AK et al v. Hamos et al

Filing 65

OPINION (See Written Opinion): For the reasons stated, Defendant's Motion to Dismiss or Transfer Case to Northern District of Illinois (d/e 56 ) 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. Entered by Judge Sue E. Myerscough on 4/21/2014. (VM, ilcd)

E-FILED

Monday, 21 April, 2014 01:37:27 PM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
P.G., by and through his mother,
K.G.; A.K., by and through his
mother, S.K.; M.L., by and
through his mother, V.L.; T.K., by
and through her mother, L.S.;
T.W., by and through her mother,
M.R.,; A.F., by an through her
parents, S.F. and M.F.; B.A., by
and through her legal guardian,
J.A.; Sa.F., by and through her
mother, J.F.; and C.S.,

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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, MICHELLE )
R.B. SADDLER, in her official
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capacity as Secretary of the
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Department of Human Services; )
and THE ILLINOIS MENTAL
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HEALTH COLLABORATIVE FOR
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ACCESS AND CHOICE,
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Defendants.
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No. 13-3020

OPINION
SUE E. MYERSCOUGH, U.S. District Judge.

Defendants Julie Hamos, in her official capacity as Director of
the Illinois Department of Healthcare and Family Services, and
Michelle R.B. Saddler, in her official capacity as Secretary of the
Illinois Department of Human Services (“the State Defendants”),
filed a Motion to Dismiss or Transfer Case to Northern District of
Illinois (d/e 56). 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 January 2013, Plaintiffs A.K., by and through his mother,

S.K., and P.G., by and through his mother, K.G., filed this action
against the State Defendants and the Illinois Mental Health
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Collaborative for Access and Choice1 (“the Collaborative”) (d/e 1).
The Amended Complaint filed February 27, 2013 (d/e 13) and the
Second Amended Complaint filed March 17, 2013 (d/e 20) added
Plaintiffs J.L, by and through his mother, V.L.; T.K., by and through
her mother, L.S.; T.W., by and through her mother M.R.; A.F., by
and through her parents S.F. and M.F.; B.A., by and through her
legal guardian, J.A.; Sa.F., by and through her mother, J.F.; and
C.S. Plaintiffs allege 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 Second 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. § 1983 (Count 1, brought against all three Defendants); the
Americans with Disabilities Act (“ADA”) and § 1983 (Count 2,
brought against the State Defendants), and the Rehabilitation Act
(Count 3, brought against the State Defendants). Specifically,

The Collaborative is an administrative services organization that oversees
services and resources allocated to the Department of Human Services Division
of Mental Health. See Collaborative Resp., d/e 60, p. 2, citing Second Am.
Compl., d/e 20, ¶ 64.
1

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Plaintiffs seek a declaratory judgment that Defendants’2 failure to
comply with the mandates of the Medicaid Act, the ADA, and the
Rehabilitation Act is unlawful. Plaintiffs also seek to enjoin
Defendants from subjecting them to practices that violate Plaintiffs’
rights under the Medicaid Act, the ADA, and the Rehabilitation Act.
Plaintiffs seek money damages under the Rehabilitation Act (Count
4, brought against the State Defendants).
Plaintiffs P.G. and C.S. also bring two additional claims
against Defendant Saddler and the Collaborative relating to alleged
deficiencies in the Individual Care Grant program which is
administered by the Department of Human Services. Count 5,
titled “Administrative Review—Improper Promulgation of Rule,”
alleges that Defendant Saddler’s and the Collaborative’s decision to
discontinue funding for P.G.’s and C.S.’s treatment was not
authorized by Illinois law. Count 6, titled “Section 1983—Due
Process,” alleges that the Collaborative did not deny Plaintiff P.G.
funding for his placement in writing and failed to give both P.G. and

The Second Amended Complaint actually uses the singular “Defendant” but
this appears to be a typographical error.
2

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C.S. an opportunity for a fair hearing (appeal) of the Collaborative’s
denials.
In February, March, and May 2013, this Court entered Agreed
Orders directing Defendant Hamos, in her official capacity as
Director of the Illinois Department of Healthcare and Family
Services, to procure a contract for appropriate treatment and
placement at a psychiatric residential treatment facility for Plaintiffs
A.K., M.L, T.K., T.W., A.F., B.A., and Sa.F. See d/e 12, 18, 39.
Plaintiffs P.G. and C.S. withdrew their requests for emergency relief
without prejudice to refiling the motions if the Individual Care
Grant program failed to meet their needs. See d/e 38; May 13,
2013 Text Order.
In their response to the Motion to Dismiss or Transfer,
Plaintiffs advise the Court that many of them remain in residential
treatment. A few Plaintiffs have been discharged home and are
receiving treatment in their respective communities. The Plaintiffs
that have been discharged are not seeking continued injunctive
relief. The remaining Plaintiffs are seeking continued injunctive
relief but are willing to forgo individual injunctive relief if and when

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class-based relief is granted that addresses their individual
situations. Pls.’ Resp., d/e 59, p. 2.
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 four of the same counts (Counts 1 through
4) contained in the Complaint in P.G. et al. v. Hamos. See N.B. v.
Hamos, Case No. 11 C 06866, d/e 1. Unlike the P.G. 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 P.G. v. Hamos in regard to the relief
sought. See Exhibit to Mot. to Dismiss, d/e 61-1. Like the
Complaint in P.G. 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,
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and the Rehabilitation Act is unlawful, an injunction to bar
Defendant from subjecting Plaintiffs (and the class) to practices that
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 61-1; 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
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licensed practitioner of the healing arts has
recommended intensive home- and community-based
services to correct or ameliorate their disorders.
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
P.G. et al. v. Hamos), Robert H. Farley, Jr., and Mary Denise Cahill
as class counsel. Id. at 14.
II. ANALYSIS
The State Defendants argue 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, the State Defendants assert that Plaintiffs
have no right to opt out of a Rule 23(b)(2) class and, therefore,
cannot maintain a separate individual action. The State
Defendants further assert that allowing Plaintiffs to proceed on
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their individual suits would lead to the type of inconsistent court
rulings class certification is designed to prevent and would inhibit
settlement.
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 is not warranted because some of the Plaintiffs
are only seeking damages and attorney’s fees for Defendants’ 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), transfer would cause
unnecessary delay and additional burdens, and this case involves
defendants and claims not involved in the Northern District of
Illinois case.
The Collaborative asserts that the case should be dismissed
because the relief sought in both cases is the same, despite the two
additional counts in the instant case. The Collaborative notes that
Counts 5 and 6 do not contain individual prayers for relief. Count
5, which asserts a claim for improper promulgation of
administrative rule in a manner affecting Plaintiffs’ Individual Care
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Grant eligibility, will be litigated in the N.B. case. Resp. d/e 60, p.
4 (“The responsibility for determining eligibility for ICG grants lies
not with the Collaborative, but with the State, which is represented
in the N.B. case through Defendant Hamos”). Count 6 alleges
violations of the same section of the Medicaid Act cited in Count 1.
The Collaborative also argues that the Collaborative is only
“tangentially connected” to the potential relief. Collaborative Resp.,
d/e 60, pp. 4-5.
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
choose not to do so.
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In addition, this case involves two defendants and claims not
involved in the Northern District case. The class certification might
not impact Plaintiffs P.G. and C.S’s claims against those
defendants. 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 dismissal may
adversely affect Plaintiffs P.G. and C.S.’s rights, the Motion to
Dismiss is denied.
The Court also, in its discretion, will not transfer the cause of
action to the Northern District.3 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

3

In opposing dismissal and transfer, Plaintiffs assert that some 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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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
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, at the very least, Defendants 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.
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However, the Northern District is not convenient to the parties
and the witnesses. Although C.S. and A.F. resided in the Northern
District of Illinois, the remaining Plaintiffs resided in the Central
District of Illinois and the relevant treating clinicians are located in
this district. Moreover, as noted above, this lawsuit contains
additional claims and defendants not included in the N.B. lawsuit.
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 and the
differences in the two cases. 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,4
whether the estoppel here would be considered mutual or
nonmutual, or whether offensive collateral estoppel could even be
asserted against Defendant Hamos in the event this Court reached
“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).
4

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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
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 of Healthcare
and Family Services’ 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 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
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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
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 closes on May 20, 2014 and dispositive motions
are due August 1, 2014. However, Plaintiffs will not be prejudiced
by any delay because they are in a satisfactory placement. 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 of
Healthcare and Family Services’ system violates the EPSDT
provisions and the integration mandate of the ADA and
Rehabilitation Act. A determination of that issue might also
expedite the resolution of P.G. and C.S.’s claims against Defendants
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Saddler and the Collaborative. 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 56) 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.
ENTER: April 21, 2014
FOR THE COURT:
s/ Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE

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