SALAZAR, et al v. DC, et al

Filing 1884

MEMORANDUM AND ORDER granting 1870 Defendants' Motion to Modify; denying as moot 1875 Plaintiffs' Motion to Stay; denying as moot 1877 Plaintiffs' Motion for Discovery; Defendants are relieved from complying with Section III of the January 25, 1999, Consent Order, as amended by Paragraphs 21A, 25A, 25B, and 27 of the Court's Order of August 8, 2000. Signed by Judge Gladys Kessler on 10/17/13. (CL, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

OSCAR SALAZAR, et al.,
Plaintiffs,
Civil Action No. 93-452 (GK)

v.
DISTRICT OF COLUMBIA, et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
On Sept.
January 25,
2000

20,

No.
[Dkt.

1870].
No.

Upon

1876],

argument

held October

and

the

for

Defendants filed a Motion to Modify the

1999 Consent Order and Related Order of August

[Dkt.

Opposition

2013,

of

the Reply !Dkt.

15,

following

consideration

2013,

and the

reasons,

the

the

No.

1879],

entire

Court

Motion,

8,
the

the oral

record herein,

grants

Defendants'

Motion.
I .

BACKGROUND
This

class

Defendants,
due

process

eligibility.

action

among
of

lawsuit

filed

in

other

claims,

denied

Medicaid

law

1993

alleged

that

beneficiaries

in

the

recertification

of

On October

16,

1996,

issued an Amended

the

Court

their

Medicaid

Findings of Fact and Conclusions of Law granting some claims and
denying

others

[Dkt.

No.

402].

comprehensive remedial order

In

[ Dkt.

1997,
Nos.

the

4 4 4,

Court
4 93] .

entered

a

The parties

On Sept.

20,

the January 25,
8,

2000

[Dkt.

2013,

Defendants filed their Motion to Modify

1999 Consent Order and Related Order of August

No.

1870].

They seek to modify the Consent Order

so as to no longer be bound by Section III,

arguing that they

cannot simultaneously comply with both Section III and the ACA.
Plaintiffs
September 30,

have

2013,

also

filed

two

related

motions.

On

Plaintiffs filed a Motion to Partially Stay

the Recertification Provisions in the Settlement Order [Dkt. No.
1875]. On October 1, 2013, Plaintiffs filed a Motion for Limited
Discovery Related to Medicaid Renewal and Redetermination Under
the

Affordable

Care

Act

[Dkt.

No.

1877].

Defendants

included

their Opposition to those two Motions in their Reply of October
7,

2013

[Dkt.

No.

1879]. Plaintiffs'

Replies in support of both

motions are due October 17, 2013.
II.

STANDARD OF REVIEW

Defendants move to modify Section III under Federal Rule of
Civil

Procedure

60 (b) (5)

and

60 (b) (6).

Rule

60

(b)

(5)

provides

that a court may vacate an order if "applying it prospectively
is no longer equitable." Fed. R. Civ. P. 60(b) (5). As to consent
decrees,
for

the moving party bears the burden of proving its need

modification

either

in

enforcement

by

factual
of

the

establishing
conditions

that

or

judgment
-3-

"'a

in

law'

'detrimental

significant
renders
to

change

continued

the

public

On Sept.

20,

the January 25,
8,

2000

[Dkt.

2013,

Defendants filed their Motion to Modify

1999 Consent Order and Related Order of August

No.

1870].

They seek to modify the Consent Order

so as to no longer be bound by Section III,

arguing that they

cannot simultaneously comply with both Section III and the ACA.
Plaintiffs
September 30,

have

2013,

also

filed

two

related

motions.

On

Plaintiffs filed a Motion to Partially Stay

the Recertification Provisions in the Settlement Order [Dkt. No.
1875]. On October 1, 2013, Plaintiffs filed a Motion for Limited
Discovery Related to Medicaid Renewal and Redetermination Under
the

Affordable

Care

Act

[Dkt.

No.

1877].

their Opposition to those two Motions in
7,

2013

[Dkt.

support of both
II.

No.

Defendants

thei~

Reply of October

187~ aint"ffs ~~r

mot~,

included

replies

in

Octo er 17, 2013.

STANDARD OF REVIEW

Defendants move to modify Section III under Federal Rule of
Civil

Procedure

60(b) (5)

and

60(b) (6).

Rule

60(b) (5)

provides

that a court may vacate an order if "applying it prospectively
is no longer equitable." Fed. R. Civ. P. 60(b) (5). As to consent
decrees,
for

the moving party bears the burden of proving its need

modification

either

in

enforcement

by

factual
of

the

establishing
conditions

that

or

judgment
-3-

"'a

in

law'

'detrimental

significant
renders
to

change

continued

the

public

interest."' Horne ·v. Flores, 557 U.S.
(quoting Rufo v.

433,

453

(2009)

("Flores")

Inmates of Suffolk Cty. Jail, 502 U.S. 367, 384

(1992)).
The Supreme Court has made it clear that courts should use
a "flexible approach" when ruling on Rule 60 (b) (5) motions which
address

institutional

ensure

that

reform

decrees,

"'responsibility

for

such

as

discharging

this

one,

to

State's

the

obligations is returned promptly to the State and its officials'
when

the

circumstances

(quoting Frew v.

warrant."

Hawkins,

Petties ex rel. Martin v.
69

(D.C.

Cir.

2011)

540 U.S.

Flores,
431,

502

442

Dist. of Columbia,

(quoting

Rufo,

u.s.

(2004));

at

see also

662 F. 3d 564,
U.S.

502

450

at

568-

380-81)

("district courts must employ 'a flexible modification standard'
because such decrees
of

time'

such

that

'often remain in place for extended periods
'the

likelihood

of

significant

changes

occurring during the life of the decree is increased.'").
Rule 60(b) (6) provides that a court may vacate an order for
"any

other

demonstrates

reason

that

justifies

"extraordinary

relief"

provided

circumstances."

Fed.

the
R.

movant

Civ.

P.

60 (b) ( 6); see also Salazar ex rel. Salazar v. Dist. of Columbia,
633 F.3d 1110,

1119

noted

even

that

(D.C.

Cir.

though

2011).
"[t]he

-4-

Our Court of Appeals has
phrase

'extraordinary

circumstances' does not appear in the text of Rule 60 (b) ( 6) ,
. the Supreme Court has added this gloss to the rule." Id.
III. ANALYSIS

Upon

consideration

of

the

submissions

of

counsel,

the

extremely long record in this case that was filed in 1993, and
the

applicable

case

law,

the

Court

concludes

that

Defendants'

Motion shall be granted for the following reasons.
The ACA, effective March 23, 2010, and its related Medicaid
regulations

have

created

a

vast

new

statutory

framework

for

ensuring health care insurance for virtually every person in the
United

States.

It

is

an

extraordinarily

complex

law

and

which presents many technological and logistical challenges.

one
It

will, if successful, bring enormous benefits to Americans of all
income

levels.

To

implement

this

statute

in

the

District

of

Columbia will be a massive undertaking requiring the resources,
creativity,

and attention to detail of many people within the

District of Columbia Government.
The Court concludes, pursuant to Fed.
that

passage of

circumstances"

the ACA has

that

created a

R. Civ.

P.

"significant

60(b) (5),
change

in

justifies termination of the provisions of

Section III of the Consent Order.

Indeed,

there has been almost

a seismic change in the areas of health insurance,
procedures for verifying Medicaid eligibility,
-5-

healthcare,

and financing of

Medicaid.

As

the ACA has

Defendants

point out

introduced enormous

in their papers,

passage of

systemic and legal

changes

in

our healthcare system. There is simply no comparison between the
statutory framework that existed at the time this Court made its
factual

findings

in

1996

and

what

implementation

of

the

ACA

envisions -- even though that implementation will undoubtedly be
both rocky and fairly long in coming.

As

Defendants argued at

oral argument, in comparing the two systems we are talking about
"apples and oranges."
Defendants
with

also

provisions

argue

of

the

that Section
ACA,

and

III

directly conflicts
its

therefore

continued

enforcement would be "detrimental to the public interest." Rufo,
502 U.S. at 384. The Court agrees.
For example,
recertification

the ACA regulations implementing a brand new
procedure

are

in

direct

conflict

with

the

renewal process set forth in Section III. Defendants are correct
and Plaintiffs do not disagree.
"an agency must make

a

The regulations establish that

redetermination of

eligibility without

requiring information from the individual if able to do so [.]"
42

C.F.R.

Defendants
Medicaid

§

435.916(a) (2).

must

send,

beneficiary

recertification

forms

Thus,

pursuant
about
and

the

to

various

Section

their

information
-6-

III,

failure
or

lose

notices

that

warning

a

to

submit

their

benefits

will

now

be

inaccurate,

confusing,

and

Were

unnecessary.

Defendants to try to comply with both Section III and the ACA,
there would be massive confusion,

as well as additional expense

and use of resources at a time when Defendants are pouring money
and

staff

time

into

their

efforts

to

comply

with

the

new

statute.
Plaintiffs concede that the provisions of Section III are
either

in

conflict

longer relevant.
19-21, 21A,

25,

with

the

ACA

or

See Opp' n at 7-10
25A,

are

outdated

and

are

no

(noting that paragraphs 17,

and 26-27 must be deleted or modified; and

that paragraphs 22-24

and 28

are no longer operative and must

also be deleted) . In sum, Plaintiffs acknowledge that there is a
conflict

between

Section

III

and

the

ACA,

and

therefore

the

District government can not continue to comply with Section III
in

light

of

the

statutory

language

of

the

ACA

and

its

implementing regulations.
Plaintiffs' primary argument is not that Section III should
remain

in

additional

effect,

but

"discovery"

that
so

they

that

they

should
can

be

provided

suggest

with

appropriate

modifications to Section III in order to fully protect the due
process rights of the plaintiff class they represent during this
time

of

transition.

While

their

concern

over

the

continued

protection of the due process rights of their clients,
-7-

members

of the plaintiff class,

is commendable,

Plaintiffs'

counsel has

failed to identify any tangible fact or law that suggests those
rights

will

not

be

adequately

protected

in

this

transitional

year.
Plaintiffs' fear is that the statutory and regulatory "safe
harbor"

that

between

protects

individuals

January and March

losing

recertified

their Medicaid

March

will

not

be

individuals

evaluated between October

2013

and

December 2013.

C.F.R.

15-16

(citing

§435.603).

argument that the

42

of

from

be

before

at

end

2014

must

eligibility

Opp'n

the

of

who

U.S.C.

Defendants'

applied

§ 1396a(e) (14) (D) (v)

counsel

represented

and
at

to

42

oral

"safe harbor" provisions apply to all those

who will be evaluated between October 2013

and December 2013,

thus providing Plaintiffs with the "binding representation" they
sought

in

interpreted

their
and

Opposition
applied

in

that
that

the

regulations

fashion

by

the

would

be

District

of

Columbia government.
Moreover,
provide

the regulations specifically require agencies to

due

process

rights

to

those

whose

eligibility may be

reevaluated

before

the

end

of

this

year:

§ 435.1205(b) (4) (i) (c)

(requiring

state

agencies

42
to

C.F.R.

"furnish

Medicaid to individuals determined eligible under this clause or
provide

notice

and

fair

hearing
-8-

rights

if

eligibility

effective in 2013 is denied"). Thus, the ACA regulations provide
multiple safeguards to ensure that no members of the plaintiff
class whose eligibility must be renewed in 2013 will be denied
due process. 1
As to the due process rights of the class members between
March 2014 and October 2014,

Plaintiffs acknowledge that the ACA

"continues and reinforces
at 4

due process protections." Opp'n

(citing regulations setting forth procedural protections) .

The regulations require an agency to provide any individual with
"notice

of

the

eligibility,"
notice

and

42

agency's
C.F.R.

fair

hearing

decision

435.916(a) (3) (i) (C),

§

rights

ineligible for Medicaid," id.
Plaintiffs
rights

§

for

Consent

protective
Order.

(permitting
beneficiaries

those

"provide

determined

identify no difference between the due process

guaranteed by the

more

and to

of

435. 1205 (b) ( 2) (iii) .

ACA and its

implementing

and those contained in Section III. In fact,
are

renewal

concerning

of

Compare

Defendants
ten

days

due

process

Consent
to

Order

terminate
to

rights

provide

regulations

the ACA regulations
than

Section

benefits
requested

the

current

III,

17

after

giving

information,

1
Defendants note that the District of Columbia has created a list of trained
and federally-approved attorneys and advocacy organizations who are available
to provide free legal assistance to individuals with "Medicaid Applications,
Renewals, Questions, and Legal Assistance Regarding the Affordable Care Act
Effective October 1, 2013." Reply, Ex. 1. Moreover, members of the plaintiff
class can also contact Plaintiffs' counsel, as they have been doing over the
years, to obtain legal assistance. Consent Order~ 64.

-9-

provided the beneficiary receives a notice fifteen days prior to
the
§

actual

termination

435.916 (a) (3) (i) (B)

of

with

benefits)

(requiring that

C.F.R.

42

the beneficiary be

given

"[a]t least 30 days from the date of the renewal form to respond
and provide any necessary information").
Rule 60(b) (5)

provides that a court may vacate an order if

"applying it is no longer equitable." The District of Columbia
has clearly pointed out why applying Section I I I would not only
be

inequitable,

cost,

and

limited

public

place

staff

Department

but

of

at

would

even

greater

the

to

Care

of

Finance.

avoid

provisions of the ACA),

great

burdens

Department

Health

interest

cause

confusion,
on

what

Human

federal

cause confusion,

is

already

Services

Obviously,

violating

additional

it

and

is

the

in

the

(the

law

a

new

and waste the limited

and precious resources of the District o:f Columbia Government.
Requiring the District of Columbia to attempt to comply with two
contradictory procedural regimes is clearly "detrimental to the
public
burdened

interest."
with

The

District

orchestrating

Medicaid program.

For all

interest

served

will

be

a

the
if

of

Columbia

comprehensive
reasons

that

smoothly as humanly possible.

-10-

Government
overhaul

just stated,

massive

overhaul

of

is
its

the public
proceeds

as

For all these reasons, it is this

ft~y

of October, 2013,

hereby
ORDERED, that the Motion is granted; and it is further
ORDERED,

that

Defendants are

relieved from complying with

Section III of the January 25, 1999 Consent Order, as amended by
Paragraphs 21A,

25A,

25B,

and 27 of the Court's Order of August

8, 2000; and it is hereby
ORDERED,

that Plaintiffs' Motion for a Partial Stay of the

Recertification
25,

1999

Provisions

in

the

Settlement

and the Order of August

8,

2000

Order

[Dkt.

of

No.

January
1875]

is

denied as moot; and it is hereby
ORDERED,

Related

to

that

Plaintiffs'

Medicaid

Renewal

Motion
and

for

Limited

Redetermination

Discovery
Under

the

Affordable Care Act [Dkt. No. 1877] is denied as moot. 2
J

rq~~~~
I

}

Gladys KeSie~
United States District Judge

Copies to: attorneys on record via ECF

2

The Plaintiffs' request to take discovery lacks merit. The discovery they
have requested relates to implementation of the ACA and its regulations;
Defendants are correct that Plaintiffs' discovery is quite broad (they seek
"statements under oath" and correspondence between the District of Columbia
and the United States Department of Health and Human Services) . Plaintiffs
are simply not entitled to this information.

-11-