KP et al v. Hamos
Filing
62
OPINION (See Written Opinion): For the reasons stated, Defendant's Motion to Dismiss or Transfer Case to Northern District of Illinois (d/e 53 ) is DENIED. The Court, sua sponte, STAYS this cause of action pending a determination in N.B. v. Hamos of whether the Department's system violates the EPSDT provisions and the integration mandate of the ADA and Rehabilitation Act. All pending deadlines are vacated. The pending Partial Motion for Summary Judgment (d/e 50 ) is DISMISSED with leave to refile after a ruling in N.B. v. Hamos. Entered by Judge Sue E. Myerscough on 4/21/2014. (VM, ilcd)
E-FILED
Monday, 21 April, 2014 04:18:40 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
K.P. by and through his father,
S.P.; J.F., by and through his
Mother, A.F.; D.R., by and
through his mother, M.R.; A.P.,
by and through her mother, P.P.;
S.C., by and through her mother,
A.T.; and T.R., by and through
his mother, C.R.,
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Plaintiffs,
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v.
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JULIE HAMOS, in her official
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capacity as Director of the
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Illinois Department of Healthcare )
and Family Services,
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Defendant.
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No. 12-2044
OPINION
SUE E. MYERSCOUGH, U.S. District Judge.
Defendant Julie Hamos, in her official capacity as Director of
the Illinois Department of Healthcare and Family Services, filed a
Motion to Dismiss or Transfer Case to Northern District of Illinois
(d/e 53). Defendant asserts that dismissal of this case is warranted
because on February 13, 2014 the District Court for the Northern
District of Illinois certified a class action in N.B. v. Hamos, Case No.
11 C 06866, which raises identical issues. In the alternative,
Defendant asserts that if the Court prefers to transfer the case, the
Court should decline to rule on the motion to dismiss and transfer
the case to the Northern District. For the reasons that follow, the
Motion to Dismiss or Transfer is DENIED. However, the Court, sua
sponte, stays this case pending resolution of the class action.
I. BACKGROUND
A.
The Instant Lawsuit
In February 2012, Plaintiffs K.P., by and through his father,
S.P.; J.F., by and through his mother, A.F.; and D.R., by and
through his mother, M.R., filed this action. See d/e 1. In April
2012, Plaintiffs filed an Amended Complaint adding A.P., by and
through her mother, P.P.; S.C., by and through her mother, A.T.;
and T.R., by and through his mother, C.R. See d/e 14. Plaintiffs
allege that they are Medicaid-eligible persons under the age of 21
who have behavioral and emotional disorders but are not being
provided with treatment required by federal law.
The Amended Complaint seeks declaratory and injunctive
relief for violations of the Early and Periodic Screening, Diagnostic,
and Treatment (“EPSDT”) program of Medicaid and 42 U.S.C. §
Page 2 of 15
1983 (Count 1); the Americans with Disabilities Act (“ADA”) and §
1983 (Count 2), and the Rehabilitation Act (Count 3). Specifically,
Plaintiffs seek a declaratory judgment that Defendant’s failure to
comply with the mandates of the Medicaid Act, the ADA, and the
Rehabilitation Act is unlawful. Plaintiffs also seek to enjoin
Defendant from subjecting them to practices that violate Plaintiffs’
rights under the Medicaid Act, the ADA, and the Rehabilitation Act.
Plaintiffs request money damages under the Rehabilitation Act
(Count 4).
On April 5, 2012, the Court entered an Agreed Order directing
Defendant to fund J.F.’s placement at Lincoln Prairie Behavioral
Health Center (“Lincoln Prairie”) (d/e 10). The Agreed Order
required that J.F. continue to pursue applications for services
through the “Illinois Department of Human Services in the Children
and Young Adults with Developmental Disabilities–Residential
Waiver or Support Waiver” and the Individual Care Grant Program.
In the event J.F. was found eligible and accepted for placement or
services under either of the waivers or the Individual Care Grant
Program, Defendant’s obligation to pay for services for J.F. at
Lincoln Prairie shall terminate. The Agreed Order also required
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that J.F. continue to pursue all appeals for any service
authorization denials from his private insurance company for his
treatment at Lincoln Prairie.
On May 15, 2012, the Court entered an Agreed Preliminary
Relief Order as to Plaintiffs K.P., A.P., and D.R. (d/e 22). The
Agreed Order required that Defendant contract for psychiatric
residential treatment facility (“PRTF”) placement for Plaintiffs K.P.,
A.P., and D.R. On July 31, 2013, the Court entered an Agreed
Order requiring that Defendant procure a contract for appropriate
treatment and placement at a PRTF for Plaintiff S.C (d/e 29).
Finally, on January 11, 2013, the Court, pursuant to the agreement
of the parties, required that Defendant procure a contract for
appropriate treatment and placement in a PRTF for Plaintiff T.R.
See January 11, 2013 Text Order.
In their response to the Motion to Dismiss or Transfer,
Plaintiffs advise the Court that Plaintiffs K.P., D.R., and S.C. remain
in PRTFs. Plaintiffs A.P. and T.R. have been successfully
discharged after treatment in a PRTF. Plaintiff J.F. is being treated
in a group home through the Medicaid Home and CommunityBased Services Children’s Residential Waiver Program. Therefore,
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Plaintiffs A.P., T.R., and J.F. are not currently seeking additional
injunctive relief and are only seeking damages and attorney’s fees
for Defendant’s prior conduct. Plaintiffs K.P., D.R., and S.C. are
seeking continued injunctive relief but are willing to forgo individual
injunctive relief if and when class-based relief is granted that
addresses their individual situations. See Pl.’s Resp., d/e 59, p. 12.
Nonetheless, in the Motion for Partial Summary Judgment
Plaintiffs filed in December 2013 (which has not yet been fully
briefed), Plaintiffs seek judgment as to liability on all four counts
and a trial on the issue of damages in Count 4. Moreover, Plaintiffs
assert in the Motion for Partial Summary Judgment that:
Defendant is knowingly denying Plaintiffs and other
children medically necessary treatment to which they are
entitled to under the EPSDT provisions of the Medicaid
Act by forcing them to either forgo treatment altogether
or obtain it by subjecting themselves to extended and
repeated psychiatric hospitalization[s]. Defendant’s
conduct is in clear violation of the Medicaid Act, the
Americans with Disabilities Act[,] and the Rehabilitation
Act.
Pl. Mot. for Partial Summ. J., d/e 50, p. 12.
Page 5 of 15
B.
The N.B. v. Hamos Lawsuit Filed in the Northern District of
Illinois
The N.B. v. Hamos lawsuit in the Northern District of Illinois
was filed in September 2011. The original Complaint, filed solely by
plaintiff N.B., contained the same four counts contained in the
Complaint in K.P. et al. v. Hamos. See N.B. v. Hamos, Case No. 11
C 06866, d/e 1. Unlike the K.P. Complaint, the N.B. Complaint
also contained class action allegations.
N.B.’s Amended Complaint, filed October 12, 2011, and
Second Amended Complaint, filed August 23, 2012, included
additional plaintiffs. Id. at d/e 15, 54. Only N.B., however, seeks
damages in Count 4.
The Second Amended Complaint in N.B. v. Hamos differs
slightly from the Complaint in K.P. et al. v. Hamos in regard to the
relief sought. See Exhibit to Mot. to Dismiss, d/e 58-1. Like the
Complaint in K.P. et al. v. Hamos, the Second Amended Complaint
in N.B. v. Hamos seeks a declaratory judgment that Defendant’s
failure to comply with the mandates of the Medicaid Act, the ADA,
and the Rehabilitation Act is unlawful, an injunction to bar
Defendant from subjecting Plaintiffs (and the class) to practices that
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violate their rights under the Medicaid Act, the ADA, and the
Rehabilitation Act, money damages for N.B. under the
Rehabilitation Act, and attorney’s fees and costs.
The Second Amended Complaint also seeks, however,
preliminary and permanent injunctive relief for violations of the
“integration mandate” and seeks an order requiring Defendant to (1)
inform individuals with disabilities that they may be eligible for
community-based services and have the choice of such services; (2)
regularly provide assessments to determine eligibility for
community-based services; and (3) promptly provide appropriate
services and support to qualifying individuals in the community,
creating a viable alternative to treatment in institutional settings.
See d/e 58-1; see also N.B. v. Hamos, Case No. 11 C 06866, d/e 54,
p. 43.
On February 13, 2014, United States District Judge John J.
Tharp, Jr., certified the following class:
All Medicaid-eligible children under the age of 21 in the
State of Illinois: (1) who have been diagnosed with a
mental health or behavioral disorder; and (2) for whom a
licensed practitioner of the healing arts has
recommended intensive home- and community-based
services to correct or ameliorate their disorders.
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N.B. v. Hamos, -- F. Supp. 2d ---, 2014 WL 562637, at *14 (N.D. Ill.
Feb. 13, 2014). The court certified the class under Rule 23(b)(2) for
injunctive or declaratory relief only. Id. at 12 (noting that “success
on the plaintiffs’ claims will require policy modifications to properly
implement EPSDT and the integration mandate”). The court
appointed attorneys Michelle N. Schneiderheinze (the attorney in
K.P. et al. v. Hamos), Robert H. Farley, Jr., and Mary Denise Cahill
as class counsel. Id. at 14.
II. ANALYSIS
Defendant argues that this cause of action should be
dismissed in light of the Northern District’s certification of a class
that encompasses the Plaintiffs and claims pending in this Court.
In the alternative, the Court should decline to rule on the dismissal
motion and transfer the case to the Northern District.
In support thereof, Defendant asserts that Plaintiffs have no
right to opt out of a Rule 23(b)(2) class and, therefore, cannot
maintain a separate individual action. Defendant further asserts
that allowing Plaintiffs to proceed on their individual suit would
lead to the type of inconsistent court rulings class certification is
designed to prevent and would inhibit settlement.
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Plaintiffs respond that under certain circumstances a plaintiff
can opt out of a Rule 23(b)(2) class. Plaintiffs also state that
dismissal or transfer are not warranted because three of the
Plaintiffs are currently only seeking damages and attorney’s fees for
Defendant’s prior conduct. Finally, Plaintiffs assert that transfer is
not warranted because the damages claim is not subject to class
treatment, the potential for inconsistent rulings is non-existent
(because, according to Plaintiffs, the law is clear), and transfer
would cause unnecessary delay and additional burdens.
Plaintiffs are part of the class certified in the Northern District.
Judge Tharp did not provide an opt-out provision, and Plaintiffs
have not sought to opt out of the class. See Johnson v. Meriter
Health Servs. Emp. Ret. Plan, 702 F.3d 364, 370-71 (7th Cir. 2012)
(noting that Rule 23(b)(2) does not mention “opting out” but that
“the case law permits the judge to allow opt out”).
This Court will not, however, dismiss this action. Plaintiffs
have asserted a claim for damages in Count 4. The class certified in
N.B. v. Hamos is for injunctive and declaratory relief only.
Although the Northern District court has the authority to devise a
method of adjudicating individual damages claims, the court may
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choose not to do so. Dismissal is rarely appropriate “unless it is
absolutely clear that dismissal cannot adversely affect any litigant’s
interests.” Cent. States, Se. & Sw. Areas Pension Fund v.
Paramount Liquor Co., 203 F.3d 442, 444 (7th Cir. 2000). Because
it is unclear whether dismissal will adversely affect Plaintiffs’
rights, the Motion to Dismiss is denied.
The Court also, in its discretion, will not transfer the cause of
action to the Northern District.1 Section 1404(a) of Title 28 of the
United States Code provides the circumstances under which a court
may transfer a civil action to another district or division:
For the convenience of parties and witnesses,
in the interest of justice, a district court may
transfer any civil action to any other district or
division where it might have been brought or
to any district or division to which all parties
have consented.
28 U.S.C. § 1404(a). In cases where the district court is asked to
transfer one lawsuit to the forum where an identical lawsuit is
1
In opposing dismissal and transfer, Plaintiffs assert that three of them are
only seeking damages and the remaining Plaintiffs are willing to forgo
individual injunctive relief if and when class-based relief is granted to address
their individual situations. However, Plaintiffs are not entitled to damages
unless they can establish liability. The liability issues in this case are
essentially the same as those raised in N.B. v. Hamos. Therefore, the Court
does not adopt this argument as a basis for denying dismissal or transfer.
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pending, the court may consider the order in which the suits were
filed among the factors evaluated under § 1404(a). Research
Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d 973,
982 (7th Cir. 2010) (refusing to adopt an inflexible rule that the
first-filed case controls).
In this case, the action could have been brought in the
Northern District because Defendant Hamos, in her official
capacity, resides in any judicial district in which she is subject to
the court’s personal jurisdiction. See 28 U.S.C. § 1391(b)(1) (venue
is proper in a judicial district in which “any defendant resides, if all
defendants are residents of the State in which the district is
located”); § 1391(c)(2) (a defendant entity is deemed to reside in any
judicial district in which such defendant is subject to the court’s
personal jurisdiction with respect to the civil action in question).
The Northern District case was also filed before the instant case.
However, the Northern District is not convenient to the parties
and the witnesses. Each of the Plaintiffs resided in the Central
District of Illinois and the relevant treating clinicians are located in
this district.
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The interests of justice, which in this case include judicial
economy and comity, support a stay as opposed to a transfer, in
light of the convenience to the parties and witnesses. See Blair v.
Equifax Servs., Inc., 181 F.3d 832, 839 (7th Cir. 1999) (noting that
“[w]hen overlapping suits are filed in separate courts, stays (or,
rarely, transfers) are the best means of coordination”). Allowing
parallel suits to proceed is an inefficient use of court resources.
The parties do not address offensive collateral estoppel,2
whether the estoppel here would be considered mutual or
nonmutual, or whether offensive collateral estoppel could even be
asserted against Defendant in the event this Court reached a
judgment in favor of Plaintiffs prior to a judgment in the Northern
District court. See Parklane Hosiery Co., Inc. v. Shore, 439 U.S.
322, 332 (1979) (holding that federal courts have the discretion to
allow the use of nonmutual offensive collateral estoppel if warranted
by the circumstances); United States v. Mendoza, 464 U.S. 154
(1984) (limiting the holding in Parklane by holding that nonmutual
offensive collateral estoppel could not be asserted against the
“Offensive use of collateral estoppel occurs when a plaintiff seeks to foreclose
a defendant from relitigating an issue the defendant has previously litigated
unsuccessfully in another action against the same or a different party.”
Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 326 n.4 (1979).
2
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United States); Hercules Carriers, Inc. v. Claimant State of Fla.,
Dep’t of Transp., 768 F.2d 1558, 1579 (11th Cir. 1985) (extending
Mendoza to state governments). Assuming that collateral estoppel
would not apply, the issue of whether the Department’s system
violates the EPSDT provisions and the integration mandate of the
ADA and Rehabilitation Act would then be litigated twice and could
result in inconsistent adjudications. This is particularly troubling
where Plaintiffs remain a member of the class certified in N.B. v.
Hamos.
In contrast, because the Northern District action is a class
action and Plaintiffs are a part of that class, the determination in
the Northern District will clearly bind Plaintiffs and all other class
members. See, e.g., Schor v. Abbott Lab., 457 F.3d 608, 615 (7th
Cir. 2006) (noting that a decision favorable to the defendant in a
California lawsuit was not conclusive against a plaintiff who was
not a party to that action unless the court in the California action
certified a class and the plaintiff failed to opt out). Resolution of the
identical issue on a class-wide basis is a more appropriate use of
court resources. In addition, the Northern District case has been
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pending since 2011 and that court has as much familiarity with the
issues as this Court.
Notably, the instant case has progressed further than N.B. v.
Hamos. Discovery is completed in this case, and a partial motion
for summary judgment is pending but not fully briefed. However,
Plaintiffs will not be prejudiced by any delay because they are
currently in a satisfactory placement, whether a PRTF, a group
home, or at home. The only delay they will suffer is to the recovery
of damages and attorney’s fees. Although the Court does not
suggest that a delay to recover damages and attorney’s fees is
minimal, the issue can be quickly resolved following a
determination on whether the Department’s system violates the
EPSDT provisions and the integration mandate of the ADA and
Rehabilitation Act. Staying this case will also reduce the attorney’s
fees incurred, avoid duplicative work for the attorneys, and
streamline any potential settlement.
III. CONCLUSION
For the reasons stated, Defendant’s Motion to Dismiss or
Transfer Case to Northern District of Illinois (d/e 53 ) is DENIED.
The Court, sua sponte, STAYS this cause of action pending a
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determination in N.B. v. Hamos of whether the Department’s
system violates the EPSDT provisions and the integration mandate
of the ADA and Rehabilitation Act. All pending deadlines are
vacated. The pending Partial Motion for Summary Judgment (d/e
50) is DISMISSED with leave to refile after a ruling in N.B. v.
Hamos.
ENTER: April 21, 2014
FOR THE COURT:
s/ Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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