Martinez et al v. Schwarzenegger et al

Filing 468

ORDER by Judge Claudia Wilken Granting 467 Stipulation to Amend Settlement Agreement. (ndr, COURT STAFF) (Filed on 9/3/2014)

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KAMALA D. HARRIS
Attorney General of California
SUSAN M. CARSON
Supervising Deputy Attorney General
State Bar No. 135875
455 Golden Gate Avenue, Suite 11000
San Francisco, CA 94102-7004
Telephone: [phone]
Fax: [phone]
E-mail: [e-mail]

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Attorneys for Defendants
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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LYDIA DOMINGUEZ et al.,

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v.

CV 09-2306 CW
Plaintiffs, STIPULATION TO AMEND
SETTLEMENT AGREEMENT;
[PROPOSED] ORDER

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The Honorable Claudia Wilken
ARNOLD SCHWARZENEGGER,
Governor of the State of California, et al.,

Action Filed: May 26, 2009

Defendants.

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STIPULATION TO AMEND SETTLEMENT AGREEMENT; [PROPOSED] ORDER (CV 09-2306 CW)

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The Parties to the Settlement Agreement resolving the Oster v. Lightbourne and

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Dominguez v. Brown lawsuits (as “Parties” is defined in the Settlement Agreement) hereby agree

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to modify and amend the Settlement Agreement as follows1:

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1.

Paragraph 18 of the Settlement Agreement is deleted and amended to read:

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“The Parties agree to jointly discuss, and State Defendants will submit to the Legislature by no

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later than February 1, 2015, proposed legislation authorizing an assessment on home care

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services, including but not limited to, home health care and IHSS (Assessment).”

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2.

Paragraph 19 of the Settlement Agreement is deleted and amended to read:

“If the Assessment is passed by the Legislature, then State Defendants shall submit a request by

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April 1, 2015, to the federal Centers for Medicare and Medicaid Services (CMS) for authorization

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to implement the Assessment and shall work with Plaintiffs in good faith to obtain CMS approval

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of this Assessment.”

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3.

Paragraph 20 of the Settlement Agreement is deleted and amended to read:

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“The Parties’ counsel shall meet and confer, in person or telephonically, regarding the status of

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the Assessment in October 2013, March or April 2014, August or September 2014, January 2015,

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and March 2015. If the Assessment is not submitted to CMS by April 1, 2015, the Parties will

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discuss next steps, and if a resolution is not reached, either Party may submit the dispute to the

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district court for resolution and for fashioning appropriate remedies needed to facilitate the

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submission of the Assessment to CMS for approval.”

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4.

All definitions in the Settlement Agreement shall apply to this First Amendment to

Settlement Agreement.

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5.

This stipulation shall constitute an amendment pursuant to Paragraph 38 of the

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Settlement Agreement, and the electronic signatures of counsel for the Parties, set forth below,

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shall satisfy the signature requirement of that paragraph.

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///

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///

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Attached as Exhibit A is a redlined version of the Settlement Agreement indicating the
amendments to the agreement.
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STIPULATION TO AMEND SETTLEMENT AGREEMENT; [PROPOSED] ORDER (CV 09-2306 CW)

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6.

The effective date of this First Amendment to Settlement Agreement shall be August

29, 2014.

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Dated: August 29, 2014

Respectfully submitted,
KAMALA D. HARRIS
Attorney General of California

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/s/ Susan M. Carson
SUSAN M. CARSON
Supervising Deputy Attorney General
Attorneys for Defendants

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Respectfully submitted,

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Stephen P. Berzon
Stacey M. Leyton
Peder J. Thoreen
Altshuler Berzon LLP

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/s/ Stacey M. Leyton
Attorneys for Plaintiffs

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.

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STIPULATION TO AMEND SETTLEMENT AGREEMENT; [PROPOSED] ORDER (CV 09-2306 CW)

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GENERAL ORDER 45 ATTESTATION
I, Susan Carson, am the ECF user whose ID and password are being used to file this

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declaration. In compliance with General Order 45, X.B., I hereby attest that counsel for Plaintiffs

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and Fresno Defendants have concurred in the filing of this document with their electronic

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signatures.

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Dated: August 29, 2014

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/S/ Susan M. Carson
Susan Carson

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.

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[PROPOSED] ORDER

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GOOD CAUSE APPEARING, THE COURT HEREBY APPROVES THE
AMENDMENT TO THE AGREEMENT. DOJ - Split billing client code - Internal Use OnlyIT
IS SO ORDERED.

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Dated: ______________, 2014
September 3

________________________
Honorable Claudia A. Wilken
United States District Court Judge

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SF2009403964
41063451.doc

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STIPULATION TO AMEND SETTLEMENT AGREEMENT; [PROPOSED] ORDER (CV 09-2306 CW)

SETTLEMENT AGREEMENT
I.

INTRODUCTION
1.

This Settlement Agreement (Agreement) globally resolves the following two

class-action lawsuits: Oster v. Lightbourne, N.D. Cal., Case No. CV 09-04668 CW, U.S. Court of
Appeals for the Ninth Circuit, Case No. 12-15366 (Oster); and Dominguez v. Brown, N.D. Cal.,
Case No. CV 09-02306 CW, U.S. Court of Appeals for the Ninth Circuit, Case No. 09- 16359
(Dominguez). It is the intent of the Parties that this Agreement will fully and finally resolve the
Oster and Dominguez cases. This Agreement represents substantial compromises among all the
Parties, and addresses the long term stability of the programs at issue in these cases for the benefit
of recipients, providers, and the State of California.
II. PARTIES
2.

The Individual Named Plaintiffs in Oster are David Oster; Willie Beatrice

Sheppard; C.R., by and through his guardian ad litem, M.R.; Dottie Jones; Andrea Hylton; Helen
Polly Stern; Charles Thurman; and L.C., by and through her guardian ad litem, M.G. The
Organizational Plaintiffs in Oster are Service Employees International Union-United Healthcare
Workers West; Service Employees International Union-United Long Term Care Workers; Service
Employees International Union Local 521; Service Employees International Union State Council;
United Domestic Workers of America, AFSCME Local 3930, AFL-CIO; and California United
Healthcare Workers. Defendants in Oster are Will Lightbourne, Director of the
California Department of Social Services (CDSS); Toby Douglas, Director of the California
Department of Health Care Services (DHCS); CDSS; and DHCS.
3.

The Individual Named Plaintiffs in Dominguez are Patsy Miller; Alex Brown, by

and through his mother and next friend Lisa Brown; Donna Brown; Chloe Lipton, by and
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through her conservator and next friend Julie Weissman-Steinbaugh; Herbert M. Meyer; Charlene
Ayers; Leslie Gordon; Willie Beatrice Sheppard; Andy Martinez; and Carolyn Stewart, on behalf
of themselves and a class of those similarly situated. The Organizational Plaintiffs in Dominguez
are Service Employees International Union-United Healthcare Workers West; Service Employees
International Union-United Long Term Care Workers; Service Employees International Union
Local 521; Service Employees International Union California State Council; United Domestic
Workers of America, AFSCME Local 3930, AFL-CIO; and California United Homecare
Workers. State Defendants in Dominguez are Will Lightbourne, Director of CDSS, and Toby
Douglas, Director of DHCS.1
4.

The term “Plaintiffs” in this Agreement refers to all individual and organizational

plaintiffs as well as the Classes for Oster and the amended class for Dominguez.
5.

The term “State Defendants” in this Agreement refers to the state officer and state

entity defendants in both Oster and Dominguez.
6.
7.

The term “Parties” in this Agreement refers to Plaintiffs and State Defendants.
The term “IHSS recipients” in this Agreement refers to all recipients in the State

of California who receive services through the In-Home Supportive Services (IHSS), IHSS Plus
Option, Personal Care Services, or Community First Choice Option programs.

By operation of law, named defendant John A. Wagner is replaced by his successor, Will
Lightbourne; and named defendant David Maxwell-Jolly is replaced by his successor, Toby
Douglas. Governor Edmund G. Brown Jr., Controller John Chiang, Fresno County, and Fresno
County In-Supportive Services Public Authority are currently named defendants in Dominguez
but are not parties to this settlement agreement. Plaintiffs have agreed to dismiss with prejudice
Brown and Chiang, with all parties to bear their own fees and costs. Plaintiffs have also agreed
to dismiss Fresno County and Fresno County IHSS Public Authority without prejudice, with all
parties to bear their own fees and costs. Plaintiffs are not releasing any claims against Fresno
County or Fresno County IHSS Public Authority arising from this county’s request for or
implementation of a future reduction in IHSS wages.
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III. JURISDICTION
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The United States District Court has jurisdiction over the claims against all

defendants pursuant to 28 U.S.C. §§ 1331, 1343, and 1367. Venue is proper in the Northern
District of California pursuant to 28 U.S.C. § 1392(b).
IV. CLASS DEFINITIONS
9.

The district court has previously certified the Oster Classes as set forth below and

appointed as Class Representatives the Individual Named Plaintiffs listed in paragraph 2 of the
Agreement:
Class A:
All IHSS recipients in the State of California whose IHSS services
will be limited, cut, or terminated under the provisions of ABX4 4, and all
applicants to IHSS in the State of California who would have been eligible for
IHSS services but who are either not eligible, or are eligible for fewer services, as
a result of ABX4 4.
Class B:
All IHSS recipients in the State of California who have received or
will receive notices of action that include a reduction of IHSS hours based on SB
73 or Defendants’ implementation of SB 73, including future applicants for IHSS
services whose notice of action will reflect reduced IHSS hours as a result of SB
73 or Defendants’ implementation of SB 73.
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The district court has previously certified a Class in Dominguez and appointed as

Class Representatives the Individual Named Plaintiffs listed in paragraph 3 of this Agreement.
The Parties agree that, due to changes in factual circumstances, the Class definition should be
amended by adding five counties (Los Angeles, Madera, Mariposa, San Joaquin, and Yuba).
Accordingly, in connection with preliminary approval of the Settlement Agreement, Plaintiffs
will ask the district court to amend the class definition to the following:
All IHSS recipients who reside in Alameda, Calaveras, Contra Costa, Fresno, Los
Angeles, Madera, Marin, Mariposa, Mendocino, Monterey, Napa, Placer,
Riverside, Sacramento, San Benito, San Francisco, San Joaquin, San Luis Obispo,
San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Yolo, and
Yuba counties.
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11.

If the district court does not approve this Agreement, the Parties agree that State

Defendants will not be prejudiced or bound by anything in this Agreement, and instead, State
Defendants will have whatever rights they would have had before they entered into this
Agreement to contest that the Plaintiffs are appropriate class representatives, and/or to contest
that the Oster and Dominguez classes meet the requirements of Federal Rules of Civil Procedure
23(a) and 23(b)(2).
V. REDUCTION IN NUMBER OF AUTHORIZED HOURS
12.

Contingent upon enactment of the state legislation described in Exhibit A of this

Agreement, State Defendants will implement an 8 percent across-the-board reduction in
authorized service hours that shall run for 12 consecutive months. It is the intent of the Parties
that this reduction be implemented on July 1, 2013.
13.

Effective 12 months after implementation of the 8 percent reduction set forth in

the preceding paragraph, and contingent upon enactment of the state legislation described in
Exhibit A of this Agreement, State Defendants will replace the 8 percent reduction with, and will
implement, an ongoing 7 percent across-the-board reduction in authorized service hours.
14.

The reductions identified in paragraphs 12 and 13 shall not be in addition to the

current 3.6 percent across-the-board reduction of authorized service hours. The current reduction
of 3.6 percent terminates by operation of law on July 1, 2013. It is the intent of the Parties to
avoid any time period during which the 3.6 percent reduction has expired but the 8 percent
reduction has not yet been implemented.
15.

The reductions identified in paragraphs 12 and 13 will be the result of a change in

state law and therefore are not subject to appeal by state fair hearing, administrative hearing, trial
court, or otherwise. Any such appeal can be administratively denied, and the recipient will not
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have “aid-paid-pending” rights in such an appeal. No further legislative authority, beyond that
provided in Exhibit A, shall be necessary to implement the reductions described in paragraphs 12
and 13.
16.

Recipients shall retain their right to request a reassessment based on a change in

circumstances consistent with California Welfare and Institutions Code section 12301.1(d) (as of
2013). In accordance with applicable law, recipients shall not be required to provide a physician’s
note or medical certification of a change in their medical condition in order to obtain a
reassessment. An IHSS recipient may appeal the denial of a request for a reassessment, and CDSS
will instruct the counties to notify recipients subject to a denial of that right to appeal. A recipient
who appeals the denial of a reassessment will not have “aid-paid-pending” rights in such an
appeal. A request for reassessment based solely on the reductions of authorized service hours
identified in paragraphs 12 and 13 can be administratively denied, but is still subject to the right
to appeal described above.
17.

CDSS agrees to provide the information in the preceding paragraph to the

counties through the provision of an All-County Letter (ACL). Plaintiffs will have the opportunity
to review and comment on a draft of the ACL prior to finalization and distribution to the counties.
CDSS also agrees to provide the information regarding reassessment and appeals in the preceding
paragraph to recipients in the Notice of Action (NOA) regarding the 8 percent reduction in
paragraph 12. Plaintiffs will have the opportunity to review and comment on a draft of the NOA
prior to finalization and distribution to recipients.

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VI. STATE LEGISLATION REGARDING AN ASSESSMENT
18.

The Parties agree to jointly discuss, and State Defendants will submit to the

Legislature by no later than February 1, 2015, proposed legislation authorizing an assessment on
home care services, including but not limited to, home health care and IHSS (Assessment).
19.

If the Assessment is passed by the Legislature, then State Defendants shall submit

a request by October April 1, 20145, to the federal Centers for Medicare and Medicaid Services
(CMS) for authorization to implement the Assessment and shall work with Plaintiffs in good faith
to obtain CMS approval of this Assessment.
20.

The Parties’ counsel shall meet and confer, in person or telephonically, regarding

the status of the Assessment in October 2013, March or April 2014, and August or September
2014, January 2015, and March 2015. If the Assessment is not submitted to CMS by October
April 1, 20145, the Parties will discuss next steps, and if a resolution is not reached, either Party
may submit the dispute to the district court for resolution and for fashioning appropriate remedies
needed to facilitate the submission of the Assessment to CMS for approval.
21.

If the Assessment is approved by CMS, the general fund savings generated by the

Assessment revenues will offset the reduction in authorized service hours set forth in paragraph
13, up to 7 percent, as set forth Section 12YYY attached hereto as part of Exhibit A.
22.

State Defendants will pursue retroactive implementation of the Assessment. If

CMS approves retroactive implementation of the Assessment, the one-time savings from that
retroactive implementation, as determined by the director of the Department of Finance, shall be
reinvested for the benefit of recipients. The Parties shall discuss how this reinvestment should
occur; however, the implementation of this reinvestment shall be subject to applicable legislative
approval.
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VII. OTHER STATE LEGISLATION
23.

The Parties agree to jointly support passage by the Legislature of the legislation

attached in Exhibit A hereto (which includes the repeal of Cal. Welf. & Inst. Code §§ 12301.07,
12306.1(d)(6) & (d)(7), 12309(e)-(i), & 12309.2) as soon as possible, but no later than May 24,
2013. If this legislation is not enacted by June 1, 2013, or is enacted with substantive alteration
(e.g., different percentage reductions than set forth in this Agreement), the Parties shall meet and
confer to discuss next steps. If this legislation is not passed by the Legislature or is passed with
substantive alteration, or is not delivered to the Governor by November 1, 2013, then the Parties
shall meet and confer to determine whether they can agree upon a mutually acceptable solution. If
the Parties cannot reach such agreement, at that time, any Party may declare the Agreement null
and void.
24.

The Parties agree to jointly support passage by the Legislature of legislation

that would authorize the creation of an assessment such as described in Section VI.
VIII. JOINT REQUEST FOR FEDERAL APPROVALS IF NECESSARY
25.

The Parties agree to jointly support federal approvals, if any are necessary, to

implement this Agreement.
IX. DISTRICT COURT APPROVAL AND ENFORCEMENT OF SETTLEMENT
26.

The Class Representatives agree to file on behalf of the certified classes in Oster

and the amended class in Dominguez, and all other Parties agree to support, a motion with the
district court to request a fairness hearing pursuant to Federal Rule of Civil Procedure 23(e) and
to seek the district court’s preliminary and final approvals of this Agreement in Oster and
Dominguez. The Parties will cooperate in presenting this Agreement to the district court at the
fairness hearings and will take all steps necessary to seek and obtain the district court’s approval.
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If the district court withholds its approval of this Agreement or the settlement for any reason, the
Parties shall meet and confer to determine whether this Agreement can be amended or modified
in a manner so as to secure the district court’s approval. If this is not attained, this Agreement
shall be null and void.
27.

If the district court approves the Agreement but an appeal is filed, the Parties

shall meet and confer to discuss opposing that appeal. If an appeal results in the district court’s
approval of the Agreement being overturned, the parties shall meet and confer to discuss next
steps.
28.

The Parties agree to stipulate and request district court approval for a proposed

schedule, attached as Exhibit B and incorporated into this agreement as if fully set forth herein.
The proposed schedule assumes that the district court will not require individually mailed notice.
The Parties agree to meet and confer to discuss alternate dates in the event that any portion of the
proposed schedule becomes impracticable or is not approved by the district court.
29.

The Class Representatives, on behalf of the certified classes in Oster and the

amended class in Dominguez, will propose to the district court, and all Parties agree to support,
that the Classes be notified of the proposed settlement as set forth in the Class Notice Plan
contained in Exhibit C to this Agreement.
30.

Following enactment of the legislative language referenced in Exhibit A, without

substantive alteration, and final approval of the Settlement Agreement by the district court, the
Parties agree to jointly move to dismiss all appeals in Oster and Dominguez within 30 days after
enactment of the legislation set forth in Exhibit A.
31.

Within 30 days of the date that the appeals have been dismissed and the

legislation enacted, the Parties agree to ask the district court to enter final judgment dismissing
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the Oster and Dominguez actions as to State Defendants, ordering the Parties to comply with the
Agreement, and retaining jurisdiction to enforce the provisions of the Agreement and fashion
remedies in the event that a Party violates the Agreement. The district court shall retain
jurisdiction for 30 months after the date of CMS approval or disapproval of the Assessment. A
copy of each of the Final Judgments, that the Parties agree to ask the district court to enter, is
attached hereto as Exhibit D.
X. ATTORNEYS’ FEES AND COSTS
32.

Each Party will bear its own attorneys’ fees and costs, and no attorneys’ fees or

costs against any Party shall be awarded in Oster, Dominguez, or any appeals therefrom, or any
action to enforce the terms of this Agreement.
XI. SCOPE OF AGREEMENT
33.

Upon final approval of this Agreement pursuant to Federal Rule of Civil

Procedure 23(e), Plaintiffs hereby release any and all claims, damages, liabilities, rights, and
complaints against State Defendants asserted in Oster and/or Dominguez, except for any claims
for enforcement of this Agreement. Plaintiffs agree not to bring or support any lawsuit
challenging any provisions of this Agreement. Plaintiffs reserve and are not waiving the right to
challenge, on any ground including those previously asserted in Oster and Dominguez, any of
the following acts that may occur after this Agreement is signed: any state reductions in
participation in IHSS wages and/or state approval of wage reductions in IHSS wages; any state
reductions of IHSS hours, services, or eligibility other that those set forth in this Agreement;
and any due process challenge to State Defendants’ notices of action or provision of hearing
rights in relation to IHSS services, assessments, or reassessments other than those required by
this Agreement.
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XII. NO ADMISSION OF LIABILITY OR WAIVER OF RIGHTS
34.

State Defendants expressly deny each and all of the claims and contentions

alleged against them in these actions. Plaintiffs expressly contend that all claims for relief in
these actions are meritorious. This Agreement, anything contained herein, and any negotiations
or proceedings hereunder shall not be construed as or deemed to be an admission, presumption,
evidence of, or concession by any State Defendant of the truth of any fact alleged or the validity
of any claim which has or could have been asserted in this action, or of the deficiency of any
defense which has or could have been asserted in this action or of any wrongdoing or liability
whatsoever.
35.

This Agreement, the fact of its existence, and any term thereof shall not be

construed as an admission by any State Defendant, or used as evidence against any State
Defendant, in any civil, criminal, or administrative action or proceeding except to the extent
necessary to enforce claims for a breach of this Agreement.
XIII. EFFECTIVE DATE OF SETTLEMENT AGREEMENT
36.

The effective date of this Agreement shall be 30 days from entry of final

approval of this Agreement pursuant to Federal Rule of Civil Procedure 23(e) in Oster and
Dominguez.
XIV. ADDITIONAL PROVISIONS
37.

This Agreement contains all of the terms and conditions agreed upon by the

Parties hereto, and no oral agreement entered into at any time nor any written agreement entered
into prior to the execution of this Agreement regarding the subject matter of this Agreement shall
be deemed to exist, or to bind the Parties hereto, or to vary the terms and conditions contained
herein.
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38.

This Agreement may only be amended, modified, or supplemented by an

agreement in writing signed by all Parties and approved by the court specifying its intent to
modify this Agreement.
39.

The Parties agree to use their best efforts to carry out the terms of the Agreement.

At no time shall any of the Parties seek to solicit or encourage members of the Settlement Class to
submit objections to the Agreement or to appeal from the order giving final approval to the
Agreement.
40.

All Parties to this Agreement, through their respective counsel, have participated

in its drafting and, consequently, any ambiguity shall not be construed for or against any party.
41.

This Agreement shall inure to the benefit of and be binding upon the legal

representatives and any successor of any party hereto.
42.

Each of the undersigned attorneys represents that he or she has been duly

authorized to enter into this Agreement.
43.

Each signatory to this Agreement represents and warrants that he/she is

authorized to sign this Agreement and bind the party on behalf of whom he/she signs.
44.

This Agreement may be executed in counterparts, each of which will be deemed

to be an original and all of which taken together shall constitute a single instrument. This
Agreement may be executed by signature via facsimile transmission or electronic mail, which
shall be deemed to be the same as an original signature.

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XV. SIGNATURES
For the Individual Named Plaintiffs and Class Representatives in Oster:

Date: March August ___, 20134
Melinda Bird, Esq.
Disability Rights California
Attorneys for Individual Named Plaintiffs and the
Certified Class in Oster

For the Organizational Plaintiffs in Oster and all Plaintiffs, including all Class Representatives,
in Dominguez:

Date: March August ___, 20134
Stacey M. Leyton, Esq.
Altshuler Berzon LLP
Attorneys for Organizational Plaintiffs in Oster and
all Plaintiffs and the Certified Class in Dominguez

For State Defendants, Approved as to Form:

Date: March August ___, 20143
Susan M. Carson
Supervising Deputy Attorney General
Office of the Attorney General
Attorneys for State Defendants
For State Defendants:

Date: March August ___, 20134
Will Lightbourne
Director
California Department of Social Services

Date: March August ___, 20143
Toby Douglas
Director
California Department of Health Care Services
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Date: March August ___, 20134
Douglas Press
Chief Counsel
California Department of Health Care Services

Exhibit A – Proposed Legislation
Exhibit B – Proposed Schedule
Exhibit C – Proposed Class Notices and Class Notice Plan
Exhibit D – Proposed Final Judgments

SF2009405031
40677551.doc

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Dominguez Class Counsel and Oster Class Counsel
Dominguez Class Counsel

Oster Class Counsel

Stephen P. Berzon
Altshuler Berzon LLP

Melinda Bird
Disability Rights California

Scott A. Kronland
Altshuler Berzon LLP

Marilyn Holle
Disability Rights California

Stacey M. Leyton
Altshuler Berzon LLP

Sujatha Jagadeesh Branch
Disability Rights California

Peder J. Thoreen
Altshuler Berzon LLP

Dara L. Schur
Disability Rights California

Anne N. Arkush
Altshuler Berzon LLP

Anna Rich
National Senior Citizen Law Center
Paula Pearlman
Disability Rights Legal Center
Charles Wolfinger
Law Office of Charles Wolfinger
Jane Perkins
National Health Law Program