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K.W. v. Armstrong

United States District Court, D. Idaho

February 13, 2015

K.W., by his next friend D.W., et al., Plaintiffs,
v.
RICHARD ARMSTRONG, in his official capacity as Director of the Idaho Department of Health and Welfare; PAUL LEARY, in his official capacity as Medicaid Administrator of the Idaho Department of Health and Welfare; and the IDAHO DEPARTMENT OF HEALTH AND WELFARE, a department of the State of Idaho, Defendants. TOBY SCHULTZ, et al. Defendants.
v.
RICHARD ARMSTRONG, et al., Plaintiffs,

MEMORANDUM DECISION AND ORDER

B. LYNN WINMILL, Chief District Judge.

INTRODUCTION

Before the Court is a motion to bifurcate and a motion to clarify, both filed by the Idaho Department of Health and Welfare (IDHW). The motions are fully briefed and at issue. For the reasons below, the Court will (1) deny the motion to bifurcate, and (2) grant in part and deny in part the motion to clarify.

LITIGATION BACKGROUND

Plaintiffs are developmentally disabled adults who qualify for benefits under Medicaid. They are eligible for long-term institutional care but choose to live instead in their own homes or in community settings. When their Medicaid payments were reduced, they brought this action against IDHW, alleging, among other things, that the notices sent by IDHW informing them of the reductions were insufficient. The Court enjoined the reductions, and the parties eventually agreed to the terms of a preliminary injunction that maintained the status quo and provided plaintiffs with information regarding their budget reductions. That injunction restored the plaintiffs' budgets to the levels they were at prior to July 1, 2011, the date IDHW sent the unconstitutional budget notices. The injunction also prohibited IDHW from reducing plaintiffs budgets until it (1) provided plaintiffs with notices, approved by this Court, and (2) made available for copying specified documents it used to calculate plaintiffs' budgets.

IDHW responded by filing a motion to approve the form of Notice that they sent to each plaintiff. The Court denied the motion, holding that the Notice failed to provide due process because it did not explain budget reductions. See Memorandum Decision (Dkt. No. 66) at p. 8. The Notice provided by IDHW made it very difficult for a participant to determine why his budget had been reduced and left him unable to effectively challenge the reduction.

In the meantime, another group of named plaintiffs filed a nearly identical case entitled Schultz v. Armstrong, CV-12-58-BLW. On April 6, 2013, the Court ordered that case consolidated with the present case. See Order (Dkt. No. 77).

The plaintiffs then filed (1) a motion to certify a class; (2) a motion to extend the existing preliminary injunction to the proposed class members; and (3) a motion to file a consolidated class action complaint. IDHW filed a second motion to approve its form of Notice.

The Court denied IDHW's motion, finding that the proposed notice contained the same flaws as found previously - it failed to properly notify participants of the reasons for IDHW's actions. The Court granted plaintiffs' motions, certifying a class and extending the existing preliminary injunction to all members of the class. The Court's decision adopted the terms of the injunction verbatim as proposed by plaintiffs.

With regard to the class, the plaintiffs had sought to certify a class to challenge the generic policies and procedures that IDHW applies across-the-board to participants and applicants in the DDS Waiver program. Of the 3, 600 or so participants in that program, 14 brought this case as representatives of all those similarly situated. They challenged several systemic components of the program, claiming that: (1) IDHW's budgeting methodology improperly reduces assistance for some recipients; (2) the notice that IDHW uses to inform participants of reductions in their assistance is insufficient; and (3) there is no fair predeprivation hearing prior to reducing assistance.

To encompass all the participants that are affected by these alleged system defects, the plaintiffs proposed - and the Court approved - the following class definition: All persons who are participants in or applicants to the DDS Waiver program administered by IDHW as part of the Idaho Medicaid program, and who undergo the annual eligibility determination or reevaluation process.

In addition to the class claims that challenge the system-wide processes of IDHW, there are individual claims brought by 16 named plaintiffs alleging that reductions to their budgets puts them at risk for being institutionalized. These individual claims are referred to as the Olmstead claims, after the Supreme Court decision requiring those in the position of plaintiffs to show that "the challenged state action creates a serious risk of institutionalization." See Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 607 (1999).

In the motion to bifurcate, IDHW seeks to bifurcate the Olmstead claims from the class-wide claims for pre-trial discovery and trial purposes under Rule 42(b). IDHW asks that the Olmstead claims be stayed pending resolution of the class claims. In the motion to clarify, IDHW asks the Court to explain whether the injunction prevents it ...


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