 Texas, sent a letter to Governor Perry; Attorney General Greg

9 Abbott; the then Executive Commissioner of the Health and

10 Human Services Commission Thomas Suehs -- the Executive

11 Director –- who was the executive director as I said for

12 Health and Human Services; as well as Chris Traylor, who is

13 the Commissioner of DADS. And we sent that letter in January

14 of 2010.

15

The letter consisted of 12 pages, five attachments

16 that consisted of a total of about 40 pages, and we set forth

17 our concerns regarding the deficiencies, the State PASRR

18 system and common failure to comply with federal law as it

19 related to the ADA, Section 504 and provisions of the NHRA as

20 well as other provisions of the Medicaid Act.

21

In our letter we requested that the State meet with

22 us to discuss the steps it needed to take to comply with the

23 requirements and obligations under federal law. The

24 plaintiffs, we outlined our specific suggestions and changes

25 that we believe were needed in order for the State to reform

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 10 of 184

8

1 its PASRR program so that --

2

(Court Reporter’s Note: Mechanical malfunction, some

(information lost.

3

4

MS. JUREN: ...cannot effect the removal of any

5 officer that he appoints and certainly does not have direct

6 authority over who the commissioner of DADS is. And these are

7 the officials, Your Honor, who will carry out and do carry out

8 the administration of the Medicaid program.

9

Yes, the Governor has general executive powers, such

10 as compiling a proposed budget or holding budget hearings, and

11 he can, of course, use the line item veto, we said that in our

12 brief, but it is the legislature ultimately who determines

13 what the State's budget is and not the Governor.

14

Furthermore, Your Honor, with regard to the specific

15 claims asserted in this lawsuit, the claims regarding the

16 PASRR process, specialized services and placement into the

17 community from nursing facilities or in lieu of going into a

18 nursing facility, certainly the Governor of the State of Texas

19 has no direct authority over any of that. And so the

20 plaintiffs have not met their redress-ability requirement of

21 standing, do not have standing to sue the Governor with regard

22 to the main thrust of their complaint because the Governor

23 himself cannot effectuate the relief that they're seeking.

24

I don't believe anything that they're seeking is a

25 specific recommendation to the budget for the budget, or a

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 11 of 184

9

1 proposed budget recommendation. I don't see that in their

2 requested relief. I don't see that they have asked that the

3 Governor be compelled to not appoint some executive

4 commissioner of the HHSC that they don't think is doing a good

5 job. I don't think that they have asked to have the Governor

6 not approve the commissioner of DADS.

7

So the relief that they're seeking just does not

8 implicate the powers of the Governor of the State of Texas,

9 Your Honor. And for the same reason, the Governor, then,

10 enjoys Eleventh Amendment immunity from suit because under

11 Okpalobi and other cases cited in the brief, he is not the

12 person with the connection to the case -- or to the issues

13 raised in the case who can get the job done if the Court does,

14 in fact, issue injunctive relief.

15

And I think basically that covers our points.

16

THE COURT: As to the Governor's inclusion in the

17 lawsuit?

18

MS. JUREN: Excuse me?

19

THE COURT: That covers your argument about the

20 Governor's inclusion in the lawsuit?

21

MS. JUREN: Yes.

22

THE COURT: Okay. Let me ask the plaintiff to

23 address the issues raised by defense counsel; that is, the

24 Governor has no direct involvement in any of the affairs or

25 matters in which you're seeking relief.

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 12 of 184

10

1

MR. CORBETT: Well, Your Honor, I think that the very

2 core of the case is that the funding and the direction of the,

3 for instance, the PASRR program, the decision that there is

4 going to be a restriction via policy on services means that,

5 which is the policy of the department, DADS, means that

6 funding is not necessary to request -- is not necessary to

7 support specialized services. That's the conclusion. In

8 other words, if the policy says there will only be four types

9 of specialized services available to people in Texas in

10 nursing homes, then the Governor has no responsibility. And

11 the Governor hasn't exercised any authority -- hasn't taken

12 any action.

13

It is quite untrue, as Ms. Juren says, that our

14 complaint does not seek action from the Governor. We want the

15 Governor to be able to both request funds and not turn around

16 and tell the agency to cut funds that are directly mandated by

17 federal law.

18

THE COURT: What role, if any, does the Governor, as

19 pointed out by the Attorney General's Office, or counsel, does

20 he have in terms of assessing these persons or making

21 decisions where they're to be placed in a community-based

22 facility or environment versus a nursing home environment?

23

MR. CORBETT: He is not involved either, you know,

24 directly or in any significant way in the individualized

25 decisions --

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 13 of 184

11

1

THE COURT: Well, what is he involved in?

2

MR. CORBETT: He is involved in --

3

THE COURT: Other than the budget.

4

MR. CORBETT: No, that -- his involvement in the

5 budget, both on the requesting side and on the vetoing side,

6 is what makes all the difference to a person.

7

THE COURT: Is that the only involvement he has,

8 then?

9

MR. CORBETT: It is the only involvement that --

10

THE COURT: In the whole process?

11

MR. CORBETT: It is the central involvement that he

12 has in the whole process.

13

THE COURT: That is the budget process?

14

MR. CORBETT: That's right, the funding for the

15 services and for the community program.

16

THE COURT: And what harm would be caused upon the

17 plaintiff if the Governor were not to be included in the

18 lawsuit?

19

MR. CORBETT: I could answer that two ways, Your

20 Honor.

21

THE COURT: Well, answer it the way you think it's

22 most effective.

23

MR. CORBETT: That he has the ability to

24 significantly frustrate any action taken by this Court in any

25 aspect of the case to provide a remedy just as he has done in

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 14 of 184

12

1 the last several months in terms of restricting the funding

2 for the agencies. As I said a moment ago, if the United

3 States' intervention is authorized, is approved, then that

4 frustrating ability that the Governor can do to undermine the

5 relief in this case, undermine the actions that are necessary

6 to insure compliance with federal law, that would not be a

7 problem. And so we recognize and we are acknowledging that

8 the Governor's role that we are concerned about is necessary

9 if the United States is not involved, and if the United States

10 is involved with the defendants --

11

THE COURT: Let me ask you, who are the other

12 defendants in this matter?

13

MR. CORBETT: They're the Executive Director of the

14 Health and Human Services Commission, the recently-appointed

15 doctor that Ms. Juren mentioned, and the Director of DADS,

16 temporarily, Mr. Weisman [sic].

17

THE COURT: Okay. Let me ask you if -- and I'm not

18 suggesting that they should be defendants, but if your

19 argument about the Governor is true -- or correct, rather --

20 that he has a role in the budgetary process and that affects

21 the entire process, why is not Speaker Straus or -- again, I'm

22 not suggesting they ought to be defendants, I'm trying to see

23 why the argument does not apply to either Speaker Straus or

24 Lieutenant Governor Dewhurst.

25

MR. CORBETT: Well, with respect to the Speaker or

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 15 of 184

13

1 any other member of the legislature, you know, there are

2 prudential concerns, federalism concerns about litigation

3 against an entirely separate legislative body and the Supreme

4 Court and others have spoken that where there are

5 constitutional claims, which are not present here, that may

6 be -- they may be involved, but where there are not

7 constitutional claims involving legislators and

8 representatives, senior representatives of the legislature are

9 not appropriate.

10

In terms of the other members of either the executive

11 chain of command, I think what we tried to do both for

12 efficiency and for direct responsibility was to say that the

13 Commissioner of DADS has the direct responsibility for

14 operating the PASRR program and for the Community Service

15 system. The Executive Director of Health and Human Services

16 has the direct responsibility for operating the Medicaid

17 program. The Governor of the State of Texas has the direct

18 responsibility for seeking and not vetoing the funding

19 necessary to make relief whole to the plaintiffs.

20

THE COURT: Okay, what about the Eleventh Amendment

21 immunity claim by the State?

22

MR. CORBETT: Well, their claim, I think, with

23 respect to the Governor really goes to the (b)(6) problem

24 because they're saying he isn't doing anything that -- the

25 defendants are saying, "He isn't doing anything that we are

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 16 of 184

14

1 asking him to do and he's not responsible for correcting the

2 wrongs."

3

As to the Eleventh Amendment point, that's really

4 just, I think, an extension of the same argument but trying to

5 put it in constitutional dimensions and, in so doing, the line

6 is: Is there sufficient connection between his actions? If

7 there's a sufficient connection between his actions to include

8 him as a party, meaning we have stated a claim under Rule

9 12(b)(6) against him, then that's another way of saying that

10 he clearly does not have immunity.

11

Governors don't have immunity for the actions of

12 their state agencies or of their state including -- for

13 instance, this Governor and Governor Bush had both enacted

14 executive orders. If there was a failure to comply with the

15 executive order, which is essentially -- you know, we're not

16 making that as a legal claim but, as a practical context,

17 there is. The Governor has said people with disabilities have

18 a right to live in the community. We have 4,000 people in

19 nursing homes who are not living in the community and who are

20 regularly denied access to the community programs that Texas

21 provides. That executive order is not being implemented. He

22 has enough of a connection -- he’s decided he has enough of a

23 connection in enacting such an order, has enough of a concern

24 about the operation of those programs that he would enact an

25 executive order.

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 17 of 184

15

1

So I think the immunity claim really rests entirely

2 on is there some connection, some general connection. The

3 Fifth Circuit has said there doesn't have to be a special

4 relationship, some connection is enough. I think there

5 clearly is that.

6

THE COURT: Do you have the citation to that Fifth

7 Circuit, or is that in your brief?

8

MR. CORBETT: It is in our brief, Your Honor.

9

THE COURT: Okay. All right. Any response to that?

10 Thank you, Counselor.

11

MS. JUREN: Yes, Your Honor. I think, although I

12 can't find that Fifth Circuit case either, I think that Fifth

13 Circuit case found that -- they did discuss whether there just

14 needed to be some connection or a special connection as is

15 discussed in Okpalobi, and they found that in that case that

16 the official satisfied both. So they did not really address

17 specifically that a special connection is not required. They

18 didn't go into detail on that. They found that in that case

19 it satisfied both, both standards.

20

And it's not just any old connection however

21 peripheral. In Okpalobi, you know, they talked about that the

22 Governor and the Attorney General were not the ones to enforce

23 the statute that was relevant there. And here I have again

24 looked through the plaintiffs' amended complaint and nowhere

25 did they complain about the Governor vetoing a line item in

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 18 of 184

16

1 the budget. They have not made a claim like that. Nowhere

2 have they claimed that there is an imminent threat that the

3 Governor is going to veto a line item in the budget that would

4 affect the programs and services that they're talking about in

5 this lawsuit. Again, the Governor can only make

6 recommendations to the legislature, he can't control what the

7 legislature appropriates.

8

Again I just want to emphasize, they have not claimed

9 in this lawsuit that the Governor has been an impediment to

10 the funding for waivers or specialized services. It just

11 doesn't appear there. And nowhere in their request for relief

12 on the last pages of their complaint do they say anything

13 about enjoining the Governor with regard to funding.

14

Also, just one more thing with regard to executive

15 orders. Again, the Governor can issue executive orders, the

16 Governor cannot enforce them. He has no authority to enforce

17 them. He cannot even remove -- he has no authority to remove

18 an official who refuses to follow through on an executive

19 order. And certainly if the Governor were to be dismissed

20 from this case as defendants believe that he should be,

21 certainly the Executive Commissioner of HHSC and the

22 Commissioner of DADS can carry out whatever injunctive relief

23 this Court deems appropriate. And particularly because the

24 relief sought is programmatic in a way, expanding programs

25 that may have implications for budget, it's the Executive

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 19 of 184

17

1 Commissioner and the Director who will be coming up with those

2 proposals not the Governor. Thank you, Your Honor.

3

THE COURT: What about the line item veto on the

4 budget as regards or as affecting this agency? Doesn't he

5 have a role then at that time?

6

MS. JUREN: I suppose theoretically that could be

7 possible. That's remote here, and as I say, there is no,

8 there's no assertion in this lawsuit of any problem like that.

9 If I could, to answer your question, let me consult?

10

THE COURT: Sure, of course.

11

MS. JUREN: Well, I'll just end by saying again

12 there's been no evidence in the past that that's been a

13 problem with this administration line item vetoing Medicaid

14 budget items and, again, nor have the plaintiffs even pled

15 such a thing.

16

THE COURT: Okay. Why don't you stay there,

17 Counselor, and if you'll address your request or claim that

18 the claims asserted under the Medicaid Act be dismissed for

19 lack of standing or failure to state a claim. If you'll get

20 into that motion?

21

MS. JUREN: I think I've covered the standing with

22 regard to the Governor, Your Honor.

23

THE COURT: Right, okay.

24

MS. JUREN: The organizational plaintiffs lack

25 standing, Your Honor. They have brought claims purportedly

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 20 of 184

18

1 on their behalf and on behalf of their members. The

2 organizational plaintiffs being the Arc of Texas and the

3 Coalition of Texans With Disabilities.

4

With regard to standing in their own behalf, Your

5 Honor, they have not pled in their complaint any injury to the

6 organization as a whole, any organizational injury directly

7 related to alleged failures of the State defendants in this

8 lawsuit, nor do the two affidavits that they submitted in

9 response to the motion to dismiss, nor do those affidavits set

10 out any particular harm that these agencies have been

11 suffered, and expenditure of organizational resources alone is

12 not sufficient to satisfy that standard.

13

"The fact that an organization redirects

14

some of its resources to litigation is

15

insufficient to impart standing on the

16

organization."

17 I was just quoting from the ACORN case out of the Fifth

18 Circuit. And they have not even attempted to show how

19 anything related to this lawsuit has caused them to do

20 anything different in their usual advocacy endeavors.

21

With regard to standing on behalf of their members, I

22 believe, you know, their members have problems of their own,

23 the plaintiffs, that would be the same analysis as the

24 plaintiffs, the named plaintiffs in this lawsuit. And I

25 believe that we focused on the standing to assert the

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19

1 1396n(c)(2) allegations. Those are the ones that were for

2 freedom of choice.

3

THE COURT: Right.

4

MS. JUREN: The freedom of choice, and again I'm

5 getting into also the failure to state a claim. I guess it

6 really all kind of dovetails together. That section of the

7 Medicaid Act, 1396n is a section of the Medicaid Act that

8 deals with waivers and what the n(c)(2)(B) talks about is the

9 evaluation of the need for inpatient hospital services at the

10 time that a person is being evaluated for enrollment in a

11 waiver. It's for the purpose of determining whether the

12 individual may be eligible for a particular waiver program

13 because only individuals who were determined to require an

14 institutional level of care specified for the waiver may be

15 enrolled in the waiver.

16

So that section is not -- it applies when someone is

17 being considered for entry into the waiver program. This

18 section, 1396n(c), has two sections that they're claiming

19 under. One is (b), which requires an assessment, and that

20 assessment falls at the time when the person is entering the

21 waiver. It does not fall at the time when the person enters

22 the nursing facility. And they're conflating the requirements

23 of PASRR and things that are required under a different

24 section of the Medicaid Act, you know, for the PASRR review.

25 They're conflating that with the requirements of

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20

1 1396n(c)(2)(B), which is a different kind of assessment.

2

So they have failed to state a claim and they also

3 have no private right of action to enforce that section

4 because they are not someone who -- their claims as persons

5 who are about to enter or have entered a nursing facility and

6 have not been given the proper assessments are not claims

7 related to failure to be assessed for appropriateness for

8 institutionalization in a nursing facility at the time you're

9 going into a waiver. I know this sounds complicated. I'm

10 sorry.

11

The second section that they're claiming under is

12 n(c)(2)(C), which is an informational requirement. (B) is an

13 assessment requirement. (C) is an informational requirement

14 and it provides that -- well, actually, it falls under the

15 section of the Medicaid Act that talks about the requirements

16 for a state plan and it says the Secretary of Health and

17 Human Services cannot grant or approve a state plan unless it

18 provides that:

19

"Individuals who are determined to be

20

likely to require the level of care

21

provided in a nursing facility are

22

informed of the feasible alternatives, if

23

available, under the waiver."

24 And, again, this is at the time that a person is going into a

25 waiver, they're in a nursing facility, they have -- their

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21

1 number has come up on the wait list, interest list for a

2 waiver, they're being assessed to go into the waiver and the

3 Medicaid Act requires that they -- essentially it's to

4 determine whether this is an appropriate person to go into

5 this waiver. Since this is funding, spending clause

6 legislation, most of the requirements in the Medicaid Act are

7 geared toward determining whether the money being given to the

8 states is being spent appropriately, and this is one of them.

9

So, because the plaintiffs are not making allegations

10 that they have been -- you know, their time was up to go into

11 a waiver and they were not assessed for their appropriateness

12 of being in a nursing facility, and because they're not

13 alleging that at the time they were going into a waiver they

14 were not assessed of the feasible alternatives to the nursing

15 facility, they have suffered -- they have not pled that

16 they've suffered any injury because of this and they lack

17 standing. They also have failed to state a claim under the

18 Medicaid Act because they're talking about something different

19 in the assessments that they're concerned with.

20

With regard to -- let's see if I've covered all the

21 standing --

22

THE COURT: Okay, let me hear from the plaintiff as

23 to the State's --

24

MS. JUREN: I have --

25

THE COURT: Yes?

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22

1

MS. JUREN: I have not covered everything with regard

2 to failure to state a claim. I think you said both of those

3 at the same time, but if you want to take it in pieces I'm

4 happy to do that.

5

THE COURT: Go ahead, do that now.

6

MS. JUREN: Oh, okay. All right. With regard to the

7 claims under the NHRA, those are brought under 42 USC Sections

8 1396r(b)(3)(F), 1396r(e)(7)(A), (b)(2) and (c), and none of

9 these state a claim under the Medicaid Act.

10

Starting with 1396(b)(3)(F), that --

11

THE COURT: That's 1396 --

12

MS. JUREN: “r.” Sorry. 1396r(b)(3)(F).

13

THE COURT: Okay.

14

MS. JUREN: That section imposes obligations only on

15 nursing facilities, not the State. So failure to comply with

16 1396r(b)(3)(F) would be a failure of the nursing facility not

17 of the State. The plaintiffs have not said that nursing

18 facilities are not doing what they're supposed to, they've

19 claimed that the State is failing in its obligations. And

20 they really don't argue otherwise.

21

Again, that requirement, 1396r(b)(3)(F), requires a

22 determination of medical necessity and the need for

23 specialized services. It does not require an assessment for

24 alternative placement or a program of active treatment or

25 dictate the scope of specialized services as the plaintiffs

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23

1 are claiming it does. But, at any rate, that section is

2 directed to nursing facilities, not to the State.

3

And with regard to the Section 1396r(e), those

4 provisions that they're claiming under? Those sections also

5 do not require -- contain a requirement for active treatment

6 and do not dictate the scope of specialized services and/or

7 nor do they require an assessment for alternative placement or

8 to advise the applicant of the availability of alternative

9 placement. So the plaintiffs are simply misconstruing those

10 sections of the Medicaid Act.

11

And with regard to, again, the provisions related to

12 active treatment, again, Your Honor, plaintiffs have failed to

13 state a claim under the NHRA to the extent that they are

14 attempting to impose requirements on the State that are not

15 required under the Medicaid Act and, therefore, have failed to

16 state a claim. They have asserted that the entire section of

17 the requirements of -- this is 42 CFR 483.440(a) --

18

THE COURT: Give me that cite again.

19

MS. JUREN: Yes. 483.440(a). (a)(1) is all that's

20 required for the provision of active treatment in a nursing

21 facility and that requirement for a nursing facility active

22 treatment is set out in Section 483.120(a)(2). That's where

23 it says that specialized services for nursing facility

24 residents with developmental disabilities are, quote:

25

"The services specified by the State

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24

1

which, combined with services provided by

2

the NF or other service providers, results

3

in treatment which meets the requirements

4

of 483.440(a)(1)."

5 (a)(1) only, not (a)(1) and the rest of that section of the

6 regulations.

7

So to the extent that plaintiffs are attempting to

8 assert claims beyond that, they've failed to state an

9 actionable claim under that section of the Medicaid Act.

10

With regard to the reasonable promptness claim,

11 that's under 1396a(a)(8). The plaintiffs make two -- have two

12 parts to this claim. They first say that the claim is the

13 defendant limits community-based services and supports, and

14 they say that defendants limit specialized services, and this

15 results in a violation of the Reasonable Promptness Provision

16 of a(a)(8).

17

With regard to the specialized services -- well,

18 excuse me just a minute. Again, with regard to the

19 specialized services, to the extent that they're saying that

20 defendants have failed to provide the specialized services

21 required in excess of what the Medicaid Act really requires

22 for persons in nursing facilities, they’ve failed to state a

23 claim under a(a)(8).

24

THE COURT: Because?

25

MS. JUREN: Because those services are simply not

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25

1 required. So there's no question of failure to provide

2 something with reasonable promptness when you're not required

3 to provide it at all.

4

With regard to the community placement part of the

5 claim, their claim is that:

6

"Defendants limit the provisions of

7

medically-necessary community-based

8

services and supports, resulting in

9

extended delays and the outright denial of

10

medically-necessary care."

11

All right. Again, this goes to what I've talked

12 about earlier. Community care in Texas is provided through

13 Medicaid waivers and the very nature of a Medicaid waiver is

14 the State may limit its scope and size, and the character of

15 it, and who it covers, and what exact services are provided.

16 And there's case law in the motion that talks about even the

17 State is allowed to make harsh distinctions here. These are

18 additional services that the State is authorized to make under

19 the Medicaid Act, they're not required services.

20

The Arc of Texas case from the Ninth Circuit found,

21 for example:

22

"The Reasonable Promptness section of the

23

Medicaid Act is not a tool for forcing a

24

state to expand its waiver program."

25 And essentially, Your Honor, I believe that's what the

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 28 of 184

26

1 plaintiffs are trying to do here. They're trying to force the

2 State to expand its waiver programs by claiming -- making

3 these claims under the Medicaid Act, as well as under the ADA.

4

So Texas is permitted by federal law to place limits

5 on the number of waiver slots that are available and to set

6 additional eligibility requirements. With regard to

7 eligibility requirements which plaintiffs are complaining

8 about, they're saying that Texas doesn't make the eligibility

9 requirements such that people in nursing facilities can go

10 into the one waiver that they prefer, which is the HCS waiver,

11 which also pays for a residential component.

12

The Reasonable Promptness provision of the Medicaid

13 Act only applies to eligible individuals. And in this

14 context, a person is only eligible if they are up for a waiver

15 slot and have been determined to be appropriate for a

16 particular waiver. So where the waivers are full, as they are

17 in Texas, the cap has been met, individuals are not eligible

18 individuals who are entitled to that reasonable promptness

19 criterion.

20

Frankly, plaintiffs' own pleadings admit that they

21 are able to bypass the interest lists for certain waivers: the

22 class waiver, the CBA waiver, the Star Plus waivers, and

23 access services and supports provided under these waivers.

24 And that's in their pleadings. So they have failed to state a

25 claim under a(a)(8) with regard to specialized services to the

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27

1 extent they're seeking to enforce more than the Medicaid Act

2 requires, and with regard to community placement, because

3 they're not eligible individuals and there is no requirement

4 under the Medicaid Act to have a wide open waiver program

5 where anyone can get in. So restricting eligibility criteria

6 under the Medicaid Act is perfectly fine, and failure to do so

7 does not state a Medicaid Act claim.

8

THE COURT: Okay.

9

MS. JUREN: And with regard to their claim under

10 1396a(a)(10)(B), that's known as the comparability

11 requirement. Basically here, Your Honor, what the plaintiffs

12 are saying is that all of the programs and services that are

13 provided in an ICFMR should be provided to individuals with

14 intellectual and developmental disabilities in a nursing

15 facility. That's essentially what their argument boils down

16 to.

17

This just flies in the face of the whole structure of

18 the Medicaid Act, which sets out separate programs and

19 requirements for different placements. The ICFMR has its

20 requirements, nursing facilities have separate requirements.

21 And, actually, their claim results in an absurdity. That

22 every program would have to provide all those services and

23 assistance provided under every other program is essentially

24 what they're arguing, and it's just not the way the Medicaid

25 Act is set out.

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 30 of 184

28

1

I have set out in the briefs the statutes covering

2 nursing facilities and the statutes covering ICF's MR in the

3 motion, and have given the support and the citations to

4 support that in both the statute and the regulations, nursing

5 facilities and ICFMR services are listed as completely

6 separate services. They each have their own requirements.

7

I think, Your Honor, I have covered all of their

8 sections.

9

THE COURT: Okay. Let me hear from the plaintiffs as

10 to the defendants' various motions to dismiss various claims.

11

MR. SCHWARTZ: Thank you, Your Honor. The defendants

12 really make, first, a very high-level argument that I would

13 like to address first if the Court is interested.

14

THE COURT: Go ahead. Take as long as necessary.

15

MR. SCHWARTZ: Okay.

16

THE COURT: I don't want anyone to feel that we're

17 rushing.

18

MS. JUREN: Your Honor, may I make one comment?

19

THE COURT: Of course.

20

MS. JUREN: My co-counsel here has reminded me that

21 we have other arguments for why this case should be dismissed

22 and I was addressing only the failure to state a claim at this

23 time --

24

THE COURT: I'll let you come back.

25

MS. JUREN: -- yes, and not the no private right of

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 31 of 184

29

1 action issue. So just to clarify that. Thank you.

2

THE COURT: Sure. And be assured I'm not going to

3 rush this hearing. This, as every case, is important. Each

4 counselor will have sufficient time and if you need more time,

5 we can take all day. If we need to come back -- I don't mean

6 that facetiously -- if we need to take all day, we'll do that.

7 If we need to come back tomorrow, we will do that. So at the

8 end of the day, if you feel that you have missed something

9 that you need to come back or -- and address or further

10 elaborate or clarify, you will have it. So I don't want you

11 to sit here and say -- I was going to say oops, but let me not

12 say that particular word -- you'll have that opportunity.

13 Okay, come on.

14

MR. SCHWARTZ: The defendants make a high-level

15 argument in their brief that the Medicaid Act doesn't create

16 any rights. Then they make specific arguments with respect to

17 four particular sections of the Medicaid Act.

18

THE COURT: Well, I think part of their claim is that

19 the Medicaid Act has certain requirements and they don't

20 extend to State action or it doesn't mean the State needs to

21 do any further work on it. But go ahead.

22

MR. SCHWARTZ: All right. That's what I was

23 referring to as their high-level claim. And then they take

24 aim at four specific sections of the Medicaid Act: the Nursing

25 Home Reform amendments, the Comparability provision, the

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30

1 Freedom of Choice provision, and the Reasonable Promptness

2 provision. And within each of those specific provisions they

3 are really making, first, an argument that we haven't stated a

4 claim under that provision and, second, even if we did, we

5 don't have a private right of action under Section 1983 to

6 enforce that.

7

So if it is acceptable to the Court, I'll take that

8 in that order --

9

THE COURT: Yes, please do.

10

MR. SCHWARTZ: -- and Ms. Juren may want to come

11 back and say certain things in response.

12

THE COURT: I'm sure they will. Go ahead.

13

MS. JUREN: Yes, since I did not cover that first

14 point.

15

THE COURT: That's fine.

16

MR. SCHWARTZ: So let me start with their first

17 point, the high-level argument. The high-level argument says

18 that -- and this is a central argument, about a quarter of

19 their reply brief is addressed to this -- that the Medicaid

20 Act doesn't create any rights or duties by anybody.

21

THE COURT: By what?

22

MR. SCHWARTZ: By anyone. Not by the State and not

23 any rights by Medicaid beneficiaries or recipients.

24

THE COURT: Okay.

25

MR. SCHWARTZ: This argument is not simply the one

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31

1 that was considered and rejected by the Supreme Court in

2 Wilder v. Virginia where the Supreme Court said that the

3 Medicaid Act can be enforced by private individuals under

4 Section 1983.

5

Nor is it the argument -- nor is it the more focused

6 argument that was made and rejected by the Supreme Court in a

7 case called Rancho Palos Verdes -- all of these cases are

8 discussed in our brief --

9

THE COURT: Right.

10

MR. SCHWARTZ: -- where the states were arguing that

11 there is another enforcement mechanism that surpasses and

12 obviates the need for private right of actions under 1983 by

13 individual beneficiaries.

14

Nor is it the argument that was made by two

15 dissenting justices but rejected by the Supreme Court in

16 Farmer v. Walsh, which is that Medicaid is a contract. It's a

17 contract between the federal government and the state, each

18 have their responsibilities and private individuals, private

19 Medicaid recipients don't have any rights to enforce the

20 contract because they would be third-party beneficiaries.

21

It's neither of those three arguments. Instead it's

22 actually quite broad and quite dramatic. It says that the Act

23 does not establish any rights for anyone, and it doesn't

24 establish any obligations on the part of anyone. So despite

25 the statutory provisions that the Congress has enacted, the

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32

1 one set Ms. Juren was just going through, and a variety of

2 others like due process hearings, and despite the commitments

3 that the State makes in its plan to fulfill those provisions,

4 that neither the obligations nor the plan can be enforced.

5 That's what the argument comes down to.

6

They actually go so far as to say that Texas is not

7 required to do anything under the Medicaid program. It can

8 accept the federal billions of dollars in Medicaid funds and

9 it's not required to do anything.

10

That argument, Your Honor, has never been accepted by

11 any court anywhere. In fact, just learned sort of yesterday

12 that the almost identical argument was made by the Indiana

13 Attorney General in almost identical words as in the reply

14 brief and was rejected by that court. This is the one

15 decision we just saw yesterday that is not in our brief called

16 Planned Parenthood v. the Commissioner of Indiana, Department

17 of Health at 794 F2d, 892 at 901, 902.

18

THE COURT: Okay, that's 794 F2d, 892 at where?

19

MR. SCHWARTZ: 901, 902. There Judge Pratt rejected

20 this same argument that the Medicaid Act creates no rights

21 and, therefore, there is no -- can't be a violation of the Act

22 by anybody.

23

THE COURT: And this was issued yesterday?

24

MR. SCHWARTZ: No, I'm sorry, we just discovered this

25 yesterday, Your Honor.

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 35 of 184

33

1

THE COURT: Oh, I see, okay.

2

MR. SCHWARTZ: It was issued in 2011. But it wasn't

3 cited by the defendants in their brief as an explicit

4 rejection of their argument.

5

THE COURT: Okay.

6

MR. SCHWARTZ: In the more than 40 years that the

7 Medicaid Act has been in place, in the more than half dozen

8 Supreme Court decisions that have interpreted the Medicaid

9 Act, no court, no judge anywhere has ever adopted this rather

10 extreme argument that the Act creates no rights. Not Wilder.

11 And, in fact, Justice Scalia in Rancho Palos Verdes indicated

12 as an example of a statute that does create rights the

13 Medicaid Act. So Justice Scalia in writing the majority in

14 Rancho Palos Verdes, which was a decision around the

15 Telecommunications Act, said:

16

"Although the Telecommunications Act

17

doesn't create rights that are enforceable

18

by private parties, a good example of an

19

act that does is the Medicaid Act."

20

And the argument that the defendants made about

21 Medicaid not creating rights -- if you remember these briefs

22 were exchanged by the parties during 2011 -- 2010, 2011. So a

23 key provision, a key element of their argument was that the

24 Medicaid Act provisions that were reenacted in the Affordable

25 Care Act, that is the Act that the Supreme Court just

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 36 of 184

34

1 declared constitutional, well, the defendants were kind of

2 projecting based on what had happened in Florida and one or

3 two other places that that act might be held unconstitutional.

4 And in 2010 and 2011 that was a distinct possibility.

5

But we now have a decision of the Supreme Court in

6 National Federation of Independent Businesses v. Sebelius at

7 132 Supreme Court 2566, we submitted this with a notice of

8 supplemental authority, Your Honor, that the Affordable Care

9 Act is constitutional. The Affordable Care Act includes

10 numerous provisions of the Medicaid program and the Medicaid

11 Act, and those provisions the Supreme Court upheld. All the

12 Supreme Court did was to say that the Secretary's funding

13 cutoff authority would be limited to certain provisions and

14 she couldn't cut off funds for the entire Medicaid program

15 based on the new provision called the Individual Mandate.

16

So, the Supreme Court in declaring the ACA

17 constitutional essentially rejected the defendants' arguments

18 because it said the Medicaid Act creates enforceable rights,

19 it creates duties, and what the Secretary's authority in

20 cutting off funds may be, restricted in certain ways, that

21 doesn't in any way mitigate either the ability of Medicaid

22 recipients to enforce the Act or the duty of states to comply

23 with the Act.

24

Second, in terms of this very broad-based argument,

25 the defendants are ignoring the line of cases that they

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35

1 subsequently talk about which are called the Private Right of

2 Action cases. The Supreme Court has what's often called by

3 various courts the Private Right of Action Triology: Wilder

4 v. Virginia, Blessing v. Freestone, and Gonzaga v. Doe. Those

5 three cases taken together shape and describe when private

6 citizens can enforce federal statutes under 1983.

7

The key concept of Blessing, the middle decision, was

8 that when courts analyze whether statutes create enforceable

9 rights, it needs to look at discrete provisions because, in

10 the words of the Supreme Court, that allows us to conduct an

11 analysis in manageable bites.

12

Here, the defendants are trying to circumvent that

13 because they're not talking about particular provisions of the

14 Act, they're saying the entire Act. They are ignoring that

15 Supreme Court directive to do things sectionally and are

16 asking to do it sweeping across the entire statute.

17

Lastly, with respect to this broad-based argument,

18 the defendants rely on a concept that, well, because the

19 Medicaid Act, like certain other statutes, are spending clause

20 statutes enacting pursuant to the constitutional provision to

21 give Congress the authority to spend funds, that that really

22 changes the analysis dramatically. It allows for a wholesale

23 declaration that the Act does not create any rights.

24

But the primary Supreme Court decision that speaks

25 about spending clause statutes and speaks that Congress has a

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 38 of 184

36

1 somewhat narrow authority under that clause, that the State's

2 brief rely [sic] on heavily, called Pennhurst v. Halderman,

3 cites the Medicaid Act and particularly its reasonableness and

4 promptness, as a prime example of a provision that creates

5 rights.

6

And so the Supreme Court in Halderman and the Supreme

7 Court in Wilder and then the Supreme Court in Blessing, which

8 was another spending clause statute, and the Supreme Court

9 subsequently in Rancho Palos Verdes and in Anoka, are

10 consistently saying the Medicaid Act requires states to do

11 certain things. The Medicaid Act affords private citizens the

12 right to enforce that Act if, and only if, the particular

13 provision of the Act -- and I'll get into that in a second --

14 the particular provision of the Act meets the

15 Wilder-Blessing-Gonzaga test of describing actions that

16 benefit individuals, that speak unmistakably in individual

17 terms, that impose unambiguous obligations on the states and

18 that are clear.

19

And so as long as -- and that's a strict test.

20 That's a tough hurdle for plaintiffs, individual Medicaid

21 recipients, to overcome. When they overcome that hurdle with

22 respect to discrete provisions of the Act, they can enforce

23 the Act because the Act creates enforceable rights.

24

And so we suggest that this broad-based argument that

25 somehow the Medicaid Act can't create any rights has been

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37

1 rejected by the Supreme Court. The Fifth Circuit has

2 indicated in two separate decisions, S.D. v. Hood, cited in

3 our brief, and Fraser v. Gilbert, that the Medicaid Act,

4 particularly certain sections benefitting children, create

5 rights. Every circuit court in the United States that has

6 addressed provisions of the Medicaid Act has found that it

7 creates rights, although certain sections it might not.

8 Certain sections it does and the sections we're going to talk

9 about in just a second are ones where courts have routinely

10 found they do create rights.

11

Let me turn now to the sectional analysis that the

12 Supreme Court says must occur and address each of the four

13 provisions of the Medicaid Act that the State is seeking to

14 first say we haven't stated a claim and then say even if we

15 did, we can't enforce the claim.

16

The key one that I want to begin with and the key one

17 in our case are the Nursing Home Reform amendments. This is

18 all found in 1396r. So the Medicaid Act was modified and

19 amended in 1987 through what's known now as the NHRA, the

20 Nursing Home Reform Amendments. And there were multiple

21 provisions in the NHRA that changed the Medicaid Act.

22

As Mr. Corbett explained in the just short

23 introduction, the reason Congress changed the Medicaid Act for

24 nursing home residents for people with disabilities was

25 grounded actually in a study done by the Comptroller and the

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38

1 General Accounting Office where it found, as Mr. Corbett said,

2 states had been told by Congress in the early '80s, "If you

3 want to run institutions for people with intellectual and

4 developmental disabilities," which carry the term intermediate

5 care facilities for persons with mental retardation or ICFMR,

6 that's the acronym, ICFMR, Congress said, "If you want to run

7 an ICFMR program and you want us to pay for it, you have to

8 make sure that people get at least minimally-adequate

9 care." And they told the Secretary, "Establish standards for

10 what minimally-adequate care requires." And the Secretary

11 promulgated regulations and the term of art that she used was

12 called active treatment.

13

So it told the states, including Texas, in its state

14 living centers in cases that were actually pending in the

15 United States District Court here in Texas, that Texas had to

16 run, like every state had to run, its ICFMR programs in

17 compliance with these active treatment requirements.

18

A study by the General Accounting Office found that

19 as soon as Congress established these standards, in order to

20 avoid compliance with the standards states sent thousands of

21 individuals from those ICFMR facilities to nursing homes where

22 they didn't have to comply with active treatment. So Congress

23 said, "Essentially this is an end run," and they enacted,

24 Congress enacted the Nursing Home Reform Amendments.

25

When it did so, it required three things. First, it

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39

1 required that the states establish this PASRR program that

2 you've heard about, which would identify any person on the way

3 in and see did that person have a disability, an intellectual

4 or developmental disability. If it did, that is -- that's

5 called the Screening Provision -- then it would conduct an

6 assessment of whether they needed to be in a nursing facility

7 or they could live somewhere else. And if they decided they

8 needed to be in a nursing facility, they'd conduct a second

9 assessment of what services they needed in the nursing

10 facility. And the last step in this process was it mandated,

11 Congress mandated that the state provide the services that the

12 assessment identified. It called them specialized services.

13

So that's the three-part program, the Nursing Home

14 Reform Amendments. It did so in a couple of different

15 sections of the Medicaid Act because the Medicaid Act is

16 complicated and so one section said, "Nursing homes, you

17 can't admit people who haven't been screened." Another

18 section, it said, "States, you must run a program that

19 screens, assesses and serves people." And then it finally

20 said, "This is a complicated matter so we're going to

21 explicitly delegate to the Secretary the authority to write

22 regulations and we want her to write regulations that describe

23 how this whole process works, what the services that have to

24 be provided are, what happens if states don't do it," et

25 cetera.

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1

And so unlike some other provisions, the delegation

2 to the Secretary was actually found in the statute. And the

3 Supreme Court has subsequently held in a number of cases that

4 where Congress explicitly delegates authority to the Secretary

5 to define terms, like specialized services or screening and

6 assessment, et cetera, that those -- that delegation is under

7 the case called Gray Panthers, Schweiker v. Gray Panthers, has

8 legislative effect. So the Secretary's regulations have

9 always been interpreted and given chevron deference because of

10 the complexity of the Medicaid Act and because of the explicit

11 delegation in the Act to the Secretary. So that's the

12 structure of the Act.

13

Every court which has looked at the Act -- this is

14 the Nursing Home Reform Amendments, excuse me -- has found

15 that the combination of the words of the statute that

16 individuals must be screened, that individuals must receive

17 services that the assessment indicates, and the words of --

18 the statutory delegation to the Secretary and the words of her

19 regulations, called the PASRR regulations, that when you take

20 that picture together, that each of these courts have found

21 that the statute and the regulations create rights. The First

22 Circuit in Rolland, the Third Circuit in Grammer, these are

23 cases all cited; every district court that has looked at this

24 question, that is: Can Medicaid recipients -- do Medicaid

25 recipients have rights under this Act? The district courts in

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41

1 Ohio, Missouri, the District of Columbia, and Massachusetts

2 and Maine, and in Connecticut have uniformly, without

3 exception, held that the Nursing Home Reform Amendments does

4 create rights. It creates rights for individuals and

5 individuals can enforce those rights under Section 1983. And

6 it has done so by looking first at the language of the Act,

7 the ones I just mentioned; the sequence, the screening

8 assessment services, and, lastly, the regulations of the

9 Secretary that defines what a nursing home placement is.

10

Now one key aspect of the Secretary's definition was

11 she was asked by Congress to say what are the services people

12 get if they have to stay in the nursing home. So if they are

13 screened and they are assessed and they're determined to need

14 habilitation, some type of treatment for their intellectual

15 and developmental disabilities, what kind of services they

16 have to get.

17

And the Secretary's regulations, which were put out

18 by public comment, and there's comments from -- thousands of

19 pages of comments from nursing homes and advocacy groups and

20 individuals and professional societies, they all focused

21 heavily on that question: What are the services people get if

22 they're in the nursing home? And the Secretary determined,

23 based on Congress' intent, that what Congress was trying to

24 avoid was this -- what the Comptroller General, the General

25 Accounting Office called a wholesale warehousing of people

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42

1 with intellectual disabilities in nursing homes. They wanted

2 to stop this transfer from the ICFMR’s to the nursing

3 facilities because the states thought they could be off the

4 hook.

5

So what the Secretary did, rather common sense, was

6 to say, "If you do transfer a person, if you do admit a person

7 with intellectual disabilities to nursing facilities, you have

8 to give them the same services as you gave them -- as you

9 would have to give them in the ICFMR. You can't avoid it by

10 just flipping the location."

11

THE COURT: That they would have otherwise been

12 required to do.

13

MR. SCHWARTZ: That's correct. And so what the

14 Secretary did was to say the definition of -- because she was

15 asked by -- told, excuse me -- told by Congress to define

16 specialized services. And she said, "Specialized services

17 mean the same thing in nursing homes as they do in the

18 ICFMR’s,” the other institutions, “and the coincidence of

19 which institution a person with intellectual disabilities

20 happens to be located in is not going to determine what level

21 of care they receive.”

22

And so she did that by using two words. First she

23 said, "Specialized services means active treatment," and she

24 said, "Active treatment is the same term I used as the

25 standard of care for the ICFMR’s." And then when asked by --

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43

1 in the commentary to her, in the public comment period, "Well,

2 do you really mean, Secretary, that it's the same kind of

3 active treatment that we have to provide in the ICF’s?" The

4 Secretary's response, found in the Federal Register, all cited

5 in our brief, is, "I mean exactly the same thing because

6 that's what Congress meant and so you have to do exactly the

7 same thing."

8

Now, what she did say later on, I mean what is true

9 is there are many other regulations that apply to ICFMR’s; for

10 instance, environmental regulations: how the sprinkler systems

11 work, what the fire doors look like, a variety of other

12 things. There are some restraint regulations. She said, "I'm

13 not talking about those. I'm not saying that you have to run

14 a nursing home that makes it every single dotted line has to

15 be exactly like an ICF, but I do say that it has to be the

16 same level of care." That's what she said.

17

Now this issue came up to the First Circuit in

18 Rolland v. Romney. You know, one of the cases that -- the

19 only case that's gone to the First Circuit that is almost

20 identical to this one. A class of individuals who are with

21 intellectual and developmental disabilities, sent to nursing

22 homes. The issue was what kinds of -- there was an ADA claim

23 there too, also, but what kinds of services -- what the

24 screening assessment and service program should look like.

25 And the state took the position in Rolland that, "Active

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1 treatment can't be the same thing in nursing homes as it is in

2 the ICF’s. The Secretary didn't mean to equate the two."

3

The First Circuit said, "Yes, they did. They exactly

4 meant that." They said that the PASRR provisions are

5 enforceable by recipients, that the PASRR statute and the

6 terms needed to be defined by the Secretary, the Secretary's

7 regulations helped give meaning to the statute and the

8 concepts and the program, and the Secretary's definition of

9 active treatment means not just one paragraph but it means the

10 various paragraphs that are covered by active treatment.

11

So that's essentially the PASRR program. And as I

12 said, every single court, two circuit courts and, by my last

13 count, approximately ten district courts have issued decisions

14 saying the statute means what it says, the regulations are

15 enforceable, the regulations require the states to do that.

16 The only cases that the defendants cite are by nursing

17 facilities or damage cases against nursing facilities. For

18 instance, the Second Circuit in Concourse says, "This Act does

19 not create any rights for nursing facilities. Nursing

20 facilities can't go and argue with the state Medicaid agency

21 under this Act how we have to be treated. This act is about

22 individuals. It's about people with intellectual and

23 developmental disabilities or people with mental illness, and

24 so while it doesn't create any rights for nursing facilities,

25 it does for recipients or nursing facility residents."

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1

And similarly it said -- similarly these courts say

2 regularly that -- each of those courts that I mentioned,

3 Grammer, Rolland, First and Third Circuit, all the district

4 courts have consistently, and without exception, rejected the

5 arguments the State's making here today that the Nursing Home

6 Reform Amendments aren't enforceable, that the regulations

7 aren't enforceable, that it doesn't create rights, that

8 Section 1983 doesn't apply.

9

So the State's arguments about private right of

10 action, as I've tried to explain, really have never been

11 supported by anyone when the plaintiff is a nursing home

12 resident and where the defendant is the state agency running

13 the PASRR program, if the defendant's the nursing home. It

14 doesn't work if the defendant is the state agency that's

15 responsible under the Act. And so arguments like this is all

16 about regulating nursing homes and things like that have all

17 been rejected.

18

The defendants' only argument they make under Rule

19 26 -- Rule 12(b)(6), stating a claim, with respect to the NHRA

20 is a pretty narrow one. They don't say that we have failed to

21 state a claimed act of treatment, because we have said people

22 are not getting active treatment. They say that we have

23 failed to state a claim that active treatment means what the

24 First Circuit says it means. It means that it covers multiple

25 provisions not just one subsection of (a).

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1

So, Your Honor, just to help explicate this because I

2 know it's complicated, within the ICFMR regulations there are

3 nine big subsections. The subsections begin -- are 483.400

4 and in sequence. Okay? And so there's a 483.410, 420, 430,

5 440, all the way up to 480. Each major subsection addresses a

6 different component of the ICFMR facility. One program, one

7 component deals with the environment: fire code issues. One

8 deals with restraint. One deals with rights. One deals

9 with -- so on and so forth.

10

One main one, 483.40 [sic] deals with active

11 treatment. The heading over the section is "Active

12 Treatment." It then has several itself, 440 has several

13 subsections. It defines active treatment, 440a(1), it says,

14 “In order to get active treatment you must have a team" -- you

15 must have a plan, a service plan, a treatment plan for the

16 person. Another subsection says the treatment plan must be

17 written by qualified professionals. Another subsection says

18 if they're going to send you out of the ICF, they must give

19 you a certain kind of discharge plan. Those are all part of

20 Active Treatment. They're all under the heading 440.

21

What the First Circuit said in Rolland was:

22

"Active Treatment, and the subsections of

23

Active Treatment, apply in nursing homes."

24 The other sections of the ICFMR, the environmental

25 modifications, the resident rights, you know, there's nothing

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1 that indicates the Secretary was intending to make the nursing

2 homes comply with those, but there was to comply with Active

3 Treatment.

4

So the defendants' only argument here under (b)(6)

5 is that the plaintiffs are wrong. The plaintiffs are wrong in

6 claiming that the Secretary and their -- our clients, that the

7 Secretary meant to apply Active Treatment, the various parts

8 of Active Treatment.

9

They don't claim that our assertion that the State is

10 not providing active treatment at least under the one

11 subsection that they concede is relevant, they don't claim we

12 failed to state a claim there. So we're saying -- we replied

13 back, and what we urge the Court to do now is, the legal

14 question that the First Circuit has addressed and resolved --

15 which the Fifth Circuit, by the way, has not ever had an

16 opportunity to address. The Fifth Circuit has said in a case

17 called Grant v. Gilbert that:

18

"We assume the Act creates rights for

19

recipients. We are not addressing exactly

20

what active treatment means here."

21

That question, that legal question actually is a

22 common contention we're going to talk about in the class

23 certification motion. It's a question the Court will

24 undoubtedly, by our briefs, be asked to resolve exactly what

25 the scope is of the Active Treatment mandate that the

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1 Secretary's regulations impose on the State of Texas and every

2 other state.

3

But it doesn't go to whether we stated a claim.

4 Because we've stated -- we have stated a claim that folks in

5 nursing homes are not getting active treatment, regardless of

6 what exactly active treatment means.

7

THE COURT: Right.

8

MR. SCHWARTZ: All right. And we have made clear

9 that that claim is privately enforceable. And, finally, we

10 have argued, and I think identified an unbroken line of cases

11 from district courts and courts of appeals saying both of

12 those things are true and that the defendants have done

13 neither of those.

14

If I may, let me turn to the other Medicaid claims

15 that Ms. Juren spoke to which the State is seeking to dismiss.

16 They really break down, I think, into -- there's three

17 additional other ones. There's comparability, freedom of

18 choice and reasonable promptness.

19

Comparability, which is the one that Ms. Juren cited

20 as 42 1396a(a)(10), essentially says that people who are

21 equally situated, who are eligible under the same Medicaid

22 provision, they're called "categorically needy."

23 Categorically needy means you're poor. Congress has said that

24 if a state has a Medicaid program, it has to offer the same

25 services to the categorically needy in one place that it

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1 offers to the categorically needy in another. And then, as

2 I've just sort of described, there's a special provision

3 because of the Nursing Home Reform Acts that says the

4 Secretary and the Congress have determined that the services

5 that you offer to residents of nursing homes with intellectual

6 disabilities, they need to be the same as the ones you offer

7 to the persons with intellectual disabilities in the other

8 institutions you run called ICFMR’s because both facilities

9 must meet the same level of care, the same professional

10 standard.

11

Active treatment is really a buzz word of sorts for a

12 professional standard of care. It's another way of saying

13 from the -- the disability professionals use that to mean

14 adequate care: active treatment. And so by the sections that

15 I've run through before, it says that -- the Congress has said

16 that comparability means for nursing facility residents the

17 same active treatment, the same specialized services that you

18 give to ICFMR residents.

19

So the Comparability Provision -- so our claim is

20 that not only under the active treatment provisions of the

21 NHRA but under the Comparability Provision of the Medicaid

22 Act, folks in nursing homes who have intellectual disabilities

23 are entitled to the same basic services as the folks in the

24 other institutions.

25

The defendants try to mischaracterize this argument

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1 and saying we’re saying -- and we are not saying -- that

2 people in nursing homes with developmental disabilities are

3 entitled to all the other services that Medicaid gives them in

4 the community or waivers or anything else like that. That's

5 way off. Way off.

6

What we are saying is that because of the coterminous

7 active treatment standard that applies to nursing facilities

8 and ICF’s, because you're not supposed to take federal money

9 for people with intellectual disabilities in nursing homes if

10 you don't give them active treatment, just like you're not

11 supposed to take federal money if you don't provide people in

12 ICFMR’s active treatment, that because of that the State is

13 violating comparability. We say very clearly they are not

14 providing the same services. There's no doubt they are not.

15 They don't deny that they are not. They don't make any

16 allegation that folks in nursing homes get the same

17 habilitative services as folks in ICFMR’s.

18

Rather they say that they're not obligated to do so,

19 and we understand that as a legal argument, but that doesn't

20 mean we haven't stated a claim. It means we have stated a

21 claim to active treatment and will ask this Court, as the

22 district court in the First Circuit was asked in Rolland, you

23 know, exactly what that provision means. But, clearly, we

24 have stated a claim. By the way, the states don't -- the

25 defendants don't make any argument that comparability can't be

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1 enforced by private citizens, except the general provision

2 that I talked about before, the sweeping Medicaid doesn't

3 create any rights argument.

4

So courts have been unmistakably clear, and without

5 exception, finding that comparability, that is Sections

6 a(a)(10), create a private right of action. And so that's

7 essentially the claim. The Fifth Circuit has also said that

8 a(a)(10) creates a private right of action enforceable both in

9 S.D. v. Hood and in Blanchard v. Forrest both of us discussed

10 in our brief.

11

So because there is no contention that comparability

12 requirements of Medicaid are -- cannot be enforced by private

13 citizens because flip side there's an acknowledgment that

14 they can, the only argument made here goes to what the scope

15 of the Active Treatment Provision is and we strongly suggest

16 to the Court that that's not a (b)(6) problem. The statute is

17 enforceable. The statute says active treatment. We are

18 entitled to the same active treatment, and the Court can, at

19 another day, you know, on summary judgment or some other

20 place, you know, after you hear from experts, for instance, or

21 discovery or we can gather certain facts and this record is

22 made, you know, more robust, at that point we can come forward

23 to you and say, "Here's why they're not getting it and here's

24 what it actually means."

25

Next let me turn to the next provision, the Freedom

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1 Of Choice provision.

2

THE COURT: I need a brief recess.

3

MR. SCHWARTZ: Sure.

4

(Recess; resuming on the record.)

5

THE COURT: Let's continue.

6

MR. SCHWARTZ: Your Honor, we've covered both the

7 broad sort of sweeping argument about Medicaid and then two of

8 the four, by far the most important, discrete provisions,

9 Nursing Home Reform Amendments and comparability. Let me turn

10 to the last two, and I'll be brief.

11

The next provision that the defendants focus on and

12 make quite a bit about has to do with Freedom of Choice.

13 Freedom of Choice, which is, as Ms. Juren said at 1396n(c),

14 was Congress's deliberate attempt to make sure that people

15 were going to actually be given a choice. If they were going

16 to enroll in the Medicaid program and if they were going to

17 get services from the state in terms of intellectual and

18 developmental disability services, it wanted to make sure that

19 people were given a choice between going to an institution to

20 get those services and getting them in the community.

21

It wasn't going to tell the state they had to do

22 certain -- how much they had to do, but they said, "If you're

23 going to operate both programs, community and institutions,

24 you have to give people a choice." And it said, "By the way,

25 you have to give them some information so they can make an

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1 intelligent choice."

2

So the question is: When do people get the

3 information? That's what we're fighting about.

4

The defendants don't claim that they're giving

5 residents -- people who are on their way to the nursing

6 facility a choice about community. They're not claiming they

7 give them even information about the choice. They just say

8 they don't have to do that. In fact, they recognize that they

9 are not giving people information about the community waiver

10 program or their other services, whatever else they run,

11 before they go to the nursing home.

12

THE COURT: Well, what, if anything, is the State of

13 Texas doing in your view?

14

MR. SCHWARTZ: I'm sorry, what are they doing?

15

THE COURT: What, if anything, is the State -- you’re

16 saying they don't give them a choice, they don't give them --

17

MR. SCHWARTZ: What they --

18

THE COURT: Assuming that's true, what else do you

19 claim -- or, rather, assuming that's even true, what are they

20 doing?

21

MR. SCHWARTZ: Well, the purpose of this section was

22 that folks would be given -- families would be given some

23 information sort of on their way towards the nursing home

24 before they made the choice to enter the institution: "You

25 can go to the institution, here's what it offers. You can go

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1 to the community and here's what we have available. Sometimes

2 we don't have any slots. Sometimes we do. Sometimes we have

3 a program over here but not over there." That would be the

4 information that a family would need to make an intelligent

5 choice. And they would be given that information before they

6 make a choice, before they elect to go into the institution.

7 Because what good is the information about choice once you've

8 made the choice? It just doesn't make any sense.

9

So the information that would be given, that Texas

10 does not give, is information to prospective nursing facility

11 residents about what community programs are or are not

12 available. And to the extent that they said, "We have a good

13 community program over here but we don't have any vacancies

14 and we don't anticipate any vacancies for a period of time,"

15 then the families would be able to make an intelligent choice.

16 If the period of time they'd have to wait was relatively

17 short, perhaps they'd choose to see if they could keep their

18 loved one out of the institution. If the period of time

19 they'd have to wait was very long, perhaps they'd choose to go

20 to the institution. That's what choice is about and that's

21 the purpose of information.

22

Now the Fifth Circuit in Grant said, "There

23

is an informational right" -- an

24

informational right, a right to

25

information -- "and the information” --

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1

“if you're not given information,

2

that constitutes an adequate injury."

3

So the difference here, the defendants don't

4 challenge the fact that we have a right to information, nor do

5 they claim that they're actually providing the information.

6 Rather, what they're saying is they don't have to give the

7 information about the community programs until people are sort

8 of on the verge of entering the community program; that is,

9 they have applied for it or they've come and asked questions

10 about it. But that's backward -- and they don't have to give

11 it when the people are going to the institution. And we're

12 suggesting to you, Your Honor, that just doesn't make sense,

13 that's just backwards.

14

You know, we're not arguing that they have to give

15 them, you know, a particular slot that isn't -- or change

16 their waiver. What we are arguing right now is that they have

17 to give people information so they can make an intelligent

18 choice. And they have to give them that information at the

19 time that the persons make the choice, which is, you know,

20 right before the front door of that nursing facility.

21

So that information about choice is relevant and

22 necessary prior to institutionalization. Once the person's

23 chosen to go into the institution, and once they're in the

24 nursing facility, the choice about where to go is already

25 moot. Of course, it's a nice thing if they would give them

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1 some information about how they might get out, you know,

2 that's desirable, but that's not what Freedom Of Choice

3 provision -- Medicaid doesn't require that once a person's

4 institutionalized you give them a lot of information about how

5 to get out. It does require that you give them information

6 before they make the choice.

7

So the crux of the claim here, which the parties --

8 the parties don't dispute there is a right to information.

9 The parties don't dispute that people are entitled to an

10 assessment and they have to meet a particular need.

11

What the parties dispute here, I think, is when the

12 choice is -- when the information must be given. The

13 defendants say, as they've already explained to you, doesn't

14 happen until you're ready to walk into the waiver, into a

15 community program, and we're saying at that point it doesn't

16 make any sense. We're saying it should be done prior to the

17 nursing home. We have stated very clearly in our complaint

18 that there are a number of the plaintiffs who were not given

19 any information about community alternatives before they went

20 to the nursing home and that's why we've stated a claim.

21

The defendants don't really make an argument that the

22 Freedom of Choice provision cannot be privately enforced by

23 Medicaid recipients; again, with the exception of the sweeping

24 claim that Medicaid can't be enforced by anybody, even the

25 United States. But as to the Discrete provision, Freedom of

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1 Choice, they don't really claim that and the Ninth Circuit has

2 held in Ball v. Rogers rather recently, post Gonzaga, that

3 because the provision speaks in terms of individuals, because

4 like the Fifth Circuit said in Grant there is a right to

5 information, or a constant and ongoing injury if you're not

6 given information, that because of that, you know, we've

7 stated a claim and the claim is privately enforceable.

8

Last provision of the Act that I want to address is

9 Reasonable Promptness. Promptness is found in 1396a(a)(8).

10

THE COURT: Tell me that again.

11

MR. SCHWARTZ: 1396a(a)(8).

12

THE COURT: Okay.

13

MR. SCHWARTZ: Promptness means that you're

14 entitled -- that when you are entitled to services you get

15 them within a reasonable period of time.

16

THE COURT: Is that defined in the law as to what is

17 a reasonable period of time?

18

MR. SCHWARTZ: It is not. The Secretary has not also

19 defined what promptly means, but the Eleventh Circuit has

20 defined it as no more than 90 days.

21

THE COURT: Okay.

22

MR. SCHWARTZ: But that's a range. So the Court gets

23 a range. And with respect to that claim we say that for all

24 the reasons I've been through before, or just a little while

25 ago before the break, about specialized services that

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1 residents of nursing homes are not getting the specialized

2 services they need. They're not getting them today, they're

3 not getting them in 90 days from today, they're not getting

4 them ever. They're not getting them. They are not getting

5 the active treatment program that they're entitled to.

6

And our plaintiffs, all of whom are individuals with

7 intellectual disabilities, all of them who, by the way, either

8 never got a PASRR, or if they did get a PASRR, it said they

9 didn't have a disability. Remarkable coincidence. Six

10 people, plaintiffs, all of whom have long histories, cerebral

11 palsy, developmental disabilities, intellectual disabilities,

12 mental retardation, all of whom, born or developed, a

13 substantial disability. This is not a close question where

14 you can't quite see based on an IQ test whether a person is

15 properly labeled as intellectual disability or not.

16

These are folks if you met them, Your Honor, you

17 would have no doubt that they have an intellectual and

18 developmental disability. Yet their PASRR said they didn't

19 have a disability. They never -- if they got a PASRR at all,

20 it said they didn't have a disability. So they never got the

21 assessment. They never got the services. And so there's a

22 chain. Obviously you don't get services unless you're

23 assessed you need the services. You don't get the assessment

24 unless you're found to have a disability. So if things are

25 screwed up on the front end, they're going to be screwed up on

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1 the back end. And that's essentially the claim here.

2

So people are not getting specialized services in a

3 timely way because they're not getting them -- a lot of them

4 are not getting them at all.

5

The Inspector General of the United States did a

6 study of the PASRR programs around a number of states. It

7 found that in Texas 82 percent of the people who needed

8 services weren't getting them. That Texas was failing or in

9 noncompliance with the PASRR requirement that they get

10 specialized services 82 percent of the time. So that,

11 essentially, is the promptness claim.

12

There is no argument that the Reasonable Promptness

13 provision of the Medicaid Act cannot be enforced by private

14 citizens. The defendants don't make that argument. They

15 couldn't make that argument. Supreme Court said in Halderman

16 v. Pennhurst that the Reasonable Promptness provision is the

17 quintessential example of a privately-enforceable right. And

18 so the fact -- you know, there is a second argument that I

19 don't think we really need to -- which is whether, whether and

20 to what extent the reasonable promptness claim applies to the

21 community services.

22

For the purposes today of have we stated a claim,

23 whether we state it as to the community or we state it as to

24 specialized services, we stated a claim. And so our claim

25 stays in. It stays in the case because we have described to

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1 the Court and given examples through our named plaintiffs,

2 evidence through various documents and Inspector General

3 reports that people are not getting specialized services in a

4 timely way, or at all for that matter.

5

That concludes the part on Medicaid. Ms. Juren did

6 talk about the standing of the organizational plaintiffs, if

7 you'd like me to address that now or come back to it?

8

THE COURT: You can do it now.

9

MR. SCHWARTZ: Okay. There are two organizational

10 plaintiffs in this case. One is the Arc of Texas, one's the

11 Coalition of Citizens with Disabilities. The Arc of Texas, as

12 the Court may be aware, is the oldest and largest volunteer

13 organization in the entire state. It has, according to the

14 affidavit of its executive director, over 3,000 members. Many

15 of those members are in nursing facilities in Texas.

16

The Arc of Texas has been an organizational plaintiff

17 in a number of other pieces of litigation involving

18 developmental disability services in Texas, including Arc v.

19 Cavannagh, McCarthy v. Hawkins. The courts have found that

20 the Arc of Texas has both organizational standing, because it

21 works hard on these issues, and associational standing.

22

The Coalition for Texans with Disabilities also has

23 thousands of members. Some of them, many of them are

24 individuals in nursing homes. So they -- and, in effect, the

25 defendants don't challenge the associational standing of

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1 either the Arc or the Coalition. And there are some other

2 more minor standing arguments in this question or that.

3

Ms. Juren described in some detail about what do you

4 need to have standing under freedom of choice, or other

5 complicated question, but they don't really challenge the

6 associational standing of the Arc and the Coalition to bring,

7 for instance, the NHRA claims, or the ADA claims. Nor could

8 they. You know, these are two organizations that have lots of

9 members who are in nursing homes who aren't getting

10 specialized services. They have lots of members who are in

11 nursing homes who are unnecessarily segregated, you know,

12 because they are -- you know, and want to leave.

13

Mr. Bright in his affidavit talks about -- you know,

14 and they misconstrue that affidavit because Mr. Bright talks

15 about, "I've been to nursing homes and I know there's hundreds

16 of our members, hundreds of people I have seen or personally

17 have observed who are in nursing homes, they don't want to be

18 there and they should be getting out. They don't -- they're

19 qualified to live in the community. They'd benefit by

20 integration."

21

All right. Mr. Bright was not saying there's only

22 300 people in all of Texas, you know, in nursing homes who are

23 qualified to get out. He's saying, "There's at least that

24 many because I know that many." He's had to submit that

25 affidavit based on personal knowledge. So he had to speak

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1 about the hundreds of people he knows. He doesn't know all

2 4,000 people in Texas nursing homes. He knows a couple of

3 hundred and he spoke about those. And so those organizations

4 have associational standing.

5

We also suggest, as we set forth in our brief,

6 although it's not as critical, that they have organizational

7 standing as well as associational standing and they have

8 organizational standing because their executive directors have

9 averred in their affidavits that they only have a limited

10 amount of resources. They have a few people who work for the

11 organization. They advocate for thousands of people. They

12 advocate at the Governor's Office or they advocate at the

13 Legislature, and if they're focusing on -- and they have been

14 and they say in their affidavits, "We have been focusing on

15 getting people out of nursing homes.” You know, the tragedy

16 of having thousands of people with intellectual disabilities

17 stuck in nursing homes not getting out, not getting access to

18 the community programs, and not getting the services while

19 they're in the specialized services and active treatment, and

20 we've been working on that. We have to -- and we've spent a

21 lot of time and energy in a variety of different forms trying

22 to change what they call the broken PASRR program

23 in Texas.

24

Well, of course, if they're spending a lot of time

25 on that issue, it’s kind of common sense, they're going to

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1 have less resources and opportunities to spend on other

2 issues. So for that reason, the fact that they have targeted

3 a reasonable portion of their resources, including information

4 to members, advocacy work at various, different public forums,

5 to these nursing home issues, they have met the organizational

6 standing.

7

But as I said a moment ago, you know, there's no

8 question, really no substantial challenge to the fact that

9 they meet the associational standing. And, of course, as long

10 as they have associational standing, they have standing,

11 they're in the case, that's the end of the matter.

12

So I think we've demonstrated, especially as

13 supplemented by those affidavits, that both organizations have

14 standing; that the sweeping Medicaid argument that no one has

15 rights is wrong; that the four Medicaid provisions, NHRA,

16 comparability, freedom of choice and promptness, we've stated

17 a claim; that they're privately enforceable and, therefore,

18 the motion to dismiss in those regards should be denied.

19

Thank you for the opportunity to address you, Your

20 Honor.

21

THE COURT: Certainly. Any other plaintiff lawyer

22 wishes to address any of the points? Well, you're not in the

23 lawsuit yet.

24

MS. RUSH: I'm sorry, Your Honor, I didn't quite hear

25 you. Were you asking whether the United States --

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1

THE COURT: I said you're not in the lawsuit yet, but

2 you might be. So go ahead and take a seat. Any response to

3 any of the matters raised or spoken?

4

MS. JUREN: Yes, Your Honor, we do have responses.

5 We're going to respond to the first issue that Mr. Schwartz

6 raised, which is what he characterized as the global issue

7 with regard to whether there's a private right of action to

8 sue to enforce the Medicaid Act. We're going to address that

9 first if that's okay with the Court.

10

THE COURT: Of course.

11

MS. JUREN: And that's going to be Mr. Oldham who

12 will address that issue. And then I will follow up with the

13 other specific matters related to private right of action and

14 failure to state a claim on the four provisions of Medicaid

15 Act.

16

THE COURT: All right. Go ahead, Counselor. Will

17 you state your name again for the record?

18

MR. OLDHAM: Good morning, Your Honor. May it please

19 the Court, my name is Andrew Oldham for the State of Texas

20 defendants.

21

THE COURT: Holden?

22

MR. OLDHAM: Oldham.

23

THE COURT: Oldham?

24

MR. OLDHAM: Yes, sir.

25

THE COURT: Okay, go ahead.

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1

MR. OLDHAM: We've spent a fair amount of time in the

2 weeds this morning and so I'm hoping that I can give the Court

3 an easy way, if we sort of take a step back, an easy way to

4 resolve the Medicaid claims in this particular case. And in

5 that regard I'd like to make two brief points.

6

THE COURT: Okay.

7

MR. OLDHAM: The first is our argument that no

8 provision of the Medicaid Act is enforceable under Section

9 1983. And then the second is a response to some of the

10 misconstructions of that argument that you've seen in the

11 papers from the plaintiffs and from the Department of Justice.

12

First I want to be very clear about what we're

13 arguing. The Medicaid Act does not unambiguously create a

14 private right for anyone. It's a reimbursement statute. It

15 dangles a carrot in front of the states and it promises them

16 federal money if they agree to provide certain services to

17 their citizens. Nowhere does it create a private right to

18 those services. So we've argued at length in our brief that

19 the Fifth Circuit's decision, its 2007 decision in Equal

20 Access for El Paso, compels that result, and the plaintiffs

21 have said nothing to the contrary.

22

In fact, I find it a little remarkable that we've

23 heard so much about all of the cases that say that this

24 argument is misguided given that equal access, the most recent

25 pronouncement on the issue, is discussed at length in the

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1 motion to dismiss, it's discussed at length in the reply

2 brief. The plaintiffs said nothing in their opposition to the

3 motion and they said nothing about it today.

4

Instead, they've relied on other cases. For example,

5 S.D. ex rel, which is a 2004 decision, written by the same

6 judge, Judge Dennis on the Fifth Circuit that wrote Equal

7 Access, and in S.D. and other cases that are discussed in

8 that, including Blessing, the courts have applied a

9 multi-factor balancing test to discern whether and to what

10 extent a particular federal statute enacted pursuant to

11 Congress' spending clause powers creates a right that would be

12 vindicable under Section 1983.

13

In Equal Access, Judge Dennis, speaking for a

14 unanimous Fifth Circuit, said that analysis, that is, the

15 analysis espoused in S.D. ex rel, the analysis espoused in the

16 decisions preceding that, and all of the other cases that the

17 plaintiffs and the Department of Justice have cited for the

18 Blessing balancing test, the three-factor, multi-factor

19 balancing test, do not survive what the Court said in Gonzaga,

20 which is:

21

"Notwithstanding all of the prior things

22

that we have said about how do you

23

determine whether and to what extent

24

something is privately enforceable, we now

25

say, in Gonzaga v. Doe, that nothing short

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1

of an unambiguously conferred right will

2

do."

3

And that is what our argument is today, that there is

4 no unambiguously conferred right in the Medicaid Act to

5 private plaintiffs anything. That the State of Texas provides

6 that subject to the reimbursement requirements in Section

7 1396b and if the State of Texas fails to substantially comply,

8 which is the standard in 1396c, to provide the services set

9 out in the State plan, there is a remedy for that and it is

10 for the United States, through its Secretary of HHS, to cut

11 off the spigot of funding.

12

The second point I'd like to make is to be very clear

13 about what we are not arguing. We are not arguing now, nor

14 have we ever in this case, that spending clause legislation is

15 always and never, that is to say it's never enforceable

16 through Section 1983. Quite to the contrary. There are

17 examples, we've cited some in our briefs, the plaintiffs have

18 cited others, where Congress can make spending clause

19 legislation enforceable through Section 1983 by using language

20 that says something to the effect of no state that accepts

21 funds under this chapter, under this article or under this act

22 may do X or Y.

23

That's what Congress did in, for example, Title VI of

24 the Civil Rights Act which prohibits discrimination on the

25 basis of race for programs that accept federal funds. That's

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1 what Congress did, for example, in Title IX of the education

2 amendments of 1972 where Congress said no state that accepts

3 funds under this chapter will discriminate on the basis of

4 gender. And that's what Congress did in, for example, ARLUPA,

5 which says that any state -- or any government, it's actually

6 broader than just states -- any government that accepts

7 federal funds shall not impose a substantial burden on the

8 exercise of religion.

9

So Congress can in fact write statute that way. Our

10 only point is that the Medicaid Act doesn't. Congress simply

11 said, "If a state does X or Y, then we shall reimburse a

12 certain portion of the state's cost pursuant to an

13 extraordinarily complicated formula," which the Court has

14 heard nothing about this morning but it's set forth in some of

15 the briefs. The conditional congressional promise to

16 reimburse some of the state's funds is far, far, far, far

17 from the clear, unmistakable and unambiguous language demanded

18 by Gonzaga and demanded by Equal Access. And that alone

19 demands dismissal of the Medicaid Act claims.

20

The second clarification I want to make is that our

21 argument has nothing at all to do with Sea Clammers. Again,

22 this is an issue we haven't talked about today but is

23 discussed at length in the brief, and I want to explain what

24 we mean when we say it's not Sea Clammers.

25

As the Court will recall, a state has two bases for

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1 avoiding a Section 1983 suit brought to vindicate spending

2 clause legislation. One is the one I just discussed, which is

3 to say there's no unambiguously conferred right under Gonzaga.

4 And then the second is to say even if there is an

5 unambiguously conferred right, there is nonetheless a

6 comprehensive remedial scheme that would somehow foreclose the

7 use of the Section 1983 remedy, and that's what happens in Sea

8 Clammers. It's also what happens in the Rancho Palos Verdes

9 case, which you heard from plaintiffs' counsel earlier this

10 morning. That's not what we're saying at all.

11

Oh, I should hasten that. Gonzaga Footnotes 4 and 8,

12 I direct the Court's attention to those where it makes this

13 distinction. It explains that in Gonzaga type cases, like the

14 one we're making here, we're just talking about the

15 unambiguously conferred right or the lack thereof, and in Sea

16 Clammers cases we're talking about a comprehensive remedial

17 scheme. Again, not our argument here. All we're saying is

18 that there's not an unambiguously conferred language -- I'm

19 sorry, not an unambiguously conferred right.

20

I'd like to make two brief rebuttal points to what we

21 heard from plaintiffs' counsel. One is the remarkable

22 suggestion that NFIB v. Sebelius, the Supreme Court's

23 pronouncement on the Healthcare Act somehow supports the

24 plaintiffs' position in this case and not only is that not

25 true, it's emphatically the opposite.

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1

As the Court may recall from that decision, the

2 Supreme Court talks at length about the Medicaid Act and the

3 Medicaid expansion provisions which were at issue in that

4 case. And the Court makes very, very clear that Medicaid

5 requires one and only one thing and that is that states must

6 have, as an incident of their co-equal sovereignty, a bona

7 fides choice to participate in the program. The federal

8 government is not allowed under any set of circumstances, and

9 this is the Court's language:

10

"... to hold a metaphorical gun to

11

the head of the states."

12 That is why the Court struck down the Medicaid expansion in

13 NFIB v. Sebelius. The Court said were we not to do so, we

14 would run afoul of many, many, many different spending clause

15 decisions that we've discussed; most appropriately, Prince v.

16 United States and New York v. United States.

17

So Prince involves the handgun registration

18 provisions of the federal spending clause statute. New York

19 v. United States required states to take titles to certain

20 portions of nuclear waste, another statute enacted pursuant to

21 the spending clause. And in both of those cases the Supreme

22 Court found that the federal government had unconstitutionally

23 commandeered the state governments for federal purposes.

24

So they're not allowed to use spending clause power

25 to commandeer the effect of the states. And what the

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1 plaintiffs in this case are effectively doing is to say,

2 "Well, sure, maybe the federal government can't use spending

3 clause legislation to hold a metaphorical gun to your head but

4 we can use Section 1983 and bring a suit that would compel

5 you, State of Texas, to adhere to Section -- our

6 interpretation of what Section 1396a of the Medicaid Act

7 requires." And that's not at all -- it's certainly not what

8 the Court said in NFIB v. Sebelius, and I would submit to the

9 Court that it's not at all an accurate description of the

10 Medicaid Act.

11

The second point I'd like to address, we heard at

12 length about the various provisions of the Secretary's

13 regulations, that there's a Chevron deference and how those

14 give rise to all sorts of rights that are vindicable under

15 Section 1983. And, again, that is squarely foreclosed by

16 Supreme Court precedent. In a case called Alexander v.

17 Sandoval, discussed in both parties' briefs at length, the

18 Supreme Court made very, very clear that when it comes to

19 finding a right that a private plaintiff wants to bring into

20 court and vindicate under Section 1983 there is one and only

21 one touchstone, and that is statutes enacted through

22 bicameralism and presentiment by the United States Congress

23 presented to the President for his signature and signed into

24 law.

25

You cannot under any set of circumstances look at

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1 something that is not in the statute but is some extra gloss

2 promulgated through a federal regulation, even if it's done

3 through notice and comment, even if it's published in the

4 Federal Register, even if it's upheld under Chevron or

5 whatever else, as the source of that private right.

6

So to put some meat on the bones, in Alexander v.

7 Sandoval, the Court was talking about a racial discrimination

8 provision. So Title VI, as I mentioned earlier, says any

9 state that accepts money under this title shall not

10 discriminate on the basis of race in the programs receiving

11 those funds. That, the Court has said, is enforceable through

12 Section 1983 because it is phrased in those terms; that is, if

13 you take this money, you shall not do this other thing, that

14 is discriminating on the basis of race.

15

What happens in Alexander v. Sandoval is the

16 administrative agency says, "Fair enough. We'd like to add an

17 additional gloss on that which is you shall not do -- take

18 steps that cause disparate impacts on the basis of race." And

19 then a private plaintiff tried to vindicate that regulatory

20 right through a Section 1983 suit and the Supreme Court said,

21 "No, that is not how it works."

22

So when the Court sits down to write its opinion and

23 to analyze these issues, I would just hasten to point out that

24 to the extent that the Court finds a right, it has to be in

25 the statute. And if the Court goes through and looks at each

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1 one of the statutory provisions under which the plaintiffs

2 have claimed in this case, they simply say, "If a state wants

3 money from the federal government pursuant to the Medicaid

4 Act, it must do this following thing."

5

It would be no different from me saying to the

6 Court -- or me saying to my friend, "Friend, if you want $10

7 from me, you must do ten pushups." My friend could do ten

8 pushups and I would give him $10. My friend could do no

9 pushups and I would give him no dollars. My friend could do

10 ten pushups today, no pushups tomorrow and I would give him

11 $10 today and none tomorrow, or he could do ten today and five

12 tomorrow, I'd give him $10 today and none tomorrow. But under

13 no set of circumstances could you ever say that my friend --

14 or, I'm sorry -- that I or anybody else would have a right

15 against my friend if he failed to do pushups, if he failed to

16 do ten pushups, or if he altogether just refused to do any.

17

And that is what the Medicaid Act does and we've

18 argued it at length in our brief and we've not heard a

19 response from the plaintiffs or from the United States. Thank

20 you.

21

THE COURT: Any response about the Equal Access case?

22

MR. SCHWARTZ: The Equal Access case addressed a

23 particular point in the Medicaid Act. It was actually an

24 important point. It's whether the Act, quite similar to what

25 you just heard, whether the Act is just an insurance program

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1 that pays bills or whether the Act creates rights to services.

2 And there were several Courts of Appeals that came down on the

3 insurance side and said, "The Act doesn't" -- looking at the

4 Reasonable Promptness provision, it says that -- it said, and

5 Equal Access was one of the Courts that said that the Act

6 doesn't create enforceable rights in that way.

7

Congress then turned around and amended the Medicaid

8 Act. It amended the Medicaid Act and explicitly defined -- by

9 the way, the Equal Access decision rests on a analysis of the

10 opening provision of the Medicaid Act, 1396a, the definition

11 of medical assistance. So the Act begins with “Medical

12 assistance means,” and Equal Access and one or two other

13 Courts said when you look at that definition it says that the

14 state must pay for, doesn't have to provide the service.

15 That's the narrow -- the focused holding of Equal Access, that

16 the definition of medical assistance requires a state to pay

17 for but not provide medical services.

18

Congress turned around after Equal Access and one or

19 two other courts and said, "That is fundamentally not what we

20 were talking about. That decision, Equal Access, that

21 interpretation of medical assistance is contrary to what we

22 tried to do in 1966 when we created the program, it's contrary

23 to what we did when we have modified the program over many

24 years." And, rather -- and it redefined, Congress redefined

25 medical assistance to mean the payment for services or the

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1 services themselves.

2

So the Medicaid Act has been modified after Equal

3 Access. Equal Access, as a result, which is essentially an

4 interpretation of the words medical assistance in 2007, is no

5 longer controlling and everyone agrees that -- I mean the

6 Congress agrees and the Supreme Court agrees because the

7 Supreme Court said, in National Federation -- one of the

8 issues that came up in National Federation was is the

9 clarification, we could call it, or the amendment of the

10 medical assistance definition binding on the states. The

11 Supreme Court said it was. It is. The Medicaid expansion,

12 you know, despite the characterization that you just heard,

13 the Supreme Court said in Federation that the Medicaid

14 expansion is permissible.

15

What's not permissible is for the Secretary to cut

16 off funds for the states who are not willing to expand their

17 program to more people. Medicaid expansion was essentially

18 every state should cover more people. And as the Congress

19 originally wrote the bill, it said, "If you don't cover the

20 more people, we're not going to give you money to cover the

21 old people. We're going to cut off all your money." And

22 under the decisions that you just heard defendants talk about,

23 the Supreme Court, speaking through Justice Roberts, said,

24 "You can't do that. You can't cut off money from the old

25 program," you know, the original Medicaid program, "because a

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1 state chooses not to expand the number of people it serves.

2 You can cut off money for the old program if they don't do

3 what the old program says, you can cut off money for the new

4 program if they don't do what the new program is, but you

5 can't lock them together." That's what would be coercive.

6

So the Supreme Court in no way struck down -- in

7 fact, it said -- it says, you know, the other provisions of

8 the Medicaid Act are -- remain intact. One of the provisions

9 of the Medicaid Act that remain intact is Congress's change,

10 amendment to the term “medical assistance.”

11

So we didn't address Equal Access because of two

12 things. One is that the law had changed by that time, but as

13 the defendants said in their brief and as we said back on the

14 time we filed these briefs, the Supreme Court hadn't spoken.

15 So we were going to -- you know, no one -- it didn't serve

16 this Court, any good for people to speculate about what the

17 district court in Florida was saying, or the Eleventh Circuit

18 or the Fourth Circuit because everyone knew this case was

19 going to the Supreme Court. And we knew, we all knew, and I

20 think the defendants ultimately conceded that the final

21 arbiter or what the “medical assistance” means and what the

22 Medicaid Act means would be the Supreme Court in National

23 Federation.

24

The one last thing I just want to mention is there

25 was a strong point, or a point about the regulations that we

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1 spoke at length about, the defendants’ claim are not

2 enforceable. We don't dispute, by the way, the controlling

3 decision that was just cited. Alexander v. Sandoval, speaks

4 to when agencies are able to create -- are able to enact

5 regulations and when those regulations are enforceable.

6

Alexander was decided in 2001, I think, or just on

7 the edge of 2002. The First Circuit's decision in Rolland

8 discussed the regulations post Sandoval. It said:

9

"Applying the Sandoval test that the

10

Supreme Court has articulated, we hold

11

that the PASRR regulations are

12

enforceable."

13 They meet that test.

14

"And we hold that for two reasons. One is

15

because the Congress has instructed the

16

Secretary to enact regulations and the

17

Supreme Court and this Court," that is the

18

First Circuit, "have always given the

19

Secretary's regulations some deference in

20

the Medicaid context; and, second, because

21

the literal words of Sandoval” -- “the

22

literal instructions in Sandoval are met."

23

The Third Circuit agreed. The District Court in

24 Massachusetts agreed. The District Court in Missouri agreed,

25 in Connecticut, in Maine, in the District of Columbia, in New

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1 York, and in Ohio. Every single District Court that has

2 considered the question or the enforceability of the

3 regulations post Sandoval have said they're enforceable, and

4 the defendants don't point to one case, not one case in which

5 a District or Appellate Court have held that those PASRR

6 regulations are not enforceable. In fact, the only thing, the

7 only citation they give you is a dissenting judge in the Third

8 Circuit who said that he doesn't think they are enforceable.

9 But (a) he wasn't in the majority; (b) the defendants in this

10 case are constantly saying, "Decisions of other courts, of

11 other circuits like the First Circuit in Rolland, or the Third

12 Circuit in Grammer are not controlling." They are. They're

13 right, they're not controlling, they're influential, they're

14 precedential, and they give this Court guidance.

15

And so I think there's no disagreement between us

16 that Sandoval sets the test. There's no disagreement between

17 us that every court post Sandoval that has applied the test

18 has found the regulations enforceable. And there's no

19 disagreement between us that no court post Sandoval has ever

20 found the regulations unenforceable. Thank you.

21

THE COURT: Yes. Go ahead.

22

MR. OLDHAM: I'm sorry, Your Honor, just one brief

23 response on the Equal Access case. I can't speak to whatever

24 statutory amendments may or may not have been made after 2007

25 because they weren't cited in the plaintiffs' brief. There's

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1 no mention -- if you look in the table of authorities of the

2 plaintiffs' opposition, there's no reference to Equal Access.

3 So they never explain exactly in their brief why Congress

4 would have overturned it.

5

But I would point the Court's attention to Page 704

6 of the Equal Access decision, and this is what we think is the

7 relevant part. And if I might, I'll just quote it briefly.

8

THE COURT: Go ahead.

9

MR. OLDHAM: "We may no longer, as we did in

10

Evergreen" -- as an aside, Evergreen is the prior

11 decision underlying S.D. ex rel, the ones that you've heard

12 before. So this is where they're abrogating their prior

13 motive analysis.

14

"We may no longer, as we did in Evergreen,

15

resolve the ambiguities in Blessing,

16

Wilder and the Equal Access Provision in

17

favor of finding a congressional intent to

18

authorize Medicaid recipients to bring

19

Equal Access Provision suits under Section

20

1983. We are forced by Gonzaga" -- that's

21 Gonzaga v. Doe -- "to abjure the notion that anything

22

short of an unambiguously conferred

23

private individual right rather than the

24

broader or vaguer benefits or interests" -- those

25 are quotes from Wilder and from Blessing -- "may be

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1

enforced under Section 1983."

2 And that is the portion that is controlling on this, on what

3 co-counsel has described as our, quote, "broad argument." But

4 our argument that Section 1983 does not create the unambiguous

5 private right -- I'm sorry, that the Medicaid Act does not

6 create the unambiguous private right vindicable under Section

7 1983. Thank you, Your Honor.

8

THE COURT: Okay.

9

MR. SCHWARTZ: Your Honor, may I make one more point?

10

THE COURT: Yes.

11

MR. SCHWARTZ: I apologize for not addressing this

12 when you asked me about Equal Access.

13

As you just heard in the quote -- that's triggered my

14 recollection -- the Fifth Circuit has previously defined --

15 had decided that a particular provision of the Medicaid Act

16 called the Equal Access Provision -- that's 1396a(a)(30). It

17 had decided that that particular provision, 1396a(a)(30), was

18 privately enforceable.

19

Then Gonzaga came down. The Fifth Circuit revisited

20 that earlier determination in Evergreen and said, just as the

21 quoted provision mentioned that:

22

"We are now forced in applying Gonzaga" --

23

"when we apply Gonzaga to change our mind."

24 That particular provision, a(a)(30), which is called Rates, it

25 affects the Rates Provision, are providers entitled to a fair

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1 amount of money to provide the services? That provision is no

2 longer enforceable. We agree. We don't dispute that.

3

In addition to Equal Access, several other Circuit

4 Courts of opinion on that particular provision have agreed

5 that the Equal Access -- the Supreme Court just decided

6 another decision under Medicaid called Independent Living

7 Centers in which that question was raised: If it is not

8 enforceable under 1983, might it be enforceable under the

9 supremacy clause? All right.

10

The Equal Access Provision of Medicaid, are providers

11 entitled to fair rates, is not an issue in this case. We

12 don't disagree on that proposition. Using the quoted

13 language, Gonzaga, is -- the issue for this Court is whether

14 the Comparability Provision, the Reasonable Promptness

15 Provision, the Nursing Home Reform Amendments and the Freedom

16 Of Choice Provisions are enforceable. And every court that

17 has looked at those provisions, barring none, have found post

18 Gonzaga that they are. Thank you.

19

THE COURT: Go ahead, Counselor, address the motion

20 to dismiss, any other argument you wish to add.

21

MS. JUREN: Yes, Your Honor. I want to go back to --

22 I'll touch briefly with regard to each section on whether the

23 defendants have asserted no private right of action even under

24 the Blessing, Gonzaga type analysis, or pre-Gonzaga analysis.

25 I think that Counsel has misstated the defendants' position on

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1 some of those things.

2

I want to start first, though, with discussing this

3 issue of specialized services because Counsel I believe has

4 not only misrepresented the actual wording of the regulation,

5 whether or not it's enforceable, the wording of the

6 regulation, but also the holding of the case that he keeps

7 citing to, Rolland v. Romney, the First Circuit case at 2003.

8

In that case, and I'm looking at Page 57 of that

9 case, that's at 318 F3d 42, and I'm at Page 57. The Court is

10 discussing there the requirement under 42 CFR, Section

11 483.120(a)(1), which sets out the standard for specialized

12 services for both the mental illness and what they call mental

13 retardation in this regulation. And it quotes there, it says

14 just what I told the Court before:

15

"For individuals with mental retardation,

16

the Secretary crafted a definition of

17

specialized services that incorporated the

18

active treatment standard traditionally

19

applied to ICFMR’s. The Secretary defines

20

specialized services for these individuals

21

as, quote” -- and they're quoting right

22

from the reg here -- "’The services

23

specialized by the state, which combined

24

with services provided by the NF or other

25

service providers, results in treatment

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1

which meets the active treatment

2

requirements of Section 483.440(a)(1).’"

3 And Section 483.440(a)(1) is just part of Section 483.440

4 which the plaintiffs have said that the defendants have failed

5 to satisfy those requirements, which they're including as part

6 of the requirements for active treatment in a nursing facility

7 because they are set out as requirements for active treatment

8 in an ICFMR.

9

483.440(a)(1) simply says:

10

"Each client must receive a continuous

11

active treatment program which includes

12

aggressive, consistent implementation of a

13

program of specialized and generic

14

training treatment, health services and

15

related services described in this subpart

16

that is directed toward the acquisition of

17

the behaviors necessary for the client to

18

function with as much self-determination

19

and independence as possible, and the

20

prevention of deceleration or regression

21

or loss of current optimal functional

22

status."

23 And so it's clear just from the face of the regs themselves

24 that the applicable standard for specialized services for

25 nursing facilities, which is defined in 483.120(a)(2), cites

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1 only to one section of 483.440, not to a bunch of sections.

2 And it also is clear that specialized services need not -- can

3 be looked at in terms of other things that are provided by the

4 nursing facility, not the list of requirements for an ICFMR.

5

And in the Rolland case, in the footnote, in

6 Footnote -- no, I'm sorry, still on Page 57. The Circuit

7 Court there held just about the opposite of what Mr. Schwartz

8 represented to be the holding of the Court and it says:

9

"Thus the regulations require states to

10

provide specialized services in such a

11

manner as to constitute active treatment

12

to mentally-retarded individuals when

13

combined with the services provided by

14

others" -- and that's essentially what the reg

15 itself says. And then it says:

16

"However, they do not impose on states,

17

when serving mentally-retarded nursing

18

home residents, the considerable onus of

19

complying with every obligation placed on

20

them in their broader role in ICFMR’s."

21 And that is exactly what the defendants have been saying, Your

22 Honor.

23

With regard to the Nursing Home Reform Act

24 Amendments, I think plaintiffs have misrepresented that the

25 defendants are not challenging the right to privately enforce

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1 those provisions of the Medicaid Act. They are challenging

2 that, and that's set out both in the motion and in the reply.

3

In addition to the broader argument made by Mr.

4 Oldham under the more traditional analysis, the Section

5 1396r(e), as I said before, that's one of those sections that

6 they're challenging and that provision is focused on the

7 regulated agencies here not, not on Medicaid recipients. And

8 that particular one, r(e), sets out a requirement for the

9 state to develop a state plan. And the defendants would urge

10 the Court to adopt the position here of the dissent in the

11 Grammer case that plaintiffs have cited which takes the

12 position that in 1396r(e), the mandatory language is directed

13 at what the entity must do to receive federal funds and not

14 directed to the residents themselves or any right that they

15 might have.

16

And our position with regard to 1396r(e) is that:

17

"The references to the nursing home

18

residents are" -- and I'm quoting from

19

Gonzaga -- "in the context of describing

20

the type of policy or practice that

21

triggers a funding prohibition and not to

22

impose particular requirements for the

23

residents that would trigger a private

24

right to enforce."

25

I believe that the plaintiffs have conceded that

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1 1396r(b), which applies to -- which is directed to nursing

2 facilities, NRF, which sets out the responsibilities of the

3 Secretary of Health and Human Services relating to nursing

4 facility requirements, I believe that they have conceded that

5 those two sections do not create enforceable rights to the

6 individual plaintiffs.

7

MR. SCHWARTZ: Would you like me to address that now,

8 Your Honor?

9

THE COURT: Yes.

10

MR. SCHWARTZ: We have not conceded that they do not

11 apply. We have not conceded that they don't create rights.

12 We have said that the statute creates the rights within

13 Section (c) and then in a separate section delegates to the

14 Secretary the regulations. The delegation section is not

15 privately enforceable. We are not trying to enforce. What we

16 are saying is because when you look at the statute, you see

17 that Congress chose to put the rights in one section, the

18 prohibitions on nursing homes in another section, and the

19 Secretary's delegation in another section, that the proper way

20 to analyze this is all together. But that the actual creation

21 of the rights is in the middle one, (c).

22

THE COURT: Okay. Go ahead.

23

MS. JUREN: I'm just going by the sections under

24 which they've asserted claims.

25

THE COURT: Right.

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1

MS. JUREN: And I'm trying to summarize what those

2 sections -- what entity those sections addressed.

3

THE COURT: Right.

4

MS. JUREN: And, again, with regard to the NHRA

5 claim, I believe I've addressed the active treatment

6 requirement and that's what they seem to be focusing on almost

7 entirely as the defendants' position. I think it’s clear

8 language that the full range of so-called active treatment in

9 an ICFMR is not required in a nursing facility. To the extent

10 that plaintiffs have claimed otherwise, or asserted otherwise

11 and seek -- have asserted a claim otherwise, they have failed

12 to state to claim under 1983.

13

THE COURT: Okay.

14

MS. JUREN: With regard to -- oh, okay. Well, with

15 regard to the so-called Freedom Of Choice sections, which is

16 1396n(c)(2)(B) and (C), again, Counsel has totally glossed

17 over where that section shows up in the Medicaid Act, which is

18 under the Waiver provisions of the Medicaid Act and what it

19 actually requires. And what the Secretary has said about when

20 those -- it's the assurances, it's the -- excuse me -- it's

21 the requirement for an assessment of eligibility for a waiver

22 and the information, provision of information relative to

23 alternatives to the waiver.

24

I have cited in the briefs that the Secretary has

25 actually -- confirms that when this provision is triggered is

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1 at the time that somebody is going into the waiver. It is

2 not, as they try to blend it in, when the person comes into

3 the nursing facility to begin with.

4

There are different provisions of the Medicaid Act

5 that relate to different requirements. There's the PASRR

6 requirements that do relate to when someone is about to come

7 to a nursing facility, the two levels of assessment that are

8 required at that time, and as part of the Level 2 assessment,

9 there is the looking at the appropriateness for community

10 placement. That is part of the Level 2 PASRR assessment. But

11 that, 1396n(c) is not that requirement. 1396n(c) is a

12 different requirement and it's not applicable to the -- in the

13 way that the plaintiffs are making it out to be. And I think

14 that's been set out already.

15

With regard to 1396a(a)(8), the reasonable promptness

16 claim, and 1396a(10)(B), the comparability claim, defendants

17 have made an argument that these are not -- these sections are

18 not privately enforceable by the Medicaid recipients even in

19 addition to the broader argument.

20

With regard to the comparability requirement, Counsel

21 cited to S.D., I believe S.D. -- related to a different

22 section not a(10)(B), maybe a(10)(A). But, at any rate, we're

23 asserting that S.D. should be revisited or overturned in light

24 of Gonzaga.

25

And certainly with regard to stating a claim, where,

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1 as here, the waivers are full, there is no requirement for

2 reasonable promptness. And certainly Judge Sparks in the

3 McCarthy case agreed with that.

4

I think I have covered the reasonable promptness, the

5 comparability, the general NHRA allegations, and then that

6 particular one regarding specialized services.

7

THE COURT: Okay.

8

MS. JUREN: If the Court has any more questions?

9

THE COURT: Not from me. Any other defense counsel

10 wants to add anything? Okay. When we reconvene, let's see,

11 at 1:45, we'll take up the U.S. Government's Motion to

12 Intervene, and one other matter I believe. I'll let you know

13 at that time. Motion to intervene, class certification, and

14 any other matter. Okay, we're in recess till then. Thank

15 you.

16

(Recess; resuming on the record.)

17

THE COURT: Okay, you may be seated. We'll proceed

18 now to the -- Mr. Schwartz, I understand you have a -- what

19 time is your flight?

20

(Discussion re: flight time.)

21

THE COURT: If we need to reconvene, we're going to

22 do that because I'm going to give you all sufficient time. So

23 don't feel constrained to finish. On the other hand, like I

24 tell lawyers, don't feel compelled to take all the time

25 granted. Okay, let me hear from the Government on the motion

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1 to intervene.

2

MR. KOCH: Good afternoon, Your Honor, Robert Koch on

3 behalf of the United States.

4

THE COURT: Okay.

5

MR. KOCH: Under controlling Fifth Circuit precedent,

6 all of which we cited in our briefs, the United States is

7 entitled to intervene as of right under Federal Rule 24(a)(2).

8 In addition, the United States satisfies the requirements for

9 permissive intervention under 24(b)(2).

10

The State's main argument against either form of

11 intervention is that, according to the State, the United

12 States did not satisfy statutory prerequisites to suit. Those

13 prerequisites apply to just that, filing a lawsuit. They do

14 not apply to intervention. And, even if they did apply, the

15 United States satisfied the plain text of the relevant

16 statute.

17

So, first, intervention as of right. The Fifth

18 Circuit has a four-part test to determine whether a party is

19 entitled to intervene, which is delineated in Doe v. Glickman,

20 256 F3d 371:

21

"The motion to intervene must be timely.

22

The intervenor must assert an interest

23

related to the basis of the controversy.

24

The case at issue must have the potential

25

to impair or impede the intervenor's

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1

interest."

2 And:

3

"The existing parties cannot adequately

4

represent the intervenor's interest."

5

Part 1: Timeliness. The State does not challenge the

6 timeliness of the United States' intervention motion. They

7 only challenge Parts 2 through 4. And our briefs lay out why

8 we satisfy the four-factor framework for timeliness that is

9 laid out in Glickman. So I'll proceed along to Parts 2

10 through 4.

11

Part 2: The Intervenor Interest. In Glickman at

12 Page 378, the Fifth Circuit stated that:

13

"The interest test is primarily a

14

practical guide to disposing of lawsuits

15

by involving as many apparently-concerned

16

persons as is compatible with efficiency

17

and due process."

18 There are two cases on point where the Fifth Circuit found

19 that a federal agency had an interest in the litigation

20 because the case concerned a federal statute under that

21 agency's authority. In Heaton v. Monogram Credit Card Bank,

22 that case concerned the FDIC overseeing safety and integrity

23 of the Federal Deposit Insurance system, and in Ceres Gulf v.

24 Cooper, that involved the Office of Workers' Compensation

25 programs and the Longshore and Harbor Workers' Compensation

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1 Act.

2

Here, DOJ has a unique role in enforcing and

3 interpreting Title II of the Americans With Disabilities Act

4 and its implementing regulations. The State conceded in its

5 briefing that Congress gave DOJ the authority to enforce the

6 ADA under 42 USC 12133. Congress said that one purpose of the

7 ADA was to ensure that the federal government play a central

8 role in enforcing the ADA. And it said that in 42 USC 12101.

9

The State attempts to distinguish the Fifth Circuit

10 cases on point by pointing to the fact that they involve

11 different federal agencies than DOJ; however, that's a

12 distinction without a difference. The legal reasoning of

13 those cases concern the fact that the agencies administered

14 the federal statute and therefore had a broader public

15 interest. Consequently, the United States asserts a broad

16 public interest related to the basis of the controversy in

17 this case.

18

Part 3: Potential Impairment. In Heaton at Page

19 424, the Fifth Circuit held that:

20

"The stare decisis effect of an adverse

21

judgment constitutes a sufficient

22

impairment that compels intervention."

23 The Court in Heaton reasoned that:

24

"A district court ruling on a federal

25

statute, part of the regulatory scheme of

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1

a federal agency, would undoubtedly,

2

unless changed, be relied upon as a

3

precedent in future actions involving that

4

federal agency."

5 In that case it was the Federal Deposit Insurance Act and the

6 FDIC. The same holds true here with the ADA and the

7 Department of Justice. Consequently, the case at issue here

8 could impair or impede the United States' interest in

9 enforcing the ADA.

10

Part 4 of the intervention as of right: Adequacy of

11 Representation. In Glickman at Page 380 the Fifth Circuit

12 noted that:

13

"This is a minimal burden." That, "An

14

intervenor need only show that the

15

representation in the case may be

16

inadequate towards its interests."

17 And then at Page 381 in Glickman, the court found that this

18 requirement was met “when a federal agency represents

19

the broad public interest versus private

20

plaintiffs' individual concerns in the case.”

21

Additionally, in Heaton at Page 425, the Fifth

22 Circuit noted that:

23

"Even if a federal agency and private

24

plaintiffs share common ground at the

25

beginning of a case," as we do here, that

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1

"those interests may diverge down the line

2

because the agency represents the public

3

interest."

4 Here, Congress said that one purpose of the ADA was to ensure

5 that the federal government play a central role in enforcing

6 the ADA and gave DOJ the explicit authority to enforce it and

7 represent the national public interest versus potential

8 statewide or individual interests of plaintiffs.

9

In its briefing the State cited a 1984 case, Bush v.

10 Vitorino, to argue that the representation here is adequate;

11 however, the case, the Bush case that the State cited did

12 not involve a federal agency that was representing the broad

13 public interest. Consequently, the United States satisfies

14 the fourth part and warrants intervention as of right.

15

I would like to turn at this point to one of the

16 State's arguments that the State challenges DOJ's notice to

17 the State of its failure to comply with the ADA and challenges

18 DOJ's determination that compliance could not be secured

19 voluntarily.

20

I note at the outset that as our briefing discusses

21 these statutory prerequisites are not required in terms of

22 intervention. Intervention is governed by Federal Rule 24 and

23 that rule does not indicate that those prerequisites are

24 factors for intervention. 42 USC 2000d pertains to the United

25 States filing its own independent enforcement action. And

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1 analogously, the EEOC is permitted intervention in

2 discrimination cases without satisfying suit prerequisites.

3 And we cite those cases in our briefs.

4

Regardless, DOJ satisfied the -- I'm sorry, Your

5 Honor?

6

THE COURT: No, go ahead.

7

MR. KOCH: Regardless, DOJ has satisfied the

8 requirements in 42 USC 2000d. We did exactly what the statute

9 requires. We advised the appropriate person or persons of the

10 State's failure to comply with the requirements of the ADA and

11 we determined that compliance cannot be secured by voluntary

12 means before we intervened.

13

Our letter to defendants, dated June 1st, 2001,

14 stated:

15

"Texas' administration of its programs

16

results in the unnecessary segregation of

17

individuals with developmental

18

disabilities in nursing facilities in

19

violation of Title II of the ADA and

20

Section 504 of the Rehabilitation Act."

21 Our June 1st letter also offered settlement discussions to try

22 and secure voluntary compliance. On June 15th we provided

23 additional requested information regarding our finding.

24

The State did not accept our offer of settlement

25 discussions. After three weeks of no substantive engagement

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1 on our notice, we determined that voluntary compliance could

2 not be secured. The determination was ours to make, we made

3 it, and we pled it in our complaint. That determination has

4 been confirmed by the fact that in the 15 months since we

5 filed for intervention, the State has never accepted our offer

6 of settlement discussions or engaged with us on our notice in

7 any substantive way. Never mind the State's failure to -- I

8 note that the State also was unable to settle the plaintiffs'

9 similar claims after a year of negotiations.

10

Analogously, this situation parallels the case in

11 Smith v. City of Philadelphia, 345 F2d 482. In that case the

12 United States determined that voluntary compliance could not

13 be secured after three weeks with no response from the

14 defendant.

15

The one case that the State cites in support of its

16 argument is United States v. Arkansas. However, that case is

17 inapposite to the one here, because in that case the letter at

18 issue never said that the State had failed to comply with

19 the ADA and never indicated that voluntary compliance had been

20 attempted. Those pieces were the basis for the Court's

21 holding.

22

I'd also like to address the fact that the State

23 notes that other letters that we have sent to states have more

24 detail than the notice that we provided here. The statute at

25 issue does not prescribe the level of detail that the notice

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1 must contain, only that we provide notice of the violation,

2 which we provided here. The level of detail provided by DOJ

3 in one case does not create a floor requirement for another

4 case. We do what makes sense based on the case-by-case

5 determination while satisfying the requirements of the

6 statute.

7

The Supreme Court in Federal Express Corporation v.

8 Holowecki noted that:

9

"An agency requires deference when it is

10

interpreting the position of a statute

11

that it enforces."

12 And I also add that Executive Order 12250 gives the Attorney

13 General the authority and discretion on the standards and

14 procedures under 42 USC 2000d for taking enforcement actions.

15 Consequently, DOJ satisfied the notice and determination steps

16 of the statute at issue.

17

Turning now to permissive intervention. I note that

18 Rule 24(b)(2) says that:

19

"A court may permit intervention of a

20

federal agency if a party's claim or

21

defense is based on a statute administered

22

by that agency."

23 The State doesn't dispute that DOJ is tasked with enforcing

24 the ADA. And, indeed, the gravamen of the United States'

25 complaint that the State unnecessarily segregates individuals

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1 with developmental disabilities in nursing facilities in

2 violation of the ADA shares common questions of law and fact

3 with plaintiffs' claims. Our motion was timely and the United

4 States has important enforcement interests in this case.

5

The State essentially claims prejudice because the

6 United States allegedly failed to satisfy the statutory

7 prerequisites, which I've already discussed. We did satisfy.

8 But the State also makes reference to -- argues prejudice

9 because of a full-scale enforcement action of whatever scope

10 the United States deems necessary. To be honest, Your Honor,

11 I'm not sure what that's referring to but I'll just note that

12 we filed our complaint in intervention which delineated our

13 claims and we are bound by the rules of discovery.

14

The State also suggested that we should participate

15 as amicus in this case rather than intervene. However, the

16 equivalence of those two positions was rejected by the Fifth

17 Circuit in Heaton at Page 424 where it noted that:

18

"Denying intervention deprives a party an

19

opportunity to exercise the legal rights

20

associated with formal intervention;

21

namely, briefing of issues, presentation

22

of evidence and the ability to appeal."

23 The State is not entitled to decide how the United States

24 should protect its interest in this case.

25

In short, the United States is entitled to intervene

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1 as of right under Glickman, Heaton and Ceres Gulf.

2 Alternatively, the United States qualifies for permissive

3 intervention under 24(b)(2) to vindicate the broad public

4 interests in the enforcement of the ADA. Thank you.

5

THE COURT: Okay, thank you, Counsel. Does the State

6 wish to respond?

7

MR. VINSON: Yes, Your Honor, if I may?

8

THE COURT: Go ahead.

9

MR. VINSON: Your Honor, if I may approach, I have

10 just a binder with the relevant briefing. This issue is

11 limited enough that it can fit into a binder. If I may

12 approach?

13

THE COURT: Okay, go ahead. Give it to Jessica,

14 please.

15

MR. VINSON: My name is Eric Vinson, V-i-n-s-o-n.

16

Your Honor, if it may please the Court, it is indeed

17 correct that the State opposes the Department of Justice's

18 attempt to intervene into this case and there are really three

19 primary arguments, and there's a fourth that's sort of a bit

20 of a corollary issue about the propriety of various parties.

21

The first one is relatively straightforward and it

22 relates to this issue as to whether the Department of Justice

23 meaningfully complied with the statutory prerequisites to

24 intervention and whether those are in fact applicable.

25

Secondly, it is the State's view that there is no

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1 good argument that under 24(a) that the Department of Justice

2 has a right to intervene and that the only possible avenue of

3 intervention would be the permissive venue under 24(b).

4

The last issue is, again, a question of parties, but

5 that presumes, I think, the presence of the DOJ and so I'll

6 table that unless the Court has any questions about that

7 particular issue.

8

Your Honor, it's interesting. Counsel is on some

9 level correct. There was, indeed, a notification on June 1st

10 of 2011 that the United States intended to intervene into this

11 lawsuit and that the option that was presented to the State as

12 an alternative to intervention was the negotiation of a

13 consent order essentially in which the defendants, the State

14 itself would capitulate and agree that it was doing the things

15 that the Department of Justice and the plaintiffs in this case

16 had alleged.

17

We asked over and over for specific information about

18 how it was that we were violating the ADA, how we were not in

19 compliance with Olmstead, what particular aspects of our

20 program did not comply with the Department of Justice's view

21 on how that program is supposed to be operated and run and it

22 was very clear from the outset that there was not going to be

23 any meaningful dialogue along those lines.

24

We asked for a copy of the motion to intervene, you

25 know, so we could take a position on whether to agree to it or

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1 not, and we were not given that opportunity. We were not

2 given the ability to even review the motion to intervene

3 before it was filed. We were simply asked, "Agree,

4 essentially, that you are not complying with the ADA or the

5 Olmstead decision or we're going to intervene."

6

And the reason, Your Honor, that we view this as a

7 meaningful issue is because the statute -- there is a

8 statutory prerequisite to participation by the Department of

9 Justice in a situation like this and it does involve a -- not

10 simply a technical, box-checking exercise where you give an

11 entity notice that you're going to intervene, it requires a

12 meaningful investigation and a meaningful dialogue between the

13 relevant stakeholders so that one of several things can

14 happen. Ideally, the parties can reach some resolution of the

15 alleged issues and then move forward on that basis without

16 making necessary a trial process.

17

Another opportunity or another possibility is that,

18 in fact, you could agree on some areas and narrow those issues

19 down that need to be litigated. Right? "We agree that the

20 State's doing this properly but, you know, there's some area

21 here where the Department of Justice may disagree." We never

22 got to have that opportunity. And allowing the parties and

23 requiring the parties to engage in that type of meaningful

24 dialogue, to allow them simply to intervene in a lawsuit that

25 happens to mention the term Olmstead and the Americans with

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1 Disabilities Act is essentially an end around, around what's

2 called, and even Counsel concedes, a prerequisite to suit.

3 And to allow them to do that I think is a disservice to the

4 process, certainly not in line with the spirit or intent of

5 that requirement.

6

I want to talk a little bit about the requirements

7 under 24(a) when it -- if there’s any -- to make clear that

8 there is no good argument that intervention is one of right in

9 this case. When you look at the 24(a) cases, they all relate

10 to the traditional, typically state law cases but they

11 obviously -- they fall under federal law, too, that involve

12 property interests and leaseholders and multiple parties who

13 are going to be literally affected by some resolution relating

14 to a corpus of some sort: some identifiable property, some

15 identifiable money, something along those lines. And in those

16 cases, of course it's appropriate to allow a party as a matter

17 of right to intervene in another dispute in which they may not

18 have been named as a party.

19

The interest that is present here that the DOJ has

20 articulated of course is one purely of interpretive and

21 enforcement acts relating to compliance with the Americans

22 with Disabilities Act. It is not the type of corpus, the type

23 of interest around which courts will typically allow parties

24 to intervene as a matter of right.

25

Now, obviously we've gone through the various stages

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1 of the analysis in terms of the actual steps but they

2 actually -- I think it makes more sense to articulate those

3 and talk about those in the permissive context as opposed to

4 in the necessary com- -- or the mandatory context because the

5 idea of mandatory intervention is just not one that is

6 terribly compelling.

7

I think perhaps the most important issue when we look

8 at the elements and the protection of the United States'

9 interest in this case is -- so far the only interest the

10 United States has expressed is one that is, I think,

11 undisputedly in line with that of the plaintiffs. However, in

12 order to intervene in a case, even under 24(b), there needs to

13 be some showing that the interest may diverge in a way that is

14 meaningful and necessary and appropriate for the party to

15 intervene yet not so divergent that, in fact, you'll add what

16 the courts consider a layer of complexity to the litigation.

17

The Department of Justice's counsel has articulated

18 the standard correctly. It is a low burden. However, other

19 than citing the possibility that there may be a divergence and

20 repeating the language, they have not yet identified how it is

21 possible for the interests in this case to diverge. And the

22 answer matters. The answer definitely matters because if, if

23 it is something that truly fits in the classic 24(b)

24 intervention mold, that is, something that is not meaningfully

25 different, will not add layers of complexity, then I think

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1 it's easier for the Court to analyze how or whether to grant

2 the intervention or not. But at some point the divergence

3 could be so significant that, in fact, you are not gaining the

4 efficiency of joinder that this rule contemplates but,

5 instead, what you're looking at is the additional layers of

6 complexity.

7

Indeed, we did cite the Bush v. Vitorino rule for the

8 proposition -- and, indeed, it is not a case involving the

9 federal government; however, it is a case that gives courts

10 guidance on what to do when somebody tries to intervene in a

11 case in which their interests appear to be represented. And

12 the Bush court in 1984 wrote, and I'm quoting directly:

13

"When the party seeking intervention has

14

the same ultimate objective as the party

15

to the suit, a presumption arises that its

16

interests are adequately represented,

17

against which the petitioner must

18

demonstrate adversity of interest,

19

collusion or nonfeasance."

20 And there is no suggestion here that any of those three issues

21 are present and that's clearly not at issue, there is a robust

22 litigation between the existing plaintiffs and the defendants

23 in this case.

24

Both parties are expressing -- that is, both the

25 plaintiffs and the Department of Justice are expressing an

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1 interest in the State's compliance with the Olmstead

2 Integration Mandate, and compliance with the ADA. When you

3 look at the briefing, indeed, that the State provided --

4 excuse me, the DOJ provided to this Court before the attempted

5 intervention, they literally stood in the shoes of the

6 plaintiff and advocated in opposition to the defendants'

7 motion to dismiss on the various issues that they felt

8 necessary to advocate on.

9

Your Honor, unless there are other questions, I feel

10 that the issue's pretty straightforward for Your Honor to

11 figure this out one way or the other. These statutory

12 prerequisites, they have to have meaning, they have to mean

13 something and here, in less than three weeks, the DOJ said

14 they wanted to intervene and they did intervene. There was no

15 meaningful opportunity for the State to respond or even

16 understand what component of their program was not being run

17 properly. Thank you very much.

18

THE COURT: Thank you. Any response from the

19 Government?

20

MR. KOCH: Real quickly, Your Honor. Regarding the

21 statutory requirement under 42 USC 2000d, the State is saying

22 that it requires meaningful engagement. They refused to

23 engage with us; thus, we made a determination that voluntary

24 compliance could not be reached. It's our determination to

25 make and we made it and we pled it.

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1

There were two other arguments that I heard under

2 intervention as of right. The second part of the four-part

3 requirements, the divergence of the interests. Counsel for

4 the State indicated that it must be an interest in property or

5 money. The cases just don't support that. I'd point the

6 Court to Heaton, 297 F3d at 424, and Ceres Gulf, 957 F3d at

7 1203. Both of those concern the federal agency interest, a

8 broad public interest and that sufficed for intervention in

9 those cases.

10

And then the last piece, adequacy of representation.

11 Once again, Heaton, 297 F3d at 425, when there's a federal

12 agency and private plaintiffs, even though they may have

13 common ground, the possible divergence between the two because

14 of the federal agency's broad public interest, that suffices

15 for intervention as well. Thank you.

16

THE COURT: So are you saying that any time parties

17 are involved and involved application or dispute with federal

18 statute that the Government always has a right to intervene

19 in that lawsuit?

20

MR. KOCH: No, Your Honor. In this case the DOJ, the

21 Government has been given expressly the statutory

22 authorization to enforce the ADA, and so it's not just any

23 federal statute. But here the United States, the DOJ has been

24 given the statutory enforcement authority for that statute.

25

THE COURT: Okay.

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1

MR. KOCH: Thank you.

2

THE COURT: All right, thank you. Now let's proceed

3 to the motion to certify as a class. And let me hear from the

4 plaintiffs.

5

MR. SCHWARTZ: Just for the record, we want to put on

6 the record that the plaintiffs support the Department of

7 Justice's motion and for reasons set forth in their brief.

8

THE COURT: Okay.

9

MR. SCWARTZ: Let me address the class certification

10 now. This case primarily challenges the defendants' failure

11 to plan, administer, operate and fund its developmental

12 disability services and provide those in the most integrated

13 settings for people who would otherwise be institutionalized.

14 It also alleges that that failure to provide those services in

15 the most integrated setting violates the ADA, Section 504 of

16 the Rehab Act. And, finally, it challenges the defendants'

17 PASRR program and the failure to operate that program by

18 accurately screening, reasonably assessing and serving people

19 with active treatment. Or in the words of Federal Rule 23(b),

20 it claims that defendants have, quote:

21

"Acted on grounds generally applicable to

22

the class by denying all qualified

23

individuals with disabilities the

24

opportunities to receive services in the

25

most integrated settings."

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1

It seeks a single injunction requiring the defendants

2 to provide those developmental services in the integrated

3 setting and to conform their PASRR program to federal law.

4 The single injunction “would cure,” in Justice Scalia's terms,

5 “in a single stroke those violations,” and I want to

6 emphasize, would not require any individual determinations, by

7 this Court, of either liability or remedy.

8

The motion that we have presented is supported by

9 detailed evidence of the deficiencies of the defendants'

10 developmental disability services. It shows why those

11 services result in unnecessary segregation, about the

12 defendants' knowledge of those deficiencies in the exhibits,

13 about their unfulfilled promise to remedy those deficiencies,

14 and of the pervasive and persistent harm that the deficiencies

15 cause the plaintiff class.

16

The evidence that we submitted in support of the

17 motion contains -- includes numerous reports that were

18 prepared by the defendants themselves or by agencies of the

19 State of Texas. Those reports recognize the deficiencies. It

20 describes the defendants' interest and acknowledgment of them

21 and what defendants think would be necessary to cure them.

22 Those are Exhibits 4 through 7 and 9 to our motion.

23

Significantly, we also support that motion with

24 evidence from two federal agencies. First, as you've just

25 heard, the findings letter of the Department of Justice that,

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1 based on its assessment of the situation in Texas, concluded

2 that there was a pattern and practice that violated the ADA

3 and Section 504. Those findings leave no doubt that the

4 defendants' operation and funding of their service system

5 unduly relies on segregated institutions.

6

In addition, there's the findings of the U.S.

7 Inspector General that evaluated the PASRR's program in Texas.

8 It found that in 37 percent of the cases people didn't receive

9 timely screens. It found that in 52 percent of the time they

10 didn't get proper assessments, and 82 percent of the time they

11 didn't get specialized services.

12

And, finally, the evidence includes two declarations

13 from two different disability professionals attesting to the

14 pattern and practice that gave rise to these deficiencies, the

15 impact on individual class members, the need for action, and

16 what was necessary to cure that. Those are both the

17 affidavits of the Executive Director of the Arc, as well as an

18 evaluation by a nationally-recognized health expert, a nurse

19 with over 30 years of experience in serving people with

20 complex medical needs in community settings and her evaluation

21 of individuals. This evidence, in Walmart's terms, is more

22 than sufficient to meet the obligations that plaintiffs have

23 to support a class action motion.

24

Let me turn a little unconventionally to the

25 requirements of 23(b)(2) because the defendants make -- focus

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1 on that and then I'm going to backtrack to the requirements of

2 23(a).

3

This case, like most civil rights cases, focuses on

4 the defendants' conduct, not the plaintiffs' needs. The

5 defendants plan, administer and fund a developmental

6 disability service system and, in doing so, they've engaged in

7 a pattern of standardized conduct that's resulted in the

8 inability of people with intellectual and developmental

9 disabilities in nursing homes to access their community

10 service system.

11

It's also resulted -- they also operate that PASRR

12 system that we've talked about this morning, and they, in

13 operating that system, have promulgated policies and engaged

14 in practices that result in the inaccurate identification of

15 people with intellectual disabilities -- that is, they don't

16 even know which people have intellectual disabilities, like

17 our five or six named plaintiffs -- in the inappropriate

18 assessment of their needs for services and the failure to

19 provide them specialized services according to the

20 requirements of the NHRA.

21

This pattern and practice of standardized conduct

22 towards the putative class, who are currently

23 institutionalized or at risk of such, is precisely the conduct

24 that Justice Scalia was looking for that would be susceptible

25 to a remedy in a single stroke. And that is what we've pled

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1 and we've supported that with evidence.

2

The amended complaint, in other words, seeks an

3 injunction to alter that conduct to compel compliance with

4 federal law and to insure that people in nursing homes are

5 provided services in the most integrated setting. And it

6 says, as Justice Ginsburg says in Olmstead, that states -- if

7 states operate a service system, as Texas does, for persons

8 with developmental disabilities, it must comply with the ADA's

9 Title II mandate, often called the Integration Mandate, that

10 the services that it does provide are provided in the most

11 integrated setting.

12

The First Circuit Court of Appeals recently was asked

13 in that Rolland case that you heard about this morning to -- a

14 class had been certified in that case in 1999. The class is

15 virtually identical to the class we're asking to certify here.

16 The plaintiffs at that time appealed to the First Circuit

17 under 23(f); their appeal was denied. Ten years later some

18 individual -- excuse me -- the defendants, strike that -- the

19 defendants appealed the certification of the district court,

20 the First Circuit denied the appeal.

21

Ten years later certain other individuals who had

22 concerns who were in nursing homes sought to decertify the

23 class. They lost in the district court. The district court,

24 in other words, found once again that certification was

25 appropriate in Rolland v. Patrick. Those individuals

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1 appealed again in the First Circuit and the First Circuit in

2 a recent decision that flips the names a little bit, called

3 Voss v. Rolland, found that -- and this is cited in our

4 brief -- found that certification was appropriate,

5 decertification was not, and that all of the standards for

6 Rule 23(a) and (b) had been met.

7

The First Circuit subsequently acknowledged in

8 another nursing home case, Hutchinson v. Patrick, that a

9 similar definition was appropriate because those

10 definitions -- and that was an ADA case -- challenge the

11 standardized conduct of the defendants.

12

We've given you 40 ADA cases in which courts have

13 certified classes under the ADA generally and Title II

14 specifically in the Integration Mandate. There is no case

15 that the defendants have pointed to in which an ADA class was

16 not certified. This is true pre-Walmart and post-Walmart.

17 The district court in Oregon just a month ago in Lane v.

18 Kitzhaber, we gave that to you in a supplemental authority,

19 certified a class under the ADA. The defendants made

20 precisely the same challenges they are making here. And I'll

21 go through them. But they made precisely the same challenges.

22 District Judge Stewart rejected them.

23

Similarly, other federal district courts in Oster

24 [phonetic], in California in Gray [phonetic], which involved

25 ADA accessibility requirements, in Pashby which required ADA

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1 and Medicaid requirements, and in Dominque [phonetic], all

2 cited in our brief, courts have uniformly -- these are all

3 post-Walmart cases in which the courts have conducted the

4 rigorous analysis and the standards, that the defendants

5 rightly point to, as required by Walmart.

6

Now, of course, there are differences in the

7 abilities and the disabilities of people in nursing homes.

8 People with disabilities don't look all the same just like all

9 other people don't look the same. And individuals with

10 intellectual and developmental disabilities do not have the

11 same disability. That does not impact them in the same way.

12 They do require supports and habilitation and places to live

13 that can differ in terms of the intensity or the frequency of

14 the support.

15

We are not claiming, we never would claim that all

16 people in nursing homes look exactly the same, require exactly

17 the same services, think exactly the same way, have exactly

18 the same preferences or vote exactly the same way.

19 Nevertheless, at the proper level of analysis for class

20 certification, the focus is on the adequacy of the defendants'

21 actions and inactions in providing supports and services to

22 the individuals.

23

At that level of analysis, the defendants

24 acknowledge, and their report's document, that many

25 individuals remain in nursing facilities solely because of the

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1 way that the administration and funding of the community

2 services, that is, the eligibility criteria for those

3 services, the decisions that the State has made from the

4 Governor down to the relevant secretary and director about

5 which services it would give to which people and which things

6 they won't do or will not engage in.

7

While the State has an enormous amount of discretion

8 in determining what programs it wants to operate, and it has

9 an enormous amount of discretion in setting criteria and

10 various other factors for those programs, the Supreme Court

11 has made clear that they do not have the discretion to

12 unnecessarily segregate people or require people to go to

13 nursing homes in order to get the basic supports that they

14 need. And that's precisely why there are 4500 people in

15 nursing homes. People are going to the nursing homes, people

16 with intellectual disabilities, because there are not services

17 in the most integrated settings, and that's the violation of

18 the ADA.

19

The Court need not and should not be involved in

20 individual determinations of which specific persons require

21 which specific services. The Department has what is known as

22 an Individual Service Planning process, or ISP. It's a

23 treatment planning process. It brings together professionals

24 as well as the consumer, the person with disabilities, and

25 their parents or family members, or a guardian if they have

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1 one, in the service planning process. People look at who the

2 individual is, what he or she prefers, what he or she needs,

3 and they determine their services. We believe that that is

4 the appropriate, professionally-available method of

5 determining exactly who out of the nursing home population

6 would leave, what they require, when they go, what they feel,

7 what they prefer, et cetera.

8

So this Court is not -- we're not asking this Court,

9 we're not in any way suggesting that any of the 4500

10 individuals need come to this court to seek individual relief.

11 We're not seeking any kind of expert panel or judicial

12 mechanism to determine which people need which service.

13

So unlike the complaint in M.D. v. Perry, the Fifth

14 Circuit's recent decision on class certification, where the

15 plaintiffs in that case were seeking a judicial panel for

16 every child who remained in state custody for more than a

17 certain amount of time, and it was that panel, that

18 involvement of the district court that the Fifth Circuit found

19 demonstrated that the plaintiffs were seeking individualized

20 relief and you couldn't have the solution in a single

21 injunction.

22

THE COURT: How is that not the case here?

23

MR. SCHWARTZ: For two reasons. One is that we are

24 relying on the State's, as I said, treatment planning process

25 to make the determinations, and, conversely, we are asking

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1 this Court to make the single injunction, the broad-based

2 assessment, the evidence you will hear as the case moves

3 forward on behalf of the class. We'll be not asking you to

4 decide how many individuals require community placement, or

5 how many people need what level of services. We're going to

6 be presenting to you the policy and practice of the PASRR

7 program, the policy and practice of the unnecessary

8 segregation.

9

Conversely, we would ask you as --

10

THE COURT: And that that be implemented?

11

MR. SCHWARTZ: That's right. And there will be --

12 the remedy that we seek, the injunctive relief that we seek is

13 specific to correcting those deficiencies. When those

14 corrections -- excuse me. When those deficiencies are

15 corrected then individuals will sort of march through a

16 compliant PASRR process and a compliant specialized services

17 evaluation. All right.

18

So the defendants, I think with respect to -- and

19 ending my argument on 23(b). The defendants look at the

20 Olmstead case, and the ADA actually more generally, and even

21 Medicaid more generally, and they say all the claims that the

22 plaintiffs have pled in this case, including ADA and Medicaid,

23 are not susceptible, ever, to broad-based, single-stroke

24 injunctions, and that all of them can only be resolved by

25 having a federal judge make individualized treatment decisions

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1 for each individual.

2

Well, Your Honor, that argument essentially says that

3 courts cannot ever certify a class in an Olmstead case; that

4 courts can never certify a class in an ADA case, because they

5 would say that the ADA makes clear that individuals'

6 preferences are relevant. And so if every remedy, every case

7 required a federal judge to decide what does each individual

8 class member prefer and what does each individual class member

9 need, then we would never have classes certified. It would

10 essentially mean that under the defendants' interpretation 20

11 years of ADA decisions, the 40 decisions we've given you as

12 Exhibit A to our motion, all have been vacated, all have been

13 overridden by Walmart. Walmart doesn't say that. No court

14 has ever said that. And the courts that have considered it,

15 the six or seven I just listed, have said exactly the

16 opposite.

17

Let me turn to the requirements of Rule 23(a) because

18 they also implicate the M.D. decision.

19

There's no challenge here to 23(a)(1), numerosity.

20 Nor is there any -- sorry?

21

THE COURT: Go ahead.

22

MR. SCHWARTZ: Nor is there any challenge to the

23 first prong of 23(a)(4), adequacy of representation; that is,

24 there is no statement that the Disability Rights Texas, Center

25 for Public Representation or Weil Gotshal won't provide

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1 competent representation to the class, or that there's some

2 conflict lurking within the class. So, really, the focus of

3 the defendants' Rule 23(a) challenge goes to commonality,

4 (a)(2).

5

M.D., as well as Walmart, affirm the basic

6 proposition in General Falcon that either a common question of

7 law or a common fact would do. What they did want to make

8 clear is that in trying to analyze the presence of a common

9 fact or a common law, there needed (a) to be evidence, the

10 court needed to conduct a rigorous analysis, it needed to be

11 provided with some evidence, not just the mere pleading, and

12 it needed to be able to say that with respect to the common

13 question of fact or the common question of law, or both, that

14 there was a clear pathway, a clear way to describe what the

15 plaintiffs were asking for and what their common contention

16 was. That's the single most important concept that Walmart

17 and M.D. elaborate on.

18

Here, we have both. With respect to the ADA claims

19 and 504 claims, the core issue in the case, as was found by

20 the Lane court, the Oster court, the Pashby court, the

21 Schwarzenegger court, and each of the other post-ADA, as well

22 as post-Walmart as well as pre-Walmart cases, the core claim

23 is whether or not the defendants are operating a developmental

24 disability services in a way -- in the most integrated setting

25 possible. The ADA regulation says:

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1

"A public entity must operate its

2

services" -- doesn't say they have to operate a

3 service, but if they choose to operate a service or a benefit,

4 they must do it "in the most integrated setting

5

possible."

6 That's the core contention, we're saying they don't. The

7 defendants have planned, developed and operated a system that

8 unduly relies on segregated facilities. That's a common fact.

9

Another common question or common contention is:

10 Whether the defendants have employed eligibility criteria for

11 their community services that effectively deny access to

12 people in nursing homes with intellectual and developmental

13 disabilities;

14

Whether the defendants discriminate against persons

15 by virtue of their disabilities in the way they have

16 constructed, operated and funded their community service

17 system;

18

And, finally, and most important -- not most

19 importantly, but importantly, under the ADA whether the

20 defendants have failed to make reasonable modifications to

21 their community service system to allow persons who are

22 institutionalized equal access or fair access.

23

That was precisely the question the Supreme Court

24 addressed in Olmstead and found that Georgia could make

25 reasonable modifications to its community mental-health system

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1 to allow L.C. and E.W. to move from the Georgia State Hospital

2 to the community.

3

There are also, by the way, common issues of fact and

4 law with respect to the PASRR claim. And I think we've been

5 through them. I'll just quickly recite them:

6

Whether the defendants failed to accurately identify

7 who has a disability;

8

Whether they failed to accurately assess whether the

9 persons with disabilities need services;

10

Whether their policy -- they have an explicit policy

11 that says what services they will cover to provide active

12 treatment -- whether that policy comports with federal law;

13

And, lastly, the debate that you heard this morning,

14 whether the defendants are required to provide essentially the

15 same range of habilitative services to people in nursing homes

16 that they apply to their similarly-situated brothers and

17 sisters in ICFMR cases.

18

In all the cases that we've cited post-Walmart, that

19 includes Lane, Oster, Gray, and Pashby, the courts have said

20 that common contention with respect to the ADA post-Walmart

21 constitutes a common question for which there can be a common

22 answer. As I said, this Court doesn't have to determine what

23 services are necessary to avoid institutionalization, but in

24 the words of Walmart and M.D., just “whether there

25

is a question that admits of a class-wide

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1

resolution."

2

So take for example, Your Honor, the issue of

3 specialized services. The defendants say that we can pick a

4 few of them and we say that the defendants must provide

5 approximately the same services as people in ICFMR, or, in any

6 event, services that are necessary to meet the federal

7 standard for active treatment.

8

That is a common question that would admit of a

9 class-wide resolution. If this Court says -- whatever the

10 Court says about that question, it will be applied to

11 everyone. The fact that some people will get these many

12 services and somebody else maybe none because they don't need

13 any more than what the State is already offering or something

14 like that, that's not what you have to decide. That's not

15 appropriate for the federal court.

16

What the class certification motion seeks is a

17 resolution by this Court of that common question and we can

18 indicate, as we have argued here and in our brief, that the

19 resolution of that question will affect everyone. It won't

20 affect everyone exactly the same, but it will affect

21 everyone's right to relief.

22

So in Walmart's terms, those common questions, be

23 they about the PASRR program or about the unnecessary

24 segregation, are the glue that binds the reasons for the

25 unnecessary institutionalization. That is, there are common

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1 operative policies, practices that Texas engages in. We claim

2 they are inappropriate. But whatever the Court's decision

3 about them, you will have resolved a common question that will

4 admit of class-wide relief, that is -- and then we will go to

5 the single decisions that are not part of this case.

6

So the evidence that we gave you goes far beyond the

7 pleadings and allows you to do that rigorous analysis. And as

8 the Fifth Circuit has said in M.D. -- oh, let me say. The

9 Fifth Circuit in M.D., when it criticized the district court's

10 failure to do the commonality analysis, it really recognized

11 two points.

12

First, in fairness to the district court, it issued

13 its original decision before Walmart was decided. So it

14 wasn't quite guided by the same analysis or the same

15 prerequisites that the Fifth Circuit considered.

16

And, second, the Fifth Circuit didn't say in any way,

17 shape or form that there weren't common questions that

18 admitted of common answers. In fact, the Fifth Circuit said

19 that the district court might well be right that the lack of

20 staffing for social workers that leaves kids with -- kids who

21 are in the welfare or the foster care system without

22 appropriate attention, that might well be a common contention

23 that admits of a common answer in a single stroke. The

24 problem was the district court hadn't just tied that together.

25 In fairness to the district court, it didn't know it was

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1 exactly supposed to tie it together because it made its

2 decision pre-Walmart.

3

So the Fifth Circuit didn't reverse, it remanded. I

4 mean it did not reverse and say no class was possible, it just

5 remanded to the district court and said, "You need to look at

6 the evidence. It's okay if you certify a class. You might

7 well have commonality. We can imagine some common questions

8 that would admit of common answers, but we need you to tie

9 those together and button that up properly."

10

And so a determination here of whether Texas'

11 administration of its community service system, or the

12 eligibility criteria that it establishes for those services

13 are denying access to people in nursing homes or, put the

14 other way, causing their unnecessary segregation. That's

15 exactly the common contention that admits of a common answer

16 and would allow for the Court, as all of the Court of Appeals

17 keep doing, repeating Justice Scalia's admonition in a single

18 stroke.

19

Walmart did not overrule the long line of ADA or

20 Medicaid cases that said class certification for beneficiaries

21 are appropriate. Remember in a Medicaid case, the basic

22 entitlement to services thing, is to get what is medically

23 necessary. That's the standard in the Medicaid Act.

24

Well, what is medically necessary for me is not

25 medically necessary for my co-counsel, Mr. Corbett. And each

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1 of us have our own, individual medical needs. But for 40

2 years the Supreme Court and others have approved of class

3 certification where the issues were what services are -- what

4 services people are eligible for. And they did that because

5 they saw rules or practices, not just policies, but practices

6 that might have had different impacts on different people but

7 the plaintiffs could point to the practice.

8

Here, we have pointed to a practice in the PASRR

9 program, I won't repeat it all, and we've pointed to a

10 practice that is causing the segregation of people in nursing

11 homes. Those common practices, some of them are actually on a

12 piece of paper like a rule or a policy; some are the way the

13 system operates. So, you know, there isn't a policy, for

14 instance, that says the defendants when they screen people

15 should inaccurately identify people. It doesn't say that. It

16 says there's a policy that says they screen people. But the

17 practice is, as found by the Inspector General, that they

18 don't accurately identify people. That people who have

19 intellectual disabilities are entered into nursing homes and

20 they never either get a PASRR, or if they do get a PASRR,

21 they're not found to have intellectual disabilities.

22

That's a sort of stunning practice and in light of

23 the very first question that you asked Mr. Corbett when this

24 hearing opened: Does every one of those practices affect a

25 hundred percent of the people in the class exactly the same

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1 way? No. But does the practice constitute an illegal

2 practice for which we are making a common contention, a common

3 question for which there's a common answer? Yes, there is.

4 And once those practices are corrected, if the Court were to

5 rule in favor of the plaintiffs' challenges, then each of the

6 individuals, not with oversight from this Court or an expert

7 panel or anything else, would be able to seek relief.

8

And the same issue here, by the way, applies in the

9 Seventh Circuit's decision, Jamie S., that the defendants

10 speak of --

11

THE COURT: What was that case?

12

MR. SCHWARTZ: Jamie S., which is a Seventh Circuit

13 case that the defendants speak a lot about. The court in

14 Jamie S. found just like the M.D. court here, the Fifth

15 Circuit found in M.D., that the plaintiffs were seeking --

16 they wanted the court, the judge to make, either by him or

17 herself or through his master or panel, individualized

18 determinations. In Milwaukee they asked the district court to

19 set up a review process with the independent monitor and to

20 look at each individual kid who hadn't -- for which there was

21 a problem.

22

We are not asking for that type of relief. We're

23 asking for the Court to hear the evidence, issue an

24 injunction, and then the State will, thorough its

25 administrative processes -- and, by the way, each of those --

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1 that team process that I mentioned to you that makes treatment

2 plans, because this program operates pursuant to the Medicaid

3 statute, individuals have a right to an appeal, not to you but

4 to the State Administrative Law Judge, an ALJ.

5

So the Medicaid Act guarantees each family member,

6 each Medicaid recipient who believes they are not getting

7 what they are entitled to, to an administrative appeal. And

8 it's that due process that both insulates the Court from

9 individual remedies and allows individual Medicaid recipients

10 to get a fair shake.

11

Let me just touch on typicality and then conclude

12 with the definition.

13

There is some argument the defendants make that the

14 individual named plaintiffs aren't exactly typical of the rest

15 of the class. Of course, the M.D. court, which it really

16 didn't address typicality, and the Walmart court, which also

17 didn't, reaffirmed the basic principle that people don't have

18 to be in exactly the same situations. People don't need to be

19 identical to be typical. Typical means that their claims are

20 similar and that the resolution of one, that is for the named

21 plaintiffs, will resolve it for the others.

22

Here, we can identify nine specific ways in which the

23 named plaintiffs are typical of all the class. First, all of

24 them have a significant intellectual or developmental

25 disability. Second, all the named plaintiffs, with the

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1 exception of Mr. Holmes, who was discharged from a nursing

2 home after we filed the case, are currently living in

3 segregated settings. Third, all of those individual

4 plaintiffs have no contact whatsoever with non-disabled peers,

5 other than paid staff, in violation of the specific mandate or

6 the ADA.

7

All of those plaintiffs want to live in the

8 community. All of them are qualified to live in integrated

9 settings. None of them are being provided with active

10 treatment as required by federal law. All of them are

11 similarly impacted by the defendants' administration and

12 funding of their disability service system as well as of their

13 PASRR program. And, ninth, they all, other than Mr. Holmes,

14 the exception, suffer the same injury as unnamed class members

15 and have factual situations that are similar. Not identical I

16 want to stress, not the same disability, but all are similar.

17

THE COURT: Are they being afforded specialized

18 services while in the nursing home?

19

MR. SCHWARTZ: They are not. And the affidavit --

20 or, excuse me, the declaration of Ms. McGowan, the nurse I

21 mentioned before, which is attached to support our motion, was

22 an independent clinical review that she did of just three of

23 them, and she documents in some detail why they're not, and

24 how they are not being provided with the range of specialized

25 services that would be necessary to meet the federal active

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1 treatment standard.

2

With respect to adequacy of representation, I

3 mentioned that most of that is not really challenged by the

4 State. The one place they do challenge is Mr. Holmes. Mr.

5 Holmes they say is not an adequate representative of the class

6 and we believe they're wrong in this respect.

7

The class is defined pursuant to the ADA and

8 Department of Justice regulations as individuals who are

9 institutionalized or at serious risk of institutionalization.

10 Mr. Holmes had lived in the community at some long time in the

11 past. He then had a health condition that sent him to a

12 nursing home for years. He very recently, after the filing of

13 the lawsuit, was placed back into the community. But he's the

14 perfect example of what's known as the at-risk group because

15 his health conditions put him, you know, at a real -- he has

16 a real and present danger for being admitted to the nursing

17 home. And we're not just speculating about that as a

18 possibility, it actually happened to him. And so his

19 day-to-day experience over the last ten years demonstrates

20 that he can be placed in the community and he can be returned

21 to the nursing home. And whether he needs to in a certain

22 situation is not the factual question this Court has to

23 address, it's just that he has standing and represents that

24 class.

25

And so we've asked you to define a class, I think you

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1 see the words in our motion, mention that that class mirrors,

2 almost identical, the class that was certified by the district

3 court in the Rolland case and affirmed by the First Circuit.

4 It is true, as the defendants point out, that not every one at

5 the same moment, that is not all -- I'm willing to bet that

6 not all 4500 people who are in nursing homes today have

7 exactly the same needs. And I'm willing to also bet that not

8 every single one of them as of today have exactly the same

9 preferences for what services or where they want to live.

10

But if this Court were to limit the class to the

11 people who today had the needs and wanted to leave, you would

12 be involved in a constantly uncertain class. Every day people

13 would change their mind. In fact, many people who might not

14 explicitly ask to leave the nursing home, they might not be

15 asking that because they never got information, the freedom of

16 choice issue we talked about before, or there weren't

17 services. And so, you know, you only ask people to make

18 choices about something that's available.

19

So if the State corrects the deficiencies, people

20 might make choices way different than they are today. We're

21 not criticizing the choices they make today or in the future,

22 we're just saying that part of having a class, and the reason

23 why the district court in Rolland certified a class, is it

24 didn't want to know every single day we could never figure out

25 who was in the class or how many people. So we ask you to

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1 certify that class.

2

Finally, recognizing that the Court must conduct the

3 rigorous analysis required by Walmart, mention that having a

4 certified class as promptly as possible in light of the

5 Court's other demands is important both so that we can finally

6 initiate our -- serve our discovery, which would affect the

7 entire class, and it's also necessary, to be frank with you,

8 Your Honor, to avoid, you know, mootness because it's always

9 easy for a few people to leave and then we could come back, we

10 have four more people, if we need to, to substitute in

11 tomorrow, but then we'll have another hearing on another group

12 and this will be a never ending struggle.

13

So thank you very much for the opportunity.

14

THE COURT: Okay, thank you. Any response from the

15 State?

16

MR. GIBSON: Good afternoon, Your Honor, Darren

17 Gibson for the defendants.

18

THE COURT: Go ahead.

19

MR. GIBSON: Thank you, Your Honor. I want to take a

20 step back and describe what I think is the plaintiffs' view of

21 the world following Walmart, or what they would have the Court

22 believe is the state of the world. In plaintiffs' view, the

23 Walmart case didn't really mean a lot, didn't really change

24 anything. They use languages [sic] like "reaffirmed what was

25 previously the law, it has not yet affected ADA class actions,

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1 it merely sort of restated what we all already knew." That's

2 what they would have this Court believe. I would like to just

3 read a little bit from the Fifth Circuit opinion in M.D. to

4 tell this Court what the Fifth Circuit thinks actually

5 happened in Walmart.

6

"Although the district court's analysis

7

may have been a reasonable application of

8

pre-Walmart precedent, the Walmart

9

decision has heightened the standards for

10

establishing commonality under Rule

11

23(a)(2) rendering the district court's

12

analysis insufficient."

13

In large part, the court went on to recognize that:

14

"The pre-Walmart case law found that the

15

test for commonality was not demanding," citing to

16 the James case, which plaintiffs themselves rely on. The

17 court went on to cite to the James case and other pre-Walmart

18 Fifth Circuit cases to say, quote:

19

"Before Walmart, the rule in this circuit

20

provided that in order to satisfy

21

commonality, the interests and claims of

22

the various plaintiffs need not be

23

identical."

24

THE COURT: Need not be what?

25

MR. GIBSON: Need not be identical; need to not be

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1 identical.

2

THE COURT: All right.

3

MR. GIBSON: "Rather, the commonality test

4

is met when there is at least one issue

5

whose resolution will affect all or a

6

significant number of the putative class

7

members."

8 This is all pre-Walmart, right? Further, the court's

9 pre-Walmart case law held that:

10

"The fact that some of the plaintiffs may

11

have different claims, or claims that may

12

require some individualized analysis is

13

not fatal to commonality. However" -- or it went on

14 to say:

15

"However, in Walmart, the court expounded

16

on the meanings of its precedent providing

17

that commonality requires the plaintiff to

18

demonstrate that the class members have

19

suffered the same injury. After Walmart,

20

Rule 23(a)(2)'s commonality requirement

21

demands more than the presentation of

22

questions that are common to the class

23

because any competently-crafted class

24

complaint literally raises common

25

questions.

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1

“Further, the members of a proposed class

2

do not establish that their claims can

3

productively be litigated at once merely

4

by alleging a violation of the same legal

5

provision by the same defendant. Instead" -- and

6 I'm almost finished, Your Honor --

7

THE COURT: No, that's okay, take your time.

8

MR. GIBSON: "Instead, the court held that

9

the claims of every class member" -- every

10

class member -- "must depend on a common

11

contention of such a nature that it is

12

capable of class-wide resolution. Which

13

means the determination of its truth or

14

falsity will resolve an issue that is

15

central to the validity of each one of the

16

claims in one stroke.

17

“Thus the commonality test is no longer

18

met when the proposed class merely

19

establishes that there is at least one

20

issue whose resolution will affect all or

21

a significant number of the putative class

22

members."

23

THE COURT: Could that or might that refer to

24 commonality -- strike that. Isn't the plaintiffs' argument

25 that the commonality refers to the process and not the

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1 individual treatment?

2

MR. GIBSON: So, the plaintiffs here despite, in my

3 view, what one would glean from their complaint, which asks

4 for all sorts of individualized-based relief, if you read the

5 actual language of their relief that they seek at the end of

6 their complaint, plaintiffs are now suggesting that they will

7 not seek any individualized relief, they're not going to have

8 any sort of this, but really they're focused on the process.

9 Okay?

10

The problem with that in this case is that the

11 process is by no means common to each individual class member.

12 And, more importantly, the alleged deficiencies in that

13 process are not common to each class member. That is what is

14 required, that literally there is some alleged deficiency, and

15 they have a litany of alleged deficiencies, but there is an

16 alleged deficiency which applies to every single class member

17 the same way such that the resolution of whether or not that

18 alleged deficiency is actually deficient under the law will

19 resolve each one of those claims, quote, "in one stroke."

20

It may seem harsh from a pre-Walmart perspective, but

21 this is the law as stated by the Supreme Court in Walmart and

22 as applied very clearly by the Fifth Circuit in M.D. v. Perry,

23 and by the Seventh Circuit in Jamie S., what I would consider

24 probably the most on-point case regarding a very similar type

25 of claim that we have here.

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1

So, Your Honor, that's how I wanted to start our

2 discussion to recognize that the law has changed. We are in a

3 different world after Walmart, as recognized very explicitly

4 here by the Fifth Circuit. And the commonality standards are

5 much more rigorous and it is no longer sufficient to say we

6 are all individuals with developmental disabilities who reside

7 in nursing facilities who are alleging an Olmstead claim.

8 That is not sufficient.

9

Number one, they all actually have to have an

10 Olmstead claim, which I'll get to, that actually the vast

11 majority of the class does not even have an Olmstead claim in

12 this case under the evidence proffered by the plaintiffs, and

13 even if they did, the reason for the harm would have to be

14 common across the entire class. I will in particular point

15 to -- talk about a couple of the cases that the plaintiffs

16 rely on which have certified classes in the ADA, Olmstead

17 arena following Walmart, which are very, very different from

18 the type of super claim, programmatic, across-the-board claim

19 that the plaintiffs are making in this lawsuit.

20

In the defendants' opposition we, of course, talk

21 thoroughly about the Walmart decision, about M.D. v. Perry and

22 about Jamie S. And then we go on to discuss the various

23 deficiencies in the putative class. I'm not going to go too

24 much further into Walmart in the case law as it exists.

25

On the overview, what our problems are with this

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1 purported class, as I stated, this class does not meet the

2 rigorous analysis of commonality as set forth in Walmart and

3 M.D. v. Perry, as I'll explain more thoroughly. The various

4 claims purported problems and alleged deficiencies in the

5 funding, the administration, the various ways that the State

6 runs this program are in no way common or across this entire

7 class. Plaintiffs essentially -- plaintiffs admit that and

8 provide evidence supporting that in their materials with their

9 motion, and there is no question that these claims are not

10 common and, in fact, the majority of the plaintiff class

11 doesn't even have these claims.

12

Secondly, the named plaintiffs are not typical. For

13 instance, they do not -- they desire to be placed in the

14 community. They want to not be in a nursing facility. As

15 plaintiffs’ own data suggests, 90 percent of individuals with

16 developmental disabilities have expressed no interest to

17 leave. Okay?

18

THE COURT: How do we know that?

19

MR. GIBSON: That data is collected -- it's data that

20 was presented by the plaintiffs in their -- Mr. Corbett's

21 declaration. I can get the exhibit number if it would be

22 helpful to the Court.

23

THE COURT: No, I'll get it.

24

MR. GIBSON: And defendants also offered an affidavit

25 that was attached to their response which confirmed that the

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1 approximately 10-percent rule applies; meaning only 10 percent

2 of individuals having expressed an interest to be placed in

3 the community.

4

In addition, the named plaintiffs lack standing to

5 bring all of the claims. Standing to bring all of the claims

6 asserted is a prerequisite to being an appropriate class

7 representative and the named plaintiffs do not have that

8 standing. That's partially for reasons that were discussed

9 this morning and I won't go into that again because that's

10 tied into the motion to dismiss. But it also relates to Mr.

11 Holmes, the issue that was discussed earlier; one of the named

12 plaintiffs who is no longer in a nursing facility.

13

In addition to commonality, the Walmart case and its

14 progeny really, you know, changed -- modified the law on what

15 it means -- what's an appropriate Rule 23(b)(2) class. Of

16 course Rule 23(b)(2) applies to classes seeking injunctive

17 relief, not damages. And in the Walmart case the discussion

18 was really about the limited portion of relief that related to

19 back-pay damages for the allegedly discriminated women that

20 had worked for Walmart. And the court really made this

21 discussion of what's an appropriate relief for 23(b)(2) class

22 in that context. But in M.D. the Fifth Circuit went well

23 beyond that and made it very clear that those strict

24 requirements apply to all Rule 23(b)(2) classes, including

25 that not only the elements that Mr. Schwartz talked about but

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1 additional elements that I'll also discuss.

2

Finally, an issue that was raised in our opposition

3 which, surprisingly, the plaintiffs nor the Government has

4 even addressed, which is that Fifth Circuit law requires that

5 a class be ascertainable and clearly defined and this class is

6 not. Which I will explain in a few minutes.

7

Plaintiffs have served four different causes of

8 action which were discussed in detail this morning. They seek

9 a class of all Medicaid eligible persons over 21 years of age,

10 quote, "with mental retardation or related

11

condition, collectively referred to as

12

persons with developmental disabilities,

13

in Texas who currently, or will in the

14

future, reside in nursing facilities, or

15

who are being, will be or should be

16

screened for admission to nursing

17

facilities,” pursuant to the PASRR statute and

18 regulation.

19

They seek an injunctive -- a variety of injunctive

20 relief "relating to screenings of persons with

21

disabilities, the provision of services

22

and supports, and the administration of

23

the community-based waiver programs."

24

As to commonality, let's focus on the Olmstead

25 integration claim. Plaintiffs allege that essentially

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1 everyone in this class has been harmed by being -- by the mere

2 fact that they are in a nursing facility. Okay? Olmstead

3 makes very clear that that is not the standard for a harm for

4 an undue institutionalization. Right? In fact, many people

5 need nursing facility care. There is a level of care that one

6 receives in a nursing facility that is not available in other

7 settings. And there's a reason that the -- all of the

8 regulations for Medicaid programs create all sorts of -- not

9 only contemplate but have a very robust regulatory environment

10 for Medicaid patients in nursing facilities.

11

There is no harm, per se, by merely being an

12 individual in a nursing facility. Instead --

13

THE COURT: Isn't the harm alleged by the plaintiff

14 that they ought not be there in the first place?

15

MR. GIBSON: That's correct, Your Honor, that's what

16 they allege. And they allege that every one -- every single

17 developmentally disabled person -- well, is harmed because

18 maybe -- they don't ever really say this, but maybe all of

19 them could be in the community. But, of course, their own

20 data and their own allegations in their complaint make very

21 clear that that's not the case. Right?

22

To have an Olmstead integration claim, there's

23 essentially three elements: That community placement has to

24 be appropriate for the individual as determined by the State's

25 professionals. And these are the elements set out very

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1 clearly in Olmstead.

2

The individual does not oppose transfer to a more

3 integrated setting.

4

And that the placement can be reasonably

5 accommodated without creating a fundamental alteration to the

6 state's Medicaid program.

7

I do not think that the plaintiffs -- well, maybe the

8 plaintiffs believe that every single one of these individuals

9 should be put in the community regardless of their needs.

10 It's unclear whether that's their position or not. They

11 clearly have asserted that they're all harmed. Of course,

12 there is no harm under Olmstead unless you are qualified for

13 community placement and do not oppose transfer. You actually

14 have to want -- be qualified for and want that placement for

15 there to be a harm in the first place.

16

And yet the plaintiffs allege that for 80 percent --

17 only 80 percent of the class is qualified for community

18 placement. That is clearly stated in their complaint. That

19 means, first off, a fifth of their purported class doesn't

20 even qualify, as they themselves allege. We are not -- this

21 is their own allegations. More importantly, approximately 10

22 percent, somewhere around 10 percent would oppose transfer.

23 So based on the evidence, they support -- they provided any

24 evidence, we provided.

25

Now Mr. Schwartz speculated, hypothesized that maybe

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1 it's possible if maybe all of these alleged wrongs were

2 remedied, maybe that 10-percent number might be greater. I

3 think the Court and the parties need to look over the evidence

4 that's before the Court, and the evidence that they,

5 themselves, provided, which is 10 percent oppose. That means

6 90 percent of this class does not have an Olmstead claim,

7 period. If 90 percent of the class doesn't have a claim, I

8 don't see how in the world commonality can be established

9 under Walmart.

10

Walmart, M.D. and all of these cases clearly

11 contemplate that you actually have to have a claim. Right?

12 Not only do they contemplate that, they have to contemplate

13 that your claim, that every class member has this claim and

14 that the claims can be resolved by a common question in one

15 stroke. So if you don't have the claim, how in the world can

16 your claim be resolved in one stroke when you have no claim in

17 the first place?

18

Clearly I don't think that the court in Walmart would

19 have contemplated a class that included women who did not

20 allege they were discriminated against. Or maybe included men

21 as well as women in the Walmart claim. Or maybe in M.D. v.

22 Perry, it included children who had been adopted but weren't

23 in foster care. I mean, it -- and maybe this is just me, Your

24 Honor, but I am flabbergasted to think that a class could be

25 certified where 90 percent of the class does not even have the

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1 claim under the elements clearly stated by the Supreme Court.

2 Furthermore, even if -- even taking that 10 percent, okay,

3 that 10 percent has to have a common question of law or fact

4 that allows their claim to be for class-wide resolution in one

5 stroke.

6

In this case, it's clear that that 10 percent does

7 not share that. Some of these people allege, or the

8 plaintiffs allege that some people are improperly segregated

9 in nursing facilities because they didn't get an appropriate

10 PASRR. Or maybe they didn't get an appropriate Level One

11 PASRR, or maybe they didn't get an appropriate Level Two

12 PASRR. Some maybe are on a really long waiting list for HES

13 waiver slot, or maybe others are on some other waiting list

14 for some other waiver slot. Others maybe should be getting

15 services that -- in ICMFR’s which they're not getting in

16 nursing facilities. It's a whole litany of different causes,

17 different reasons why these individuals are purportedly

18 segregated in nursing facilities and not receiving community

19 placement.

20

Those reasons are not common. They are, in fact,

21 uncommon as the very data provided by the plaintiffs show. It

22 is not the case that every single person in Texas is not

23 receiving a PASRR. Texas has had a PASRR process for years

24 and years. It has been modified before with the input of

25 various stakeholders, including the federal government, and it

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1 continues to be modified and improved based on the input of

2 the federal government.

3

They do not allege that even the problems with the

4 PASRR are common. Some people, you know, get treated this

5 way, some people get treated this way. And nor have they

6 identified the common reason or problems with the PASRR

7 requirement process. They haven't said that the form is wrong

8 or that the training is improper, that all of the training on

9 PASRR is improper, or that the implementation is improper

10 because you're doing it this way instead of this way. They

11 don't allege that.

12

And their own report offered by the Office of the

13 Inspector General recognized that there's a litany of reasons

14 why someone may or may not get an appropriate PASRR review.

15 It could be the insufficient training at the nursing facility

16 side. It could be for all sorts of different reasons:

17 insufficient oversight by the federal government itself in

18 its consistent oversight.

19

And so it's as if you have someone, you know, all the

20 people who got into wrecks with the State with state cars

21 saying, "We're going to have a class action lawsuit suing the

22 State for all of its negligent equal accidents," which, of

23 course, are all caused by a variety of different reasons.

24 Some of them are bad drivers, some of them are bad -- we

25 allegedly haven't maintained the fleet properly, "But we're

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1 just going to lump them all together because we allege we've

2 all been harmed the same, because we've all been in an

3 accident with a State vehicle." That is clearly not

4 sufficient under Walmart. You have to have a very clear level

5 of commonality that allows for class-wide resolution of the

6 claim based on common issues. Common dispositive issues.

7 That's the real key, common dispositive issues.

8

Going to the Medicaid Act claim -- and before I go on

9 to other claims, Your Honor, the plaintiffs are seeking a

10 class of all of these individuals for all of these claims.

11 They have to show commonality for all the of the claims. It

12 is not allowed in class actions to say, "We have one claim" --

13 let's say we have a Federal Securities class action and all

14 the plaintiffs are all the people who bought that claim -- or

15 bought the stock.

16

You can't say, "We're going to allow that case to

17 proceed as a class action but we're also going to let all of

18 the class members who may" -- let's say there's a securities

19 class action against Bridgestone for misstatements regarding

20 their tires. We're not also going to allow those named

21 plaintiffs -- or those class members to litigate their product

22 liability action in the same lawsuit unless there's

23 commonality on that claim as well. We have to establish

24 commonality on every claim that's being asserted here for that

25 claim to be litigated on a class-wide basis.

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1

THE COURT: By all the class members?

2

MR. GIBSON: That's right. And the plaintiffs have

3 not proposed subclasses, breaking this apart, nothing. They

4 want, they have asked for one gigantic class of all of these

5 individuals to litigate all these claims together. And to do

6 that, they have --

7

THE COURT: Isn't it more efficient that way, though?

8

MR. GIBSON: Walmart and the Fifth Circuit have made

9 it clear that if there are differences among the class that

10 you have to have subclasses. In particular, M.D. v. Perry is

11 very clear about the consideration of subclasses. None of

12 those have been presented, it hasn't been discussed, we don't

13 think it's -- I mean, I have raised it because of, really for

14 its lack of discussion here. And certainly the defendants

15 have no -- it's really up to the plaintiffs whether or not

16 they want to try that, and not that that would even be

17 appropriate in this case, but we don't even have anything on

18 the table to discuss. We are discussing solely one mega-class

19 to address one super claim, as the M.D. v. Perry court called

20 it, of a litany of alleged failures and problems all affecting

21 the various class members differently even to the effect that

22 they affect -- even to the level that they affect them because

23 most of the don't even have an Olmstead claim as we discussed.

24

Going to the Medicaid Act claim. Of course, there

25 are different provisions under the Medicaid Act that they

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1 cite. Going to the reasonable promptness claim. It states:

2

"The State plan must provide all

3

individuals which may make application for

4

medical assistance under the plan...shall

5

have an opportunity to do so and such

6

assistance shall be furnished with

7

reasonable promptness to all eligible

8

individuals."

9

They say that the reasons for the delay are arbitrary

10 policies. This is what they state in their brief in their

11 amended complaint. There's simply no glue, as required by

12 Walmart, holding these claims together for the reasonable

13 promptness.

14

Again, they admit that it's numerous different

15 policies. Some policies affect some class members, some

16 policies affect other class members. Again, some are delayed

17 due to their failure to receive specialized services because

18 of the definition of specialized services. Some have alleged

19 violations of the reasonable promptness standard based on

20 insufficient PASRR reviews because if the PASRR review would

21 have been sufficient, they would have had a more prompt

22 assessment of their needs and prompt provision of services.

23 Others claim that the reason for the reasonable promptness

24 standard not being met is because they're on a really long

25 entrance list for a waiver program. Again, these claims are

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1 just a multitude of claims, none of which are common across

2 the entire class.

3

The same goes for the freedom of choice claim.

4 Plaintiffs admit that the application of this provision is

5 limited to those who are eligible for waiver services; amended

6 complaint Paragraph 97. Yet plaintiffs also admit that a

7 significant portion of the class is not qualified for

8 community-based placement.

9

So if only 80 percent of the class is qualified and

10 only 10 percent actually want community-based placement, and

11 how in the world could a provision, a freedom of choice

12 provision that only applies to those who are eligible for

13 community-based waiver services be common across the class

14 when a lot of people aren't qualified and haven't applied and

15 will never, ever be determined to be eligible or not?

16

As to the NHRA, or what I call the PASRR claim, the

17 PASRR process claim, that claim also lacks commonality. They

18 allege that the screening fails to identify some but not all

19 people as those with developmental disabilities. Some people,

20 they would admit, even by their own evidence, receive a

21 level -- PASRR Level 1 screening, are appropriately identified

22 as persons with developmental disabilities, receive an

23 assessment and receive those services.

24

I mean, the percentages that they have are like a

25 funnel, right? Only 80 percent get Level 1, 50 percent get a

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1 Level 2, 20 percent get the appropriate thing. Which means

2 there are other people outside of that funnel which are

3 getting the appropriate level reviews. And so, again, it just

4 shows that there is no commonality for why these people are

5 harmed, allegedly harmed.

6

This "some but not all" sort of idea just pervades

7 their entire complaint. Some but not all are on the entrance

8 list for the waiver programs and aren't getting in. Some but

9 not all have an Olmstead claim. Some but not all have

10 received an improper PASRR review. Some but not all should be

11 receiving specialized services. I mean, it's just, again,

12 replete throughout their entire idea of what this case is and

13 they would take their litany of alleged transgressions and

14 say, "Based on all of these, everyone's been harmed."

15

It's like Venn diagrams that never meet anywhere.

16 There's just a bunch of Venn diagrams that sort of overlap but

17 there's no center where it all comes together. There's no

18 glue. That's where the glue would be, and based on the

19 allegations and the evidence before the Court, there is no

20 glue for any sub-population, they have not established that

21 any sub-population here has all of the claims that they

22 allege. Even their own plaintiffs, one of them is in a

23 nursing facility. Right, his claims are moot. Even he

24 doesn't have all the claims.

25

So and this also goes -- I'm going to move on to

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1 typicality. Before I do, just to summarize, there's no way in

2 my view, Your Honor, to be, to be perfectly honest, that this

3 claim meets the standard set forth in Walmart and M.D. v.

4 Perry on commonality. I just don't see it. I don't see how

5 when 90 percent of your class doesn't have your primary claim,

6 admittedly cannot meet the elements of the primary claim in

7 the lawsuit, how we can certify a class including those people

8 to litigate that claim. I just don't understand it, Your

9 Honor, and I'm surprised -- I was actually surprised that

10 following the decisions in Walmart and M.D. when the

11 plaintiffs filed their amended motion that they filed it as

12 they did.

13

In terms of typicality, plaintiffs aren't typical of

14 the class. In fact, as their own evidence shows, and I know I

15 keep harping on this, 90 percent of the class does not desire

16 community placement. Only 80 percent of the class is

17 qualified for community placement, under their own purported

18 facts, which is what the record is here.

19

Yet, all of them purportedly qualify for community

20 placement and all of the named plaintiffs would like to be

21 placed in the community. They do not represent the interests

22 of those people who do not, who actually wish to remain in a

23 nursing facility, which is the vast majority of individuals.

24 They do not represent the one-fifth of all individuals, under

25 their own admissions, that do not qualify for community

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1 placement.

2

Just as with commonality, merely asserting a common

3 legal theory does not establish typicality when proof of a

4 violation requires an individualized inquiry. Merely

5 asserting that we are representing a class that has all of the

6 same -- asserting claims under common statutes does not meet

7 the typicality requirement.

8

As far as the adequacy of the class representatives,

9 at this stage, Your Honor, we really are -- make two simple

10 arguments. Number one, to be an adequate class representative

11 you have to have standing to assert all the claims. That's a

12 very clear requirement. The law is set forth in our brief.

13 As discussed this morning, we argue that the plaintiffs do not

14 have standing to assert the freedom of choice claims nor

15 standing to assert claims against the Governor, and for that

16 reason, we would assert they are inappropriate class

17 representatives for those claims.

18

In addition, Mr. Holmes is currently placed in the

19 community and is not a member of the class except for the fact

20 that plaintiffs allege there is some risk that he will be

21 placed again in a nursing facility. As we argue in our brief,

22 Your Honor, his claims are now moot. He is not in a nursing

23 facility. He certainly doesn't have an Olmstead claim anymore

24 and he is not an adequate class representative.

25

Moving on to the other critical and sort of

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1 game-changing holding in Walmart and M.D. and Jamie S. is the

2 requirement of Rule 23(b)(2) cohesiveness. Despite the

3 assertions in plaintiffs' reply brief and as well as in the

4 government's, the federal government's brief on class

5 certification, Walmart and M.D. make it very clear that:

6

"Injunctive relief is only appropriate if

7

the injuries are uniform and essentially

8

the same across the entire class."

9 Those are the words used by the Fifth Circuit in M.D. v. Perry

10 at 847 to 848. In addition, the claim cannot -- the requested

11 relief cannot request individualized relief on behalf of

12 individual class members. It has to be common across the

13 entire class.

14

And, finally, the relief must be particular. Again,

15 one of the reasons that -- Mr. Schwartz suggested that the

16 only reason that the court in M.D. v. Perry had an issue with

17 the relief requested was due to the panel, expert panels that

18 the plaintiffs were requesting in the foster care case. That

19 is clearly not the case. The court in M.D. v. Perry also

20 took -- had problems with the fact that the relief requested

21 was not sufficiently particular and said that, quote:

22

"Finally, injunctive relief must be

23

crafted to describe in reasonable detail

24

the acts required."

25

I've looked at the purported relief in the back of

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1 the amended complaint, I don't think it's very particular.

2 It's a lot of sort of platitudes and goals. It is not

3 particularized relief. It does not say how we would get to

4 the provision of services in community-based settings. It

5 does not say what changes are necessary to the PASRR program.

6 It does not say what changes are necessary to the waiver

7 programs. None of that's in there. It does not say a

8 particular law should be overturned, a particular policy

9 should be changed. It doesn't say any of that. It has a lot

10 of platitudes about goals for insuring that the class members

11 are -- have opportunities for community base -- based on,

12 quote, "Their individualized needs," end quote. And

13 individualized needs and individualized assessments is all

14 over the requested relief in this lawsuit.

15

For that reason, defendants took umbrage with the

16 requested relief and said that it would require improper

17 individualized assessments. And we took them at their word

18 that that's what they meant when they put those words in their

19 requested relief.

20

In addition, three of the named plaintiffs filed a

21 motion for preliminary injunction in this lawsuit. They

22 sought -- and, again, they've alleged -- plaintiffs have

23 alleged that they've all been harmed very similarly. So we

24 thought that the requested relief which they sought to address

25 their harms, that they said, "We can't wait anymore, we have

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1 the harms which are common," they alleged common to the entire

2 class, "and the way to address those harms are very specific,

3 individualized relief that we are now asking for in this

4 preliminary injunction motion."

5

We took them at their word and said, "Well, if that's

6 the way to address the harms that you allege in this lawsuit,

7 this is what you think is necessary to meet -- the relief

8 needed for these claims, then presumably that's the relief

9 you're going to request on behalf of all class members." Of

10 course, if they're not going to request that relief, that also

11 questions whether they are adequate class representatives.

12 Why was that relief sufficient for the named plaintiffs and

13 it's not sufficient for the entire class?

14

So, and if you look at that relief, it's very clear

15 that it is a very individualized, case-by-case assessment of

16 needs, service needs, placement needs, where those needs can

17 be met, and monitoring by this Court of all of those decisions

18 as to whether or not the defendants would be meeting those

19 needs as alleged by the plaintiffs.

20

Really this goes back, these two ideas are tied

21 together, commonality and (b)(2) cohesiveness. Because the

22 claims aren't uniform, because the claims aren't common, there

23 is no uniform injunctive relief that will remedy a common

24 claim. Okay, they've alleged that they've all been harmed

25 allegedly the same way, but as we pointed out, in fact, 90

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1 percent of the class does not even have a harm under Olmstead.

2

So what is the relief that will address a common

3 claim? They haven't offered any such relief; a particular

4 change to a waiver program, a particular change to the PASRR

5 program. We have none -- none of that has been proposed here

6 and that all -- again, that violates the particularity

7 requirement of the Fifth Circuit.

8

Finally, Your Honor, the Fifth Circuit has made it

9 clear that classes must be clearly ascertainable, adequately

10 defined so we know who's in it: Who are these people? The

11 way they have defined this class they have first all Medicaid

12 eligible persons. They don't have all Medicaid recipients,

13 they have all people who are Medicaid eligible.

14

The State has no way of identifying who's Medicaid

15 eligible. Those decisions are only met when a person applies

16 for Medicaid. At that point eligibility is determined. So if

17 a person never applies, there's no way to determine that.

18

Secondly, they state, "People who have developmental

19 disabilities." Again, they themselves alleged that the way of

20 determining that under the PASRR process is flawed and does

21 not identify people with developmental disabilities. So how

22 are we supposed to know who is in this class if we can't rely

23 on who -- on the PASRR process to identify who the class

24 members are? Again, it would be necessary to conduct a,

25 quote, "intensive, individualized, factual inquiry," end

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1 quote, to identify class members which was found to be

2 improper in the Jamie S. case at Page 496.

3

To close, Your Honor, I want to talk about a couple

4 of the cases that plaintiffs talk about that have been

5 certified following Walmart. In the Pashby case, that case

6 involved a change in the law. North Carolina put a specific

7 provision that changed services that were going to be provided

8 to a very specific population of Medicaid recipients. In

9 particular, it changed eligibility and the services provided

10 for what is called personal care services. And the class in

11 that case was defined not as everybody receiving Medicaid, the

12 class was defined as adults affected by the new rule resulting

13 in termination or reduction of services. All right?

14

So we're talking about a specific law that affects

15 specific people and with specific changes in service. All of

16 them, every person who was receiving those services was going

17 to be affected the same way.

18

The relief that was sought was an injunction,

19 enjoining enforcement of the particular rule. Okay? It was

20 very clear. There was one policy at issue. It affected a

21 very specific population. And the relief was enjoining the

22 enforcement of this new policy so that those service changes

23 wouldn't take effect.

24

It's not surprising that the court found that, quote:

25

"A determination that Policy 3E is valid

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1

or invalid on its face will resolve the

2

claims of all potential plaintiffs

3

irrespective of their factual

4

circumstances," end quote.

5 That's at the Pashby case 279 F3d 347 at 353.

6

That is clearly not what we're talking about here,

7 Your Honor. We are not talking about a single law, making a

8 single change to the provision of services to a specific

9 population.

10

Similarly, in Oster v. Lightborn [phonetic], Northern

11 District of California case, again referred to a specific

12 change in California law regarding mandatory reductions in the

13 state's, quote, "in-home support services,” or IHSS services,

14 “for the elderly and disabled." Again, the class was limited

15 to -- actually, there wasn't a single class. There were

16 multiple subclasses in that case and the classes were limited

17 to the recipients or those eligible for IHSS services whose

18 services would be limited or terminated under this new law.

19 And, again, the plaintiffs sought an injunction preventing the

20 enforcement of this change, very specific relief on a narrow

21 issue that was clearly common across the class: whether or not

22 this specific law violated the ADA.

23

THE COURT: And that case again was Oster --

24

MR. GIBSON: That's Oster v. Lightborn, 2012 Westlaw,

25 685808.

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1

THE COURT: Okay.

2

MR. GIBSON: Those cases are totally different than

3 the type of super-claim, as the Fifth Circuit called the

4 foster care case, that we're talking about here. A claim that

5 attacks, as plaintiffs themselves say, the "funding,

6 administration, operation and” -- one other word -- “of the

7 entire provision of Medicaid services to the developmentally

8 disabled in nursing facilities.” The entire program from

9 start to finish is being, is being attacked. From the time

10 that they step foot in that door and they're screened to the

11 time that they get to a community placement.

12

In fact, the class isn't even limited to that. It

13 allegedly would include everyone who's in community placement

14 including Mr. Holmes because there's maybe a potential risk

15 that they may at some day be back in a nursing facility.

16

Your Honor, to close, this case as asserted by the

17 plaintiffs is a across-the-board challenge to this entire

18 program for every single person who is currently in the

19 program and those who may at some point be in the future and

20 who may come back into the program for a litany of different

21 reasons under a variety of different statutes and regulations,

22 none of which is common across every member of this class.

23 The class lacks commonality, is not cohesive under 23(b)(2),

24 and has the other problems identified.

25

The class should not be certified, Your Honor. Thank

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1 you.

2

THE COURT: Counselor, do you wish to respond to any

3 or all -- well, not all.

4

MR. SCHWARTZ: Not all.

5

THE COURT: You'll miss your plane.

6

MR. SCHWARTZ: I promise not all.

7

THE COURT: First of all, how does the class have

8 the -- the purported class have an Olmstead claim?

9

MR. SCHWARTZ: Defense counsel dramatically

10 misrepresents what we have said in our complaint and the

11 evidence that we have supported the motion.

12

THE COURT: Well, in any event, how does the

13 purported class have an Olmstead claim?

14

MR. SCHWARTZ: Well, they all are -- because of the

15 way the defendants have deny -- have operated their community

16 service system and have -- the result of which is segregation

17 in nursing facilities, everyone is subject to the same common

18 practice. We recognize, as we said, precisely the reasons why

19 the Court is not involved in individualized relief, which is

20 that after those corrections are -- let's fast forward.

21

If we prove at trial that the defendants' eligibility

22 criteria for certain of its programs, that its funding and

23 administration, that its notices and information that they

24 give to people, all significantly contribute to, independently

25 contribute to people's unnecessary segregations, we would

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1 ask the Court would issue an injunction saying you change

2 those things. As a result of the change to that community

3 services are made available to people in nursing homes. There

4 then would be -- so all of those individuals suffer a common

5 wrong. They are subject to the way the defendants have denied

6 them access, through their eligibility criteria have denied

7 them access to community services.

8

The defendants right now operate, as I think the

9 Department of Justice mentioned, they operate a community

10 service system. They provide services to a bunch of people,

11 including, by the way, people with intellectual and

12 developmental disabilities who happen to be in those other

13 institutions, ICMFR’s. They just don't do it for people in

14 the nursing homes. So that's the common contention.

15

What is critical is that -- so all of the individuals

16 in nursing homes are injured in that way. Now as we

17 acknowledged in an earlier part of our argument, if that

18 deficiency is corrected, there will then be the use of the

19 State's own treatment planning process to look at what each

20 person needs and who wants to go and things like that. All

21 right.

22

If it were true, if the defendants' proposition was

23 true, one of two things would have to happen. Either, for the

24 reasons they say of what constitutes an Olmstead claim and a

25 Medicaid claim, and they went down the reasonable promptness

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1 and so on like that, either it would be absolutely impossible

2 for any federal judge to ever certify a case under the ADA

3 again. It would be impossible -- or the Medicaid Act. It

4 would be impossible because, as they say it, the only people

5 who have a Medicaid claim to specialized services are people

6 who have -- for whom that would be necessary, for whom that

7 would be appropriate, who has an assessment.

8

So then every person -- there could never be a single

9 challenge under the Medicaid Act. There could never be a

10 single challenge under the ADA. The defendants' theory would

11 obviate all 40 decisions which we gave you. It says that

12 Walmart is not just a change in law but it vacates, it

13 effectively repudiates all prior decisions because the only

14 people they would say who have a claim are the people who have

15 stepped forward and say, "Today, today, Judge, I want to

16 leave, I'm able to leave, I'm qualified to leave. I might not

17 be tomorrow, by the way, because I could get sicker. I might

18 not be yesterday because I didn't have an opportunity to even

19 think about this, but today."

20

So the second part of their position is that it's not

21 only impossible to ever certify an Olmstead case but that

22 because of the very nature of all of us, we change our minds,

23 we get sick and we get better --

24

THE COURT: Okay, how is the purported class

25 ascertainable?

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1

MR. SCHWARTZ: It's ascertainable because -- there's

2 really two branches to the answer to that question. All

3 people who are in nursing homes, that is, once someone -- ones

4 with intellectual disabilities, we're only talking about

5 people, I think that's clear, people with intellectual and

6 developmental disabilities -- as soon as they enter the

7 nursing home or are required to be given a PASRR, because

8 sometimes a PASRR, if it's done properly, will actually create

9 a diversion. A person will go and be assessed and find that

10 they do better in a community program, that's if it's done

11 right. So any person who is subject to a PASRR, that's the

12 ascertainable condition.

13

It is true that the condition that the Department of

14 Justice and the Olmstead court says people who are at serious

15 risk of institutionalization is vaguer. It's harder to

16 identify. And so the Ninth Circuit in M.D. -- excuse me -- in

17 M.R. recently made clear, adopted the Department of Justice's

18 guidance and rules and said that people who are at risk of

19 institutionalization are also covered by the ADA. As did the

20 Tenth Circuit in Fisher, as did the Ninth Circuit in Arc v.

21 Braddock, as has the Third Circuit in Frederick L. All of

22 those circuits have said that the ADA covers people who are

23 institutionalized. So that's easy to ascertain. It's all the

24 people in the nursing homes with intellectual and

25 developmental disabilities. It also includes the people at

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1 risk of institutionalization.

2

The defendants’ repeated mischaracterization that we

3 keep -- that we're admitting that only 10 percent of all those

4 people want to leave is plainly wrong. We say first at

5 Paragraph -- in our complaint at Paragraph 82 that:

6

"National experience when PASRR programs

7

are properly implemented have identified" -- that at

8 least 80 percent of all the people in a properly adequate or

9 appropriately operating PASRR program are identified as

10 leaving -- as needing to leave, they shouldn't be in there.

11

THE COURT: Identified as what?

12

MR. SCHWARTZ: I'm sorry. Have been -- let me say it

13 better. When a PASRR program is operating properly, that

14 program will identify 80 percent -- at least 80 percent of the

15 people will be described as those who do not need to be in a

16 nursing home. In Massachusetts, for instance, where the court

17 is about to -- in Rolland. The PASRR program currently

18 identifies 93 percent of all the people who are referred to

19 nursing homes as not needing to be there. That's the current

20 statistic that was provided to the federal court by the

21 defendants and the court monitor.

22

So that's another way of saying, of course, and we

23 acknowledge not every single person who's admitted to a

24 nursing home are inappropriate. There's some people who do

25 have to be in a nursing home. But 93 percent are identified

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1 in that program.

2

We further say at Paragraph 83 that:

3

"Of the approximately 4500 people with

4

developmental disabilities, the vast

5

majority could be diverted or are

6

qualified for community living."

7 One of the difficulties, Your Honor, is -- and that's why I

8 used that number just a moment ago, appropriately constituted

9 an operating PASRR program. If a PASRR program

10 mis-identifies, meaning they don't think a person's

11 developmentally disabled when his school, his father, his

12 doctor and everybody who's ever seen that person say they are

13 developmentally disabled, how can you get an accurate count?

14 The fact is the defendants, because of their program, don't

15 have any idea exactly how many people are in nursing homes.

16

So all we have to go on is some data that the

17 defendants have generated from a program that we feel, and to

18 some extent they acknowledge, needs to be fixed.

19

So from that data, there's another piece of data that

20 the federal government collects. It asks each person, not --

21 it doesn't break it down to people with developmental

22 disabilities. But every elderly person, every person who

23 comes into a nursing home, "Do you want to leave? Do you want

24 to leave right now?" Shortly after they're admitted, "Do you

25 want to leave?" That's the number that the defendants'

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1 counsel is talking about. Right?

2

It's about Medicare clients and non-Medicare clients,

3 not broken down by disability, not broken down by people

4 giving information, not reflecting people who've given a

5 realistic opportunity. We have never conceded, we have never

6 presented evidence to the Court and we will never state that

7 only 10 percent of the purported class are qualified. All

8 right?

9

So what we're saying is that the class is

10 ascertainable because of two factors. It talks about the

11 people who are in facilities and, and in at least a

12 minimally-adequate PASRR program, the defendants should be

13 able to tell you, Your Honor, "These are the number of people

14 and these are the -- the people by name who have intellectual

15 disabilities who are in the nursing homes we're paying for.

16 We are paying for their care. We're spending tens of

17 thousands of dollars to have them in nursing homes. We are

18 operating a PASRR program that should identify who has a

19 disability." You should be able to ask them what are their

20 names and they should be able to tell you. That's how

21 ascertainable it should be.

22

THE COURT: Well, how does the law in Walmart not

23 apply, or applicable in this case for your purported class?

24

MR. SCHWARTZ: Let me say that defense counsel

25 started by saying we believe Walmart is irrelevant, or

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1 whatever exactly he said, "We don't think it makes a change."

2

THE COURT: I don't think they said that, but, in any

3 event, just answer my question.

4

MR. SCHWARTZ: Walmart does make a change. Walmart

5 applies by saying, and this is the quote that was read to you

6 in part. Walmart says that -- and this is quoted, actually,

7 by the Fifth Circuit is quoting Walmart.

8

THE COURT: Right, he read --

9

MR. SCHWARTZ: It says:

10

"Rule 23(a)(2) requires that all class

11

members' claims depend on a common issue

12

of law, or fact, whose resolution will

13

resolve an issue that is central to the

14

validity of each one."

15 It doesn't say, and Walmart doesn't mean, and the Fifth

16 Circuit didn't hold, as was previously argued, that every

17 single deficiency must affect every single class member in

18 precisely the same way. That's not the law. That's not what

19 M.D. is saying. And that's not what the quote from Walmart

20 is.

21

What Walmart requires you to do now is first ask us

22 for evidence. We've given that to you. Second, you've always

23 been asked, the federal court, federal district judges have

24 always been asked to conduct a rigorous analysis. That's been

25 the law for 30 years.

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1

But what Walmart newly does, and this is I think a

2 new requirement, is to say that in order for a purported class

3 to meet commonality, there must be a showing that there are

4 common questions that are susceptible to common answers. All

5 right? In Walmart, if you remember, you had 3-1/2 million

6 people who were supervised by thousands of different

7 supervisors across the United States. Each supervisor was

8 making promotion or paid decisions based on his or her own

9 criteria.

10

In fact, what was really problematic in Walmart was

11 that not only couldn't they prove a common policy for the

12 corporation Walmart, but their basic allegation was that there

13 wasn't anything common. They were trying to prove that there

14 was no common situation that binds it together. Every

15 supervisor operated on his or her own. And Justice Scalia

16 says, "Wait a minute. We need some common glue that holds

17 this together and you haven't suggested anything; in fact,

18 what you are alleging,” in Walmart, “is that there is no

19 common glue. You say that's really the problem. You say

20 Walmart should tell every one of its supervisors, ‘When you

21 make promotion decisions, use these explicit criteria and do

22 it in this way.’" Walmart failed to do it.

23

In fact, what they did was to allow there to be a

24 lack of commonality. That's what Walmart -- and so the

25 plaintiffs had a pretty high burden and didn't convince the

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 169 of 184

167

1 Supreme Court that the lack of a common anything, even common

2 instructions, even a memo to the supervisors, they couldn't

3 point to anything.

4

Here, we can point to any number of things. We can

5 point to -- and so what Walmart requires us to do, and

6 ultimately the district court to do, is to closely tie a claim

7 to a common contention and demonstrate there's a common

8 answer. What the defendants want us to do is to tell you

9 today the answer to the question. They want to essentially

10 leap frog over the trial.

11

The trial is going to be a time which after

12 discovery, after we find out exactly how many people in

13 nursing homes do they think there are, exactly how many people

14 have gotten a PASRR, exactly how many people they believe, in

15 whatever way they determine it, are qualified to live in the

16 community, and then we'll have experts do assessments and

17 we'll give you reports and information. So we'll answer the

18 question at the trial how many people. But Justice Scalia,

19 nor the Fifth Circuit, said that you have to answer the common

20 question today. The common question has to be presented with

21 clarity. It has to be tied to a claim.

22

And so here we can go down each of the claims, but

23 the two main ones that you've heard kind of over and over is

24 there's an ADA unnecessary segregation claim that Texas fails

25 to provide its public entity disability services in the most

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 170 of 184

168

1 integrated settings possible. That common question, which

2 is -- flip it around: Does Texas fail to provide its

3 community service -- its disability services in the most

4 integrated setting possible? Right? That's the common

5 question. There will be a common answer.

6

We can't answer exactly how many people. We can

7 demonstrate by evidence of even the experts and the data and

8 the Inspector General that there is an answer. It is capable

9 of a resolution. And as Walmart says, we just have to have a

10 common issue of law or fact; that is, whose resolution will

11 resolve? It doesn't say, it doesn't say that the deficiency

12 has to be common.

13

So I think I've talked about why the defendants have

14 either misunderstood or misrepresented, I'm not sure, this

15 10-percent number. But we were not claiming that. Our

16 evidence does not say that.

17

Similarly, there's not a super claim. We've made, I

18 think -- the Court has sat through patiently the entire

19 morning hearing about all the individual claims. All right?

20 There are two constellations: people who are unnecessarily

21 segregated, people who are not getting services while they're

22 there. All right? That is what PASRR -- right? And that's

23 what the PASRR claim was.

24

As I've said a couple of times so I'm not going to

25 keep on repeating this, we are not asking for individualized

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 171 of 184

169

1 relief. The prayers in our claim don't seek that. We are not

2 like the M.D. or Jamie S. things where courts should set up an

3 independent expert so every one of the people could be

4 evaluated by the expert. We rely on the defendants. And,

5 frankly, we framed our prayers in a way that we're not trying

6 to dictate to the State of Texas how it should fix its PASRR

7 program.

8

The PASRR program says accurately screen people,

9 accurately identify them. All right. In part, until we

10 conduct the discovery we're not sure of all the reasons that

11 contribute to it, but, more importantly, you know, both out of

12 deference to the State and respectful of the Supreme Court's

13 admonition to federal courts, it is up to the defendants in

14 the first instance to be able to identify how they want to

15 correct their program or how they want to comply with the ADA.

16

If we wrote ten pages of prescriptive requirements,

17 train people like this, make sure that these are the

18 qualifications of PASRR reviewers, make sure that the waiver

19 provides this service and that service with these many hours,

20 the defendants would be complaining to you today that the

21 plaintiffs were trying to dictate how Texas should run its

22 community service program or its nursing program.

23

So there has to be a balance. The balance is that we

24 have an obligation to come forward in our complaint to

25 identify both what the wrongs are and to give you some

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 172 of 184

170

1 guidance in terms of the injunctive relief we want. At the

2 same time, we are neither respectful of the prerogatives of

3 the State nor -- or of the deference the Court is supposed to

4 give to the State of Texas if we try to write you, you know,

5 the precise road map of how the State should comply.

6

Significantly just at the end when the cases were

7 being described post-ADA, the defense counsel neglected to

8 mention both Lane, the case that we provided you as

9 supplemental authority, as well as Gray, which is discussed in

10 our brief in detail. In both of those cases what was being

11 challenged was a common practice. In Oregon it was that the

12 state segregates individuals in its employment programs. In

13 fact, the district court judge noted that the one policy that

14 they do have says, "We shall not segregate." It's just they

15 don't listen to that policy.

16

So we weren't challenging a policy in Oregon, we were

17 challenging the failure to insure that the system of

18 employment services were provided in the most integrated

19 setting possible. Similarly, in Gray it was not a single

20 policy or rule but, instead, California was running some of

21 its public parks without accommodating the needs of wheelchair

22 users.

23

I want to stress at the end, Your Honor, that the

24 combination of the -- the defendants have essentially made

25 sort of two core arguments. One is that the individualized

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 173 of 184

171

1 nature of the claims in this case and the individualized

2 nature of the relief sought precludes class certification.

3 And the second argument that they make is that -- it's really

4 a version of that which is that the wrongs that are happening

5 to people in nursing homes are not happening to every single

6 person. But they are --

7

THE COURT: How do you get around those two

8 arguments?

9

MR. SCHWARTZ: As to the first one, I think we've

10 tried to say two things back to you. One is that if taken

11 literally, if taken on their face value, it would be

12 impossible to ever certify an ADA or Medicaid class. And

13 Walmart doesn't mean that, no court has ever held that. The

14 second, the second point that individuals, not all 4500

15 people, are being subject to all of the --

16

THE COURT: The same wrong?

17

MR. SCHWARTZ: No, all of the same -- the reasons for

18 the wrong. They are being suffered the same wrong. They are

19 being denied access to services in the most integrated setting

20 and they're being denied access to a proper PASRR program. It

21 doesn't affect every individual in exactly the same way. And

22 our answer to that is Walmart does not require that. It

23 requires the resolution -- it requires us to state, and we

24 have stated, a common contention, a common problem, a common

25 injury. And it doesn't require -- which is susceptible to a

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 174 of 184

172

1 common solution in a single stroke.

2

You could enter -- and here's the kind of easy answer

3 to that. You could enter an injunction that says that the

4 defendants will make reasonable -- essentially the injunction

5 the Supreme Court ordered in Georgia, and that the Fifth

6 Circuit and the district court on remand entered was that the

7 State of Georgia, or the State of Texas, will make reasonable

8 modifications to its community-service system so that all

9 individuals who are qualified for community services are

10 provided the opportunity to live in the most integrated

11 setting. That's the single injunction in one stroke.

12

And you could say, "I'll enter a second injunction,

13 the State of Texas will make improvements -- will revise its

14 PASRR program to insure that individuals are accurately

15 identified, professionally assessed, and provided the same

16 specialized services that people in their ICMFR institutions

17 are provided so that they all can receive active treatment."

18

THE COURT: Okay.

19

MR. SCHWARTZ: Thank you.

20

THE COURT: You want to say anything?

21

MR. GIBSON: Just a few things, Your Honor.

22

THE COURT: Sure, of course.

23

MR. GIBSON: I just want to respond to a couple of

24 the points. Plaintiffs claim that defendants' position

25 results in this parade of horribles that means that no

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 175 of 184

173

1 Olmstead ADA claim can ever be certified. That is clearly not

2 what we're saying.

3

What we are saying is that this class cannot be

4 certified on these claims --

5

THE COURT: Because?

6

MR. GIBSON: Because there is no common question of

7 fact or law that allows for the class-wide resolution of any

8 of these claims to address a common injury. That is required

9 both under the commonality provision and the (b)(2) provision.

10

They claim that --

11

THE COURT: Well, aren't they talking that the common

12 injury is the lack of a process?

13

MR. GIBSON: No, I think they say that -- the

14 question is they -- he stated this. The common question is:

15 Does Texas provide disability services in the most integrated

16 way possible? It is not: Does Texas provide a process that

17 meets PASRR? Does Texas provide a process that meets Medicaid

18 requirements?

19

THE COURT: Okay.

20

MR. GIBSON: The question proposed and being relied

21 upon by the plaintiffs is: Does Texas provide disability

22 services in the most integrated way possible?

23

THE COURT: Okay.

24

MR. GIBSON: That is not sufficient. The same could

25 be said for Walmart: Does Walmart discriminate against women?

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 176 of 184

174

1 That is not a sufficient common question. All he has done is

2 merely restated the Olmstead Integration Mandate on a very

3 vague level. That is not a common question capable of

4 class-wide resolution in this case.

5

The same thing in terms of his purported single

6 injunction would -- an injunction that would require Texas to

7 provide disability services in the most integrated way

8 possible. Again, that is such a vague, un-specific injunction

9 that there's no way that that can meet the requirement of M.D.

10 and the requirement for a specific injunction that resolves

11 the claim on a class-wide basis.

12

I would like to point out that the two cases that

13 were referenced, the Lane case and the Gray case, both of

14 those cases relied on a reading of Walmart that has been

15 specifically rejected by the Fifth Circuit.

16

THE COURT: That's the Lane and Gray case?

17

MR. GIBSON: Yes, Your Honor, and those cites are --

18 the Lane is 2012 Westlaw 3322680. And Gray is 279 Frd 501.

19

THE COURT: Okay.

20

MR. GIBSON: Very, very briefly, Your Honor. In both

21 Lane and Gray the courts distinguished the holding in Walmart

22 to say that it was limited to Title VII discrimination claims,

23 and essentially said that the old law regarding civil rights

24 cases still applies and we're going to continue to allow

25 certification so long as there's some vague allegation of a

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 177 of 184

175

1 common violation suffered by the whole class.

2

I would suggest that the Court compare the discussion

3 of Walmart in Lane at Page 10, Star 10, to the discussion in

4 M.D. at Page 840. You will see a very different understanding

5 of the impact of Walmart on cases outside of Title VII and in

6 cases such as this that M.D. v. Perry found these programmatic

7 challenge -- across the board challenges to entire state

8 programs.

9

The same is in Gray. It relied on a limited reading

10 of Walmart as applied only to Title -- which applied only to

11 Title VII cases, which, again, has been rejected by M.D. v.

12 Perry.

13

I think those are the only points I wanted to make,

14 Your Honor. We are not saying that no ADA case can ever be

15 certified again. You know, Pashby and Otis, they address the

16 commonality concern by having a specific class to address a

17 specific change in the law, a specific issue that was applied

18 to everyone the same. Thank you, Your Honor.

19

THE COURT: Okay, thank you.

20

MS. JUREN: Your Honor?

21

THE COURT: Yes.

22

MS. JUREN: If I might address some of the --

23

THE COURT: Okay.

24

MS. JUREN: I’d like to address some of the factual

25 statements that Mr. Schwartz made and I think he did it in

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 178 of 184

176

1 response to class and maybe a couple of other times today

2 also. That is that I believe he said just a few minutes ago

3 that, that Texas has a variety of community-based programs,

4 and that is true, I'm not taking issue with that, that

5 certainly is true. But I believe he indicated to the Court

6 that they are not available to persons in nursing facilities

7 and that is absolutely not true.

8

I wanted to make that clear to the Court that there

9 are a number of programs that are available, community-based

10 programs that are available to the named plaintiffs and to

11 other members of the purported, would-be class who are living

12 in nursing facilities. And the plaintiffs in their response

13 to the motion to dismiss basically admit, they say that they

14 are able now to bypass the interest lists for the class

15 waiver, that's c-l-a-s-s, the CBA waiver, which is a nursing

16 facility waiver, and the Star Plus waivers and access

17 community-based services and supports through a program called

18 Money Follows the Person.

19

Those are available now, Your Honor. I just don't

20 want to leave you with the impression that the State is doing

21 nothing and that there are no programs available to these

22 people. In fact, all the named plaintiffs are now being

23 evaluated for placement into the HCS waiver and, in fact, have

24 been offered other waivers that they've turned down. But

25 those facts are not yet before the Court.

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 179 of 184

177

1

The other thing that I wanted to say is that a number

2 of times Mr. Schwartz has commented on what the State has not

3 asserted in terms of the motion to dismiss. We have not --

4 the State has not claimed that they are doing such and such.

5 And I would just say that the time for that has not yet come.

6 No, we have not even filed an answer where we will refute many

7 of the things that they have said, of course, in their

8 complaint. I mean the Court knows that, but the time has not

9 yet come for the defendants to put forward their side of the

10 story on much of this.

11

The final thing is just a housekeeping matter, Your

12 Honor. We do also have notebooks for the Court on the motion

13 to dismiss that has all of the relevant pleadings in one place

14 and we have them, also, for the motion for class certification

15 if the Court is interested in having a notebook.

16

THE COURT: Yes, yes, of course. Now have those been

17 provided to the plaintiffs?

18

MS. JUREN: They have all the materials. I do have a

19 notebook for the United States and for the plaintiffs as well.

20

THE COURT: All right. And you have them here today?

21

MS. JUREN: I have them here today.

22

THE COURT: Okay. Let's do this. I know our court

23 reporter -- you don't need to -- this doesn't need to be in

24 the record.

25

(Discussion off the record re: transcript.)

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 180 of 184

178

1

THE COURT: Once we get that transcript, we'll review

2 it and get a ruling out on the motion to intervene. Now I

3 know the Government requested in their pleading that they be

4 afforded ten minutes on the motion to dismiss and the class

5 certification motion. If they are permitted to intervene,

6 they'll have 30 days to -- if you need to further supplement

7 your arguments or whatever, or submit a brief on the motion to

8 dismiss or motion for certification, you'll have those 30

9 days. Which is a lot longer than ten minutes.

10

Then once you get the transcript, if any party wishes

11 to supplement their brief, additional briefing, you'll have 30

12 days after that, the same period as the DOJ would have; that

13 is, to respond -- that is to submit a brief on the motion to

14 dismiss. And then if you want to -- is it likely, do you know

15 at this point, whether you would like to supplement your brief

16 or pleadings on either the certification motion or the motion

17 to dismiss, or you can reserve that judgment? Or you can make

18 that judgment later.

19

MS. JUREN: We probably will reserve --

20

THE COURT: To make that determination later.

21

MS. JUREN: -- to make that determination later.

22

THE COURT: And I'm certain you'll likewise, the

23 plaintiffs, would like to supplement --

24

MR. CORBETT: Well, we have briefed these, especially

25 the motion to dismiss to the hilt.

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 181 of 184

179

1

THE COURT: Oh, okay.

2

(Discussion re: submission of supplemental briefings.)

3

THE COURT: You’ll get a copy of the transcript

4 perhaps. After then you can decide whether you want to

5 supplement your briefing. And if you do, if you’ll let the

6 Court know that you’re going to be doing this so that we’ll

7 give you 30 days. Okay? So if you'll provide those

8 notebooks, Counselor, to --

9

MS. JUREN: Yes, sir.

10

THE COURT: -- our courtroom deputy, Jessica. She'll

11 make sure we get it. If there's anything in those notebooks

12 that you need to respond to, you can do it within that 30-day

13 period after you get the transcript.

14

Okay, so we'll be in recess. That will permit you,

15 Counselor, to get to the airport.

16

MR. SCHWARTZ: Thank you.

17

(Discussion re: trip to airport.)

18

MR. SCHWARTZ: Your Honor, right now we haven't had a

19 Rule 16 conference yet.

20

THE COURT: We will do that after the rulings on

21 these other matters.

22

MS. JUREN: Your Honor?

23

THE COURT: Yes.

24

MS. JUREN: I did want just a final word. Thank you

25 for your indulgence today. I really appreciate the time

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 182 of 184

180

1 you've given to all of us to --

2

THE COURT: Sure. Well, this is my way of staying

3 here and not having to deal with redistricting. All right, 4 thank you.

5

(Proceedings concluded.)

6

7

8

9 UNITED STATES DISTRICT COURT ) 10 WESTERN DISTRICT OF TEXAS )

11

12

I, MAURICE D. WEST, Official Court Reporter, United

13 States District Court, Western District of Texas, do certify

14 that the foregoing is a correct transcript from the record of

15 proceedings in the above-entitled matter.

16

I certify that the transcript fees and format comply

17 with those prescribed by the Court and Judicial Conference of

18 the United States.

19

20

21

22 12 October 2012
23 24 25

/s/Maurice D. West MAURICE D. WEST Official Court Reporter United States District Court Western District of Texas 210-472-6574

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 183 of 184

1

INDEX

2
Plaintiffs’ Overview Opening Statement, 3 by Mr. Corbett --------------------------------------

4 Inclusion of Government in Lawsuit:

Argument by Ms. Juren -------------------------------

5

Response by Mr. Corbett --------------------------

Rebuttal by Ms. Juren ----------------------------

6

Defendants’ Request that Claims Under Medicaid Act

7 Be Dismissed:

Argument by Ms. Juren -------------------------------

8

Failure to State a Claim -------------------------

Reasonable Promptness --------------------------

9

Comparability Requirement ----------------------

Argument by Mr. Schwartz ----------------------------

10

Medicaid Act Doesn’t Create Rights ---------------

Nursing Home Reform Amendments -------------------

11

Comparability ------------------------------------

Freedom of Choice --------------------------------

12

Reasonable Promptness ----------------------------

Organizational Plaintiffs ------------------------

13

Argument by Mr. Oldham ------------------------------

14

Section 1983 -------------------------------------

NFIB v. Sebelius ---------------------------------

15 Response to Equal Access by Mr. Schwartz ------------

Response to Equal Access by Mr. Oldham --------------

16

Further Response by Mr. Schwartz -----------------

Clarifying Argument by Ms. Juren:

17 Specialized Services --------------------------------

Nursing Home Reform Act Amendments ------------------

18

Response by Mr. Schwartz -------------------------

Freedom of Choice -----------------------------------

19 Reasonable Promptness and Comparability -------------

20 United States’ Motion to Intervene:

Presented by Mr. Koch -------------------------------

21

(1) Timeliness -----------------------------------

(2) The Intervenor Interest ----------------------

22

(3) Potential Impairment -------------------------

(4) Adequacy of Representation -------------------

23 Response to State’s Argument, Re: Notice of Failure

to Comply & Compliance Not Voluntary, by Mr. Koch ---

24

Permissive Intervention --------------------------

Argument by Mr. Vinson ------------------------------

25 Response by Mr. Koch --------------------------------

i
Page
2
8 10 15
17 23 24 27 28 30 37 48 52 57 60
64 65 69 73 78 80
82 84 86 87 88
90 91 91 92 93
94 97 99 105

Case 5:10-cv-01025-OLG Document 142 Filed 10/12/12 Page 184 of 184

1

INDEX - CONT’D

2

3 Plaintiffs’ Motion to Certify as a Class:

Presented by Mr. Schwartz ---------------------------

4

Rule 23(b)(2) Requirements -----------------------

Rule 23(a) ---------------------------------------

5

Typicality ---------------------------------------

Adequacy of Representation -----------------------

6 Response by Mr. Gibson ------------------------------

Commonality --------------------------------------

7

Medicaid Act Claim - Reasonable Promptness -------

- Freedom of Choice -----------

8

- PASRR Claim -----------------

Typicality ---------------------------------------

9

Rule 23(b)(2) Cohesiveness -----------------------

Class Must Be Adequately Defined -----------------

10

Post-Walmart Cases -------------------------------

Response by Mr. Schwartz ----------------------------

11 Response by Mr. Gibson ------------------------------

Response by Ms. Juren -------------------------------

12

13

14

15

16

17

18

19

20

21

22

23

24

25

ii
Page
107 109 117 126 128 130 131 146 147 147 149 151 154 155 158 172 175

 Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 1 of 47

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend and mother, Lillian Minor, et al.,
Plaintiffs, v. RICK PERRY, Governor, et al.
Defendants.

§

§

§

§

§

§

CIV. NO. 5:1O-CV-1025-OG

§

§

§

§

I2J'

PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION AND SUPPORTING MEMORANDUM

Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 2 of 47

TABLE OF CONTENTS

TABLE OF AUTHORITIES

lv

I. INTRODUCTION

1

II. STATEMENT OF FACTS

3

A. Overview

3

B. The Expert's Review

4

C. The Expert's Findings and Conclusions

5

1. Andrea Padron

6

a. Failure to Provide an Adequate PASSAR Level I Screen and PASSAR Level II Assessment

b. Failure to Provide Necessary Specialized Services in the Most Appropriate Setting and Resulting Harm

1. Impairment of Breathing, Pneumonia and

Related Medical Complications

7

2. Flexion Contractures

7

3. "Foot Drop"

8

2. Linda Arizpe

8

a. Failure to Provide an Adequate PASSAR Level I
Screen and PASSAR Level IlAssessment

b. Failure to Provide Necessary Specialized Services

in the Most Appropriate Setting and Resulting

Harm

9

1. "Frog Leg" Deformity

9

2. Deterioration of Hips

10

3. Eric Steward

10

Plaintiffs' OpposedMotionfor Preliminary Injunction

Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 3 of 47

a. Failure to Provide and Adequate PASSAR Level I

Screen and PASSAR Level IlAssessment

11

b. Failure to Provide Necessary Specialized Services

in the Most Appropriate Setting and Resulting

Harm

11

1. Inadequate Seizure Management

11

2. Loss of Mobility

12

3. Untreated Medical Conditions

12

4. Vocational Programming

13

III. THE STANDARD FOR GRANTING A PRELIMINARY

INJUNCTION

13

IV. THERE IS A SUBSTANTIAL LIKELIHOOD THAT THE

PLAINTIFFS WILL PREVAIL ON THEIR NHRA CLAIMS

14

A. Overview of Title XIX of the Social Security Act

(Medicaid) and the Relevant Components ofthe Texas

Medicaid Program

14

1. Federal Medicaid Requirements

14

2. The Texas Medicaid Program

16

3. Nursing Facilities

16

B. The Requirements of the Nursing Home Reform

Amendments and the PASARR Provisions ofthe

MedicaidAct

17

1. Overview of PASARR Provisions of the NHRA

17

2. PASARR Requirements Concerning Level I Screens

and Level II Reviews

21

3. PASARR Requirements Concerning the Provision

of Specialized Services: Deceleration and

Prevention of Regression

22

Plaintiffs' Opposed Motionfor Preliminary Injunction

ii

Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 4 of 47
C. The Defendants' Failure to Conduct PASARR Level I
Screens, Level II Reviews and to Provide Specialized
Services in the Most Appropriate Settings 25
V. THERE IS A SUBSTANTIAL THREAT THAT THE PLAINTIFFS WILL SUFFER IRREPARABLE INJURY IF A PRELIMINARY INJUNCTION IS NOT GRANTED 28
VI. THE PLAINTIFFS' SUBSTANTIAL INJURIES OUTWEIGH ANY INJURY THE DEFENDANTS MIGHT SUFFER IF AN INJUNCTION ISSUES 30
VII. AN INJUNCTION WILL NOT DISSERVE THE PULIC INTEREST
31
VIII. THE PLAINTIFFS SHOULD NOT BE REQUIRED TO POST A SECURITY BOND AS A CONDITION OF THE PRELIMINARY INJUNCTION
33
IX. CONCLUSION 34

P1aint[fs' Opposed Motionfor Preliminary Injunction

jjj

Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 5 of 47

TABLE OF AUTHORITIES
CASES
Alabama Nursing Home Ass 'n v. Harris, 617 F.2d 388 (5th
Cir. 1980)
Allied Home Mortg. Corp. v. Donovan, 2011 WL 5553645 (W.D.Tex.Nov. 15. 2011)
Blanchardv. Forrest, 71 F.3d 1163 (5th Cir. 1996)
Bluefleld Water Ass 'n, Inc. v. City of Starkville, Miss., 577
F.3d 250 (5th Cir. 2009)
Canal Authority ofthe State ofFla. v. Callaway, 489 F.2d 567
(5th Cir. 1974)
Camacho v. Texas Workforce Corn 'n, 326 F.Supp. 2d 794 (W.D. Tex 2004)
Charles H. Wesley Edu. Foundation, Inc. v. Cox, 408 F.3d 1349 (11th Cir. 2005)
Cmte. Health Choice, Inc. v. Hawkins, 328 S.W.3d 10 (Tex. App. Austin 2010, no pet.)
Elder v. Real, 609 F.2d 695 (3d Cir. 1979)
Equal Justicefor El Paso, Inc. v. Hawkins, 562 F.3d 724 (5th
Cir. 2009)
Finlan v. City ofDallas, 888 F.Supp. 779 (N.D. Tex. 1995)
Frazer v. Gilbert, 300 F.3d 530 (5th Cir. 2002) , rev 'don
other grounds, 540 U.S. 431 (2004)
Fred C. v. Tex. Health and Human Services Comm 'n, 9924 F.Supp. 788 (W.D. Tex. 1996), vacated and remanded per
curium, 117 F. 3d 1416 (5th Cir. 1997), on remand, 988 F.
Supp. 1032, 1036 (W.D. Tex. 1997), aff'dper curiam 167 F.
3d 537 (5th Cir. 1998)
Harris v. McRae, 448 U.S. 297 (1980)
Plaints' Opposed Motionfor Preliminary Injunction

30
13 14, 15
13 14
29, 30, 31, 32
13 25 15 14, 15
32
15
15 14
iv

Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 6 of 47

Idaho Health Care Ass 'n v. Sullivan, 716 F.Supp. 464 (D. Idaho 1989)
Janveyv. Alguire, 647 F.3d 585 (5rh Cir. 2011)
Jonathan C. v. Hawkins, 2006 WL 3498494 (E.D. Tex. December 5, 2006)
Joseph S. v. Hogan, 561 F.Supp. 2d 280 (S.D.N.Y. 2008)
Kansas Hosp. Ass 'n v. Whiteman, 835 F.Supp. 1548 (D. Kan. 1993)
Kaepa, Inc. v. Achilles Corp., 76 F.3d 624 (5th Cir. 1996)
Kingv. Smith, 392 U.S. 309 (1968)
Knowles v. Horn, 2010 WL 517591 (N.D. Tex. Feb. 10, 2010)
Lopezv. Heckler, 713 F.3d 1437 (9th Cir. 1983)
Martin v. Voinovich, 840 F.Supp.1175 (S.D. Ohio 1993)
Massachusetts Ass 'n of Older Americans v. Sharp, 700 F.2d
749 (1st Cir. 1983)
Miller v. Gorski Wladyslaw Estate, 547 F.3d 273 (5th Cir. 2008)
Nobby Lobby, Inc. v. City of Dallas, 767 F.Supp. 801 (N.D.
Tex.1992), aff'd. 970 F.2d 82 (5th Cir. 1992)
Oak Park Health Care Center, LLC v. Johnson, 2009 WL
331563 (W.D. La. Feb. 10, 2009)
Orantes-Hernandez, et al. v. Smith, 541 F.Supp. 351 (C.D. Cal. 1982)
Planned Parenthood v. Sanchez, 280 F.Supp. 2d 590 (W.D. Tex 2003)
Protection andAdvocacy, Inc. v. Murphy, 1992 WL 59100 (N.D. Ii!. March 16, 1992)
Rayfordv. Bowen, 715 F.Supp.1347 (W.D. La. 1989)
Plaintiffs' Opposed Motion for Preliminary Injunction

19 13 25
20 31,32
33
15
13, 29
31 20 15 14
32 29 34
31 17
18, 20, 33
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Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 7 of 47

Rollandv. Cellucci, 191 F.R.D. 3 (D. Mass. 2000) Rollandv. Romney, 318 F.3d 42 (1st Cir. 2003) S.D. ex rel. Dickson v. Hood, 391 F.3d 581 (5th Cir. 2004) Schweiker v. Gray Panthers, 453 U.S. 34 (1981) Sobky v. Smoley, 855 F.Supp. 1123 (E.D. Cal. 1994) Temple Univ. v. White, 941 F.2d 201 (3rd Cir. 1991) Texas Health Care Ass 'n v. Bowen, 710 F.Supp.1109 (W.D. Tex. 1989) Texas Health Care Ass 'n v. Sullivan, 1992 WL 206271 (W.D. Tex. April 1, 1992) Texas Medical Providers Performing Abortion Services v. Lakey, 667 F.3d 570 (5th Cir. 2012) Weaver v. Reagan, 886 F.2d 194 (8th Cir. 1989) Wilder v. Virginia Hosp. Ass 'n, 496 U.S. 498 (1990) STATUTES, REGULATIONS, RULES 42 U.S.C. § 1396 etseq.
42U.S.C.1396
42 U.S.C. § 1396a(a) 42 U.S.C. § 1396a(a)(10) 42 U.S.C. § 1396d(a) 42 U.S.C. § 1396d(d) 42 U.S.C. § 1396d(f) 42 U.S.C. § 1396(e)(7)(B) 42 U.S.C. § 1396n
42U.S.C.1396r
P1aintffs' Opposed Motion for Preliminary Injunction

4 18, 19, 20
14 14 15 34
33
18, 32
13 15 15
14 14 15 15 15 18, 19 16 19
15,18
18
vi

Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 8 of 47

42 U.S.C. § 1396r(a)(1)(A-C) 42 U.S.C. § 1396r(b)(3)(F)(i) 42 U.S.C. § 1396r(b)(3)(F)(ii) 42 U.S.C. § 1396r(b)(7) 42 U.S.C. § 1396r(e) 42 U.S.C. § 1396r(e)(7) 42 U.S.C. § 1396r(e)(7)(A) 42 U.S.C. § 1396r(e)(7)(B) 42 U.S.C. § 1396r(e)(7)(B)(ii)(I) 42 U.S.C. § 1396r(e)(7)(B)(ii)(TI) 42 U.S.X. § 1396r(e)(7)(B)(iv) 42 U.S.C. § 1396r(e)(7)(C)(i) 42 U.S.C. § 1396r(e)(7)(C)(ii) 42 U.S.C. § 1396r(e)(7)(D) 42 U.S.C. § 1396r(f)(8)
42U.S.C.1983
42 C.F.R. § 430 etseq. 42 C.F.R. § 435.1009 42 C.F.R. § 483.1-483.75 42 C.F.R. § 483.100 etseq. 42 C.F.R. § 483.102(b)(3)
42C.F.R.483.104
42 C.F.R. § 483.106
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Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 9 of 47

42 C.F.R. § 483.106(e) 42 C.F.R. § 483.108 42 C.F.R. § 483.114 42C.F.R. § 483.114(b) 42 C.F.R. § 483.116 42 C.F.R. § 483.116(a) 42 C.F.R. § 483.1 16(b)(2) 42 C.F.R. § 483.118(c) 42 C.F.R. § 483.120 42 C.F.R. § 483.120(a) 42 C.F.R. § 483.120(a)(2) 42 C.F.R. § 483.120(b) 42 C.F.R. § 483.120(c) 42C.F.R.'483.122 42 C.F.R. § 483.124 42 C.F.R. § 483.126 42 C.F.R. § 483.128 42 C.F.R. § 483.128(a) 42 C.F.R. § 483.128(b) 42 C.F.R. § 483.128(c) 42 C.F.R. § 483.128(f) 42 C.F.R. § 483.128(k) 42 C.F.R. § 483.130(1)(3)
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23, 26 25 19 19 24 25 23 22 22 26 23
passim 25
17,31 25, 31 21, 23
22 21 20 20 21 22 22
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Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 10 of 47

42 C.F.R. § 483.130(n) 42 C.F.R. § 483.132 42 C.F.R. § 483.136 42 C.F.R. § 483.136(c)(2)(iii). 42 C.F.R. § 483 .440 42 C.F.R. § 483 .440(a) 42 C.F.R. § 483 .440(a)(1) 57 Fed. Reg. 56,450-5 14 (1992) 57 Fed. Reg. 56,477 H.R. Rep. No. 391(I), l00t Cong., 1st Sess. 459 (1987),
reprinted in 1987 Code Cong. & Admin. News 23 12-1
Fed. R. Civ. P. 65(a) Fed. R. Civ. P. 65(c) Tex. Govt. Code § 53 1.005 Tex. Govt. Code § 53 1.021 etseq. Tex. Govt. Code § 531.0055 40 Tex. Admin. Code § 19.1303 40 Tex. Admin. Code Rule § 19.2500
Other Authorities Braddock, The State of the States in Developmental
Disabilities (AAID 2011) MRA OBRA Handbook (Revision 10-0, Oct. 26, 2009) http://www.dads.state .tx.us/providers/communications/20 11 letters/1L20 11-11 .pdf
Plaintiffs' Opposed Motion for Preliminary Injunction

24 17, 21, 22, 26
21,22,24
24 24 22, 24, 26 23 20 25
17, 18, 32
1
33 25 25 25 27 19
17 27
27
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I. INTRODUCTION Three of the named Plaintiffs, Andrea Padron, Linda Arizpe, and Eric Steward,1 by and
through their next friends and guardians, respectfully move this Court for a preliminary injunction to prevent ongoing and irreparable harm resulting from the Defendants' failure to provide them necessary specialized services. As more fully described in the Declaration and
Report of Karen Green McGowan, RN, CDDN, attached as Exhibit 1 (the "Report"), all three Plaintiffs have suffered physical injury and regression of basic life skills are a result of the lack of essential services required by federal law. Andrea Padron's condition is now life-threatening.
Linda Arizpe's condition may soon be irreversible. Eric Steward's situation is clearly preventable. All three have suffered significant pain and physical regression while in their current nursing facilities. All three require specialized services that the Defendants currently provide in various community settings and should be, but are not, providing in nursing facilities. As determined by Ms. McGowan, all three would be better served in the community.
Pursuant to the Rule 65(a) of the Federal Rules of Civil Procedure, Andrea Padron, Linda
Arizpe, and Eric Steward bring this Motion to enjoin the Defendants from continuing to fail to fulfill their obligations under the Nursing Home Reform Amendments (NHRA) of 1987 to the Medicaid Act, 42 U.S.C. 1396r(e) and 42 C.F.R. § 483.100 et seq.2 to provide these Plaintiffs

This Motion is limited to these three named Plaintiffs. Upon initiation of discovery, however, the Plaintiffs may file another motion on behalf of other plaintiffs and putative class members in
the event that it is determined, based upon such discovery, that their lives are in immediate jeopardy as is the case of Andrea Padron, Linda Arizpe, and Eric Steward.
2 Although this Motion only seeks preliminary relief under the NHRA, these plaintiffs may file another motion seeking prompt community supports that would allow them to leave the segregated settings where they now reside. Thus, in filing this Motion, the Plaintiffs do not waive any of their other claims for relief as alleged in the Plaintiffs'Amended and Supplemented Complaint ("Amend. Comp.") (Doc. # 63).

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with timely and comprehensive assessments of their habilitative needs and the specialized and
nursing services required to meet such needs in the most appropriate setting. Andrea Padron, Linda Arizpe, and Eric Steward are all individuals with intellectual and
developmental disabilities who also have complex medical needs. They all reside in nursing
facilities in the San Antonio area of Texas. All three Plaintiffs have been deprived of timely and
adequate screens and assessments, required by the Pre-Admission Screening & Resident Review (PASARR)3 provisions of the NHRA, including both a Level I screen and a Level II review4 to identify their service needs while they are in these nursing facilities. Consequently, the specialized services that the Plaintiffs require to meet their basic habilitative needs have not been
identified or provided. As a result of the Defendants' failures, Andrea Padron, Linda Arizpe, and
Eric Steward have lost basic skills, have deteriorated in basic functioning and have acquired serious, sometimes life-threatening medical conditions. Absent preliminary relief to require the Defendants to immediately address the Plaintiffs' conditions, these urgent health and safety risks may be exacerbated and their deterioration that is not already permanent, may become irreversible.
Under applicable law: (a) there is a likelihood that the Plaintiffs will prevail on the
merits; (b) the Plaintiffs will suffer immediate irreparable injury if the injunction is not granted;
(c) the threatened harm to the Plaintiffs outweighs the threatened harm the injunction may cause the Defendants; and (d) granting the preliminary injunction will not disserve the public interest.

The PASARR program is now generally referred to as the "PASRR" program, although both terms are frequently used interchangeably. In Texas the program is still referred to as "PASARR" and therefore being referred to as such in this Motion.

For a full description of these requirements, see discussion at Section IV(B)(2), infra.

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Case 5:10-cv-01025-OLG Document 108 Filed 07/23/12 Page 13 of 47
This Motion is supported by the Memorandum of Points and Authorities infra, the Declaration and Report of Karen Green McGowan, RN, CDDN, and the Declaration of Deborah A. Dorfman (hereafter "Dorfman Decl.") attached as Exhibit 2, and Exhibit A, appended thereto.
The Plaintiffs are not able to post bond or other security interest because their only income is public assistance. II. STATEMENT OF FACTS
A. Overview Andrea Padron, Linda Arizpe, and Eric Steward all currently reside in nursing facilities in
the San Antonio area of Texas. Report, at 3, 4, 7, 11; Amend. Comp. (Doc. #63) ¶11 10-12, 140, 150, 161. They are categorically eligible for Medicaid services and are eligible to receive developmental disability services from the Texas Division of Aging and Disability Services (DADS). Amend. Comp. (Doc. #63) ¶J 137, 248 ; see also ¶IJ 147, 164-167, As detailed more fully below in Section 11(B), all three individuals have not been provided with timely and adequate PASARR Level I Screens or Level II Reviews. Report at 4. Therefore, the specialized services that they require in order to meet their basic habilitative needs and to prevent regression, including the appropriate setting for these services, have not been identified or provided. As a result, they have lost skills and developed serious medical conditions, some of which are irreversible and life- threatening. See generally Report. Additionally, they are regressing as a result of their inappropriate continued confinement to their nursing facilities. Id. at 5, 7, 10, 14, 15. The specialized services that these Plaintiffs desperately need are not being provided by Defendants in the nursing facilities, but are provided by the same Defendants in various community settings.

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B.

The Expert's Review

Based upon information concerning the condition of certain individual Plaintiffs, the

Plaintiffs retained Karen Green McGowan, RN, CDDN, an internationally-renowned expert in

the area of developmental disabilities, with a particular expertise in the identification and

treatment of complex medical conditions and serious health problems. As more fully described

in her curriculum vitae, attached to her Report, Ms. McGowan is a nurse with extensive

experience in evaluating the health needs and services of persons with disabilities. She has

served an Independent Expert in a similar case, Rolland v. Cellucci, 191 F.R.D. 3 (D. Mass.

2000) and currently assists several states and federal courts in monitoring the health status of

persons with intellectual and developmental disabilities.5 Id.

Ms. McGowan reviewed Andrea Padron, Linda Arizpe, and Eric Steward to determine:

(1) whether they were timely and appropriately screened and evaluated at the time of their

admission to a nursing facility; (2) whether each has received an accurate, comprehensive

assessment of their service needs and the most appropriate setting in which to provide these

services; (3) whether each is being provided the level of specialized and nursing services

necessary to meet their basic habilitative needs and to prevent regression; (4) whether these

specialized services are being provided in the most appropriate setting; and (5) whether

placement in a nursing facility is the most appropriate setting to meet their habilitative needs.

Report, at 1,2,5-16.

Ms. McGowan has qualified as an expert in several other cases and has held several different positions that render her especially qualified to render an expert opinion in this case. Report at 1-2 and Attachment 1. She is currently serving as a member of the Quality Review Panel
overseeing the implementation of the settlement in People First of Tennessee v. Cloverbottom, No. 3:95-1227, in the United States District Court for the Middle District of Tennessee, Nashville Division, a case involving the transition of people with intellectual disabilities from
institutional care to the community.

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As more fully described in her Report, Ms. McGowan's review included observations and assessments of Andrea Padron, Linda Arizpe, and Eric Steward in their nursing facilities, interviews with some of their family members and nursing facility staff, and a detailed review of relevant documents and records. Id. at 2-3. Based upon her extensive training and experience, Ms. McGowan is well qualified to assess the adequacy of the care and treatment provided to the Plaintiffs as well as their specialized service and nursing needs and the appropriateness of the settings where these services should be provided. See id. at 1.
C. The Expert's Findings and Conclusions Ms. McGowan determined that the PASARR process for Andrea Padron, Linda Arizpe, and Eric Steward was "entirely inadequate for all three individuals." Id. at 15. She found that none of them had appropriately completed PASARR Level 1 Pre-Admission screens or PASARR Level II evaluations. Id. at 4, 8, 12, 15. Due to these failures, the specialized and nursing services that these individuals need, including the most appropriate setting to meet those needs, have not been identified or provided, even though they have been residing in their nursing facilities for many years. Id. at 5-15. As detailed more fully below, the Defendants have failed to provide the Plaintiffs with the requisite timely and appropriate screens and assessments, as well as the specialized and nursing services in the most appropriate setting to meet their basic habilitative needs and to prevent deterioration. Id. Consequently, the Plaintiffs have significantly regressed to the point where they have not only lost skills that they previously had, but they have also developed serious medical conditions, some of which are irreversible and now may be life-threatening. Id.

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1. Andrea Padron Ms. McGowan has concluded that "Andrea will likely die of preventable conditions" that she has developed in the nursing facility and due to the Defendants' failure to provide her with
the requisite specialized services. Ms. McGowan also found that the skills Andrea has lost since being at her nursing facility are the result of "lying in bed continuously for 164-166 hours per week" and being denied specialized services. Id. at 7. She also found that Andrea's placement at her nursing facility is inappropriate to meet her habilitative needs and that she isn"is in fact regressing" as a result of being there. Id. Ms. McGowan determined that "Andrea needs to move to a community-based setting such as small group home and to attend a day program in the community." Id.
Andrea Padron is a 27 year-old woman who was diagnosed with a closed head injury as a
result of a car accident at the age of ten. Id. at 4. She also has been diagnosed with post-
traumatic quadriplegia and a seizure disorder. Id. When she was 18 years old, Andrea was admitted to Meridian Nursing Facility ("Meridian"), where she has resided continuously, except for a brief period in 2007 during which she was hospitalized for pneumonia, "severe deconditioning" and gastro-esophageal reflux disease ("GERD"). Id. at 4, 6.
a. Failure to Provide an Adequate PASARR Level I Screen and PASARR Level II
Assessment Ms. McGowan found that there was no PASARR Level I screen in Andrea Padron's nursing facility record, and concluded that she had not received an adequate PASARR Level I screen. Id. at 4. She also found no indication in the nursing facility record that Andrea has received an adequate PASARR Level II review during the almost decade that she has been in the nursing facility. Id. at 5. Because Andrea has not been provided with an adequate PASARR Level I screen and Level II review, the specialized services to meet her habilitative needs,

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including the most appropriate setting in which these services should be provided, have not been
identified or provided. Instead, she has been lying idle in her bed virtually all of the time for at
least the past five years, since her special education services from the local school district ended. Id. at 3-7.
b. Failure to Provide Necessary Specialized Services in the Most Appropriate Setting and Resulting Harm
Due to lack of activity, Andrea Padron has lost skills, such as standing upright and
interacting with others, that she had when she was first admitted to the nursing facility.
Id. at 3, 6. Additionally, Andrea has now developed a number of serious medical conditions that
are irreversible and potentially life-threatening. Id. at 5-7.
1. Impairment of Breathing. Pneumonia and Related Medical
Complications
One of the most dangerous conditions that Andrea has developed is "kyphoscoliosis" that
impairs her ability to breathe. This condition causes her spine to increasingly bend forward and
to one side and applies excessive weight on her diaphragm, which restricts her airway. Id at 5-6.
This condition places her at extremely high risk that secretions will enter her lungs and cause serious lung infections, which can be life-threatening. Id. at 5. Each day that Andrea continues to remain idle and go without the necessary specialized services, this risk increases. Id. at 6. In fact, she has already been hospitalized at least once due to respiratory failure resulting from pneumonia and other medical conditions due to lack of specialized and nursing services. Id.
2. Flexion Contractures Since her admission to the nursing facility, Andrea has also developed "flexion contractures," so that she no longer can straighten her wrists, ankles, shoulders, legs, and hips.
Id This condition is the direct result of a having her joints bent for extended periods of time due

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to lack of activity and a lack of specialized and nursing services, including physical therapy, to
address this condition. Id. 3. "Foot Drop"
Due to lack the of other needed specialized services, Andrea has also developed a condition referred to "foot drop," which involves the severe deterioration of the ankles and feet. As a result, Andrea has lost the ability to stand upright on her feet with the assistance of a
stander, as she once could when she was first admitted to the nursing facility. Id. Due to the
lack of specialized and nursing services, she is unlikely to regain her ability to stand on her feet with the assistance of a stander and, instead, is relegated to "standing" on her knees. Id.
It is urgent that Andrea be afforded a comprehensive assessment of her needs, including
the most appropriate setting to meet those needs, and promptly be provided with the necessary specialized services to address these needs, as required by federal law. Ms. McGowan
concluded that "if these serious conditions continue to go unabated, there is a serious risk that
she will die prematurely." Id. at 7. 2. Linda Arizpe
Ms. McGowan concluded that Linda Arizpe has suffered grave medical deterioration as
a result of the Defendants' failure to timely and adequately assess even her basic habilitative
needs and to provide her with the necessary specialized services in the most appropriate setting to meet those needs. Id. at 7-11. Ms. McGowan also found that Linda Arizpe is regressing at the nursing facility where she resides and that a nursing facility is not an appropriate placement to meet her habilitative needs. Id. at 7, 10, 11,
Linda Arizpe is a 43-year-old woman who was has resided in nursing facilities in Texas since 2005. She was first at the Rosewood nursing facility from 2005 until 2008, when she was

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transferred to her current nursing facility, the Meridian. Id. at 7-8. She is diagnosed with anoxic

brain damage, seizure disorder, anxiety, anemia associated with nutritional deficit, and asthma.

Id. at 7. She was diagnosed with a developmental disability during her childhood. She acquired

a brain injury in 2005. Id. at 8.

a.

Failure to Provide an Adequate PASARR Level I Screen and PASARR

Level II Assessment

Ms. McGowan determined that there is no indication that Linda Arizpe has been afforded

a timely or adequate PASARR Level I screen.6 Id. at 8. Additionally, Linda has not been

provided an adequate PASARR Level II review, although she has been in a nursing facility for

the past seven years. Therefore, the necessary specialized services that she requires and the most

appropriate setting in which these services should be provided, have neither been identified nor

provided. Id.

b. Failure to Provide Necessary Specialized Services in the Most Appropriate Setting and Resulting Harm

Ms. McGowan concluded that due to the Defendants' failure to provide Linda Arizpe

with the necessary evaluations and specialized services to meet her habilitative needs and to

prevent her regression, she has significantly deteriorated since her nursing facility admission. Id.

at 8.

1. "Frog Leg" Deformity

As a result of spending virtually all of her time in her bed without the necessary

specialized and nursing services for the past seven years, Linda Arizpe has developed a severe

"frog-leg" deformity pattern, causing each thigh to extend dramatically outward. Id. at 9.

Because of this deformity, Linda is now unable to sit in "a traditional sitting position," which

6 The only PASARR Level I-related documents in Linda's records include: a blank PASARR Level I screen form, dated January 14, 2011; and a PASARR Level I screen, dated April 29, 2011, which was completed seven years following initial admission to nursing facility. Id.

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prevents her from being able to use her wheelchair to get to the bathroom or to leave her
bedroom. Id. This preventable condition could be remedied with the immediate provision of appropriate specialized services, such as a physical management plan. Id. If this condition is not immediately addressed, Linda's legs are will remain in this disfigured position and will require
invasive surgical intervention. Id. at 9, 10.
2. Deterioration of Hips Linda's hips have also extensively deteriorated due to lack necessary specialized and nursing services. Id at 10. Specifically, Linda's hips have lost their range of motion as result of her continuous and extended confinement to her bed and deprivation of the necessary specialized
services including, but not limited to, physical management techniques. Id. Linda requires a
medical assessment of her hips in order to determine the full extent of the deterioration of her hipsparticularly her left hip as it now has almost no mobility. Id. If Linda does not
immediately receive the appropriate medical and other therapeutic interventions to address the
degeneration of her hips, they are likely to harden, making it difficult, if not impossible, to
reverse, absent major surgery. Id.
It is urgent that Linda receive a comprehensive assessment of her needs and then immediately be provided with the necessary specialized and nursing services in the most appropriate setting to meet her needs, in order to prevent her further physical deterioration and psychological regression. Ms. McGowan determined that Linda Arizpe should be transferred to
a smaller community-based setting with staff support. Id
3. Eric Steward Ms. McGowan concluded that Eric Steward has physically regressed as a result of not having timely and appropriate evaluations of his basic habilitative needs and not being provided the

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specialized services that he requires to address these needs. Id. at 12-13, 15. She also found that

Eric Steward's nursing facility placement is "inappropriate and harmful to him" and has caused him

to regress. Ms. McGowan determined that the most appropriate setting to meet Eric's needs is in an

apartment in the community with staff support. Id. at 14.

Eric Steward is a 44-year-old man with cerebral palsy and a severe seizure disorder. Id.

at 11. Eric has lived in a nursing facility since having surgery for his seizure disorder in 2002.

a.

Failure to Provide an Adequate PASSAR Level I Screen and PASSAR

Level IlAssessment

Ms. McGowan determined that although Eric Steward has been at a nursing facility for

almost ten years, he has not had an adequate PASARR Level I screen. Id. at 12,15. Although a

PASARR Level I screen was completed for Eric in December of 2010, the form incorrectly

stated that he did not have a developmental disability or intellectual disability, even though

attached to that same form was one of the Defendants' own documents that explicitly stated that

Eric was eligible for services from DADS because of his intellectual and developmental

disabilities. Moreover, Eric's nursing facility records contained numerous references to his

intellectual and developmental disabilities. Id.

Ms. McGowan also found that Eric Steward did not have an adequate PASARR Level II

review. Id. Consequently, over time he has significantly regressed, has lost basic skills, and has

developed other serious medical problems.

b. Failure to Provide Necessary Specialized Services in the Most Appropriate Setting and Resulting Harm

1. Inadequate Seizure Management

Ms. McGowan concluded that Eric Steward is not receiving necessary specialized services

to prevent regression in his seizure disorder. Id. at 12. If Eric's seizure disorder is not

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appropriately assessed and managed, it will continue to impede his mobility and his ability to participate in all activities and any therapeutic interventions.
2. Loss of Mobility
Ms. McGowan found that Eric Steward is provided with almost no specialized services and is idle most of the time. This has contributed significantly to Eric's regression, including the loss of
his mobility skills since the time of his admission to the nursing facility. Id. at 13. When admitted, he could use a walker and a stander. Id. Now, he relies solely on his motorized wheelchair for mobility. Id. Eric needs a comprehensive assessment, an evaluation of his
mobility, and the necessary specialized services to address his mobility problems. Id If he is
not afforded such services and continues to remain physically inactive, there is a serious likelihood that he will lose what limited mobility abilities he has, which will then further compromise his other bodily systems. Id. at 15.
3. Untreated Medical Conditions Eric Steward has other medical conditions including, possible peptic ulcer, weight gain, GERD, and dementia, that have not been adequately assessed and for which he is not being provided specialized and nursing services. Id. at 13-14. Eric urgently requires a comprehensive assessment to determine the necessary treatment interventions for these medical conditions, and the appropriate specialized and nursing services to address these conditions, in order to meet his
basic habilitative needs and prevent further regression. Id. at 13-14, 15. If he is not promptly provided such an assessment and services, he is at serious risk of continuing to lose skills as well as developing a myriad of serious medical complications, such as gastro-intestinal bleeding, and metabolic syndrome, which creates a high risk of diabetes, heart disease and stroke, and other
serious medical problems. Id. at 15.

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4. Vocational Programming Ms. McGowan also found that Eric Steward requires vocational training and supported employment. Id. at 14. She determined that such programming was essential to help him to
"regain some of independence and participate in the community." Id. During the ten years that Eric Steward has been at his nursing facility, he has not received
an adequate evaluation of habilitative needs for specialized services or received these services. It
is crucial that he now be immediately provided with this assessment and these services in the most appropriate setting to meet his habilitative needs, which is, as Ms. McGowan has concluded, a community based living arrangement with support staff, in order to abate his regression and to provide him with the opportunity to regain lost skills and health. III. THE STANDARD FOR GRANTING A PRELIMINARY INJUNCTION
To prevail on a motion for a preliminary injunction, the Plaintiffs must show: (1) a substantial likelihood that they will prevail on the merits; (2) a substantial threat that irreparable
harm will result if the injunction is not granted; (3) that the threatened injury outweighs the threatened harm to the Defendants; and (4) that the granting of the preliminary injunction will not disserve the public interest. Tex. Med. Providers Performing Abortion Sen's v. Lakey, 667
F.3d 570, 574 (5th Cir. 2012); Bluefield Water Ass'n, Inc. v. City of Starkville, 577 F.3d 250, 252-53 (5th Cir. 2009). Generally, the unavailability of a remedy at law, such as damages, constitutes irreparable harm. Janvey v. Alguire, 647 F.3d 585, 600 (5th Cir. 2011); Allied Home Mortg. Corp. v. Donovan, 2011 WL 5553645 (W.D. Tex. Nov. 15, 2011); Knowles v. Horn, 2010 WL 517591, at *7 (N.D. Tex. Feb. 10, 2010). The decision whether or not to issue a
preliminary injunction lies within the sound discretion of the trial court. Charles H. Wesley Edit.
Found., Inc. v. Cox, 408 F.3d 1349, 1354 (11th Cir. 2005). The "primary justification" for the

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issuance of a preliminary injunction is to preserve the court's ability to render a meaningful decision on the merits. Canal Authority of F/a. v. Cal/away, 489 F.2d 567, 573, 576 (5th Cir.
1974).
Here, preliminary injunctive relief is necessary to prevent further irreparable physical harm to the Plaintiffs caused by the Defendants' failure to assess their basic habilitative needs an& to provide them with the specialized services to meet those needs and to which they are legally entitled. As more fully set forth in Sections IV-VIII, infra, the Plaintiffs have met all of the factors necessary for this court to issue the requested preliminary injunction. IV. THERE IS A SUBSTANTIAL LIKELIHOOD THAT THE PLAINTIFFS WILL
PRAVAIL ON THEIR NHRA CLAIMS A. Overview of Title XIX of the Social Security Act (Medicaid) and the Relevant
Components of the Texas Medicaid Program
1. Federal Medicaid Requirements Medicaid is a jointly funded state and federal program that provides medical services to
low-income persons pursuant to Title XIX of the Social Security Act. 42 U.S.C. § 1396 et seq. State participation in the Medicaid program is optional. However, States choosing to receive federal matching funds for their Medicaid program must comply with the requirements of the federal Medicaid Act and with the federal regulations governing state Medicaid programs promulgated by the U.S. Department of Health and Human Services ("HHS"). 42 U.S.C. § 1396, 42 C.F.R. 430 et seq. See Harris v. McRae, 448 U.S. 297, 301 (1980); Schweiker v. Gray Panthers, 453 U.S. 34, 37 (1981); Equal Justice for El Paso, Inc. v. Hawkins, 562 F.3d 724, 726 (5th Cir. 2009); Miller v. Gorski Wladyslaw Estate, 547 F.3d 273, 277 (5th Cir. 2008); S.D. ex rel. Dickson v. Hood, 391 F.3d 581, 585-86 (5th Cir. 2004); Blanchard v. Forrest, 71
F.3d 1163, 1166 (5th Cir. 1996).

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As a condition of participating in the federal Medicaid program, States must submit to the HHS, a State Medicaid Plan that fulfills the requirements of the Medicaid Act. 42 U.S.C. § 13 96a(a); Equal Justice for El Paso, Inc. v. Hawkins, 562 F.3d at 726; Blanchard v. Forrest, 71 F.3d at 1166 (citing Wilder v. Virginia Hosp. Ass 'n, 496 U.S. 498, 502 (1990)); Massachusetts Ass'n of Older Americans v. Sharp, 700 F.2d 749, 750 (1st Cir. 1983). A State Plan must comply with fifty-eight conditions set forth in 42 U.S.C. § 1396a(a) in order to be approved. Frazer v. Gilbert, 300 F.3d 530,539 (5th Cir. 2002), rev'd on other grounds, 540 U.S. 431
(2004); Sobky v. Smoley, 855 F.Supp. 1123, 1126 (E.D. Cal. 1994).
Title XIX enumerates eight broad categories of services that a state must provide to individuals who are "categorically needy."7 42 U.S.C. § 1396d(a). In addition to the mandatory services that a State must provide, there are an array of optional or elective services a State may choose to offer. "Once a State elects to provide an optional service that service becomes part of the State Medicaid Plan and is subject to the requirements of federal law." Sobky, 855 F. Supp. at 1127 (citing Weaver v. Reagan, 886 F.2d 194, 197 (8th Cir. 1989)); Fred C. v. Tex. Health & Human Sen's. Comm 'n, 924 F.Supp. 788 (W.D. Tex. 1996), vacated and remanded per curium, 117 F. 3d 1416 (5th Cir. 1997), on remand, 988 F. Supp. 1032, 1036 (W.D. Tex. 1997), aff'd per curiam 167 F. 3d 537 (5th Cir. 1998); Elder v. Beal, 609 F.2d 695, 701-02 (3d Cir. 1979); see
also King v. Smith, 392 U.S. 309, 316 (1968). Medicaid-funded services for persons with developmental disabilities include mandated
and optional state plan services, PASARR program, the ICF/MR program, and various community programs funded through federal home and community-based waivers pursuant to 42 U.S.C. § 1396n. ' 42 U.S.C. § 1396a(a)(10) sets forth the criteria for determining whether an individual is "categorically needy."

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2. The Texas Medicaid Program Texas has chosen to participate in the Medicaid program. It has prepared a State Plan which HHS has reviewed and approved. That Plan, along with the relevant federal law and regulations, forms the foundation for Texas' Medicaid program and establishes Texas' obligations and responsibilities to Medicaid recipients. As a mandatory service under the Medicaid Act, Texas's Medicaid program funds ICFIMR services, home and community based waiver services, and nursing and specialized services in nursing facilities. As required by the Act and its State Plan, Texas, through DADS, is
required to administer a PASARR program and provide specialized services as part of that
program, See Section IV(B), infra. 3. Nursing Facilities
A nursing facility is an institution that primarily provides: (1) skilled nursing care; (2) rehabilitation services for those who are sick, injured or disabled; and (3) health related care and
services to individuals who, because of their mental or physical condition, require care and
services which can only be provided in an institutional setting. 42 U.S.C. § 1396r(a)(1)(A-C). Nursing facilities services are defined as "services which are . . . required to be given an
individual who needs. . . on a daily basis nursing care (provided by or requiring the supervision of nursing personnel) or other rehabilitation services which as a practical matter can only be provided in a nursing facility on an inpatient basis." 42 U.S.C. § 1 396d(f) (emphasis added). A basic condition for State payment and federal reimbursement of nursing facilities is that available
community or ICF/MR alternatives do not meet the person's needs and that the individual recipient is appropriately placed according to PASARR standards and DADS' nursing facility eligibility

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criteria. 42 C.F.R. § 483.122, 483.132. Admission and discharge of persons with disabilities in
nursing facilities is governed by the NHRA, 42 U.S.C. § 1396r(e). DADS licenses nursing facilities in Texas. Because these facilities participate in the
federal Medicaid program, DADS is required to review and certify these facilities pursuant to the federal requirements for nursing facilities under 42 C.F.R. § 483.1-483.75, as well as the
PASARR requirements, 42 C.F.R. § 483.100 et seq. As part of its responsibility for surveying,
inspecting and certifying nursing facilities, DADS is required to identify and/or correct any lack of compliance with the PASARR regulations. Id.
B. The Requirements of the Nursing Home Reform Amendments and the PASARR Provisions of the Medicaid Act 1. Overview of PASARR Provisions of the NHRA
The NHRA, 42 U.S.C. 1 396r(e), is part of a comprehensive remedial statute designed to address the widespread problem of warehousing people with developmental disabilities in the Nation's nursing facilities. Congress noted in the legislative history to the Omnibus Budget Reconciliation Act of 1987 (OBRA 87), that several of the States use federal dollars to
inappropriately "warehouse" individuals with mental illness and developmental disabilities in
nursing homes that are ill-equipped to meet their special needs. See Protection and Advocacy, Inc. v. Murphy, 1992 WL 59100, *2 (N.D. Ill. March 16, 1992), citing H.R. Rep. No. 391(I), 100th Cong., 1st Sess. 459, reprinted in 1987 U.S.Code Cong. & Admin.News 23 13-279. Texas, which has seen an 8% increase in the number of institutionalized persons with developmental disabilities in nursing facilities since 2006, is a prime example of the inappropriate use of nursing facilities, which concerned Congress.8 To prevent further unnecessary institutionalization, Congress amended

8 See Braddock, The State of The States In Developmental Disabilities at 57, 272 (AAID, 2011),
excerpted pages attached as Ex. A to Dorfman Decl.

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the Medicaid Act to require that States implement a PASARR for all individuals with intellectual and developmental disabilities.9 See Tex. Health Care Ass'n v. Sullivan, 1992 WL 206271, *3
(W.D. Tex. April 1, 1992) (Congress adopted PASARR to prevent "warehousing" of patients with
mental illness and mental retardation in nursing homes).1° In OBRA 87, codified as the NHRA, 42 U.S.C. § 1396r, Congress sought to enforce the
long-standing Medicaid proscription against the costly and inhumane practice of institutionalizing individuals who do not require such confinement. Rolland v. Romney, 318 F.3d 42, 45-46 (1St Cir.
2003). It did so by mandating a professional review process designed to stem the inappropriate
placement of individuals with intellectual or developmental disabilities into institutions that are

Mental retardation is defined broadly in the statute to include an individual with mental retardation or a related condition, as further described in 42 U.S.C. § 1396d(d). That statutory reference includes all persons with developmental disabilities other than mental retardation as well.
The regulations further refine and cross-reference the definition of both mental retardation and
related condition. See 42 C.F.R. § 483.102(b)(3).
10 The District Court quoted at length the Congressional history of the Amendments:
Congress determined that "[s]ubstantial numbers of mentally retarded and mentally
ill residents are inappropriately placed, at Medicaid expense, in [nursing homes]. These residents often did not receive the active treatment or services that they need
Testimony ... indicates that, in 1985, roughly 980,000 nursing home residents,
about two-thirds of the nursing home population, had a primary or secondary diagnosis of mental disorder." H.R. Rep. No. 391(I), 100th Cong., 1st Sess. 459
(1987), reprinted in 1987 U.S.Code Cong. & Admin. News 2313-1, 2313- 279. The PASARR legislation is plainly a direct and reasonable way to attempt to eliminate
the warehousing of mentally ill and mentally retarded patients in nursing homes. As
another district court in this Circuit has put it:
[T]here can be no doubt that Congress could decide that mentally ill and retarded patients were being inappropriately placed in nursing homes. It would be hard to
imagine a more rational means of putting a stop to this than to prevent such
individuals from entering nursing homes unless a determination is made that it would be appropriate.
Tex. Health Care Ass'ii, 1992 WL 206271, at ** 8-9, quotingfrom Rayford v. Bowen, 715 F. Supp.
1347, 1356 (W.D. La. 1989).

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unable to provide them with needed treatment. Id at 46. See also Idaho Health Care Ass'n v. Sullivan, 716 F. Supp. 464, 472 (D. Idaho 1989) (court rejected challenge to constitutionality of the
NT-IRA, finding that Congress properly acted to benefit "many individuals who are unable to look out for themselves in that they were being inappropriately placed in nursing homes where they were not receiving active treatment for their individual needs").
Under the NHRA, an individual cannot be admitted to a Medicaid nursing facility after January 1, 1989, unless the appropriate state agency" determines whether: (1) a person with mental
retardation requires the level of services provided by a nursing facility; and (2) the person requires active treatment for mental retardation.'2 42 U.s .C. § 1 396r(b)(3)(F)(ii). In addition, by April 1,
1990, and annually thereafter, States are required to review all current facility residents who have mental illness or an intellectual or developmental disability to determine whether they require the
level of services provided by a nursing facility or require the level of services of an intermediate
care facility described under 42 U.S.C. § 1396d(d). 42 U.S.C. § 1396r(e)(7)(B)(ii)(I); 42 C.F.R. § 483.114(b).'3 The review must also determine "whether or not the resident requires specialized. services for mental retardation." 42 U.S.C. § 1 396r(e)(7)(B)(ii)(II). Failure to perform the

' Under the NT-IRA, 42 U.S.C. § 1396r(e)(7)(B)(iv) and state law, 40 Tex. Admin. Code Rule § 19.2500, the state agency responsible for conducting evaluations and reviews is DADS.
12 In a 1990 amendment to the Medicaid statute, Congress substituted the term "specialized services" for "active treatment" but made it clear the two terms are synonymous in the context of PASARR requirements.
13 In a 1996 amendment to the NHRA, the requirement to conduct annual reviews was deleted. Instead, reviews are mandated only when there is a substantial change in the resident's condition. 42 U.S.C. § 1 396r(e)(7)(B). There have been no corresponding modifications to the regulatory requirements for annual reviews. 42 C.F.R. § 483.114.

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preadmission screenings or annual reviews results in a denial of federal reimbursement.'4 42 U.S.C.
§ 1396r(e)(7)(D).
Congress explicitly commanded the Secretary to promulgate regulations to implement
several provisions of the statute.15 Thus, unlike certain federal laws where the administrative
agency, on its own initiative, issues interpretative rules, here Congress expressly left it to the
administering agency to develop specific requirements with respect to the PASARR process and the
funding conditions for serving individuals with intellectual and developmental disabilities in nursing
facilities. Rolland, 318 F.3d at 48; Rayford, 715 F.Supp. 1347, 1352-53 (W.D. La. 1989). The
Secretary followed Congress' command, albeit slowly.'6 The regulations both clarify the meaning
of certain PASARR requirements and specify the States' duties to individuals with developmental
disabilities.
The regulations also describe in detail the process and criteria for conducting PASARR
screens and reviews. PASARR assessments must be adapted to the culture, language, ethnic origin,
and method of communication of the individual. 42 C.F.R. § 483.128(b). They must include the
individual, his/her legal representative, and family. Id. at § 483.128(c). Evaluations must be
14 The statute and implementing regulations concerning preadmission screenings and annual reviews create enforceable rights for the benefit of individuals with intellectual and other developmental disabilities. See Rolland, 318 F.3d at 56; Martin v. Voinovich, 840 F.Supp.1 175, 1200 (S.D. Ohio 1993). See also Joseph S. v. Hogan, 561 F. Supp. 2d 280, 294-304 (S.D.N.Y. 2008). Similarly, the other Medicaid claims discussed in this section are enforceable in federal
court pursuant to 42 U.S.C. § 1983. For a detailed discussion ofthe enforceability of the PASARR provisions of the NI-IRA, as well as the comparability, reasonable promptness and freedom of choice provisions of Title XIX ofthe Social Security Act, see Plaintiffs' Opposition to the
Defendants' Partial Motion to Dismiss, Section III (Doc. 70).
15 For instance, the Secretary was ordered to issue regulations concerning client rights, 42 U.S.C. § 1 396r(b)(7) and to develop minimum criteria for the preadmission screening as well as the annual resident review determinations. See 42 U.S.C. § 1396r(f)(8).
16 Final regulations were published in November 1992. See 57 Fed. Reg. 56, 450-5 14 (1992).

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coordinated, must be based upon detailed criteria set forth in the regulations, must review and fully consider available data,17 must issue findings that correspond to the individual's "current functional status," and must disseminate a comprehensive report that describes, among other things, all specialized services needed by the individual. 42 C.F.R. § 483.126.
2. PASARR Requirements Concerning Level I Screens and Level II Reviews
The PASARR provisions of the NHRA described above require a careful screening of all individuals being considered for admission to a nursing facility to determine if they may have an
intellectual or developmental disability. This is referred to as the Level I PASARR screen. 42 C.F.R. § 483.128(a).
All persons seeking admission to a nursing facility whose Level I PASARR screen indicates that they may have an intellectual or developmental disability must then be assessed
and evaluated to determine if they do, in fact, have such a disability, whether they satisfy the nursing facility level of care criteria, whether their needs could be met in the community through the provision of appropriate services and supports, and whether they could benefit from the provision of specialized services designed to maximize their functioning or to prevent regression. This part of the PASARR process is referred to as the Level II PASARR review. 42 C.F.R. §
483.128(a), 483.132. The Level II review must include a comprehensive assessment, which analyzes the
individual's strengths and needs in fifteen different areas, including current living arrangements, medical, therapeutic, habilitative, and social domains. 42 C.F.R. § 483.136. The assessment must determine whether it would be possible to meet the individual's needs through the provision of services and supports in the community as an alternative to nursing facility placement. 42

17 This is especially important with respect to the PASARR determination of whether the individual should be placed in "another appropriate setting." 42 C.F.R. § 483.128(f).

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C.F.R. § 483.132. If the Level II PASARR review determines that a resident does not require
nursing facility services, but instead requires specialized services in a non-institutional setting, the State has a duty to provide or arrange for the provision of these services to the resident in an appropriate community setting. 42 U.S.C. § 1396r(e)(7)C)(i); 42 U.S.C. § 1396r(e)(7)(C)(ii); 42 C.F.R. § 483.118(c); 42 C.F.R. § 483.120(b).'8
If the individual is admitted to a nursing facility, periodic reviews must be conducted whenever there is a change in the person's condition to determine whether the individual continues to need a nursing level of care and to require confinement in a nursing facility. The
initial and periodic PASARR Level II evaluations must also determine whether specialized services are necessary to provide habilitation and active treatment. 42 U.S.C. § 1396r(b)(3)(F)(i), 1396r(e)(7)(A)&(B); 42 C.F.R. § 483.128, 483.132, & 483.136.
3. PASARR Requirements Concerning the Provision of Specialized Services: Deceleration and Prevention of Regression
Specialized services consist of a continuous active treatment program that includes aggressive, consistent implementation of a program of specialized and generic training,
treatment, health and related services that are aimed at allowing the individual to function as independently and with as much self-determination as possible, and services designed to prevent
or decelerate regression and loss of abilities. 42 C.F.R. § 483.120, 483.440(a). If the individual
requires specialized services, under federal law the state must provide those services with the frequency, intensity, and duration that, taken together with needed nursing services, meet the federal standard for active treatment. 42 C.F.R. § 483.440(a).

18 The PASARR reviewers are obligated to explain to the individual involved and, where
applicable, his or her legal representative the results of the Level II PASARR evaluation, including information regarding the individual's ability to reside in a less restrictive community placement, and must provide the individual and legal representative with a copy of the PASARR report. 42 C.F.R. § 483.128(k), 483.130(l)(3).

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If the PASARR review determines that an individual admitted to a nursing facility needs specialized services, it must then be determined if the nursing facility can provide all needed specialized services and active treatment. If the review concludes the facility cannot, the
individual cannot be admitted to that nursing facility. 42 C.F.R. § 483.126. The regulations issued by the Secretary describing the State's basic obligations under NHIRA to conduct PASARRs, 42 C.F.R. § 483.106, make clear that the State's developmental disability authority cannot delegate its ultimate responsibility to comply with the statute to another entity. Id. at § 483.106(e). If an individual is determined to need specialized services, "the State must provide or arrange for the provision of the specialized services needed by the individual...." Id. at § 483.1 16(b)(2). Significantly, "the State must provide or arrange for the provision of specialized services, in accordance with this subpart, to all NF'9 residents [with mental retardation] whose needs are such that continuous supervision, treatment and training by a qua4fled ... mental retardation professional is necessary as identified by the [PASARRJ screening. 42 C.F.R. § 483.1 20(b)(emphasis added). Specialized services "means the services specified by the state, which combined with the services provided by the NF or other service providers results in the [active] treatment requirements of 42 C.F.R. § 483.440(a)(1)."2042 C.F.R. § 483.120(a)(2). Thus, there is an

19 Throughout the regulations the abbreviation "NF" refers to nursing facilities.
20 Active treatment is defined as:
(1) Each client must receive a continuous active treatment program, which includes
aggressive, consistent implementation of a program of specialized and generic
training, treatment, health services, and related services described in this subpart, that is directed toward --
(i) The acquisition of the behaviors necessary for the client to function with as much self determination and independence as
possible; and

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unconditional mandate that the relevant state agency must ensure that recommended specialized services -- of sufficient intensity, along with the services provided by the NF, so as to constitute continuous active treatment and ongoing training by qualified staff -- are actually provided to each resident determined to need them.
If an individual who is determined to need specialized services by the PASARR process is
admitted to, or retained in, a nursing facility, there must be firm assurances that the services can be and will be provided or arranged for by the State in a timely manner. 42 C.F.R. § 483.130(n). These assurances must be set forth in the State Medicaid Plan and confirmed on an individual basis by the PASARR process. The standards for making that determination are delineated in 42 C.F.R. § 483.136. The fundamental criteria is "whether the individual needs a continuous specialized
services program which is analogous to active treatment defined in § 435.1009 and 483.440 of this chapter." Id. (emphasis added). The standards also require a determination of whether the individual's "training needs ... necessitate the availability of trained MR personnel, 24 hours per day,
to teach the person functional skills." 42 C.F.R. § 483.136(c)(2)(iii). Failure to guarantee and comply with these assurances renders the placement inappropriate.
Thus, the PASARR regulations make clear that specialized services must be provided to persons who have been determined to need them by the PASARR process. 42 C.F.R. § 483.120(b); 483.136. Those services must be provided when they are needed, and without delay. 42 C.F.R. § 483.116. They must be provided by the States, not the nursing facilities, since the
(ii) The prevention or deceleration of regression or loss of current
optimal functional status.
(2) Active treatment does not include services to maintain generally independent
clients who are able to function with little supervision or in the absence of a
continuous active treatment program.
42 C.F.R. § 483.440(a).

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facilities are not permitted to claim federal financial participation for offering these services. 42 C.F.R. § 483.104, 483.108, 483.116(a), 483.124. See 57 Fed. Reg. 56,477 (nursing facility not accountable for specialized services). It is the State's responsibility to ensure that specialized services are provided, and to coordinate with nursing facilities so that continuous active treatment for all residents with disabilities who need it, actually receive it. 42 C.F.R. § 483.120(b) and(c).
Congress' and CMS's plan for ensuring that residents of nursing facilities with mental disabilities
receive the specialized services to which they are entitled is reasonable, clear, and unambiguous. See 57 Fed. Reg. 56,477.
C. The Defendants' Failure to Conduct PASARR Level I Screens and Level II
Reviews and to Provide Specialized Services in the Most Appropriate Settings The Governor, Defendant Perry, is responsible for ensuring that the State submits a State Medicaid Plan which conforms to federal law, and that Texas's Medicaid program is administered consistent with that Plan, relevant federal statutes, and federal regulations. Tex. Gov't Code §531.005, 531.0055 & 531.021; Cmty. Health Choice, Inc., v. Hawkins, 328 S.W.3d 10, 15 (Tex. App.-Austin 2010, no pet.) (when Texas Medicaid appropriations are insufficient to meet expenditures required by state or federal law, the Governor and the Legislative Budget Board are authorized to direct the transfer of sufficient funds to HHSC from Medicaid appropriations made elsewhere). HHSC and its Executive Commissioner, Defendant Suehs, are responsible for the overall administration of the Texas Medicaid program. They have delegated to DADS and its Commissioner, Defendant Traylor, responsibility for the delivery of Medicaid and other services and supports to elderly and disabled Medicaid recipients, including the Plaintiffs. Tex. Gov't Code §531.021 et seq.; see also Jonathan C. v. Hawkins, 2006 WL 3498494, at *7 (E.D. Tex. December 5, 2006). Pursuant to the PASARR provisions of the Medicaid Act, 42 U.S.C. §

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1396r(e)(7) and their implementing regulations, 42 C.F.R. § 483.132, DADS and Defendant Traylor are responsible for accurately identifying, through the PASARR screening process, whether any individuals have an intellectual or developmental disability, whether a nursing facility is an appropriate placement, or whether the individual's needs could be met in a more integrated community setting. 42 C.F.R. § 483.106(e); 483.132. They are also responsible for ensuring that persons with intellectual and developmental disabilities are comprehensively assessed for specialized services, and that those who require specialized services are promptly provided these services at the appropriate level, intensity, and duration in the appropriate setting. 42 C.F.R. § 483.120(a), 483.440(a).
Defendants Perry, Suehs and Traylor have failed to ensure that the Plaintiffs, who are categorically eligible for Medicaid services, are provided those medically necessary services to
which they are entitled under the Plan and pursuant to Title XIX of the Social Security Act. See Section II, supra. Specifically, these Defendants have failed to develop and implement a.
PASARR program that timely and appropriately screens nursing facility applicants for a
developmental disability; that determines whether the needs of individuals with developmental
disabilities could be met in an alternative, less restrictive setting; that assesses whether the individual needs specialized services; and, if so, that provides those services in a timely manner in the appropriate setting, consistent with federal standards Id. See also 42 C.F.R. § 483.120(b).
The problem in this case is not that the Defendants do not understand how to provide these services, but simply that they have chosen not to do so. The Defendants' failure to conduct PASARR reviews in a complete, comprehensive and professional manner and their failure to provide the necessary specialized services, including appropriate habilitation services, to persons
with developmental disabilities has resulted in several of the Plaintiffs habilitation needs being

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largely ignored in violation of the NHRA. See Section II, supra, and Report at 4-5, 8, 12. As Ms. McGowan's Report reveals, not one of the Plaintiffs reviewed had an adequate, timely Level I PASARR Screen and none had any of the required Level II evaluations or reviews. Id. at 4-5, 8, 12. Furthermore, rather than providing the full array of specialized services necessary to allow class
members to function as independently and with as much self-determination as possible, the
Defendants have, by regulation and in violation of federal law, arbitrarily restricted the scope of
specialized services provided by the nursing facility to "physical, occupational, and speech therapy evaluations and services." 40 Tex. Admin. Code § 19.1303.21 DADS has even constrained the
scope of services that the local mental health and mental retardation authority (hereafter "MRA") is responsible for providing to eligible nursing facility residents.22 According to the MRA OBRA Handbook (Revision 10-0, Oct. 26, 2009),23 there are just two specialized services nursing facility residents with developmental disabilities are entitled to receive vocational training and alternate placement services even though similarly-situated persons with developmental disabilities are offered a wide range of habilitative services and supports by the same Defendant if they live in other Medicaid facilities or in the community. See DADS Information Letter dated January 25, 2011 regarding nursing facility specialized services. Available at http://www.dads.state.tx.us/providers/communications/20 11 /letters/1L2011-11 .pdf
As a direct result of the Defendants' violation of federal law, the Plaintiffs are

21 See also DADS Information Letter dated January 25, 2011 regarding nursing facility specialized services. Available at http ://www.dads.state.tx.us/providers/communications/20 11 /Ietters/1L20 11-11 .pdf
22 All of the services that MRAs are responsible for providing occur outside the nursing facility and are related to community-based activities.
23 See also n. 21 regarding MRA specialized services. Available at http ://www.dads .state.tx.us/providers/communications/20 11 /letters/1L20 11-11 .pdf

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inappropriately confined at their nursing facilities and needlessly experiencing, and will likely continue to experience, regression and deterioration in their current condition and functioning as further described in Section II, supra. V. THERE IS A SUBSTANTIAL THREAT THAT THE PLAINTIFFS WILL
SUFFER IRREPARABLE INJURY IF A PRELIMINARY INJUNCTION IS NOT GRANTED The irreparable injury resulting from the Defendants ongoing refusal and failure to provide the Plaintiffs with the requisite evaluations of their habilitative needs, and provide the specialized services in the most appropriate settings to address these needs, will be severe. Andrea Padron, Linda Arizpe, and Eric Steward have had no adequate screens or assessments of their basic habilitative needs and have not received the necessary specialized and nursing services in the most appropriate setting required to meet these needs. Report, at 3-16. Thus, the Plaintiffs have been deprived of specialized services for many years and are actually being harmed, on an ongoing basis, as a result of their inappropriate confinement to their nursing facilities. Consequently, they have not only lost skills, but also developed severe medical conditions, some of which are life-threatening. Id. For example, because Andrea Padron has languished in her bed for at least the past five years with virtually no activity, save an hour or two each week, she is now unable to breathe easily, move her joints, or stand on her feet with the assistance of a stander. In fact, she is no longer responsive. Id. at 3-7. 15. For Andrea, if no preliminary injunction issues, she is almost certain to die from these preventable conditions. See
id.
Similarly, Linda Arizpe, due to lying idle with virtually no active treatment for the past
seven years while be inappropriately confined to her nursing facility, has developed a number of
serious medical conditions, including a frog-leg deformity that prevents her from holding her

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legs together and severe deterioration of her hips. Id. at 7-11, 15. Without immediate intervention, Linda's deformity pattern will worsen and likely become impossible to reverse. The deterioration of her hips will also continue and the chances of any intervention, short of
invasive surgery, to mitigate the damage will be diminished and likely foreclosed. id. She will remain confined to her bed with heightened vulnerability to developing other serious medical conditions, her ability to move increasingly comprised, and her isolation prolonged.
If the Defendants continue to deny Eric Steward an evaluation of his needs and the
specialized services to meet these needs in the most appropriate setting, he will continue to
regress irreparably. He will have no meaningful chance of regaining his ability to walk and
engaging in vocational and other programming. His already existing serious medical conditions will go untreated and are likely to deteriorate. Id. at 11-15.
The deprivation of prompt specialized and nursing services covered under Medicaid and mandated by the Medicaid Act constitutes irreparable harm. See Knowles v. Horn, 2010 WL 517591 at *7 (N.D. Tex. Feb. 10, 2010) (plaintiff demonstrated irreparable injury where he was at substantial risk of death and had no adequate remedy at law if his Medicaid-funded community-based services were withdrawn); Camacho v. Texas Workforce Corn 'n, 326 F.Supp. 2d 794, 802 (W.D. Tex. 2004) (irreparable harm shown where state sought to enact rules restricting Medicaid eligibility, which if allowed to take effect, would cause plaintiffs to lose medical benefits and leaving them with no way to pay for medical care, care for their children and work, and cause financial loss); Oak Park Health Care Center, LLC v. Johnson, 2009 WL 331563, at *3 (W.D. La. Feb. 10, 2009) (finding irreparable harm to nursing home residents and their families where cessation of provider contract would result in residents having to suddenly
move nursing home residents to a new facility).

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Here, the Plaintiffs have clearly demonstrated that, absent immediate preliminary injunctive relief, they will be irreparably harmed as a result of their deterioration, their
inadequately and untreated physical conditions, and the lack of specialized services provided in
the most appropriate setting to meet their habilitative needs and prevent regression. Since they have no adequate remedy at law, equitable relief, in the form of a preliminary injunction, is necessary. See Section II, supra and Report. VI. THE PLAINTIFFS' SUBSTANTIAL INJURIES OUTWEIGH ANY INJURY THE
DEFENDANTS MIGHT SUFFER IF AN INJUNCTION ISSUES The substantial injuries to the Plaintiffs sharply outweigh any injury to the Defendants. As described above, the severe harm to the Plaintiffs if no injunction issues will result in further physical deterioration, functional regression, and perhaps death. The Defendants' failure to provide the Plaintiffs with the necessary evaluations of their habilitative and medical needs and
the specialized and nursing services to meet these needs has caused them to incur profound loss
of their functional skills as well as extreme physical and medical deterioration. Report at 3-16; see also Section II, supra. The Defendants, by contrast, will suffer little or no harm, particularly because an injunction would only require the Defendants to do what they are already legally required to do. See Section IV, supra.
Furthermore, any claim that the Defendants may make with regard to hardship due to fiscal constraints cannot, as a matter of law, serve as a valid excuse for not fulfilling their obligations under Medicaid and the NHRA. Alabama Nursing Home Ass 'n v. Harris, 617 F. 2d 388, 396 (5th Cir. 1980) ("A state is not obligated to participate in the Medicaid program. However, once it has voluntarily elected to participate in the program, the state must comply with federal statutes. Inadequate state appropriations do not excuse noncompliance) (citations omitted); Camacho, 326 F. Supp. 2d at 802, (In finding that the hardships to plaintiffs

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outweighed any harm to defendant, court held that as a matter of law, " '[A] state's budget problems cannot serve as an excuse for altering federal eligibility requirements of federal funding; if they could, the federal requirements would become superfluous' ") quoting Planned Parenthood v. Sanchez, 280 F. Supp. 2d 590, 606 (W.D. Tex. 2003), Camacho v. Texas Workforce Corn 'n, 408 F.3d 229 (5th Cir. 2005) ("States electing to participate in the [Medicaid] program must comply with requirements imposed by the Act and regulations of the Secretary of Health and Human Resources"); Lopez v. Heckler, 713 F.3d 1437 (9th Cir. 1983); Kansas Hosp. Ass'n v. Whiternan, 835 F.Supp. 548, 1552-53 (D. Kan. 1993).
While an injunction has very minor resource implications for the Defendants, the failure to comply with federal law potentially has more serious resource implications. Under federal law, Texas is prohibited from claiming federal reimbursement for care or confinement that does not meet federal standards for active treatment. 42 U.S.C. § 1 396r(e)(7)(D) and 42 CFR §
483.122 and 483.124. Moreover, under the conditions of participation in the Medicaid program,
the Defendants simply cannot assert that resource constraints preclude their compliance with the
mandates of Title XIX, the obligations of the NHRA, or the commitments set forth in the Texas
Medicaid State Plan. Thus, the Defendants' continued refusal to comply with the requirements of Medicaid and the NHRA could have an enormous negative financial impact on the State.
When the Plaintiffs! loss of basic life skills is balanced against the very minor cost to the Defendants, and the potential loss of a huge amount of federal reimbursement, the balance of harm clearly tilts in favor of an injunction. VII. AN INJUCTION WILL NOT DISSERVE THE PUBLIC INTEREST
Granting preliminary relief requiring the Defendants to comply with the law by providing Andrea, Linda and Eric with proper screens, assessments, and specialized services that they

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require to meet their basic habilitative needs and prevent their further regression could have no appreciable negative impact on the public. To the contrary, such relief will service the public interest.
Courts have consistently held that the public interest is served where injunctions are
issued to stop government officials and entities from violations of the law, particularly in regards to constitutional and statutory laws pertaining to civil rights, welfare and medical benefits and other rights, including Medicaid. Camacho, .326 F.Supp. 2d at 802, quoting Finlan v. City of Dallas, 888 F.Supp. 779, 791 (N.D. Tex. 1995) (quoting Nobby Lobby, Inc. v. City of Dallas, 767 F.Supp. 801 (N.D. Tex. 1991), aff'd, 970 F. 2d 82 (5th Cir. 1992)) ("[T]he public interest always is served when public officials act within the bounds of the law and respect the rights of the citizens they serve."); Kansas Hosp. Ass'n, 835 F.Supp. at 1552-53 (finding where the "effect of a temporary restraining order would be to enforce the federal law and regulations governing the Medicaid program," it is in the public interest).
In enacting the NHRA, Congress explicitly recognized the public interest in ensuring that individuals with intellectual and developmental disabilities in nursing facilities, such as the Plaintiffs, receive the necessary specialized habilitative services to prevent regression. H.R. Rep. No. 391(1), 100th Cong., 1st Sess. 459 (1987), reprinted in 1987 Code Cong. & Admin. News 2312-1 to 2313-279 (Congress found that "substantial numbers of mentally retarded and mentally ill residents are inappropriately placed, at Medicaid expense, in [nursing facilities]. These residents often do not receive the active treatment or services that they need.")
Courts have also recognized the importance and validity of the NHRA and the PASARR process. See Tex. Health Care Ass 'n 1992 WL 206271 at * 8-9 ("The PASARR legislation is plainly a direct and reasonable way to attempt to eliminate the warehousing of mentally ill and

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mentally retarded patients in nursing homes."); see also Rayford, 715 F.Supp. at 1356 ("There can be no doubt that Congress could decide that mentally ill and retarded patients were
inappropriately placed in nursing homes. It would be hard to imagine a more rational means of
putting a stop to this than to prevent such individuals from entering nursing homes unless a determination is made that it would be appropriate."); Tex. Health Care Ass 'n v. Bowen, 710
F.Supp. 1109, 1110 (W.D. Tex. 1989) (Stating that in enacting of the OBRA, "it appears uncontested that the revisions were intended to end inappropriate placement of mentally ill and
mentally retarded individuals in nursing homes not equipped to deal with such individuals' special needs").
Here, the Plaintiffs have clear federal statutory rights to such evaluations and specialized services. See Section IV, supra. They have been denied these rights for many years and have consequently lost skills and acquired serious medical conditions, some of which are life
threatening. If no immediate relief is afforded, these already dangerous conditions will be exacerbated and they will further regress. See Sections II and IV, supra, and Report attached as
Ex. A to McGowan Decl.. Remedying such violations is clearly in the public interest. Finally, as discussed above in Section VII, the failure to comply with the requirements
Title XIX and the NHRA, may cost the State money because federal reimbursement for Medicaid nursing facility services could be disallowed, due to its failure to provide the Plaintiffs with the requisite active treatment. VIII. THE PLAINTIFFS SHOULD NOT BE REQUIRED TO POST A SECURITY
BOND AS A CONDITION OF THE PRELIMINARY INJUNCTION The Plaintiffs should not be required to post a security bond if a preliminary injunction is issued. Although Fed. R. Civ. P 65 (c) permits courts to order the posting of a bond, they are not required to do so. Kaepa, Inc. v. Achilles Corp., 76 F.3d 624 (5th Cir. 1996). Courts regularly

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decline to require a plaintiff to post bond where the harm to the plaintiff significantly outweighs the harm to defendant and the plaintiff is indigent. Temple Univ. v. White, 941 F.2d 201, 220 (3rd Cir. 1991) (waiver of bond requirement in case where brought to enforce Medicaid Rights); Orantes-Hernandez v. Smith, 541 F.Supp. 351, 385 (C.D. Cal. 1982) (Court declined to order indigent El Salvadorian plaintiffs to post security when a TRO was issued against plaintiffs).
Here, the Plaintiffs are all indigent. See Amend. Comp. (Doc. #63) ¶J 137,248; see also ¶J 147, 164-167. Moreover, as discussed above in Section VI, any harm to the Defendants resulting from the issuance of a preliminary injunction is sharply outweighed by the harm to the Plaintiffs if such an injunction does not issue. Thus, they should not be required to post a
security. IX. CONCLUSION
For the reasons set forth above, the Plaintiffs Andrea Pedron, Linda Arizpe and Eric Steward, respectfully request that this Court preliminarily enjoin the Defendants, their officers, agents, servants, employees, and attorneys, and any and all persons in active concert or participation with them, from denying the Plaintiffs' comprehensive assessments of their habilitative needs, and the identified specialized and nursing services to meet those needs in the most appropriate setting, as required by federal law.
Specifically, the Plaintiffs respectfully request that the Court order Defendants to: (1) Conduct a comprehensive assessment by a qualified mental retardation professional of each Plaintiffs habilitative and nursing needs, including the most appropriate setting to meet those needs, in accordance with professional standards and federal regulations. The assessment should be conducted in consultation with Karen Green McGowan and completed within thirty (30) days of issuance of an injunction;

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(2) Provide, or ensure the provision of, all necessary specialized and nursing services required to meet each the Plaintiffs' habilitative needs in the most appropriate setting, as determined by the comprehensive assessment and the consultation with Karen Green
McGowan, within thirty (30) days of completion of the comprehensive assessment; (3) Ensure that the combination of specialized and nursing services are provided in the
most appropriate setting and with sufficient frequency, intensity and duration to prevent deceleration of their conditions or regression and to satisfy the federal standard for active
treatment, as required by the PASARR provisions of the Medicaid Act and their
implementing regulations; and (4) Certify to the Court and the parties that they have fully complied with the Court's
Order within 60 days of the date of the Order. If either the Defendants fail to make the required certification or the services provided to each Plaintiff do not meet federal standards, the Defendants shall promptly transfer each Plaintiff to an appropriate community setting with necessary supports.

Plaint4ffs' Opposed Motion for Preliminary Injunction

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Respectfully submitted,
/s/ Garth A. Corbett
Garth A. Corbett State Bar No. 04812300 gcorbettdisabilityrightstx.org Sean A. Jackson State Bar No. 24057550 sjackson@disabilityrightstx.org Disability Rights Texas 7800 Shoal Creek Boulevard, Suite 171 -E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 yvette.ostolaza@weil.com Robert Velevis State Bar No. 24047032 Robert.velevis@weil.com Casey A. Burton State Bar No. 24058791 Casey.burton@weil.com Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz (admitted pro hac vice) S Schwartzcpr-ma.org Deborah Dorfman (admitted pro hac vice) DDorfmancpr-ma.org Bettina Toner (admitted pro hac vice) BTonercpr-ma.org
Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Attorneysfor Plaintiffs

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CERTIFICATE OF CONFERENCE
I, Garth A. Corbett, hereby certify that I have conferred with counsel for Defendants on the relief requested in this Motion for Preliminary Injunction, and certify that Defendants are opposed to the relief sought herein.
/s/ Garth A. Corbett
Garth A. Corbett

CERTIFICATE OF SERVICE

I, Garth Corbett, hereby certify that all parties have been served through the Court's ECF system, or if such party does not accept service through the Court's ECF system, then by first class mail.

Dated: May 9, 2012

/s/ Garth A. Corbett
Garth A. Corbett

Plaintiffs' Opposed Motionfor Preliminary Injunction

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ç

UNITED STATES DISTRICT COURT FOR THE WESTERN I)ISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, LINDA ARIZPE, ANDREA )

PADRON, PATRICIA FERRER BENNY

)

HOLMES, ZACKOWITZ MORGAN, on behalf )

of themselves and all others similarly situated,

)

THE ARC OF TEXAS, INC., and COALITION )

OF TEXANS WITH DISABILITIES, NC.,

)

)
Plaintiffs,

V.
RICK PERRY, Governor, in his official capacity, THOMAS SUEHS, Executive Commissioner of Texas Health and Human Services Commission, in his official capacity, CHRIS TRAYLOR,
Commissioner of the Texas Department of Aging
and Disability Services, in his official capacity,

Defendants.

)

)

)

THE UNITED STATES OF AMERICA,

)

)

Plaintiff-Intervenor

)

V.

)

THE STATE OF TEXAS,

)

Defendants.

)

Case No. 5:lO-cv-1025-OLG

UNITED STATES' COMPLAINT IN INTERVENTION

Case 5:10-cv-01025-OLG Document 137 Filed 09/20/12 Page 2 of 18
The United States alleges that the State of Texas ("State") discriminates against individuals with developmental disabilities1 by unnecessanly institutionalizing them in nursing facilities As set forth more fully below, the State is in violation of title 11 of the Americans with Disabilities Act of 1990 ("ADA"), 42 U S C § 12131-12134, and Section 504 ofthe Rehabilitation Act of 1973, 29 U S C § 794 ("Rehabilitation Act")
The State continuós to fund institutional care for individuals with developmental disabilities in nursing facilities while effectively denying them care in community-based
alternatives in violation of the ADA and the Rehabilitation Act. The alleged discrimination goes to the heart of the ADA and Congress' intent to eliminate the segregation and isolation of individuals with disabilities. As Congress stated in the findings and purposes of the ADA: "historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of
discrimination against individuals with disab1ities continue to be a serious and pervasive social problem." 42 U.S.C. § 12101(a)(2).
JURISDICTION AND VENUE
1. This Court has jurisdiction of this action under title II of the ADA, 42 U.S.C. § 12131-12132, Section 504 ofthe Rehabilitation Act, 29 U.S.C. § 794a, and 28 U.S.C. § 1331 and 1345. The Court may grant the relief sought in this action pursuant to 28
U.S.C. §220l and 2202.
Throughout this complaint,the United States uses the tenn 'developmental disabilities" to refer to individuals with intellectual disabilities (mental retardation) and individuals with "related conditions" as defined by 42 C.F.R. § 483.102(b)(3) and 42 CF.R § 435.1010.
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2. Venue is proper in this district pursuant to 28 U.S.C. § 1391, given that a substantial part of the acts and omissions giving rise to this action occurred in the Western District of Texas. 28 U.S.C. § 1391(b).
PARTIES. 3. Plaintiff-Intervenor is the United States of America. 4. Defendant State of Texas is a "public entity" within the meaning of the ADA, 42 U.S.C. § 12131(1), 28 C.F.R. § 35.104, and is therefore subject to title II of the ADA, 42 U.S.C. § 12131 etseq. 5. At all times relevant to this action, the State of Texas, has been a "recipient" of "federal financial assistance," including Medicaid funds, and is therefore subject to the Rehabilitation Act, 29 U.S.C. § 794. 6. The proposed Plaintiff class consists of:
[A]ll Medicaid-eligible persons over twenty-one years of age with mental
retardation and/or a related condition in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 etseq. (Complaint ¶ 25, December 20, 2010, ECF No. 1.)
7. Each of the individually named Plaintiffs and members of the Plaintiff class has
impairments that substantially limit one or more major life activities. Each class member is an individual with a disability, as defined by the ADA and Rehabilitation Act..
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BACKGROUND A. The Americans with Disabilities Act and the Rehabilitation Act 8. Congress enacted the ADA in 1990 "to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." 42 U.S.C. § 12101(b)(1). 9. Congress found that "historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social problem." 42 U.S.C. § 12101(a)(2). 10. For those reasons, Congress prohibited discrimination against individuals with disabilities by public entities: "[Nb qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity." 42 U.S.C. § 12132. 11. Congress directed the Attorney General to issue regulations implementing title II ofthe ADA. 42 U.S.C. § 12134. 12. The title II regulations require public entities to "administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d). The preamble discussion of the "integration regulation" explains that "the most integrated setting" is one that "enables individuals with disabilities to interact with nondisabled persons to the fullest extent
possible... ." 28 C.FR. § 35.130(d), App. A.
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13. Regulations implementing title II of the ADA prohibit public entities from utilizing "criteria or methods ofadministration" that have the effect of subjecting qualified individuals with disabilities to discrimination or "that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the entity's program with respect to individuals with disabilities.. . ." 28 C.F.R. § 35.130(b)(3); accord 45 C.F.R. § 84.4(b)(4) (Rehabilitation Act). 14. The Supreme Court held that title II prohibits the unjustified segregation of
individuals with disabilities. Olmstead v. L. C., 527 U.S. 581, 596 (1999). 15. The Supreme Court explained that the Olmstead holding "reflects two evident
judgments." id. at 600. "First, institutional placement of persons who can handle and benefit from community settings perpetuates unwarranted assumptions that persons so isolated are incapable or unworthy ofparticipating in community life." Id. "Second, confinement in an institution severely diminishes the everyday life activities of
individuals, including family relations, social contacts, work options, economic independence, educational advancement, and cultural enrichment." Id. at 601.
16. Discrimination on the basis of disability is also prohibited by Section 504 of the
Rehabilitation Act, 29 U.S.C. § 794(a): No otherwise qualified individual with a disability in the United States.. .shall,
solely by reason of her or his disability, be excluded from the participation in, be
denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance or under any program or activity...
17. The Rehabilitation Act's implementing regulations provide that recipients of federal finds "shall administer programs and activities in the most integrated setting
5

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appropriate to the needs of qualified handicapped persons." 28 C.F.R. § 41.51(d); see
also 45 C.F.R. § 84.4. 18. Texas has numerous statutes, regulations and executive orders that strongly favor
integrated community services and supports. See TEx. HEALTH & SAFETY CODE
§ 591.002(d), 592.013(3), 591.005, 592.032; 40 TEx. ADMIN. CODE § 4.107(2); Executive Order GWB 99-2 (Sept. 28, 1999); Executive Order RP 13 (Apr. 18, 2002).
B. The Nursing Home Reform Amendments to the Medicaid Act 19. The federal Nursing Home Reform Act requires that states develop and implement a Preadmission Screening and Resident Review ("PASRR") program for all Medicaid-certified nursing facilities. 42 U.S.C. § 1 396r(e)(7); 42 C.F.R. § § 483.100 to 483.138. 20. All persons seeking admission to a nursing facility who have a developmental disability must be assessed to determine, inter alia, whether "the individual's total needs are such that his or her needs can be met in an appropriate community setting" (42 C.F.R. § 483. 132(a)(1)), and "[ilf specialized services are recommended, [the evaluation must] identiflyJ the specific mental retardation. . . services required to meet the evaluated individual's needs." 42 C.F.R. § 483.128(i)(5); see also 42 C.F.R. § 483.136. This evaluation is referred to as the Level II PASRR review. 42 C.F.R. § 483.128(a). 21. For individuals with developmental disabilities in nursing facilities, "specialized services means the services specified by the State which, combined with services provided by the [nursing facility] or other service providers," results in a specialized services treatment program, "which includes aggressive, consistent implementation" of
6

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services "that [are] directed toward [both] (i) [t]he acquisition of the behaviors necessary

for the client to function with as much self determination and independence as possible;

and (ii) [t]he prevention or deceleration of regression or loss of current optimal functional

status." See 42 C.F.R. § 483. 120(a)(2) (defining specialized services and referencing 42 C.F.R. § 483.440(a)(1)); see also 42 U.S.C. § 1396r(e)(7)(G)(iii).
22. If an individual in a nursing facility requires specialized services, then "[t]he State

must provide or arrange for the provision of the specialized services needed by the

individual while he or she resides in the [nursing facility]." 42 C.F.R. § 483.11 6(b)(2); see also 42 C.F.R. § 483.126. 23. The nursing facility "must provide [developmental disability] services which are

of a lesser intensity than specialized services to all residents who need such services." 42

C.F.R. § 483.120(c).

FACTUAL ALLEGATIONS

A. Plaintjffs are Unnecessarily Institutionalized in Nursing Facilities

24. The five individually named Plaintiffs who remain in nursing facilities and many

of the proposed Plaintiff class are unnecessarily institutionalized in nursing facilities and

are not being served in the most integrated setting appropriate to their needs.

Patricia Ferrer

25. Plaintiff Patricia Ferrer is 47 years-old and has an intellectual disability and

epilepsy. For 44 years, Ms. Ferrer lived at home with her parents. She was independent

in the community and required little additional assistance. While she lived at home with

7

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her family, she worked as a hotel housekeeper. Ms. Ferrer wants to leave the nursing facility and explore the possibility of returning to work. 26. With the appropriate supports, Ms. Ferrer could live in the community. 27. Ms. Ferrer is currently confined in a nursing facility that resembles a hospital-like setting. It is large and houses unrelated individuals with disabilities. Ms. Ferrer rarely leaves the nursing facility. Other than occasional visits with family and the nursing facility staff, Ms. Ferrer has little opportunity to interact with individuals without disabilities. 28. Ms. Ferrer has not received a Level II PASRR review and thus she was not evaluated to determine whether she needs specialized services and whether she could be
served in the community instead of a nursing facility. Ms. Ferrer has not received
appropriate specialized services while in the nursing facility. Eric Steward 29. PlaintiffEric Steward is 45 years-old and is currently confined in a nursing facility. Mr. Steward has epilepsy and cerebral palsy. He uses a wheelchair for mobility, but with the appropriate physical therapy, he may be able to walk. 30. Mr. Steward wants to move into the community. He wants to enjoy activities such as shopping, bowling, eating out with friends and family and watching movies. He also enjoys woodworking and wants to pursue employment. He pursued these interests prior to his admission into the nursing facility. 31. With the appropriate supports, Mr. Steward could live in the community.
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32. Mr. Steward shares a room with an assigned roommate. The nursing facility is large, it houses unrelated individuals with disabilities, and resembles a hospital-like setting. Other than visits from his family and the nursing facility staff, Mr. Steward has limited opportunities to interact with individuals without disabilities. 33. Mr. Steward has never received a Level II PASRR evaluation, despite having been admitted to two different nursing facilities. He does not receive appropriate specialized services or any consideration for community placement. Zackowitz Morgan 34. Plaintiff Zackowitz Morgan is 41 years-old and has been confined in the nursing facility since January 2008, but previously lived in the community. Mr. Morgan has an intellectual disability. He has regressed since living in the nursing facility and has gained significant weight. He wants to live once again in the community. He wants to go to picnics with his family, attend church, play basketball and go to the park. He does not have the opportunity to engage in these activities in the nursing facility. 35. With the appropriate supports, Mr. Morgan could live in the community. 36. The nursing facility is large, houses unrelated individuals with disabilities and resembles a hospital-like setting. Mr. Morgan rarely leaves the facility. Mr. Morgan and
his roommate share a room together without a built-in divider. His roommate, as of March 2011, is not ableto engage in a conversation because of his severe dementia.
Other than visits from his family and the nursing facility staff, Mr. Morgan has limited opportunities to interact with individuals who do not have disabilities.
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37. In March 2009, Mr. Morgan's treatment team determined that a nursing facility was not an appropriate placement for Mr. Morgan. Nevertheless, Mr. Morgan remains in the nursing facility and the State has not taken steps to transition him into the community 38 Mr Morgan first received his Level II PASRR review in January 2009 nearly a year after his admission to a nursing facility. His PASRR assessment indicated that he was appropriate for specialized services. However, there is no indication that Mr. Morgan has actually received appropriate specialized services while in the nursing facility. Linda Arizpe 39. Plaintiff Linda Arizpe is 42 years-old and has a developmental disability and a visual impairment. She is currently confined in a nursing facility. She is unable to walk and cannot talk, but she is responsive, particularly to her parents. 40. With the appropriate. supports, Ms. Arizpe could live in the community. 41. Ms. Arizpe has very little social interaction at the nursing facility and rarely has the opportunity to leave the nursing facility to engage in community activities. The nursing facility whereMs. Arizpe is confined is large, houses unrelated individuals with disabilities and resembles a hospital-like setting. She shares a room with a roommate and only a curtain separates their beds. Other than visits from her family and the nursing facility staff, Ms. Arizpe has limited opportunities to interact with individuals without disabilities. 42. Ms. Arizpe's parents want her to move to a community-based setting and do not want Ms. Arizpe to live the rest of her life in a nursing facility.
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43. Ms. Arizpe never received a Level II PASRR evaluation and thus was not
considered for community placement or specialized services while in the nursing facility. Ms. Arizpe does not receive appropriate specialized services in the nursing facility. Andrea Padron 44 Andrea Padron is 26 years-old Ms Padron has quadnplegia and a developmental
disability, both of which resulted from a severe head injury from a car accident when she
was a child. She has been confined to a nursing facility since she was 16 years-old. 45. Prior to her placement in the nursing facility, Ms. Padron lived at home with her mother, Rosa Hudeck. Ms. Padron attended public school and received habilitative services, including aqua therapy. She was able to use a wheelchair at home. Although Ms. Padron is nonverbal, when she was at home, she was able to communicate with her family with verbal cues 46. Since her placement at the nursing facility, Ms. Padron has regressed. She is less communicative and she no longer uses the wheelchair she used at home because her limbs have become significantly more rigid. She also experiences skin breakdowns, which Ms. Hudeck attributes to the nursing facility's failure to appropriately reposition Ms. Padron. 47. The nursing facility where Ms. Padron is confined resembles a hospital-like setting. It is large and housós unrelated individuals with disabilities. Ms. Padron shares her room with a roommate and only a curtain divides their beds. Other than the staff and visits from family, Ms. Padron has little opportunity to interact with individuals without
11

Case 5:10-cv-01025-OLG Document 137 Filed 09/20/12 Page 12 of 18
disabilities. Ms. Padron rarely leaves the nursing facility and for the past year, has barely left her room in the nursing facility. 48. Ms. Hudeck does not oppose Ms. Padron's placement in the community with the appropriate supports and Ms. Padron is able to live in the community. 49. Ms. Padron has never received a Level II PASRR review and thus was not considered for community placement or assessed for specialized services while in the nursing facility. As a result, Ms. Padron does not receive appropriate specialized services in the nursing facility.
B. Texas Unnecessarily Segregates Individuals with Developmental Disabilities in Nursing Facilities
50. Nursing facilities are institutions and are not integrated settings. They provide little opportunity for individuals with disabilities to interact with individuals without disabilities. 51. The individually named Plaintiffs and the proposed Plaintiff class are able to live in the community with the appropriate services and supports.
52. The individually named Plaintiffs and many of the proposed Plaintiff class do not oppose living in the community instead of a nursing facility. 53. The State already offers an array of community-based services to individuals
with developmental disabilities, including residential assistance services and habilitation
services which, if offered to the Plaintiffs, would enable them to live in the community.
40 TEX.ADMIN. CODE § 48.2103, 9.553(34), 711.3(20). 54. The State has not given nursing facility residents with developmental disabilities the opportunity to have their needs for residential and habilitation services met in the
12

Case 5:10-cv-01025-OLG Document 137 Filed 09/20/12 Page 13 of 18
community rather than a nursing facility. In order to access these community-based services, Plaintiffs must first place their names on the Home and Community Based
Services (HCS) waiting list that has, as of March 31, 2011, over 50,000 names for approximately 22,800 slots, all of which are cunently filled. See 40 TEx. ADMIN. CODE
§ 9.157. According to a November 2009 report by the State, individuals enrolling in the
HCS program had been on the waiting list for an average of nearly nine years.2
55. Plaintiffs who presently live in the community are unable to access residential and habilitation services in a manner to prevent their unnecessary institutionalization in nursing homes because they must first place their names on the HCS waitlist list and wait for approximately nine years before receiving services. 56. The State's policies effectively limit timely access to community-based services
for individuals with developmental disabilities to residents of Intermediate Care Facilities ("ICFs") and individuals in state-supported living centers ("SSLCs") who want to move into the community because these individuals do not have to place their names on the
lengthy waitlist for community services. ICFs and SSLC are institutions for which only individuals with developmental disabilities are eligible. I TEX. ADMIN. CODE § 358.103 (47), (87). 57. Pursuant to Section 531.0235 of the Texas Government Code, the Texas Council
for Developmental Disabilities and the Office for the Prevention of Developmental Disabilities are required to prepare a joint biennial report on the state of services to
persons with disabilities in Texas. In their 2008 Biennial Report, these agencies
2 The report is available at bttp://www.sao.state.tx.us/reports/main/l O-014.pdf.
13

Case 5:10-cv-01025-OLG Document 137 Filed 09/20/12 Page 14 of 18
concluded that "[p]eople with MRJRC [mental retardation or related conditions] do not have access to services with reasonable promptness" because "Texas significantly and chronically underfunds its service system." The Report's second major finding is that "[m]any people with intellectual and developmental disabilities (IDIDD) do not receive
services within the least restrictive setting appropriate to their needs.. . In fact, the
discrepancy in Texas's investment in institutions compared to its investment in community services is extraordinary."3 58. The findings of the 2008 Biennial Report largely mirror the conclusions reached by the Human Services Research Institute in its 2008 report, Closingthe Gap in Texas:
Improving Servicesfor People with Intellectual and Developmental Disabilities. The
Closing the Gap report found that "the gap between present capacity and unmet needs means Texas does not. operate its service system in a manner that ensures that individuals will receive services promptly" and that because individuals must wait significantly for community based services, "their situation may deteriorate and caregivers can buckle under the stress of longterm unassisted care giving."4 59. The failure of the State's PASRR program further results in the unnecessary
institutionalization of individuals with developmental disabilities in nursing facilities.
Individuals with developmental disabilities are often admitted to nursing facilities without being appropriately assessed for whether they can be served in the community. 60. The State's PASRR program does not adequately or appropriately assess whether an individual with a developmental disability needs specialized services. Due to the
The report is available at bUn://www,txddc.statetx.us/resourcesJpublieations/bienniaI reort/2OiObiennial/2OIObiennialreport.pdf.
This report is available at htt,://www.txddc.state.tx.us/public Policv/aprpt.Ddf
14

Case 5:10-cv-01025-OLG Document 137 Filed 09/20/12 Page 15 of 18
State's failure to ensure that appropriate PASRR reviews are conducted and to provide
needed specialized services, according to the State, only 1% of the individuals with
developmental disabilities who are confined in Texas nursing facilities receive specialized services. 61 On June 1, 2011, the Umted States sent notice to counsel for the State, Assistant Attorney General Nancy Juren, advising the State that it has failed to comply with the
requirements of the Americans with Disabilities Act and the Rehabilitation Act by.
unnecessarily segregating individuals with developmental disabilities in nursing facilities and placing individuals with developmental disabilities living in the community at risk of
placement in nursing facilities. The United States further advised the State of its
intention to intervene in this matter to remedy the violations. 62. On June 15, 2011, the United States provided the State additional factual
information regarding its determination that the State is in violation of the Americans with Disabilities Act and the Rehabilitation Act, including the remedies that the United
States seeks in this action.
63. The Department of Justice has determined that the State's compliance with the Americans with Disabilities Act and the Rehabilitation Act cannot besecured by
voluntary means at this point.
15

Case 5:10-cv-01025-OLG Document 137 Filed 09/20/12 Page 16 of 18
COUNT I TITLE II OF THE AMERICANS WITH DISABILITIES ACT
42 U.S.C. § 12131 et. seq.
64 The allegations of Paragraphs 1 through 63 of the Complaint m Intervention are
hereby realleged and incorporated by reference.
65. The State of Texas discriminates against "qualified individual[s] with a disability" within the meaning of the ADA by administering programs and services for individuals
with developmental disabilities in a manner that denies individuals the opportunity to receive services in the most integrated settings appropriate to their needs.
66. The State's actions constitute discrimination in violation of title II of the ADA, 42
U.S.C. § 12132, and its implementing regulations at 28 C.F.R. § 35.130.
COUNT II SECTION 504 OF THE REHABILITATION ACT
29 U.S.C. § 794
67. The allegations of Paragraphs 1 through 66 ofthe Complaint in Intervention are
hereby realleged and incorporated by reference.
68. The State of Texas, which is a recipient of federal financial assistance, discriminates against "qualified individual[s] with a disability" within the meaning ofthe
Rehabilitation Act by administering programs and services for individuals with developmental disabilities in a manner that denies individuals the opportunity to receive services in the most integrated setting appropnate to their needs
16

Case 5:10-cv-01025-OLG Document 137 Filed 09/20/12 Page 17 of 18

PRAYER FOR RELIEF

WHEREFORE, the United States of America prays that the Court:

A Grant judgment in favor of the United States on its Complaint in

Intervention and declare that the Defendant has violated title 1.1 of the ADA, 42 U.S.C.

§1213 1 etseq and Section 504 ofthe Rehabilitation Act of 1973, 29 U S C § 794, B Enjoin Defendant from

1. faiiingto provide appropriate, integrated community services and

supports for all class members, consistent with their individual needs;

2. discriminating against Plaintiff class members with developmental

disabilities by failing to provide services and supports in the most integrated setting

appropriate to their needs;

C. Issue a declaratory judgment declaring that:

1.

Defendant has violated title II ofthe Americans with Disabilities

Act and Section 504 of the Rehabilitation Act by failing to make reasonable

modifications to programs for persons with developmental disabilities to enable Plaintiffs and members of the class to obtain the services and supports they require to reside in the

most integrated setting appropriate to their needs; and

D. Order such other appropriate relief as the interests ofjustice may require.

17

Case 5:10-cv-01025-OLG Document 137 Filed 09/20/12 Page 18 of 18

-

------

I

Respectfiiil' submitted,

THOMAS E:PEREZ

u

Assistant Attorney General

Civil Rights Division

SAMUEL R. BAGENSTOS Principal Deputy Assistant Attorney General Civil Rights Division

JOEN WODATCH

Acting Deputy Assistant Attorney General

Civil Rights Division

0

ALISON BARKOFF, Special Counsel for Olmstead Enforcement

4LL1ONIC, otion ef
TLEEN WOLFE Ac Special Legal Counsel
RENEE M. WOHLENHAUS, Deputy Chief REGAN RUSH, Trial Attorney Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 307-0663 Facsimile: (202) 307-1197 Regan.Rushusdoi.gov
Counselfor Plaintiff-Inrervenor United States ofAmerica

18

 Case 5:10-cv-01025-OLG Document 149 Filed 11/12/12 Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

§

v.

§

§

RICK PERRY, Governor, et al.

§

Defendants

§

___________________________________________§

§

THE UNITED STATES OF AMERICA, §

Plaintiff-Intervenor

§

§

v.

§

§

THE STATE OF TEXAS

§

Defendants

§

§

Case No. 5:10-CV-1025-0G

DECLARATION OF GARTH A. CORBETT IN SUPPORT OF PLAINTIFFS’ SUPPLEMENTAL MEMORANDUM IN SUPPORT OF AMENDED MOTION FOR
CLASS CERTIFICATION

I, GARTH A. CORBETT, hereby declare: 1. I am an attorney with Disability Rights Texas, and one of the attorneys of record for
Plaintiffs in this case. I make this declaration in support of Plaintiffs’ Supplemental Memorandum in Support of Amended Motion for Class Certification. I am competent to testify to the matters stated herein and either have personal knowledge of the facts set forth below or they are from sources deemed reliable.
2. This declaration has been prepared to authenticate the pertinent exhibit attached to Plaintiffs Supplemental Memorandum in Support of Amended Motion for Class Certification.

Case 5:10-cv-01025-OLG Document 149 Filed 11/12/12 Page 2 of 3 3. Attached hereto as Exhibit 1 is a true and correct copy of a report issued by the Texas Department of Aging and Disability Services, entitled Medicaid Nursing and Home and Community Based Services in Texas, Prepared in Response to Senate Bill 222, Section 4, 82nd Legislature, Regular Session, 2011, prepared by the Center for Policy and Innovation, dated August 2012, available at: http://www.dads.state.tx.us/news_info/publications/legislative/sb222report-8-2012.pdf (last visited November 12, 2012). This report examines the factors leading to Nursing Facility placements as opposed to Home and Community-based Services (HCBS) placements, including ways to expedite access to HCBS services. Pursuant to 28 USC § 1746, I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge. Executed on this 12th day of November, 2012, at Austin Texas.
GARTH A. CORBETT
2

Case 5:10-cv-01025-OLG Document 149 Filed 11/12/12 Page 3 of 3
CERTIFICATE OF SERVICE I, Garth Corbett, hereby certify that all parties have been served through the Court’s ECF system, or if such party does not accept service through the Court’s ECF system, then by first class mail.
/s/ Garth A. Corbett Garth A. Corbett
3

 Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 1 of 14

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

v.

§

§

RICK PERRY, Governor of the State of Texas, §

~~'

§

Defendants

§

_____________________________§

§

THE UNITED STATES OF AMERICA,

§

Plaintiff-Intervenor

§

v.

§

§

THE STATE OF TEXAS

§

Defendant

§

Case No. 5:10-CV-1025-0G

DECLARATION OF STACY LINDSEY 1. "My name is Stacy Lindsey, and I am over 18 years of age, of sound mind, and capable of making this declaration. The facts stated in this declaration are true and conect and are within my personal knowledge due to my personal involvement, or are within my personal knowledge based on a review of DADS records, as described herein. 2. "I am currently employed with the Texas Department of Aging and Disability Services ("DADS") as manager of the Local Procedure Development and Support unit within the Local Authority Section of the Access and Intake Division. As unit manager, my responsibilities include authorizing the release of program vacancies for the Home and Community-based Services (HCS) and Texas Home Living Medicaid waiver programs, overseeing the tracking of the progress of enrollments in the program, and managing the HCS interest list. Prior to being manager, I worked in the same unit and was responsible for tracking the progress of

Declaration ofStacy Lindsey

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 2 of 14

enrollments in the HCS and Texas Home Living programs and managed the HCS interest list. My work and professional experience has made me familiar with the policies, procedures, programs, and practices of DADS relating to enrollment in the HCS Medicaid waiver program.
3. "In August 2012, Patricia Ferrer, Zakowitz Morgan, Eric Steward, Andrea Padron, and Linda Arizpe, five of the plaintiffs in this lawsuit, were informed by their respective local mental retardation authorities ("local authorities"), that "diversion slots" were available in the HCS Medicaid waiver program. To be offered an HCS diversion slot, an individual must first submit an application packet to the State Supported Living Center program and be found eligible for admission to a State Supported Living Center. All five of these individuals or their legal guardians decided to pursue this opportunity. With the assistance of their local authorities, each individual followed the procedures to apply for admission to a State Supported Living Center and requested access to the HCS program as an alternative to admission to a State Supported Living Center.
4. "Following that process, each of the five individuals was offered a slot in the HCS program on September 14, 2012. Since September 14, each individual or the individual's guardian has signed the Verification of Freedom of Choice accepting the HCS program (true and correct copies of which are attached hereto as Exhibits A through E), and has been working with his or her local authority to choose an HCS provider and go through the necessary steps to enroll in the HCS program. Typically, the enrollment process takes less than 90 days. In the case of the five plaintiffs, however, advocates with Disability Rights Texas have arranged for physical therapy evaluations and other kinds of evaluations to be done for most of these individuals before they visit prospective providers for pre-placement visits. This may cause some delays in the enrollment process.

Declaration ofStacy Lindsey

2

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 3 of 14

Patricia Ferrer 5. "Patricia Ferrer made two pre-placement visits to Family Faith HCS provider and
later selected that provider. Ms. Ferrer is scheduled to meet with a representative from Family Faith and the local authority enrollment service coordinator on November 13, 2012 to complete the enrollment process. Ms. Ferrer is scheduled to move on November 19th. Zakowitz Morgan
6. "Zakowitz Morgan and his guardian are interviewing potential providers. They visited one provider but Mr. Morgan was unable to access the group home because the home was not wheelchair accessible. The local authority enrollment service coordinator is working with Mr. Morgan and his guardian to ensure future potential providers are aware of Mr. Morgan's accessibility needs. Eric Steward
7. "At the request of the attorney for Disability Rights Texas, a physical therapy evaluation was completed for Eric Steward. A conference call with the attorney, the local authority staff, and Mr. Steward and his mother was scheduled for November 9, 2012, to discuss the results of the evaluation as well as the HCS services to be included on Mr. Steward's Individual Plan of Care. Mr. Steward and his mother are still in the process of selecting a provider with the assistance of their advocate. Andrea Padron
8. "At the request of the attorney for Disability Rights Texas, a physical therapy evaluation was completed for Andrea Padron. A conference call with the attorney, the local authority staff, and Ms. Padron's guardian was scheduled for November 9, 2012, to discuss the results of the evaluation as well as the HCS services to be included on Ms. Padron's Individual

Declaration ofStacy Lindsey

3

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 4 of 14
Plan of Care. Ms. Padron's guardian is still in the process of selecting a provider with the assistance of an advocate. Linda Arizpe
9. "The attorney for Disability Rights Texas requested a physical therapy evaluation be completed for Linda Arizpe. The recommendations from the evaluation will be used to develop Ms Arizpe's Individual Plan of Care at the enrollment meeting scheduled for November 14, 2012. Ms. Arizpe's mother is her legal guardian. Her guardian has selected Caleb, Inc., as the HCS provider. Ms. Arizpe's mother and father have chosen to self-direct the supported home living and respite that will be provided through the HCS waiver. The Consumer Directed Service Agency that Ms. Arizpe's guardian has selected to provide financial management services is Imagine Enterprises. Ms. Arizpe will be moving to her parents' home at Canyon Lake, where she is scheduled to begin receiving HCS services on December 1, 2012.
"I hereby declare under penalty of peljury that the foregoing is true and correct." Executed on November 12, 2012.

Declaration ofStacy Lindsey

4

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 5 of 14
Exhibit A

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 6 of 14

Texas Department of Aging and Disability Services

Waiver Program/Programa opcional
Verification of Freedom of ChoiceNerificaci6n de libre opci6n

Form 8601 September 2012

As a recipient or potential recipient oN.iledicaid funded services, I understand that I have a choice between the waiver program I have selected and the applicable institutional program from which it is waived.
I have been informed of the services available through the waiver program I have selected. The services I would receive through this waiver program will be identified on my service plan.
I have received information about the types of institutional services available to me.
Providing that I meet the eligibility requirements, I have been given the choice of either institutional or home and community-based services and I choose the following:
D Community Living Assistance and Support Services
(CLASS)
D Consolidated Waiver Program (CWP)
D Deaf Blind with Multiple Disabilities (DBMD)
~and Community-based Services (HCS) Program

Como beneficiario o posible beneficiario de servicios financiados por media de Medicaid, entiendo que tengo una opci6n entre el programa opcional que he seleccionado y el programa institucional que me hubiera correspondido.
Me han informado de los servicios disponibles por media del programa opcional que he seleccionado. Los servicios que recibiria bajo este programa opcional estarim indicados en mi plan de servicios.
He recibido informaci6n sabre los tipos de servicios institucionales que puedo recibir.
Siempre y cuando yo Ilene los requisites de elegibilidad, me han dado Ia opci6n de seleccionar entre servicios institucionales y de apoyo en el hagar y en Ia comunidad, y escojo el siguiente:
D Servicios de Apoyo y Asistencia para Vivir en Ia Comunidad
(CLASS)
D Programa Opcional Combinado (CWP)
O Programa Opcional de Personas Sordociegas con
Discapacidades Multiples (DBMD)
O Programa de Servicios en el Hagar y en Ia Comunidad (HCS)

D Intermediate Care Facility for Individuals with an Intellectual Disability or Related Conditions (ICF/110) Institutional Program
D Nursing Facility (NF) Institutional Program
D Texas Home Living (TxHmL) Program
D Other: ------------------------------------for the following reason: ------------------------

D Programa institucional de Centros de atenci6n intermedia para personas con una discapacidad intelectual o un padecimiento relacionado (ICF/110)
D Programa institucional de Centros para Convalecientes (NF)
D Programa de Texas para Vivir en Casa (TxHmL)
D Otro: --------------------------------------
por las siguientes razones:

Agency Name Nombre del departamento

Comp Code (HCS and TxHmL Only)

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 7 of 14
Exhibit B

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12
aTnedxaDsisDaebpilaityrtmSeesnrvt ho;efsAsing

Waiver Pro~rarn/Programa opclonal

Name of !ndlvlduaVNambre Zakowits: Morgan

dala

petsona

VeriVficeariftiicoan.qoi6fnFdreeefidboremoopcfiConhoice

Page 8 of 14

.

. F.orm . November

8601
2010.

de Medicaid

iwsneasrftvvaiiteucrreetispco~rinpoJaiguelrnnpadtrmooegrrIsrhpataaomnvteedfnrsottihemaialetwrQIethhc~laidcpvtaiieeninitdlticstohh:fweoMiaaciepvedepbidlcei.actiawdbeflueenndtehde

I have been informe
mrtheyceeswievarevivitehc~rroppurlogangh.rtahmis

Idwhoaafivvteheersepslreeorcgvttreacdem.~TwahJveIaI sibleaerbvildieceret:h~strfoffuwiegdohuo.lnd

cbPitnoehrsmeoatnvivmtieudgutiirnniveoegictnnyeta-hiltbvhasaeetesdIrecvmIhdnicoefseoieecsrtrme.tvahoaivcetfaeieoiesllinaitaghbanilebbedriotliJinoutcystm.thtrihtoeeue.oqtsutiyoeirpnteea~msleeoofnorftlhsloo, wm1ihenagav:ned

0 Community (ClASS)

Living

Assistance

and

Support

Services

0 D Consolidated Wal~er P~ogram {CWP)
0 Deaf-Blind with Multiple Disabilitie~ (OBMO)

~me Commun~ty-b and

csufCioennorlaaermencosccoppliaocbodnienooandnsdiedoefpoincoy.tlarreerrlinoepelordopiopgroordassemrlabMamleelanbdseoictnplatuecidicfol.cionieaannrlaitoqll.euqdneuedahosemeqreuvelchituoebsnf.egroa
elmSniHinqsdnMsiesuceeedtetoelm(lSiithrCctu~jpeuho~rrpaLcreevacndroAl.elcioenboiogSldicnbinsyrSsdllanaaioalro)dagcsfmlrteooanueudIsranaslemIebmafnyooqnAaadlprotujdpdomepocpoeeo:licyaeaoypaiandsconouptie.anoeydIeollneAleyddopqno$oessrsuelo~aseressrgteblenveeorcMrinalrseeclevcbm!cliirliaocosrechas.ieisqop.ao'toausnget·irpipacasadccorlrit.Visloasyaepisnvnndeoiaradnte·nlredeeienbIsoa·esesl.eItareclaLe:svorCrgvoimptcimoisc·obiomui·s.irlsonieudfsiTnrdavliaeddicdda,!.id,oasy
0 Progrlilma Opdonal Cambinado (CWP) D QPri$ocgarepmacaidOadpeo&ioMnallll.tdlpelePse{rOeoanMaOs )Sordoclegas con

ased Se~lces .(HCS) Program
0 0 Rlnet.etarmrdealltdioiante(ICCaFr/eMFRa) cJinlistytitfuotrioPnearlsPornosgwraimth Men'tal

0 Nursing Facility (NF) Institutional Pro_grarn 0 Texas Home Uving (TxH~L).P.rogra~

0 0 Other: Do~:------- fQr the

f-ol-low-i-ng-r-et~-So-n:-:-~-----..----:-

0

pPParrrooaggrrPa~emmrsaaoidnneasstSltuceocrnivoicnRiaoelstdraeesnoCeelM.nHetronegtsaaldr(eYIC. A~FntIeMIl'alRcic)oonm·1ln.11nelrdmaded(lHaCS} .

·0 Programa
Progr~ma

instituclonal de Centro~ para Conv.alet:lentfils
de iexas para Vivir en Casa {TxHmL)

(NF}

-------------~~--~ por las siguientes razones:

Nombr~A:~gaMelcgyeNpaanmaem. e.nJto

Date/Feeha
:zeo
Comp Cgde (HCS and TxHmL Only}

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 9 of 14
Exhibit C

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 10 of 14
and Disablflty SeNices
Waiver Program/Programa opclonal
Verification of Freedom of ChoiceNerificaci6n de libre opci6n

• -•••• wvw•
September 2012

Name oflndlvlduai/Nombre de Ia persona
ez_,._,, L 5 f-t'

- • :;

I I

~ ; .. 11- I ; ... t! I I

. . . II I I • • ...-

lJ ·.1_· ..... ' II: .. • -

lcald

As a recipient or potential recipient of Medicaid funded services, I understand that I have a choice between the waiver program I have selected and the applicable Institutional program from which It Is waived. I have ~een Informed of the services available through the waiver program I have selected. The services I would receive through this waiver program will be Identified on my service plan. 1have received Information about the types of Institutional services available to me. Providing that I meet the eligibility requirements, I have been given the choice of either Institutional or home and community-based services and I choose the following:

Como beneficlario o poslble beneflclario de servlclos flnanclados por media de Medicaid, entlendo que tango una opcl6n entre el programa opclonal que he selecclonado y el programa lnstituclonal que me hubiera correspondldo. Me han lnformado de los servlclos dlsponlbles por medlo del programa opclonal que he selecclonado. Los servlclos que reclblrla bajo este programs opclonal estaran lndlcados en ml plan de servlcias. He recibldo informacl6n sabre los tlpas de servlclos lnstituclanales que puedo reciblr. Siempre y cuando yo Ilene los requlsltas de eleglbllldad, me han
dado Ia apcl6n de selecclonar entre servlclos instltuclonales y de
apayo en el hagar y en Ia comunidad, y escojo el slgulente:

O Community Living Assistance and Support Services (CLASS)
0 Consolidated Waiver Program (CWP) O Deaf Blind with Multiple Disabilities (DBMD) ~ome and Communlty·based Services (HCS) Program

O Servlclos de Apaya y Aslstencla para Vivlr en Ia Comunidad (CLASS)
0 Programa Opclanal Comblnado (CWP)
D Programa Opclanal de Personas Sordoclegas con Dlscapacldades Multiples (DBMD)
D Programs de Servlclas en el Hogary en Ia Comunidad (HCS)

0 Intermediate Care Facility for Individuals with an Intellectual Disability or Related Conditions (ICF/IID) Institutional Program
D Nursing Facility {NF) Institutional Program

D Programa lnstltuclonal de Centres de atenci6n intennedla para personas con una dlscapacldad lntelectual o un padeclmlenta relaclanada (ICF/110)
0 Programs lnstltuclonal de Centros para Canvaleclentes (NF)

0 Texas Home Living (TxHmL) Program
D Other: -------------------------------------
for the following reason: -----------------------

0 Programa de Texas para Vivir en Casa (TxHmL)
D Otro: ------------------------------par las slgulentes rezones:

Signature - Agency Representative Firma del representante del departamento
Agency Name Nombre del departamento

Date/Fecha oiteJFecha Comp Code (HCS and TxHmL Only)

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 11 of 14
Exhibit D

and DisabilityCSaersvieces5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 12 of 14
Verification of FWreaeivdeor mProogfraCmh/PoriocgeraNmeariofipccaiocnla6ln de libre opcl6n

Form 8601 September 201 ~

pspAerrsoorvgagirrcaraeemmsc,ipfIIrhioueamnnvdteweosrrhsepitcloaehtnceitdtenItdtshiaaawlntradIeivhctehaipdevi.eeanaptpcolhifcoMaicbeeldeibcIenatsiwdtietfuuetnniodtnheaedlwaiver
tpw1hhlaaraoinvvu.eegrhbpetrheonigsrIanwmfaoirIvmheear dpveroosfgetrhlaeemcstewedri.vllTicbheeesIdsaeevrnavtiilicafiebesldeIotwhnroomuulydgshreetrchveeicivee
sI heravviceersecaeviavieladbIlnefotormmaet.ion about the types of Institutional cgPoirvmoevmnidutihnneigtyct-hhboaaitscIaemdoesfeeetirttvhhieceeresIlniagsnitbidtiulIitticyohnroeaoqlsuoeirrethhmoemefnoetlslao,nwIdhinagv:e been

O Community (CLASS)

Living

Assistance

and

Support

Services

0 Consolidated Waiver Program (CWP)

0 Deaf Blind with Multiple Disabilities (DBMD)

~ome and Community-based Services (HCS) Program

0

IIInnnstteetilrtlmeucteitoduniaaaltleDPCisraoargberialFitmaycoilritRyefolarteInddCivoidnudaitlisonwsit(hICaFnniD)

0 Nursing Facility (NF) Institutional Program

D Texas Home Uvlng (TxHml) Program

0

Other: for the

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0 Programa lnstituclonal de Centres para Convaleclentes (NF)

0 Programa de Texas para Vlvlr en Casa (TxHml)
D rnro: ______________________________

per las slgulentes razones:

AnSniagndaelturerper-eAsegnetannctyeRdeepl dreespeanrttaamtiveento

Agency Name Nombre del departamento

(

Date/Fecha
D~te/Fe'cha
Comp Code (HCS and TxHmL Only)

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 13 of 14
Exhibit E

Case 5:10-cv-01025-OLG Document 151-1 Filed 11/13/12 Page 14 of 14

Texas Department of Aging and Disability Services

Waiver Program/Programa opcional
Verification of Freedom of ChoiceNerificaci6n de libre opci6n

Form 8601 September 2012

de Ia persona

As a recipient or potential recipient of Medicaid funded services, I understand that I have a choice between the waiver program I have selected and the applicable Institutional program from which it is waived. I have been informed of the services available through the waiver program I have selected. The services I would receive through this waiver program will be identified on my service plan.
I have received information about the types of institutional services available to me.
Providing that I meet the eligibility requirements, I have been given the choice of either institutional or home and community-based services and I choose the following:
O Community living Assistance and Support Services
(CLASS)
0 Consolidated Waiver Program (CWP)
O Deaf Blind with Multiple Disabilities (DBMD)
~ Home and Community-based Services (HCS) Program
O Intermediate Care Facility for Individuals with an
Intellectual Disability or Related Conditions (ICFIIID) Institutional Program
D Nursing Facility (NF) Institutional Program
D Texas Home Living (TxHmL) Program
D Other: -------
for the following reason:

Como beneficiario o posible beneficiario de servicios financiados por medio de Medicaid, entiendo que tango una opci6n entre el programa opclonal que he seleccionado y el programa institucional que me hubiera correspondido. Me han informado de los servicios disponibles por medio del programa opcional que he seleccionado. Los servicios que recibiria bajo este programa opcional estaran indicados en mi plan de servicios.
He recibido informacion sabre los tipos de servicios institucionales que puedo recibir.
Siempre y cuando yo Ilene los requisites de elegibilidad, me han dado Ia opci6n de selecclonar entre servicios instituclonales y de apoyo en el hogar yen Ia comunidad, y escojo el siguiente:
0 Servicios de Apoyo y Asistencia para Vivir en Ia Comunidad
(CLASS)
D Programa Opcional Combinado (CWP)
D Programa Opcional de Personas Sordociegas con
Discapacidades Multiples (DBMD)
D Programa de Servicios en el Hogar yen Ia Comunidad (HCS)
D Programa institucional de Centres de atenci6n intermedia para personas con una discapacidad intelectual o un padecimiento relacionado (ICFIIID)
D Programa institucional de Centres para Convalecientes (NF)
D Programa de Texas para Vivir en Casa (TxHmL)
D Otro:
por las siguientes razones:

;L-~die-2:~1/i.~d Representat.~iv-e~-Firma de Ia persona o del representante legalmente autorizado -I \ ,/\__)

Date/Fecha
___!1/a7 /; su Oate/Fecha

Camp Code (HCS and TxHmL Only)

 Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 1 of 60

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend and

§

mother, Lillian Minor;

§

§

LINDA ARIZPE, by her next friend and

§

guardian, Rudy Arizpe;

§

§

ANDREA PADRON, by her next friend

§

and guardian, Rosa Hudecek;

§

FILED

OCT - 4 zon

WCELESR1KE, RUN.I(DS-1k11\TO

COURT TEXAS

pv

§

PATRICIA FERRER, by her next friend and §

mother, Petra Ferrer;

§

§

BENNY HOLMES, by his next friend

§

and guardian, Priscilla Holmes;

§

Case No. 5:10-CV-1025

§

ZACKOWITZ MORGAN, by his next

§

friend and guardian, Sharon Barker,

§

§

on behalf of themselves and all others

§

similarly situated, and

§

§

THE ARC OF TEXAS, INC. and

§

§

COALITION OF TEXANS WITH

§

DISABILITIES, INC.

§

§

Plaintiffs,

§

V.

§

§
RICK PERRY, Governor of the State of Texas, §

§

CHRIS TRAYLOR, Commissioner of

§

the Texas Department of Aging and Disability §

Services, and

§

§

THOMAS SUEHS, Executive Commissioner §

ofthe Texas Health and Human Services

§

Commission,

§

§
all in their official capacities, §

§

Defendants.

§

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 2 of 60
AMENDED AND SUPPLEMENTAL COMPLAINT I. INTRODUCTION
1. Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes, and Zackowitz Morgan, (hereafter the "Individual Plaintiffs") are adult persons with mental retardation or other related conditions (hereafter referred to as "developmental disabilities"). Each of these individuals is qualified for the Defendants' system of community-based services and supports for individuals with developmental disabilities. Each is able and would prefer to reside in a more integrated, community-based placement. Nevertheless, the Individual Plaintiffs
and thousands of similarly situated individuals in Texas are unnecessarily institutionalized and segregated in nursing facilities because of the Defendants' decision to exclude them from any meaningful access to Texas's system of community-based services and supports which they need
to be able to reside in the community.
2. The Defendants, by their actions and inactions in violation of federal law, have
caused the Individual Plaintiffs and the class they seek to represent to live in institutional nursing facilities isolated from their family and friends. The Individual Plaintiffs and the class are not able to leave the nursing facility to work, attend day habilitation programs or prevocational
activities, and are deprived of the right to attend social, recreational or religious activities outside of the nursing home. Instead, they have no option but to remain in nursing facilities in order to
receive Medicaid-funded services.
3. Despite their ability to benefit from Texas's system of community-based supports that are available to other individuals with disabilities, all of the Individual Plaintiffs and the
class they seek to represent are experiencing or will experience unnecessary and prolonged
institutionalization in violation of the Americans with Disabilities Act (ADA), 42 U.S.C. §
2

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 3 of 60
12132 et seq., and Section 504 of the Rehabilitation Act of 1973 (Rehabilitation Act), 29 U.S.C.
§ 794 et seq.
4. To avoid the inappropriate institutionalization of individuals with developmental
disabilities in nursing facilities, Congress enacted the Nursing Home Reform Amendments (NHRA) to the Medicaid Act, 42 U.S.C. § 1 396r(e). These Amendments require that before admission to a nursing facility, an individual with developmental disabilities must be screened by a mental retardation professional to determine whether their needs could be met in the community or other less restrictive placement. These Amendments also require that the Defendants provide individuals with developmental disabilities who are placed in nursing facilities with specialized services and active treatment, designed to enable the individual to function as independently and with as much selfdetermination as possible, and to prevent
regression and loss of abilities. 5. Despite the requirements of the NHRA, the Defendants have failed to conduct
pre-admission screening and assessments that comply with the requirements of the NHRA and
have failed to provide all needed specialized services to the Individual Plaintiffs and the class. As a result, the Individual Plaintiffs and class members have been inappropriately placed in nursing facilities and, while there, have frequently suffered significant regression or stagnation
that could have been avoided through the provision of specialized services, required by federal
law.
6. Plaintiffs and the class seek declaratory and injunctive relief against the Defendants to require the provision of adequate community-based services and supports to enable them to transition from their current nursing facility placements to more integrated community placements as required by the ADA, 42 U.S.C. § 12101 et seq.; the Rehabilitation

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 4 of 60
Act, 29 U.S.C. § 794; the NHRA, 42 U.S.C. § 1396r(e); the federal Medicaid Act and the regulations implementing these statutes. They also seek additional declaratory and injunctive relief requiring the Defendants to comply with the pre-admission screening and resident review
(PASARR) requirements of the NHRA, including the provision of specialized services and
active treatment to class members while residing in nursing facilities. II. JURISDICTION ANt) VENUE
7. This is a civil action authorized by 42 U.S.C. § 1983 to redress the deprivation
under color of state law of rights, privileges and immunities guaranteed by federal laws and the
United States Constitution. This Court has jurisdiction pursuant to 28 U.S.C. § 1331, 1343(3) and 1343(4).
8. This action is also brought pursuant to Title II ofthe ADA, 42 U.S.C. § 12132, and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794. TheDefendants are all public entities subject to Title II of the ADA and receive federal financial assistance to operate their Medicaid program and to cover the cost of nursing facility care and the provision of community-based services and supports. This Court has jurisdiction over the claims under the ADA and § 504 pursuant to 42 U.S.C. § 12133 and 29 U.S.C. § 794a.
9. Plaintiffs' request for declaratory relief is brought pursuant to 28 U.S.C. § 2201 and Rule 57 of the Federal Rules of Civil Procedure. Injunctive relief is authorized by 28 U.S.C. § 2202, 42 U.S.C. § 1983 and Rule 65 of the Federal Rules of Civil Procedure. III. PARTIES
A. Individual Plaintiffs 10. Plaintiff Eric Steward is a 44 year-old man with developmental disabilities including mental retardation and the related condition of infantile cerebral palsy. He resides at
4

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 5 of 60
Buena Vida Nursing & Rehabilitation Center of San Antonio, 5027 Pecan Grove, San Antonio,
Texas. He brings this action through his next friend and mother, Lillian Minor. 11. Plaintiff Linda Arizpe is a 40 year-old woman. She has mental retardation. She
resides at Meridian Care, a nursing facility located at 8181 Crestway Drive, San Antonio, Texas. She brings this action by and through her father and legal guardian, Rudy Arizpe.
12. Plaintiff Andrea Padron is 26 years old. She has mental retardation and a head injury. She resides at Meridian Care, a nursing facility located at 8181 Crestway Drive, San Antonio, Texas. She brings this action by and through her mother and legal guardian, Rosa Hudecek.
13. Plaintiff Patricia Ferrer is a 46 year-old woman with mental retardation who currently resides at the ManorCare Health Services nursing facility located at 3326 Burgoyne Street, Dallas, Texas 75233. She brings this action through her mother and next friend, Petra Ferrer, who lives at 814 N. Barnett Avenue, Dallas, Texas 75211
14. Plaintiff Benny Holmes is a 31 year-old man with mental retardation and cerebral palsy who currently resides at 7404 Clover Glen, Dallas, Texas. He brings this action through his mother and legal guardian, Priscilla Holmes, who lives at 3404 Beliville Drive, Dallas, Texas.
15. Plaintiff Zackowitz Morgan is a 40 year-old man with a developmental disability who currently resides in the Silver Springs Healthcare Center, a nursing facility located at 12350 Wood Bayou Drive, Houston, Texas. Mr. Morgan also has diagnoses of cerebral palsy, obesity, hypertension, hypothyroidism, glaucoma, and peripheral vascular disease, congestive heart failure and a seizure disorder. He brings this action through his guardian and next-friend, Sharon

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 6 of 60
Barker who was appointed his legal guardian by the Harris County Probate Court on August 20, 2008. Sharon Barker lives at 118 St. Finans Way, Houston, Texas.
B. Organizational Plaint .[fi 16. The Arc of Texas, Inc. is a statewide non-profit membership organization comprised of persons with mental retardation, their parents and friends, and mental retardation professionals. Members of the Arc of Texas and its local chapters include individuals with developmental disabilities who reside in nursing facilities or the families of such residents. They also include individuals with developmental disabilities who are at risk of placement in nursing facilities due to the Defendants' failure to provide them access to the supports and services they need to live safely in the community. 17. The Arc of Texas is dedicated to ensuring that all citizens with developmental disabilities in Texas are afforded appropriate services and supports in the most integrated, homelike setting possible, and that all persons with developmental disabilities and their families have meaningful choices about the nature and location of those services. The Arc of Texas, as a statewide advocacy organization, has long monitored the actions of the Defendants in order to ensure that persons with developmental disabilities receive the services to which they are entitled. In this capacity, the Arc of Texas has served as an organizational plaintiff in other federal court litigation against many of the same state agencies. 18. The Arc of Texas brings this action on its own behalf and on behalf of its members who are directly affected by the actions and inactions of the Defendants at issue in this
case.
19. The Coalition of Texans with Disabilities, Inc. (CTD) is a statewide cross-
disability advocacy organization. CTD is a membership organization with both individual and

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 7 of 60

organizational members. Its individual members include persons with developmental disabilities
and the parents, guardians and caretakers of such persons. CTD also has over 80 member

organizations representing some 3 million unduplicated individuals with all types of disabilities,

including developmental disabilities, their families, friends and caretakers.

20. CTD's mission is to ensure that people with disabilities may live, learn, work, play and participate fully in their community of choice. In line with this mission, CTD advocacy focuses on full inclusion in all aspects of community living.

21. CTD brings this action on behalf of itself and its members with developmental

disabilities who are residing or are at risk of residing in a nursing facility based upon the current policies and practices of the Defendants.

C.

Defendants

22. Governor Rick Perry is the chief executive officer of the State of Texas. He is responsible for directing, supervising, and controlling the executive departments of state
government as well as for seeking funds from the legislature to implement the programs and
deliver the services of those executive agencies. Defendant Perry appoints the Executive Commissioner of the Health and Human Services Commission, and approves the appointment of the Commissioner of the Department of Aging and Disability Services. He is sued in his official

capacity.

23. Thomas Suehs, Executive Commissioner of the Health and Human Services Commission ("HHSC"), is responsible for the oversight, supervision, and control of the health

and human services departments within the executive branch, including the Department of Aging and Disability Services. He is responsible for appointing the Commissioner of the Department of Aging and Disability Services. Defendant Suehs is also responsible for the supervision,

7

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 8 of 60
direction and oversight of the Texas Medicaid Program, including the various waiver programs and other services designed to enable the named plaintiffs and members of the plaintiff class to reside in community-based settings and, if in a nursing facility, to receive specialized services
and active treatment. He is sued in his official capacity.
24. Chris Traylor, Commissioner of the Department of Aging and Disability Services ("DADS"), is the chief executive officer of DADS, which is responsible for admissions to, provision of specialized services in, and the funding, licensing, and monitoring of nursing
facilities. Defendant Traylor is also charged with the responsibility for ensuring compliance with PASARR requirements of the NHRA, as well as providing information about, and determining
eligibility for, an array of home and community-based services that would enable class members
to live safely and productively in the community. He is sued in his official capacity. IV. CLASS ACTION ALLEGATIONS
25. Pursuant to Rules 23(a)(1)-(4) and (b)(2) of the Federal Rules of Civil Procedure, plaintiffs bring this action as a class action on behalf of all Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related condition (collectively referred
to as persons with developmental disabilities) in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq.
26. The size of the class is so numerous that joinder of all members is impracticable.
There are approximately 4,500 adult residents with developmental disabilities in nursing facilities throughout Texas, plus thousands more individuals with developmental disabilities who
are at risk of being institutionalized in these nursing facilities. Joinder is also impracticable

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 9 of 60
because the class is dynamic and because the absent class members lack the knowledge, sophistication, and financial means to maintain individual actions.
27. There are questions of law and fact common to the class, including inter a/ia:
a. whether Defendants are violating the ADA and Section 504 by: (i) failing to offer and provide community support services to nursing facility residents with developmental disabilities that would enable them to live in the most integrated setting appropriate to their needs; (ii) failing to offer community services to individuals with developmental disabilities who are at risk of
admission to nursing facilities, in order to divert the unnecessary admission of
those individuals who could be appropriately served in a community or alternative setting; and (iii) utilizing eligibility criteria and methods of
administration that have the effect of excluding the named plaintiffs and members of the plaintiff class from access to the services and supports that
they need to reside in integrated, community-based settings; b. whether Defendants are violating the NI-IRA by: (i) failing to establish a
screening program that accurately determines if persons with developmental
disabilities who apply for admission to a nursing facility can be appropriately served in a less restrictive community setting; (ii) failing to conduct professionally acceptable assessments to determine what specialized services
these individuals require; and (iii) failing to provide an array of specialized
services to all persons with developmental disabilities in nursing facilities who need them, in a manner that satisfies the federal standard for active treatment; and

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 10 of 60
c. whether Defendants are violating the federal Medicaid program by: (i) failing
to provide necessary rehabilitative services to the members of the plaintiff
class with reasonable promptness; (ii) denying class members a choice between receiving medically necessary supports and services in a segregated nursing facility or an integrated community-based setting, including failing to provide them with relevant information necessary to exercise this choice, and (iii) failing to afford them meaningful access to community-based services.
28. The plaintiffs' claims are typical of the claims of the class. 29. The representative parties will fairly and adequately protect the interests of the class. Plaintiffs will vigorously represent the interests of the unnamed class members, and all members of the proposed class will benefit by the efforts of the named plaintiffs. The interests of the proposed class and those of the named plaintiffs are identical.
30. Defendants, their agents, employees, and predecessors and successors in office have acted or will act on grounds generally applicable to the plaintiff class, thereby making appropriate injunctive or declaratory relief with respect to the class as a whole. V. STATEMENT OF FACTS
A. Texas Community Service Programsfor Persons with Developmental
Disabilities (1) The Americans with Disabilities Act and the Rehabilitation Act 31. On July 12, 1990, Congress enacted the ADA, 42 U.S.C. § 12101 etseq., (ADA), establishing the most important civil rights laws for persons with disabilities in our nation's history. 32. Congress stated in its findings that "historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of
10

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 11 of 60
discrimination against individuals with disabilities continue to be a serious and pervasive social problem." 42 U.S.C. § 12101(a)(2).
33. Congress found that "discrimination against individuals with disabilities persists
in.. . institutionalization. . . and access to public services." 42 U.S.C. § 12101(a)(3). Congress
found that "individuals with disabilities continually encounter various forms of discrimination,
including outright intentional exclusion. . . , segregation, and relegation to lesser services, programs, activities, benefits, jobs, or other opportunities." 42 U.S.C. § 12101(a)(5).
34. Congress further concluded that "[i]ndividuals with disabilities are a discrete and
insular minority who have been faced with restrictions and limitations, subjected to a history of purposeful unequal treatment, and relegated to a position of political powerlessness in our society, based on characteristics that are beyond the control of such individuals and resulting from stereotypic assumptions not truly indicative of the individual ability of such individuals to
participate in, and contribute to, society." 42 U.S.C. § 12101(a)(7).
35. A major purpose of the ADA is to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities, and to provide
clear, strong, consistent and enforceable standards addressing discrimination against individuals with disabilities. 42 U.S.C. § 12101(b)(1)&(2).
36. "Discrimination" under the ADA includes the segregation of persons with disabilities from society as a result of unnecessary institutionalization. As the Supreme Court stated in Olmsteadv. L.C., 527 U.S. 581 (1999), "unjustified institutional isolation of persons with disabilities is a form of discrimination" because "[un order to receive needed medical services, persons with mental disabilities, because of those disabilities, relinquish participation in community life...." 527 U.S. at 600-601.
11

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 12 of 60
37. The regulations implementing the ADA require that: "a public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d).
38. Discrimination on the basis of disability is also prohibited by Section 504 ofthe Rehabilitation Act, 29 U.S.C. § 794(a). Section 504's implementing regulations provide that recipients of federal funds "shall administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons." 28 C.F.R. § 41.5 1(d).
39. The ADA and § 504 regulations prohibit the differential treatment of individuals with disabilities or any class of individuals with disabilities with respect to their opportunity to participate in or access the full range of aids, benefits or services in any program operated by a
public entity. See 28 C.F.R. § 35.130(b)(1)(ii) & (b)(1)(iv), 41.5 1(b)(1)(ii) & (b)(1)(iv); 45 C.F.R. § 84.4(b)(1)(ii) & (b)(1)(iv).
40. The ADA and § 504 regulations prohibit public entities from utilizing "criteria or
methods of administration" that have the effect of subjecting qualified individuals with
disabilities to discrimination, including unnecessary institutionalization or "that have the purpose
or effect of substantially impairing accomplishment of the objectives of the public entity's
program with respect to individuals with disabilities." See 28 C.F.R. § 35.130(b)(3), 41.5 1(b)(3); 45 C.F.R. § 84.4(b)(4).
41. The ADA regulations further specify that "[a] public entity shall not impose or apply eligibility criteria that screen out or tend to screen out an individual with a disability or any class of individuals with disabilities from fully and equally enjoying any service program or
activity unless such criteria can be shown to be necessary for the provision of the service,
program, or activity being offered." 28 C.F.R. § 35.130(b)(8).
12

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 13 of 60
42. Both the ADA and § 504 also require that public entities must make reasonable modifications in their policies, practices or procedures when necessary to avoid discrimination
on the basis of disability, including the unnecessary segregation or institutionalization of such
individuals, unless the public entity can demonstrate that such modifications would
fundamentally alter the nature of the service, program or activity. 42 U.S.C. § § 12131, 12132;
29 U.S.C. § 794; 28 C.F.R. § 35.130(b)(7).
(2) Texas's Implementation of the ADA' s Integration Mandate
43. Although Texas provides care, treatment and services to persons with developmental disabilities in large state supported living centers, nursing facilities, private intermediate care facilities for individuals with mental retardation (ICF/MR' s), and home and community-based settings, it has enacted laws, promulgated regulations, issued policies, conducted studies, written reports, and developed programs that strongly favor integrated community services and supports.
44. In Texas, the Persons with Mental Retardation Act ("PMRA") preserves and
promotes the rights of individuals with mental retardation "to live in the least restrictive setting appropriate to the person's individual needs and abilities and in a variety of living situations,
including living: (1) alone; (2) in a group home; (3) with a family; or (4) in a supervised, protective environment." Tex. Health & Safety code § 592.0 13(3).
45. The PMRA expressly guarantees an individual's right to receive services in "(1) the available program or facility that is the least confining for the client's condition; and (2) that is provided in the least intrusive manner reasonably and humanely appropriate to the person's needs." Id. at § 59 1.005. Furthermore, "[e]ach client has the right to live in the least
13

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 14 of 60
restrictive habilitation setting and to be treated and served in the least intrusive manner appropriate to the client's individual's needs." Id. at § 592.032.
46. In addition the PMRA ensures that "[e]ach person with mental retardation has the right to receive for mental retardation adequate treatment and habilitative services that: (1) are suited to the person's individual needs; (2) maximize the person's capabilities; (3) enhance the person's ability to cope with the person's environment; and (4) are administered skillfully,
safely, and humanely with full respect for the dignity and personal integrity of the person." Id. at
§ 592.017; see also 40 Tex. Admin. Code § 4.107(2). 47. Moreover, in 2001, the Texas legislature, in response to the United States
Supreme Court's Olmstead decision, passed SB 367, which codified one of the earliest "Money
Follows the Person" ("MFP") initiatives in the country that was designed to transition persons in institutional settings to community-based services.
48. Shortly after the Olmstead decision, former Governor George W. Bush issued Executive Order GWB 99-2 (Sept. 28, 1999) declaring that "[tjhe State of Texas is committed to providing community-based alternatives for people with disabilities...
49. Similarly, Defendant Perry issued Executive Order RP 13 (Apr. 18, 2002); in
which he said that "the State of Texas is committed to providing community-based alternatives
for people with disabilities and recognize that such services and supports advance the best
interests of Texans." He further proclaimed that "it is imperative that consumers and their families have a choice from among the broadest range of supports to most effectively meet their
needs in their homes, community settings, state facilities or other residential settings," and "that people with disabilities have the opportunity to enjoy full lives of independence, productivity and self-determination."
14

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 15 of 60
50. Texas agencies and commissions have conducted studies and issued reports and plans that confirm that most individuals with developmental disabilities benefit from living in the community, rather than in institutional settings. The Texas Health and Human Services Commission recently issued the 2008 Revised Texas Promoting Independence Plan. The Plan recognizes that the Olmstead decision "requires states to provide individuals an opportunity to live in the most integrated setting in order to receive their long-term services and supports" and, therefore, establishes as a top priority "full-funding for community-based services and elimination of all interest [waiting] lists."
51. In its State Plan for Individuals with Developmental Disabilities: Fiscal Years 2002-2006, the Texas Council on Developmental Disabilities noted that "individuals with developmental disabilities should have access to opportunities and the supports needed to be included in community life, have interdependent relationships, live in homes and communities, and make contributions to their families, communities, the state, and the nation."
52. Texas has developed an array of community-based programs, services and
supports that provide habilitation and support to individuals with developmental disabilities in their homes, in adult foster care settings, and in residential homes. These programs are funded through both federal and state resources and implemented through a complex blend of federallyapproved programs. However, these programs, services and supports are largely unavailable to adult individuals with developmental disabilities residing in Texas nursing facilities.
(3) Texas's Discriminatory Administration of Its Community Programs
53. Despite this statutory, regulatory, and policy commitment to integration, Texas has not created a program for adult persons with developmental disabilities in nursing facilities that will allow them to transition to integrated community settings. Instead, it has developed, implemented, and administered its community service programs in a manner that systemically or
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effectively denies adult nursing facility residents with developmental disabilities access to these community service programs.
54. The Individual Plaintiffs and the majority of the class could reside in integrated, community-based settings if they were able to access the full array of community-based programs, services, and supports that the Defendants provide for other individuals with
developmental disabilities who are not in nursing facilities. 55. For persons with developmental disabilities residing in nursing facilities or at risk
of nursing home placement, the key services and supports that they need in order to safely
transition to the community are residential assistance services and habilitation services. 56. Adult persons with developmental disabilities residing in nursing facilities or at
risk of placement in a nursing facility are denied to access residential assistance services or necessary community-based habilitation services by the policies and methods of administration of the Defendants that systemically or effectively restrict access to those services to individuals
with developmental disabilities who live in their state-supported living centers and private intennediate care facilities for the developmentally disabled (generally referred to as ICF/MRs). As a result, the named plaintiffs and members of the plaintiff class remain unnecessarily institutionalized in segregated nursing facilities, often for decades.
57. Adult persons with developmental disabilities residing in nursing facilities or at risk of placement in a nursing facility are relegated to placing their names on a Home and
Community-Based Services (HCS) waiting list, which, as of July 31, 2010, contained 45,756
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58. On the other hand, persons with physical disabilities in nursing facilities are able
to access the array of community-based services and supports designed to meet their needs
immediately, without having to go on a lengthy, slow moving waiting list. 59. Texas agencies and commissions have conducted studies that confirm that
individuals with developmental disabilities are not able to access the community-based services and supports that they require to avoid institutional placements with reasonable promptness and, as a result, are deprived of their right to obtain services in the least restrictive setting appropriate to their individual needs.
60. Pursuant to Section 531.0235 of the Texas Government Code, the Texas Council for Developmental Disabilities and the Office for the Prevention of Developmental Disabilities are required to prepare a joint biennial report on the state of services to persons with disabilities in Texas. In their 2008 Biennial Report, these agencies reported that "Texas ranks 49th out of the
50 states in providing community-based services to individuals with developmental disabilities." It then concluded that "[p]eople with MRIRC [mental retardation or a related condition] do not have access to services with reasonable promptness" because "Texas significantly and chronically underfunds its service system." The Report's second major finding is that "[m]any people with intellectual and developmental disabilities (I/DD) do not receive services within the least restrictive setting appropriate to their needs.... In fact, the discrepancy in Texas's investment in institutions compared to its investment in community services is extraordinary."
61. The findings of the 2008 Biennial Report largely mirror the conclusions reached
by the Human Services Research Institute in its 2008 report, Closing the Gap in Texas: Improving Services for People with Intellectual and Developmental Disabilities. The "Closing the Gap" report found that "in Texas the gap between present capacity and unmet needs means
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Texas does not operate its system in a manner that ensures that individuals will receive services

promptly." The report also concluded that "Texas relies on large congregate care facilities to

serve people with mental retardation and related conditions to an extraordinary extent.

Opportunities for individuals to receive services in the most integrated setting are abridged."

B.

Texas 's Nursing Facilities

62. The Medicaid Act defines a nursing facility as an institution which primarily

provides: (1) skilled nursing care; (2) rehabilitation services for those who are sick, injured or

disabled; and (3) health related care and services to individuals who, because of their mental or

physical condition, require care and services which can only be provided in an institutional

setting. 42 U.S.C. § 1396r(a)(1)(A-C). 63. Nursing facilities' services are defined as "services which are ... required to be

given an individual who needs ... on a daily basis nursing care (provided by or requiring the

supervision of nursing personnel) or other rehabilitation services which as a practical matter can

only be provided in a nursing facility on an inpatient basis." 42 u.s.c. § 1396d(f).
64. A basic condition for state payment and federal reimbursement of Medicaid-

funded nursing facilities is that community-based services do not meet the person's needs and

that the care that the individual needs can only be provided in an institutional setting.

(1) The Nursing Home Reform Amendments to the Medicaid Act 65. The Nursing Home Reform Amendments (NHRA) of 1987 to the Medicaid Act,
42 U.S.C. 1396r(e), are part of a comprehensive remedial statute designed to address the widespread problem of warehousing people with developmental disabilities in the Nation's

nursing facilities. Congress enacted the Pre-Admission Screening and Resident Review

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(PASARR) provisions of the NIL-IRA to prevent and remedy the unnecessary admission and confinement of people with psychiatric and developmental disabilities in nursing facilities.
66. The PASARR provisions of the NHRA require a careful screening of all individuals being considered for admission to a nursing facility to determine if they may have a
developmental disability. This is referred to as the Level I PASARR screen. 42 C.F.R. § 483. 128(a).
67. All persons seeking admission to a nursing facility whose Level I PASARR screen indicates that they may have a developmental disability must then be assessed and
evaluated to determine if they do in fact have a developmental disability, whether they satisfy the nursing facility level of care criteria, whether their needs could be met in the community through the provision of appropriate services and supports, and whether they could benefit from the provision of specialized services designed to maximize their ability for self-determination and independence. This part of the PASARR process is referred to as the Level II PASARR review.
42 C.F.R. § 483.128(a), 483.132. 68. The Level II review must include a psychosocial evaluation, which analyzes
current living arrangements and medical and social supports. The review also must include a
functional assessment of the individual's ability to engage in activities of daily living and must document the level of support that would be needed to assist the individual to perform these
activities while living in the community. 42 C.F.R. § 483.134(b)(5). The assessment must
determine whether it would be possible to meet the individual's needs through the provision of
services and supports in the community as an alternative to nursing facility placement.
69. If the Level II PASARR review determines that a resident does not require
nursing facility services, but instead requires specialized services in a non-institutional setting,
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Defendants have a mandatory duty to provide or arrange for the provision of these services to the
resident in an appropriate community setting. 42 U.S.C. § 1396r(e)(7)C)(i); 42 U.S.C. § 1396r(e)(7)(C)(ii); 42 c.F.R. § 483.118(c); 42 C.F.R. § 483.120(b).
70. The PASARR reviewers are obligated to explain to the individual involved and,
where applicable, his or her legal representative the results of the Level II PASARR evaluation,
including information regarding the individual's ability to reside in a less restrictive community
placement, and must provide the individual and legal representative with a copy of the PASARR
report. 42 CFR § 483.128(k), 483.130(l)(3).
71. If the individual is admitted to a nursing facility, periodic reviews must be
conducted whenever there is a change in the person's condition to determine whether the individual continues to need a nursing level of care and to require confinement in a nursing facility. The initial and periodic PASARR Level II evaluations must also determine whether specialized services are necessary to provide habilitation and active treatment. 42 U.S.C. § 1396r(b)(3)(F)(i), 1396r(e)(7)(A)&(B); 42 C.F.R. § 483.128, 483.132, 483.134, & 483.136.
72. Specialized services consist of an active and continuous treatment program which includes aggressive, consistent implementation of specialized and generic training, treatment,
and health services that are aimed at allowing the individual to function as independently and with as much self-determination as possible, and services designed to prevent or decelerate
regression and loss of abilities. 42 C.F.R. § 483.120, 483.440(a). If the individual requires
specialized services, under federal law the state must provide those services with the frequency, intensity, and duration that meet the federal standard for active treatment. 42 C.F.R. § § 440(a)(f).
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73. If the PASARR review determines that an individual admitted to a nursing facility needs specialized services, it must then be determined if the nursing facility can provide all needed specialized services and active treatment. If the review concludes the facility cannot, the
individual cannot be admitted to that nursing facility. 42 C.F.R. § 483.126.
(2) Texas's Implementation of the N}{RA and PASARR Requirements
74. Texas's PASARR program does not adequately screen applicants to nursing facilities to determine if they may have a developmental disability. As a result, many individuals with developmental disabilities are admitted to nursing facilities without being accurately identified and are never provided a Level II PASARR evaluation and determination, as required by federal law.
75. Texas's PASARR program does not adequately or appropriately assess whether an individual with a developmental disability can be served in the community prior to admission to a nursing facility, as required by federal law.
76. Texas's PASARR program does not assess whether the individual who needs an
institutional level of services can be served in another specialized facility for persons with
developmental disabilities, as required by federal law. 77. Texas's PASARR program does not adequately or appropriately assess whether
an individual needs any specialized habilitative services and, if so, what those specific needs and
services are.
78. Texas's PASARR program does not allow for the delivery ofthe full scope of
specialized services required by federal law.
79. Rather than providing the full array of specialized services necessary to allow
class members to function as independently and with as much self-determination as possible, the
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Defendants have, by regulation and in violation of federal law, arbitrarily restricted the scope of
specialized services to only "physical, occupational, and speech therapy evaluations and services." 40 Tex. Admin. Code § 19.1303.
80. Not only does the Texas Administrative Code restrict the scope of specialized services in violation of federal law, but also DADS has even further constrained the scope of
such services in its MRA OBRA Handbook (Revision 10-0, Oct. 26, 2009). It has only provided nursing facility residents with developmental disabilities two specialized services vocational training and alternate placement services even though it provides similarly situated persons
who live in ICF/MRs with a wide range of habilitative services and supports.
81. Without any change to either its regulations or the MRA OBRA Handbook, DADS issued Information Letter 10-50 to nursing facility providers on April 15, 2010. Information Letter 10-50 stated that nursing facility residents who have had a PASARR Level II review that indicates that they need specialized services may qualify for a customized manual wheelchair or other specified durable medical equipment as a specialized services benefit.
82. National experience demonstrates that where PASARR reviews are properly
performed, approximately 80% of individuals with developmental disabilities who are referred
for or temporarily admitted to a nursing facility placement are determined to be able to reside in the community with appropriate services and supports and should, therefore, be diverted to a more integrated community placement prior to or shortly after admission to the nursing facility.
83. Of the approximately 4,500 class members with developmental disabilities who
are confined in nursing facilities, most should have been diverted to a more integrated
community placement if their PASARR reviews had been performed properly.
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84. Of these 4,500 class members who remain in nursing facilities, most of them
could be appropriately transitioned to the community, with appropriate supports.
85. The overwhelming majority of class members would, if properly assessed during
the PASARR review, be identified as needing and qualifying for specialized services. 86. In Massachusetts, where the state was required by court order to conduct
comprehensive PASARR reviews of all individuals with developmental disabilities residing in nursing facilities, more than 90% of those individuals were found to need specialized services.
87. Due to the failure of the Defendants to ensure that PASARR reviews are properly and professionally completed, compounded by Defendants' failure to provide a full array of specialized services, less than 1% of the persons with developmental disabilities who are
currently residing in nursing facilities are receiving any specialized services. 88. The Defendants' failure to conduct PASSAR reviews in a complete,
comprehensive and professional manner and their failure to provide the necessary specialized services, including appropriate habilitation services, to persons with developmental disabilities has resulted in their inappropriate placement in institutional nursing facilities where their
habilitation needs are largely ignored, all in violation of the NHRA, the ADA and the
Rehabilitation Act. 89. DADS licenses nursing facilities in Texas. Because these facilities participate in
the federal Medicaid program, DADS is required to review and certify these facilities pursuant to the federal requirements for nursing facilities under 42 C.F.R. § 483.1 - 483.75. As part of its responsibility for surveying, inspecting, and certifying nursing facilities, DADS is required to
identify and/or correct any lack of compliance with the PASARR provisions of the NHRA and
its implementing regulations. 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.100-138.
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90. Given the systemic failure of Texas's PASARR program to adequately screen,
divert, and assess individuals with developmental disabilities, as well as the failure to provide specialized services which meet the federal standard for active treatment, DADS is not fulfilling its responsibilities under federal law.
91. The federal government apparently agrees. In 2007, the Office of the Inspector General (OIG) of the United States Department of Health and Human Services conducted an audit of Texas and four other states to determine the extent of compliance with the PASARR requirements of federal law. The OIG found that Level I PASARR screens to determine whether an applicant or resident has a developmental disability were performed only 88% of the time, and 25% of those that were performed were completed late.
92. Moreover, the OIG found that 52% of the reviewed files did not contain either a
Level II PASARR evaluation or a Level II determination. Even when Level II evaluations were
performed, 22% of those evaluations did not contain evidence that the evaluator assessed whether the individual's needs could be met in a community setting.
93. The OIG found that the state agencies responsible for oversight and enforcement
of PASARR requirements conducted limited, if any, oversight.
94. Upon information and belief, the Center for Medicare and Medicaid Services
(CMS) of the United States Department of Health and Human Services (HHS) has identified deficiencies in DADS design and implementation of its PASARR process. DADS is in the process of developing a proposal to CMS regarding changes to its PASARR process.
95. Upon information and belief, any changes resulting from the redesign of its PASARR process will not take effect until September 2012 and will not remedy the major flaws in its current practices.
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96. Despite being alerted by the attorneys for the plaintiffs and the OIG Report, DADS has not corrected the pervasive problems that exist regarding the timeliness, accuracy and
quality of PASARR Level I screens and Level II reviews, the resulting inappropriate admission of class members to nursing facilities, the failure to comprehensively assess class members' need
for specialized services, and the total failure to provide specialized services that meet the federal active treatment standard.
97. The defendants are required to ensure that individuals who are eligible for and may require nursing facility services and may be eligible for HCBS waiver services are evaluated regarding their need for nursing facility services. 42 U.S.C. § 1396n(c)(2)(B).
98. Following the evaluation required by 42 U.S.C. § 1 396n(c)(2)(B), the defendants
must ensure that "individuals who are determined to be likely to require the level of care provided in a ... nursing facility ... are informed of the feasible alternatives, if available under the
{HCBS] waiver, at the choice of such individuals, to the provision of... nursing facility
services...." 42 U.S.C. § 1396n(c)(2)(C). 99. State regulations require that DADS "must provide to each long-term care client;
to the client's legally authorized representative (LAR) ...; and, if the LAR is not a member of the
client's family and it is possible, to at least one family member, information about all long-term care and long-term support options appropriate to the client's needs that are currently available. The information must be provided before the agency allows the client to be placed in a care
setting, including a nursing home..... The information must be provided in a manner designed
to maximize the client's understanding of all available options. The information must include
community-based options and other options available through other agencies and providers and
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must be easily understood by the client, the client's family member, or the client's LAR." 1 Tex. Admin. Code § 35 1.15(b)
100. Despite these statutory and regulatory reguirements, DADS fails to provide or
ensure the provision of information to class members regarding the options available to them to
access services in a less restrictive setting than a nursing facility. As a result, class members who would prefer to reside in a less restrictive, more integrated community placement are not even aware that they may be eligible for community-based services and supports or for a small ICF/MR placement, or how to apply for such services.
101. Not surprisingly, few members of the class have applied for community-based
services and supports or for admission to a small ICF/MR. 102. Many persons with developmental disabilities, including the named plaintiffs and
members of the plaintiff class, have unnecessarily been admitted to, or remain segregated in, nursing facilities. Many class members who reside in nursing facilities do not need intensive nursing services that can only be provided in a nursing facility, nor do they require an
institutional setting. Moreover, virtually all class members do not receive those specialized services or supports which constitute active treatment, as required by the NI-IRA and its regulations.
103. The plaintiffs and members ofthe plaintiff class could live and function in an integrated community setting if they were informed of and provided with support services
appropriate to their needs, such as the habilitative services and residential assistance services operated and funded by the Defendants through their HCS waiver or their ICFIMR program described below.
(3) Conditions in Texas's Nursing Facilities for Class Members
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104. Nursing facilities are largely institutional. They are not real homes and or even
home-like. Nursing facilities are segregated and house large numbers of unrelated persons, most ofwhom are either elderly or disabled.
105. Most residents of nursing facilities are neither integrated into nor part of the
communities in which they live. Class members in nursing facilities have limited access to the
community. The vast majority of the plaintiffs and plaintiff class members do not participate in community activities, nor are they active members of civic clubs and churches.
106. Many class members who are confined in nursing facilities never have the opportunity to leave the facility not because their condition precludes it, but simply because there are few opportunities and limited means to do so.
107. Many nursing facility residents never receive visitors. 108. Class members in nursing facilities are denied access to meaningful employment
and education opportunities by virtue of the environments in which they live and the limited
supports that they are provided. 109. Most nursing facilities resemble hospitals they have nurses' stations and
"escape guards" posted at the front doors to monitor persons leaving and entering the facility. Some have locked doors. There are large common areas or day rooms for congregating.
110. There is little, if any, privacy for class members in nursing facilities. Individuals
often share rooms with up to five other residents whom they did not know previously and with whom they did not choose to live. Nursing facility residents are often not free to close the door to their rooms.
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111. Many nursing facilities are stark environments where residents have a minimal number of personal possessions. Most class members do not have their own telephones, televisions or furniture.
112. Most class members in nursing facilities have little, if any, choice regarding what
to eat or when to eat. 113. Nursing facilities do not provide active treatment or habilitation designed to meet
the needs of class members with developmental disabilities. The care that the nursing facilities provide is primarily custodial. There is often a shortage of direct-care staff and trained
professionals.
114. The operating philosophy of most nursing facilities is to care for people rather
than to have them care for themselves. Consequently, individuals with developmental disabilities in nursing facilities often regress and deteriorate, losing basic skills and competencies
as a result of their inappropriate confinement. 115. As a result of these institutional conditions, class members suffer harm from
unnecessary confinement in these segregated facilities and rarely, if ever, receive the level of
habilitative care and active treatment that is required by federal law.
C. Texas 's Intermediate Care Facilities for the Mentally Retarded (ICF/MR)
(1) Federal ICF/MR Recuirements
116. The ICF/MR Program is an optional Medicaid service authorized by Title XIX of
the Social Security Act. 42 U.S.C. § 1396d(a)(15). The program is also known as Intermediate Care Facilities for the Developmentally Disabled. ICF/MRs provide residential, health, and rehabilitative services for individuals with developmental disabilities.
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117. In 1971 Congress passed legislation, P.L. 92-223, that provides Medicaid reimbursement for institutions for persons with developmental disabilities who need long term care. An ICF/MR is defined as an institution for four or more persons with mental retardation or related conditions. Its primary purpose is to provide health or rehabilitative services consistent
with standards prescribed by the Secretary of HHS. 42 U.S.C. § 13 96d(d). 118. Federal law permits, but does not require, a state to provide ICF/MRs as part of its
Medicaid program. Once a state elects to provide such optional services, they become part of the state Medicaid plan and are subject to the requirements of federal Medicaid law. These services
must be available to any Medicaid recipients for whom they are medically necessary. 119. Persons residing in ICF/MRs must receive "active treatment." The HHS
regulations governing ICFIMRs define active treatment as a continuous active treatment
program, which includes aggressive, consistent implementation of specialized and generic
training, treatment, health services and related services that is directed at:
a. the acquisition of behaviors necessary for the client to function as
independently and with as much self-determination as possible, and
b. the prevention or deceleration of regression or loss of current functional
status. 42 C.F.R. § 483 .440(a).
120. Active treatment in ICF/MRs means an individualized program of habilitative
services and supports that is provided throughout the day from the time the individual wakes up until the time she retires. It must be provided in a consistent manner across all settings and
parts of the facility or other locations where the individual is served. It must be designed by a qualified professional and implemented by competent staff trained in developmental disabilities. It must be based upon a comprehensive assessment of the individual's needs and delivered
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pursuant to an individualized plan of care that includes measurable goals, timelines, and persons
or providers with assigned responsibilities. The plan must be reviewed periodically and modified as the individual attains the stated goals or when the individual's needs change. Finally, the plan must be evaluated for effectiveness and improved when needed. 42 C.F.R. § 483 .440(a)-(f).
121. Federal statutes and regulations require that individuals in ICF/MRs receive active treatment, which includes habilitative services, vocational services, occupational therapy, speech therapy, physical therapy, speech and language therapy, assistive technology, auxiliary aides, adaptive equipment, case management, and community integration activities. See 42 U.S.C. . 1396d(d); 42 C.F.R. § 440(a)-(f).
122. The type, level and intensity of services must be individually tailored and appropriate to meet the individual's needs, as determined by an Interdisciplinary Team. The
Interdisciplinary Team includes several disability professionals from various disciplines who are
required to conduct an individualized assessment of each individual's needs and to develop a
habilitation plan to provide each individual the services and supports necessary to meet his/her identified needs.
(2) Texas's ICF/MR Program 123. Texas has chosen to provide the optional ICF/MR service. HHSC has delegated
the operation and administration of Texas's ICF/MR program to DADS. Texas delivers ICF/MR
services through thirteen state-operated supported living centers and numerous privately run facilities licensed by DADS.
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124. The thirteen state-operated ICF/MR schools are large institutions serving from 75 to over 600 individuals with developmental disabilities. The average census per state-operated ICF/MR is 498.
125. The privately operated facilities range in size from 4 beds to over 200 beds, with most facilities serving from 6 to 13 residents.
126. All ICF/MRs are required to provide active treatment to their residents. The cost
of active treatment is built into their Medicaid payment rate and is a condition of licensure.
127. Thus, while persons with developmental disabilities who reside in the ICF/MR programs which DADS licenses, monitors, and funds receive active treatment through a wide
array of habilitative services, persons with the same developmental disabilities who reside in
nursing facilities receive almost no habilitative services and no active treatment.
D. Texas 's Medicaid Programsfor Persons with Developmental Disabilities
(1) The Federal Medicaid Program 128. Medicaid is a jointly funded state and federal program that provides medical
services to low-income persons pursuant to Title XIX of the Social Security Act. 42 U.S.C. § 1396 etseq.
129. State participation in the Medicaid program is optional. States choosing to receive federal matching funds for their Medicaid program must comply with the requirements
of the federal Medicaid Act and with the federal regulations governing state Medicaid programs promulgated by the U.S. Department of Health and Human Services. 42 U.S.C. § 1396, 42 C.F.R. § 430 et seq.
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130. As a condition of participating in the federal Medicaid program, states must submit to HHS a state Medicaid plan that fulfills the requirements of the Medicaid Act. 42
U.S.C. § 1396a(a). 131. Medicaid funded services for persons with developmental disabilities include
mandated and optional state plan services, the PASARR program, the ICF/MR program, and various community programs funded through federal waivers, pursuant to 42 U.S.C. § 13 96n.
(2) Texas's Medicaid Program 132. Texas has chosen to participate in the Medicaid program. It has prepared a state plan which HHS has reviewed and approved.
133. HHC and its Executive commissioner, Defendant Suehs, are responsible for the
overall administration of the Medicaid program. They have delegated to DADS and its commissioner, Defendant Traylor, responsibility for the delivery of Medicaid and other services
and supports to elderly and disabled Medicaid recipients, including plaintiffs and the class. Nevertheless, DADS and Defendant Traylor are subject to HHSC's oversight and control, and
HHSC and Defendant Suehs remain responsible for the actions and inactions of DADS, its
officers and agents. 134. DADS and Defendant Traylor are responsible for ensuring that individuals with
developmental disabilities are appropriately screened prior to or immediately after admission to a nursing facility to determine whether a nursing facility is an appropriate placement or whether the individual's needs could be met in a more integrated community setting.
135. If a community placement is appropriate, DADS and Defendant Traylor are
responsible for ensuring that appropriate habilitative and other services and supports are
provided in the community. If a nursing facility placement is the most appropriate setting for
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meeting the individual's needs, DADS and Defendant Traylor are responsible for ensuring that the individual is comprehensively assessed to determine his or her need for specialized services. Finally, for persons needing specialized services, DADS and Defendant Traylor are responsible for ensuring that those specialized services are in fact provided at the level, frequency, and
intensity necessary to satisf' the federal standard for active treatment. 136. The Governor, Defendant Perry, is responsible for ensuring that the State submits
a State Medicaid Plan which conforms to federal law, and that Texas's Medicaid program is administered consistent with that Plan, relevant federal statutes, and federal regulations.
137. Defendants Perry, Suehs and Traylor have failed to ensure that plaintiff class members, who are categorically eligible for Medicaid services, are provided those medically necessary services to which they are entitled under the Plan and pursuant to Title XIX of the Social Security Act.
138. Defendants Perry, Suehs and Traylor also have failed to develop plans and budgets which are designed to provide class members with developmental disabilities with the services and supports needed to reside safely in the community. These defendants have also failed to offer class members who require care in a nursing facility the specialized services and active treatment necessary to ensure that they reach their full potential for self-determination and independence and do not suffer regression.
E. The Individual Plaintiffi (1) Eric Steward
139. Eric Steward is a 44 year-old man with developmental disabilities including
mental retardation and the related condition of infantile cerebral palsy. Since birth, Mr. Steward has also had a diagnosis of quadriplegia. He uses a power scooter for mobility, can stand with
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assistance, is verbal and has receptive language skills. Mr. Steward is very friendly and likes meeting and talking with other people.
140. Mr. Steward has resided at the Buena Vida Nursing & Rehabilitation Center of
San Antonio since November 2007. Mr. Steward has lived in nursing facilities since 2002. His first nursing facility admission occurred subsequent to surgery for a seizure disorder. Despite residing in two different nursing facilities, Mr. Steward has never received either a Level I PASARR screen or Level II PASARR assessment.
141. Before his placement in the first nursing facility, Mr. Steward lived in a small community-based ICF/MR for approximately 4 years. Mr. Steward's ICFIMR provided him, and the other seven inaividuals with disabilities who resided in the facility, with the opportunity
to live in a home-like setting in a residential section of San Antonio.
142. As an ICF/MR resident, Mr. Steward shared a bedroom in a home where he had access to all living and dining areas. Mr. Steward also had opportunities to work and participate in community-based activities, including going to movies, dining out, attending sporting events, engaging in sports related activities such as bowling, and participating in Special Olympics. In addition, Mr. Steward also received active treatment, including the opportunity to engage in skill-based activities, such as day habilitation, vocational training, and employment-related activities. Living in an ICF/MR also helped Mr. Steward develop independent living skills. He learned about meal preparation, money management, and doing laundry.
143. However, in 2002 following surgery and hospitalization for his seizure activity, Mr. Steward lost his ICF/MR placement, resulting in his admission to a nursing facility where he has remained for the past eight years.
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144. According to Mr. Steward's nursing facility medical records, his mental state has
declined. He has increasing periods of what the nursing facility characterizes as "persistent sad mood," and a decline in functioning. According to Buena Vida's own professionals, Mr.
Steward has deteriorated since his last assessment. 145. Nursing facility notes also indicate that Mr. Steward's communication deficits
adversely affect his ability to interact with others. However, there is no indication in Mr.
Steward's chart that he has been evaluated for any form of assistive communication or speech
therapy, even though such supports and services are available under the state Medicaid plan and
required as part of a program of active treatment.
146. There is nothing in the Buena Vida medical records indicating that he has ever received a PASARR evaluation. In fact, the nursing facility's own data indicates that it is unknown whether or not Mr. Steward ever received a PASARR determination. As a result, there has been no determination or assessment from DADS or the local mental health mental retardation authority regarding his need for specialized services or alternate placement options. Consequently, Mr. Steward does not receive any specialized services, any active treatment, or any consideration for community living. Because Mr. Steward lives in a nursing facility, he has
very few, if any, meaningful opportunities to go anywhere, to work, or to receive the habilitation
and other supportive services he needs to avoid further regression. 147. In late July 2011 Mr Steward applied for the HCS waiver and was placed on the
interest list. Based upon the current length of the HCS interest list, Mr. Steward does not expect
to be offered a HCS waiver slot until 2017 or later. 148. Mr. Steward wants to live in the community. He very much wants the
opportunity to work, develop independent living skills and once again have the opportunity to
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engage in an array of community-based living activities. Living in a community-based setting
would enable him to live and interact with individuals much closer to his age. (2) Linda Arizpe
149. Linda Arizpe is a 41 year-old woman with a significant developmental disability. She is unable to walk and cannot talk, although she does have good receptive communication abilities and is particularly responsive to her parents. She also has a significant visual impairment.
150. Ms. Arizpe was initially admitted to Rosewood Care Center in November 2005 with anoxic brain damage. Ms. Arizpe was admitted to Rosewood from the hospital where, while being treated for a leg injury, she was overmedicated and stopped breathing, resulting in a brain injury. Ms. Arizpe has been living at Meridian Care Nursing Facility in San Antonio since January 2008.
151. Prior to her admission to Rosewood, Ms. Arizpe attended public schools where she participated in special education classes including pre-vocational activities.
152. When Ms. Arizpe was not in school, she traveled extensively with her family.
She also participated in a variety of community-based activities including shopping, swimming,
hiking and especially dining out.
153. While Ms. Arizpe needs assistance with many of her activities of daily living
including eating, dressing, and hygiene related activities, she is able to follow directions, dress and care for herself.
154. Ms. Arizpe is considerably younger than most of the other residents at the nursing facility, and further because of her developmental disability, other nursing facility residents do not interact with her. For instance, Ms. Arizpe's roommate is well over 70 and has significant
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physical and mental disabilities that result in extremely limited opportunities for social interaction.
155. Since living at Meridian, Ms. Arizpe has not participated in any of the community-based activities she previously enjoyed. Moreover, she receives none of the
habilitation services that would enable her become more independent and socially engaged.
156. Despite her longstanding diagnosis of a developmental disability, Ms. Arizpe's
Level I PASARR form at the nursing facility indicates that she does not have such a disability. As a result, she was not identified as requiring a Level II PASARR assessment, and no
evaluation has been made to determine (a) the type of community-based placement she may be eligible for andlor (b) the type and intensity of specialized services she could benefit from.
157. In 2001, Ms. Arizpe applied for a HCS waiver and was placed on the HCS interest list. She has not yet been offered a HCS waiver slot despite being on the interest list for a decade.
158. Neither Ms. Arizpe nor her parents were informed of any feasible alternatives to a nursing home placement.at or about the time of her admission to the nursing facility in 2008.
159. Ms. Arizpe's family, and, in particular, her elderly parents, want to ensure that she is not forced to spend the rest of her life in a nursing facility without the habilitative services she needs to avoid regression and to be as independent as she can be.
160. Ms. Arizpe and her parents would like very much to have her transferred to a
small community-based setting where she could receive all of the needed services, supports, and
therapies which she needs and also interact with the outside world. (3) Andrea Padron
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161. Andrea Padron is 26 years old. She has resided at Meridian Care in San Antonio since 2001.
162. When Ms. Padron was ten years old, she suffered a severe head injury from a car accident. Since the accident, Ms. Padron has required extensive care and habilitation. Her diagnosis includes quadriplegia and quadriparesis, esophageal reflux, mental retardation, and epilepsy. In addition, Ms. Padron is nonverbal, although she appears to have good receptive language skills. Her treating doctor indicates that her rehabilitation potential is fair.
163. Until she was 16, Ms. Padron lived at home. There she received a range of habilitative services and therapies. She attended public school. She was able to use a wheelchair and, on occasion, to stand with the use of a standing table. She also participated in aqua-therapy,
as well as arts and crafts classes in the community. 164. In or about 1995, Andrea's mother, Rosa Hudacek, applied for a HCS waiver slot
for Andrea and she was placed on the HCS interest list at that time. 165. In or about May 2001, Andrea's eligibility for the supplemental security income
program was terminated. Because Ms. Hudecek could no longer afford to care for Andrea at home, she placed her in a nursing facility -- believing she would get the care and attention she needed. In December 2004, Ms Hudecek, who was on active military duty with the United State Army, was deployed to Iraq.
166. In or about September 2005, Andrea reached the top of the HCS interest list and
was offered a HCS waiver slot. At that time, Ms. Hudacek was deployed to Iraq, and the HCS wailver slot was not accepted.
167. Aithought Ms. Hudacek did not accept the HCS waiver for Andrea in 2005, she continued to want to obtain the services and supports that would enable Andrea to leave the
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nursing facility and live in a more integrated community setting. As a result, Ms. Hudacek promptly reapplied for a HCS waiver slot for Andrea. Andrea has been on the HCS interest list since late 2005 and remains on the interest list, waiting to reach the top and be offered a HCS slot.
168. When Ms. Hudecek returned from her deployment to Iraq in February 2007, Ms. Hudecek reports that Andrea could no longer even sit in her wheelchair. She attributes this to the
nursing facility's failing to get Andrea out of bed regularly. As a result, Andrea has regressed.
She is no longer able to stand or use her wheelchair. She no longer receives aqua-therapy or participates in recreational or social activities.
169. Following Ms. Hudecek's return from Iraq and her re-involvement with her daughter, the nursing facility staff began to assist Andrea into her wheelchair. However, the nursing facility staff often left Andrea sitting in her chair for long periods of time unattended, resulting in skin breakdown and sores.
170. To address both the skin breakdown and sores and to enable Andrea to continue to use her wheelchair, Ms Hudecek purchased Roho cushions. These cushions are designed to more evenly distribute a patient's body weight, significantly reducing the chances for skin breakdown. However, over the past two years, nursing facility staff have failed to regularly use these cushions. As a result, Ms. Padron is no longer using her wheelchair.
171. A review of Ms. Padron's nursing home record at Meridian indicates that her
Level I PASARR screening form was completed incorrectly; erroneously stating that Ms. Padron does not have a developmental disability. As a result, Ms. Padron was not referred for a Level II
assessment and no assessment of her ability to reside in a community-based setting and/or her
need for specialized services has ever been done by the local mental health mental retardation
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authority. Consequently, she receives no specialized services, no active treatment, and no consideration for community living.
172. Ms. Hudecek wants Andrea moved to an integrated, community-based setting where she can get the care and habilitation needed to recover lost skills related to mobility, where she can enhance and further develop the skills needed to maximize her ability to function with as much self-direction and independence as possible, and where she will have much greater opportunities to participate in community-based activities.
(4) Patricia Ferrer 173. Plaintiff Patricia Ferrer is an individual with developmental disabilities,
specifically mental retardation and the related condition of epilepsy. 174. Plaintiff Patricia Ferrer has been residing at ManorCare Health Services nursing
facility since September 2008, when her elderly mother, Petra Ferrer, no longer was able to provide for her care.
175. Ms. Ferrer has few physical limitations and is quite mobile. In addition to her intellectual disability, she has epilepsy which is poorly controlled by medication.
176. For the first forty-four years of her life, Ms. Ferrer lived at home with her parents.
She attended public schools, graduating from Adamson High School in Dallas. 177. After graduation from high school, Ms. Ferrer worked full-time as a chamber
maid for a hotel chain for approximately four years. She then obtained a position in the security department at Love Field in Dallas, where she worked for approximately two years.
178. Ms. Ferrer ultimately had to leave her employment at Love Field when her epilepsy became more active and difficult to control. In order to control her epilepsy, Ms. Ferrer must take medication periodically throughout the day.
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179. During the more than forty years that Ms. Ferrer lived in the community with her
parents she was very independent and active. She required no assistance with activities of daily
living. In fact, she sometimes prepared simple meals for the family and would regularly assist in meal preparation.
180. Until her epilepsy became more active and unpredictable, Ms. Ferrer was able to use public transportation and would often go to the mall, movies, or visit a friend. After her epilepsy became more active, Ms. Ferrer was not allowed by her parents to take the bus on her own. Nevertheless, she continued to go out to the movies, shopping, and restaurants, and to visit friends when accompanied by a family member or friend.
181. Approximately three years ago, Ms. Ferrer's father was diagnosed with Parkinson's disease. Ms. Ferrer's mother, who is in her seventies and the sole care provider in the household, then had to provide care for both her husband and her daughter. Ultimately, Mrs. Ferrer realized that she lacked the physical ability to provide both her husband and Patricia with the care and support they needed.
182. Because of her inability to properly care for her daughter, Patricia, while also attending to the medical needs of her husband, Mrs. Ferrer reluctantly decided to place Patricia
in a nursing facility. 183. When Ms. Ferrer was admitted to ManorCare in September 2008, her admitting
records indicated that she was a person with mental retardation. Nevertheless, her Level I PASARR screen indicated that she did not have mental retardation or any other developmental disability.
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184. Because Ms. Ferrer was not identified on the Level I PASARR screen as an
individual with a developmental disability, she was never evaluated to determine if her needs could appropriately be met in the community or if she could benefit from specialized services.
185. On or about September 7, 2010, Ms. Ferrer applied for and was placed on the
interest list for an HCS waiver slot. Based upon the current length of the interest list, she does
not anticipate that she will be provided with HCS wainver services until 2018 or later. 186. Neither at the time she was admitted to a nursing facility in 2008 nor when she
applied for the HCS waiver program in September 2010 were Ms. Ferrer or her parents provided with information on feasible alternatives to nursing facility care.
187. Since being placed in ManorCare, Ms. Ferrer's condition has deteriorated. She has become less communicative, cries frequently, has developed behavioral issues requiring
medication, and spends most of her waking hours sitting in a chair by the nurses' station.
188. There is no reason for Ms. Ferrer to be confined in a segregated nursing facility.
She is very independent and able to take care of most of her daily living needs. She would like
to live in an integrated community setting where she could meet new people, go to the movies, go shopping, and otherwise interact with the outside world. She is also interested in obtaining the training and support so that she could go back to work.
(5) Benny Holmes 189. Plaintiff Benny Holmes is an individual with developmental disabilities,
specifically mental retardation and the related condition of cerebral palsy.
190. Mr. Holmes resided at the Renaissance at Kessler Park nursing facility from January 2009 when he was discharged from a local hospital following an admission for treatment related to his epilepsy, weight loss, and hydration issues until late December 2010..
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191. Until Mr. Holmes was a young adult, he lived at home and attended public high school. Not only did he attend school regularly, but he also participated in school-related activities, including frequently going to school athletic events and attending his senior prom.
192. Mr. Holmes continued to receive special educations services from the Dallas Independent School District until he was 21 years old. He lived at home with his mother and legal guardian, Priscilla Holmes, during this period.
193. Mr. Holmes mother, who is a single parent, had to work to support herself and her son. When Mr. Holmes' special education services terminated, his mother was not able to both work and care for him during the day. As a result, Mr. Holmes was placed at the Dallas Health and Rehabilitation Center, where he remained for approximately one year.
194. After about one year at the Dallas Health and Rehabilitation Center, the local Mental Retardation Authority in Dallas determined that Mr. Holmes' needs could be more appropriately met in a community-based setting. He was provided with a HCS-waiver slot which enabled him to transfer from the nursing facility to a three bedroom home in the community where he lived for approximately nine years.
195. During the nine years that Mr. Holmes resided in the community, he attended day habilitation programming, went to the movies, and participated in other community outings. While he is unable to talk, he could and did communicate with others using sounds and gestures. He is also not able to walk. While in the community, he had a wheelchair which provided him with the ability to move around.
196. After successfully residing in the community for approximately nine years, Mr. Holmes was admitted to a local hospital because of problems he was having with his epilepsy, hydration, and weight loss. Following his treatment at the hospital, he was not discharged back
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to his community residence, but rather was transferred in January 2009 to the Renaissance at Kessler Park nursing facility..
197. Shortly after his admission, a preadmission screening and resident review (PASARR) form was filled out regarding his admission. That Level I PASARR screen indicated that Mr. Holmes did not have a developmental disability, even though the Renaissance's own
admission form indicates that he has a history of mental retardation and cerebral palsy. That PASARR form also indicated that Mr. Holmes did not need specialized services.
198. Because the Level I PASARR screen incorrectly indicated that Mr. Holmes did
not have a developmental disability, no Level II PASARR assessment of Mr. Holmes was
undertaken by either DADS or the local Mental Retardation Authority to determine his interest in and ability to reside in a less restrictive community setting, or his need for and interest in specialized services.
199. While Mr. Holmes had a HCS-waiver slot when he was admitted to Renaissance and could have used that waiver slot to move back to a community-based setting, neither he nor
his mother was advised by the defendants or anyone else of feasible alternatives to placement in a nursing facility.
200. Not only did no one advise Mr. Holmes or his mother and legal guardian of
the options available to him under the HCS waiver and other available Medicaid programs and services to avoid a nursing facility placement, but Renaissance nursing facility staff repeatedly informed Mr. Holmes' mother that a community-based waiver program would not be appropriate for him.
201. Renaissance staff told Mr. Holmes' mother that a community-based placement was not appropriate without ever contacting the local mental retardation authority, the agency
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responsible for determining whether or not a community-based alternative would be appropriate. This was never done in part because Renaissance failed to conduct a Level II PASARR assessment, as required by federal law.
202. The Renaissance nursing facility staff also told Mr. Holmes' legal representatives from Advocacy, Incorporated that he was not appropriate for a community-based placement. When representatives from Advocacy, Incorporated suggested that Mr. Holmes could possibly qualify for and benefit from a HCS Medicaid waiver slot, Renaissance nursing facility staff continued to assert that a community placement was inappropriate, notwithstanding having never contacted a Medicaid waiver provider for information about community-based alternatives.
203. On information and belief, Mr. Holmes' initial HCS provider, Dallas MetroCare,
contacted the Renaissance nursing facility regarding the possibility of Mr. Holmes moving to a
small residential home in the community with his HCS-waiver slot, which they were still holding for him. Dallas MetroCare was told by the Renaissance nursing facility that Mr. Holmes was not appropriate for such a setting.
204. On information and belief, Renaissance nursing facility staff told MetroCare that Mr. Holmes' mother never visited her son, despite the fact that she regularly visited him. In addition, in response to requests from MetroCare for Ms. Holmes' telephone number, Renaissance never provided Dallas MetroCare with a working phone number for Ms. Holmes.
205. Upon information and belief, these statements regarding Mr. Holmes'
appropriateness for community-based care and the frequency of Ms. Holmes' visits were made to MetroCare in order to discourage MetroCare from further pursuing the possibility of providing
Mr. Holmes with support and services in the community through the HCS waiver.
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206. As a result of the statements by Renaissance, Dallas MetroCare planned to give
Mr. Holmes' HCS-waiver slot to another applicant on the interest list. However, before this occurred, Advocacy, Incorporated learned that Mr. Holmes' had previously resided in the community through the HCS-waiver program and contacted Dallas MetroC are, providing them with Ms. Holmes' phone number and informing them that, contrary to the nursing facility's claim, Ms. Holmes frequently visits her son at the nursing facility.
207. Dallas MetroCare contacted Ms. Holmes and, after being informed of the
community-based options that were available for her son, Ms. Holmes advised MetroCare that she would like to retain the HCS-waiver slot for her son and develop a plan to transition him back to the community.
208. In response to the information provided by Dallas MetroCare, Ms. Holmes had Mr. Holmes evaluated by an HCS-waiver provider in Dallas in late 2010. That HCS provider
determined that it could meet all of Mr. Holmes health and habilitation needs in a community
setting and recommended a placement is a four bedroom home in a quiet residential neighborhood, where Mr. Holmes would have his own room and live with three other residents.
209. Mr. Holmes moved out of the Renaissance nursing facility to his new residential
placement at 7404 Clover Glen, Dallas, Texas in late December 2010. 210. While Mr. Holmes was not evaluated by a speech or language pathologist or
therapist to determine if he could benefit from any form of assistive augmentative
communication device or therapy during his time at the Renaissance nursing facility, he is now scheduled to receive such an evaluation at his new community-based group home.
211. After being admitted to the Renaissance nursing facility, Mr. Holmes' condition deteriorated markedly. At the time Mr. Holmes was admitted to the Renaissance nursing facility,
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he was described as alert, able to follow commands, and an active participant in treatment. But,
after only six months at the nursing facility, medical notes indicated that Mr. Holmes rarely, if
ever, understands commands from others and no longer is an active participant in his treatment.
212. During the course of his stay at the Renaissance nursing facility, Mr. Holmes
became withdrawn and depressed. While he used to be active and participate in community activities, Mr. Holmes spent his days at Renaissance confined to his bed or in a wheelchair in
front ofthe television. 213. Since moving to the community-based group home, Mr. Holmes' condition has
markedly improved. He has gained a significant amount of weight and is much more engaged
with his parent and caregivers. He also now gets out into the community on a regular basis.
214. Because of his cerebral palsy and epilepsy, Mr. Holmes remains at significant risk of a flare up of these conditions which would require hospitalization and a subsequent discharge
to a nursing facility in the future. (6) Zackowitz Morgan
215. Plaintiff Zackowitz Morgan is a 40 year-old man with developmental disabilities. Mr. Morgan has diagnoses of mental retardation, cerebral palsy, obesity, hypertension, hypothyroidism, glaucoma, and peripheral vascular disease, congestive heart failure and a seizure disorder.
216. Mr. Morgan has been in living in a nursing facility since January 2008, following his discharge from a hospital where he was treated for a leg infection. Mr. Morgan was admitted into the Katyville Healthcare Center (nursing facility) on January 25, 2008. Upon his admission, Mr. Morgan did not receive a PASARR screen or a comprehensive assessment for specialized services.
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217. On January 27, 2009, more than a year after being admitted into his nursing facility placement, Mr. Morgan finally received a PASARR screening. That screening simply indicated that he was appropriate for specialized services.
218. On March 18, 2009, an Inter-Disciplinary Team (IDT) meeting was held at Katyville Healthcare Center. Participants included representatives from the nursing facility, Mr. Morgan's guardian, and his legal counsel. There was no representative from Harris County
Mental Health and Mental Retardation Authority (MHM1A), the county branch of the state
agency responsible for providing specialized services and community services. The IDT determined that Katyville Healthcare could not meet Mr. Morgan's specialized services needs related to his mental retardation. In addition, the IDT also determined that a nursing facility was not an appropriate placement for him.
219. In July 2009, Mr. Morgan was transferred to the Silver Springs Healthcare Center
at the request of his guardian.
220. AlmOst nine months after Mr. Morgan's IDT meeting, a Harris County Mental Health and Mental Retardation Authority (MHMRA) service coordinator finally visited him at Silver Springs Healthcare Center to. perform a needs assessment. That September 16, 2009 assessment determined Mr. Morgan had ". . .a moderate need for service coordination." However, there is no indication that Mr. Morgan has ever received any specialized services, and
he is not aware of having received any. He clearly does not receive active treatment.
221. Despite the IDT determination that a nursing facility was not an appropriate placement for Mr. Morgan, the Defendants have not undertaken any steps to assist him in locating an alternative, more integrated setting in which his habilitation and residential assistance needs could be met.
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222. Upon information and belief, prior to his nursing home placement, Mr. Morgan lived in a small ICF-MR with three other individuals.
223. In or about 1996, Mr. Morgan applied for and was put on the interest list for a HCS waiver slot. He remained on the HCS interest list until 2001, at which time he was removed from the interest list. Neither he nor his guardian, Sharon Barker, know why he was removed from the HCS interest list in 2001.
224. In or about June 2009, Mr. Morgan again applied for a HCS waiver slot and was put on the HCS interest list on or about June 5, 2009. He requested that his position on the interest list be adjusted to reflect the five years he had already been on the interest list between 1996 and 2001, but was told that such an adjustment was not possible. As a result, in June 2009
he was placed at the bottom of the interest list and, based upon the length of that list, is not likely
to be provided a HCS waiver slot until sometime in 2017 or later. 225. Neither Mr. Morgan nor his guardian was advised by the defendants or anyone
else of feasible alternatives to placement in a nursing facility in 2008 when he was admitted to
Katyville Healthcare Center. 226. Neither Mr. Morgan nor his guardian was advised by the defendants or anyone
else of feasible alternatives to placement in a nursing facility in July 2009 when he was
transferred to Silver Springs Healthcare Center. 227. Mr. Morgan is an individual with an extremely outgoing personality. Living in
the community would afford him a variety of opportunities that institutional living precludes,
including meeting and socializing with people and pursuing his desire to work. Prior to his nursing home placement, Mr. Morgan participated regularly in a vocational workshop operated
by EduCare of Texas.
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228. Since moving to a nursing facility placement, Mr. Morgan has regressed. He is
no longer participating in EduCare workshops. He has gained a significant amount of weight, and is no longer ambulatory and now uses a wheelchair. In terms of daily living activities, Mr.
Morgan can no longer self-transfer or self-toilet, tasks that he could perform prior to his nursing facility placement. He now must wear diapers.
229. Mr. Morgan is both frustrated and depressed about the deterioration of his health, his inability to participate in social activities outside of the nursing facility, and his goal of being employed. At the nursing facility he receives no vocational support or training. He spends all of
his waking hours in institutional rooms with little to do or engage him. VI. LEGAL CLAIMS
First Claim for Relief The Americans with Disabilities Act A. Violation ofthe ADA 's Integration Mandate 230. The plaintiffs and the members of the plaintiff class are qualified individuals with disabilities within the meaning of the ADA. 42 U.S.C. § 12131(2). 231. Title II of the ADA requires that "a public entity shall administer services, programs and activities in the most integrated setting appropriate to the needs of qualified
individuals with disabilities." 28 C.F.R. § 35.130(d). Defendants Suehs and Traylor, acting in
their official capacities, are public entities within the meaning of the ADA.
232. The Individual Plaintiffs and plaintiff class members qualify for and would benefit from community support services available from the Texas Medicaid program. Although community programs are the most integrated setting appropriate to meet their needs, the plaintiffs remain institutionalized in nursing or rehabilitation facilities, or at imminent risk of such institutionalization. By denying plaintiffs and the class access to existing community
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programs, and by requiring them to be confined in segregated institutional settings in order to receive the care they require, Defendants discriminate against the plaintiffs and class on the basis
of their disability in violation of 42 U.S.C. § 12132 and 28 C.F.R. § 35.130(d).
B. Eligibility Criteria 233. Regulations implementing Title II ofthe ADA specif' that "[a] public entity shall not impose or apply eligibility criteria that screen out or tend to screen out an individual with a
disability or any class of individuals with disabilities from fully and equally enjoying any service program, or activity, unless such criteria can be shown to be necessary for the provision of the
service, program, or activity being offered." 28 C.F.R. § 35.130(b)(8). 234. The Defendants have developed and implemented eligibility criteria for their
community-based support services for individuals with developmental disabilities that screen out
or tend to screen out the class of individuals with developmental disabilities who are residing in
Texas nursing facilities from gaining access to or enjoying those community-based habilitative
services and supports in violation of 42 U.S.C. § 12132 and 28 C.F.R. § 35.130(b)(8).
C. Methods ofAdministration 235. Regulations implementing Title II of the ADA provide that "a public entity may
not, directly or through contractual or other arrangements, utilize criteria or other methods of administration: (i) that have the effect of subjecting qualified individuals with disabilities to discrimination on the basis of disability; [or] (ii) that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the entity's program with respect to
individuals with disabilities ...." 28 C.F.R. § 35.130(b)(3).
236. The Defendants have developed and utilize criteria and methods of administering Texas's long-term care system for persons with developmental disabilities that have the tendency
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and effect of subjecting the plaintiffs and the class to unnecessary and unjustified segregation on the basis of their disability by, inter alia, failing to inform them of the services, supports and programs that would enable them to reside in a less restrictive, more integrated setting, failing to assess them for such services, supports and programs, failing to offer them a choice of such community-based services, supports and programs, and failing to afford them equal access to such services, supports and programs with other institutionalized individuals on the basis of the nature of their disability and placement, all in violation of 42 U.S.C. § 12132 and 28 U.S.C. §
35. 130(b)(3). 237. It would not fundamentally alter the Defendants' programs, services, or activities
to provide the plaintiffs and the class with the services necessary to allow them to live in the community.
Second Claim for Relief Section 504 of the Rehabilitation Act 238. The plaintiffs are qualified individuals with disabilities under Section 504 of the Rehabilitation Act. 29 U.S.C. § 794(a). 239. Defendants receive federal financial assistance to operate the Medicaid Program and other related programs and services designed to provide medically necessary services and supports to the plaintiff class. 240. The regulations accompanying Section 504 provide that: "[r]ecipients shall administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons." 28 C.F.R. § 41.5 1(d). 241. These regulations further prohibit recipients of federal financial assistance from "utiliz[ing} criteria or methods of administration ... (i) [t]hat have the effect of subjecting handicapped persons to discrimination on the basis of handicap; [or] (ii) that have the purpose or
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effect of defeating or substantially impairing accomplishment of the objectives of the recipient's
program with respect to handicapped persons." 28 C.F.R. § 41.51 (b)(3); 45 C.F.R. § 84.4(b).
242. The Individual Plaintiffs and plaintiff class members qualif' for and would
benefit from community support services provided by the Defendants. Although the community is the most integrated setting appropriate to meet their needs, the plaintiffs remain
institutionalized in nursing and rehabilitation facilities, or at risk of such institutionalization. By
denying them access to existing community programs, and by requiring that plaintiffs and class members be confined in segregated institutional settings in order to receive needed rehabilitative
services, the Defendants violate Section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a). 243. The Defendants' criteria and methods of administering their system of long-term
services for persons with developmental disabilities subject plaintiffs and the class to illegal
discrimination and unnecessary segregation in violation of § 504 of the Rehabilitation Act and its
implementing regulations. 244. It would not fundamentally alter the Defendants' programs, services, or activities
to provide the plaintiffs and the class with the services necessary to allow them to live in the community.
Third Claim for Relief Title XIX of the Social Security Act A. Reasonable Promptness 245. Title XIX of the Social Security Act requires states to provide Medicaid benefits
to all eligible persons with reasonable promptness and for as long as medically necessary. 42
U.S.C. § 1396a(a)(8); 1396a(a)(10)(A). Provision of services must not be delayed by the
agencies' administrative procedures. 42 C.F.R § 435.930(a).
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246. The Defendants' arbitrary policies, which limit the provision of medically
necessary community-based services and supports, as well as medically necessary specialized
services, result in extended delays and the outright denial of medically necessary care to the plaintiffs and members of the plaintiff class. The residential support, habilitation and other specialized services that the plaintiff class needs are not provided with reasonable promptness, in violation of 42 U.S.C. § 1396a(a)(8).
B. Freedom of Choice
247. The Defendants have failed to provide residents of nursing facilities with developmental disabilities with: 1) notice of and equal opportunities to apply for and access medically necessary community-based services; 2) an assessment of their eligibility for such
services; and 3) meaningful choice between institutional and community-based services, in
violation of 42 U.S.C. § 1396n(c)(2)(B) & (C).
C. Comparability 248. Under federal Medicaid law, persons, like plaintiffs and the class, who are "categorically eligible" for Medicaid benefits based upon their disability and income must be provided with assistance which shall not be less in amount, duration and scope than the medical assistance made available to another "categorically eligible" recipient and shall not be less in amount, duration and scope than the medical assistance made available to other recipients in the program. 42 U.S.C. § 1396a(a)(1O)(B)(i) and (ii); 42 C.F.R. § 440.240. 249. By failing to provide Medicaid services, including specialized services and active
treatment, to Individual Plaintiffs and members of the plaintiff class who reside in nursing
facilities which are comparable to the services provided to similarly-situated individuals such as
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Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 55 of 60
categorically needy persons who reside in ICF/MRs, the Defendants violate the comparability requirement of the Social Security Act. 42 U.S.C. § 1396a(a)(10)(B).
Fourth Claim for Relief Nursing Home Reform Amendments A. Screening, Assessment and Placement
250. The federal NT4RA requires that states develop and implement a PASARR program for all applicants to, and residents of, Medicaid-certified nursing facilities. 42 U.S.C. § 1396r(e)(7); 42 C.F.R. § 483.100 to 483.138. Each state's PASARR program must identify all
individuals who are suspected of having mental illness or developmental disabilities and must
determine whether nursing facility services and other specialized services are necessary. 42 U.S.C. § 1396r(b)(3)(F)(i), 1396r(e)(7)(A)&(B); 42 C.F.R. § 483.128.
251. The Defendants have failed to develop and implement a PASARR program that timely and appropriately screens nursing home applicants for developmental disabilities, assesses
whether the needs of individuals with developmental disabilities could be met in an alternative, less restrictive setting than a nursing facility, and advises the applicant or resident of the available alternatives to a nursing home placement in violation of 42 U.S.C. § 1396r(b)(3)(F)(i),
1396r(e)(7)(A) & (B) and 42 C.F.R. § 483.128. 252. The Defendants' failure to appropriately screen all applicants for nursing facility
admission for possible developmental disabilities and to then assess whether the needs of those
so identified require nursing facility care or, instead, could be met in a more integrated
community-based setting has resulted in the inappropriate placement and retention of plaintiffs and many members of the class in nursing facilities in violation of 42 U.S.C. §
1396r(e)(7)(B)(ii) & (C) and 42 C.F.R. § 483.132(a). B. Specialized Services
55

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 56 of 60
253. The Level II PASARR assessment must determine whether the applicant or
resident requires specialized services and, if so, must provide those specialized services either in
the nursing facility or in an alternative appropriate setting. 42 U.s.c. § 13 96r(e)(7)(B)(ii)(II) & (C); 42 C.F.R. § 483.112(b), 483.114(b)(2), 483.116(b)(2), 483.118, 483.120(b).
254. Specialized services for individuals with developmental disabilities must include all services which are needed to implement "a continuous active treatment program, which
includes aggressive, consistent implementation of a program of specialized and generic training, treatment, health services and related services ... that is directed toward---(i) The acquisition of the behaviors necessary for the client to function with as much self determination and independence as possible; and (ii) The prevention or deceleration of regression or loss of current
optimal functional status." 42 C.F.R. § 483.440(a)(1), made applicable to nursing facility residents by 42 C.F.R. § 483.120(a)(2).
255. The intensity, duration and frequency of specialized services must be sufficient to
provide active treatment, using training and qualified staff, to each individual who needs such
services. 42 C.F.R. § 483.440 (c) (0. The scope and breadth of specialized services cannot be
arbitrarily curtailed or limited by the state. 42 C.F.R. § 483.440(c). In addition, the process for planning, providing and monitoring those services must comply with 42 C.F.R. § 483 .440 (c) (f).
256. The Defendants have failed to provide a program of active treatment to each resident of a nursing facility who needs specialized services, and have instead arbitrarily and
illegally limited these services by regulation to only "physical, occupational, and speech therapy evaluations and services." 40 Tex. Admin. Code § 19.1303, 19.2500(e)(3). Defendants'
56

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 57 of 60
limitation of the scope of specialized services that they will authorize violates 42 U.S.C. § 1396r(b)(3)(F), (e)(7)(B)(ii), (0(8) and 42 C.F.R. § 483.120(a)(2), 483.440.
257. In addition to illegally limiting the scope of specialized services available to class
members, the Defendants have failed to provide even those limited services to almost all
members of the plaintiff class. Contrary to the their obligation to provide specialized services,
including active treatment, to the class, the Defendants have failed and refused to provide or
ensure the provision of needed specialized services to all but 28 members of the class of
approximately 4,500 nursing facility residents with developmental disabilities, despite the fact
that experience in other states indicates that over 90% of the class are eligible for and in need of
such services. 258. The Defendants' failure to appropriately assess class members' need for
specialized services, their failure to provide the full range of needed specialized services and active treatment to individual class members and members of the plaintiff class, and their failure
to ensure that plaintiffs and the class are not inappropriately placed or retained in nursing facilities, violates the NIl-IRA, 42 U.S.C. § 1396r(e)(7) and its implementing regulations, 42 C.F.R. § 483.100 etseq. VII. PRAYERS FOR RELIEF
WHEREFORE, the plaintiffs respectfully request that this Court: 1. Certify this case as a class action pursuant to Fed. R. Civ. P. 23; 2. Issue preliminary and permanent injunctions restraining the Defendants, their successors in office, agents, employees and assigns, and all persons acting in concert with them from:
57

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 58 of 60
(a) Failing to provide appropriate, integrated community services and supports for all class members, consistent with their individual needs; (b) Failing to make reasonable modifications to the rules and requirements
regarding the eligibility for and administration of Texas's community-based
services, supports and programs which exclude plaintiffs and the class from the services and supports needed to reside safely in more integrated community-based settings; (c) Failing to provide equal access to medically necessary community-based habilitative mental retardation and developmental disability services to all eligible class members based on their individual needs and medical necessity, and without regard to arbitrary funding or service caps or waiting list requirements; (d) Discriminating against plaintiff class members with developmental disabilities by failing to provide medically necessary habilitation services and supports in the most integrated setting appropriate to their needs; (e) Failing to provide medically necessary community-based habilitation services and supports with reasonable promptness and in a comparable manner to all eligible class members; (f) Failing to conduct proper, comprehensive PASARR screens and
assessments of class members to determine whether their needs could be
appropriately met in a less restrictive setting than a nursing facility, and failing to
inform class members of the results of their PASARR assessment;
(g) Failing to assess class members' needs for specialized services;
58

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 59 of 60
(h) Failing to provide the full array of needed specialized services, at the
frequency, level, intensity, and duration needed to constitute active treatment, to class members as required by the NHRA; and
(i) Arbitrarily restricting the scope of available specialized services. Issue a declaratory judgment declaring that:
(a) the Defendants have violated the Americans with Disabilities Act and
Section 504 of the Rehabilitation Act in their implementation and administration of the state Medicaid program and in their failure to make reasonable
modifications to their community programs for persons with developmental
disabilities to enable plaintiffs and members of the class to obtain the seryices and
supports they require to reside in the most integrated setting appropriate to their needs; (b) the Defendants have violated the Medicaid Act including the
comparability, reasonable promptness, and freedom of choice provisions of the
Social Security Act governing Medicaid services; and (c) the Defendants have violated the Nursing Home Reform Amendments by failing to properly screen and assess class members' ability to reside in a less restrictive, more integrated setting than a nursing facility, by their inappropriate
placement of class members in nursing facilities, by their failure to assess class
members' need for specialized services, by their arbitrary restriction on the scope
of available specialized services, and by their failure to provide members of the
plaintiff class with specialized services, including active treatment;
59

Case 5:10-cv-01025-OLG Document 63 Filed 10/04/11 Page 60 of 60
4. Award plaintiffs their reasonable attorneys' fees and costs pursuant to 42 U.s.c.
§ 1988 & 12205 and 29 U.S.C. § 794a; and
5. Grant such other relief which is necessary and proper to protect the federal rights
ofthe plaintiffs and the class which they represent.
Respectfully submitted,
Is! Garth A. Corbett Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Advocacy, Incorporated 7800 Shoal Creek Boulevard., Suite. 171-B Austin, Texas 78757 (5 12) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 Robert Velevis State Bar No. 24047032 Casey A. Burton State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz J. Paterson Rae Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Attorneysfor Plaint ffs
60

 Case 5:10-cv-01025-OLG Document 136 Filed 09/20/12 Page 1 of 2

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

SEP 2 0 2012

SAN ANTONIO DIVISION

DISTZlXAS CLERK, U.S. DISTRICT COURT
WESTERN

BY
EPD-CLERK

ERIC STEWARD, by his next friend and mother, Lillian Minor, et. al.

Plaintiffs

I!1
RICK PERRY, Governor of the State of Texas, et. al.

CIVIL ACTION NO. SA- 10-CA-i 025-OG

Defendants
iii

Pending before the Court is the Partial Consent Motion by the United States of America to
Intervene (Dkt. # 53). Plaintiffs consent to the intervention. Defendants oppose intervention, and have filed a brief in opposition (Dkt. # 56). The Unites States has filed a reply (Dkt. # 57). The Court held a hearing on all pending motions, and heard the parties' arguments regarding intervention. After hearing the parties' arguments, and reviewing the briefs and applicable law, the Court finds that the United States request to intervene should be GRANTED.

The United States clearly meets the requirements for permissive intervention under Rule
24(b), Federal Rules of Civil Procedure.' The United States' request is timely and will not unduly delay or prejudice the adjudication of the original parties' rights.
The United States' Complaint in Intervention (Dkt. # 53, Exh. 1), shall be filed of record herein. If the United States wishes to file any further briefs on the issues raised in the other pending

1Thus, the Court need not reach the issue of whether the United States meets the requirements for intervention as a matter of right under Rule 24(a).

Case 5:10-cv-01025-OLG Document 136 Filed 09/20/12 Page 2 of 2
motions, it may file its briefs within thirty (30) days after receipt of the hearing transcript.2 IT IS SO ORDERED this It' day of September, 2012.

ORLANDO L. GARCIA

p..

UNITED STATES DISTRICT JUDGE

2The Defendants' partial motion to dismiss (Dkt. # 67) and Plaintiffs' amended motion to certify class (Dkt. # 94) remain pending, and the other parties have been given the same opportunity to
supplement their briefs if they so desire.
2

 Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 1 of 10

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

§

and mother, Lillian Minor, et al.,

§

§

Plaintiffs,

§

§

v.

§

CIV. NO. 5:10-CV-1025-OG

§

§

§

RICK PERRY, Governor, et al.,

§

ORAL ARGUMENT REQUESTED

§

Defendants.

§

PLAINTIFFS’ AMENDED MOTION FOR CLASS CERTIFICATION Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes, and Zackowitz Morgan (collectively, the “Named Plaintiffs”) move this Court to certify this case as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure. In support of their amended motion,1 the Named Plaintiffs state that: 1. All of the Named Plaintiffs are Medicaid-eligible individuals with mental retardation or a related condition2 (collectively referred to as “developmental disabilities”) who currently are confined in nursing facilities in Texas or at risk of being placed in a nursing facility.3 Each Named

1 The Plaintiffs filed their original Motion for Class Certification, with an accompanying Memorandum, on January 19, 2011. See Dkt. ## 13 and 14. The Court subsequently granted the Defendants' Motion to Abate the Plaintiffs' Motion for Class Certification (Dkt # 20) and stayed all further proceedings, See Order of September 27, 2011 (Dkt. # 58). This Amended Motion incorporates an analysis of recent decisions of the United States Supreme Court, the Fifth Circuit Court of Appeals, and lower courts on class certification that have been issued since the original motion was filed, It also incorporates additional documents in support of the Amended Motion. Concurrently with this motion, the Named Plaintiffs are also filing their Memorandum of Law in Support of the Amended Motion for Class Certification, which is expressly incorporated herein.
2 This Motion incorporates the term “mental retardation or a related condition” as defined and used in the federal PASARR regulations. See 42 C.F.R. § 483.102(b)(3).
3 Subsequent to the filing of the Complaint, Named Plaintiff, Benny Holmes, moved from the nursing facility where he had been residing into a small group home in the community. Since he remains at risk of readmission to a nursing facility, he continues to be an appropriate class representative.

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 2 of 10

Plaintiff is qualified for the community service system that is funded and operated by the Defendants and prefers to live in a more integrated setting, with appropriate services and supports. However, each Named Plaintiff (except Mr. Holmes) remains segregated as a result of the Defendants’ planning, administration, and funding of their developmental disability service system, which unduly relies on segregated settings like nursing facilities, and which denies the Named Plaintiffs and other similarly-situated persons with developmental disabilities in nursing facilities the opportunity to receive services in the most integrated setting. The Defendants' operation and funding of their developmental disability service system violates Title II of the Americans with Disabilities Act (ADA), 42 U.S.C. § 12132 et seq.; 28 C.F.R. § 35.130(d) et seq., and Section 504 of the Rehabilitation Act, 29 U.S.C. § 794.
2. Additionally, each Named Plaintiff has been or is being denied the specialized services in the nursing facility that are necessary to provide them with active treatment, in violation of the Nursing Home Reform Amendments (NHRA) to the Medicaid Act, 42 U.S.C. § 1396r(e)(7) and their implementing regulations, 42 C.F.R. § 483.100 et seq.
3. This action seeks class-wide injunctive relief under Rule 23(b)(2) of the Federal Rules of Procedure to end the harm suffered by the Named Plaintiffs and others similarly-situated who are segregated in nursing facilities and denied active treatment. The Named Plaintiffs seek injunctive relief to require Rick Perry, Governor of the State of Texas, Thomas Suehs, Executive Commissioner of the Texas Health and Human Services Commission, and Chris Traylor, Commissioner of the Texas Department of Aging and Disability Services (the “Defendants”) to fulfill their obligations to the proposed class under Title II of the ADA, Section 504 of the Rehabilitation Act (“Section 504”), and the NHRA by, among other things: (1) providing all qualified persons with developmental disabilities the opportunity to receive services in the most

Plaintiffs’ Amended Motion for

2

Class Certification

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 3 of 10

integrated setting; (2) making reasonable modifications to the Defendants' community service system to accommodate the needs of qualified individuals who prefer to live in more integrated settings; (3) implementing a professionally-adequate screening and assessment process that will accurately identify individuals with developmental disabilities, including whether they can be appropriately served in the community; and (4) for those who require nursing facility care, determining their need for specialized services and providing them with those services with sufficient frequency, intensity, and duration to constitute active treatment.
4. The Amended Complaint seeks the same relief from the Defendants for approximately 4,500 other similarly-situated individuals with developmental disabilities who are living in nursing facilities, and many more who will or should be screened for admission to nursing facilities in the future. Most of these individuals are unnecessarily segregated in nursing facilities and would prefer to live in an integrated community setting with appropriate services and supports. Additionally, most of the proposed class members currently confined to nursing facilities are denied the specialized services and active treatment that the Defendants are obligated to provide.
5. The Amended Complaint requests that the Court certify a plaintiff class comprised of all Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related condition4 in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq.
6. The proposed class satisfies the numerosity requirement of Fed. R. Civ. P. 23(a)(1) because there are over 4,500 persons with developmental disabilities currently segregated in nursing facilities in Texas, because a significant portion of these individuals have indicated their preference

4 The class definition utilizes the phrase “mental retardation and/or a related condition,” rather than “developmental disabilities” because this is the current terminology in the federal PASARR regulations. 42 CFR § 483.102(b)(3).

Plaintiffs’ Amended Motion for

3

Class Certification

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 4 of 10

to leave these institutions, and because there are hundreds of other individuals with developmental disabilities who are screened and admitted to nursing facilities each year. See Declaration of Garth Corbett, Ex. 1 (DADS response to FOIA request, dated October 26, 2009); Ex. 2 (MDS data on number of persons with developmental disabilities in nursing facilities, 2010).
7. Pursuant to Fed. R. Civ. P. 23(a)(2), the proposed class shares several common legal and factual claims, including:
a. Whether the Defendants are violating the ADA and Section 504 by: (i) failing to offer and provide community support services to nursing facility residents with developmental disabilities that would enable them to live in the most integrated setting appropriate to their needs; (ii) failing to offer community services to individuals with developmental disabilities who are at risk of admission to nursing facilities, in order to divert the unnecessary admission of those individuals who could be appropriately served in an integrated community setting; and (iii) utilizing eligibility criteria and methods of administration that have the effect of excluding the Named Plaintiffs and members of the plaintiff class from access to the services and supports that they need to reside in integrated, community-based settings;
b. Whether the Defendants are violating the NHRA by: (i) failing to establish a screening program that accurately determines if persons with developmental disabilities who apply for admission to a nursing facility can be appropriately served in a less restrictive community setting; (ii) failing to conduct professionally acceptable assessments to determine what

Plaintiffs’ Amended Motion for

4

Class Certification

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 5 of 10

specialized services these individuals require; and (iii) failing to provide an array of specialized services to all persons with developmental disabilities in nursing facilities who need them, in a manner that satisfies the federal standard for active treatment; and c. Whether the Defendants are violating the federal Medicaid program by: (i) failing to provide necessary rehabilitative services to the members of the plaintiff class with reasonable promptness; (ii) denying class members a choice between receiving medically necessary supports and services in a segregated nursing facility or an integrated community-based setting, including failing to provide them with relevant information necessary to exercise this choice, and (iii) failing to afford them meaningful access to community-based services. 8. The Defendants have acknowledged, in their biennial reports, legislative budget requests, and other documents that there are a significant number of individuals with developmental disabilities in nursing facilities who could safely and appropriately live in integrated community settings, but numerous obstacles and waiting lists which prevent their moving to integrated community settings. See Corbett Decl., Ex. 4 (2010 Biennial Report of Developmental Disabilities Council); Ex. 5 (2012 Report of the Promoting Independence Advisory Committee; Ex. 6 (2012 DADS Legislative Appropriations Request); Ex. 7 (DADS waiver waiting lists); Ex. 8 (HCBS eligibility criteria); Ex. 9 (MDS data on persons in nursing facilities who want to leave). 9. The United States Department of Justice, the agency charged by Congress with the enforcement of the ADA, conducted a "thorough investigation" of Texas' practice of segregating persons with developmental disabilities in nursing facilities and concluded that

Plaintiffs’ Amended Motion for

5

Class Certification

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 6 of 10

"Texas is in violation of the Americans with Disabilities Act and the Rehabilitation Act as it relates to issues pending in the Steward v. Perry litigation." See Corbett Decl., Ex. 10, DOJ Findings Letter, dated June 15, 2011. This conclusion is based upon DOJ's determination that the State of Texas unnecessarily institutionalizes individuals with developmental disabilities in nursing facilities and places individuals who live in the community at risk of placement in nursing facilities." Id.
10. Mike Bright, the executive director of the Arc of Texas and a member of numerous DADS advisory committees, task forces, and working groups, concludes that many persons with developmental disabilities in nursing facilities would benefit from community services and supports, are qualified for the Defendants' community services programs, and would prefer to live in a community setting. Nevertheless, the Defendants' planning and funding of their community service system prevents these individuals from living in the most integrated setting. See Declaration of Mike Bright, ¶ 13.
11. The Office of the Inspector General of the federal Department of Health and Human Services has reviewed Texas' Pre-Admission Screening and Resident Review (PASRR) program that is required by the Medicaid Act, 42 U.S.C. § 1396r(e) and identified numerous deficiencies. See Corbett Decl., Ex. 3 (2007 Preadmission Screening Report). The Defendants acknowledge that they have no data or reliable information on the number of nursing facility residents with developmental disabilities who have had received the mandated screening and assessment, or the specialized services, that are required by federal law. See Corbett Decl., Ex. 1.
12. These facts, claims, and evidence set forth a common contention of standardized conduct that is susceptible to a common answer, and can be remedied by a single injunction. The Court is not required to make individual determinations of liability or remedy.

Plaintiffs’ Amended Motion for

6

Class Certification

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 7 of 10

13. As required by Fed. R. Civ. P. 23(a)(3), the legal claims, the fact of segregation, and the harms suffered by the Named Plaintiffs are typical of the class.
14. The Plaintiffs' expert, Karen Green McGowan, R,N., has reviewed the needs of three of the Named Plaintiffs and determined that all three are qualified for, and would benefit from, placement in an integrated community setting, but continue to suffer similar harms from being segregated in nursing facilities and not being provided needed services. See Declaration of Karen Green McGowan and accompanying expert report.
15. Ms. McGowan's report on three Named Plaintiffs describes in troubling detail the Defendants' failure to accurately screen, assess, and treat these individuals, and the lack of specialized services and active treatment provided to these individuals. See McGowan report.
16. There is no antagonism or conflict between the Named Plaintiffs and other members of the class. In addition, Disability Rights Texas, Weil, Gotshal & Manges LLP, and the Center for Public Representation are highly-qualified attorneys with considerable experience in assisting persons with disabilities and in class action litigation. Therefore, the requirements of Fed. R. Civ. P. 23(a)(4) are satisfied.
17. Because this is a civil rights action seeking only injunctive relief, and since the Defendants have acted or refused to act on grounds generally applicable to the entire class, thereby making final injunctive and declaratory relief appropriate for the whole class, the proposed class satisfies the standards of Fed. R. Civ. P. 23(b)(2).
18. There are no other pending actions in any court of which the Plaintiffs are aware against the Defendants alleging the same or similar causes of action.
19. Counsel for the Named Plaintiffs, Disability Rights Texas, the Center for Public Representation, and Weil, Gotshal & Manges LLP (Plaintiffs’ Counsel), have discussed and

Plaintiffs’ Amended Motion for

7

Class Certification

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 8 of 10
thoroughly explained to the Named Plaintiffs the nature of a class action and the potential advantages and disadvantages to the Named Plaintiffs of proceeding in a class action rather than individually. Prior to filing this action, Plaintiffs’ Counsel engaged in extensive settlement negotiations with the Defendants over a period of seven months in an attempt to resolve the issues raised in this litigation. The settlement negotiations focused exclusively on a systemic resolution of the issues and did not involve negotiations seeking to obtain individual relief for any of the Named Plaintiffs.
20. Plaintiffs’ Counsel are not aware of any person who has relied on the fact that this action was filed as a class action. Plaintiffs’ Counsel intend to pursue this litigation on behalf of the class even if the claims of the current Named Plaintiffs are rendered moot by the actions of Defendants or otherwise, either by continuing to pursue the action through the institutional plaintiffs and/or by intervening additional named plaintiffs.
21. Because this a Rule 23(b)(2) class action, notice to the class is not required. Rule 23(c)(2)(A); see also Newton-Nations v. Rogers, 316 F. Supp. 2d 883, 890 (D. Ariz. 2004); Advisory Committee Note on Rule 23, 215 F.R.D. 158, 218 (2003) (“The authority to direct notice to class members in a (b)(1) or (b)(2) class action should be exercised with care. For several reasons, there may be less need for notice than in a (b)(3) class action. There is no right to request exclusion from a (b)(1) or (b)(2) class. The characteristics of the class may reduce the need for formal notice. The cost of providing notice, moreover, could easily cripple actions that do not seek damages. The court may decide not to direct notice after balancing the risk that notice costs may deter the pursuit of class relief against the benefits of notice.”). Consequently, the Named Plaintiffs do not believe that there is any need for notice to the class at this point in the litigation.

Plaintiffs’ Amended Motion for

8

Class Certification

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 9 of 10

22. Plaintiffs’ Counsel have extensive experience in prosecuting class actions, including
numerous class actions on behalf of persons with disabilities. They have the skills and resources to
adequately represent the plaintiff class in this case as set forth more fully in the attached
Memorandum of Law and seek appointment as co-class counsel in this action.
REQUESTED RELIEF
WHEREFORE, the Named Plaintiffs respectfully request that, pursuant to Rule
23(c) of the Federal Rules of Civil Procedure, the Court certify a class consisting of all
Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related
condition in Texas who currently or will in the future reside in nursing facilities, or who are
being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. §
1396r(e)(7) and 42 C.F.R. § 483.112 et seq. The Named Plaintiffs further request that the Court
appoint Disability Rights Texas, Weil, Gotshal & Manges LLP, and the Center for Public
Representation as co-class counsel pursuant to Rule 23(g) of the Federal Rules of Civil
Procedure.
Dated: July 9, 2012.
Respectfully submitted,
/s/ Garth A. Corbett Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Disability Rights Texas 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)

Yvette Ostolaza State Bar No. 00784703 Robert Velevis

Plaintiffs’ Amended Motion for

9

Class Certification

Case 5:10-cv-01025-OLG Document 94 Filed 07/09/12 Page 10 of 10
State Bar No. 24047032 Casey A. Burton State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz (admitted pro hac vice) Deborah Dorfman (admitted pro hac vice) Bettina Toner (admitted pro hac vice) Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Attorneys for Plaintiffs

CERTIFICATE OF SERVICE
I, Garth Corbett, hereby certify that all parties have been served through the Court’s ECF system, or if such party does not accept service through the Court’s ECF system, then by first class mail.
/s/ Garth A. Corbett Garth A. Corbett

CERTIFICATE OF CONFERENCE
I, Garth A. Corbett, hereby certify that I have conferred with counsel for the Defendants on the relief requested in this Amended Motion for Class Certification, and certify that the Defendants are opposed to the relief sought herein.
/s/ Garth A. Corbett Garth A. Corbett

Plaintiffs’ Amended Motion for

10

Class Certification

 Case 5:10-cv-01025-OLG Document 94-1 Filed 07/09/12 Page 1 of 37

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, by his next friend

§

and mother, Lilian Minor, et al.,

§

§

Plaintiffs,

§

§

v.

§

CIV. NO. 5:10-CV-1025-OG

§

§

RICK PERRY, Governor, et al.,

§

§

Defendants.

§

PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF AMENDED MOTION FOR CLASS CERTIFICATION I. INTRODUCTION Eric Steward, Linda Arizpe, Andrew Padron, Patricia Ferrer, Benny Holmes, and Zackowitz Morgan (collectively, the “Named Plaintiffs”) on behalf of themselves and thousands of similarly-situated Medicaid-eligible individuals with mental retardation and/or other related conditions in Texas who reside or are at risk of residing in nursing facilities, have filed a class action complaint seeking declaratory and injunctive relief under Title II of the Americans with Disabilities Act (ADA), 42 U.S.C. § 12132 et seq., Section 504 of the Rehabilitation Act, 29 U.S.C. § 794a, and the Nursing Home Reform Amendments (NHRA) to the Medicaid Act, 42 U.S.C. § 1396r(e)(7). Rule 23(c)(1) of the Federal Rules of Civil Procedure requires that the court shall determine whether the action is to be maintained as a class action “at an early practicable time” after the commencement of an action. Oscar Private Equity Invs. v. Allegiance

Case 5:10-cv-01025-OLG Document 94-1 Filed 07/09/12 Page 2 of 37

Telecom, Inc., 487 F.3d 261, 267 (5th Cir. 2007). The Named Plaintiffs respectfully submit this brief in support of Plaintiffs’ Motion for Class Certification.1 II. PRELIMINARY STATEMENT
Courts commonly certify classes of disabled persons challenging the appropriateness of government action, as sought here. Without the procedural benefits provided by the class action mechanism, the Named Plaintiffs and others similarly situated would be unable to effectively seek the relief to which they are entitled. Because the members of the plaintiff class are largely unable to challenge the propriety of government action on their own, it is necessary that such relief be sought on a class-wide basis.
The propriety of a class device in cases like this is illustrated by the large number of class actions that have been certified against governmental agencies at both the state and federal levels. See e.g., 7 Newberg on Class Actions § 23:1 (4th ed. 2002); List of Selected ADA Class Action Cases, attached as Exhibit 1 to this Memorandum (hereafter ADA Case List); List of 36 Class Actions on behalf of Institutionalized Individuals, attached as Exhibit 2 to this Memorandum. Because members of this class have developmental disabilities,2 class relief becomes even more important because such class members are less likely to be able to institute

1 The plaintiffs filed their original Motion for Class Certification, with an accompanying Memorandum, on January 19, 2011. See Dkt. ## 13 and 14. The Court subsequently granted the Defendants’ Motion to Abate the Plaintiffs’ Motion for Class Certification (Dkt # 20) and stayed all further proceedings, See Order of September 27, 2011 (Dkt. # 58). This Memorandum includes an analysis of recent decisions of the United States Supreme Court, the Fifth Circuit Court of Appeals, and lower courts on class certification that have been issued since the original motion was filed, It also incorporates additional documents in support of the Amended Motion. Concurrently with this Memorandum, the Named Plaintiffs are also filing their Amended Motion for Class Certification, together with extensive documentary evidence as described in the Declaration of Garth Corbett which is expressly incorporated herein.
2 The term “developmental disabilities” is used to refer to mental retardation or a related condition as those terms are defined in the federal pre-admission screening and resident review regulations of the U.S. Department of Health and Human Services, 42 C.F.R. § 483.102(b)(3).

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legal proceedings on their own behalf. Indeed, a nearly identical class has been certified by federal courts in Massachusetts relating to the treatment of persons with developmental disabilities in nursing facilities in that state. Rolland v. Cellucci, 1999 WL 34815562 (D. Mass. Feb. 2, 1999) (certifying class comprised of “all adults with mental retardation or other developmental disabilities in Massachusetts who reside in nursing facilities on or after October 29, 1998, or who are or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq.);3 Rolland v. Patrick, 2008 WL 410488 (D. Mass. Aug. 19, 2008) (refusing to decertify the class based upon alleged differences in the needs and conditions of persons in nursing facilities); Voss v. Rolland, 592 F.3d (1st Cir. 2010) (refusing to consider a challenge to class certification in an ADA case involving persons with intellectual disabilities in nursing facilities). In Massachusetts, the district court found that the plaintiff class met all of the requirements of Rule 23(a), and found that a Rule 23(b)(2) class action is particularly appropriate for the kind of civil rights action seeking systematic governmental reform such as this action. Rolland v. Cellucci, supra. For the same reasons, this Court should find that the plaintiffs have met the requirements of Rule 23(a) and should certify a Rule 23(b)(2) class as requested herein.4

3 Discretionary review was denied pursuant to Fed. R. Civ. P. 23(f) by the United States Court of Appeals for the First Circuit, Docket 99-8089 (March 2, 1999).
4 See section IV(A), infra for a compilation of other ADA class action cases involving nursing facilities. See also Ex. 1 for a list of other ADA Title II class action cases.

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III. STATEMENT OF FACTS The Named Plaintiffs are all persons with developmental disabilities who live in, or are at
risk of placement in, nursing facilities throughout Texas.5 Because of the Defendants’6 failure to comply with Title II of the ADA and its implementing regulations, Section 504 of the Rehabilitation Act and its implementing regulations, and the NHRA and their implementing regulations, the Named Plaintiffs are segregated in nursing facilities, are denied access to publicly-funded services in the most integrated settings, and are not provided the necessary specialized services required to meet the federal standard of active treatment. This systemic failure constitutes a standardized course of conduct that results in common injury to all members of the plaintiff class.
There are at least 4,500 adult persons with developmental disabilities confined in nursing facilities in Texas.7 In addition, there are probably hundreds of other individuals with

5 Subsequent to the filing of the original Complaint, Named Plaintiff, Benny Holmes moved out of the nursing facility where he had been residing into a small group home in the community. Even though he is now in the community, he remains at risk of readmission to a nursing facility and, therefore, continues to be an appropriate class representative.
6 The Defendants include Rick Perry, Governor of the State of Texas, Thomas Suehs, Executive Commissioner of the Texas Health and Human Services Commission, and Chris Traylor, Commissioner of the Texas Department of Aging and Disability Services.
7 In response to a Freedom of Information Act Request, the Department of Aging and Disability Services (DADS) stated that there are at least 5,765 persons with developmental disabilities confined in nursing facilities in Texas who had a preadmission screen in the past several years. See Corbett Decl., Ex. 1 (Response to FOIA request dated Oct. 26, 2009 at ¶ 1) While DADS has subsequently reported that it believes that the 5,765 number overstates the actual population, there is no dispute that the class numbers in the thousands.

The United States Department of Health and Human Services’ Center for Medicare and Medicaid Services (CMS) collects detailed information on a quarterly basis from all Medicaid-funded nursing facilities in the country regarding the health characteristics of their residents. This resident information is aggregated and reported on CMS' website in its Minimum Data Set (MDS), http://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-andSystems/MDSPubQIandResRep/activeresreport.html. Based upon the MDS Active Resident Report for the Third Quarter 2010, there are in excess of 4,500 individuals with mental retardation residing in Texas nursing facilities. See Corbett Decl., Ex. 2 (MDS Active Resident Report for persons with developmental disabilities). More recent data, based upon an updated version of the MDS, 3.0, is not yet available on CMS’ website.

Moreover, due to the inadequacy of DADS’ current screening process, there are likely hundreds of other persons with

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developmental disabilities currently living in nursing facilities who have not been identified due to inadequacies in Texas’s pre-admission screening and resident review PASARR program. See Corbett Decl., Ex. 3 (Report of the Office of Inspector General, Preadmission Screening and Resident Review for Younger Nursing Facility Residents with Mental Retardation, OEI-07-0500230 (January 2007)). Most of these individuals could live in integrated community settings with appropriate services and supports, but instead are being subjected to prolonged institutionalization in violation of the ADA and the NHRA. Moreover, almost all of these individuals require and are entitled to receive specialized services appropriate to their individual needs in order to promote independence and growth while they remain confined in nursing facilities. The frequency, intensity, duration, and scope of these specialized services must meet the federal standards for active treatment. Nevertheless, fewer than one percent of adult residents with developmental disabilities in nursing facilities in Texas receive any specialized services at all, much less specialized services that satisfy the criteria to constitute active treatment. See Corbett Decl., Ex. 1, DADS FOIA Response at ¶ 5.
This case seeks to end the common harm suffered by class members who are segregated in nursing facilities, who are not provided the community and waiver services necessary to allow them to live in integrated settings, and who also are denied active treatment while they reside in nursing facilities. Therefore, the Named Plaintiffs seek to require Defendants to fulfill their obligations under Title II of the ADA, Section 504 of the Rehabilitation Act, and the NHRA by, among other things: (1) providing qualified persons with developmental disabilities in nursing

developmental disabilities living in nursing facilities who have not been identified. Additionally, there is an even larger, but not precisely known, number of individuals with developmental disabilities who will be or should be screened before admission to a nursing facility in the future.

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facilities with the necessary services and supports to enable them to live in integrated community settings; (2) modifying Texas’s developmental disability community service system to accommodate the needs of persons in nursing facilities; (3) implementing an effective screening and assessment process that will accurately identify individuals with developmental disabilities, including whether they can be appropriately served in the community; and (4) for those who require nursing facility care, determining their need for specialized services and providing them with those services with sufficient frequency, intensity, and duration to constitute active treatment. IV. THE PROPOSED CLASS MEETS THE STANDARDS FOR CLASS
CERTIFICATION UNDER RULE 23 OF THE FEDERAL RULES OF CIVIL PROCEDURE. A. The Proposed Class The proposed class consists of all Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related condition8 in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112, et seq. A nearly identical class was certified in a similar case raising similar claims under the ADA and NHRA. See Rolland v. Cellucci, supra; Rolland v. Patrick, supra. Courts have certified similar classes in other ADA Title II cases brought on behalf of nursing facility residents. See Van Meter v. Harvey, 272 F.R.D. 274 (D. Me. 2011); Hutchinson v. Patrick, No. 07-30084-MAP (D. Mass. Oct, 4, 2007), approved 636 F.3d 1 (1st Cir. 2011) (affirming fee award for class based upon district court's approval of settlement agreement under Fed. R. Civ. P. 23(e)); Connecticut Office of Protection and Advocacy,

8 The class definition utilizes the phrase “mental retardation and/or a related condition,” rather than “developmental disabilities” because this is the current terminology in the federal PASARR regulations. 42 CFR § 483.102(b)(3).

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706 F. Supp. 2d 266 (D. Conn. 2010); Long v. Benson, No. 08-cv-26 (N.D. Fl. Oct. 14, 2008); Colbert v. Blagojevich, 2008 WL 4442597 (N.D. Ill. Sept. 29, 2008); Chambers v. San Francisco, No. 06-cv-6346 (N.D. cal July 12, 2007); Williams v. Quinn, 2006 WL 3332844 * 5 (N.D. Ill. Nov. 13, 2006).
B. The Standards for Class Certification In order for one or more members of a class to sue as representative parties on behalf of all members, the party moving for class certification must satisfy all of the requirements of Rule 23(a) of the Federal Rules of Civil Procedure. Rule 23(a) has four distinct criteria: (1) the class must be so numerous that joinder of all members is impracticable; (2) the members of the class must share common questions of law or fact; (3) the claims or defenses of the named representatives must be typical of those of the class; and (4) the persons representing the class must be able to fairly and adequately represent the interests of the class. Fed. R. Civ. P. 23(a); see also Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 623 (5th Cir. 1999). Once all four elements of Rule 23(a) are established, a class action may be maintained if it satisfies at least one of the three subdivisions of Rule 23(b). In re Enron Corp. Securities, 529 F. Supp. 2d 644, 672 n.40 (S.D. Tex. 2006) (citing Horton v. Goose Creek Independent School District, 690 F.2d 470, 484 n.25 (5th Cir. 1982), cert denied, 463 U.S. 1207 (1983)). For the purpose of this case, the relevant subpart is Rule 23(b)(2), which requires that the defendants act or refuse to act on grounds generally applicable to the class, therefore making declaratory or injunctive relief appropriate. James v. City of Dallas, 254 F.3d 551, 570 (5th Cir. 2001). The Fifth Circuit has recognized that “Rule 23(b)(2) was intended to be used ‘in the civil-rights field where a party is charged with discriminating unlawfully against a class.’” James, 254 F.3d at 567 n.16 (quoting

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Advisory Committee’s Notes to Rule 23); see also Kincade v. General Tire and Rubber Co., 635 F.2d 501, 506 (5th Cir. 1981) (“(S)ubdivision (b)(2) was added to Rule 23 in 1966 primarily to facilitate the bringing of class actions in the civil rights area”).
In almost every case involving persons who allege noncompliance with Title II of the ADA or the requirements of the Medicaid Act by government officials, such as the case here, courts have certified a class. This is particularly true with respect to cases involving the integration mandate of the ADA. See Ex. 1 (ADA Case List). In addition, in almost every case involving persons with mental disabilities who challenge the lack of appropriate services in a state or private facility, courts throughout the nation have certified classes under Rule 23. See Exhibit 2 (Institutional Case List). Finally, courts traditionally certify classes in cases concerning adults and children who allege violations of their federal statutory rights under Title XIX of the Social Security Act, 42 U.S.C. §1396(a). See, e.g., Herweg v. Ray, 455 U.S. 265, 271 (1982); Blum v. Yaretsky, 457 U.S. 991, 993 (1982); Rosie D. v. Romney, 410 F. Supp. 2d 18, 22 (D. Mass. 2006).
ADA Title II integration cases customarily focus on the standardized conduct of the defendants and do not depend on individualized determinations of either liability or remedy. Thus, courts frequently, and barely without exception, have little difficulty certifying ADA classes, precisely because the Title II claims focus on the defendants’ systemic practices, not the individual plaintiffs’ conditions. See Ex. 1 (ADA Case List). Significantly, there is not a single decision where a court has declined to certify an ADA Title II case or which has applied WalMart v Dukes, 131 S. Ct. 2541 (2011), to an ADA Title II case and concluded that class certification is inappropriate. To the contrary, in several ADA or Rehabilitation Act post-WalMart cases, courts have certified classes, re-certified classes, or refused to decertify classes.

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Oster v. Lightbourne, 2012 WL 685808 at * 6 (N.D. Cal. Mar. 2, 2012) (certifying a class of persons whose services will be “limited, cut, or terminated” under California's home-care program, based upon violations of the ADA, the Rehabilitation Act, and the Medicaid Act); Pashby v. Cansler, 2011 WL 6130819 (E.D.N.C. Dec. 8, 2011); Gray v. Golden Gate Nat’l Recreational Area, 2011 WL 5573466 (N.D. Cal. Nov. 15, 2011) (certifying class and subsequently refusing to decertify the class based upon the Ninth Circuit's decision in Ellis v. Costco Wholesale Corp., 657 F.3d 970 (9th Cir. 2011)); D.L. v. District of Columbia, 277 F.R.D. 38 (D.D.C. 2011).9
ADA Title II classes routinely have been certified precisely because they raise a common question susceptible to a common solution through a single injunction: the modification of the public entity’s program to provide services in the most integrated setting. Like those cases, the Amended Complaint here seeks a single injunction that would require the defendants to make reasonable modifications to their community service system, in order to ensure that all class members have access to community services in the most integrated setting. Thus, in Wal-Mart terms, the Court can, “in a single stroke,” ensure that eligible class members have the

9 Courts have also continued to certify classes in a variety of other contexts, and refused to de-certify existing class after Wal-Mart. See Morrow v. Washington, 277 F.R.D. 172, 192-194 (E.D. Tex., 2011) (certifying a class of motorists who alleged they had been targeted by police because of they were members of racial or ethnic minority groups was appropriate under theory that city had acted, or refused to act, on grounds that applied generally to class, making injunctive or declaratory relief appropriate with respect to class as a whole); Connor B. ex. Rel. Vigurs v. Patrick, 278 F.R.D. 30 (D. Mass. Nov, 2011)(following the Wal-Mart decision, court declined to de-certify class of foster children harmed by systemic deficiencies in state’s foster care system); Johnson v. General Mills, 276 F.R.D. 519 (C.D. Cal. 2011) (unlike Wal-Mart, injury results from a common core of salient facts); In re Ferrero Litigation, 2011 WL 5557407 (S.D. Cal. Nov. 15, 2011) (plaintiffs need not prove a common class-wide injury at class certification stage; rather, they need only to demonstrate that there is a common contention that is capable of class wide resolution); Martinez v. Gerber Childrenswear, LLC, 2011 WL 6757875 (C.D. Cal. Dec. 15, 2011) (unlike Dukes, there is common control over the challenged practice); Parkinson v. Freedom Fidelity Management, Inc., 2012 WL 72820 (E.D. Wash. Jan. 10, 2012) (certifying class for violations of state Consumer Protection Act and Debt Adjusting Statute, although plaintiffs suffered different statutory violations in different ways by different debt collectors); Arthur v. Sallie Mae, Inc., 2012 WL 90101 * 7 (W.D. Wash. Jan. 10, 2012) (commonality only requires a single question of law or fact).

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opportunity to leave nursing facilities and live in the community.10 Thus, there is a virtually

unbroken line of decisions granting class certification in Title II cases challenging systemic

practices of institutionalizing persons with disabilities in violation of federal statutory and

constitutional provisions. Those conclusions and the reasoning of those cases are equally applicable

here, and should weigh heavily in the Court’s analysis regarding certification of the plaintiff class.

C. The Plaintiffs Have Presented Sufficient Evidence to Support Their Motion.

Well before Wal-Mart, courts were required to conduct a “rigorous analysis” of the

evidence submitted in support of a class certification motion. General Telephone Co. of

Southwest v. Falcon, 457 U.S. 157, 160 (1982). That test, and the quantum of evidence needed

to satisfy that test, has not been enlarged nor made more demanding by Wal-Mart. 131 S. Ct. at

2551-52. Further, neither Falcon nor Wal-Mart ever suggests that information set forth in the

Complaint was irrelevant or inadequate. Rather, the Supreme Court affirmed Falcon’s

understanding that “sometimes it may be necessary for the court to probe behind the pleadings

before coming to rest on the certification question.” Id. (quoting Falcon, 457 U.S. at 160

(emphasis added)).

In addition to the information set forth in their Amended Complaint, which includes

substantial details about the Named Plaintiffs and numerous references to documents, reports,

and data, the Plaintiffs have supported their Motion with a declaration from Mike Bright

concerning the needs of persons with developmental disabilities in nursing facilities, the ability

and preference of many of these individuals to live in integrated settings with appropriate

10 As discussed in Section IV(C)(2), infra, individualized decisions concerning which persons want to leave nursing facilities and what community services they need to leave has nothing to do with class certification, since this process is not part of the federal court proceedings. Instead, these determinations are properly made in an individualized service planning process, similar in many respects to the treatment planning process currently used by the Defendants.

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supports, and the obstacles to community placement confronting the plaintiff class. Declaration of Mike Bright, ¶¶ 9-13.
The Plaintiffs also have submitted the declaration of Garth Corbett, which contains considerable evidence from the Defendants’ own reports, state and federal databases, and federal reports. These documents demonstrate that the Defendants maintain a community service system that (1) unduly relies on segregated nursing facilities, (2) does not offer integrated community living and support opportunities to all nursing facility residents with developmental disabilities that could benefit from and want them, (3) does not comply with federal requirements for screening, assessing, and serving persons with developmental disabilities in nursing facilities, and (4) has failed to shift from a segregated to an integrated system, despite numerous promises to do so over the past two decades. See Corbett Decl., Ex. 1-10. For example, DADS has acknowledged in its 2012 Legislative Appropriation Request (LAR) that hundreds of persons with developmental disabilities should and could be diverted from admission to nursing facilities. See Corbett Decl., Ex. 6, 2012 LAR, p. 20. And DADS’ Advisory Committee on Promoting Independence has recently recommended that substantial efforts be made to accommodate the needs of persons with developmental disabilities in nursing facilities and facilitate their transition to the community. See Corbett Decl., Ex. 5, 2012 Promoting Independence Advisory Committee Stakeholder Report at 13. The state Developmental Disability Council acknowledges that there are many individuals who are segregated in institutions and who could safely live in the community. Corbett Decl., Ex. 4, 2010 Biennial Report at 10-13. Despite these acknowledgements and recommendations, nursing facility residents with developmental disabilities have no access to Texas’ largest community service

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program, the Home and Community Services (HCS) waiver. See Corbett Decl., Ex. 8, Description and eligibility criteria for Texas’s waiver programs at 2; see also Bright Decl., ¶ 10.
Moreover, and perhaps most significantly, the United States Department of Justice, the agency charged by Congress with the enforcement of the ADA conducted an investigation of precisely the issues raised in this case and concluded that “Texas is in violation of the Americans with Disabilities Act and the Rehabilitation Act as it relates to issues pending in the Steward v. Perry litigation.” See Corbett Decl, Ex. 10, DOJ Findings Letter, dated June 15, 2011. This conclusion is based upon DOJ’s determination that the State of Texas unnecessarily institutionalizes individuals with developmental disabilities in nursing facilities and places individuals who live in the community at risk of placement in nursing facilities.” Id.
Finally, the Plaintiffs have submitted a declaration and detailed expert report from Karen Green McGowan R.N.. Ms. McGowan reviewed the conditions, needs, strengths, and preferences of three of the Named Plaintiffs and concluded that all are able to live in the community, prefer to do so, but nevertheless remain confined in nursing facilities where they currently receive inadequate care that places their very safety at imminent risk. See Declaration of Karen Green McGowan.11
Taken together, the Court now has a considerable quantum and scope of evidence, which is more than sufficient to allow it to undertake a “rigorous analysis” of the relevant facts, claims, and defenses. Since Wal-Mart has not altered Falcon’s longstanding requirement concerning the evidence needed to certify a class, nor the scope of analysis which the court must conduct to

11 In addition to the facts that the Plaintiffs presented in the Amended Complaint, the Defendants already had considerable – if not voluminous – data and documents about these individuals, in the form of assessments, worksheets, eligibility applications and determinations, and lengthy Individual Service Plans dating back years, if not decades.

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evaluate that evidence, the plaintiffs’ Complaint, exhibits, documents, reports, records, and declarations are plainly sufficient for the Court to perform its task and certify a class in this case.
D. The Proposed Class Meets the Requirements of Rule 23(a.) 1. The Class is so Numerous that Joinder of All Members is Impractical.
Rule 23(a)(1) of the Federal Rules of Civil Procedure has two components: assessing the number of class members and evaluating the practicability of joining them individually in the case. For the purpose of satisfying the first component, the plaintiffs need not establish the precise number or identity of class members. Phillips v. Joint Legislative Comm., 637 F.2d 1014, 1022 (5th Cir. 1981); Garcia v. Gloor, 618 F.2d 264, 267 (5th Cir. 1980); Carpenter v. Davis, 424 F.2d 257, 260 (5th Cir. 1970). This is particularly true where only declaratory and injunctive relief is sought. McCuin v. Sec’y of Health and Human Servs., 817 F.2d 161, 167 (1st Cir. 1987); Doe v. Charleston Area Med. Ctr., Inc., 529 F.2d 638, 645 (4th Cir. 1975) (size of class can be speculative where only equitable relief is requested); Rolland, 1999 WL 34815562 at *3; Ledet v. Fischer, 548 F. Supp. 775, 781-82 (M.D. La. 1982).
Furthermore, in civil rights cases, the membership of a class is often “incapable of specific enumeration.” Yaffe v. Powers, 454 F.2d 1362, 1366 (1st Cir. 1972). In such circumstances, as in the present matter, a class action may proceed if the plaintiffs “demonstrate some evidence or reasonable estimate of the number of purported class members.” Zeidman v. J. Ray McDermott & Co., Inc., 651 F.2d 1030, 1038 (5th Cir. 1981); see also 7 Newberg on Class Actions § 23.2 (“Courts generally have not required detailed proof of class numerousness in government benefit class actions when challenged statutes or regulations are of general applicability to a class of recipients, because those classes are often inherently very large”).

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The proposed class in this case, which consists of more than 4,500 members is sufficiently numerous to make joinder impracticable. Frequently, proposed classes consisting of only a fraction of this number are certified under Rule 23(a)(1). See Jones v. Diamond, 519 F.2d 1090, 1100 n.18 (5th Cir. 1975) (class of 48 individuals found sufficient); Morrow v. Washington, 277 F.R.D. 172, 190-191 (E.D. Tex. 2011) (putative class of 136 individuals satisfied the numerosity requirement); Griffin v. Burns, 570 F.2d 1065, 1072-73 (1st Cir. 1978) (123 voters sufficient to satisfy Rule 23(a)(1)); Korn v. Franchard Corp., 456 F.2d 1206, 1209 (2d Cir. 1972) (class of approximately 212 members sufficient); Rolland, 1999 WL 34815562 at *1-2 (nearly identical class certified with approximately 1500 members).
While the sheer size of this class clearly makes joinder impracticable, other factors also support a finding that joinder is impracticable. Courts have given significant weight to factors such as the geographic distribution of the plaintiffs, the ability of the plaintiffs to bring their own separate actions, and the type of relief sought. Zeidman, 651 F.2d at 1038; Jordan v. Los Angeles, 669 F.2d 1311, 1319 (9th Cir. 1982), vacated on other grounds, 459 U.S. 810 (1982).
In the instant case, the class representatives seek injunctive and declaratory relief on behalf of themselves and thousands of Texans with developmental disabilities who are or will be institutionalized in nursing facilities throughout the state. This geographic dispersion of class members makes joinder impracticable. See Ibarra v. Tex. Employment Comm’n, 598 F. Supp. 104 (E.D. Tex. 1984) (500 member class certified where class members “dispersed throughout Texas”) rev’d on other grounds, 823 F.2d 873 (5th Cir. 1987). Importantly, the combined impact of class members’ poverty and disabilities severely limits their access to attorneys and their resulting ability to bring individual actions for declaratory or injunctive relief, making class

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certification particularly appropriate. See Rolland, 1999 WL 34815562 at *3 (“Considering plaintiffs’ confinement, their economic resources, and their mental handicaps, it is highly unlikely that separate actions would follow if class treatment were denied.” (quoting Armstead v. Pingree, 629 F. Supp. 273, 279 (M.D. Fla. 1986)).
Furthermore, joinder is impracticable in the instant case because the class includes not only current nursing facility residents, but also individuals who will be or should be screened prior to admission to a nursing facility in the future, whose identity cannot be presently determined. Where “[t]he alleged class also includes unnamed, unknown future” class members who will allegedly be harmed by the defendants’ conduct and policies, the Fifth Circuit has held that joinder is “certainly impracticable.” Jack v. Am. Linen Supply Co., 498 F.2d 122, 124 (5th Cir. 1974). See also Phillips, 637 F.2d at 1022 (“the requirement of Rule 23(a)(1) is clearly met, for joinder of unknown individuals is certainly impracticable.” (internal quotations omitted)); San Antonio Hispanic Police Officers’ Ass’n. v. City of San Antonio, 188 F.R.D. 433, 442 (W.D. Tex. 1999). For the above reasons, the proposed class satisfies the numerosity requirement of Rule 23(a)(1).
2. The Members of the Class Share Common Questions of Law and Fact. In order for a class to be certified, Rule 23(a)(2) requires that the proposed class members have at least one factual or legal issue in common, the resolution of which will affect all or a significant number of putative class members. Lightbourn v. County of El Paso, 118 F.3d 421, 426 (5th Cir. 1997); Forbush v. J.C. Penney Co., Inc., 994 F.2d 1101, 1106 (5th Cir. 1993); Rosario v. Livaditis, 963 F.2d 1013, 1017-18 (7th Cir. 1992); City of San Antonio v. Hotels.com, 2008 WL 2486043 at *5 (W.D. Tex. May 23, 2008) (holding that commonality requires that “there is at least

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one issue that will affect all or a significant number of putative class members” (emphasis in original)). “For this reason, ‘[t]he threshold of ‘commonality’ is not high.’” Forbush, 994 F.2d at 1106 (quoting Jenkins v. Raymark Industries, 782 F.2d 468, 472 (5th Cir. 1986)); see also Hotels.com, 2008 WL 2486043 at *5.
In order to satisfy the requirement of commonality, the Named Plaintiffs must show that there exist “questions of law or fact common to the class.” Mullen, 186 F.3d at 625. However, there is no requirement that “all questions of law and fact involved in the dispute be common to all members of the class.” Arnold v. United Artists Theatre Circuit, Inc., 158 F.R.D. 439, 448-49 (N.D. Cal. 1994). Nor does Rule 23(a)(2) require all putative class members to share identical claims; rather, the rule requires only “that complainants’ claims be common and not in conflict.” Hassine v. Jeffes, 846 F.2d 169, 176-77 (3d Cir. 1988). “[T]hat some of the plaintiffs may have different claims, or claims that may require some individualized analysis, is not fatal to commonality.” James, 254 F.3d at 570. Only where there are no common questions of fact or law should certification be denied. Yaffe, 454 F.2d at 1366.
Similarly, the requirement that there be a substantial question of law or fact common to all class members does not mean that each class member must be identically situated. General Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 155 (1982). Commonality is not defeated by the presence of individual differences among class members. See Lightbourn, 118 F.3d at 426 (class of individuals with different disabilities requiring different accommodations was certified because all were impacted by the same governmental inaction); Adamson v. Bowen, 855 F.2d 668, 676 (10th Cir. 1988) (“Rule 23(b)(2) does not require that common questions of law or fact predominate”); Appleyard v. Wallace, 754 F.2d 955, 958 (11th Cir. 1985); Milonas v. Williams, 691

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F.2d 931, 938 (10th Cir. 1982) (factual distinctions among plaintiffs not relevant where legal theories are similar). In fact, “allegations of similar discriminatory practices generally meet the commonality requirement.” Lightbourn, 118 F.3d at 426 (citing Shipes v. Trinity Indus., 987 F.2d 311, 316 (5th Cir. 1993)); see also Curtis v. Commissioner, Maine Dep’t. of Human Servs., 159 F.R.D. 339, 341 (D.Me. 1994) (where “a question of law refers to standardized conduct of the defendant towards . . . the proposed class, commonality is usually met”). The commonality “requirement has been liberally construed and ‘those courts that have focused on Rule 23(a)(2) have given it permissive application so that common questions have been found to exist in a broad range of contexts.’” Rodriguez v. Carlson, 166 F.R.D. 465, 472 (E.D. Wash. 1996) (citing Haywood v. Barnes, 109 F.R.D. 568, 577 (E.D.N.C. 1986)). Courts have broadly applied the rule to class actions seeking injunctive and declaratory relief to remedy the denial of a legal entitlement or the application of a governmental policy or practice that infringes that right. See Neff v. VIA Metro. Transit Auth., 179 F.R.D. 185, 193 (W.D. Tex. 1998) (“Given that the class members are affected by the general policy and that policy is the focus of this litigation, the Court finds the commonality requirement has been satisfied.”); Morrow, 277 F.R.D. at 193 (plaintiffs offered significant proof that police department operated a general policy of discrimination in conducting traffic stops.); Anderson v. Dep’t of Public Welfare, 1 F. Supp. 2d 456, 461 (E.D. Pa. 1998) (“Commonality is easily established in cases seeking injunctive relief.”). “[C]lass suits for injunctive or declaratory relief by their very nature often present common questions satisfying Rule 23(a)(2).” 7A Wright, Miller, & Kane, Federal Practice and Procedure § 1763 (3d ed. 2005); Marisol A. v. Guiliani, 929 F. Supp. 662, 691 (S.D.N.Y. 1996). Class actions are particularly appropriate where, as here, governmental policies and practices have a broad impact upon a class of recipients, and the scope of

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the relief is dictated by the nature of the violation. See Califano v. Yamaski, 442 U.S. 682 (1979); Morrow, 277 F.R.D. at 193, quoting Wal-Mart, 131 S.Ct. at 2557 (“As Wal-Mart emphasized ‘[c]ivil rights cases against parties charged with unlawful, class-based discrimination are prime examples’ of what (b)(2) classes are meant to capture).
In the recent decision of Wal-Mart v. Dukes, 131 S. Ct. 2541, the Supreme Court overturned the certification of a nationwide class of 1.5 million women who sought damages and equitable relief against Wal-Mart to redress alleged discriminatory practices by local Wal-Mart managers from 3,400 stores “exercising their discretion over pay and promotions.” Id. at 2547. Though the Supreme Court determined that the proposed Wal-Mart class lacked commonality, the Court confirmed that its analysis does not alter the long-standing precedent that only where there are no common questions of fact or law should certification be denied. (“We quite agree that for purposes of Rule 23(a)(2) ‘[e]ven a single [common] question will do”) (citations omitted). Id. at 2541, 2557. Instead, the Court’s decision under 23(a)(2) focuses on whether the claims depend upon a “common contention…of such a nature that it is capable of class wide resolution”. Id. at 2551. Wal-Mart does not suggest that class certification is inappropriate here. Since unlike Wal-Mart, the claims of all class members can be resolved “in a single stroke” through the provision of the requested community services that are critical to avoiding unnecessary institutionalization.
Federal decisional law post-Wal-Mart recognizes that while Wal-Mart provides “guidance on how existing law should be applied to expansive, nationwide class actions,” it does not preclude injunctive relief designed to remedy overarching deficiencies in a state service system. Connor B., 2011 WL 5513233 at *3, 5. Nor does it prevent certification of cases seeking injunctive and

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compensatory relief when common questions exist regarding the impact of a defendant’s policies on alleged discrimination and those questions are most efficiently resolved on a class-wide basis. See McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482, 488-492 (7th Cir. 2012) (reversing denial of class certification in disparate impact case where common questions exist regarding company policies and their contributory effect on alleged employment discrimination, even if individual employee decisions may also be a factor).
Viewed in its proper context, the multi-million person class in Wal-Mart and the class proposed in this action bear no relation to one another in commonality or other terms. In this action, the plaintiff class seeks only injunctive relief. In this action, the plaintiff class has demonstrated the common thread or “glue” which unites their common factual and legal claims: all members of the plaintiff class are subject to, or at serious risk of,12 segregation as a result of the Defendants’ standardized conduct – specifically, the Defendants’ planning, administering, operating, and funding of their community service system which denies all persons with developmental disabilities in nursing facilities the community services necessary to avoid their segregation and to allow them to live in the most integrated setting. As a result, the plaintiff class is suffering as a result of a

12 Numerous courts have recognized the rights of those ‘at risk’ of institutionalization to state claims under the ADA’s integration mandate. See, e.g., M.R. v. Dreyfus, 663 F.3d 1100, 1116-17 (9th Cir. 2011)(“An ADA plaintiff need not show that institutionalization is ‘inevitable’ or that she has ‘no choice’ but to submit to institutional care in order to state a violation of the integration mandate. Rather, a plaintiff need only show that the challenged state action creates a serious risk of institutionalization.”); Radaszewski ex. rel. Radaszewski v. Maram, 383 F.3d 599, 614-17 (7th Cir. 2004); M.A.C. v. Betit, 284 F. Supp. 2d 1298, 1309 (D. Utah 2003); Fisher v. Okla. Health Care Auth., 335 F.3d 1175, 1177-78, 1182 (10th Cir. 2003) (“Olmstead does not imply that disabled persons who, by reason of a challenge to that state policy, stand imperiled with segregation, may not bring a challenge to that state policy under the ADA’s integration regulation without first submitting to institutionalization.”); Makin ex.rel. Russel v. Hawaii, 114 F. Supp.2d 1017, 1033 (D. Haw. 1999).

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common course of conduct by defendants, from which arises a set of common claims and contentions.13
In short, the Named Plaintiffs have established commonality precisely because they identify both a common contention – that the Defendants’ planning, administration, and funding of their community services system denies persons with developmental disabilities in nursing facilities the ability to live in the most integrated setting – as well as a common injury – discriminatory segregation. The common contention, moreover, is “of such a nature that it is capable of class wide resolution.” 131 S. Ct. at 2551. Here, as in most ADA Title II cases, the challenge is directed to the public entity’s failure to administer and fund a service system that provides services which allow persons with disabilities to live in the most integrated setting. This failure is the common contention that is susceptible to a common answer, through a single injunction that would require the entity to remedy this deficiency and accommodate the needs of all persons with disabilities who are in segregated settings. The class’ injuries in this case can be redressed by a modification to the Defendants’ service system that would afford persons with developmental disabilities in nursing facilities access to community services, such that they may avoid segregation. This modification can be achieved through a single injunction providing relief to the class as a whole. Id. at 2560. Therefore, the Plaintiffs have presented both the common questions and the “common answers apt to drive the resolution of the litigation.” Id. at 2551. Consistent with long standing

13 See Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C., at http://www.ada.gov/olmstead/q&a_olmstead.htm (“[T]he ADA and the Olmstead decision extend to persons at serious risk of institutionalization or segregation and are not limited to individuals currently in institutional or other segregated settings. Individuals need not wait until the harm of institutionalization or segregation occurs or is imminent . . . a plaintiff could show sufficient risk of institutionalization to make out an Olmstead violation if a public entity’s failure to provide community services or its cut to such services will likely cause a decline in health, safety, or welfare that would lead to the individual’s eventual placement in an institution.”).

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precedent in class actions alleging systemic civil rights violations, the Court should find there are questions of law and fact common to the class.
Neither an assessment of commonality for the purposes of class certification, nor even a determination of liability under federal law, require this Court to evaluate the individual clinical conditions, support needs, or the residential preferences of each one of the thousands of persons with developmental disabilities in Texas who are in, or at risk being admitted to, nursing facilities. Rather, this Court can determine that a violation of federal law has occurred, and remedy that common legal violation, without the type of individualized liability determinations at issue in Wal-Mart. It is both unnecessary and unrealistic for the Plaintiffs to prove that each individual class member’s support needs or preferences are identical. This is not the standard of proof required for class certification before or after Wal-Mart.
Class action cases interpreting Wal-Mart have concurred with this assessment, finding the commonality may exist even where class members are not identically situated. See, e.g., Oster, 2012 WL 685808 at * 5 (rejecting defendants’ challenge under Wal-Mart that class members do not meet the commonality because they suffer different service reductions); Churchill v. Cigna Corp., 2011 WL 3563489 (E.D. Pa. Aug. 12, 2011) (plaintiff class denied the benefit of treatment for Autism Spectrum Disorder stated common claims as well as “'common answer apt to drive the resolution of the litigation’” regardless of their different conditions, treatment needs, and abilities to benefit from ABA therapy. Id. at *3 (citing Wal-Mart); Connor B., 272 F.R.D. at 296 (that harms suffered by unnamed class members differs from that experienced by named plaintiffs does not undermine commonality or typicality); D.L. v. District of Columbia, 2011 WL 5559927 at *7 (D.D.C., Nov. 16, 2011) (the reasons for class members’ common injury – denial

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of a Free and Appropriate Public Education (FAPE) – do not have to be common to all members of the class.).
Nor do two recent court of appeal decisions, M.D. v. Perry, 675 F.3d 832 (5th Cir. 2012), and Jamie S. v. Milwaukee Public Schools, 668 F.3d 481 (7th Cir. 2012), question this analysis or alter this conclusion. In M.D., the Fifth Circuit concluded that the district court failed to explain how systemic deficiencies in Texas’s child welfare system that arose from three separate and unrelated constitutional claims gave rise to a common solution that would address the claims of all class members.14 At the same time, the Fifth Circuit identified a number of practices that could well satisfy commonality, such as the lack of sufficient staffing or a statewide deficiency in its child welfare system. As the Fifth Circuit explained:
Rather, the class claims could conceivably be based upon an allegation that the State engages in a pattern or practice of agency action or inaction – including a failure to correct a structural deficiency within the agency…. M.D., 675 F.3d at 847. Here, the defendants’ failure to plan, administer, and fund their community services system in a manner that provides the integrated residential and other services they have deemed necessary to avoid segregation leads logically and ineluctably to an injunction to provide those services, which would, in a single stroke, address the claims and harms of each class member. As long as the district court is not involved in individualized determinations of liability and

14 Moreover, the appeals court was understandably troubled by the lack of coherence between three quite different claims under three quite different constitutional provisions, particularly since the substantive due process one appeared to require an individualized inquiry of harm. Id. at 843. It suggested that the district court should consider the possibility of subclasses for each claim, since each presented a quite different contention, and different answer to the contention. Id. at 848. Here, of course, there are really only two claims, one involving segregation in nursing facilities made under two related statutes, the ADA and the Rehabilitation Act, and the other involving admission to and treatment in nursing facilities, made under the Nursing Home Reform Amendments and other related provisions of the Medicaid Act. In no sense do the common questions in this case involve the type of “super-claim” that the Fifth Circuit found so troubling in M.D.

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remedy, which is plainly not requested here, and can issue a single injunction that can remedy the structural deficiency, as is the case here, M.D. actually supports class certification. See id.
Similarly, Jamie S. is even less relevant. The Seventh Circuit was understandably troubled by the combination of two factors that simply are not present here. First, the Individuals with Disabilities Education Act (IDEA) requires, on its face, individualized determinations of each child’s education needs and precludes judicial relief without the exhaustion of all administrative remedies. The class action case in Jamie S. sought to circumvent that requirement by challenging a systemic deficiency in Milwaukee’s child find practices. The Seventh Circuit found that the class definition was fatally flawed and could not be invoked to accomplish such circumvention. Jamie S., 668 F.3d. at 493-96. Neither the ADA nor the Rehabilitation Act impose such exhaustion limitations nor demand such individualized determinations.
Second, and perhaps more importantly, the remedy ordered by the district court established an individualized child review process that substituted for the city’s child find process and resulted in the issuance of separate injunctive orders for each child. The Seventh Circuit concluded that these separate injunctions demonstrated that the remedial order did not generate a common answer and a single injunction that applied to the class as a whole.15 Id. at 498-99. Here, the Court is not involved in an inquiry into individualized relief. Instead, it only will determine whether it is appropriate to issue a single injunction requiring the Defendants to end their segregation of persons with developmental disabilities in nursing facilities, and instead,

15 That there is nothing in Jamie S. which precludes a finding of commonality or precludes class certification when there is no judicially-mandated process for affording individualized relief is best demonstrated by a subsequent decision of the same court of appeals that, post-Wal-Mart, certified a class of African-American employees who alleged racial discrimination in employment promotion and compensation practices. McReynolds v. Merrill Lynch, Pierce, Fenner, and Smith, Inc., 672 F.3d 482 (7th Cir. 2012) (certifying a class for liability purposes because this phase of an employment discrimination case, as opposed to the damage claims, can be resolved by a single injunction and does not require individualized remedial orders).

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to provide community support services that would allow these individuals to live in the most integrated setting.
Here, there are several questions of law and fact that are common to all class members including, but not limited to:
(1) whether the Defendants are violating the ADA and Section 504 of the Rehabilitation Act by: (a) failing to offer alternate community services to individuals with developmental disabilities in nursing facilities who can live in a community setting with appropriate supports; (b) failing to offer community services to individuals with developmental disabilities at risk of admission to nursing facilities, in order to divert the unnecessary admission of those individuals who can be appropriately served in a community setting; and (c) failing to administer their community service system for persons with developmental disabilities in a manner that accommodates persons in nursing facilities who qualify for and do not oppose community living; and
(2) whether Defendants are in violation of the NHRA and the Medicaid Act by: (a) failing to establish a screening and assessment program that accurately determines if individuals with developmental disabilities can be appropriately placed in a community setting or should be admitted to a nursing facility; (b) failing to conduct professionally acceptable assessments to determine what specialized services such individuals require; and (c) failing to promptly provide an array of specialized services to all individuals with developmental disabilities in nursing facilities who need them, in a manner that satisfies the federal standard for active treatment.
In this case, as a direct result of the Defendants’ actions and inactions, the Plaintiffs are segregated in nursing facilities when they could live in integrated community settings, and are not

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being accurately screened or assessed, in violation of their rights under the ADA and the NHRA.

Additionally, the plaintiffs are not receiving specialized services and active treatment, as required by

42 C.F.R. § 483.126 & § 483.440(a)-(f). This standardized conduct is the common problem that is

susceptible to a common answer: an injunction requiring the Defendants to modify the community

service system for persons with developmental disabilities to accommodate the needs of nursing

facilities residents, and to modify their PASARR screening, assessment, and treatment program to

ensure that persons are not inappropriately admitted to nursing facilities, and, if so admitted, receive

needed specialized services. Any differences between class members’ abilities and disabilities have

no bearing on these claims or on the Defendants’ failure to provide class members with the required screening and necessary specialized services.16 See Rolland, 2008 WL 4104488 at *4 (“[A]ny

identified factual differences between the named Plaintiffs and some of the class they sought to

represent did not undermine commonality and, in particular, did not preclude certification of a class

of persons with mental retardation who were challenging Defendants’ practices.”). Nor do factual

distinctions between class members impact the systemic nature of the relief requested in the

Amended Complaint or the prosecution of this case. Risinger, 201 F.R.D. at 20-21. Therefore, the

proposed class satisfies the commonality requirement of Rule 23(a)(2).

3. The Claims of the Named Plaintiffs Are Typical of Those of the Class.

The third component of Rule 23(a) requires that the proposed class representatives’ claims

for relief be typical of the claims of the absent class members. The test for “typicality” asks whether

the class representatives “possess the same interest and suffer the same injury” as other class
16 Like other Medicaid Act and ADA integration cases, this action does not require the Court to engage in individualized determinations of the appropriateness of community placement or the need for particular specialized services. Those determinations are best left to existing or new remedial processes. The failure to utilize an effective screening process and the dearth of specialized services can be established without resort to individual treatment determinations by the Court.

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members, but it does not require that the claims of the named plaintiffs be identical to the claims of the other class members. Gen. Tel. Co., 457 U.S. at 156; see also Mullen, 186 F.3d at 625 (the test for typicality “focuses on the similarity between the named plaintiffs’ legal and remedial theories and the theories of those whom they purport to represent”). “[T]he critical inquiry is whether the class representative’s claims have the same essential characteristics of those of the putative class. If the claims arise from a similar course of conduct and share the same legal theory, factual differences will not defeat typicality.” James, 254 F.3d at 571 (quoting 5 Moore’s Federal Practice ¶ 23.24[4] (3d ed. 2000)). Additionally, most courts agree that “[l]ike commonality, the test for typicality is not demanding.” Mullen, 186 F.3d at 625; James, 254 F.3d at 571; Morrow, 277 F.R.D. at 194; Hotels.com, 2008 WL 2486043 at *6.
For example, in Appleyard, a class action was brought in Alabama challenging the state’s Medicaid level of care admission criteria on behalf of individuals who were denied Medicaid nursing facility benefits. 754 F.2d. at 956. The district court refused to certify the class based on its findings that the named plaintiffs could not satisfy the typicality requirement due to the “vast factual differences surrounding the medical condition of each of the named Plaintiffs.” Id. at 957. In reversing, the Eleventh Circuit held that these factual differences were irrelevant because they had nothing to do with the injunctive and declaratory relief requested by the plaintiffs on behalf of themselves and the class. Id. at 958. The Eleventh Circuit concluded that “[t]he similarity of the legal theories shared by plaintiffs and the class at large is so strong as to override whatever factual differences might exist and dictate a determination that the named plaintiffs’ claims are typical of those of the members of the putative class.” Id. Similarly, the Rolland court considered the potential differences between the members of a class (nearly identical to the class proposed here)

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and found that “the fact that class members may have had somewhat different medical needs or placement preferences did not mean the typicality requirement had not been met.” 2008 WL 4104488 at *5.
The Named Plaintiffs satisfy the typicality requirement of Rule 23(a)(3) because their claims, and those of the unnamed class members, present similar factual situations: (1) they all have mental retardation or a related condition; (2) they all are confined, or at risk of confinement in a nursing facility; (3) virtually all would benefit from living in the community; (4) most are qualified for the Defendants’ community service system; (5) most would prefer, or at least would not oppose community placement; (6) they all are entitled to screening and assessment to determine if they require a nursing level of care, could have their needs met in an appropriate community setting, and could benefit from specialized services; and (7) those identified as needing specialized services would benefit from being provided such services in the nursing facility. The fact that class members may have different medical conditions or that they may require a slightly different service array does not justify denying class certification. See Rolland, 2008 WL 4104488 at *5. Instead, the requisite typicality exists because the Defendants are needlessly institutionalizing class members and denying necessary specialized services in violation of Title II of the ADA and the NHRA. See Curtis, 159 F.R.D. at 341 (typicality is met because “the representative Plaintiff is subject to the same statute and policy as the class members.”); Hotels.com, 2008 WL 2486043 at *6 (“While each putative class member has its own ordinance, the claims arising thereunder, and the legal and remedial theories on which the claims are based, are the same”).
Finally, the Named Plaintiffs have a personal interest in this litigation which is reasonably related to the harm experienced by all class members. See Risinger, 201 F.R.D. at 22 (finding

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typicality where plaintiffs invoking same Medicaid Act provisions, allege same systemic deficiencies, and seek same relief). Thus, the Named Plaintiffs satisfy the typicality requirement of Rule 23(a)(3).
4. The Class Representatives Fairly and Adequately Represent the Interest of the Class.
Rule 23(a)(4) requires that the representative plaintiffs in a class action fairly and adequately protect the interests of the entire class. In order to satisfy this requirement, two criteria must be met: (1) the class representatives must not have antagonistic or conflicting interests with the unnamed members of the class, and (2) the attorneys representing the class must be qualified and competent. Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978); Neff, 179 F.R.D. at 194. Both elements of Rule 23(a)(4) are met in this case.
(1) Adequacy of the Named Representatives In order for the named representatives to be deemed adequate to represent the class, their interests must coincide with those of the unnamed class members. Neff, 179 F.R.D. at 195; see generally Gen. Tel. Co., 457 U.S. 147. Additionally, the interests of the Named Plaintiffs must not be antagonistic to the unnamed class members. Andrews v. Bechtel Power Corp., 780 F.2d 124, 130 (1st Cir. 1985). In the present case, although all members of the plaintiff class may not have exactly the same treatment recommendations or needs, they all have suffered, or are at risk of suffering, the same injuries as a result of the Defendants’ policies and practices: segregation in a nursing facility and the denial of specialized services sufficient to provide active treatment. See Amended Complaint ¶¶ 53-61, 74-103. They all seek the same remedies: the provision of integrated community services and supports for those who are qualified for the Defendants' community service

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system; accommodations that would allow them to transition to the community; a screening and assessment process that accurately identifies individuals whose needs could be appropriately met in the community and that reliably determines the need for specialized services for persons who are admitted to a nursing facility; and the provision of specialized services that satisfy the federal standard for active treatment for those who are admitted to a nursing facility. See generally id. None of these claims are unique to any individual plaintiff. Rather, the claims raised and the relief sought operate equally to benefit all class members.
The Named Plaintiffs do not, therefore, have interests divergent from other class members who live in nursing facilities or who are at risk of inappropriate admission to a nursing facility. Consequently, the Named Plaintiffs can fully and adequately represent the legal rights and seek the legal remedies to which all members of the putative class are entitled as required by Rule 23(a)(4).
(2) Adequacy of Counsel The factors that courts consider in determining the adequacy of the counsel in class actions include: the attorneys’ professional skills, experience, and resources. See N. Am. Acceptance Corp. Sec. Cases, 593 F.2d 642, 644 (5th Cir. 1979), cert. denied, 444 U.S. 956 (1979); Rodriguez, 166 F.R.D. at 473. Plaintiffs’ counsel are well qualified to handle this action and will prosecute it vigorously on behalf the class. Disability Rights Texas (formerly Advocacy, Inc.) is the federallydesignated Protection and Advocacy agency for persons with disabilities in Texas and is experienced in class action litigation on behalf of individuals with disabilities. The Center for Public Representation has been involved in complex class action litigation on behalf of institutionalized persons with disabilities for over thirty years and has been lead counsel in numerous institutional reform lawsuits throughout the country, including a very similar case in

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Massachusetts. See Rolland, 2010 WL 157475; Voss v. Rolland, 592 F.3d 247-49 (recounting history of litigation). Weil, Gotshal & Manges LLP is a leading private law firm, internationally, nationally, and in Texas, and has litigated numerous class actions and other complex cases. Finally, plaintiffs’ counsel command the necessary resources to competently represent the class, and they have no other professional commitments which are antagonistic to, or which would detract from, their efforts to seek a favorable decision for the class in this case.
E. This Action Meets the Requirements of Rule 23(b)(2). Courts have recognized that class actions certified under subsection (b)(2) of Rule 23 of the Federal Rules of Civil Procedure are particularly important in civil rights cases where injunctive relief is sought, as in the present case. James, 254 F.3d at 567 n.16 (recognizing that “Rule 23(b)(2) was intended to be used ‘in the civil-rights field where a party is charged with discriminating unlawfully against a class’”); Morrow, 277 F.R.D. at 197; Yaffe, 454 F.2d at 1366 ((b)(2) is “uniquely suited to civil rights actions”); Holmes v. Continental Can Co., 706 F.2d 1144. 1152 (11th Cir. 1983); see also Advisory Committee Note on Rule 23, 39 F.R.D. 69, 102 (1966). Certification of classes has been deemed “an especially appropriate vehicle for civil rights actions” seeking systemic reform. See Coley v. Clinton, 635 F.2d 1364, 1378 (8th Cir. 1980); see also Hoptowit v. Ray, 682 F.2d 1237, 1245 (9th Cir. 1982). In cases seeking only equitable relief, class certification is necessary to make sure that mandatory relief runs to benefit all class members. Rolland, 2008 WL 4104488 at *6 (citing Jane B. v. N.Y. Dept. of Social Servs., 177 F.R.D. 64, 72 (S.D.N.Y. 1987)). The elements of Rule 23(b)(2) are satisfied in this case, and class certification is appropriate, because it is a civil rights class action seeking declaratory and injunctive relief, which is exactly the

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type of litigation that the Federal Rules Advisory Committee anticipated would be certified under Rule 23(b)(2). See Advisory Committee Notes to Rule 23, 39 F.R.D. at 102; Coley, 635 F.2d at 1378. The Defendants’ planning, administration, operation, and funding of their community service system for persons with developmental disabilities; their failure to provide appropriate services in the community and/or placements in integrated settings; their failure to conduct effective screenings to prevent the unnecessary admission of persons with developmental disabilities to nursing facilities; their failure to conduct professionally-acceptable assessments to determine if individuals who are admitted need specialized services; and their failure to provide active treatment to nursing facility residents all violate federal statutory rights common to both the Named Plaintiffs and the unnamed class members. Thus, the Defendants are acting or refusing to act in a manner that equally affects and is “generally applicable” to the entire class. Therefore, final injunctive and declaratory relief is appropriate, precisely because it will resolve the legality of the challenged actions and inaction for the class as a whole. In a case such as this, the “proposed class certification is eminently appropriate.” Rolland, 2008 WL 4104488 at *6 (quoting Rolland, 1999 WL 34815562 at *9).
The Fifth Circuit also has recognized the importance of class certification where a defendant governmental agency may voluntarily perform a specific action sought in a lawsuit for an individual plaintiff and, consequently, moot the representative plaintiff’s claim. Zeidman, 651 F.2d at 1051. In Zeidman, the Court of Appeals explained that “refusal to certify the class ‘would mean that the (agency) could avoid judicial scrutiny of its procedures by the simple expedient of granting hearings to plaintiffs who seek, but have not yet obtained, class certification.’” 651 F.2d at 1051 (quoting White v. Mathews, 559 F.2d 852, 857 (2d Cir. 1977)). A similar risk exists here: the Defendants

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could provide the Named Plaintiffs with a home and community-based waiver slot and/or specialized services, thereby mooting the Named Plaintiffs’ claims, while continuing to deny similar relief to the thousands of other similarly-situated persons.
This case, like most civil rights cases, primarily focuses on the Defendants’ conduct not the Plaintiffs’ needs. The Plaintiffs challenge how the Defendants fund, plan and administer their existing community service system. The Plaintiffs claim that the Defendants have engaged in a pattern of standardized conduct, the result of which is a failure to make sufficient community support services available to persons with developmental disabilities, leading to segregation in nursing facilities. This pattern and practice of standardized conduct by the Defendants towards the putative class of persons currently segregated or at risk of institutionalization in nursing facilities is appropriate for, and susceptible to, a single injunction.
The Amended Complaint seeks an injunction to alter that conduct and to compel compliance with federal law, by reasonably modifying Texas’s community service system for persons with developmental disabilities, so that Texas offers services in integrated settings for all qualified persons with developmental disabilities. The focus on the Defendants’ conduct in operating their community services system, and the resulting systemic claims of discrimination, are what have led virtually every court that has considered class certification in ADA, Rehabilitation Act, and Medicaid Act cases to certify a class, despite the obvious difference in the abilities, disabilities, and needs of class members. At the proper level of analysis for class certification purposes, the focus is, and should be, on the adequacy of the Defendants’ actions and inactions in providing services in the most integrated setting for qualified persons with developmental disabilities.

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Differences concerning an individual’s disability do not preclude certification in cases where those class members have suffered a common injury and where that injury can be redressed by a single injunction requiring the Defendants to fund and operate their community service system consistent with federal law. Unlike M.D., 675 F.3d at 846, and Jamie S., 668 F.3d at 499-500, which explicitly sought or resulted in a judicial process that used court-created expert panels or a hybrid IEP system to determine for each class member whether a separate injunctive order should issue, no individualized remedy is sought or needed here. Thus, the determinative factor that led both appeals courts to decline certification are absent in this case. Rather, because the Amended Complaint seeks, and the ADA and Rehabilitation violations can be remedied by, a single injunction, certification of the proposed class is appropriate under Rule 23(b)(2).
In this case, class certification pursuant to Rule 23(b)(2) is appropriate and necessary to ensure that any mandatory relief will extend to all individuals with developmental disabilities who are confined in, or at a risk of being admitted to, nursing facilities in Texas. V. DISABILITY RIGHTS TEXAS, THE CENTER FOR PUBLIC
REPRESENTATION, AND WEIL, GOTSHAL & MANGES LLP SHOULD BE APPOINTED CO-CLASS COUNSEL PURSUANT TO RULE 23(G). The Named Plaintiffs are jointly represented by Disability Rights Texas, the Center for Public Representation, and Weil, Gotshal & Manges LLP, each of which brings unique resources, experience and skills to the case, and those three law firms should be appointed as class co-counsel pursuant to Rule 23(g). Disability Rights Texas. is the federally-designated protection and advocacy organization for the state of Texas and is charged with protecting the rights of individuals with disabilities throughout Texas. It brings to this case a knowledge of and experience with the

Plaintiffs’ Memorandum of Law in Support of

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workings of Texas’s service array and service delivery systems for individuals with disabilities. It is also in direct contact with the Named Plaintiffs and numerous other class members through its ongoing outreach and intake processes. Disability Rights Texas has seven regional offices throughout Texas. Garth Corbett, the lead Disability Rights Texas attorney on this case, has over 28 years of experience representing individuals with disabilities and has litigated 2 class action cases, including Neff., 179 F.R.D. at 195 (“The Court had the opportunity to see counsel [Garth Corbett] in action and review the pleading and other legal memoranda submitted by counsel….The Court is confident counsel provided adequate representation for the class.”). He is not counsel in any pending class actions.
The Center for Public Representation is a Massachusetts-based public interest law firm that focuses on systemic advocacy on behalf of individuals with psychiatric and intellectual disabilities. It provides litigation support and assistance to the National Disabilities Rights Network and the protection and advocacy organizations throughout the country. It has litigated dozens of class actions on behalf of institutionalized individuals, raising claims under the Americans with Disabilities Act, the Nursing Home Reform Amendments Act, the Medicaid Act, Section 504 of the Rehabilitation Act, and the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Mr. Schwartz and Ms. Dorfman, the two lead Center for Public Representation attorneys, have been lead counsel in numerous class actions. Mr. Schwartz is a nationallyrecognized expert concerning the rights of institutionalized individuals and has almost 40 years of experience representing individuals with psychiatric and intellectual disabilities. He is currently counsel in nine ongoing class actions, including the case of Rolland v. Patrick that involves claims virtually identical to those at issue in this case, and has handled more than 15 additional cases

Plaintiffs’ Memorandum of Law in Support of

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involving class claims over the course of his career. Ms. Dorfman has 20 years of experience representing individuals with disabilities and has litigated in excess of six class actions and more than five other large systemic reform cases raising claims under the Americans with Disabilities Act, Section 504 of the Rehabilitation Act, the Medicaid Act, and the Due Process Clause of the United States Constitution. Ms. Toner is co-counsel on a large ADA class action in Oregon on behalf of over 2,000 individuals with developmental disabilities, and assists on several other class action cases involving persons with disabilities.
Weil, Gotshal & Manges, LLP (“Weil”) is an international law firm with over 1,200 lawyers in 20 offices worldwide. The Dallas office has over 80 attorneys and specializes in complex litigation. Ms. Ostolaza is a partner in the firm and is co-head of the firm’s 160-lawyer complex commercial litigation practice. She concentrates in the trial and supervision of complex civil litigation. She has over 18 years of experience and has significant experience litigating class actions. She is supported in this case by several associates in the firm, each of whom also have experience with complex litigation and class actions. Weil adds expertise in the area of class actions, litigation and trial skills, and provides extensive litigation support capabilities.
There is no conflict among counsel. This is a Rule 23(b)(2) class action seeking only declaratory and injunctive relief. Any attorneys’ fees for plaintiffs counsel will be awarded by the Court pursuant to federal fee-shifting statutes based upon the time reasonably expended by plaintiffs’ counsel. Pursuant to Rule 23(g), Plaintiffs request that this Court appoint Disability Rights Texas, Weil, Gotshal & Manges LLP, and the Center for Public Representation as co-class counsel in this case. Hamilton v. First Am. Title Ins. Co., 266 F.R.D. 153, 173 (N.D. Tex. 2010)

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(appointing co-class counsel); Garcia v. Tyson Foods, Inc., 255 F.R.D. 678, 692 (D. Kan. 2009)
(same).
VI. CONCLUSION AND REQUESTED RELIEF
For the reasons set forth above, the Named Plaintiffs respectfully request that the Court
certify a plaintiff class consisting of all Medicaid-eligible persons over twenty-one years of age with
mental retardation and/or a related condition in Texas who currently or will in the future reside in
nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities
pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112, et seq. In addition, the Named
Plaintiffs respectfully request that this Court appoint Disability Rights Texas, the Center for Public
Representation and Weil, Gotshal & Manges, LLP, as co-class counsel in this action pursuant to
Rule 23(g).
DATED: July 9, 2012.
Respectfully submitted,
/s/ Garth A. Corbett______________ Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Disability Rights Texas 7800 Shoal Creek Boulevard., Suite. 171-E Austin, Texas 78757 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)

Yvette Ostolaza State Bar No. 00784703 Robert Velevis State Bar No. 24047032 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201

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(214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz (admitted pro hac vice) Deborah A. Dorfman (admitted pro hac vice) Bettina Toner (admitted pro hac vice) Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Attorneys for Plaintiffs
CERTIFICATE OF SERVICE
I, Garth Corbett, hereby certify that all parties have been served through the Court’s ECF system, or if such party does not accept service through the Court’s ECF system, then by first class mail.
/s/ Garth A. Corbett Garth A. Corbett

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FILED

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

JUL 1 9 2013

SAN ANTONIO DIVISION

CLERK, U.S. DISTRICT COURT WESTERN TRICT OF TEXAS

ERIC STEWARD, by his next friend and

§

BY TY CLERK

mother, Lillian Minor;

§

§

LINDA ARIZPE, by her next friend and

§

guardian, Rudy Arizpe;

§

§

ANDREA PADRON, by her next friend

§

and guardian, Rosa Hudecek;

§

§

PATRICIA FERRER, by her next friend and §

mother, Petra Ferrer;

§

§

BENNY HOLMES, by his next friend

§

and guardian, Priscilla Holmes;

§

Case No. 5:lO-CV-1025

§

ZACKOWITZ MORGAN, by his next

§

friend and guardian, Sharon Barker,

§

§

MARIA HERNDANEZ, by her next

§

friend and guardian, Diane Hernandez

§

§

VANISONE THONGPHANH, by his next §

friend, Paul Mastin

§

§

MELVIN OATMAN,

§

§

RICHARD KRAUSE, by his next friend

§

and guardian, Lenwood Krause

§

§

MICHAEL MC BURNEY, by his next friend §

Estelle Le Master

§

§

LEON HALL

§

§

LEONARD BAREFIELD

§

§

TOMMY JOHNSON

§

§

JOHNNY KENT

§

§

JOSEPH MORRELL

§

§

Case 5:10-cv-01025-OLG Document 173 Filed 07/19/13 Page 2 of 87

§

on behalf of themselves and all others

§

similarly situated, and

§

§

THE ARC OF TEXAS, INC. and

§

§

COALITION OF TEXANS WITH

§

DISABILITIES, INC.

§

§

Plaintiffs,

§

v.

§

§
RICK PERRY, Governor of the State of Texas, §

§

JON WEIZENBAUM, Commissioner of

§

the Texas Department of Aging and Disability §

Services, and

§

§

KYLE L. JANEK, M.D.,

§

Executive Commissioner

§

of the Texas Health and Human Services

§

Commission,

§

§
all in their official capacities, §

§

__ _____ Defendants.

§
§

§

THE UNITED STATES OF AMERICA,

§

Plaintiff-Intervenor, §

§

v.

§

§

§

THE STATE OF TEXAS,

§

Defendant.

§

SECOND AMENDED AND SUPPLEMENTAL COMPLAINT
I. INTRODUCTION Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes,
Zackowitz Morgan, Maria Hernandez, Vanisone Thongphanh, Melvin Oatman, Richard Krause, Michael Mc Burney, Leon Hall, Leonard Barefield, Johnny Kent, Tommy Johnson and Joseph
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Morrell (hereafter the "Individual Plaintiffs") are adult persons with mental retardation or other related conditions (hereafter referred to as "developmental disabilities"). Each of these individuals is qualified for the Defendants' system of community-based services and supports for individuals with developmental disabilities. Each is able and would prefer to reside in a more integrated, community-based placement. Nevertheless, the Individual Plaintiffs and thousands of similarly situated individuals in Texas are unnecessarily institutionalized and segregated in
nursing facilities because of the Defendants' decision to exclude them from any meaningful access to Texas's system of community-based services and supports which they need to be able

to reside in the community.

2.

The Defendants, by their actions and inactions in violation of federal law, have

caused the Individual Plaintiffs and the class they seek to represent to live in institutional nursing

facilities isolated from their family and friends. The Individual Plaintiffs and the class are not

able to leave the nursing facility to work, attend day habilitation programs or prevocational

activities, and are deprived of the right to attend social, recreational or religious activities outside

of the nursing home. Instead, they have no option but to remain in nursing facilities in order to

receive Medicaid-funded services.

3.

Despite their ability to benefit from Texas's system of community-based supports

that are available to other individuals with disabilities, all of the Individual Plaintiffs and the

class they seek to represent are experiencing or will experience unnecessary and prolonged

institutionalization in violation of the Americans with Disabilities Act (ADA), 42 U.S.C. §

12132 et seq., and Section 504 of the Rehabilitation Act of 1973 (Rehabilitation Act), 29 U.s.c.

§ 794 etseq.

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4.

To avoid the inappropriate institutionalization of individuals with developmental

disabilities in nursing facilities, Congress enacted the Nursing Home Reform Amendments

(NHRA) to the Medicaid Act, 42 U.S.C. § 1396r(e). These Amendments require that before

admission to a nursing facility, an individual with developmental disabilities must be screened by

a mental retardation professional to determine whether their needs could be met in the

community or other less restrictive placement. These Amendments also require that the

Defendants provide individuals with developmental disabilities who are placed in nursing

facilities with specialized services and active treatment, designed to enable the individual to

function as independently and with as much self determination as possible, and to prevent

regression and loss of abilities.

5.

Despite the requirements of the NHRA, the Defendants have failed to conduct

pre-admission screening and assessments that comply with the requirements of the NHRA and

have failed to provide all needed specialized services to the Individual Plaintiffs and the class.

As a result, the Individual Plaintiffs and class members have been inappropriately placed in

nursing facilities and, while there, have frequently suffered significant regression or stagnation

that could have been avoided through the provision of specialized services, required by federal

law.

6.

Plaintiffs and the class seek declaratory and injunctive relief against the

Defendants to require the provision of adequate community-based services and supports to

enable them to transition from their current nursing facility placements to more integrated

community placements as required by the ADA, 42 U.S.C. § 12101 el seq.; the Rehabilitation

Act, 29 U.S.C. § 794; the NHRA, 42 U.S.C. § 1396r(e); the federal Medicaid Act and the

regulations implementing these statutes. They also seek additional declaratory and injunctive

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relief requiring the Defendants to comply with the pre-admission screening and resident review (PASRR) requirements of the NHRA, including the provision of specialized services and active

treatment to class members while residing in nursing facilities.

II. JURISDICTION AND VENUE

7.

This is a civil action authorized by 42 U.S.C. § 1983 to redress the deprivation

under color of state law of rights, privileges and immunities guaranteed by federal laws and the

United States constitution. This Court has jurisdiction pursuant to 28 u.s.c. § 1331, 1343(3)

and 1343(4).

8.

This action is also brought pursuant to Title II of the ADA, 42 u.s.c. § 12132,

and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794. The Defendants are all public entities subject to Title II of the ADA and receive federal financial assistance to operate their Medicaid program and to cover the cost of nursing facility care and the provision of
community-based services and supports. This Court has jurisdiction over the claims under the

ADA and § 504 pursuant to 42 U.S.C. § 12133 and 29 U.S.C. § 794a.

9.

Plaintiffs' request for declaratory relief is brought pursuant to 28 U.S.C. § 2201

and Rule 57 of the Federal Rules of Civil Procedure. Injunctive relief is authorized by 28 U.S.C.

§ 2202, 42 U.S.C. § 1983 and Rule 65 of the Federal Rules of Civil Procedure.

III. PARTIES

A. Individual Plaintiffs 10. Plaintiff Eric Steward is a 44 year-old man with developmental disabilities including mental retardation and the related condition of infantile cerebral palsy. He resides at Buena Vida Nursing & Rehabilitation Center of San Antonio, 5027 Pecan Grove, San Antonio, Texas. He brings this action through his next friend and mother, Lillian Minor.

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11. Plaintiff Linda Arizpe is a 40 year-old woman. She has mental retardation. She resides at 30836 Olympus, Bulverde, Texas. She brings this action by and through her father and

legal guardian, Rudy Arizpe. 12. Plaintiff Andrea Padron is 26 years old. She has mental retardation and a head
injury. She resides at 16506 Fox Den, San Antonio, Texas. She brings this action by and
through her mother and legal guardian, Rosa Hudecek. 13. Plaintiff Patricia Ferrer is a 46 year-old woman with mental retardation who
currently resides at 7312 Boisenberry Lane. Dallas, Texas. She brings this action through her mother and next friend, Petra Ferrer, who lives at 814 N. Barnett Avenue, Dallas, Texas 75211
14. Plaintiff Benny Holmes is a 31 year-old man with mental retardation and cerebral palsy who currently resides at 7404 Clover Glen, Dallas, Texas. He brings this action through his mother and legal guardian, Priscilla Holmes, who lives at 3404 Beliville Drive, Dallas,

Texas.
15.

Plaintiff Zackowitz Morgan is a 40 year-old man with a developmental disability

who currently resides in the Silver Springs Healthcare Center, a nursing facility located at 12350
Wood Bayou Drive, Houston, Texas. Mr. Morgan also has diagnoses of cerebral palsy, obesity,
hypertension, hypothyroidism, glaucoma, and peripheral vascular disease, congestive heart failure and a seizure disorder. He brings this action through his guardian and next-friend, Sharon

Barker who was appointed his legal guardian by the Harris County Probate Court on August 20,

2008. Sharon Barker lives at 118 St. Finans Way, Houston, Texas. 16. Plaintiff Maria Hernandez is a 22 year-old woman with a developmental disability

who currently resides at Meridian Care, a nursing facility located at 8181 Crestway Drive, San

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Antonio, Texas. She brings this action by and through her mother and legal guardian, Diane Hernandez. Diane Hernandez lives at 1829 Waverly, San Antonio, Texas
17. Plaintiff Vanisone Thongphanh is a 34 year-old man with a developmental disability who currently resides at the Arlington Residence Rehabilitation Center, a nursing facility located at 405 Duncan Perry, Arlington, Texas. He brings this action by and through his next friend, Paul Mastin. Paul Mastin lives at 2304 Rushing Springs, Fort Worth, Texas.
18. Plaintiff Melvin Oatman is a 49 year-old man with a condition related to a developmental disability who currently resides at the Renaissance at Kessler Park, a nursing facility located at 2428 Bahama Drive, Dallas, Texas.
19. Plaintiff Richard Krause is a 32 year-old man with a condition related to a developmental disability who currently resides at River City Care Center, a nursing facility located at 921 Nolan Street, San Antonio, Texas. He brings this action by and through his father and legal guardian, Lenwood Krause. Lenwood Krause lives at 211 Sylvia Street, Victoria, Texas.
20. Plaintiff Michael Mc Burney is a 29 year-old man with a developmental disability who currently resides at River City Care Center, a nursing facility located at 921 Nolan Street, San Antonio, Texas. He brings this action by and through his next friend, Estelle Le Master. Estelle Le Master lives at 173 W. Ligustrum, San Antonio, Texas.
21. Plaintiff Leon Hail is a 59 year-old man with a developmental disability who currently resides at the Terrace West Nursing & Rehabilitation, L.C., a nursing facility located at 2800 Midland Drive, Midland, Texas.
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22. Plaintiff Leonard Barefield is a 68 year-old man with a developmental disability who currently resides at the Terrace West Nursing & Rehabilitation, L.C., a nursing facility located at 2800 Midland Drive, Midland, Texas.
23. Plaintiff Thomas Johnson is a 60 year-old man with a developmental disability who currently resides at the Terrace West Nursing & Rehabilitation, L.C., a nursing facility located at 2800 Midland Drive, Midland, Texas.
24. Plaintiff John Kent is a 63 year-old man with a developmental disability who currently resides at the Terrace West Nursing & Rehabilitation, L.C., a nursing facility located at 2800 Midland Drive, Midland, Texas.
25. Plaintiff Joseph Morrell is a 69 year-old man with a developmental disability who currently resides at the Terrace West Nursing & Rehabilitation, L.C., a nursing facility located at 2800 Midland Drive, Midland, Texas.
B. Organizational Plaintff 26. The Arc of Texas, Inc. is a statewide non-profit membership organization comprised of persons with mental retardation, their parents and friends, and mental retardation professionals. Members of the Arc of Texas and its local chapters include individuals with developmental disabilities who reside in nursing facilities or the families of such residents. They also include individuals with developmental disabilities who are at risk of placement in nursing
facilities due to the Defendants' failure to provide them access to the supports and services they need to live safely in the community.
27. The Arc of Texas is dedicated to ensuring that all citizens with developmental
disabilities in Texas are afforded appropriate services and supports in the most integrated, homelike setting possible, and that all persons with developmental disabilities and their families have
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meaningful choices about the nature and location of those services. The Arc of Texas, as a statewide advocacy organization, has long monitored the actions of the Defendants in order to
ensure that persons with developmental disabilities receive the services to which they are
entitled. In this capacity, the Arc of Texas has served as an organizational plaintiff in other
federal court litigation against many of the same state agencies. 28. The Arc of Texas brings this action on its own behalf and on behalf of its
members who are directly affected by the actions and inactions of the Defendants at issue in this

case.
29. The Coalition of Texans with Disabilities, Inc. (CTD) is a statewide cross-
disability advocacy organization. CTD is a membership organization with both individual and organizational members. Its individual members include persons with developmental disabilities
and the parents, guardians and caretakers of such persons. CTD also has over 80 member organizations representing some 3 million unduplicated individuals with all types of disabilities,
including developmental disabilities, their families, friends and caretakers. 30. CTD's mission is to ensure that people with disabilities may live, learn, work,
play and participate fully in their community of choice. In line with this mission, CTD advocacy focuses on full inclusion in all aspects of community living.
31. CTD brings this action on behalf of itself and its members with developmental disabilities who are residing or are at risk of residing in a nursing facility based upon the current
policies and practices of the Defendants.

C.

Defendants

32. Governor Rick Perry is the chief executive officer of the State of Texas. He is

responsible for directing, supervising, and controlling the executive departments of state

Case 5:10-cv-01025-OLG Document 173 Filed 07/19/13 Page 10 of 87
government as well as for seeking funds from the legislature to implement the programs and deliver the services of those executive agencies. Defendant Perry appoints the Executive
Commissioner of the Health and Human Services Commission, and approves the appointment of the Commissioner of the Department of Aging and Disability Services. He is sued in his official
capacity.
33. Kyle L. Janek, M.D. Executive Commissioner of the Health and Human Services Commission ("HHSC"), is responsible for the oversight, supervision, and control of the health and human services departments within the executive branch, including the Department of Aging and Disability Services. He is responsible for appointing the Commissioner of the Department of Aging and Disability Services. Defendant Janek is also responsible for the supervision, direction and oversight of the Texas Medicaid Program, including the various waiver programs and other services designed to enable the named plaintiffs and members of the plaintiff class to reside in community-based settings and, if in a nursing facility, to receive
specialized services and active treatment. He is sued in his official capacity.
34. John Weizenbaum, Commissioner of the Department of Aging and Disability Services ("DADS"), is the chief executive officer of DADS, which is responsible for admissions to, provision of specialized services in, and the funding, licensing, and monitoring of nursing
facilities. Defendant Weizenbaum is also charged with the responsibility for ensuring
compliance with PASRR requirements of the NHRA, as well as providing information about, and determining eligibility for, an array of home and community-based services that would
enable class members to live safely and productively in the community. He is sued in his official capacity.
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IV. CLASS ACTION ALLEGATIONS 35. Pursuant to Rules 23(a)(1)-(4) and (b)(2) of the Federal Rules of Civil Procedure,
plaintiffs bring this action as a class action on behalf of all Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related condition (collectively referred
to as persons with developmental disabilities) in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 ci seq.
36. The size of the class is so numerous that joinder of all members is impracticable. There are approximately 4,500 adult residents with developmental disabilities in nursing facilities throughout Texas, plus thousands more individuals with developmental disabilities who are at risk of being institutionalized in these nursing facilities. Joinder is also impracticable because the class is dynamic and because the absent class members lack the knowledge, sophistication, and financial means to maintain individual actions.
37. There are questions of law and fact common to the class, including inter a/ia: a. whether Defendants are violating the ADA and Section 504 by: (i) failing to
offer and provide community support services to nursing facility residents with developmental disabilities that would enable them to live in the most integrated setting appropriate to their needs; (ii) failing to offer community
services to individuals with developmental disabilities who are at risk of admission to nursing facilities, in order to divert the unnecessary admission of
those individuals who could be appropriately served in a community or
alternative setting; and (iii) utilizing eligibility criteria and methods of administration that have the effect of excluding the named plaintiffs and
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members of the plaintiff class from access to the services and supports that
they need to reside in integrated, community-based settings; b. whether Defendants are violating the NHRA by: (i) failing to establish a
screening program that accurately determines if persons with developmental
disabilities who apply for admission to a nursing facility can be appropriately served in a less restrictive community setting; (ii) failing to conduct professionally acceptable assessments to determine what specialized services
these individuals require; and (iii) failing to provide an array of specialized services to all persons with developmental disabilities in nursing facilities who
need them, in a manner that satisfies the federal standard for active treatment; and c. whether Defendants are violating the federal Medicaid program by: (i) failing
to provide necessary rehabilitative services to the members of the plaintiff
class with reasonable promptness; (ii) denying class members a choice between receiving medically necessary supports and services in a segregated nursing facility or an integrated community-based setting, including failing to provide them with relevant information necessary to exercise this choice, and (iii) failing to afford them meaningful access to community-based services.
38. The plaintiffs' claims are typical of the claims of the class. 39. The representative parties will fairly and adequately protect the interests of the class. Plaintiffs will vigorously represent the interests of the unnamed class members, and all members of the proposed class will benefit by the efforts of the named plaintiffs. The interests of the proposed class and those of the named plaintiffs are identical.
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40. Defendants, their agents, employees, and predecessors and successors in office have acted or will act on grounds generally applicable to the plaintiff class, thereby making appropriate injunctive or declaratory relief with respect to the class as a whole.

V. STATEMENT OF FACTS

A.

Texas 's Community Service Programs for Persons with Developmental

Disabilities

(1) The Americans with Disabilities Act and the Rehabilitation Act

41. On July 12, 1990, Congress enacted the ADA, 42 U.S.C. § 12101 et seq., (ADA),

establishing the most important civil rights laws for persons with disabilities in our nation's

history. 42. Congress stated in its findings that "historically, society has tended to isolate and
segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social

problem." 42 U.S.C. § 12101(a)(2). 43. Congress found that "discrimination against individuals with disabilities persists
in . . . institutionalization . . . and access to public services." 42 U.S.C. § 12101(a)(3). Congress
found that "individuals with disabilities continually encounter various forms of discrimination, including outright intentional exclusion . . . , segregation, and relegation to lesser services, programs, activities, benefits, jobs, or other opportunities." 42 U.S.C. § 12101(a)(5).
44. Congress further concluded that "[i]ndividuals with disabilities are a discrete and insular minority who have been faced with restrictions and limitations, subjected to a history of
purposeful unequal treatment, and relegated to a position of political powerlessness in our society, based on characteristics that are beyond the control of such individuals and resulting

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from stereotypic assumptions not truly indicative of the individual ability of such individuals to
participate in, and contribute to, society." 42 U.S.C. § 12101(a)(7).
45. A major purpose of the ADA is to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities, and to provide
clear, strong, consistent and enforceable standards addressing discrimination against individuals with disabilities. 42 u.s.c. § 12101(b)(1)&(2).
46. "Discrimination" under the ADA includes the segregation of persons with disabilities from society as a result of unnecessary institutionalization. As the Supreme Court stated in Olmstead v. L. C., 527 U.S. 581 (1999), "unjustified institutional isolation of persons with disabilities is a form of discrimination" because "[i]n order to receive needed medical services, persons with mental disabilities, because of those disabilities, relinquish participation in community life...." 527 U.S. at 600-601.
47. The regulations implementing the ADA require that: "a public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d).
48. Discrimination on the basis of disability is also prohibited by Section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a). Section 504's implementing regulations provide that recipients of federal funds "shall administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons." 28 C.F.R. § 41.5 1(d).
49. The ADA and § 504 regulations prohibit the differential treatment of individuals with disabilities or any class of individuals with disabilities with respect to their opportunity to participate in or access the full range of aids, benefits or services in any program operated by a
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public entity. See 28 C.F.R. § 35.130(b)(1)(ii) & (b)(1)(iv), 41.51(b)(1)(ii) & (b)(l)(iv); 45 C.F.R. § 84.4(b)(l)(ii) & (b)(l)(iv).
50. The ADA and § 504 regulations prohibit public entities from utilizing "criteria or
methods of administration" that have the effect of subjecting qualified individuals with
disabilities to discrimination, including unnecessary institutionalization or "that have the purpose
or effect of substantially impairing accomplishment of the objectives of the public entity's
program with respect to individuals with disabilities." See 28 C.F.R. § 35.130(b)(3), 41.5 l(b)(3); 45 C.F.R. § 84.4(b)(4).
51. The ADA regulations further specify that "[a] public entity shall not impose or apply eligibility criteria that screen out or tend to screen out an individual with a disability or any class of individuals with disabilities from fully and equally enjoying any service program or
activity unless such criteria can be shown to be necessary for the provision of the service,
program, or activity being offered." 28 C.F.R. § 35.130(b)(8). 52. Both the ADA and § 504 also require that public entities must make reasonable
modifications in their policies, practices or procedures when necessary to avoid discrimination on the basis of disability, including the unnecessary segregation or institutionalization of such individuals, unless the public entity can demonstrate that such modifications would fundamentally alter the nature of the service, program or activity. 42 U.S.C. § 12131, 12132; 29 U.S.C. § 794; 28 c.F.R. § 35.130(b)(7).
(2) Texas's Implementation of the ADA's Integration Mandate 53. Although Texas provides care, treatment and services to persons with developmental disabilities in large state supported living centers, nursing facilities, private intermediate care facilities for individuals with mental retardation (ICF/MR's), and home and
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community-based settings, it has enacted laws, promulgated regulations, issued policies, conducted studies, written reports, and developed programs that strongly favor integrated community services and supports.
54. In Texas, the Persons with Mental Retardation Act ("PMRA") preserves and
promotes the rights of individuals with mental retardation "to live in the least restrictive setting appropriate to the person's individual needs and abilities and in a variety of living situations,
including living: (1) alone; (2) in a group home; (3) with a family; or (4) in a supervised, protective environment." Tex. Health & Safety Code § 592.0 13(3).
55. The PMRA expressly guarantees an individual's right to receive services in "(1) the available program or facility that is the least confining for the client's condition; and (2) that is provided in the least intrusive manner reasonably and humanely appropriate to the person's needs." Id. at § 59 1.005. Furthermore, "[ejach client has the right to live in the least restrictive habilitation setting and to be treated and served in the least intrusive manner appropriate to the client's individual's needs." Id. at § 592.032.
56. In addition the PMRA ensures that "[ejach person with mental retardation has the right to receive for mental retardation adequate treatment and habilitative services that: (1) are suited to the person's individual needs; (2) maximize the person's capabilities; (3) enhance the person's ability to cope with the person's environment; and (4) are administered skillfully, safely, and humanely with full respect for the dignity and personal integrity of the person." Id. at § 592.017; see also 40 Tex. Admin. Code § 4.107(2).
57. Moreover, in 2001, the Texas legislature, in response to the United States
Supreme Court's Olmstead decision, passed SB 367, which codified one of the earliest "Money
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Follows the Person" ("MFP") initiatives in the country that was designed to transition persons in institutional settings to community-based services.
58. Shortly after the Olmstead decision, former Governor George W. Bush issued
Executive Order GWB 99-2 (Sept. 28, 1999) declaring that "[t]he State of Texas is committed to
providing community-based alternatives for people with disabilities ......
59. Similarly, Defendant Perry issued Executive Order RP 13 (Apr. 18, 2002); in
which he said that "the State of Texas is committed to providing community-based alternatives
for people with disabilities and recognize that such services and supports advance the best interests of Texans." He further proclaimed that "it is imperative that consumers and their families have a choice from among the broadest range of supports to most effectively meet their needs in their homes, community settings, state facilities or other residential settings," and "that
people with disabilities have the opportunity to enjoy full lives of independence, productivity and
self-determination." 60. Texas agencies and commissions have conducted studies and issued reports and
plans that confirm that most individuals with developmental disabilities benefit from living in the community, rather than in institutional settings. The Texas Health and Human Services Commission recently issued the 2008 Revised Texas Promoting Independence Plan. The Plan recognizes that the Olmstead decision "requires states to provide individuals an opportunity to live in the most integrated setting in order to receive their long-term services and supports" and, therefore, establishes as a top priority "full-funding for community-based services and elimination of all interest [waiting] lists."
61. In its State Plan for Individuals with Developmental Disabilities: Fiscal Years 2002-2006, the Texas Council on Developmental Disabilities noted that "individuals with
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developmental disabilities should have access to opportunities and the supports needed to be included in community life, have interdependent relationships, live in homes and communities, and make contributions to their families, communities, the state, and the nation."
62. Texas has developed an array of community-based programs, services and supports that provide habilitation and support to individuals with developmental disabilities in
their homes, in adult foster care settings, and in residential homes. These programs are funded through both federal and state resources and implemented through a complex blend of federallyapproved programs. However, these programs, services and supports are largely unavailable to adult individuals with developmental disabilities residing in Texas nursing facilities.
(3) Texas's Discriminatory Administration of Its Community Programs
63. Despite this statutory, regulatory, and policy commitment to integration, Texas has not created a program for adult persons with developmental disabilities in nursing facilities that will allow them to transition to integrated community settings. Instead, it has developed, implemented, and administered its community service programs in a manner that systemically or effectively denies adult nursing facility residents with developmental disabilities access to these community service programs.
64. The Individual Plaintiffs and the majority of the class could reside in integrated, community-based settings if they were able to access the full array of community-based
programs, services, and supports that the Defendants provide for other individuals with developmental disabilities who are not in nursing facilities.
65. For persons with developmental disabilities residing in nursing facilities or at risk of nursing home placement, the key services and supports that they need in order to safely transition to the community are residential assistance services and habilitation services.
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66. Adult persons with developmental disabilities residing in nursing facilities or at risk of placement in a nursing facility are denied to access residential assistance services or
necessary community-based habilitation services by the policies and methods of administration of the Defendants that systemically or effectively restrict access to those services to individuals
with developmental disabilities who live in their state-supported living centers and private intermediate care facilities for the developmentally disabled (generally referred to as ICF/MRs).
As a result, the named plaintiffs and members of the plaintiff class remain unnecessarily
institutionalized in segregated nursing facilities, often for decades. 67. Adult persons with developmental disabilities residing in nursing facilities or at
risk of placement in a nursing facility are relegated to placing their names on a Home and Community-Based Services (HCS) waiting list, which, as of July 31, 2010, contained 45,756
individuals. 68. On the other hand, persons with physical disabilities in nursing facilities are able
to access the array of community-based services and supports designed to meet their needs
immediately, without having to go on a lengthy, slow moving waiting list. 69. Texas agencies and commissions have conducted studies that confirm that
individuals with developmental disabilities are not able to access the community-based services and supports that they require to avoid institutional placements with reasonable promptness and,
as a result, are deprived of their right to obtain services in the least restrictive setting appropriate
to their individual needs.
70. Pursuant to Section 531.0235 of the Texas Government Code, the Texas Council for Developmental Disabilities and the Office for the Prevention of Developmental Disabilities are required to prepare a joint biennial report on the state of services to persons with disabilities
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in Texas. In their 2008 Biennial Report, these agencies reported that "Texas ranks 49th out of the 50 states in providing community-based services to individuals with developmental disabilities." It then concluded that "[p]eople with MRIRC [mental retardation or a related condition] do not have access to services with reasonable promptness" because "Texas significantly and chronically underfunds its service system." The Report's second major finding is that "[m]any people with intellectual and developmental disabilities (I/DD) do not receive services within the least restrictive setting appropriate to their needs.... In fact, the discrepancy in Texas's investment in institutions compared to its investment in community services is extraordinary."
71. The findings of the 2008 Biennial Report largely mirror the conclusions reached by the Human Services Research Institute in its 2008 report, Closing the Gap in Texas:
Improving Services for People with Intellectual and Developmental Disabilities. The "Closing the Gap" report found that "in Texas the gap between present capacity and unmet needs means Texas does not operate its system in a manner that ensures that individuals will receive services promptly." The report also concluded that "Texas relies on large congregate care facilities to serve people with mental retardation and related conditions to an extraordinary extent. Opportunities for individuals to receive services in the most integrated setting are abridged."

B.

Texas 's Nursing Facilities

72. The Medicaid Act defines a nursing facility as an institution which primarily

provides: (1) skilled nursing care; (2) rehabilitation services for those who are sick, injured or

disabled; and (3) health related care and services to individuals who, because of their mental or

physical condition, require care and services which can only be provided in an institutional

setting. 42 U.S.C. § 1396r(a)(1)(A-C).

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73. Nursing facilities' services are defined as "services which are ... required to be given an individual who needs ... on a daily basis nursing care (provided by or requiring the supervision of nursing personnel) or other rehabilitation services which as a practical matter can only be provided in a nursing facility on an inpatient basis." 42 U.S.C. § 1396d(f).
74. A basic condition for state payment and federal reimbursement of Medicaidfunded nursing facilities is that community-based services do not meet the person's needs and that the care that the individual needs can only be provided in an institutional setting.
(1) The Nursing Home Reform Amendments to the Medicaid Act 75. The Nursing Home Reform Amendments (NHRA) of 1987 to the Medicaid Act,
42 U.S.C. 1396r(e), are part of a comprehensive remedial statute designed to address the widespread problem of warehousing people with developmental disabilities in the Nation's
nursing facilities. Congress enacted the Pre-Admission Screening and Resident Review
(PASRR) provisions of the NHRA to prevent and remedy the unnecessary admission and confinement of people with psychiatric and developmental disabilities in nursing facilities.
76. The PASRR provisions of the NHRA require a careful screening of all individuals being considered for admission to a nursing facility to determine if they may have a developmental disability. This is referred to as the Level I PASRR screen. 42 C.F.R. §
483. 128(a). 77. All persons seeking admission to a nursing facility whose Level I PASRR screen
indicates that they may have a developmental disability must then be assessed and evaluated to
determine if they do in fact have a developmental disability, whether they satisfy the nursing facility level of care criteria, whether their needs could be met in the community through the provision of appropriate services and supports, and whether they could benefit from the
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provision of specialized services designed to maximize their ability for self-determination and independence. This part of the PASRR process is referred to as the Level II PASRR review. 42 C.F.R. § 483.128(a), 483.132.
78. The Level II review must include a psychosocial evaluation, which analyzes current living arrangements and medical and social supports. The review also must include a
functional assessment of the individual's ability to engage in activities of daily living and must document the level of support that would be needed to assist the individual to perform these
activities while living in the community. 42 C.F.R. § 483.134(b)(5). The assessment must determine whether it would be possible to meet the individual's needs through the provision of services and supports in the community as an alternative to nursing facility placement.
79. If the Level II PASRR review determines that a resident does not require nursing facility services, but instead requires specialized services in a non-institutional setting, Defendants have a mandatory duty to provide or arrange for the provision of these services to the resident in an appropriate community setting. 42 U.S.C. § 1396r(e)(7)C)(i); 42 u.s.c. § 1396r(e)(7)(C)(ii); 42 c.F.R. § 483.118(c); 42 c.F.R. § 483.120(b).
80. The PASRR reviewers are obligated to explain to the individual involved and, where applicable, his or her legal representative the results of the Level II PASRR evaluation, including information regarding the individual's ability to reside in a less restrictive community placement, and must provide the individual and legal representative with a copy of the PASRR report. 42 CFR §S 483.128(k), 483.130(l)(3).
81. If the individual is admitted to a nursing facility, periodic reviews must be conducted whenever there is a change in the person's condition to determine whether the individual continues to need a nursing level of care and to require confinement in a nursing
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facility. The initial and periodic PASRR Level II evaluations must also determine whether specialized services are necessary to provide habilitation and active treatment. 42 U.S.C. § 1396r(b)(3)(F)(i), 1396r(e)(7)(A)&(B); 42 c.F.R. § 483.128, 483.132, 483.134, & 483.136.
82. Specialized services consist of an active and continuous treatment program which includes aggressive, consistent implementation of specialized and generic training, treatment, and health services that are aimed at allowing the individual to function as independently and with as much self-determination as possible, and services designed to prevent or decelerate regression and loss of abilities. 42 C.F.R. § 483.120, 483.440(a). If the individual requires
specialized services, under federal law the state must provide those services with the frequency, intensity, and duration that meet the federal standard for active treatment. 42 C.F.R. § 440(a)-
(I).
83. If the PASRR review determines that an individual admitted to a nursing facility needs specialized services, it must then be determined if the nursing facility can provide all needed specialized services and active treatment. If the review concludes the facility cannot, the
individual cannot be admitted to that nursing facility. 42 C.F.R. § 483.126. (2) Texas's Implementation of the NHRA and PASRR Requirements
84. Texas's PASRR program does not adequately screen applicants to nursing facilities to determine if they may have a developmental disability. As a result, many individuals with developmental disabilities are admitted to nursing facilities without being accurately identified and are never provided a Level II PASRR evaluation and determination, as required by federal law.
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85. Texas's PASRR program does not adequately or appropriately assess whether an individual with a developmental disability can be served in the community prior to admission to a nursing facility, as required by federal law.
86. Texas's PASRR program does not assess whether the individual who needs an institutional level of services can be served in another specialized facility for persons with developmental disabilities, as required by federal law.
87. Texas's PASRR program does not adequately or appropriately assess whether an individual needs any specialized habilitative services and, if so, what those specific needs and services are.
88. Texas's PASRR program does not allow for the delivery of the full scope of specialized services required by federal law.
89. Rather than providing the full array of specialized services necessary to allow class members to function as independently and with as much self-determination as possible, the Defendants have, by regulation and in violation of federal law, arbitrarily restricted the scope of specialized services to only "physical, occupational, and speech therapy evaluations and
services." 40 Tex. Admin. Code § 19.1303.
90. Not only does the Texas Administrative Code restrict the scope of specialized services in violation of federal law, but also DADS has even further constrained the scope of such services in its MRA OBRA Handbook (Revision 10-0, Oct. 26, 2009). It has only provided nursing facility residents with developmental disabilities two specialized services vocational training and alternate placement services even though it provides similarly situated persons who live in ICF/MRs with a wide range of habilitative services and supports.
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91. Without any change to either its regulations or the MRA OBRA Handbook, DADS issued Information Letter 10-50 to nursing facility providers on April 15, 2010. Information Letter 10-50 stated that nursing facility residents who have had a PASRR Level II review that indicates that they need specialized services may qualify for a customized manual wheelchair or other specified durable medical equipment as a specialized services benefit.
92. National experience demonstrates that where PASRR reviews are properly
performed, approximately 80% of individuals with developmental disabilities who are referred
for or temporarily admitted to a nursing facility placement are determined to be able to reside in the community with appropriate services and supports and should, therefore, be diverted to a more integrated community placement prior to or shortly after admission to the nursing facility.
93. Of the approximately 4,500 class members with developmental disabilities who are confined in nursing facilities, most should have been diverted to a more integrated community placement if their PASRR reviews had been performed properly.
94. Of these 4,500 class members who remain in nursing facilities, most of them could be appropriately transitioned to the community, with appropriate supports.
95. The overwhelming majority of class members would, if properly assessed during
the PASRR review, be identified as needing and qualifying for specialized services. 96. In Massachusetts, where the state was required by court order to conduct
comprehensive PASRR reviews of all individuals with developmental disabilities residing in nursing facilities, more than 90% of those individuals were found to need specialized services.
97. Due to the failure of the Defendants to ensure that PASRR reviews are properly and professionally completed, compounded by Defendants' failure to provide a full array of

Case 5:10-cv-01025-OLG Document 173 Filed 07/19/13 Page 26 of 87
specialized services, less than 1% of the persons with developmental disabilities who are currently residing in nursing facilities are receiving any specialized services.
98. The Defendants' failure to conduct PASSAR reviews in a complete, comprehensive and professional manner and their failure to provide the necessary specialized services, including appropriate habilitation services, to persons with developmental disabilities has resulted in their inappropriate placement in institutional nursing facilities where their habilitation needs are largely ignored, all in violation of the NHRA, the ADA and the Rehabilitation Act.
99. DADS licenses nursing facilities in Texas. Because these facilities participate in the federal Medicaid program, DADS is required to review and certify these facilities pursuant to the federal requirements for nursing facilities under 42 C.F.R. § 483.1 - 483.75. As part of its responsibility for surveying, inspecting, and certifying nursing facilities, DADS is required to
identify and/or correct any lack of compliance with the PASRR provisions of the NHRA and its
implementing regulations. 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.100-138.
100. Given the systemic failure of Texas's PASRR program to adequately screen, divert, and assess individuals with developmental disabilities, as well as the failure to provide specialized services which meet the federal standard for active treatment, DADS is not fulfilling
its responsibilities under federal law.
101. The federal government apparently agrees. In 2007, the Office of the Inspector General (OIG) of the United States Department of Health and Human Services conducted an audit of Texas and four other states to determine the extent of compliance with the PASRR requirements of federal law. The OIG found that Level I PASRR screens to determine whether
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an applicant or resident has a developmental disability were performed only 88% of the time, and 25% of those that were performed were completed late.
102. Moreover, the OIG found that 52% of the reviewed files did not contain either a Level II PASRR evaluation or a Level II determination. Even when Level II evaluations were performed, 22% of those evaluations did not contain evidence that the evaluator assessed whether the individual's needs could be met in a community setting.
103. The OIG found that the state agencies responsible for oversight and enforcement
of PASRR requirements conducted limited, if any, oversight.
104. Upon information and belief, the Center for Medicare and Medicaid Services
(CMS) of the United States Department of Health and Human Services (HHS) has identified deficiencies in DADS design and implementation of its PASRR process. DADS is in the process of developing a proposal to CMS regarding changes to its PASRR process.
105. Upon information and belief, any changes resulting from the redesign of its PASRR process will not take effect until September 2012 and will not remedy the major flaws in
its current practices. 106. Despite being alerted by the attorneys for the plaintiffs and the OIG Report,
DADS has not corrected the pervasive problems that exist regarding the timeliness, accuracy and
quality of PASRR Level I screens and Level II reviews, the resulting inappropriate admission of
class members to nursing facilities, the failure to comprehensively assess class members' need for specialized services, and the total failure to provide specialized services that meet the federal active treatment standard.
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107. The defendants are required to ensure that individuals who are eligible for and may require nursing facility services and may be eligible for HCBS waiver services are evaluated regarding their need for nursing facility services. 42 U.S.C. § 1396n(c)(2)(B).
108. Following the evaluation required by 42 U.S.C. § 1396n(c)(2)(B), the defendants
must ensure that "individuals who are determined to be likely to require the level of care provided in a ... nursing facility ... are informed of the feasible alternatives, if available under the {HCBS] waiver, at the choice of such individuals, to the provision of ... nursing facility services...." 42 U.S.C. § 1396n(c)(2)(C).
109. State regulations require that DADS "must provide to each long-term care client;
to the client's legally authorized representative (LAR) ...; and, if the LAR is not a member of the
client's family and it is possible, to at least one family member, information about all long-term care and long-term support options appropriate to the client's needs that are currently available. The information must be provided before the agency allows the client to be placed in a care
setting, including a nursing home..... The information must be provided in a manner designed
to maximize the client's understanding of all available options. The information must include community-based options and other options available through other agencies and providers and must be easily understood by the client, the client's family member, or the client's LAR." 1 Tex. Admin, Code § 351.15(b)
110. Despite these statutory and regulatory requirements, DADS fails to provide or ensure the provision of information to class members regarding the options available to them to access services in a less restrictive setting than a nursing facility. As a result, class members who would prefer to reside in a less restrictive, more integrated community placement are not

Case 5:10-cv-01025-OLG Document 173 Filed 07/19/13 Page 29 of 87
even aware that they may be eligible for community-based services and supports or for a small ICF/MR placement, or how to apply for such services.
111. Not surprisingly, few members of the class have applied for community-based services and supports or for admission to a small ICF/MR.
112. Many persons with developmental disabilities, including the named plaintiffs and members of the plaintiff class, have unnecessarily been admitted to, or remain segregated in, nursing facilities. Many class members who reside in nursing facilities do not need intensive nursing services that can only be provided in a nursing facility, nor do they require an institutional setting. Moreover, virtually all class members do not receive those specialized services or supports which constitute active treatment, as required by the NHRA and its regulations.
113. The plaintiffs and members of the plaintiff class could live and function in an integrated community setting if they were informed of and provided with support services appropriate to their needs, such as the habilitative services and residential assistance services operated and funded by the Defendants through their HCS waiver or their ICF/MR program
described below. (3) Conditions in Texas's Nursing Facilities for Class Members
114. Nursing facilities are largely institutional. They are not real homes and or even
home-like. Nursing facilities are segregated and house large numbers of unrelated persons, most of whom are either elderly or disabled.
115. Most residents of nursing facilities are neither integrated into nor part of the
communities in which they live. Class members in nursing facilities have limited access to the
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community. The vast majority of the plaintiffs and plaintiff class members do not participate in community activities, nor are they active members of civic clubs and churches.
116. Many class members who are confined in nursing facilities never have the opportunity to leave the facility not because their condition precludes it, but simply because there are few opportunities and limited means to do so.
117. Many nursing facility residents never receive visitors. 118. Class members in nursing facilities are denied access to meaningful employment and education opportunities by virtue of the environments in which they live and the limited supports that they are provided. 119. Most nursing facilities resemble hospitals they have nurses' stations and 'escape guards" posted at the front doors to monitor persons leaving and entering the facility. Some have locked doors. There are large common areas or day rooms for congregating.
120. There is little, if any, privacy for class members in nursing facilities. Individuals
often share rooms with up to five other residents whom they did not know previously and with whom they did not choose to live. Nursing facility residents are often not free to close the door to their rooms.
121. Many nursing facilities are stark environments where residents have a minimal number of personal possessions. Most class members do not have their own telephones, televisions or furniture.
122. Most class members in nursing facilities have little, if any, choice regarding what
to eat or when to eat. 123. Nursing facilities do not provide active treatment or habilitation designed to meet
the needs of class members with developmental disabilities. The care that the nursing facilities
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provide is primarily custodial. There is often a shortage of direct-care staff and trained
professionals.
124. The operating philosophy of most nursing facilities is to care for people rather than to have them care for themselves. Consequently, individuals with developmental
disabilities in nursing facilities often regress and deteriorate, losing basic skills and competencies as a result of their inappropriate confinement.
125. As a result of these institutional conditions, class members suffer harm from unnecessary confinement in these segregated facilities and rarely, if ever, receive the level of
habilitative care and active treatment that is required by federal law.
C. Texas 's Intermediate Care Facilities for the Mentally Retarded (ICF/MR)
(1) Federal ICF/MR Requirements 126. The ICF/MR Program is an optional Medicaid service authorized by Title XIX of the Social Security Act. 42 U.S.C. § 1396d(a)(15). The program is also known as Intermediate Care Facilities for the Developmentally Disabled. ICF/MRs provide residential, health, and rehabilitative services for individuals with developmental disabilities. 127. In 1971 Congress passed legislation, P.L. 92-223, that provides Medicaid reimbursement for institutions for persons with developmental disabilities who need long term care, An ICF/MR is defined as an institution for four or more persons with mental retardation or related conditions. Its primary purpose is to provide health or rehabilitative services consistent
with standards prescribed by the Secretary of HHS. 42 U.S.C. § 1396d(d). 128. Federal law permits, but does not require, a state to provide ICF/MRs as part of its
Medicaid program. Once a state elects to provide such optional services, they become part of the
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state Medicaid plan and are subject to the requirements of federal Medicaid law. These services must be available to any Medicaid recipients for whom they are medically necessary.
129. Persons residing in ICF/MRs must receive "active treatment." The HHS regulations governing ICF/MRs define active treatment as a continuous active treatment program, which includes aggressive, consistent implementation of specialized and generic training, treatment, health services and related services that is directed at:
a. the acquisition of behaviors necessary for the client to function as independently and with as much self-determination as possible, and
b. the prevention or deceleration of regression or loss of current functional
status. 42 C.F.R. § 483.440(a). 130. Active treatment in ICF/MRs means an individualized program of habilitative services and supports that is provided throughout the day from the time the individual wakes up until the time she retires. It must be provided in a consistent manner across all settings and parts of the facility or other locations where the individual is served. It must be designed by a qualified professional and implemented by competent staff trained in developmental disabilities. It must be based upon a comprehensive assessment of the individual's needs and delivered pursuant to an individualized plan of care that includes measurable goals, timelines, and persons or providers with assigned responsibilities. The plan must be reviewed periodically and modified as the individual attains the stated goals or when the individual's needs change. Finally, the plan must be evaluated for effectiveness and improved when needed. 42 C.F.R. § 483 .440(a)-(f). 131. Federal statutes and regulations require that individuals in ICF/MRs receive active treatment, which includes habilitative services, vocational services, occupational therapy, speech
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therapy, physical therapy, speech and language therapy, assistive technology, auxiliary aides, adaptive equipment, case management, and community integration activities. See 42 U.S.C. § 1396d(d); 42 c.F.R. § 440(a)-(f).
132. The type, level and intensity of services must be individually tailored and appropriate to meet the individual's needs, as determined by an Interdisciplinary Team. The Interdisciplinary Team includes several disability professionals from various disciplines who are required to conduct an individualized assessment of each individual's needs and to develop a habilitation plan to provide each individual the services and supports necessary to meet his/her identified needs.
(2) Texas's ICF/MR Program 133. Texas has chosen to provide the optional ICF/MR service. HHSC has delegated the operation and administration of Texas's ICF/MR program to DADS. Texas delivers ICF/MR services through thirteen state-operated supported living centers and numerous privately run facilities licensed by DADS. 134. The thirteen state-operated ICF/MR schools are large institutions serving from 75 to over 600 individuals with developmental disabilities. The average census per state-operated ICF/MR is 498. 135. The privately operated facilities range in size from 4 beds to over 200 beds, with most facilities serving from 6 to 13 residents. 136. All ICF/MRs are required to provide active treatment to their residents. The cost of active treatment is built into their Medicaid payment rate and is a condition of licensure. 137. Thus, while persons with developmental disabilities who reside in the ICF/MR programs which DADS licenses, monitors, and funds receive active treatment through a wide
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array of habilitative services, persons with the same developmental disabilities who reside in nursing facilities receive almost no habilitative services and no active treatment.
D. Texas 's Medicaid Programs for Persons with Developmental Disabilities
(1) The Federal Medicaid Program 138. Medicaid is a jointly funded state and federal program that provides medical services to low-income persons pursuant to Title XIX of the Social Security Act. 42 U.S.C. § 1396 et seq. 139. State participation in the Medicaid program is optional. States choosing to receive federal matching funds for their Medicaid program must comply with the requirements of the federal Medicaid Act and with the federal regulations governing state Medicaid programs
promulgated by the U.S. Department of Health and Human Services. 42 U.S.C. § 1396, 42 C.F.R. § 430 etseq.
140. As a condition of participating in the federal Medicaid program, states must submit to 1-IHS a state Medicaid plan that fulfills the requirements of the Medicaid Act. 42
U.S.C. § 1396a(a). 141. Medicaid funded services for persons with developmental disabilities include
mandated and optional state plan services, the PASRR program, the ICF/MR program, and various community programs funded through federal waivers, pursuant to 42 U.S.C. § 1396n.
(2) Texas's Medicaid Program 142. Texas has chosen to participate in the Medicaid program. It has prepared a state plan which HHS has reviewed and approved. 143. HHSC and its Executive Commissioner, Defendant Janek, are responsible for the overall administration of the Medicaid program. They have delegated to DADS and its
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Commissioner, Defendant Weizenbaum, responsibility for the delivery of Medicaid and other
services and supports to elderly and disabled Medicaid recipients, including plaintiffs and the class. Nevertheless, DADS and Defendant Weizenbaum are subject to HHSC's oversight and control, and HHSC and Defendant Janek remain responsible for the actions and inactions of DADS, its officers and agents.
144. DADS and Defendant Weizenbaum are responsible for ensuring that individuals with developmental disabilities are appropriately screened prior to or immediately after admission to a nursing facility to determine whether a nursing facility is an appropriate placement or whether the individual's needs could be met in a more integrated community setting.
145. If a community placement is appropriate, DADS and Defendant Weizenbaum are
responsible for ensuring that appropriate habilitative and other services and supports are
provided in the community. If a nursing facility placement is the most appropriate setting for
meeting the individual's needs, DADS and Defendant Weizenbaum are responsible for ensuring that the individual is comprehensively assessed to determine his or her need for specialized services. Finally, for persons needing specialized services, DADS and Defendant Weizenbaum are responsible for ensuring that those specialized services are in fact provided at the level, frequency, and intensity necessary to satisfy the federal standard for active treatment.
146. The Governor, Defendant Perry, is responsible for ensuring that the State submits a State Medicaid Plan which conforms to federal law, and that Texas's Medicaid program is administered consistent with that Plan, relevant federal statutes, and federal regulations.
147. Defendants Perry, Janek, and Weizenbaum have failed to ensure that plaintiff class members, who are categorically eligible for Medicaid services, are provided those
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medically necessary services to which they are entitled under the Plan and pursuant to Title XIX of the Social Security Act.
148. Defendants Perry, Janek, and Weizenbaum also have failed to develop plans and budgets which are designed to provide class members with developmental disabilities with the services and supports needed to reside safely in the community. These defendants have also failed to offer class members who require care in a nursing facility the specialized services and active treatment necessary to ensure that they reach their full potential for self-determination and independence and do not suffer regression.
F. The Individual Plaintiffs (1) Eric Steward
149. Eric Steward is a 44 year-old man with developmental disabilities including
mental retardation and the related condition of infantile cerebral palsy. Since birth, Mr. Steward has also had a diagnosis of quadriplegia. He uses a power scooter for mobility, can stand with
assistance, is verbal and has receptive language skills. Mr. Steward is very friendly and likes meeting and talking with other people.
150. Mr. Steward has resided at the Buena Vida Nursing & Rehabilitation Center of San Antonio since November 2007. Mr. Steward has lived in nursing facilities since 2002. His first nursing facility admission occurred subsequent to surgery for a seizure disorder. Despite residing in two different nursing facilities, Mr. Steward has never received either a Level I PASRR screen or Level II PASRR assessment.
151. Before his placement in the first nursing facility, Mr. Steward lived in a small community-based ICF/MR for approximately 4 years. Mr. Steward's ICF/MR provided him,

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and the other seven individuals with disabilities who resided in the facility, with the opportunity to live in a home-like setting in a residential section of San Antonio.
152. As an ICF/MR resident, Mr. Steward shared a bedroom in a home where he had access to all living and dining areas. Mr. Steward also had opportunities to work and participate in community-based activities, including going to movies, dining out, attending sporting events, engaging in sports related activities such as bowling, and participating in Special Olympics. In addition, Mr. Steward also received active treatment, including the opportunity to engage in skill-based activities, such as day habilitation, vocational training, and employment-related activities. Living in an ICF/MR also helped Mr. Steward develop independent living skills. He learned about meal preparation, money management, and doing laundry.
153. However, in 2002 following surgery and hospitalization for his seizure activity, Mr. Steward lost his ICF/MR placement, resulting in his admission to a nursing facility where he has remained for the past eight years.
154. According to Mr. Steward's nursing facility medical records, his mental state has declined. He has increasing periods of what the nursing facility characterizes as "persistent sad mood," and a decline in functioning. According to Buena Vida's own professionals, Mr. Steward has deteriorated since his last assessment.
155. Nursing facility notes also indicate that Mr. Steward's communication deficits adversely affect his ability to interact with others. However, there is no indication in Mr. Steward's chart that he has been evaluated for any form of assistive communication or speech therapy, even though such supports and services are available under the state Medicaid plan and required as part of a program of active treatment.
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156. There is nothing in the Buena Vida medical records indicating that he has never received a PASRR evaluation. In fact, the nursing facility's own data indicates that it is unknown whether or not Mr. Steward ever received a PASRR determination. As a result, there has been no determination or assessment from DADS or the local mental health mental retardation authority regarding his need for specialized services or alternate placement options. Consequently, Mr. Steward does not receive any specialized services, any active treatment, or any consideration for community living. Because Mr. Steward lives in a nursing facility, he has very few, if any, meaningful opportunities to go anywhere, to work, or to receive the habilitation and other supportive services he needs to avoid further regression.
157. In late July 2011 Mr. Steward applied for the HCS waiver and was placed on the
interest list. Based upon the current length of the HCS interest list, Mr. Steward does not expect
to be offered a HCS waiver slot until 2017 or later. 158. Mr. Steward wants to live in the community. He very much wants the
opportunity to work, develop independent living skills and once again have the opportunity to
engage in an array of community-based living activities. Living in a community-based setting
would enable him to live and interact with individuals much closer to his age. (2) Linda Arizpe
159. Linda Arizpe is a 41 year-old woman with a significant developmental disability. She is unable to walk and cannot talk, although she does have good receptive communication abilities and is particularly responsive to her parents. She also has a significant visual impairment.
160. Ms. Arizpe was initially admitted to Rosewood Care Center in November 2005 with anoxic brain damage. Ms. Arizpe was admitted to Rosewood from the hospital where,

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while being treated for a leg injury, she was overmedicated and stopped breathing, resulting in a brain injury. Ms. Arizpe lived at Meridian Care Nursing Facility in San Antonio since January 2008. On February 28, 2013, Ms. Arizpe moved home to live with her parents at 30836 Olympus, Bulverde, Texas.
161. Prior to her admission to Rosewood, Ms. Arizpe attended public schools where she participated in special education classes including pre-vocational activities.
162. When Ms. Arizpe was not in school, she traveled extensively with her family.
She also participated in a variety of community-based activities including shopping, swimming,
hiking and especially dining out. 163. While Ms. Arizpe needs assistance with many of her activities of daily living
including eating, dressing, and hygiene related activities, she is able to follow directions, dress and care for herself
164. Ms. Arizpe was considerably younger than most of the other residents at the nursing facility, and further because of her developmental disability, other nursing facility residents do not interact with her. For instance, Ms. Arizpe's roommate was well over 70 and
has significant physical and mental disabilities that result in extremely limited opportunities for social interaction.
165. While living at Meridian, Ms. Arizpe did not participate in any of the communitybased activities she previously enjoyed. Moreover, she received none of the habilitation services
that would enable her become more independent and socially engaged. 166. Despite her longstanding diagnosis of a developmental disability, Ms. Arizpe's
Level I PASRR form at the nursing facility indicates that she does not have such a disability. As a result, she was not identified as requiring a Level II PASRR assessment, and no evaluation has
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been made to determine (a) the type of community-based placement she may be eligible for and/or (b) the type and intensity of specialized services she could benefit from.
167. In 2001, Ms. Arizpe applied for a HCS waiver and was placed on the HCS interest list. She has not yet been offered a HCS waiver slot despite being on the interest list for a decade.
168. Neither Ms. Arizpe nor her parents were informed of any feasible alternatives to a nursing home placement at or about the time of her admission to the nursing facility in 2008.
169. Ms. Arizpe's family, and, in particular, her elderly parents, want to ensure that she is not forced to spend the rest of her life in a nursing facility without the habilitative services she needs to avoid regression and to be as independent as she can be.
170. Ms. Arizpe and her parents wanted to have her transferred to a small communitybased setting where she could receive all of the needed services, supports, and therapies which she needs and also interact with the outside world.
171. On February 28, 2013, this wish was finally realized, when she moved from the
nursing facility to her new home in the community. Nevertheless, because of her significant disabilities and medical needs, she remains at risk of re-institutionalization in a nursing facility.
(3) Andrea Padron 172. Andrea Padron is 26 years old. She resided at Meridian Care in San Antonio since 2001. On February 10. 2013, Ms. Padron moved to 16506 Fox Den, San Antonio, Texas. 173. When Ms. Padron was ten years old, she suffered a severe head injury from a car accident. Since the accident, Ms. Padron has required extensive care and habilitation. Her diagnosis includes quadriplegia and quadriparesis, esophageal reflux, mental retardation, and
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epilepsy. In addition, Ms. Padron is nonverbal, although she appears to have good receptive language skills. Her treating doctor indicates that her rehabilitation potential is fair.
174. Until she was 16, Ms. Padron lived at home. There she received a range of habilitative services and therapies. She attended public school. She was able to use a wheelchair and, on occasion, to stand with the use of a standing table. She also participated in aqua-therapy, as well as arts and crafts classes in the community.
175. In or about 1995, Andrea's mother, Rosa Hudecek, applied for a HCS waiver slot for Andrea and she was placed on the HCS interest list at that time.
176. In or about May 2001, Andrea's eligibility for the supplemental security income program was terminated. Because Ms. Hudecek could no longer afford to care for Andrea at home, she placed her in a nursing facility -- believing she would get the care and attention she needed. In December 2004, Ms Hudecek, who was on active military duty with the United State Army, was deployed to Iraq.
177. In or about September 2005, Andrea reached the top of the HCS interest list and
was offered a HCS waiver slot. At that time, Ms. Hudecek was deployed to Iraq, and the HCS waiver slot was not accepted.
178. Although Ms. Hudecek did not accept the HCS waiver for Andrea in 2005, she continued to want to obtain the services and supports that would enable Andrea to leave the nursing facility and live in a more integrated community setting. As a result, Ms. Hudecek promptly reapplied for a HCS waiver slot for Andrea. Andrea has been on the HCS interest list since late 2005 and remained on the interest list, waiting to reach the top and be offered a HCS
slot.
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179. When Ms. 1-ludecek returned from her deployment to Iraq in February 2007, Ms. Hudecek reports that Andrea could no longer even sit in her wheelchair. She attributes this to the
nursing facility's failing to get Andrea out of bed regularly. As a result, Andrea has regressed.
She is no longer able to stand or use her wheelchair. She no longer receives aqua-therapy or participates in recreational or social activities.
180. Following Ms. Hudecek's return from Iraq and her re-involvement with her daughter, the nursing facility staff began to assist Andrea into her wheelchair. However, the nursing facility staff often left Andrea sitting in her chair for long periods of time unattended, resulting in skin breakdown and sores.
181. To address both the skin breakdown and sores and to enable Andrea to continue to use her wheelchair, Ms Hudecek purchased Roho cushions. These cushions are designed to more evenly distribute a patient's body weight, significantly reducing the chances for skin breakdown. However, over the past two years, nursing facility staff have failed to regularly use these cushions. As a result, Ms. Padron is no longer using her wheelchair.
182. A review of Ms. Padron's nursing home record at Meridian indicates that her
Level I PASRR screening form was completed incorrectly; erroneously stating that Ms. Padron does not have a developmental disability. As a result, Ms. Padron was not referred for a Level II
assessment and no assessment of her ability to reside in a community-based setting and/or her
need for specialized services has ever been done by the local mental health mental retardation authority. Consequently, she received no specialized services, no active treatment, and no consideration for community living.
183. Ms. Hudecek wanted Andrea moved to an integrated, community-based setting where she can get the care and habilitation needed to recover lost skills related to mobility,
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where she can enhance and further develop the skills needed to maximize her ability to function with as much self-direction and independence as possible, and where she will have much greater opportunities to participate in community-based activities.
184. On February 10, 2013, this wish was finally realized, when she moved from the
nursing facility to her new home in the community. Nevertheless, because of her significant disabilities and medical needs, she remains at risk of re-institutionalization in a nursing facility.
(4) Patricia Ferrer 185. Plaintiff Patricia Ferrer is an individual with developmental disabilities, specifically mental retardation and the related condition of epilepsy. 186. Plaintiff Patricia Ferrer resided at ManorCare Health Services nursing facility since September 2008, when her elderly mother, Petra Ferrer, no longer was able to provide for her care. On or about December 20, 2012, Ms. Ferrer moved from the nursing facility to her new home in the community located at 7312 Boisenberry Lane, Dallas, Texas. 187. Ms. Ferrer has few physical limitations and is quite mobile. In addition to her intellectual disability, she has epilepsy which is poorly controlled by medication. 188. For the first forty-four years of her life, Ms. Ferrer lived at home with her parents. She attended public schools, graduating from Adamson High School in Dallas. 189. After graduation from high school, Ms. Ferrer worked full-time as a chamber maid for a hotel chain for approximately four years. She then obtained a position in the security department at Love Field in Dallas, where she worked for approximately two years. 190. Ms. Ferrer ultimately had to leave her employment at Love Field when her epilepsy became more active and difficult to control. In order to control her epilepsy, Ms. Ferrer must take medication periodically throughout the day.
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191. During the more than forty years that Ms. Ferrer lived in the community with her parents she was very independent and active. She required no assistance with activities of daily living. In fact, she sometimes prepared simple meals for the family and would regularly assist in meal preparation.
192. Until her epilepsy became more active and unpredictable, Ms. Ferrer was able to use public transportation and would often go to the mall, movies, or visit a friend. After her epilepsy became more active, Ms. Ferrer was not allowed by her parents to take the bus on her own. Nevertheless, she continued to go out to the movies, shopping, and restaurants, and to visit friends when accompanied by a family member or friend.
193. Approximately three years ago, Ms. Ferrer's father was diagnosed with Parkinson's disease. Ms. Ferrer's mother, who is in her seventies and the sole care provider in the household, then had to provide care for both her husband and her daughter. Ultimately, Mrs. Ferrer realized that she lacked the physical ability to provide both her husband and Patricia with the care and support they needed.
194. Because of her inability to properly care for her daughter, Patricia, while also attending to the medical needs of her husband, Mrs. Ferrer reluctantly decided to place Patricia
in a nursing facility. 195. When Ms. Ferrer was admitted to ManorCare in September 2008, her admitting
records indicated that she was a person with mental retardation. Nevertheless, her Level 1 PASRR screen indicated that she did not have mental retardation or any other developmental disability.
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196. Because Ms. Ferrer was not identified on the Level 1 PASRR screen as an
individual with a developmental disability, she was never evaluated to determine if her needs could appropriately be met in the community or if she could benefit from specialized services.
197. On or about September 7, 2010, Ms. Ferrer applied for and was placed on the
interest list for an HCS waiver slot. Based upon the current length of the interest list, she does
not anticipate that she will be provided with HCS waiver services until 2018 or later. 198. Neither at the time she was admitted to a nursing facility in 2008 nor when she
applied for the HCS waiver program in September 2010 were Ms. Ferrer or her parents provided with information on feasible alternatives to nursing facility care.
199. Since being placed in ManorCare, Ms. Ferrer's condition has deteriorated. She has become less communicative, cries frequently, has developed behavioral issues requiring medication, and spends most of her waking hours sitting in a chair by the nurses' station.
200. There was no reason for Ms. Ferrer to be confined in a segregated nursing facility. She is very independent and able to take care of most of her daily living needs. She would like to live in an integrated community setting where she could meet new people, go to the movies, go shopping, and otherwise interact with the outside world. She is also interested in obtaining the training and support so that she could go back to work.
201. On December 20, 2012 her wish was finally realized, when she moved from the
nursing facility to her new home in the community. Nevertheless, because of her disabilities, she remains at risk of re-institutionalization in a nursing facility.
(5) Benny Holmes 202. Plaintiff Benny Holmes is an individual with developmental disabilities, specifically mental retardation and the related condition of cerebral palsy.
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203. Mr. Holmes resided at the Renaissance at Kessler Park nursing facility from January 2009 when he was discharged from a local hospital following an admission for treatment related to his epilepsy, weight loss, and hydration issues until late December 2010.
204. Until Mr. Holmes was a young adult, he lived at home and attended public high school. Not only did he attend school regularly, but he also participated in school-related activities, including frequently going to school athletic events and attending his senior prom.
205. Mr. Holmes continued to receive special educations services from the Dallas Independent School District until he was 21 years old. He lived at home with his mother and legal guardian, Priscilla Holmes, during this period.
206. Mr. Holmes mother, who is a single parent, had to work to support herself and her son. When Mr. Holmes' special education services terminated, his mother was not able to both work and care for him during the day. As a result, Mr. Holmes was placed at the Dallas Health and Rehabilitation Center, where he remained for approximately one year.
207. After about one year at the Dallas Health and Rehabilitation Center, the local Mental Retardation Authority in Dallas determined that Mr. Holmes' needs could be more appropriately met in a community-based setting. He was provided with a HCS-waiver slot which enabled him to transfer from the nursing facility to a three bedroom home in the community where he lived for approximately nine years.
208. During the nine years that Mr. Holmes resided in the community, he attended day habilitation programming, went to the movies, and participated in other community outings. While he is unable to talk, he could and did communicate with others using sounds and gestures. He is also not able to walk. While in the community, he had a wheelchair which provided him with the ability to move around.
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209. After successfully residing in the community for approximately nine years, Mr.
Holmes was admitted to a local hospital because of problems he was having with his epilepsy,
hydration, and weight loss. Following his treatment at the hospital, he was not discharged back to his community residence, but rather was transferred in January 2009 to the Renaissance at Kessler Park nursing facility.
210. Shortly after his admission, a preadmission screening and resident review (PASRR) form was filled out regarding his admission. That Level I PASRR screen indicated that Mr. Holmes did not have a developmental disability, even though the Renaissance's own admission form indicates that he has a history of mental retardation and cerebral palsy. That PASRR form also indicated that Mr. Holmes did not need specialized services.
211. Because the Level I PASRR screen incorrectly indicated that Mr. Holmes did not have a developmental disability, no Level II PASRR assessment of Mr. Holmes was undertaken by either DADS or the local Mental Retardation Authority to determine his interest in and ability to reside in a less restrictive community setting, or his need for and interest in specialized services.
212. While Mr. Holmes had a HCS-waiver slot when he was admitted to Renaissance and could have used that waiver slot to move back to a community-based setting, neither he nor his mother was advised by the defendants or anyone else of feasible alternatives to placement in a nursing facility.
213. Not only did no one advise Mr. Holmes or his mother and legal guardian of the options available to him under the HCS waiver and other available Medicaid programs and services to avoid a nursing facility placement, but Renaissance nursing facility staff repeatedly
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informed Mr. Holmes' mother that a community-based waiver program would not be appropriate for him.
214. Renaissance staff told Mr. Holmes' mother that a community-based placement was not appropriate without ever contacting the local mental retardation authority, the agency responsible for determining whether or not a community-based alternative would be appropriate. This was never done in part because Renaissance failed to conduct a Level II PASRR assessment, as required by federal law.
215. The Renaissance nursing facility staff also told Mr. Holmes' legal representatives from Advocacy, Incorporated that he was not appropriate for a community-based placement. When representatives from Advocacy, Incorporated suggested that Mr. Holmes could possibly qualify for and benefit from a HCS Medicaid waiver slot, Renaissance nursing facility staff continued to assert that a community placement was inappropriate, notwithstanding having never contacted a Medicaid waiver provider for information about community-based alternatives.
216. On information and belief, Mr. Holmes' initial HCS provider, Dallas MetroCare, contacted the Renaissance nursing facility regarding the possibility of Mr. Holmes moving to a small residential home in the community with his HCS-waiver slot, which they were still holding for him. Dallas MetroCare was told by the Renaissance nursing facility that Mr. Holmes was not appropriate for such a setting.
217. On information and belief, Renaissance nursing facility staff told MetroCare that Mr. Holmes' mother never visited her son, despite the fact that she regularly visited him. In addition, in response to requests from MetroCare for Ms. Holmes' telephone number, Renaissance never provided Dallas MetroCare with a working phone number for Ms. Holmes.

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218. Upon information and belief, these statements regarding Mr. Holmes'
appropriateness for community-based care and the frequency of Ms. Holmes' visits were made to MetroCare in order to discourage MetroCare from further pursuing the possibility of providing
Mr. Holmes with support and services in the community through the HCS waiver.
219. As a result of the statements by Renaissance, Dallas MetroCare planned to give
Mr. Holmes' HCS-waiver slot to another applicant on the interest list. However, before this occurred, Advocacy, Incorporated learned that Mr. Holmes' had previously resided in the community through the HCS-waiver program and contacted Dallas MetroCare, providing them with Ms. Holmes' phone number and informing them that, contrary to the nursing facility's claim, Ms. Holmes frequently visits her son at the nursing facility.
220. Dallas MetroCare contacted Ms. Holmes and, after being informed of the
community-based options that were available for her son, Ms. Holmes advised MetroCare that she would like to retain the HCS-waiver slot for her son and develop a plan to transition him back to the community.
221. In response to the information provided by Dallas MetroCare, Ms. Holmes had Mr. Holmes evaluated by an HCS-waiver provider in Dallas in late 2010. That HCS provider
determined that it could meet all of Mr. Holmes health and habilitation needs in a community
setting and recommended a placement is a four bedroom home in a quiet residential neighborhood, where Mr. Holmes would have his own room and live with three other residents.
222. Mr. Holmes moved out of the Renaissance nursing facility to his new residential
placement at 7404 Clover Glen, Dallas, Texas in late December 2010. 223. While Mr. Holmes was not evaluated by a speech or language pathologist or
therapist to determine if he could benefit from any form of assistive augmentative

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communication device or therapy during his time at the Renaissance nursing facility, he is now scheduled to receive such an evaluation at his new community-based group home.
224. After being admitted to the Renaissance nursing facility, Mr. Holmes' condition deteriorated markedly. At the time Mr. Holmes was admitted to the Renaissance nursing facility, he was described as alert, able to follow commands, and an active participant in treatment. But, after only six months at the nursing facility, medical notes indicated that Mr. Holmes rarely, if ever, understands commands from others and no longer is an active participant in his treatment.
225. During the course of his stay at the Renaissance nursing facility, Mr. Holmes became withdrawn and depressed. While he used to be active and participate in community activities, Mr. Holmes spent his days at Renaissance confined to his bed or in a wheelchair in front of the television.
226. Since moving to the community-based group home, Mr. Holmes' condition has markedly improved. He has gained a significant amount of weight and is much more engaged with his parent and caregivers. He also now gets out into the community on a regular basis.
227. Because of his cerebral palsy and epilepsy, Mr. Holmes remains at significant risk of a flare up of these conditions which would require hospitalization and a subsequent discharge
to a nursing facility in the future. (6) Zackowitz Morgan
228. Plaintiff Zackowitz Morgan is a 40 year-old man with developmental disabilities. Mr. Morgan has diagnoses of mental retardation, cerebral palsy, obesity, hypertension, hypothyroidism, glaucoma, and peripheral vascular disease, congestive heart failure and a seizure disorder.
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229. Mr. Morgan has been in living in a nursing facility since January 2008, following his discharge from a hospital where he was treated for a leg infection. Mr. Morgan was admitted into the Katyville Healthcare Center (nursing facility) on January 25, 2008. Upon his admission, Mr. Morgan did not receive a PASRR screen or a comprehensive assessment for specialized services.
230. On January 27, 2009, more than a year after being admitted into his nursing facility placement, Mr. Morgan finally received a PASRR screening. That screening simply indicated that he was appropriate for specialized services.
231. On March 18, 2009, an Inter-Disciplinary Team (IDT) meeting was held at Katyville Healthcare Center. Participants included representatives from the nursing facility, Mr. Morgan's guardian, and his legal coUnsel. There was no representative from Harris County
Mental Health and Mental Retardation Authority (MHMRA), the county branch of the state
agency responsible for providing specialized services and community services. The IDT determined that Katyville Healthcare could not meet Mr. Morgan's specialized services needs related to his mental retardation. In addition, the IDT also determined that a nursing facility was not an appropriate placement for him.
232. In July 2009, Mr. Morgan was transferred to the Silver Springs Healthcare Center
at the request of his guardian. 233. Almost nine months after Mr. Morgan's IDT meeting, a Harris County Mental
Health and Mental Retardation Authority (MHMRA) service coordinator finally visited him at Silver Springs Healthcare Center to perform a needs assessment. That September 16, 2009
assessment determined Mr. Morgan had "...a moderate need for service coordination."
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However, there is no indication that Mr. Morgan has ever received any specialized services, and he is not aware of having received any. He clearly does not receive active treatment.
234. Despite the IDT determination that a nursing facility was not an appropriate placement for Mr. Morgan, the Defendants have not undertaken any steps to assist him in locating an alternative, more integrated setting in which his habilitation and residential assistance needs could be met.
235. Upon information and belief, prior to his nursing home placement, Mr. Morgan lived in a small ICF-MR with three other individuals.
236. In or about 1996, Mr. Morgan applied for and was put on the interest list for a HCS waiver slot. He remained on the HCS interest list until 2001, at which time he was removed from the interest list. Neither he nor his guardian, Sharon Barker, know why he was removed from the HCS interest list in 2001.
237. In or about June 2009, Mr. Morgan again applied for a HCS waiver slot and was put on the HCS interest list on or about June 5, 2009. He requested that his position on the interest list be adjusted to reflect the five years he had already been on the interest list between 1996 and 2001, but was told that such an adjustment was not possible. As a result, in June 2009
he was placed at the bottom of the interest list and, based upon the length of that list, is not likely
to be provided a HCS waiver slot until sometime in 2017 or later. 238. Neither Mr. Morgan nor his guardian was advised by the defendants or anyone
else of feasible alternatives to placement in a nursing facility in 2008 when he was admitted to Katyville Healthcare Center.
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239. Neither Mr. Morgan nor his guardian was advised by the defendants or anyone else of feasible alternatives to placement in a nursing facility in July 2009 when he was transferred to Silver Springs Healthcare Center.
240. Mr. Morgan is an individual with an extremely outgoing personality. Living in the community would afford him a variety of opportunities that institutional living precludes, including meeting and socializing with people and pursuing his desire to work. Prior to his nursing home placement, Mr. Morgan participated regularly in a vocational workshop operated by EduC are of Texas.
241. Since moving to a nursing facility placement, Mr. Morgan has regressed. He is no longer participating in EduCare workshops. He has gained a significant amount of weight,
and is no longer ambulatory and now uses a wheelchair. In terms of daily living activities, Mr.
Morgan can no longer self-transfer or self-toilet, tasks that he could perform prior to his nursing facility placement. He now must wear diapers.
242. Mr. Morgan is both frustrated and depressed about the deterioration of his health, his inability to participate in social activities outside of the nursing facility, and his goal of being employed. At the nursing facility he receives no vocational support or training. He spends all of his waking hours in institutional rooms with little to do or engage him.
(7) Maria Hernandez 243. Maria Hernandez is a 22 year-old woman with developmental disabilities, specifically mental retardation and the related condition of epilepsy, as well as a number of medical conditions.
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244. Although she cannot speak, Ms. Hernandez can communicate by making sounds and facial expressions. She is not able to walk and therefore uses a wheelchair for mobility. She can manipulate objects with her left hand.
245. Ms. Hernandez resides at Meridian Care, a nursing facility located in San Antonio, Texas. Prior to living at Meridian Care, she lived at Esperanza, an intermediate care facility for children with intellectual and developmental disabilities, in Austin, Texas. She was admitted to Meridian Care in 2007 after Esperanza closed.
246. Prior to being admitted to Esperanza, Ms. Hernandez lived at home with her mother and her siblings. As Ms. Hernandez got older, her mother determined that she could no longer meet Ms. Hernandez's complex medical needs at home and admitted her to Esperanza. When Esperanza closed, her mother was not able to care for her at home, and, therefore, reluctantly admitted Ms. Hernandez to Meridian.
247. In spite of her long-standing diagnosis of mental retardation and cerebral palsy, the Level I PASRR screens in Ms. Hernandez's records contain inconsistent information. In
many cases the screens are inaccurate, incomplete, or left blank. 248. Because Ms. Hernandez has not been consistently accurately identified as an
individual with a developmental disability, she was never given a PASRR Level II assessment to
determine whether her needs could be properly met in the community or if she could benefit from specialized services, and if so, the type and intensity of these services.
249. Since being placed at Meridian Care, Ms. Hernandez has deteriorated. For example, while at Meridian, her spine began to curve and impair her ability to breathe. She had surgery to straighten her back to enable her to breathe more easily. Following the surgery,
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however, she was not been provided the necessary follow-up therapy, and consequently, her spine began to again curve to the side and she again having problems breathing.
250. Since she has been at Meridian Care, Ms. Hernandez has been neglected. On a number of occasions, the Meridian staff members failed to provide her with adequate assistance
with her activities of daily living. Consequently, she was sent to school without proper bathing and wearing dirty clothing. The Meridian staff also neglected her further by failing to keep the area where her G-tube is inserted clean. This resulted in the development of an infection for
which she needed hospitalization.
251. As a result of being at her nursing facility, Ms. Hernandez is needlessly
segregated and isolated from the community. She has no regular activities at her nursing facility, and she is no longer eligible to attend school in the local school district, as she is now 22 yearsold. With the exception of occasionally attending church and visiting with her family, Ms. Hernandez spends the vast majority of her time either confined to her bed or in a chair in her room watching television.
252. In 2007, Ms. Hernandez applied for HCS waiver and was placed on the HCS interest list. She is number 1,219 on the list and she has not yet been offered a HCS waiver slot.
253. Ms. Hernandez and her mother and legal guardian, were not informed of any feasible alternatives to a nursing home placement at or about the time of her admission to her nursing facility.
254. Ms. Hernandez and her mother would like for Ms. Hernandez to live in an integrated community placement where she could more readily see her family, participate in community activities, and otherwise interact with the outside world.
(8) Vanisone Thongphan
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255. Vanisone Thongphanh is a 34 year-old man with significant developmental disabilities, including mental retardation and cerebral palsy. He also has medical conditions including diabetes, dysphyagia, and acute pulmonary edema, among others.
256. Because Mr. Thongphanh is unable to walk, he uses a wheelchair for mobility. Although he cannot talk, Mr. Thongphanh does not like to be isolated and enjoys socializing and participating in activities with others. He especially enjoys going to parties and listening to music. His former HCS community provider is active in his life and visits him regularly at his nursing facility.
257. Mr. Thongphanh was admitted to the Arlington Residence Rehabilitation Center in November of 2007 from a hospital where had been treated for aspiration and pneumonia. It was initially expected that he would remain at the nursing facility for a short period of rehabilitation immediately following his hospitalization, and then return to his HCS-funded community placement. Because he remained on a ventilator longer than was anticipated and had to stay at the nursing facility for an extended period of time, Mr. Thongphahn lost his HCS waiver slot.
258. In spite of his long standing diagnosis of developmental disabilities, including mental retardation and cerebral palsy, Mr. Thongphanh's PASRR Level I screens have inconsistently identified him as: 1) not having a developmental disability and not in need of specialized services; 2) having a developmental disability and not needing specialized services;
and as 3) having a developmental disability and needing specialized services. 259. Because Mr. Thongphanh has not been consistently or accurately identified as an
individual with a developmental disability, he was never given a PASRR Level II assessment to
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determine whether his needs could be properly met in the community or whether he could
benefit from specialized services, and if so, the type and intensity of such services. 260. Except for the receipt of a specialized wheelchair, Mr. Thongphanh has not been
provided with any of the other specialized services that he needs. These services include
physical therapy, occupational therapy, and speech therapy. 261. When Mr. Thongphanh lived in the community, he participated in a day
habilitation program every weekday. He also regularly attended dinners with his fellow group home residents and participated in weekly community activities, including going to baseball games, fairs and taking walks. Since moving to the nursing facility, Mr. Thongphanh has been segregated and isolated from the community. His activities are limited to nursing facility-related activities, including watching television and going outside to spend time on facility property. He
has almost no opportunity to interact with individuals outside of his nursing facility. 262. In 2011, Mr. Thongphanh applied for HCS waiver and was placed on the HCS
interest list. He has not yet been offered a HCS waiver slot. 263. Mr. Thongphanh was not informed of any feasible alternatives to a nursing home
placement at or about the time of his admission to his nursing facility. 264. Mr. Thongphanh's next friend, Paul Mastin would like Mr. Thongphan to move to
the community so that he can do the things that he was able to do when he lived in the community before living at his nursing facility and so that he can interact with the overall community.
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(9) Melvin Oatman 265. Melvin Oatman is a 49 years-old. Mr. Oatman has a disability (AIDS) which he
contracted before the age of 22. Mr. Oatman also has impaired speech, glaucoma, problems with
coordination, and seizure disorder, among other medical conditions. 266. Mr. Oatman can walk independently and perform his activities of daily living
with minimal assistance. Mr. Oatman has a high school diploma and has previous work experience as a janitor. He is friendly and enjoys socializing with others.
267. Mr. Oatman currently resides at the Renaissance at Kessler Park Nursing Facility in Dallas, Texas. He has resided there since October of 2007. Mr. Oatman was homeless prior to living at the nursing facility. He then became ill and was hospitalized. Following his hospitalization in October of 2007, Mr. Oatrnan was admitted to the nursing facility as a hospice patient, as he was only expected to live for up to six months. Since that time, however, his health has improved and he is no longer a hospice patient.
268. Mr. Oatman's PASRR Level I screens incorrectly indicate that Mr. Oatman does not have a related condition to a developmental disability and that he does not need specialized services.
269. Because he has never been correctly identified as having a condition related to developmental disability, he has never been given a PASRR Level II assessment to determine his whether his needs could be properly met in the community or whether he could benefit from
specialized services, and if so, the type and intensity of such services.
270. Mr. Oatman is extremely bored at his current nursing facility. He is confined to the nursing facility most days, with the exception a once a month trip to Wal-Mart.

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271. Mr. Oatman would like a job so that he can have money to spend on social activities in the community, such as eating in restaurants. Prior to moving to his nursing facility, he would like to do similar work to his prior employment as a janitor.
272. Because he does not have an intellectual disability, Mr. Oatman does not qualify for Texas HCS waiver program. Additionally, the Texas Medicaid waivers for which he does qualify are insufficient to meet his needs, because they do not include a housing component which he needs in order to move to the community.
273. Mr. Oatman did not receive any information about feasible alternatives to a nursing home placement at or about the time of his initial admission to his nursing facility.
274. He has not received any discharge planning from his nursing facility. 275. Mr. Oatman would like to move to the community to live near his cousin. He
would also like to get ajob and participate daily in the community activities of his choosing.
(10) Richard Krause 276. Richard Krause is a 32 year-old man with a traumatic brain injury resulting from a car accident that occurred when he was 21. He has a seizure disorder, chronic liver disease, and other medical and psychiatric conditions. 277. Although his speech is impaired, Mr. Krause can express his thoughts and
wishes. He can participate in different activities. He can perform some of his activities of daily living, with assistance of others. Mr. Krause was a good student and has a high school diploma.
He is also a talented artist. 278. Mr. Krause was hospitalized following his car accident. After hospitalization, he
was briefly admitted to a nursing facility in Victoria, Texas. Because this facility was not able to meet his treatment needs, Mr. Krause was admitted to a rehabilitation facility, Warm Springs
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Rehabilitation, a rehabilitative hospital in Victoria Texas. While at Warm Springs, Mr. Krause received extensive rehabilitative therapies including physical, occupational and speech therapy.
As a result, he was able to independently perform his activities of daily living, his speech improved, and he was able to walk with the assistance of the walker. Due to his significant
rehabilitation, Mr. Krause was discharged to live with his parents in their home in Victoria, Texas.
279. While living with his parents, he attended an adult day care program during the week days and regularly participated in a variety of community activities with his family. He
was able to attend to most of his ADLs with minimal assistance, was able to speak, and could
walk using a walker.
280. Mr. Krause lived with his family until his father could no longer take care of Mr. Krause due to his own health problems and the demands of his employment. His father reluctantly admitted Mr. Krause to Amber Oaks Assisted Living, a nursing facility in San Antonio, Texas. He resided there for approximately eight years.
281. While at Amber Oaks, Mr. Krause began to languish and was not given the appropriate medications. Mr. Krause's father grew concerned about his health and safety and transferred him to the Retama Manor South, a nursing facility in Pleasanton, Texas.
282. Mr. Krause resided at the Retama Manor South for approximately three months. While at Ratama Manor South, Mr. Kruase again languished and was overmedicated. Mr. Krause's father then transferred him to Southeast Nursing and Rehabilitation, another nursing facility in San Antonio. After two months, Southeast Nursing and Rehabilitation administrators determined that they would no longer care for Mr. Krause. He was then transferred to the River
City Care Center in San Antonio, Texas, where he has resided since September of 2011.

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283. Mr. Krause's PASRR Level I screens incorrectly indicate that he does not have a related condition to a developmental disability and that he does not need specialized services.
284. Because he has never been correctly identified as having a condition related to a developmental disability, he has never been given a PASRR Level II assessment to determine whether his needs could be properly met in the community or whether he could benefit from
specialized services, and if so, the type and intensity of such services.
285. Although Mr. Krause has received some speech, occupational, and physical therapy since his admission to the River City Care Center, this therapy was insufficient to meet Mr. Krause rehabilitative needs. Consequently, Mr. Krause has physically and cognitively deteriorated. He is no able longer to walk with his walker and must now use a wheelchair. He is also no longer able to feed himself because his left arm has grown unsteady; his speech has become more impaired; his short term memory has declined; and he has become depressed.
286. Mr. Krause is isolated and segregated from the community. He is rarely given opportunities to leave his nursing facility to participate in community activities. He spends most
of his time in his room. For the vast majority of the time, the only socialization that he is
afforded is with other residents in the nursing facility who are substantially older than he. 287. Because he has a developmental disability but not an intellectual disability, he
does not qualify for Texas HCS waiver program. Additionally, the Texas Medicaid waivers he qualifies for are insufficient to meet his needs because they do not include a housing component which he needs in order to move to the community.
288. Neither Mr. Krause, nor his father received any information about feasible
alternatives to a nursing home placement at or about the time of his initial admission to his first nursing facility or at or about the time of his admission to subsequent nursing facilities.
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289. Mr. Krause has not received any discharge planning from his nursing facility. 290. Mr. Krause and his father would like Mr. Krause to move to the community so that he could participate in various activities in the community such as going to sporting events and socializing with others his age. He would like to get a job. By moving to the community,
Mr. Krause could also receive all of the therapies in sufficient amount, scope and duration that he needs in order to avoid or prevent further deterioration of his mental and physical conditions.
(11) Michael Mc Burney 291. Michael Mc Burney is a 29 year old man with a developmental disability, schizophrenia, anxiety, blindness, and a number of medical conditions including aphasia, hypertension, tachycardia, among others. 292. Mr. Mc Burney is eligible to receive services for individuals with intellectual and developmental disabilities from the Alamo Local Authority. He has limited verbal abilities but can nod his head in responses to yes or no questions. He is able to walk on his own and enjoys walking outside. 293. Mr. Mc Burney currently resides at the River City Care Center located in San Antonio Texas. He was admitted to the River City Care Center in February of 2013 from the Retama South Manor, a nursing facility in Pleasanton, Texas, after residing there for several weeks. He was transferred to River City Care Center because the Retama South Manor administrators determined that they would no longer serve him. Before living at Retama South Manor, Mr. Mc Burney resided for approximately two days at Retama West Manor in Jourdanton, Texas. 294. Prior to his admission to Ratama West Manor, Mr. Mc Burney resided in the community with his younger brother and his caretaker and next friend, Estelle Le Master. He
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lived with Ms. Le Master for nine years after his mother abandoned him and his brother in 2004. When Mr. Mc Burney lived in the community with Ms. Le Master, he attended school, enjoyed shopping, dancing, and participating in other community activities.
295. Mr. Mc Burney became ill in December of 2012 as a result of having what his
doctors believe was a stroke. At this time, Mr. Mc Burney lost his ability to see and soon thereafter lost other skills, including the ability to talk and to dress and groom himself He also
became incontinent. Because of Mr. Mc Burney's increasing support and supervision needs, Ms.
Le Master determined that she could no longer care for him at her home and felt that she had no choice but to admit him into a nursing facility.
296. Although his PASRR Level I has identified him as having a developmental disability, Mr. Mc Burney has not been given a PASRR Level II assessment to determine whether his needs could be properly met in the community or whether he could benefit from
specialized services, and if so, the type and intensity of such services.
297. In 2013, Mr. Mc Burney applied for HCS waiver and was placed on the HCS interest list. He has not yet been offered a HCS waiver slot.
298. Neither Mr. Mc Burney, nor his former care provider and next friend, Ms. Le Master, were informed of any feasible alternatives to a nursing home placement at or about the time of his admission to his nursing facility.
299. He has received no discharge planning from his current nursing facility. 300. Mr. Mc Burney is unhappy at his nursing facility and would very much like to return to live in the community.
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(12) Leon Hall 301. Leon Hall is a 59 year-old man with moderate mental retardation, depression, and a number of chronic medical conditions, including obstructive chronic bronchitis, asthma, and other problems. 302. Mr. Hall is able to walk and can communicate his thoughts, feelings and needs
verbally. He is able to independently perform most of his activities of daily living, except that he needs some assistance with bathing because of his need for intermittent oxygen. He enjoys
socializing with others and attending church. 303. Mr. Hall currently resides at Terrace West Nursing & Rehabilitation, a nursing
facility in Midland, Texas where he has resided since June of 2010. Prior to living at Terrace
West, Mr. Hall resided at the Parks Methodist Retirement Village ("Park Methodist"), a nursing facility in Odessa.
304. Before being admitted to Parks Methodist, Mr. Hall resided at "Henry's Turkey
Service" a now-closed a turkey farm and processing plant in Atalissa, Iowa.
305. While at Henry's Turkey Service, Mr. Hall was subjected to approximately 30 years of abuse, neglect, and forced labor at grossly substandard wages processing turkeys and doing chores at a "bunkhouse," where he lived with approximately 20 other men with intellectual disabilities. These other men also worked for Henry's Turkey Service. The "bunkhouse" was a dilapidated old school with faulty wiring and boarded windows that was poorly heated, had a leaky roof, and was infested with roaches and mice.
306. While living at Henry's Turkey Service, Mr. Hall was segregated and isolated from the community. Virtually the only social interaction that he had for approximately the 30 years that he was at Henry's Turkey Service was with the other men with intellectual and

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developmental disabilities with whom he lived and worked, other workers at Henry's Turkey Services, and his abusers.
307. Mr. Hall was moved from Henry's Turkey Service to Texas and placed in the Parks Methodist nursing facility on or about August of 2008, and resided there until June of 2010. He was then transferred to Terrace West. The nephew of the owner of Henry's Turkey Service is the administrator of Terrace West.
308. Although his initial PASRR Level I has identified him as having a developmental disability, Mr. Hall's subsequent PASRR Level I screens have inconsistently identified him as:
1) not having a developmental disability and not in need of specialized services; 2) having a
developmental disability and not needing specialized services; and as 3) having a developmental disability and needing specialized services.
309. Because Mr. Hall has not been consistently or accurately identified as an individual with a developmental disability he did not receive a PASRR Level II assessment to determine whether his needs could be properly met in the community or whether he could
benefit from specialized services, and if so, the type and intensity of such services.
310. Since his admission to Terrace West, Mr. Hall has not received any specialized services that he needs to improve his functioning and prevent his deterioration.
311. As a result of his placement at his nursing facility, Mr. Hall is isolated and
segregated from the community. Mr. Hall is not provided with regular opportunities to socialize
with others outside of the nursing facility. He rarely leaves the nursing facility, except for occasional outings under the supervision of nursing facility staff. He attends nursing facility activities and spends most of his time in his room with his roommate watching television. He
has no family living in the area near his nursing facility and almost never receives any visitors.
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312. In 2013, Mr. Hall applied for HCS waiver and was placed on the HCS interest list. He has not yet been offered a HCS waiver slot.
313. Mr. Hall was not informed of any feasible alternatives to a nursing home placement at or about the time of his admission to the Parks Methodist or Terrace West nursing
facilities. 314. Mr. Hall has received no discharge planning from the Parks Methodist or Terrace
West nursing facilities. 315. Mr. Hall would like to move from his nursing facility to live in the community.
He would like to receive supported living services and live in an apartment with a friend who lives with him at his nursing facility, so that he could have the freedom to go and come from his apartment as he pleases and participate in community activities of his choosing, including attending sports events, going to movies and shopping, attending church and interacting generally with the community.
(13) Leonard Barefield 316. Leonard Barefield is a 68 year-old man with a developmental disability, depression and other mental health conditions, high blood pressure and other medical conditions. Mr. Barefield also has a hearing impairment for which he uses a hearing aide. He also has significantly impaired speech. 317. Mr. Barefield can read, write and drive a truck. He can walk and perform all of
his activities of daily living independently. He is friendly and enjoys socializing with others. 318. Mr. Barefield currently resides at Terrace West Nursing & Rehabilitation, a
nursing facility in Midland, Texas. Before being admitted to Terrace West, Mr. Barefield

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resided at "Henry's Turkey Service" a now-closed turkey farm and processing plant in
Atalissa, Iowa. 319. While at Henry's Turkey Service, Mr. Barefield was subjected to approximately
30 years of forced labor at grossly substandard wages processing turkeys. He was also abused and neglected at Henry's Turkey Service. He was forced to live in a "bunkhouse" with approximately 20 other men with intellectual disabilities who also worked for Henry's Turkey Service. The "bunkhouse" was a dilapidated old school with faulty wiring and boarded windows that was poorly heated, had a leaky roof, and was infested with roaches and mice.
320. While living at Henry's Turkey Service, Mr. Barefield and was segregated and isolated from the community. Virtually the only social interaction that he had for approximately the 30 years that he was at Henry's Turkey Service was with the other men with intellectual and developmental disabilities with whom he lived and worked, other workers at Henry's Turkey Service, and his abusers.
321. Mr. Barefield was moved from Henry's Turkey Service to Texas and placed in the Terrace West nursing facility in December of 2008. He has continued to reside at Terrace West since that time. The nephew of the owner of Henry's Turkey Service is the administrator of Terrace West.
322. Although his initial PASRR Level I has identified him as having a developmental disability, Mr. Barefield's subsequent PASRR Level I screens have inconsistently identified him as: 1) not having a developmental disability and not in need of specialized services; 2) having a developmental disability and not needing specialized services; and as 3) having a developmental disability and needing specialized services.
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323. Because Mr. Barefield has not been consistently or accurately identified as a person with a developmental disability, Mr. Barefield has not been given a PASRR Level II assessment to determine whether his needs could be properly met in the community or whether
he could benefit from specialized services, and if so, the type and intensity of such services.
324. Since his admission to Terrace West, Mr. Barefiled has not received the specialized services that he needs to improve his functioning and prevent his deterioration. For example, although Mr. Barefield has severely impaired speech, he has not been provided with speech therapy to help him speak more clearly.
325. Since his admission to Terrace West, Mr. Barefield has also developed an unsteady gait and is now experiencing difficulty walking. He has not been provided with any specialized services to assist him in addressing this problem or to prevent his mobility skills from deteriorating
326. As a result of his placement at his nursing facility, Mr. Barefield is isolated and
segregated from the community. He is not provided with regular opportunities to socialize with
others outside of his nursing facility. He rarely leaves the nursing facility, except for occasional outings under the supervision of nursing facility staff. He has no family living near him and
almost never receives any visitors. 327. In 2013, Mr. Barefield applied for HCS waiver and was placed on the HCS
interest list. He has not yet been offered a HCS waiver slot.
328. Mr. Barefield was not informed of any feasible alternatives to a nursing home placement at or about the time of his admission to his nursing facility.
329. Mr. Barefield has received no discharge planning from his nursing facility.

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330. Mr. Barefield would like to move from his nursing facility to live in his own apartment with supported living services in the community so that he could have the freedom to go and come from his home as he pleases. He would also like to participate in community activities, including attending sports events, going to movies and going shopping, among other community activities and interact with the community.
(14) Tommy Johnson 331. Tommy Johnson is 60 year-old man with a developmental disability, dementia, mental health conditions, and cataracts. Mr. Johnson also has impaired speech. 332. Although Mr. Johnson has problems with his speech, he is able to articulate his
thoughts, feelings, needs and desires. He is able to walk and perform all of his activities of daily
living independently. 333. Mr. Johnson currently resides at Terrace West Nursing & Rehabilitation, a
nursing facility in Midland, Texas. Before being admitted to Terrace West, Mr. Johnson resided
at "Henry's Turkey Service" a now-closed a turkey farm and processing plant in Atalissa,
Iowa.
334. While at Henry's Turkey Service, Mr. Johnson was subjected to approximately 30 years of forced labor at grossly substandard wages processing turkeys. Mr. Johnson was physically and psychologically abused, including being handcuffed to a bed and beaten, and neglected at Henry's Turkey Service. He was forced to live in a "bunkhouse" with approximately 20 other men with intellectual disabilities who also worked for Henry's Turkey Service. The "bunkhouse" was a dilapidated old school with faulty wiring and boarded windows that was poorly heated, had a leaky roof, and was infested with roaches and mice.

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335. While living at Henry's Turkey Service, Mr. Johnson and was segregated and isolated from the community. Virtually the only social interaction that he had for approximately the 30 years that he was at Henry's Turkey Service was with the other men with intellectual and developmental disabilities with whom he lived and worked, other workers for Henry's Turkey Services, and his abusers.
336. Mr. Johnson was moved from Henry's Turkey Service to Texas and placed in the Terrace West nursing facility in December of 2008. He has continued to reside at Terrace West since that time. The nephew of the owner of Henry's Turkey Service is the administrator of Terrace West.
337. Although his initial PASRR Level I identified him as having a developmental disability, Mr. Johnson's subsequent PASRR Level I screens have inconsistently identified him
as: 1) not having a developmental disability and not in need of specialized services; 2) having a
developmental disability and not needing specialized services; and as 3) having a developmental disability and needing specialized services.
338. Because he was not consistently or accurately identified as having a developmental disability, Mr. Johnson has not been given a PASRR Level II assessment to determine whether his needs could be properly met in the community or whether he could
benefit from specialized services, and if so, the type and intensity of such services. 339. Since his admission to Terrace West, Mr. Johnson has not received the specialized
services that he needs to improve his functioning and prevent his deterioration. For example, although Mr. Johnson has impaired speech, he has not been provided with speech therapy to help him speak more clearly.
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340. Since his admission to Terrace West, Mr. Johnson has developed maladaptive behaviors including rummaging in ashtrays and chewing on cigarette butts. He has not, however, been provided with any specialized services to assist him in addressing these problems.
341. As a result of his placement at his nursing facility, Mr. Johnson is segregated and
isolated from the community. Since the time he was admitted to Terrace West, Mr. Johnson has
not been provided with regular opportunities to socialize with others outside of his nursing
facility. He rarely leaves the nursing facility, except for occasional outings under the supervision of nursing facility staff. He has no family living near him and almost never receives any visitors.
342. In 2013, Mr. Johnson applied for HCS waiver and was placed on the HCS interest list. He has not yet been offered a HCS waiver slot.
343. Mr. Johnson was not informed of any feasible alternatives to a nursing home placement at or about the time of his admission to his nursing facility.
344. Mr. Johnson has received no discharge planning from his nursing facility. 345. Mr. Johnson would like to move from his nursing facility to live in the community. He would like to receive supported living services and share an apartment with his friend, who lives with him at his nursing facility. He would also like to have the opportunity to make decisions about what he would like to do each day and to participate in community activities of his choosing.
(15) Johnny Kent 346. Johimy Kent is 63 year-old man with a developmental disability, dementia, and medical conditions including high blood pressure and arthritis. 347. Mr. Kent also has impaired speech but is able to articulate his thoughts, feelings, needs and desires. Mr. Kent is also able to walk and independently attend to most of his
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activities of daily living, including eating, hygiene, and dressing. }-Ie is friendly, likes to work,
and enjoys socializing with others. 348. Mr. Kent currently resides at Terrace West Nursing & Rehabilitation, a nursing
facility in Midland, Texas. Before being admitted to Terrace West, Mr. Kent resided at "Henry's
Turkey Service" a now-closed turkey farm and processing plant in Atalissa, Iowa.
349. While at Henry's Turkey Service, Mr. Kent was subjected to approximately 30 years of forced labor at grossly substandard wages processing turkeys. Mr. Kent was abused and neglected at Henry's Turkey Service. He was forced to live in a "bunkhouse" with approximately 20 other men with intellectual disabilities who also worked for Henry's Turkey Service. The "bunkhouse" was a dilapidated old school with faulty wiring and boarded windows that was poorly heated, had a leaky roof, and was infested with roaches and mice.
350. While living at Henry's Turkey Service, Mr. Kent and was segregated and isolated from the community. Virtually the only social interaction that he had for approximately the 30 years that he was at Henry's Turkey Service was with the other men with intellectual and developmental disabilities with whom he lived and worked, other workers at Henry's Turkey Service, and his abusers.
351. Mr. Kent was moved from Henry's Turkey Service to Texas and placed in the Terrace West nursing facility in December of 2008. He has continued to reside at Terrace West since that time. The nephew of the owner of Henry's Turkey Service is the administrator of Terrace West.
352. Although his initial PASRR Level I identified him as having a developmental disability, Mr. Kent's subsequent PASRR Level I screens have inconsistently identified him as: 1) not having a developmental disability and not in need of specialized services; 2) having a
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developmental disability and not needing specialized services; and as 3) having a developmental disability and needing specialized services.
353. Because he was not consistently or accurately identified as having a developmental disability Mr. Kent has not been given a PASRR Level II assessment to determine whether his needs could be properly met in the community or whether he could
benefit from specialized services, and if so, the type and intensity of such services 354. Since his admission to Terrace West, Mr. Kent has not received the necessary
specialized services that he needs to improve his functioning and prevent his deterioration. For example, although Mr. Kent has impaired speech, he has not received speech therapy necessary to help him speak more clearly.
355. As a result of his placement at his nursing facility, Mr. Kent is, isolated and
segregated from the community. Mr. Kent is not provided with regular opportunities to socialize
with others outside of the nursing facility. He rarely leaves the nursing facility, except for occasional outings under the supervision of nursing facility staff. He has no family living in the
area near his nursing facility and almost never receives any visitors.
356. Mr. Kent is bored at his nursing facility. He spends most of the day sitting at the
front door in a chair greeting people who are entering the facility. 357. Mr. Kent likes to work. At his nursing facility, he helps the facility staff clear the
dining tables after each meal. Mr. Kent would like to have a paying job in the community. 358. In 2013, Mr. Kent applied for HCS waiver and was placed on the HCS interest
list. He has not yet been offered a HCS waiver slot. 359. Mr. Kent was not informed of any feasible alternatives to a nursing home
placement at or about the time of his admission to his nursing facility.
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360. Mr. Kent has received no discharge planning from his nursing facility. 361. Mr. Kent would like to move from his nursing facility to live in the community with supported living services with his friend who lives at his nursing facility. He would like to live in the community so that he could go and come to and from his home as he pleases, get a paying job, and participate in community activities such as attending sports events, going to
movies and shopping, among other community activities of his choosing
(16) Joseph Morrell 362. Joseph Morrell is a 69 year-old man with a developmental disability and glaucoma. Mr. Morrell has wounds on his legs for which he has recently needed medical treatment due to infection. 363. Mr. Morrell can walk and independently perform his activities of daily living. Additionally, although his speech is somewhat impaired, he is able to articulate his thoughts, feelings, and needs. 364. Mr. Morrell currently resides at Terrace West, a nursing facility in Midland, Texas where he has been residing since January of 2013. Prior to his admission to Terrace West, he resided at the Parks Methodist, a nursing facility in Odessa, Texas from on or about December
of 2008 until January of 2013. The nephew of the owner of Henry's Turkey Service is the administrator of Terrace West.
365. Before being admitted to Parks Methodist, Mr. Morrell resided at "Heniy's
Turkey Service" a now-closed turkey farm and processing plant in Atalissa, Iowa.
366. While at Henry's Turkey Service, Mr. Morrell was subjected to approximately 30 years of forced labor at grossly substandard wages processing turkeys. Mr. Morrell was also physically and psychologically abused and neglected at Henry's Turkey Service. He was forced
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to live in a "bunkhouse" with approximately 20 other men with intellectual disabilities who also worked for Henry's Turkey Service. The "bunkhouse" was a dilapidated old school with faulty wiring and boarded windows that was poorly heated, had a leaky roof, and was infested with roaches and mice.
367. While living at Henry's Turkey Service, Mr. Morrell and was segregated and isolated from the community. Virtually the only social interaction that he had for approximately the 30 years that he was at Henry's Turkey Service was with the other men with intellectual and developmental disabilities with whom he lived and worked, other workers at Henry's Turkey Service, and his abusers.
368. Mr. Morrell was moved from Henry's Turkey Service to Texas and placed in the Parks Methodist nursing facility on or about August of 2008. Recently, while at Parks Methodist the wounds on his lower legs and ankles were improperly treated and became infected. Mr. Morrell was hospitalized as a result. In January of 2013, following his discharge from the hospital, he was transferred to Terrace West where he currently resides. The nephew of the owner of Henry's Turkey Service is the administrator of Terrace West.
369. In spite of his long standing diagnosis of developmental disabilities, including mental retardation and Down's Syndrome, Mr. Morrell's PASRR Level I screens have inconsistently identified him as: 1) not having a developmental disability and not in need of
specialized services; 2) having a developmental disability and not needing specialized services; and as 3) having a developmental disability and needing specialized services.
370. Because he has not been consistently or accurately identified as having a developmental disability, Mr. Morrell has not been given a PASRR Level II assessment to
75

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determine whether his needs could be properly met in the community or whether he could
benefit from specialized services, and if so, the type and intensity of such services.
371. Since his admission to Parks Methodist and Terrace West, Mr. Morrell has not received the specialized services that he needs to improve his functioning and prevent his deterioration.
372. As a result of his admission to the Parks Methodist and Terrace West nursing
facilities, Mr. Morrell has been isolated and segregated from the community. He has not been
provided with regular opportunities to socialize with others outside of either nursing facility. He rarely leaves Terrace West, except for occasional outings under the supervision of nursing
facility staff. He has no family living near him and almost never receives any visitors. 373. In 2013, Mr. Morrell applied for HCS waiver and was placed on the HCS interest
list. He has not yet been offered a HCS waiver slot. 374. Mr. Morrell was not informed of any feasible alternatives to a nursing home
placement at or about the time of his admissions to his nursing facilities.
375. Mr. Morrell has received no discharge planning from his nursing facility. 376. Mr. Morrell would like to move from his nursing facility to live in an apartment with a friend who lives with him at Terrace West and receive supported living services in the community. He would also like to participate in community activities including attending sports events--especially football games, going to movies and shopping, among other community activities. VI. LEGAL CLAIMS
First Claim for Relief The Americans with Disabilities Act A. Violation ofthe ADA 's Integration Mandate
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377. The plaintiffs and the members of the plaintiff class are qualified individuals with disabilities within the meaning of the ADA. 42 U.S.C. § 1213 1(2).
378. Title II of the ADA requires that "a public entity shall administer services, programs and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d). Defendants Janek and Weizenbaum, acting in their official capacities, are public entities within the meaning of the ADA.
379. The Individual Plaintiffs and plaintiff class members qualify for and would benefit from community support services available from the Texas Medicaid program. Although community programs are the most integrated setting appropriate to meet their needs, the plaintiffs remain institutionalized in nursing or rehabilitation facilities, or at imminent risk of such institutionalization. By denying plaintiffs and the class access to existing community programs, and by requiring them to be confined in segregated institutional settings in order to receive the care they require, Defendants discriminate against the plaintiffs and class on the basis of their disability in violation of 42 U.S.C. § 12132 and 28 C.F.R. § 35.130(d).

B.

Eligibility Criteria

380. Regulations implementing Title II of the ADA specify that "[a] public entity shall

not impose or apply eligibility criteria that screen out or tend to screen out an individual with a

disability or any class of individuals with disabilities from fully and equally enjoying any service

program, or activity, unless such criteria can be shown to be necessary for the provision of the

service, program, or activity being offered." 28 C.F.R. § 35.130(b)(8).

381. The Defendants have developed and implemented eligibility criteria for their

community-based support services for individuals with developmental disabilities that screen out

or tend to screen out the class of individuals with developmental disabilities who are residing in

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Texas nursing facilities from gaining access to or enjoying those community-based habilitative services and supports in violation of 42 U.S.C. § 12132 and 28 C.F.R. § 35.130(b)(8).
C. Methods ofAdministration 382. Regulations implementing Title II of the ADA provide that "a public entity may not, directly or through contractual or other arrangements, utilize criteria or other methods of administration: (i) that have the effect of subjecting qualified individuals with disabilities to discrimination on the basis of disability; [or] (ii) that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the entity's program with respect to individuals with disabilities ...." 28 C.F.R. § 35.130(b)(3). 383. The Defendants have developed and utilize criteria and methods of administering Texas's long-term care system for persons with developmental disabilities that have the tendency and effect of subjecting the plaintiffs and the class to unnecessary and unjustified segregation on the basis of their disability by, inter alia, failing to inform them of the services, supports and programs that would enable them to reside in a less restrictive, more integrated setting, failing to assess them for such services, supports and programs, failing to offer them a choice of such community-based services, supports and programs, and failing to afford them equal access to such services, supports and programs with other institutionalized individuals on the basis of the nature of their disability and placement, all in violation of 42 U.S.C. § 12132 and 28 U.S.C. § 35.1 30(b)(3). 384. It would not fundamentally alter the Defendants' programs, services, or activities to provide the plaintiffs and the class with the services necessary to allow them to live in the community.

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Second Claim for Relief Section 504 of the Rehabilitation Act 385. The plaintiffs are qualified individuals with disabilities under Section 504 of the
Rehabilitation Act. 29 U.S.C. § 794(a). 386. Defendants receive federal financial assistance to operate the Medicaid Program
and other related programs and services designed to provide medically necessary services and supports to the plaintiff class.
387. The regulations accompanying Section 504 provide that: "[r]ecipients shall administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons." 28 C.F.R. § 41.5 1(d).
388. These regulations further prohibit recipients of federal financial assistance from 'uti1iz[ingI criteria or methods of administration ... (i) [t]hat have the effect of subjecting handicapped persons to discrimination on the basis of handicap; [or] (ii) that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the recipient's
program with respect to handicapped persons." 28 C.F.R. § 41.5 1(b)(3); 45 C.F.R. § 84.4(b). 389. The Individual Plaintiffs and plaintiff class members qualify for and would
benefit from community support services provided by the Defendants. Although the community is the most integrated setting appropriate to meet their needs, the plaintiffs remain
institutionalized in nursing and rehabilitation facilities, or at risk of such institutionalization. By
denying them access to existing community programs, and by requiring that plaintiffs and class members be confined in segregated institutional settings in order to receive needed rehabilitative
services, the Defendants violate Section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a). 390. The Defendants' criteria and methods of administering their system of long-term
services for persons with developmental disabilities subject plaintiffs and the class to illegal
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discrimination and unnecessary segregation in violation of § 504 of the Rehabilitation Act and its

implementing regulations. 391. It would not fundamentally alter the Defendants' programs, services, or activities
to provide the plaintiffs and the class with the services necessary to allow them to live in the

community.

Third Claim for Relief Title XIX of the Social Security Act

A. Reasonable Promptness
392. Title XIX of the Social Security Act requires states to provide Medicaid benefits
to all eligible persons with reasonable promptness and for as long as medically necessary. 42
U.S.C. § 1396a(a)(8); 1396a(a)(l0)(A). Provision of services must not be delayed by the
agencies' administrative procedures. 42 C.F.R § 435.930(a).
393. The Defendants' arbitrary policies, which limit the provision of medically
necessary community-based services and supports, as well as medically necessary specialized
services, result in extended delays and the outright denial of medically necessary care to the plaintiffs and members of the plaintiff class. The residential support, habilitation and other specialized services that the plaintiff class needs are not provided with reasonable promptness, in

violation of 42 U.S.C. § 1396a(a)(8).
B. Freedom o/Choice
394. The Defendants have failed to provide residents of nursing facilities with developmental disabilities with: 1) notice of and equal opportunities to apply for and access medically necessary community-based services; 2) an assessment of their eligibility for such
services; and 3) meaningful choice between institutional and community-based services, in

violation of 42 U.S.C. § 1396n(c)(2)(B) & (C).

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C. Comparability 395. Under federal Medicaid law, persons, like plaintiffs and the class, who are "categorically eligible" for Medicaid benefits based upon their disability and income must be provided with assistance which shall not be less in amount, duration and scope than the medical assistance made available to another "categorically eligible" recipient and shall not be less in amount, duration and scope than the medical assistance made available to other recipients in the program. 42 U.S.C. § 1396a(a)(10)(B)(i) and (ii); 42 C.F.R. § 440.240. 396. By failing to provide Medicaid services, including specialized services and active treatment, to Individual Plaintiffs and members of the plaintiff class who reside in nursing facilities which are comparable to the services provided to similarly-situated individuals such as categorically needy persons who reside in ICF/MRs, the Defendants violate the comparability requirement of the Social Security Act. 42 U.S.C. § 1396a(a)(10)(B).
Fourth Claim for Relief Nursing 1-lome Reform Amendments A. Screening, Assessment and Placement
397. The federal NHRA requires that states develop and implement a PASRR program for all applicants to, and residents of, Medicaid-certified nursing facilities. 42 U.S.C. § 1396r(e)(7); 42 C.F.R. § 483.100 to 483.138. Each state's PASRR program must identify all
individuals who are suspected of having mental illness or developmental disabilities and must
determine whether nursing facility services and other specialized services are necessary. 42 U.S.C. § 1396r(b)(3)(F)(i), 1396r(e)(7)(A)&(B); 42 C.F.R. § 483.128.
398. The Defendants have failed to develop and implement a PASRR program that timely and appropriately screens nursing home applicants for developmental disabilities, assesses
whether the needs of individuals with developmental disabilities could be met in an alternative,
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less restrictive setting than a nursing facility, and advises the applicant or resident of the available alternatives to a nursing home placement in violation of 42 U.S.C. § 1396r(b)(3)(F)(i), 1396r(e)(7)(A) & (B) and 42 C.F.R. § 483.128.
399. The Defendants' failure to appropriately screen all applicants for nursing facility admission for possible developmental disabilities and to then assess whether the needs of those so identified require nursing facility care or, instead, could be met in a more integrated community-based setting has resulted in the inappropriate placement and retention of plaintiffs and many members of the class in nursing facilities in violation of 42 U.S.C. §sS 1396r(e)(7)(B)(ii) & (C) and 42 C.F.R. § 483.132(a).
B. Specialized Services 400. The Level II PASRR assessment must determine whether the applicant or resident requires specialized services and, if so, must provide those specialized services either in the nursing facility or in an alternative appropriate setting. 42 U.S.C. § 1396r(e)(7)(B)(ii)(II) & (C); 42 C.F.R. §S 483.112(b), 483.1 14(b)(2), 483.1 16(b)(2), 483.1 18, 483.120(b). 401. Specialized services for individuals with developmental disabilities must include all services which are needed to implement "a continuous active treatment program, which includes aggressive, consistent implementation of a program of specialized and generic training,
treatment, health services and related services ... that is directed toward(i) The acquisition of
the behaviors necessary for the client to function with as much self determination and independence as possible; and (ii) The prevention or deceleration of regression or loss of current optimal functional status." 42 C.F.R. § 483.440(a)(1), made applicable to nursing facility residents by 42 C.F.R. § 483.120(a)(2).
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402. The intensity, duration and frequency of specialized services must be sufficient to
provide active treatment, using training and qualified staff, to each individual who needs such
services. 42 C.F.R. § 483.440 (c) (f). The scope and breadth of specialized services cannot be
arbitrarily curtailed or limited by the state. 42 C.F.R. § 483.440(c). In addition, the process for planning, providing and monitoring those services must comply with 42 C.F.R. § 483.440 (c) (I).
403. The Defendants have failed to provide a program of active treatment to each resident of a nursing facility who needs specialized services, and have instead arbitrarily and illegally limited these services by regulation to only "physical, occupational, and speech therapy
evaluations and services." 40 Tex. Admin. Code § 19.1303, 19.2500(e)(3). Defendants'
limitation of the scope of specialized services that they will authorize violates 42 U.S.C. § 1396r(b)(3)(F), (e)(7)(B)(ii), (0(8) and 42 C.F.R. § 483.120(a)(2), 483.440.
404. In addition to illegally limiting the scope of specialized services available to class
members, the Defendants have failed to provide even those limited services to almost all members of the plaintiff class. Contrary to the their obligation to provide specialized services, including active treatment, to the class, the Defendants have failed and refused to provide or ensure the provision of needed specialized services to all but 28 members of the class of approximately 4,500 nursing facility residents with developmental disabilities, despite the fact
that experience in other states indicates that over 90% of the class are eligible for and in need of
such services. 405. The Defendants' failure to appropriately assess class members' need for
specialized services, their failure to provide the full range of needed specialized services and active treatment to individual class members and members of the plaintiff class, and their failure
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to ensure that plaintiffs and the class are not inappropriately placed or retained in nursing facilities, violates the NHRA, 42 U.S.C. § 1396r(e)(7) and its implementing regulations, 42 C.F.R. § 483.100 etseq. VII. PRAYERS FOR RELIEF
WHEREFORE, the plaintiffs respectfully request that this Court: 1. certify this case as a class action pursuant to Fed. R. Civ. P. 23; 2. Issue preliminary and permanent injunctions restraining the Defendants, their successors in office, agents, employees and assigns, and all persons acting in concert with them from:
(a) Failing to provide appropriate, integrated community services and supports for all class members, consistent with their individual needs; (b) Failing to make reasonable modifications to the rules and requirements regarding the eligibility for and administration of Texas's community-based services, supports and programs which exclude plaintiffs and the class from the services and supports needed to reside safely in more integrated community-based settings; (c) Failing to provide equal access to medically necessary community-based habilitative mental retardation and developmental disability services to all eligible class members based on their individual needs and medical necessity, and without regard to arbitrary funding or service caps or waiting list requirements; (d) Discriminating against plaintiff class members with developmental disabilities by failing to provide medically necessary habilitation services and supports in the most integrated setting appropriate to their needs;

Case 5:10-cv-01025-OLG Document 173 Filed 07/19/13 Page 85 of 87
(e) Failing to provide medically necessary community-based habilitation services and supports with reasonable promptness and in a comparable manner to all eligible class members; (f) Failing to conduct proper, comprehensive PASRR screens and assessments of class members to determine whether their needs could be appropriately met in a less restrictive setting than a nursing facility, and failing to
inform class members of the results of their PASRR assessment; (g) Failing to assess class members' needs for specialized services; (h) Failing to provide the full array of needed specialized services, at the
frequency, level, intensity, and duration needed to constitute active treatment, to class members as required by the NHRA; and
(i) Arbitrarily restricting the scope of available specialized services.
3. Issue a declaratory judgment declaring that: (a) the Defendants have violated the Americans with Disabilities Act and
Section 504 of the Rehabilitation Act in their implementation and administration of the state Medicaid program and in their failure to make reasonable
modifications to their community programs for persons with developmental
disabilities to enable plaintiffs and members of the class to obtain the services and
supports they require to reside in the most integrated setting appropriate to their needs; (b) the Defendants have violated the Medicaid Act including the comparability, reasonable promptness, and freedom of choice provisions of the Social Security Act governing Medicaid services; and

Case 5:10-cv-01025-OLG Document 173 Filed 07/19/13 Page 86 of 87
(c) the Defendants have violated the Nursing Home Reform Amendments by
failing to properly screen and assess class members' ability to reside in a less
restrictive, more integrated setting than a nursing facility, by their inappropriate
placement of class members in nursing facilities, by their failure to assess class
members' need for specialized services, by their arbitrary restriction on the scope
of available specialized services, and by their failure to provide members of the
plaintiff class with specialized services, including active treatment;
4. Award plaintiffs their reasonable attorneys' fees and costs pursuant to 42 U.s.c.
§ 1988 & 12205 and 29 U.S.C. § 794a; and
5. Grant such other relief which is necessary and proper to protect the federal rights
of the plaintiffs and the class which they represent. DATED this 12th day of March, 2013.
Respectfully submitted,
/s/ Garth A. Corbett Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Disability Rights Texas 2222 West Braker Lane Austin, Texas 78758 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
Yvette Ostolaza State Bar No. 00784703 Robert Velevis Admitted Pro Hac Vice State Bar No. 24047032 Casey A. Burton Admitted Pro Hac Vice State Bar No. 24058791

Case 5:10-cv-01025-OLG Document 173 Filed 07/19/13 Page 87 of 87
Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
Steven J. Schwartz Admitted Pro Hoc Vice Deborah Dorfman Admit/ed Pro Hac Vice Bettina Toner Admitted Pro Hoc Vice Center for Public Representation 22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Attorneys for Plaintiffs

 Case 5:10-cv-01025-OLG Document 174 Filed 07/19/13 Page 1 of 11

CL
IN THE UNITED STATES DISTRICT COURIWE FOR THE WESTERN DISTRICT OF
SAN ANTONIO DIVISION
ERIC STEWARD, by his next friend and mother, Lillian Minor, et. al.
Plaintiffs,

JUL 1 9 2013

V.

RICK PERRY, Governor of the State of
Texas, et. al,
Defendants.

Case No. SA-5:lO-CA-1025-OG

THE UNITED STATES OF AMERICA, Plaintiff-Intervenor,
V.
THE STATE OF TEXAS, Defendant.

PLAINTIFFS' SECOND AMENDED MOTION FOR CLASS CERTIFICATION

I. INTRODUCTION AND MOTION
Eric Steward, Linda Arizpe, Andrea Padron, Patricia Ferrer, Benny Holmes, Zackowitz Morgan, Maria Hernandez, Vanisone Thongphanh, Melvin Oatman, Richard Krause, Michael McBurney, Leon Hall, Leonard Barefield, Tommy Johnson, Johnny Kent, and Joseph Morrell (collectively, the "Named Plaintiffs") move this Court to certify this case as a class action pursuant
to Rule 23 of the Federal Rules of Civil Procedure. In support of their second amended motion,1 the

'The Plaintiffs filed their original Motion for Class Certification, with an accompanying Memorandum, on January 19, 2011 See Dkt. ## 13 and 14. The Court subsequently granted the Defendants' Motion to Abate the Plaintiffs'

Case 5:10-cv-01025-OLG Document 174 Filed 07/19/13 Page 2 of 11

Named Plaintiffs state that:

1.

All of the Named Plaintiffs are Medicaid-eligible individuals with mental retardation

or a related condition2 (collectively referred to as "developmental disabilities") who currently are

confined in nursing facilities in Texas or at risk of being placed in a nursing facility.3 Each Named

Plaintiff is qualified for the community service system that is funded and operated by the

Defendants and prefers to live in a more integrated setting, with appropriate services and supports.

However, each Named Plaintiff (except Mr. Holmes, Ms. Ferrer, Ms. Padron, and Ms. Arizpe)

remains segregated as a result of the Defendants' planning, administration, and funding of their

developmental disability service system, which unduly relies on segregated settings like nursing

facilities, and which denies the Named Plaintiffs and other similarly-situated persons with

developmental disabilities in nursing facilities the opportunity to receive services in the most

integrated setting. The Defendants' operation and funding of their developmental disability service

system violates Title II of the Americans with Disabilities Act (ADA), 42 U.S.C. § 12132 et seq.; 28 C.F.R. § 35.130(d) ci seq., and Section 504 of the Rehabilitation Act, 29 u.s.c. § 794.

Motion for Class Certification (Dkt # 20) and stayed all further proceedings, See Order of September 27, 2011 (Dkt. # 58). This Amended Motion incorporates an analysis of recent decisions of the United States Supreme Court, the Fifth Circuit Court of Appeals, and lower courts on class certification that have been issued since the original motion was filed, It also incorporates additional documents in support of the Amended Motion. Concurrently with this motion, the Named Plaintiffs are also filing their Memorandum of Law in Support of the Amended Motion for Class Certification, which is expressly incorporated herein. On July 9, 2012, with leave of Court, the Plaintiffs filed an Amended Class Motion for Class Certification ("Amended Motion"), an accompanying Memorandum, and supporting declarations and exhibits. See Dkts 94-98. The Defendants filed their Response on August 31, 2012. See Dkt # 125. The Court heard oral argument on the Amended Motion on September 12, 2012, and with leave of Court, the Parties filed supplemental briefing on the Amended Motion on November 12 & 13, 2012. See Dkts # 148, l50,& 151.
2 This Motion incorporates the term "mental retardation or a related condition" as defined and used in the federal PASRR regulations. See 42 C.F.R. § 483.l02(b)(3).
Subsequent to the filing of the Complaint, Named Plaintiff, Benny Holmes, moved from the nursing facility where he had been residing into a small group home in the community. Subsequent to the filing the First Amended and Supplemental Complaint and the Amended Motion for Class Certification and after the hearing on that Motion, Named Plaintiffs Patricia Ferrer, Andrea Padron, and Linda Arizpe moved from the nursing facilities where they had been residing to the community. Since Mr. Holmes, Ms. Ferrer, Ms. Padron, and Ms. Arizpe remain at risk of
readmission to a nursing facility, they continue to be appropriate class representatives.
2

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2. Additionally, each Named Plaintiff has been or is being denied the specialized

services in the nursing facility that are necessary to provide them with active treatment, in violation

of the Nursing Home Reform Amendments (NHRA) to the Medicaid Act, 42 U.S.C. § 1396r(e)(7)
and their implementing regulations, 42 C.F.R. § 483.100 et seq.

3.

This action seeks class-wide injunctive relief under Rule 23(b)(2) of the Federal

Rules of Procedure to end the harm suffered by the Named Plaintiffs and others similarly-situated

who are segregated in nursing facilities and denied active treatment. The Named Plaintiffs seek

injunctive relief to require Rick Perry, Governor of the State of Texas, Kyle L. Janek, M.D.,

Executive Commissioner of the Texas Health and Human Services Commission, and Jon

Weizenbaum, Commissioner of the Texas Department of Aging and Disability Services (the

"Defendants") to fulfill their obligations to the proposed class under Title II of the ADA, Section

504 of the Rehabilitation Act ("Section 504"), and the NHRA by, among other things: (1) providing

all qualified persons with developmental disabilities the opportunity to receive services in the

most integrated setting; (2) making reasonable modifications to the Defendants' community

service system to accommodate the needs of qualified individuals who prefer to live in more

integrated settings; (3) implementing a professionally-adequate screening and assessment

process that will accurately identify individuals with developmental disabilities, including

whether they can be appropriately served in the community; and (4) for those who require

nursing facility care, determining their need for specialized services and providing them with

those services with sufficient frequency, intensity, and duration to constitute active treatment.

4.

The Second Amended Complaint seeks the same relief from the Defendants for

approximately 4,500 other similarly-situated individuals with developmental disabilities who are

living in nursing facilities, and many more who will or should be screened for admission to nursing

3

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facilities in the future. Most of these individuals are unnecessarily segregated in nursing facilities

and would prefer to live in an integrated community setting with appropriate services and supports.

Additionally, most of the proposed class members currently confined to nursing facilities are denied

the specialized services and active treatment that the Defendants are obligated to provide.

5.

The Second Amended Complaint requests that the Court certify a plaintiff class

comprised of all Medicaid-eligible persons over twenty-one years of age with mental retardation

and/or a related condition4 in Texas who currently or will in the future reside in nursing facilities, or

who are being, will be, or should be screened for admission to nursing facilities pursuant to 42

U.S.C. § I 396r(e)(7) and 42 C.F.R. § 483.112 et seq.

6.

The proposed class satisfies the numerosity requirement of Fed. R. Civ. P. 23(a)(1)

because there are over 4,500 persons with developmental disabilities currently segregated in nursing

facilities in Texas, because a significant portion of these individuals have indicated their preference

to leave these institutions, and because there are hundreds of other individuals with developmental

disabilities who are screened and admitted to nursing facilities each year. See Declaration of Garth

Corbett Regarding Exhibits in Support of Plaintiffs' Amended Motion for Class Certification (Dkt

#97), Ex. 1 (DADS response to FOIA request, dated October 26, 2009); Ex. 2 (MDS data on
number of persons with developmental disabilities in nursing facilities, 2010).

7.

Pursuant to Fed. R. Civ. P. 23(a)(2), the proposed class shares several common legal

and factual claims, including:

a.

Whether the Defendants are violating the ADA and Section 504 by: (i)

failing to offer and provide community support services to nursing facility

residents with developmental disabilities that would enable them to live in

The class definition utilizes the phrase "mental retardation and/or a related condition," rather than "developmental disabilities" because this is the current terminology in the federal PASRR regulations. 42 CFR § 483.102(b)(3).

Case 5:10-cv-01025-OLG Document 174 Filed 07/19/13 Page 5 of 11

the most integrated setting appropriate to their needs; (ii) failing to offer

community services to individuals with developmental disabilities who are
at risk of admission to nursing facilities, in order to divert the unnecessary admission of those individuals who could be appropriately served in an

integrated community setting; and (iii) utilizing eligibility criteria and
methods of administration that have the effect of excluding the Named

Plaintiffs and members of the plaintiff class from access to the services

and supports that they need to reside in integrated, community-based

settings;

b. Whether the Defendants are violating the NHRA by: (i) failing to establish

a screening program that accurately determines if persons with

developmental disabilities who apply for admission to a nursing facility

can be appropriately served in a less restrictive community setting; (ii)

failing to conduct professionally acceptable assessments to determine what

specialized services these individuals require; and (iii) failing to provide
an array of specialized services to all persons with developmental

disabilities in nursing facilities who need them, in a manner that satisfies

the federal standard for active treatment; and

c.

Whether the Defendants are violating the federal Medicaid program by: (i)

failing to provide necessary rehabilitative services to the members of the

plaintiff class with reasonable promptness; (ii) denying class members a

choice between receiving medically necessary supports and services in a

segregated nursing facility or an integrated community-based setting,

5

Case 5:10-cv-01025-OLG Document 174 Filed 07/19/13 Page 6 of 11

including failing to provide them with relevant information necessary to

exercise this choice, and (iii) failing to afford them meaningful access to

It

community-based services.

8.

The Defendants have acknowledged, in their biennial reports, legislative budget

requests, and other documents that there are a significant number of individuals with developmental

disabilities in nursing facilities who could safely and appropriately live in integrated community

settings, but numerous obstacles and waiting lists which prevent their moving to integrated

community settings. See Corbett Dccl., Ex. 4 (2010 Biennial Report of Developmental Disabilities

Council); Ex. 5 (2012 Report of the Promoting Independence Advisory Committee; Ex. 6 (2012

DADS Legislative Appropriations Request); Ex. 7 (DADS waiver waiting lists); Ex. 8 (HCBS

eligibility criteria); Ex. 9 (MDS data on persons in nursing facilities who want to leave).

9. The United States Department of Justice, the agency charged by Congress with

the enforcement of the ADA, conducted a "thorough investigation" of Texas' practice of
segregating persons with developmental disabilities in nursing facilities and concluded that

"Texas is in violation of the Americans with Disabilities Act and the Rehabilitation Act as it

relates to issues pending in the Steward v. Perry litigation." See Corbett Dccl., Ex. 10, DOJ

Findings Letter, dated June 15, 2011; United States Complaint in Intervention (Dkt # 137). This

conclusion is based upon DOJ's determination that the State of Texas unnecessarily

institutionalizes individuals with developmental disabilities in nursing facilities and places
individuals who live in the community at risk of placement in nursing facilities.' Id.

10. Mike Bright, the executive director of the Arc of Texas and a member of
numerous DADS advisory committees, task forces, and working groups, concludes that many persons with developmental disabilities in nursing facilities would benefit from community

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services and supports, are qualified for the Defendants' community services programs, and would prefer to live in a community setting. Nevertheless, the Defendants' planning and funding of their community service system prevents these individuals from living in the most integrated
setting. See Declaration of Mike Bright, ¶ 13. 11. The Office of the Inspector General of the federal Department of Health and Human
Services has reviewed Texas' Pre-Admission Screening and Resident Review (PASRR) program that is required by the Medicaid Act, 42 U.S.C. § 1396r(e) and identified numerous deficiencies. See Corbett Decl., Ex. 3 (2007 Preadmission Screening Report). The Defendants acknowledge that
they have no data or reliable information on the number of nursing facility residents with
developmental disabilities who have had received the mandated screening and assessment, or the specialized services, that are required by federal law. See Corbett Decl., Ex. 1.
12. These facts, claims, and evidence set forth a common contention of standardized
conduct that is susceptible to a common answer, and can be remedied by a single injunction. The
Court is not required to make individual determinations of liability or remedy. 13. As required by Fed. R. Civ. P. 23(a)(3), the legal claims, the fact of segregation, and
the harms suffered by the Named Plaintiffs are typical of the class. 14. The Plaintiffs' expert, Karen Green McGowan, R,N., has reviewed the needs of three
of the Named Plaintiffs and determined that all three are qualified for, and would benefit from, placement in an integrated community setting, but continue to suffer similar harms from being segregated in nursing facilities and not being provided needed services. See Declaration of Karen Green McGowan and accompanying expert report.
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15. Ms. McGowan's report on three Named Plaintiffs describes in troubling detail the Defendants' failure to accurately screen, assess, and treat these individuals, and the lack of specialized services and active treatment provided to these individuals. See McGowan report.
16. There is no antagonism or conflict between the Named Plaintiffs and other members of the class. In addition, Disability Rights Texas, Weil, Gotshal & Manges LLP, and the Center for Public Representation are high1y.qua1ified attorneys with considerable experience in assisting persons with disabilities and in class action litigation. Therefore, the requirements of Fed. R. Civ. P. 23(a)(4) are satisfied.
17. Because this is a civil rights action seeking only injunctive relief, and since the Defendants have acted or refused to act on grounds generally applicable to the entire class, thereby making final injunctive and declaratory relief appropriate for the whole class, the proposed class
satisfies the standards of Fed. R. Civ. P. 23(b)(2). 18. There are no other pending actions in any court of which the Plaintiffs are aware
against the Defendants alleging the same or similar causes of action.
19. Counsel for the Named Plaintiffs, Disability Rights Texas, the Center for Public Representation, and Weil, Gotshal & Manges LLP (Plaintiffs' Counsel), have discussed and
thoroughly explained to the Named Plaintiffs the nature of a class action and the potential advantages and disadvantages to the Named Plaintiffs of proceeding in a class action rather than
individually. Prior to filing this action, Plaintiffs' Counsel engaged in extensive settlement negotiations with the Defendants over a period of seven months in an attempt to resolve the issues raised in this litigation. The settlement negotiations focused exclusively on a systemic resolution of
the issues and did not involve negotiations seeking to obtain individual relief for any of the Named
Plaintiffs.
1']
r]

Case 5:10-cv-01025-OLG Document 174 Filed 07/19/13 Page 9 of 11
20. Plaintiffs' Counsel are not aware of any person who has relied on the fact that this action was filed as a class action. Plaintiffs' Counsel intend to pursue this litigation on behalf of the class even if the claims of the current Named Plaintiffs are rendered moot by the actions of
Defendants or otherwise, either by continuing to pursue the action through the institutional plaintiffs andlor by intervening additional named plaintiffs.
21. Because this a Rule 23(b)(2) class action, notice to the class is not required. Rule 23(c)(2)(A); see also Newton-Nations v. Rogers, 316 F. Supp. 2d 883, 890 (D. Ariz. 2004); Advisory Committee Note on Rule 23, 215 F.R.D. 158, 218 (2003) ("The authority to direct notice to class members in a (b)(l) or (b)(2) class action should be exercised with care. For several reasons, there may be less need for notice than in a (b)(3) class action. There is no right to request
exclusion from a (b)(1) or (b)(2) class. The characteristics of the class may reduce the need for formal notice. The cost of providing notice, moreover, could easily cripple actions that do not seek
damages. The court may decide not to direct notice after balancing the risk that notice costs may
deter the pursuit of class relief against the benefits of notice."). Consequently, the Named Plaintiffs do not believe that there is any need for notice to the class at this point in the litigation.
22. Plaintiffs' Counsel have extensive experience in prosecuting class actions, including numerous class actions on behalf of persons with disabilities. They have the skills and resources to adequately represent the plaintiff class in this case as set forth more fully in the attached Memorandum of Law and seek appointment as co-class counsel in this action.
23. In further support of Plaintiffs' Second Amended Motion for Class Certification, Plaintiffs incorporate by reference, the Memorandum of Law in Support of Plaintiffs' Amended Motion for Class Certification (attached to the Amended Motion), the Declarations of Mike Bright,
Garth Corbett, and Karen McGowan, R.N., CDDN, and all attached exhibits. See Dkts. 94-98.

Case 5:10-cv-01025-OLG Document 174 Filed 07/19/13 Page 10 of 11

IL

REQUESTED RELIEF

WHEREFORE, the Named Plaintiffs respectfully request that, pursuant to Rule 23(c) of the Federal Rules of Civil Procedure, the Court certify a class consisting of all
Medicaid-eligible persons over twenty-one years of age with mental retardation and/or a related
condition in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq. The Named Plaintiffs further request that the Court appoint Disability Rights Texas, Weil, Gotshal & Manges LLP, and the Center for Public
Representation as co-class counsel pursuant to Rule 23(g) of the Federal Rules of Civil
Procedure.

DATED: March 12, 2013

Respectfully submitted,
/s/ Garth A. Corbeit
Garth A. Corbett State Bar No. 04812300 Sean A. Jackson State Bar No. 24057550 Disability Rights Texas 2222 W. Barker Lane Austin, Texas 78758 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)

Yvette Ostolaza State Bar No. 00784703
Robert Velevis (admitted pro hac vice)
State Bar No. 24047032
Casey A. Burton (admitted pro hac vice)
State Bar No. 24058791 Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, Texas 75201 (214) 746-7700 (Telephone)

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Case 5:10-cv-01025-OLG Document 174 Filed 07/19/13 Page 11 of 11
(214) 746-7777 (Facsimile)
Steven J. Schwartz (admitted pro hac vice) Deborah Dorfman (admitted pro hac vice) Bettina Toner (admitted pro hac vice) Center for Public Representation
22 Green Street Northampton, Massachusetts 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Attorneys for Plaintiffs
CERTIFICATE OF CONFERENCE
I, Garth A. Corbett, hereby certify that I have conferred with counsel for the United States, Plaintiff-Intervenor and Defendants on the relief requested in this Second Amended Motion for Class Certification, and certify that the Plaintiff-Intervenor Assents to and the Defendants oppose the relief sought herein.
/s/ Garth A. Corbett
Garth A. Corbett
CERTIFICATE OF SERVICE
I, Garth Corbett, hereby certify that all parties have been served through the Court's ECF system, or if such party does not accept service through the Court's ECF system, then by first class mail.
/s/ Garth A. Corbeti
Garth A. Corbett

 Case 5:10-cv-01025-OLG Document 177 Filed 08/19/13 Page 1 of 13

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
ERIC STEWARD, by his next friend and mother, Lillian Minor, et al.,
Plaintiffs,
v.

RICK PERRY, Governor of the State of Texas, et al.,
Defendants. _____________________________________

Case No. SA-5:10-CV-1025-OG

THE UNITED STATES OF AMERICA,

Plaintiff-Intervenor, v.

THE STATE OF TEXAS,

Defendant.

JOINT MOTION FOR ENTRY OF INTERIM SETTLEMENT AGREEMENT AND STAY OF PROCEEDINGS, WITH BRIEF IN SUPPORT
Plaintiffs, Defendants, and the United States (collectively, “Parties”) jointly move this Court to enter the Interim Settlement Agreement, attached as Exhibit A, as an order of the Court and to stay the litigation, except as to the Parties’ Joint Motion to Amend the Protective Order (Dkt # 176) and further proceedings relating to compliance with the Interim Agreement, if necessary.

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BACKGROUND A. Summary of Plaintiffs’ and the United States’ Claims and Defendants’ Responses
In th is la wsuit, P laintiffs a nd th e U nited S tates a llege th at D efendants u nnecessarily segregate i ndividuals w ith developmental d isabilities1 in n ursing f acilities, in v iolation of t he Americans w ith D isabilities A ct ( “ADA”), 42 U .S.C. §§ 12132 -12134, and S ection 504 of t he Rehabilitation A ct of 1 973 ( “Section 504” ), 29 U .S.C. § 794. Plaintiffs further allege th at Defendants ha ve vi olated t he r ights of i ndividuals w ith de velopmental disabilities in n ursing facilities under s everal s ections of Title X IX of t he S ocial S ecurity Act, 42 U .S.C. § 1396a, et seq. (“Medicaid Act”), including the Preadmission Screening and Resident Review (“PASRR”) provisions of the 1987 Nursing Home Reform Act, 42 U.S.C. § 1396r, et seq.
Defendants ha ve m oved t o di smiss Plaintiffs’ M edicaid A ct c laims on gr ounds of bot h lack of jurisdiction and failure to state a cognizable claim. (Dkt. #s 30, 32, 67.) Defendants have not yet f iled a n a nswer t o P laintiffs’ c omplaint. Defendants ha ve a nswered t he U nited S tates’ Complaint in Intervention, asserting the fundamental alteration defense to the ADA and Section 504 claims. (Dkt. # 143.)
B. Procedural Background Plaintiffs filed their original Complaint in this action on D ecember 20, 20 10. (Dkt. # 1.)
Thereafter, P laintiffs a mended th eir C omplaint tw ice.2 Plaintiffs’ liv e p leading is th e S econd Amended Complaint (Dkt. # 173), filed on July 19, 2013.

1 “Developmental disability,” for purposes of this Motion, refers to individuals with intellectual disabilities or related conditions.

2 On October 4, 2011, this Court issued an Order (Dkt. # 62) lifting the stay imposed on September 27, 2011 (Dkt. #
58), to allow Plaintiffs to file their Amended and Supplemental Complaint (“First Amended Complaint”) (Dkt. # 63). On March 12, 2013, Plaintiffs filed a motion for leave to file a Second Amended and Supplemental Complaint (“Second Amended Complaint”) (Dkt. # 162), which Defendants opposed on March 19, 2013 (Dkt. # 164). The Court granted Plaintiffs’ motion on July 19, 2013 (Dkt. # 172), and filed the Second Amended Complaint the same day (Dkt. # 173).

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Defendants filed a motion to dismiss Plaintiffs’ original Complaint on March 8, 2011 (Dkt. #s 30, 32),3 and a Partial Motion to Dismiss the First Amended Complaint on November 4, 2011 (Dkt. # 67). The Partial Motion to Dismiss remained pending until the Court’s order of July 25, 2013, denying all pending motions. (Dkt. # 175.)
Plaintiffs filed a Motion for Class Certification on January 19, 2011 (Dkt. #s 13, 14), and thereafter amended their class motion twice (Dkt. #s 94, 174).4 Defendants responded in opposition to both the original class motion (Dkt. # 20)5 and the first amended class motion (Dkt. # 125). The Court denied the original class motion as moot on July 23, 2012, after Plaintiffs filed the first amended class motion. (Dkt. # 107.) The first and second amended class motions were pending when the Court issued its order of July 25, 2013, denying all pending motions. (Dkt. # 175.)
The United States moved to intervene in the lawsuit on June 22, 2011. (Dkt. # 53.)6 The Court granted the United States’ motion to intervene on September 20, 2012 (Dkt. # 136), and filed the Complaint in Intervention the same day (Dkt. # 137). Defendants answered the Complaint in Intervention on October 24, 2012. (Dkt. # 143.)

3 The Court denied Defendants’ original motion to dismiss as moot on July 23, 2012 (Dkt. # 107), after Plaintiffs amended their First Amended Complaint.
4 Plaintiffs filed the first amended class motion on July 9, 2012. (Dkt. #94.) On March 12, 2013, Plaintiffs filed a motion for leave to file a Second Amended Motion for Class Certification (Dkt. # 162), which Defendants opposed on March 19, 2013 (Dkt. # 164). The Court granted Plaintiffs’ motion on July 19, 2013 (Dkt. # 172), and filed the second amended motion for class certification the same day (Dkt. # 174).
5 Defendants responded to the original class motion on January 26, 2011, by filing a Motion to Abate Plaintiffs’ Motion for Class Certification (Dkt. # 20), which Plaintiffs opposed (Dkt. # 21). On September 27, 2011, the Court granted Defendants’ motion to abate and stayed all proceedings in the case. (Dkt. # 58.)
6 Defendants’ opposed the intervention on July 19, 2011. (Dkt. # 56.)

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On September 12, 2012, this Court heard oral argument on Defendants’ Partial Motion to Dismiss, Plaintiffs’ first amended Motion for Class Certification, and the United States’ Motion to Intervene.
On July 19, 2013, the Court granted Plaintiffs’ March 12, 2013 m otion for leave to file a Second A mended C omplaint a nd a S econd A mended M otion f or C lass C ertification ( Dkt. # 172), and the Second Amended Complaint and Second Amended Motion for Class Certification were filed the same day (Dkt. #s 173, 174). Pursuant to applicable rules, Defendants’ deadline to respond to Plaintiffs’ Second Amended Motion for Class Certification would have been July 26, 2013, Local R ule CV-7(e)(2), a nd t he de adline t o r espond t o P laintiffs’ S econd A mended Complaint would have been August 2, 2013, FRCP 15(a)(3).
On July 25, 2013, the Court issued an Order for Settlement Papers, staying all deadlines,7 denying a ll pe nding m otions,8 and s etting A ugust 19, 2013, a s the de adline f or t he pa rties t o submit a stipulation of dismissal or agreed judgment. (Dkt. # 175.)
C. Settlement Discussions and Interim Agreement The Parties engaged in settlement discussions over a period of approximately six months,
and reached an interim agreement on a number of matters that they have memorialized in a twoyear Interim Agreement (the “Interim Agreement” or “IA”). The Interim Agreement is attached hereto as Exhibit A.

7 Defendants’ deadlines for responding to Plaintiffs’ Second Amended Complaint (Dkt. # 173) and Second Amended Motion for Class Certification (Dkt. # 174) were pending at the time of issuance of the July 25, 2013 Order.
8 Defendants’ Partial Motion to Dismiss the first amended complaint (Dkt. # 67), Plaintiffs’ Amended Motion for Class Certification (Dkt. # 94), and Plaintiffs’ Second Amended Motion for Class Certification (Dkt. # 174) were pending at the time of issuance of the July 25, 2013 Order.

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The Interim A greement, w hich b y i ts t erms e nds a t t he l atest on July 1, 2015, 9 contemplates th at th e P arties w ill f ile a jo int mo tion w ith th e C ourt, a sking th at th e Interim Agreement be entered as an order of the Court, and that the case be stayed during the pendency of the Interim Agreement. See IA, p. 15, § VIII.A.3. During the term of the Interim Agreement, the P arties w ill s eek to r esolve a ll is sues p ending in th e lit igation th rough a c omprehensive agreement. See IA, p. 15, § VIII.B.1.
The two-year Interim Agreement calls for Defendants to request additional funding for home and community-based waiver services to transition and divert a larger number of individuals with developmental disabilities who do not oppose community-based services from nursing facilities to the community (IA, p. 5, § III.A.1), and to ensure the availability of certain community services to support individuals with developmental disabilities with complex medical needs living in the community (IA, pp. 6-10, §§ III.B-F). It also requires the State to perform a one-time review to identify all individuals with developmental disabilities living in nursing facilities (IA, p. 10, § IV.A.1), and to provide opportunities for nursing facility residents to learn about and explore community-based alternatives (IA, p. 11, §§ IV.B.1 and IV.C.1).
Defendants will also expand their system for diverting individuals with developmental disabilities from entering nursing facilities by tracking nursing facility referrals, offering community-based alternatives prior to admission, and improving screening procedures to avoid unnecessary nursing home admissions. IA, pp. 12-13, § V.
For individuals covered by the Interim Agreement, a team of key professional staff, the individual, and his or her legally authorized representative, if any, will create an individualized and person-centered service plan that identifies all of the necessary community-based services
9 The Interim Agreement, and the Court’s jurisdiction over it, terminates on July 1, 2015, unless earlier terminated pursuant to VIII.C of the Interim Agreement. IA, p. 18, § VIII.I.

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and supports. IA, pp. 6-7, § III.B. Each individual who does not refuse service coordination will have a Service Coordinator who will facilitate the services identified in the service plan and will meet with the individual at least monthly following transition or diversion from a nursing facility. IA, pp. 7-8, § III.C. These processes will help ensure that individuals covered under the Interim Agreement who do not oppose community-based services will have the opportunity to successfully live and receive services in the most integrated setting appropriate to their needs. The Interim Agreement also provides that individuals with developmental disabilities in nursing facilities will be provided appropriate specialized services. IA, pp. 6-7, § III.B.4 and p. 14, § VI.C.
With the help of a jointly selected Expert Reviewer, the Parties will develop outcomes, outcome measures, and data collection processes for measuring Defendants’ implementation of the Interim Agreement. IA, pp. 14-15, § VII.
Finally, the Interim Agreement contains dispute resolution provisions should disagreements arise over compliance, and outlines the process for enforcement proceedings if informal resolution fails. IA, pp. 16–17, §§ VIII.D. Any Court order entered in accordance with those provisions, and the Court’s jurisdiction over the order, will expire on the termination of the Interim Agreement. IA, pp. 17–18, §§ VIII.F, I.
While the Parties have not yet reached an agreement to fully resolve all issues in the litigation, the Parties are committed to attempting to resolve the entire case through settlement. Accordingly, the Interim Agreement includes a process by which the Parties will work together to try to reach a comprehensive agreement in the near future, including a timeline for certain milestones. IA, pp. 15-16, §§ VIII.B, C.

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ARGUMENT
A. The Court Should Approve the Interim Agreement Because the Interim Agreement Is Constitutional, Lawful, and Accords with Public Policy 1. The Fifth Circuit Court of Appeals Requires a Deferential Review of Voluntary Agreements to Which the United States Is a Party The Fifth Circuit applies a deferential standard of review for approval of voluntary
agreements such as the Interim Agreement. A proposed settlement agreement to which the United States is a party must not be unconstitutional, unlawful, contrary to public policy, or unreasonable. United States v. Texas Educ. Agency, 679 F.2d 1104, 1108 (5th Cir. 1982) (citing United States v. Alexandria, 614 F. 2d 1358, 1362 (5th Cir. 1980)); United States v. City of Miami, 614 F.2d 1322, 1332-33 (5th Cir. 1980), aff’d in part on rehearing, 664 F.2d 435 (1981). Such agreements are entitled to a presumption of validity. Texas Educ. Agency, 679 F.2d at 1108; City of Miami, 614 F.2d at 1332 (for agreements that include the government agency charged with enforcement of the law at issue, courts can “safely assume that the interests of all affected have been considered”). “If the suit seeks to enforce a statute, the [agreement] must be consistent with the public objectives sought to be attained by Congress.” United States v. City of Miami, 664 F.2d 435, 441 (5th Cir. 1981). In enacting the ADA, Congress intended it to be a comprehensive statute to end discrimination against individuals with disabilities, including unnecessary isolation and segregation.10 The Department of Justice has the authority to enforce

10 Congress enacted the ADA in 1990, having found that “historically, society has tended to isolate and segregate
individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals continues to be a serious and pervasive problem.” 42 U.S.C. § 12101(a)(2). The ADA provides that “[n]o qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefit of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C. § 12132. The ADA’s regulations require that public entities “administer services, programs and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.” 28 C.F.R. § 35.130(d). In 1999, the Supreme Court, in Olmstead v. L.C., 527 U.S. 581, 596 (1999), held that the ADA prohibits the unjustified institutionalization of individuals with disabilities. Under Olmstead, public entities are required to provide community-based services when (a) such services are appropriate, (b) the affected persons do

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Title II of the ADA, and pursuant to congressional mandate, to issue regulations implementing the statute. See 42 U.S.C. § 12134.
2. The Interim Agreement Is Reasonable, Lawful, and in Accord with Public Policy and the Requirements of the Americans with Disabilities Act
The Interim Agreement, to which the United States is a party, is reasonable, lawful, constitutional, and in accord with public policy that individuals with developmental disabilities who do not oppose community-based services receive such services in the most integrated setting appropriate, taking into account the State’s available financial resources and responsibilities to the entire community of disabled individuals, as required by the ADA. The Interim Agreement is the product of intense, arms-length, and thoughtful negotiations, and provides that the Defendants will take specific action to improve and expand services for individuals with developmental disabilities, in furtherance of the objectives of the ADA. The Texas legislature approved the Interim Agreement by a concurrent resolution, and the Governor signed that resolution. It does not contravene any law or constitutional provision.
Pursuant to the Interim Agreement, Defendants will develop additional community-based services, expand efforts to transition individuals with developmental disabilities who do not oppose community placement from nursing facilities to the community, and assure the provision of community-based alternatives for eligible individuals referred for nursing facility placement, where appropriate. The Interim Agreement furthers the purpose of the ADA by allowing individuals with developmental disabilities in or at risk of entry into nursing facilities to have the opportunity to live safely in integrated, community settings. For these reasons, the Court should approve the Interim Agreement and enter it as an Order of the Court.

not oppose community-based treatment, and (c) community-based services can be reasonably accommodated, taking into account the resources available to the state and the needs of other persons with disabilities. Id. at 607.

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B. The Court Should Grant a Stay Pending the Term of the Interim Agreement to Allow Implementation of the Interim Agreement and Permit the Parties to Negotiate a Comprehensive Settlement. The Parties also request that the Court stay this action during the pendency of the Interim
Agreement, excepting a ruling on the Parties’ Joint Motion to Amend the Protective Order (Dkt. # 176) and any proceedings relating to compliance with the Interim Agreement, in the unlikely event that becomes necessary.
Since the Parties only have entered an Interim Agreement, rather than a final, comprehensive agreement, a stay, rather than dismissal, is appropriate and the Parties therefore request that the Court’s July 25, 2013 Order for final settlement papers and dismissing all outstanding motions be vacated.11 The Parties request that the stay extend through July 1, 2015, unless the Interim Agreement is terminated earlier upon a motion and order as permitted in Section VIII.C of the Interim Agreement. A stay of this action will allow the Parties to focus on negotiating a comprehensive agreement and implementing the terms of the Interim Agreement.
The Parties request that rulings on the Parties’ Joint Motion to Amend the Protective Order and any proceedings relating to compliance with the Interim Agreement, be exempted from the stay. The requested amendments are necessary, and the Protective Order will be applicable to the exchange of information, if any, under the Interim Agreement.
The Parties further request that, if the stay requested herein is lifted, Defendants be granted an extension of time to file their responses to Plaintiffs’ Second Amended and Supplemental Complaint (Dkt. # 173) and Second Amended Motion for Class Certification (Dkt.

11 The Court’s Order of July 25, 2013 (Dkt. # 175), reflects an apparent misunderstanding of the nature of the settlement agreement adopted by the Parties. That Order also seeks to stay pretrial deadlines and cancels the trial setting, but no pretrial order has ever been entered in this case, and no trial setting established. Therefore, the Parties believe that this Order should be vacated upon entry of the order requested by this joint motion.

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# 174), and that Defendants’ deadline be extended to thirty days from the date of the Court’s order lifting the stay.
A stay is proper because it will not prejudice any party, no trial date has yet been set, and a stay may allow the Parties to fully resolve the action. See Southwire Co. v. Cerro Wire, Inc., 750 F. Supp. 2d 775, 778 (E.D. Tex. 2010) (“In deciding whether to stay litigation pending reexamination, courts typically consider: (1) whether a stay will unduly prejudice or present a clear tactical disadvantage to the nonmoving party, (2) whether a stay will simplify the issues in question and trial of the case, and (3) whether discovery is complete and whether a trial date has been set.”); see also Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) (holding that the district court has the inherent power to control its own docket, including the power to stay proceedings).
CONCLUSION For the reasons stated above, the Parties ask that the Court take the following action: 1. GRANT this Motion; 2. ENTER the Interim Agreement as an order of the Court; 3. STAY the proceedings until July 1, 2015, or earlier upon a Party’s motion and court
order as provided in section VIII of the Interim Agreement, excepting a ruling on the Parties’ Joint Motion to Amend the Protective Order (Dkt. # 176) and future proceedings relating to compliance with the Interim Agreement, if any; 4. VACATE the Court’s July 25, 2013 Order for Settlement Papers; and 5. GRANT Defendants an extension of time to respond to Plaintiffs’ Second Amended and Supplemental Complaint (Dkt.# 173) and Second Amended Motion for Class Certification (Dkt. # 174) until July 31, 2015, or until thirty days following the date of the Court’s order lifting the stay, whichever is earlier.

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Case 5:10-cv-01025-OLG Document 177 Filed 08/19/13 Page 11 of 13 A proposed order is attached.

Respectfully submitted,
/s/ Garth A. Corbett (by express permission) GARTH A. CORBETT State Bar No. 04812300 SEAN A. JACKSON State Bar No. 24057550 Disability Rights Texas 2222 W. Barker Lane Austin, TX 78758 (512) 454-4816 (Telephone) (512) 454-3999 (Facsimile)
YVETTE OSTOLAZA State Bar No. 00784703 ROBERT VELEVIS State Bar No. 24047032 Admitted Pro Hac Vice CASEY A. BURTON State Bar No. 24058791 Admitted Pro Hac Vice Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, TX 75201 (214) 746-7700 (Telephone) (214) 746-7777 (Facsimile)
STEVEN J. SCHWARTZ Admitted Pro Hac Vice DEBORAH A. DORFMAN Admitted Pro Hac Vice ELIZABETH F. TONER Admitted Pro Hac Vice Center for Public Representation 22 Green Street Northampton, MA 01060 (413) 586-6024 (Telephone) (413) 586-5711 (Facsimile)
Counsel for Plaintiffs

JOCELYN SAMUELS Acting Assistant Attorney General Civil Rights Division
EVE L. HILL Deputy Assistant Attorney General Civil Rights Division
JONATHAN M. SMITH Chief Special Litigation Section
BENJAMIN O. TAYLOE, JR. Deputy Chief Special Litigation Section
/s/ Regan Rush____________________ REGAN RUSH (D.C. Bar No. 980252) ALEXANDRA L. SHANDELL (D.C. Bar No. 992252) Admitted Pro Hac Vice Trial Attorneys Special Litigation Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Ave. NW, PHB Washington, DC 20530 (202) 514-6255 (Telephone) (202) 514-6903 (Facsimile) Regan.Rush@usdoj.gov
Counsel for the United States

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HONORABLE GREG ABBOTT Attorney General
DANIEL T. HODGE First Assistant Attorney General
DAVID MATTAX Deputy Attorney General for Defense Litigation
JAMES “BEAU” ECCLES Chief, General Litigation Division
/s/ Nancy K. Juren (by express permission) NANCY K. JUREN Assistant Attorney General Attorney in Charge Texas Bar No. 11059300 DARREN G. GIBSON Assistant Attorney General Texas Bar No. 24068846 ANGELA V. COLMENERO Assistant Attorney General Texas Bar No. 24048399 AMANDA COCHRAN-McCALL Assistant Attorney General Texas Bar No. 24039526 ANDREW STEPHENS Assistant Attorney General Texas Bar No. 24079396 AMY PENN Assistant Attorney General Texas Bar No. 24056117 MARC RIETVELT Assistant Attorney General Texas Bar No. 24043892 MICHAEL PATTERSON Assistant Attorney General Texas Bar No. 24074868 General Litigation Division P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 (512) 463-2120 (Telephone) (512) 320-0667 (Facsimile)
Counsel for Defendants

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CERTIFICATE OF SERVICE
I hereby certify that on August 19, 2013, a copy of the foregoing was filed electronically. Notice of this filing will be sent by e-mail to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s CM/ECF System.
/s/ Regan Rush REGAN RUSH D.C. Bar No. 980252 Admitted Pro Hac Vice Trial Attorney Special Litigation Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - PHB Washington, D.C. 20530 Telephone: (202) 514-6255 Facsimile: (202) 514-6903 Regan.Rush@usdoj.gov
Counsel for the United States

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Exhibit A

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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

v.

§

§

RICK PERRY, Governor of the State of Texas, §

et al.,

§

Defendants

§

§

§

THE UNITED STATES OF AMERICA,

§

Plaintiff-Intervenor

§

v.

§

§

THE STATE OF TEXAS

§

Defendant

§

Case No. 5:10-CV-1025-OG

INTERIM SETTLEMENT AGREEMENT
I. Introduction
A. The Parties. Plaintiffs are Eric Steward, by his next friend and mother, Lillian Minor; Linda Arizpe, by her next friend and guardian, Rudy Arizpe; Andrea Padron, by her next friend and guardian, Rosa Hudecek; Patricia Ferrer, by her next friend and mother, Petra Ferrer; Benny Holmes, by his next friend and guardian, Priscilla Holmes; Zackowitz Morgan, by his next friend and guardian, Sharon Barker; The Arc Of Texas, Inc.; and the Coalition Of Texans With Disabilities, Inc. (“Plaintiffs”). Plaintiff-Intervenor is the United States (“United States”). Defendants are the State of Texas; Rick Perry, in his official capacity as Governor of The State of Texas (“Governor”); Kyle L. Janek, in his official capacity as Executive Commissioner of the Texas Health and Human Services Commission (“HHSC”); and Jon Weizenbaum, in his official capacity as Commissioner of the Texas Department of Aging and Disability Services (“DADS”). Hereinafter, Defendants the State of Texas, Governor, HHSC, and DADS are referred to collectively as “the State.” The Plaintiffs, the United States, and the State are hereinafter referred to collectively as “the Parties.”
B. The Lawsuit. Plaintiffs filed suit against Defendants HHSC, DADS, and the Governor on December 20, 2010, asserting claims under the Americans with Disabilities Act, 42 U.S.C. § 12132 et seq. (“ADA”), Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, and several sections of Title XIX of the Social Security Act, 42 U.S.C. § 1396a, et seq. (“Medicaid Act”), including the Preadmission Screening and Resident Review (“PASRR”) provisions of the 1987 Nursing Home Reform Act, 42 U.S.C. § 1396r, et seq. (“NHRA”).

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Plaintiffs’ claims were brought under 42 U.S.C. § 1983 (“Section 1983”), and were brought on behalf of themselves and a purported class. Plaintiffs’ live pleading is the Amended and Supplemental Complaint, filed October 4, 2011 (Docket # 63). A Second Amended Complaint (Docket # 162-1) to add ten additional named plaintiffs was filed on March 12, 2013 and is pending before the Court. The United States was granted leave to intervene, and filed its Complaint in Intervention against the State of Texas (Docket # 137), on September 20, 2012. The United States asserts claims under Section 504 of the Rehabilitation Act and Title II of the ADA. In general terms, the litigation brought by Plaintiffs and the United States concerns individuals with IDD residing in nursing facilities and at risk of admission to nursing facilities. Hereinafter, the above-styled and referenced litigation, Steward et al. v. Perry, et al; United States v. Texas, Case No. 5:10-CV-1025-OLG, United States District Court for the Western District of Texas, San Antonio Division, is referred to as “the Lawsuit.”
C. Interim Agreement and Comprehensive Agreement. The Parties enter into this agreement (“Interim Agreement” or “Agreement”) in order to resolve as many issues as possible related to the Lawsuit for a limited time period, while still seeking to resolve all issues in the Lawsuit pursuant to a comprehensive agreement (“Comprehensive Agreement”) without the expense, risks, delays, and uncertainties of litigation.
D. By entering into this Agreement, the State does not admit to the truth or validity of any claim made against it by Plaintiffs and the United States.
E. This Agreement applies only to the Target Population as defined herein.
F. The Parties acknowledge that the Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331; 28 U.S.C. § 1345; and 42 U.S.C. §§ 12131-12132, and that the Court is empowered to enter this Agreement. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b).
II. Definitions
A. “CFC” means “Community First Choice Options,” a new program that the State intends to create to provide attendant and other services for eligible individuals living in the community. CFC would offer an opportunity for eligible individuals to receive person-centered community-based services to assist in the prevention of placement in a nursing facility. See 42 U.S.C. § 1396n(k); 42 C.F.R. § 441.500 et seq. If approved by CMS, the CFC program is targeted for implementation beginning September 1, 2014.
B. “CMS” means the United States Department of Health & Human Services Centers for Medicare & Medicaid Services.
C. “Department of Aging and Disability Services” or “DADS” means the Texas state agency that provides long-term services and supports for individuals who are aging, for individuals with IDD, and for individuals with physical disabilities.
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D. “Home and Community-based Services waiver” or “HCS waiver” means the array of services and supports provided under the State’s Home and Communitybased Services waiver as approved by CMS as of the Effective Date of this Agreement.
E. “ICF/IID” means Intermediate Care Facilities for Persons with Intellectual Disabilities that provide health and habilitation services to individuals with IDD.
F. “IDD” for purposes of this Agreement means an intellectual disability, related condition, or both.
G. “Intellectual disability” or “ID” means significantly subaverage general intellectual functioning existing concurrently with deficits in adaptive behavior and originating before the age of 18. “Subaverage general intellectual functioning” refers to measured intelligence on standardized psychometric instruments of two or more standard deviations below the age-group mean for the tests used.
H. “LAR” means legally authorized representative. A “legally authorized representative” means a person authorized by law to act on behalf of an individual with regard to a matter described in this Agreement, which may be the guardian of an adult individual or a surrogate decision maker under Texas Health and Safety Code §313.004.
I. “Local Authority” means an entity to which the Health and Human Services Commission delegates authority and responsibility within a specified region for the planning, policy development, coordination, resource development and allocation, and for supervising and ensuring the provision of services to individuals with IDD in one or more local service areas.
J. “PASRR Level I” or “PASRR Level I screening” means the process of identifying individuals who are suspected of having IDD and therefore require a PASRR Level II evaluation. A PASRR Level I screening is further described and defined in 42 C.F.R. §§ 483.112(a) and 483.128.
K. “PASRR Level II” means a face-to-face evaluation performed by a Local Authority to assess: (1) whether the individual’s needs could be met in the community through alternate placement options; (2) the individual’s need for inpatient care, whether in a nursing facility or other setting such as an ICF/IID; and (3) the individual’s need for specialized services. A PASRR Level II evaluation is further described and defined in 42 C.F.R. §§ 483.112, 483.132, and 483.136.
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L. “Related condition” means a severe, chronic disability that meets all of the following conditions: 1. It is attributable to— a. Cerebral palsy or epilepsy; or b. Any other condition, other than mental illness, found to be closely related to Intellectual Disability because this condition results in impairment of general intellectual functioning or adaptive behavior similar to that of individuals with intellectual disabilities, and requires treatment or services similar to those required for these persons. 2. It is manifested before the person reaches age 22. 3. It is likely to continue indefinitely. 4. It results in substantial functional limitations in three or more of the following areas of major life activity: a. Self-care. b. Understanding and use of language. c. Learning. d. Mobility. e. Self-direction. f. Capacity for independent living.
M. “Specialized services” means services for the Target Population in nursing facilities identified by the PASRR Level II. Specialized services are further described and defined in 42 C.F.R. §§ 483.116, 483.120(a)(2), 483.136, 483.440(a)(1)), and 42 U.S.C. § 1396r(e)(7)(G)(iii).
N. Target Population:
1. “Target Population” as used in this Agreement means individuals with IDD 21 years of age or older who:
a. are in a nursing facility for more than 90 days; or
b. are determined by a PASRR Level I screening to be in need of a PASRR Level II evaluation or are in a nursing facility for 90 days or less.
2. Individuals remain in the Target Population for as long as they are in a nursing facility and until one year after transition or diversion from a nursing facility through enrollment in community-based Medicaid services.
O. “Texas Home Living waiver” or “TxHmL waiver” means the array of services and supports provided under the State’s TxHmL waiver as approved by CMS as of the Effective Date of this Agreement.
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III. Serving Individuals with Developmental Disabilities In the Most Integrated Setting
A. Expansion of Community Services
1. For the biennium beginning September 1, 2013, the State will request and make all reasonable efforts to obtain from the Texas Legislature the necessary appropriations for the following additional services:
a. Targeted transition HCS waiver services for at least 360 individuals in Target Population II.N.1.a;
b. Targeted diversion HCS waiver services for at least 150 individuals in Target Population II.N.1.b; and
c. Targeted diversion TxHmL waiver services for 125 individuals in Target Population II.N.1.b.
2. With notice to Plaintiffs and the United States, the State may re-allocate HCS waiver slots between III.A.1.a and III.A.1.b.
3. Not later than 180 days after the Effective Date of this Agreement, the State will submit to CMS an application to renew its HCS waiver to include individuals in the Target Population with related conditions. If the renewal is approved by CMS, the State will not exclude any otherwise qualified individual from the Target Population because the individual has a related condition but not an intellectual disability. If the inclusion is not approved by CMS because of a defect in the State’s waiver renewal application, the State will use its best efforts to correct the application.
4. The State will not exclude any otherwise qualified individual from the Target Population due to the existence of complex behavioral or medical needs. However, individuals in the Target Population must meet all eligibility requirements of a waiver to enroll in waiver services.
5. If CFC is approved by the Legislature, within 180 days of the Effective Date of this Agreement, the State will submit to CMS a State Plan amendment for a Community First Choice Option. If the amendment is not approved by CMS because of a defect in the State’s amendment application, the State will use its best efforts to correct the application.
6. During the term of this Agreement, the State will notify Plaintiffs and the United States of any proposed amendments to the HCS and TxHmL waivers at least 90 days prior to submitting the amendments to CMS for approval.
7. The State will include individuals with IDD in nursing facilities as a priority population in its Promoting Independence Plan.
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B. Service Planning Team (“SPT”)

1. The State will ensure that, through the Local Authorities, all individuals in the Target Population have an SPT.

2. The State will ensure that, through the Local Authorities, the individual’s SPT is convened at least quarterly, or more frequently if requested by the individual or LAR, or if there is a change in service needs.

3. For all individuals in the Target Population, the SPT will:

a. Develop a service plan that:

i.

Is individualized and developed through a person-centered

process. The SPT will ensure that individuals, regardless

of whether they have an LAR, will participate in the SPT to

the fullest extent possible and will receive the support

necessary to do so, including, but not limited to,

communication supports;

ii.

Identifies the individual’s strengths; preferences; medical,

nursing, nutritional management, clinical, and support

needs; and desired outcomes; and

iii.

Identifies the services and supports that are needed to meet

the individual’s needs, achieve the desired outcomes, and

maximize the person’s ability to live successfully in the

most integrated setting possible.

b. Assess the adequacy of the services and supports that the individual is receiving; and

c. Monitor the individual’s service plan to make timely additional referrals, service changes, and amendments to the plan as needed.

4. For individuals in the Target Population in nursing facilities, the SPT will:
a. Include the following persons: the individual being served; his or her LAR; the service coordinator; nursing facility staff familiar with the individual’s needs; persons providing specialized services for the individual; and, if a specific alternate placement provider has been selected, a representative from that provider. The SPT may include: other concerned persons whose inclusion is requested by the individual or the LAR and, at the discretion of the Local Authority, other persons who are directly involved in the delivery of services to individuals with IDD;

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b. Identify the specific specialized services to be provided to the individual, including the amount, intensity, and frequency of each specialized service;
c. Be responsible for planning, ensuring the implementation of, and monitoring all specialized services identified in the service plan, and transition planning in coordination with the nursing facility’s care planning team; and
d. Ensure that the individual’s service plan, including specialized services, is integrated into the nursing facility’s plan of care and that specialized services are planned, provided, and monitored in a consistent manner, and integrated with the medical and nursing services, and services of lesser intensity, provided by the nursing facility.
5. For individuals in the Target Population living in the community, the SPT will:
a. Include the persons specified in the rules for the program in which the individual is enrolled;
b. Be responsible for planning, ensuring the implementation of, and monitoring all services identified in the service plan; and
c. Determine the sufficient frequency of face-to-face service coordination contacts based on risk factors including, but not limited to, recent transition from a nursing facility, the assessed need for more intensive monitoring; recent or repeat hospitalizations; recent or repeat emergency room contacts; or factors placing the individual at risk of readmission to a nursing facility due to identified medical, psychiatric, or behavioral conditions.
C. Service Coordinator
1. The State will ensure that, through the Local Authorities, all individuals in the Target Population who do not refuse service coordination receive service planning and coordination by a service coordinator employed by an entity other than the nursing facility, such as a Local Authority, in conjunction with an SPT.
2. The service coordinator will be responsible for (a) convening and facilitating the SPT; (b) facilitating the development of the service plan; (c) facilitating revisions to the service plan, as needed; and (d) facilitating the coordination of services and supports.
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3. The service coordinator will meet face-to-face with each assigned individual in the Target Population on a monthly basis, or more frequently if needed.
4. After the individual has transitioned or been diverted from a nursing facility admission into a community program for 180 days, the service coordinator will meet with the individual with the frequency required by the rules for the program in which the individual is enrolled.
5. For individuals in the Target Population in nursing facilities, the service coordinator will:
a. Discuss with the individual and LAR a range of community options and alternatives, facilitate visits to community programs, and address concerns about community living;
b. Ensure that the individual receives the educational and informational activities described in VI.A; and
c. Facilitate coordination between an individual’s service plan and the nursing facility’s plan of care.
6. For individuals in the Target Population in nursing facilities transitioning to the community, the service coordinator will facilitate the SPT’s transition planning responsibilities under IV.B and IV.C, including the development of a Community Living Discharge Plan pursuant to IV.B.2.
7. For individuals in the Target Population in the community, the service coordinator will:
a. Inquire about any recent hospitalizations, emergency department contacts, increased physician visits, or other crises, including medical crises. If an individual experiences an increase in hospitalization, emergency room contacts, and/or crises, the service coordinator will convene the SPT to identify all necessary modifications to the individual’s service plan and will work with the SPT to arrange for any additional needed services or supports;
b. Record health care status sufficient to readily identify when changes in the individual’s status occurs; and
c. Ensure that the individual receives timely initial and ongoing assessments of medical, nursing, and nutritional management needs.
8. Caseload ratios for service coordinators will be sufficient to effectively meet the requirements of this Agreement and will be based on individual needs and the person-centered planning process, recognizing that transitioning an individual from a nursing facility to a community
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placement and that serving individuals with complex needs in the community can require intensive service coordination.
D. Medical, Nursing, and Nutritional Management Services and Supports
1. To ensure that medical, nursing, and nutritional management services and supports are available in the community so that individuals in the Target Population living in the community, including those with complex medical needs, can receive such services in the most integrated settings appropriate to their needs, the State will:
a. Use available outcome data and other information to work with each Local Authority, as well as community providers and stakeholders in each region, to identify gaps in services and to develop and, within available authority and resources, implement a plan to address those gaps, including the capacity of small residential settings that provide intensive clinical services and supports to individuals in the Target Population with the most complex medical needs;
b. Require each Local Authority to designate one or more qualified registered nurse, advanced practice nurse, and/or medical doctor to provide training, technical assistance, and ongoing support, as needed, to residential and other providers who serve individuals in the Target Population with complex medical needs living in the community; and
c. Develop collaborative relationships with local healthcare providers to promote timely access to routine, preventative, and emergency clinical services and supports (both general and specialized) for individuals in the Target Population living in the community.
E. Integrated Day Activities
1. All individuals in the Target Population in a nursing facility will be provided opportunities for engaging in community activities to the fullest extent practicable, consistent with their identified needs and preferences.
2. The State will ensure that individuals in the Target Population living in the community have access to the existing array of day activities in the most integrated settings appropriate to their needs and desires. Integrated day activities include supported and competitive employment, community volunteer activities, community learning and recreational opportunities, and other integrated day activities.
3. Goals related to integrated day activities, including integrated employment, must be developed and discussed by the individual’s SPT and included in the individual’s service plan described in III.B.
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F. Community Living Options
1. The State will serve individuals in the Target Population in the most integrated setting consistent with their informed choice and needs by implementing the provisions in III.F.
2. To facilitate individuals in the Target Population living independently in the community, the State will provide information about and make appropriate referrals for individuals to apply for rental or housing assistance through all existing sources, including local, State, or federal affordable housing or rental assistance programs (tenant-based or projectbased).
3. No individual in the Target Population who is in a nursing facility will be served in another nursing facility or in a residential setting that serves more than four individuals, and no individual in the Target Population in the community will be served in a residential setting that serves more than four individuals, unless the Diversion Coordinator (see V.F):
a. In consultation with the individual’s SPT, attempted and was unable to address barriers to placement in a more integrated setting pursuant to IV.C.5; and
b. Verified that the individual, family, and/or LAR made an informed decision regarding alternate living options.
IV. Planning for Transition from Nursing Facilities
A. Identification of Persons for Transition
1. By August 31, 2014, the State will review all current nursing facility residents to identify any residents who may have IDD, and, for any individuals so identified, will conduct a Level II PASRR evaluation if an evaluation was not conducted on or after May 24, 2013.
2. If the State becomes aware of an individual in a nursing facility whose Level I screening should have indicated that the individual needed a Level II evaluation but did not, the State will ensure that the Local Authority conducts a Level II evaluation.
3. The State will provide a monthly report to the Local Authority that identifies each individual in the Target Population currently in a nursing facility whose response in Section Q of the MDS 3.0 indicated that the individual is interested in speaking with someone about returning to the community. The State will ensure that the Local Authority, within 30 days of receipt of this information, contacts the individual to determine whether the individual is interested in transitioning to the community.
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4. The State will provide a monthly report to the Local Authority that identifies each individual in the Target Population currently in a nursing facility whose PASRR Level II evaluation reflects that the individual’s needs can be met in an appropriate community setting.
5. The State will ensure that each Local Authority and nursing facility identifies and reports to the Local Authority the identity of any individual who expresses an interest in transitioning to the community to any employee, contractor, or specialized service provider of the Local Authority or nursing facility.
B. Planning for Transition
1. The State will ensure, through the Local Authorities, that upon admission to the nursing facility and at least every six months thereafter, service coordinators will provide all individuals in the Target Population living in nursing facilities and their LARs information about community services and supports, and will discuss these options with individuals and their LARs in order to better enable the individual and LAR to make an informed decision about transitioning, as described in VI.B.
2. The State will ensure, through the Local Authorities, that the SPT will create a Community Living Discharge Plan (“CLDP”) for the individuals in the Target Population identified in IV.A.4 and IV.A.5. The CLDP will describe the activities, timetable, responsibilities, services, and supports involved in assisting the individual to consider community living options, choose a provider, and transition from the nursing facility to the community. The SPT will develop, implement, monitor, and revise the CLDP as necessary.
C. Transition to Community Setting
1. The State will facilitate trial visits (including overnight visits, where feasible) for individuals transitioning to community settings.
2. Enrollment in a community-based waiver program of an individual in the Target Population transitioning from a nursing facility to a community setting will occur within 180 days from when the Local Authority is notified of the availability of a waiver slot for the individual, unless DADS grants an extension to the Local Authority. The State will maintain data about these extensions and will evaluate the data to identify relevant trends and patterns.
3. All essential supports identified in the individual’s CLDP must be in place prior to the individual’s transition to the community. This determination will be documented.
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4. The State will develop and implement a monitoring tool to follow up with individuals in the Target Population after their discharge from a nursing facility to assess whether supports identified in the individual’s CLDP are in place, to identify any gaps in care, and to address such gaps to reduce the risk of re-admission, crises, or other negative outcomes. The individual will receive at least three monitoring visits during the first 90 days following the individual’s move, including one within the first 7 days. The individual’s CLDP will specify the frequency of those monitoring visits.
5. In the event that an SPT makes a recommendation to maintain placement at a nursing facility, the SPT will document the reasons for the decisions, identify the barriers to placement in a more integrated setting, and describe in the service plan the steps the team will take to address those barriers.
V. Nursing Facility Diversion
A. Diversion occurs before admission or within 90 days of admission to a nursing facility when, consistent with the PASRR Level II evaluation, community living options, services, and/or supports provide an appropriate alternate placement to avoid admission to, or a stay beyond 90 days in, a nursing facility, consistent with the individual’s choice.
B. The State will develop a system that tracks all referrals to nursing facilities and ensures a PASRR Level I screening is completed for the referred individual prior to admission. The system will notify the Local Authority and the Diversion Coordinator (see V.F) of all referrals once the Level I is submitted electronically to DADS.
C. The State will ensure that the Local Authorities conduct PASRR Level II evaluations for every individual in the Target Population seeking admission to a nursing facility. The PASRR Level II evaluation will be conducted after referral but prior to admission of the individual to a nursing facility except individuals who are determined by the PASRR Level I screening to have either an exempted hospital discharge as defined by 42 C.F.R. § 483.106(b)(2) or a categorical determination that nursing facility services are needed for the individual pursuant to 42 C.F.R. § 483.130, as approved by CMS.
D. The PASRR Level II evaluation will assess whether the individual can live in the community through an alternate placement option as referenced in 42 C.F.R. § 483.132, and each of the fifteen domains listed in the PASRR regulations, 42 C.F.R. § 483.136; evaluate whether the individual would benefit from specialized services; and make recommendations regarding specialized services. A report of the reviewer’s determination will be provided to the individual and the individual’s LAR.
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E. When conducting the PASRR Level II evaluation, the Local Authority will inform individuals referred for admission to a nursing facility, their families, and LAR of community options, services, and supports for which the individual may be eligible. The Local Authority will identify, arrange, and coordinate access to these services in order to avoid, wherever possible and consistent with an individual’s informed choice, admission to a nursing facility.
F. The State will ensure that each Local Authority designates a Diversion Coordinator to identify and arrange community services to divert individuals in the Target Population from nursing facilities. The Diversion Coordinator will be a professional who has experience in coordinating and/or providing services to individuals with IDD, including those with complex medical needs, in the community.
G. Individuals in the Target Population will be admitted to a nursing facility only when the individual’s needs for specialized services can be met by the Local Authority and by the nursing facility.
VI. Services for Individuals with IDD in Nursing Facilities
A. Educational and Informational Activities
1. The State will ensure that, at least quarterly, the Local Authorities provide or arrange for the provision of educational or informational activities addressing community living options for individuals in the Target Population in nursing facilities and their families. These activities may include family-to-family and peer-to-peer programs, providing information about the benefits of community living options, facilitating visits in such settings, and offering opportunities to meet with other individuals with IDD who are living, working, and receiving services in integrated settings, with their families, and with community providers.
2. These educational or informational activities will be provided by persons who are knowledgeable about community services and supports.
3. The activities required by VI.A.1 will not be provided by nursing facility staff or others with a contractual relationship with nursing facilities, with the exception of specialized services providers.
4. The State will publish guidelines for individuals and families seeking IDD services on how and where to apply for and obtain services, and make the guidelines available to individuals in the Target Population who are in nursing facilities, and to appropriate agencies, including Local Authorities and referring entities. These guidelines will describe the various services, supports, and programs available to the Target Population to enable them to reside in the community.
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B. The State will develop and implement a Community Living Options Information Process (“CLOIP”) for all individuals in the Target Population who reside in nursing facilities. The Local Authority will coordinate and ensure consistent implementation of the CLOIP process for individuals in the Target Population in nursing facilities in its service area.
C. For individuals in the Target Population in a nursing facility, the State will ensure that the Local Authority and the nursing facility provide specialized services.
VII. Outcomes and Outcome Measures
A. Within ninety (90) days of the Effective Date of this Agreement, as defined by VIII.A.1, the Parties will jointly agree on an Expert Reviewer who will be retained by the State to assist the Parties in developing and achieving outcomes for the State’s obligations under this Agreement.
B. The Expert Reviewer will be knowledgeable concerning the management and oversight of programs and services for individuals with IDD. The Expert Reviewer also will be knowledgeable regarding best practices concerning service and system outcomes for individuals with IDD. The Expert Reviewer will be independent and will not be a current employee of any Party.
C. Within 120 days of identifying the Expert Reviewer, the Expert Reviewer will assist the Parties in completing the following:
1. Developing the outcomes and outcome measures for the State’s obligations contained within III-VI of this Agreement.
2. Identifying the information and other data to be collected and reported necessary to determine whether each of the outcomes in VII.C.1 has been met.
3. Developing and implementing processes for analyzing, evaluating, and validating the reported information and other data.
4. Developing and implementing protocols and a sampling methodology for validation reviews that determine the degree to which the needs of individuals in the Target Population are being appropriately identified and met through person-centered planning and services; whether programs and services are based on the individual’s strengths, preferences, needs, and goals; whether services and supports are being provided with the requisite intensity, frequency, and duration to meet the individual’s needs; whether services and supports are being provided in the most integrated setting appropriate to the individual’s needs and consistent with his or her informed choice, and whether the individual has opportunities for integration in all aspects of his or her life, such as living arrangement, integrated meaningful day activities, access to community services, and opportunities for relationships with non-staff persons. The validation
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reviews will include face-to-face interviews with individuals in the Target Population, relevant professional staff, and other people involved in the individual’s life, along with reviews of the individuals’ treatment records and incident data.
5. Developing a schedule for reporting and providing data and information developed pursuant to VII.C.1–4.
D. The Parties will work collaboratively with the Expert Reviewer to complete the items in VII.C.1–5. To develop the processes and protocols described in VII.C.3 and VII.C.4, first the Parties will confer jointly with the Expert Reviewer on the Parties’ expectations for these provisions, following which the State will work collaboratively with the Expert Reviewer but will share drafts of documents with Plaintiffs and the United States.
VIII. Approval, Implementation, Termination, and Enforcement
A. Approval and Implementation
1. The Effective Date of the Agreement is the date on which the Interim Agreement is signed by all Parties.
2. Implementation of IV-VII of this Agreement will begin on the Effective Date of the Agreement. Implementation of III of this Agreement will begin on September 1, 2013.
3. The Parties agree that, within 14 days of the Effective Date of this Agreement, they will file with the Court a joint motion to approve the Agreement and to stay this Lawsuit during the term of this Agreement, as set out in VIII.I. The joint motion will request the Court to enter the Agreement as an order of the Court.
B. Comprehensive Agreement
1. The Parties agree that, during the term of this Agreement, they will continue to engage in good faith negotiations regarding all terms and conditions of a Comprehensive Agreement.
2. If the Parties reach a Comprehensive Agreement, the State will submit it as soon as practicable to the Texas Legislature for approval.
3. The Comprehensive Agreement will be expressly conditioned on obtaining approval by the Texas Legislature in accordance with Texas Civil Practice and Remedies Code, Chapter 111.
4. If the Parties reach a Comprehensive Agreement and the Comprehensive Agreement is approved by the Texas Legislature, all Parties will sign the Comprehensive Agreement by no later than July 1, 2015.
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C. Termination Conditions and Timelines
1. The Parties agree that, unless a timeline for achieving a condition in VIII.C.2 is extended by mutual written agreement of the Parties, if a timeline for any one of the conditions identified in VIII.C.2 is not met, then the exclusive remedy is that any Party may file a motion with the Court requesting that the Agreement be voided, the order entering the Interim Agreement be vacated, and the stay of this Lawsuit be lifted.
2. The conditions referenced in VIII.C.1 are:
a. Agreement on all terms of the Comprehensive Agreement within 150 days of the Effective Date of the Agreement, unless all Parties earlier agree that they have reached impasse. The Parties anticipate the possibility of extending this timeline to no later than July 31, 2014, in order to reach agreement with respect to the number of transition waiver slots in future biennia and the length of the Comprehensive Agreement;
b. Selection of an Expert Reviewer within 90 days of the Effective Date of the Agreement pursuant to VII.A;
c. Approval by CMS of the State’s amendment to the HCS waiver to include individuals with related conditions by the process outlined in III.A.3; and
d. Approval of the Comprehensive Agreement by the Texas Legislature no later than June 1, 2015.
D. Noncompliance and Enforcement
1. Except as provided in VIII.C, if Plaintiffs or the United States believes that the State has failed to fulfill any obligation under this Agreement, the Parties agree that the following process constitutes the exclusive means for resolution of any dispute related to any such claim of noncompliance.
2. The party asserting failure of the State to comply with this Agreement (“Complaining Party”), will give written notice to the State that, with specificity, sets forth the details of the alleged noncompliance, including:
a. the specific provision/s of this Agreement concerning which the alleged noncompliance is asserted; and
b. the reasons for the alleged noncompliance.
3. The State will have forty-five (45) days from the date of such written notice to respond in writing by denying noncompliance or by proposing steps that the State will take, and by when, to cure the alleged noncompliance.
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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 18 of 23
4. If the State fails to respond within forty-five (45) days or denies noncompliance, the Complaining Party may file a motion with the Court seeking specific performance regarding the alleged noncompliance related to the matters set out in VIII.D.2.a, or, if the Complaining Party has already obtained an order for specific performance regarding the same alleged noncompliance, the Complaining Party may file a motion to ensure compliance with the provisions of the Agreement addressed in the order for specific performance. The Complaining Party will not initiate any such motion without first having obtained an order for specific performance referenced herein and having given the State at least seven (7) business days’ notice of the intent to initiate such motion.
5. If the State timely responds by proposing curative action by a specified deadline, the Complaining Party may accept the State’s proposal or offer a counterproposal for a different curative action or deadline.
6. The Parties will confer in good faith to resolve any outstanding differences regarding the proposed curative action, but a Party may seek a judicial determination regarding the alleged noncompliance as described in VIII.D.4 thirty (30) days after the State’s curative action proposal if the Parties fail to reach agreement on a plan for curative action.
7. If Plaintiffs or the United States believe that the alleged noncompliance poses an immediate and serious threat to life or health of individuals in the Target Population with respect to a provision of this Agreement, then all provisions outlined in VIII.D apply, except that the State will have two (2) business days to respond to the notice in accordance with VIII.D.3, and the time set out in VIII.D.6 for a Party to file a motion described in VIII.D.4 regarding the alleged serious threat to life or health will be two (2) business days after a curative action proposal.
8. In no event will the Complaining Party seek this Court’s determination regarding alleged noncompliance until after June 1, 2014 and the time provided for the State to respond under VIII.D.3–4 and VIII.D.7 above , except that proceedings under VIII.D.7 may be initiated before June 1, 2014.
E. In any action brought under VIII.D, the party filing the action will have the burden of proof.
F. Any court order entered in accordance with VIII of this Interim Agreement, and the court’s jurisdiction over the order, will expire on the termination of this Interim Agreement, as set forth in VIII.I.
G. Except as provided in VIII.D of this Agreement, during the term of the Agreement, Plaintiffs and the United States will not file suit under the ADA, the Rehabilitation Act, the Medicaid Act, or the NHRA for any claim or allegation set forth in their pleadings in this Lawsuit.
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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 19 of 23
H. This Interim Agreement is expressly conditioned on obtaining subsequent approval by the Texas Legislature in accordance with Texas Civil Practice and Remedies Code, Chapter 111.
I. Termination Date. Unless earlier terminated pursuant to VIII.C, this Interim Agreement, and the Court's jurisdiction over it, will terminate on July 1, 2015.
IX. General Provisions
A. This Agreement constitutes the entire integrated Agreement between the Parties. Any modification of this Agreement will be executed in writing by the Parties and will be filed with the Court.
B. The Agreement is applicable to, and binding upon, all Parties, their employees, assigns, agents, and contractors charged with implementation of any portion of this Agreement, and their successors in office. If the State contracts with an outside provider for any of the services provided in this Agreement, the Agreement will be binding on any contracted parties, including agents and assigns.
C. The State agrees that it will not retaliate against any person because that person has filed a complaint, provided assistance or information, or participated in any other manner related to this Agreement.
D. The Parties will promptly notify each other of any court or administrative challenge to this Agreement or any portion thereof, and will defend against any challenge to the Agreement.
E. Each Party to this Agreement represents and warrants that the person who has signed this Agreement on behalf of his or her entity is duly authorized to enter into this Agreement and to bind that Party to the terms and conditions of this Agreement.
F. Nothing in this Agreement will be construed as an acknowledgement, an admission, or evidence of liability of the State under federal or state law, and this Agreement will not be used as evidence of liability in this or any other civil or criminal proceeding.
G. No person or entity is intended to be a third-party beneficiary of the provisions of this Agreement for purposes of any other civil, criminal, or administrative action, and, accordingly, no person or entity may assert any claim or right as a beneficiary or protected class under this Agreement in any separate action. This Agreement is not intended to impair or expand the right of any person or organization to seek relief against the State or their officials, employees, or agents.
H. This Agreement may be executed in counterparts, each of which will be deemed an original, and the counterparts will together constitute one and the same
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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 20 of 23
agreement, notwithstanding that each Party is not a signatory to the original or the same counterpart. I. Provision of any information to the Expert Reviewer, Plaintiffs, or the United States pursuant to this Agreement will not constitute a waiver of any privilege that would otherwise protect the information from disclosure to third parties. J. “Notice” under this Agreement will be provided to the following or their successors: For the State:
Attorney General of Texas For Plaintiffs:
Center for Public Representation Disability Rights Texas Weil, Gotshal & Manges LLP For the United States: United States Department of Justice [SIGNATURES ATTACHED]
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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 21 of 23

Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 22 of 23

Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 23 of 23

Case 5:10-cv-01025-OLG Document 177-2 Filed 08/19/13 Page 1 of 2

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
ERIC STEWARD, by his next friend and mother, Lillian Minor, et al.,
Plaintiffs,
v.

RICK PERRY, Governor of the State of Texas, et al.,
Defendants. _____________________________________

Case No. SA-5:10-CV-1025-OG

THE UNITED STATES OF AMERICA,

Plaintiff-Intervenor, v.

THE STATE OF TEXAS,

Defendant.

ORDER GRANTING JOINT MOTION FOR ENTRY OF INTERIM SETTLEMENT AGREEMENT and STAY OF PROCEEDINGS
Upon consideration of the Parties’ Joint Motion for Entry of Interim Settlement Agreement and Stay of Proceedings (“Motion”) (Dkt. #___), it is hereby:
ORDERED that the Motion is hereby GRANTED;
ORDERED that the Interim Agreement attached to the Motion as Exhibit A, is hereby entered as an order of this Court;
ORDERED that, except for the Parties’ Joint Motion to Amend the Protective Order (Dkt. # 176) and any motions filed with respect to compliance with the Interim Agreement as provided in section VIII.C of the Interim Agreement, the above-captioned litigation is stayed until July 1, 2015, unless the Interim Agreement is terminated earlier upon a motion and order as set forth in Section VIII of the Interim Agreement;
ORDERED that the Court’s July 25, 2013 Order (Dkt. # 175) is vacated; and

1

Case 5:10-cv-01025-OLG Document 177-2 Filed 08/19/13 Page 2 of 2 ORDERED that if the stay imposed by this order is lifted, Defendants shall have until July 31, 2015, or until thirty days from the date of the Court’s order lifting the stay, whichever is earlier, to respond to Plaintiffs’ Second Amended and Supplemental Complaint (Dkt. # 173) and Second Amended Motion for Class Certification (Dkt. # 174).
SIGNED on this day ____of _____________, 2013. ________________________________ ORLANDO L. GARCIA UNITED STATES DISTRICT JUDGE
2

 Case 5:10-cv-01025-OLG Document 179 Filed 08/26/13 Page 1 of 2

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS

AUG 2 6 Z013

SAN ANTONIO DIVISION ERIC STEWARD, by his next friend

CLERK, U.S. DIST4F
WBESTYER USTTtER

and mother, Lillian Minor, et al.,

Plaintiffs,

V.

RICK PERRY, Governor of the State of
Texas, et al.,
Defendants.

Case No. SA-5:lO-CV-1025-OG

THE UNITED STATES OF AMERICA,

Plaintiff-Intervenor,
v.

THE STATE OF TEXAS,

Defendant.

ORDER GRANTING JOINT MOTION FOR ENTRY OF INTERIM SETTLEMENT AGREEMENT and STAY OF PROCEEDINGS

Upon consideration of the Parties' Joint Motion for Entry of Interim Settlement

Agreement and Stay of Proceedings ("Motion") (Dkt.

it is hereby:

ORDERED that the Motion is hereby GRANTED;

ORDERED that the Interim Agreement attached to the Motion as Exhibit A, is hereby entered as an order of this Court;

ORDERED that, except for the Parties' Joint Motion to Amend the Protective Order (Dkt. # 176) and any motions filed with respect to compliance with the Interim Agreement as provided in section VIII.0 of the Interim Agreement, the above-captioned litigation is stayed until July 1, 2015, unless the Interim Agreement is terminated earlier upon a motion and order as set forth in Section VIII of the Interim Agreement;

ORDERED that the Court's July 25, 2013 Order (Dkt. # 175) is vacated; and

Case 5:10-cv-01025-OLG Document 179 Filed 08/26/13 Page 2 of 2
tAO2o0mRr1eDe5sn,EpdooRerndEudDnMttoitolhPttaihlotainriintffyttoihfdrefaCsys'ltsaaSsyfesrcoiCommnepdrtothiAsefeimcddaaebttnieyodnoethdf(iDtsahkneotdr.CdS#eoruu1pi7rspt4'lls)ie.fmotereddn,etrDalleiCffteionnmdgaptnlhatesinssttha(ayDl,lkwht.ahv#iceh1ue7nv3t)eirlanJisudleySaer3lc1ioe,nr,d

SIGNED on this day of

,2013.
ORLANDO L. GARCIA UNITED STATES DISTRICT JUDGE

2

 Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 1 of 22

iN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

"N

(.lr7
b
'2.

ERIC STEWARD, et al.,

§

Plaintiffs

§

V.

§

§

RICK PERRY, Governor of the State of Texas, §

etal.,

§

Defendants

§

§

§

THE UNITED STATES OF AMERICA,

§

Plaint fJJntervenor

§

v.

§

§

THE STATE OF TEXAS

§

Defendant

§

Case No. 5:10-CV-1025-OG

INTERIM SETTLEMENT AGREEMENT
I. Introduction
A. The Parties. Plaintiffs are Eric Steward, by his next friend and mother, Lillian Minor; Linda Arizpe, by her next friend and guardian, Rudy Arizpe; Andrea Padron, by her next friend and guardian, Rosa Hudecek; Patricia Ferrer, by her next friend and mother, Petra Ferrer; Beimy Holmes, by his next friend and guardian, Priscilla Holmes; Zackowitz Morgan, by his next friend and guardian, Sharon Barker; The Arc Of Texas, Inc.; and the Coalition Of Texans With Disabilities, Inc. ("Plaintiffs"). Plaintiff-Intervenor is the United States ("United States"). Defendants are the State of Texas; Rick Perry, in his official capacity as Governor of The State of Texas ("Governor"); Kyle L. Janek, in his official capacity as Executive Commissioner of the Texas Health and Human Services Commission ("HHSC"); and Jon Weizenbaum, in his official capacity as Commissioner of the Texas Department of Aging and Disability Services ("DADS"). Hereinafter, Defendants the State of Texas, Governor, HHSC, and DADS are referred to collectively as "the State." The Plaintiffs, the United States, and the State are hereinafter referred to collectively as "the Parties."
B. The Lawsuit. Plaintiffs filed suit against Defendants HHSC, DADS, and the Governor on December 20, 2010, asserting claims under the Americans with Disabilities Act, 42 U.S.C. § 12132 et seq. ("ADA"), Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, and several sections of Title XIX of the Social Security Act, 42 U.S.C. § 1396a, et seq. ("Medicaid Act"), including the Preadmission Screening and Resident Review ("PASRR") provisions of the 1987 Nursing Home Reform Act, 42 U.S.C. § 1396r, et seq. ("NHRA").

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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 2 of 22
Plaintiffs' claims were brought under 42 U.S.C. § 1983 ("Section 1983"), and
were brought on behalf of themselves and a purported class. Plaintiffs' live
pleading is the Amended and Supplemental Complaint, filed October 4, 2011 (Docket # 63). A Second Amended Complaint (Docket # 162-1) to add ten additional named plaintiffs was filed on March 12, 2013 and is pending before the Court. The United States was granted leave to intervene, and filed its Complaint
in Intervention against the State of Texas (Docket # 137), on September 20, 2012. The United States asserts claims under Section 504 of the Rehabilitation Act and Title II of the ADA. In general terms, the litigation brought by Plaintiffs and the
United States concerns individuals with IDD residing in nursing facilities and at
risk of admission to nursing facilities. Hereinafter, the above-styled and
referenced litigation, Steward et al. v, Perry, et a!; United States v. Texas, Case No. 5:10-CV-1025-OLG, United States District Court for the Western District of Texas, San Antonio Division, is referred to as "the Lawsuit."
C. Interim Agreement and Comprehensive Agreement. The Parties enter into
this agreement ("Interim Agreement" or "Agreement") in order to resolve as many issues as possible related to the Lawsuit for a limited time period, while still seeking to resolve all issues in the Lawsuit pursuant to a comprehensive agreement ("Comprehensive Agreement") without the expense, risks, delays, and
uncertainties of litigation.
D. By entering into this Agreement, the State does not admit to the truth or validity
of any claim made against it by Plaintiffs and the United States.
E. This Agreement applies only to the Target Population as defined herein.
F. The Parties acknowledge that the Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331; 28 U.S.C. § 1345; and42 U.S.C. § 12131-12132,andthat the Court is empowered to enter this Agreement. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b).
II. Definitions
A. "CFC" means "Community First Choice Options," a new program that the State intends to create to provide attendant and other services for eligible individuals living in the community. CFC would offer an opportunity for eligible individuals to receive person-centered community-based services to assist in the prevention of placement in a nursing facility. See 42 U.S.C. § 1396n(k); 42 C.F.R. § 441.500 et
seq. If approved by CMS, the CFC program is targeted for implementation
beginning September 1, 2014.
B. "CMS" means the United States Department of Health & Human Services
Centers for Medicare & Medicaid Services.
C. "Department of Aging and Disability Services" or "DADS" means the Texas state agency that provides long-term services and supports for individuals who are aging, for individuals with IDD, and for individuals with physical disabilities.
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 3 of 22

D. "Home and Community-based Services waiver" or "HCS waiver" means the
array of services and supports provided under the State's Home and Community-
based Services waiver as approved by CMS as of the Effective Date of this Agreement.

E. "ICF/IID" means Intermediate Care Facilities for Persons with Intellectual Disabilities that provide health and habilitation services to individuals with IDD.

F. "IDD" for purposes of this Agreement means an intellectual disability, related
condition, or both.

G. "Intellectual disability" or "ID" means significantly subaverage general intellectual functioning existing concurrently with deficits in adaptive behavior and originating before the age of 18. "Subaverage general intellectual functioning" refers to measured intelligence on standardized psychometric
instruments of two or more standard deviations below the age-group mean for the
tests used.

H. "LAR" means legally authorized representative. A "legally authorized
representative" means a person authorized by law to act on behalf of an individual
with regard to a matter described in this Agreement, which may be the guardian of an adult individual or a surrogate decision maker under Texas Health and
Safety Code §313.004.

"Local Authority" means an entity to which the Health and Human Services Commission delegates authority and responsibility within a specified region for the planning, policy development, coordination, resource development and
allocation, and for supervising and ensuring the provision of services to
individuals with IDD in one or more local service areas.

J.

"PASRR Level I" or "PASRR Level I screening" means the process of identifying

individuals who are suspected of having IDD and therefore require a PASRR

Level II evaluation. A PASRR Level I screening is further described and defined

in42C.F.R. §483.1l2(a)and483.128.

K. "PASRR Level II" means a face-to-face evaluation performed by a Local Authority to assess: (1) whether the individual's needs could be met in the
community through alternate placement options; (2) the individual's need for inpatient care, whether in a nursing facility or other setting such as an ICF/IID; and (3) the individual's need for specialized services. A PASRR Level II evaluation is further described and defined in 42 C.F.R. § 483.112, 483.132, and 483.136.

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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 4 of 22

L. "Related condition" means a severe, chronic disability that meets all of the

to following conditions:
1. It is attributable

a. Cerebral palsy or epilepsy; or

b. Any other condition, other than mental illness, found to be closely

related to Intellectual Disability because this condition results in

impairment of general intellectual functioning or adaptive behavior

similar to that of individuals with intellectual disabilities, and

requires treatment or services similar to those required for these

persons.

2. It is manifested before the person reaches age 22.

3. It is likely to continue indefinitely.

4. It results in substantial functional limitations in three or more of the

following areas of major life activity:

a.

Self-care.

b. Understanding and use of language.

c. Learning.

d. Mobility.

e.

Self-direction.

f.

Capacity for independent living.

M. "Specialized services" means services for the Target Population in nursing facilities identified by the PASRR Level II. Specialized services are further described and defined in 42 C.F.R. § 483.116, 483.120(a)(2), 483.136, 483.440(a)(1)), and 42 U.S.C. § 1396r(e)(7)(G)(iii).
N. Target Population:
"Target Population" as used in this Agreement means individuals with IDD 21 years of age or older who:
a. are in a nursing facility for more than 90 days; or
b. are determined by a PASRR Level I screening to be in need of a
PASRR Level II evaluation or are in a nursing facility for 90 days or less.
2. Individuals remain in the Target Population for as long as they are in a nursing facility and until one year after transition or diversion from a nursing facility through enrollment in community-based Medicaid services.
0. "Texas Home Living waiver" or "TxHmL waiver" means the array of services
and supports provided under the State's TxHmL waiver as approved by CMS as of the Effective Date of this Agreement.

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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 5 of 22
III. Serving Individuals with Developmental Disabilities In the Most Integrated Setting
A. Expansion of Community Services
For the biennium beginning September 1, 2013, the State will request and make all reasonable efforts to obtain from the Texas Legislature the necessary appropriations for the following additional services:
a. Targeted transition HCS waiver services for at least 360 individuals in Target Population u.N. 1 .a;
b. Targeted diversion HCS waiver services for at least 150 individuals in Target Population u.N. 1 .b; and
c. Targeted diversion TxHmL waiver services for 125 individuals in Target Population u.N. 1 .b.
2. With notice to Plaintiffs and the United States, the State may re-allocate
HCS waiver slots between III.A. l.a and lILA. 1 .b.
3. Not later than 180 days after the Effective Date of this Agreement, the State will submit to CMS an application to renew its HCS waiver to include individuals in the Target Population with related conditions. If the
renewal is approved by CMS, the State will not exclude any otherwise qualified individual from the Target Population because the individual has
a related condition but not an intellectual disability. If the inclusion is not approved by CMS because of a defect in the State's waiver renewal
application, the State will use its best efforts to correct the application.
4. The State will not exclude any otherwise qualified individual from the
Target Population due to the existence of complex behavioral or medical
needs. However, individuals in the Target Population must meet all
eligibility requirements of a waiver to enroll in waiver services.
If CFC is approved by the Legislature, within 180 days of the Effective Date of this Agreement, the State will submit to CMS a State Plan amendment for a Community First Choice Option. If the amendment is not approved by CMS because of a defect in the State's amendment
application, the State will use its best efforts to correct the application.
6. During the term of this Agreement, the State will notify Plaintiffs and the United States of any proposed amendments to the HCS and TxHmL
waivers at least 90 days prior to submitting the amendments to CMS for approval.
7. The State will include individuals with IDD in nursing facilities as a priority population in its Promoting Independence Plan.
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 6 of 22

B. Service Planning Team ("SPT")

1. The State will ensure that, through the Local Authorities, all individuals in the Target Population have an SPT.

2. The State will ensure that, through the Local Authorities, the individual's
SPT is convened at least quarterly, or more frequently if requested by the individual or LAR, or if there is a change in service needs.

3. For all individuals in the Target Population, the SPT will:

a. Develop a service plan that:

Is individualized and developed through a person-centered process. The SPT will ensure that individuals, regardless
of whether they have an LAR, will participate in the SPT to
the fullest extent possible and will receive the support necessary to do so, including, but not limited to,
communication supports;

ii.

Identifies the individual's strengths; preferences; medical,

nursing, nutritional management, clinical, and support

needs; and desired outcomes; and

iii.

Identifies the services and supports that are needed to meet

the individual's needs, achieve the desired outcomes, and

maximize the person's ability to live successfully in the

most integrated setting possible.

b. Assess the adequacy of the services and supports that the
individual is receiving; and

c. Monitor the individual's service plan to make timely additional referrals, service changes, and amendments to the plan as needed.

4. For individuals in the Target Population in nursing facilities, the SPT will:
a. Include the following persons: the individual being served; his or her LAR; the service coordinator; nursing facility staff familiar with the individual's needs; persons providing specialized services for the individual; and, if a specific alternate placement provider has been selected, a representative from that provider. The SPT may include: other concerned persons whose inclusion is requested by the individual or the LAR and, at the discretion of the Local Authority, other persons who are directly involved in the delivery of services to individuals with IDD;

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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 7 of 22
b. Identify the specific specialized services to be provided to the
individual, including the amount, intensity, and frequency of each
specialized service;
c. Be responsible for planning, ensuring the implementation of, and monitoring all specialized services identified in the service plan, and transition planning in coordination with the nursing facility's care planning team; and
d. Ensure that the individual's service plan, including specialized services, is integrated into the nursing facility's plan of care and that specialized services are planned, provided, and monitored in a consistent manner, and integrated with the medical and nursing services, and services of lesser intensity, provided by the nursing facility.
5. For individuals in the Target Population living in the community, the SPT will:
a. Include the persons specified in the rules for the program in which the individual is enrolled;
b. Be responsible for planning, ensuring the implementation of, and monitoring all services identified in the service plan; and
c. Determine the sufficient frequency of face-to-face service coordination contacts based on risk factors including, but not limited to, recent transition from a nursing facility, the assessed
need for more intensive monitoring; recent or repeat hospitalizations; recent or repeat emergency room contacts; or
factors placing the individual at risk of readmission to a nursing
facility due to identified medical, psychiatric, or behavioral conditions.
C. Service Coordinator
The State will ensure that, through the Local Authorities, all individuals in the Target Population who do not refuse service coordination receive servi planning and coordination by a service coordinator employed by an enXity other than the nursing facility, such as a Local Authority, in conjunction with an SPT.
2. The service coordinator will be responsible for (a) convening and
facilitating the SPT; (b) facilitating the development of the service plan;
(c) facilitating revisions to the service plan, as needed; and (d) facilitating
the coordination of services and supports.
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 8 of 22
3. The service coordinator will meet face-to-face with each assigned individual in the Target Population on a monthly basis, or more frequently
if needed.
4. After the individual has transitioned or been diverted from a nursing facility admission into a community program for 180 days, the service coordinator will meet with the individual with the frequency required by the rules for the program in which the individual is enrolled.
5. For individuals in the Target Population in nursing facilities, the service coordinator will:
a. Discuss with the individual and LAR a range of community
options and alternatives, facilitate visits to community programs, and address concerns about community living;
b. Ensure that the individual receives the educational and informational activities described in VI.A; and
c. Facilitate coordination between an individual's service plan and the nursing facility's plan of care.
6. For individuals in the Target Population in nursing facilities transitioning to the community, the service coordinator will facilitate the SPT' s transition planning responsibilities under IV.B and IV.C, including the
development of a Community Living Discharge Plan pursuant to IV.B.2.
7. For individuals in the Target Population in the community, the service coordinator will:
a. Inquire about any recent hospitalizations, emergency department contacts, increased physician visits, or other crises, including
medical crises. If an individual experiences an increase in
hospitalization, emergency room contacts, and/or crises, the service coordinator will convene the SPT to identify all necessary modifications to the individual's service plan and will work with the SPT to arrange for any additional needed services or supports;
b. Record health care status sufficient to readily identify when changes in the individual's status occurs; and
c. Ensure that the individual receives timely initial and ongoing
assessments of medical, nursing, and nutritional management
needs.
8. Caseload ratios for service coordinators will be sufficient to effectively
meet the requirements of this Agreement and will be based on individual
needs and the person-centered planning process, recognizing that transitioning an individual from a nursing facility to a community
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 9 of 22

placement and that serving individuals with complex needs in the community can require intensive service coordination.

D. Medical, Nursing, and Nutritional Management Services and Supports

To ensure that medical, nursing, and nutritional management services and supports are available in the community so that individuals in the Target Population living in the community, including those with complex medical needs, can receive such services in the most integrated settings appropriate
to their needs, the State will:

a.

Use available outcome data and other information to work with

each Local Authority, as well as community providers and

stakeholders in each region, to identify gaps in services and to

develop and, within available authority and resources, implement a

plan to address those gaps, including the capacity of small

residential settings that provide intensive clinical services and

supports to individuals in the Target Population with the most

complex medical needs;

b. Require each Local Authority to designate one or more qualified registered nurse, advanced practice nurse, and/or medical doctor to
provide training, technical assistance, and ongoing support, as needed, to residential and other providers who serve individuals in the Target Population with complex medical needs living in the
community; and

c.

Develop collaborative relationships with local healthcare providers

to promote timely access to routine, preventative, and emergency

clinical services and supports (both general and specialized) for

individuals in the Target Population living in the community.

E. Integrated Day Activities

All individuals in the Target Population in a nursing facility will be provided opportunities for engaging in community activities to the fullest extent practicable, consistent with their identified needs and preferences.

2. The State will ensure that individuals in the Target Population living in the
community have access to the existing array of day activities in the most
integrated settings appropriate to their needs and desires. Integrated day activities include supported and competitive employment, community volunteer activities, community learning and recreational opportunities,
and other integrated day activities.

3. Goals related to integrated day activities, including integrated employment, must be developed and discussed by the individual's SPT
and included in the individual's service plan described in III.B.

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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 10 of 22
F. Community Living Options
The State will serve individuals in the Target Population in the most integrated setting consistent with their informed choice and needs by implementing the provisions in III.F.
2. To facilitate individuals in the Target Population living independently in the community, the State will provide information about and make appropriate referrals for individuals to apply for rental or housing assistance through all existing sources, including local, State, or federal affordable housing or rental assistance programs (tenant-based or projectbased).
3. No individual in the Target Population who is in a nursing facility will be served in another nursing facility or in a residential setting that serves more than four individuals, and no individual in the Target Population in the community will be served in a residential setting that serves more than four individuals, unless the Diversion Coordinator (see V.F):
a. In consultation with the individual's SPT, attempted and was unable to address barriers to placement in a more integrated setting pursuant to IV.C.5; and
b. Verified that the individual, family, and/or LAR made an informed decision regarding alternate living options.
IV. Planning for Transition from Nursing Facilities
A. Identification of Persons for Transition
By August 31, 2014, the State will review all current nursing facility residents to identify any residents who may have IDD, and, for any
individuals so identified, will conduct a Level II PASRR evaluation if an
evaluation was not conducted on or after May 24, 2013.
2. If the State becomes aware of an individual in a nursing facility whose
Level I screening should have indicated that the individual needed a Level II evaluation but did not, the State will ensure that the Local Authority conducts a Level II evaluation.
3. The State will provide a monthly report to the Local Authority that identifies each individual in the Target Population currently in a nursing facility whose response in Section Q of the MDS 3.0 indicated that the individual is interested in speaking with someone about returning to the community. The State will ensure that the Local Authority, within 30 days of receipt of this information, contacts the individual to determine whether the individual is interested in transitioning to the community.
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4. The State will provide a monthly report to the Local Authority that identifies each individual in the Target Population currently in a nursing facility whose PASRR Level II evaluation reflects that the individual's needs can be met in an appropriate community setting.
5. The State will ensure that each Local Authority and nursing facility identifies and reports to the Local Authority the identity of any individual who expresses an interest in transitioning to the community to any
employee, contractor, or specialized service provider of the Local
Authority or nursing facility.
B. Planning for Transition
The State will ensure, through the Local Authorities, that upon admission to the nursing facility and at least every six months thereafter, service coordinators will provide all individuals in the Target Population living in nursing facilities and their LARs information about community services and supports, and will discuss these options with individuals and their LARs in order to better enable the individual and LAR to make an informed decision about transitioning, as described in VI.B.
2. The State will ensure, through the Local Authorities, that the SPT will create a Community Living Discharge Plan ("CLDP") for the individuals in the Target Population identified in IV.A.4 and IV.A.5. The CLDP will describe the activities, timetable, responsibilities, services, and supports involved in assisting the individual to consider community living options, choose a provider, and transition from the nursing facility to the community. The SPT will develop, implement, monitor, and revise the CLDP as necessary.
C. Transition to Community Setting
The State will facilitate trial visits (including overnight visits, where feasible) for individuals transitioning to community settings.
2. Enrollment in a community-based waiver program of an individual in
the Target Population transitioning from a nursing facility to a community setting will occur within 180 days from when the Local Authority is notified of the availability of a waiver slot for the individual, unless DADS grants an extension to the Local Authority. The State will maintain data about these extensions and will evaluate the data to identify relevant trends and patterns.
3. All essential supports identified in the individual's CLDP must be in place prior to the individual's transition to the community. This determination will be documented.
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4. The State will develop and implement a monitoring tool to follow up with individuals in the Target Population after their discharge from a nursing facility to assess whether supports identified in the individual's CLDP are in place, to identify any gaps in care, and to address such gaps to reduce the risk of re-admission, crises, or other negative outcomes. The
individual will receive at least three monitoring visits during the first 90 days following the individual's move, including one within the first 7
days. The individual's CLDP will specify the frequency of those
monitoring visits.

5.

In the event that an SPT makes a recommendation to maintain placement at a

nursing facility, the SPT will document the reasons for the decisions,

identify the barriers to placement in a more integrated setting, and

describe in the service plan the steps the team will take to address those

barriers.

V. Nursing Facility Diversion

A. Diversion occurs before admission or within 90 days of admission to a nursing
facility when, consistent with the PASRR Level II evaluation, community living options, services, and/or supports provide an appropriate alternate placement to avoid admission to, or a stay beyond 90 days in, a nursing facility, consistent with the individual's choice.

B. The State will develop a system that tracks all referrals to nursing facilities and ensures a PASRR Level I screening is completed for the referred individual prior
to admission. The system will notify the Local Authority and the Diversion
Coordinator (see V.F) of all referrals once the Level I is submitted electronically
to DADS.

C. The State will ensure that the Local Authorities conduct PASRR Level II evaluations for every individual in the Target Population seeking admission to a nursing facility. The PASRR Level II evaluation will be conducted after referral
but prior to admission of the individual to a nursing facility except individuals
who are determined by the PASRR Level I screening to have either an exempted hospital discharge as defined by 42 C.F.R. § 483.1 06(b)(2) or a categorical determination that nursing facility services are needed for the individual pursuant to 42 C.F.R. § 483.130, as approved by CMS.
D. The PASRR Level II evaluation will assess whether the individual can live in the community through an alternate placement option as referenced in 42 C.F.R.
§ 483.132, and each of the fifteen domains listed in the PASRR regulations, 42
C.F.R. § 483.136; evaluate whether the individual would benefit from specialized
services; and make recommendations regarding specialized services. A report of the reviewer's determination will be provided to the individual and the individual's LAR.

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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 13 of 22
E. When conducting the PASRR Level II evaluation, the Local Authority will inform
individuals referred for admission to a nursing facility, their families, and LAR of community options, services, and supports for which the individual may be
eligible. The Local Authority will identify, arrange, and coordinate access to these services in order to avoid, wherever possible and consistent with an individual's informed choice, admission to a nursing facility.
F. The State will ensure that each Local Authority designates a Diversion Coordinator to identifi and arrange community services to divert individuals in the Target Population from nursing facilities. The Diversion Coordinator will be a professional who has experience in coordinating and/or providing services to individuals with IDD, including those with complex medical needs, in the community.
G. Individuals in the Target Population will be admitted to a nursing facility only when the individual's needs for specialized services can be met by the Local Authority and by the nursing facility.
VI. Services for Individuals with IDD in Nursing Facilities
A. Educational and Informational Activities
The State will ensure that, at least quarterly, the Local Authorities provide
or arrange for the provision of educational or informational activities
addressing community living options for individuals in the Target Population in nursing facilities and their families. These activities may include family-to-family and peer-to-peer programs, providing
information about the benefits of community living options, facilitating
visits in such settings, and offering opportunities to meet with other individuals with IDD who are living, working, and receiving services in integrated settings, with their families, and with community providers.
2. These educational or informational activities will be provided by persons who are knowledgeable about community services and supports.
3. The activities required by VI.A.1 will not be provided by nursing facility staff or others with a contractual relationship with nursing facilities, with
the exception of specialized services providers.
4. The State will publish guidelines for individuals and families seeking IDD services on how and where to apply for and obtain services, and make the guidelines available to individuals in the Target Population who are in nursing facilities, and to appropriate agencies, including Local Authorities and referring entities. These guidelines will describe the various services, supports, and programs available to the Target Population to enable them to reside in the community.
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 14 of 22
B. The State will develop and implement a Community Living Options Information Process ("CLOIP") for all individuals in the Target Population who reside in nursing facilities. The Local Authority will coordinate and ensure consistent
implementation of the CLOIP process for individuals in the Target Population in
nursing facilities in its service area.
C. For individuals in the Target Population in a nursing facility, the State will ensure that the Local Authority and the nursing facility provide specialized services.
VII. Outcomes and Outcome Measures
A. Within ninety (90) days of the Effective Date of this Agreement, as defined by VIII.A. 1, the Parties will jointly agree on an Expert Reviewer who will be
retained by the State to assist the Parties in developing and achieving outcomes for the State's obligations under this Agreement.
B. The Expert Reviewer will be knowledgeable concerning the management and
oversight of programs and services for individuals with IDD. The Expert
Reviewer also will be knowledgeable regarding best practices concerning service and system outcomes for individuals with IDD. The Expert Reviewer will be
independent and will not be a current employee of any Party.
C. Within 120 days of identifying the Expert Reviewer, the Expert Reviewer will
assist the Parties in completing the following:
1. Developing the outcomes and outcome measures for the State's obligations contained within ifi-VI of this Agreement.
2. Identifying the information and other data to be collected and reported
necessary to determine whether each of the outcomes in VII.C. 1 has been
met.
3. Developing and implementing processes for analyzing, evaluating, and validating the reported information and other data.
4. Developing and implementing protocols and a sampling methodology for
validation reviews that determine the degree to which the needs of
individuals in the Target Population are being appropriately identified and met through person-centered planning and services; whether programs and services are based on the individual's strengths, preferences, needs, and goals; whether services and supports are being provided with the requisite intensity, frequency, and duration to meet the individual's needs; whether services and supports are being provided in the most integrated setting appropriate to the individual's needs and consistent with his or her informed choice, and whether the individual has opportunities for integration in all aspects of his or her life, such as living arrangement, integrated meaningful day activities, access to community services, and opportunities for relationships with non-staff persons. The validation
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 15 of 22
reviews will include face-to-face interviews with individuals in the Target Population, relevant professional staff, and other people involved in the
individual's life, along with reviews of the individuals' treatment records and incident data.
5. Developing a schedule for reporting and providing data and information developed pursuant to VII.C. 1-4.
D. The Parties will work collaboratively with the Expert Reviewer to complete the items in VII.C. 1-5. To develop the processes and protocols described in VII.C.3 and VII.C.4, first the Parties will confer jointly with the Expert Reviewer on the Parties' expectations for these provisions, following which the State will work collaboratively with the Expert Reviewer but will share drafts of documents with Plaintiffs and the United States.
VIII. Approval, Implementation, Termination, and Enforcement
A. Approval and Implementation
1. The Effective Date of the Agreement is the date on which the Interim
Agreement is signed by all Parties.
2. Implementation of IV-VII of this Agreement will begin on the Effective Date of the Agreement. Implementation of III of this Agreement will
begin on September 1, 2013.
3. The Parties agree that, within 14 days of the Effective Date of this Agreement, they will file with the Court a joint motion to approve the Agreement and to stay this Lawsuit during the term of this Agreement, as set out in VIII.I. The joint motion will request the Court to enter the Agreement as an order of the Court.
B. Comprehensive Agreement
The Parties agree that, during the term of this Agreement, they will continue to engage in good faith negotiations regarding all terms and conditions of a Comprehensive Agreement.
2. If the Parties reach a Comprehensive Agreement, the State will submit it
as soon as practicable to the Texas Legislature for approval.
The Comprehensive Agreement will be expressly conditioned on obtaining approval by the Texas Legislature in accordance with Texas Civil Practice and Remedies Code, Chapter 111.
4. If the Parties reach a Comprehensive Agreement and the Comprehensive
Agreement is approved by the Texas Legislature, all Parties will sign the Comprehensive Agreement by no later than July 1, 2015.
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 16 of 22
C. Termination Conditions and Timelines
The Parties agree that, unless a timeline for achieving a condition in
VIII.C.2 is extended by mutual written agreement of the Parties, if a timeline for any one of the conditions identified in VIII.C.2 is not met,
then the exclusive remedy is that any Party may file a motion with the Court requesting that the Agreement be voided, the order entering the Interim Agreement be vacated, and the stay of this Lawsuit be lifted.
2. The conditions referenced in VIII.C. 1 are:
a. Agreement on all terms of the Comprehensive Agreement within 150 days of the Effective Date of the Agreement, unless all Parties
earlier agree that they have reached impasse. The Parties anticipate the possibility of extending this timeline to no later than July 31, 2014, in order to reach agreement with respect to the number of transition waiver slots in future biennia and the length of the Comprehensive Agreement;
b. Selection of an Expert Reviewer within 90 days of the Effective Date of the Agreement pursuant to VII.A;
c. Approval by CMS of the State's amendment to the HCS waiver to include individuals with related conditions by the process outlined
in III.A.3; and
d. Approval of the Comprehensive Agreement by the Texas
Legislature no later than June 1, 2015.
D. Noncompliance and Enforcement
Except as provided in VIII.C, if Plaintiffs or the United States believes
that the State has failed to fulfill any obligation under this Agreement, the Parties agree that the following process constitutes the exclusive means for
resolution of any dispute related to any such claim of noncompliance.
2. The party asserting failure of the State to comply with this Agreement
("Complaining Party"), will give written notice to the State that, with
specificity, sets forth the details of the alleged noncompliance, including:
a. the specific provisionls of this Agreement concerning which the
alleged noncompliance is asserted; and
b. the reasons for the alleged noncompliance.
3. The State will have forty-five (45) days from the date of such written
notice to respond in writing by denying noncompliance or by proposing steps that the State will take, and by when, to cure the alleged noncompliance.
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 17 of 22
4. If the State fails to respond within forty-five (45) days or denies
noncompliance, the Complaining Party may file a motion with the Court seeking specific performance regarding the alleged noncompliance related
to the matters set out in VIII.D.2.a, or, if the Complaining Party has
already obtained an order for specific performance regarding the same alleged noncompliance, the Complaining Party may file a motion to
ensure compliance with the provisions of the Agreement addressed in the
order for specific performance. The Complaining Party will not initiate any such motion without first having obtained an order for specific performance referenced herein and having given the State at least seven
(7) business days' notice of the intent to initiate such motion.
5. If the State timely responds by proposing curative action by a specified
deadline, the Complaining Party may accept the State's proposal or offer a counterproposal for a different curative action or deadline.
6. The Parties will confer in good faith to resolve any outstanding differences regarding the proposed curative action, but a Party may seek a judicial determination regarding the alleged noncompliance as described in
VIII.D.4 thirty (30) days after the State's curative action proposal if the
Parties fail to reach agreement on a plan for curative action.
7. If Plaintiffs or the United States believe that the alleged noncompliance poses an immediate and serious threat to life or health of individuals in the Target Population with respect to a provision of this Agreement, then all
provisions outlined in VIII.D apply, except that the State will have two (2) business days to respond to the notice in accordance with VIII.D.3, and the time set out in VIII.D.6 for a Party to file a motion described in VIII.D.4 regarding the alleged serious threat to life or health will be two (2) business days after a curative action proposal.
8. In no event will the Complaining Party seek this Court's determination regarding alleged noncompliance until after June 1, 2014 and the time provided for the State to respond under VIII.D.3-4 and VIII.D.7 above, except that proceedings under VIII.D.7 may be initiated before June 1, 2014.
E. In any action brought under VIII.D, the party filing the action will have the burden of proof.
F. Any court order entered in accordance with VIII of this Interim Agreement, and the court's jurisdiction over the order, will expire on the termination of this
Interim Agreement, as set forth in VIII.I.
G. Except as provided in VIII.D of this Agreement, during the term of the
Agreement, Plaintiffs and the United States will not file suit under the ADA, the Rehabilitation Act, the Medicaid Act, or the NHRA for any claim or allegation set forth in their pleadings in this Lawsuit.
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 18 of 22
H. This Interim Agreement is expressly conditioned on obtaining subsequent approval by the Texas Legislature in accordance with Texas Civil Practice and Remedies Code, Chapter 111.
I. Termination Date. Unless earlier terminated pursuant to VIII.C, this Interim Agreement, and the Court's jurisdiction over it, will terminate on July 1, 2015.
IX. General Provisions
A. This Agreement constitutes the entire integrated Agreement between the Parties.
Any modification of this Agreement will be executed in writing by the Parties and
will be filed with the Court.
B. The Agreement is applicable to, and binding upon, all Parties, their employees, assigns, agents, and contractors charged with implementation of any portion of
this Agreement, and their successors in office. If the State contracts with an outside provider for any of the services provided in this Agreement, the
Agreement will be binding on any contracted parties, including agents and assigns.
C. The State agrees that it will not retaliate against any person because that person has filed a complaint, provided assistance or information, or participated in any other manner related to this Agreement.
D. The Parties will promptly notify each other of any court or administrative challenge to this Agreement or any portion thereof, and will defend against any
challenge to the Agreement.
E. Each Party to this Agreement represents and warrants that the person who has
signed this Agreement on behalf of his or her entity is duly authorized to enter into this Agreement and to bind that Party to the terms and conditions of this
Agreement.
F. Nothing in this Agreement will be construed as an acknowledgement, an
admission, or evidence of liability of the State under federal or state law, and this Agreement will not be used as evidence of liability in this or any other civil or
criminal proceeding.
G. No person or entity is intended to be a third-party beneficiary of the provisions of this Agreement for purposes of any other civil, criminal, or administrative action, and, accordingly, no person or entity may assert any claim or right as a beneficiary or protected class under this Agreement in any separate action. This Agreement is not intended to impair or expand the right of any person or organization to seek relief against the State or their officials, employees, or
agents.
H. This Agreement may be executed in counterparts, each of which will be deemed
an original, and the counterparts will together constitute one and the same
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 19 of 22
agreement, notwithstanding that each Party is not a signatory to the original or the same counterpart. Provision of any information to the Expert Reviewer, Plaintiffs, or the United States pursuant to this Agreement will not constitute a waiver of any privilege that would otherwise protect the information from disclosure to third parties.
J. "Notice" under this Agreement will be provided to the following or their
successors: For the State:
Attorney General of Texas
For Plaintiffs: Center for Public Representation Disability Rights Texas Weil, Gotshal & Manges LLP
For the United States:
United States Department of Justice
[SIGNATURES ATTACHED]
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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 20 of 22

FOR THE PLA[NTIFFS:
7-//
date

7 2/
date

7-

o/3

date

Amy Mlzeles,lExecut v Director
The Arc of Texas
Pkdntff
Dennis Borel, Executive Direct
Coalition of Texans with Disabilities, Inc.
Plaint[f
AR A. CORBETT SEAN JACKSON Disability Rights Texas
YVETTE OSTOLAZA ROBERT VELEVIS CASEY A. BURTON Weil, Gotshal & Manges LLP
STEVEN J. SCHWARTZ DEBORAH DORFMAN BETTINA TONER Center for Public Representation
Counselfor Plaintjffs

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Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 21 of 22

FOR THE UNITED STATES:
I date
_______
date

-CELYN SA'IBLS
Acting Assistant Attorney General Civil Rights Division
EVE L. HILL
Deputy Assistant Attorney General Civil Rights Division
ALISON N. BARKOFF
Special Counsel for Olmstead Enforcement Civil Rights Division
JONATHAN SMITH, Chief
Special Litigation Section Civil Rights Division
BENJAMIN 0, TAYLOE, JR.
Deputy Chief Special Litigation Section Civil Rights Division
L 2A- A
ROBERT A. KOCH REGAN RUSH ALEXANDRA SHANDELL
Trial Attorneys Special Litigation Section Civil Rights Division U.S. Department of Justice
Counselfor PlaintifjIntervrnor

Page 21 of 22

Case 5:10-cv-01025-OLG Document 180 Filed 08/26/13 Page 22 of 22

FOR THE DEFENDANTS: date

DA

ORALES

General Counsel, for

RICK PERRY

Governor of Texas

Defendant

date

KYLE L. JANEKIvLD.

Executive Commissioner, Texas Health and

Human Services Commission

Def ndant

date

J N WEIZENUM'

Commissionei'texas Department of Aging and

Disability Services

Defendant

HONORABLE GREG ABBOTt Attorney General

DANIEL T. HODGE First Assistant Attorney General

DAVID MATTAX Deputy Attorney General for Defense Litigation

JAMES "BEAU" ECCLES Chief, General Litigation Division

date

NANtYREN

DARREN GIBSO

ANGELA V. COLMENERO

AMANDA COCHRAN-McCALL

ANDREW B. STEPHENS

MICHAEL PATtERSON

AMY PENN

MARK RIETVELT

Assistant Attorneys General

Counselfor Defendants

Page 22 of 22

 Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 2 of 23

IN THE UNITED STATES DISTRICT COURT
 FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

ERIC STEWARD, et al.,

§

Plaintiffs

§

v.

§

§

RICK PERRY, Governor of the State of Texas, §

et al.,

§

Defendants

§

§

§

THE UNITED STATES OF AMERICA,

§

Plaintiff-Intervenor

§

v.

§

§

THE STATE OF TEXAS

§

Defendant

§

Case No. 5:10-CV-1025-OG

INTERIM SETTLEMENT AGREEMENT
I. Introduction
A. The Parties. Plaintiffs are Eric Steward, by his next friend and mother, Lillian Minor; Linda Arizpe, by her next friend and guardian, Rudy Arizpe; Andrea Padron, by her next friend and guardian, Rosa Hudecek; Patricia Ferrer, by her next friend and mother, Petra Ferrer; Benny Holmes, by his next friend and guardian, Priscilla Holmes; Zackowitz Morgan, by his next friend and guardian, Sharon Barker; The Arc Of Texas, Inc.; and the Coalition Of Texans With Disabilities, Inc. (“Plaintiffs”). Plaintiff-Intervenor is the United States (“United States”). Defendants are the State of Texas; Rick Perry, in his official capacity as Governor of The State of Texas (“Governor”); Kyle L. Janek, in his official capacity as Executive Commissioner of the Texas Health and Human Services Commission (“HHSC”); and Jon Weizenbaum, in his official capacity as Commissioner of the Texas Department of Aging and Disability Services (“DADS”). Hereinafter, Defendants the State of Texas, Governor, HHSC, and DADS are referred to collectively as “the State.” The Plaintiffs, the United States, and the State are hereinafter referred to collectively as “the Parties.”
B. The Lawsuit. Plaintiffs filed suit against Defendants HHSC, DADS, and the Governor on December 20, 2010, asserting claims under the Americans with Disabilities Act, 42 U.S.C. § 12132 et seq. (“ADA”), Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, and several sections of Title XIX of the Social Security Act, 42 U.S.C. § 1396a, et seq. (“Medicaid Act”), including the Preadmission Screening and Resident Review (“PASRR”) provisions of the 1987 Nursing Home Reform Act, 42 U.S.C. § 1396r, et seq. (“NHRA”).

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Plaintiffs’ claims were brought under 42 U.S.C. § 1983 (“Section 1983”), and were brought on behalf of themselves and a purported class. Plaintiffs’ live pleading is the Amended and Supplemental Complaint, filed October 4, 2011 (Docket # 63). A Second Amended Complaint (Docket # 162-1) to add ten additional named plaintiffs was filed on March 12, 2013 and is pending before the Court. The United States was granted leave to intervene, and filed its Complaint in Intervention against the State of Texas (Docket # 137), on September 20, 2012. The United States asserts claims under Section 504 of the Rehabilitation Act and Title II of the ADA. In general terms, the litigation brought by Plaintiffs and the United States concerns individuals with IDD residing in nursing facilities and at risk of admission to nursing facilities. Hereinafter, the above-styled and referenced litigation, Steward et al. v. Perry, et al; United States v. Texas, Case No. 5:10-CV-1025-OLG, United States District Court for the Western District of Texas, San Antonio Division, is referred to as “the Lawsuit.”
C. Interim Agreement and Comprehensive Agreement. The Parties enter into this agreement (“Interim Agreement” or “Agreement”) in order to resolve as many issues as possible related to the Lawsuit for a limited time period, while still seeking to resolve all issues in the Lawsuit pursuant to a comprehensive agreement (“Comprehensive Agreement”) without the expense, risks, delays, and uncertainties of litigation.
D. By entering into this Agreement, the State does not admit to the truth or validity of any claim made against it by Plaintiffs and the United States.
E. This Agreement applies only to the Target Population as defined herein.
F. The Parties acknowledge that the Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331; 28 U.S.C. § 1345; and 42 U.S.C. §§ 12131-12132, and that the Court is empowered to enter this Agreement. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b).
II. Definitions
A. “CFC” means “Community First Choice Options,” a new program that the State intends to create to provide attendant and other services for eligible individuals living in the community. CFC would offer an opportunity for eligible individuals to receive person-centered community-based services to assist in the prevention of placement in a nursing facility. See 42 U.S.C. § 1396n(k); 42 C.F.R. § 441.500 et seq. If approved by CMS, the CFC program is targeted for implementation beginning September 1, 2014.
B. “CMS” means the United States Department of Health & Human Services Centers for Medicare & Medicaid Services.
C. “Department of Aging and Disability Services” or “DADS” means the Texas state agency that provides long-term services and supports for individuals who are aging, for individuals with IDD, and for individuals with physical disabilities.
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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 4 of 23
D. “Home and Community-based Services waiver” or “HCS waiver” means the array of services and supports provided under the State’s Home and Communitybased Services waiver as approved by CMS as of the Effective Date of this Agreement.
E. “ICF/IID” means Intermediate Care Facilities for Persons with Intellectual Disabilities that provide health and habilitation services to individuals with IDD.
F. “IDD” for purposes of this Agreement means an intellectual disability, related condition, or both.
G. “Intellectual disability” or “ID” means significantly subaverage general intellectual functioning existing concurrently with deficits in adaptive behavior and originating before the age of 18. “Subaverage general intellectual functioning” refers to measured intelligence on standardized psychometric instruments of two or more standard deviations below the age-group mean for the tests used.
H. “LAR” means legally authorized representative. A “legally authorized representative” means a person authorized by law to act on behalf of an individual with regard to a matter described in this Agreement, which may be the guardian of an adult individual or a surrogate decision maker under Texas Health and Safety Code §313.004.
I. “Local Authority” means an entity to which the Health and Human Services Commission delegates authority and responsibility within a specified region for the planning, policy development, coordination, resource development and allocation, and for supervising and ensuring the provision of services to individuals with IDD in one or more local service areas.
J. “PASRR Level I” or “PASRR Level I screening” means the process of identifying individuals who are suspected of having IDD and therefore require a PASRR Level II evaluation. A PASRR Level I screening is further described and defined in 42 C.F.R. §§ 483.112(a) and 483.128.
K. “PASRR Level II” means a face-to-face evaluation performed by a Local Authority to assess: (1) whether the individual’s needs could be met in the community through alternate placement options; (2) the individual’s need for inpatient care, whether in a nursing facility or other setting such as an ICF/IID; and (3) the individual’s need for specialized services. A PASRR Level II evaluation is further described and defined in 42 C.F.R. §§ 483.112, 483.132, and 483.136.
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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 5 of 23
L. “Related condition” means a severe, chronic disability that meets all of the following conditions: 1. It is attributable to— a. Cerebral palsy or epilepsy; or b. Any other condition, other than mental illness, found to be closely related to Intellectual Disability because this condition results in impairment of general intellectual functioning or adaptive behavior similar to that of individuals with intellectual disabilities, and requires treatment or services similar to those required for these persons. 2. It is manifested before the person reaches age 22. 3. It is likely to continue indefinitely. 4. It results in substantial functional limitations in three or more of the following areas of major life activity: a. Self-care. b. Understanding and use of language. c. Learning. d. Mobility. e. Self-direction. f. Capacity for independent living.
M. “Specialized services” means services for the Target Population in nursing facilities identified by the PASRR Level II. Specialized services are further described and defined in 42 C.F.R. §§ 483.116, 483.120(a)(2), 483.136, 483.440(a)(1)), and 42 U.S.C. § 1396r(e)(7)(G)(iii).
N. Target Population:
1. “Target Population” as used in this Agreement means individuals with IDD 21 years of age or older who:
a. are in a nursing facility for more than 90 days; or
b. are determined by a PASRR Level I screening to be in need of a PASRR Level II evaluation or are in a nursing facility for 90 days or less.
2. Individuals remain in the Target Population for as long as they are in a nursing facility and until one year after transition or diversion from a nursing facility through enrollment in community-based Medicaid services.
O. “Texas Home Living waiver” or “TxHmL waiver” means the array of services and supports provided under the State’s TxHmL waiver as approved by CMS as of the Effective Date of this Agreement.
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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 6 of 23
III. Serving Individuals with Developmental Disabilities In the Most Integrated Setting
A. Expansion of Community Services
1. For the biennium beginning September 1, 2013, the State will request and make all reasonable efforts to obtain from the Texas Legislature the necessary appropriations for the following additional services:
a. Targeted transition HCS waiver services for at least 360 individuals in Target Population II.N.1.a;
b. Targeted diversion HCS waiver services for at least 150 individuals in Target Population II.N.1.b; and
c. Targeted diversion TxHmL waiver services for 125 individuals in Target Population II.N.1.b.
2. With notice to Plaintiffs and the United States, the State may re-allocate HCS waiver slots between III.A.1.a and III.A.1.b.
3. Not later than 180 days after the Effective Date of this Agreement, the State will submit to CMS an application to renew its HCS waiver to include individuals in the Target Population with related conditions. If the renewal is approved by CMS, the State will not exclude any otherwise qualified individual from the Target Population because the individual has a related condition but not an intellectual disability. If the inclusion is not approved by CMS because of a defect in the State’s waiver renewal application, the State will use its best efforts to correct the application.
4. The State will not exclude any otherwise qualified individual from the Target Population due to the existence of complex behavioral or medical needs. However, individuals in the Target Population must meet all eligibility requirements of a waiver to enroll in waiver services.
5. If CFC is approved by the Legislature, within 180 days of the Effective Date of this Agreement, the State will submit to CMS a State Plan amendment for a Community First Choice Option. If the amendment is not approved by CMS because of a defect in the State’s amendment application, the State will use its best efforts to correct the application.
6. During the term of this Agreement, the State will notify Plaintiffs and the United States of any proposed amendments to the HCS and TxHmL waivers at least 90 days prior to submitting the amendments to CMS for approval.
7. The State will include individuals with IDD in nursing facilities as a priority population in its Promoting Independence Plan.
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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 7 of 23

B. Service Planning Team (“SPT”)

1. The State will ensure that, through the Local Authorities, all individuals in the Target Population have an SPT.

2. The State will ensure that, through the Local Authorities, the individual’s SPT is convened at least quarterly, or more frequently if requested by the individual or LAR, or if there is a change in service needs.

3. For all individuals in the Target Population, the SPT will:

a. Develop a service plan that:

i.

Is individualized and developed through a person-centered

process. The SPT will ensure that individuals, regardless

of whether they have an LAR, will participate in the SPT to

the fullest extent possible and will receive the support

necessary to do so, including, but not limited to,

communication supports;

ii.

Identifies the individual’s strengths; preferences; medical,

nursing, nutritional management, clinical, and support

needs; and desired outcomes; and

iii.

Identifies the services and supports that are needed to meet

the individual’s needs, achieve the desired outcomes, and

maximize the person’s ability to live successfully in the

most integrated setting possible.

b. Assess the adequacy of the services and supports that the individual is receiving; and

c. Monitor the individual’s service plan to make timely additional referrals, service changes, and amendments to the plan as needed.

4. For individuals in the Target Population in nursing facilities, the SPT will:
a. Include the following persons: the individual being served; his or her LAR; the service coordinator; nursing facility staff familiar with the individual’s needs; persons providing specialized services for the individual; and, if a specific alternate placement provider has been selected, a representative from that provider. The SPT may include: other concerned persons whose inclusion is requested by the individual or the LAR and, at the discretion of the Local Authority, other persons who are directly involved in the delivery of services to individuals with IDD;

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Case 5:10-cv-01025-OLG Document 177-1 Filed 08/19/13 Page 8 of 23
b. Identify the specific specialized services to be provided to the individual, including the amount, intensity, and frequency of each specialized service;
c. Be responsible for planning, ensuring the implementation of, and monitoring all specialized services identified in the service plan, and transition planning in coordination with the nursing facility’s care planning team;

Output:
Adults with developmental disabilities who were institutionalized filed this lawsuit in the U.S. District Court for the Western District of Texas alleging that they, along with the class of similarly situated individuals, were institutionalized unnecessarily as a result of the policies of the State of Texas.  There are also two organizational Plaintiffs: the Arc of Texas and the Coalition of Texans with Disabilities.  The Plaintiffs alleged that Texas failed to provide adequate habilitation and support services in the community that would allow them to avoid institutionalization or transition out of institutions. They alleged that individuals with developmental disabilities must enter institutions in order to receive necessary services in Texas.  Furthermore, the Plaintiffs claimed that the state systematically violated a provision of the Nursing Home Reform Act (NHRA) known as Pre-Admission Screening and Resident Review (PASRR), which would divert individuals slated to enter nursing facilities into community placements if institutionalization was deemed unnecessary. The Plaintiffs alleged violations of the Americans with Disabilities Act, Section 504 of the Rehabilitation Act, the federal Medicaid Act, and the Nursing Home Reform Act.

The Plaintiffs filed a complaint on December 20, 2010 and a motion for class certification on January 19, 2011.  The Defendants filed a motion to abate the Plaintiffs' motion for class certification, asking the court to delay a ruling on class certification until the parties could conduct further discovery and the court could consider a motion to dismiss. The court ultimately granted this motion on September 27, 2011.  Class certification is still pending in this case.

The Defendants filed a motion to dismiss on March 8, 2011, claiming that Plaintiffs lacked standing, claims against the Governor were barred by sovereign immunity, and that Plaintiffs failed to state a claim.  The United States (Department of Justice) filed a brief opposing the Defendants' motion to dismiss, and on June 22, 2011, the United States moved to intervene in the case.

The Plaintiffs filed an amended complaint on October 4, 2011, and the Defendants filed a second motion to dismiss in response on November 4, 2011.  The United States filed an additional brief opposing the Defendants' motion soon after.

The court heard arguments on both motions on September 12, 2012 and took the motions under advisement. The court has repeatedly agreed to continue scheduled hearings and suspend deadlines and certain discovery requirements.

The court granted the United States' motion to intervene on September 20, 2012, and the United States filed its complaint in intervention. The Plaintiffs filed a second amended complaint on July 19, 2013 as well as a second amended motion for class certification.

On August 10, 2013, the Court stayed the case pursuant to a two year interim agreement that the parties had reached, which at the time was set to expire in July 2015. While the parties agreed to attempt to resolve all claims during this time, the case could be reopened at any time upon the request of any party or on the Court's own motion.

After a status conference on June 6, 2015, the parties agreed to extend the interim settlement agreement until September 30, 2015, or until a court-appointed Special Settlement Master filed a report with the court stating that settlement discussions had concluded.

While the Court did appoint a Special Settlement Master, and the parties did continue to negotiate for some time, settlement talks ultimately proved unsuccessful, and the litigation continued.

On May 17, 2016, the Court denied the Defendants' motion to dismiss. It held that the United States and organizational Plaintiffs had standing; that the Plaintiffs stated a claim; and that the Nursing Home Reform Act created a private cause of action. 189 F. Supp. 3d 620.

The Court granted class certification on May 20, 2016. The Plaintiff class was defined as: All Medicaid-eligible persons over twenty-one years of age with intellectual or developmental disabilities or a related condition in Texas who currently or will in the future reside in nursing facilities, or who are being, will be, or should be screened for admission to nursing facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R. § 483.112 et seq.

The litigation continued for years and focused largely on various discovery disputes. On June 15, 2018, the Defendants moved for summary judgment on the United States' claims in intervention, arguing that the United States lacks authority to bring an enforcement action under Title VI, the Rehabilitation Act, and Title II of the ADA. The Court denied this motion on September 27, 2018, and it explained that the United States did not have to establish its own standing to proceed because it was an intervenor here, and the original Plaintiffs' standing satisfied Article III. In that same September 27, 2018 Order, the Court terminated the Plaintiffs' motion for a preliminary injunction and held that all requests for injunctive relief would be considered upon determination of the merits at trial.

Since then, the litigation focused largely on discovery or evidentiary disputes as the case headed towards trial. A bench trial began on October 15, 2018, and seems to have gone on until November 15, 2018. The parties have continued filing motions regarding proposed findings of fact and law, but the Court has not issued any judgment following that trial. As of August 12, 2020, the litigation is ongoing.