BOATMAN v. WALTERMANN MURPHY et al

Filing 56

ORDER APPROVING STIPULATION BETWEEN PARTIES AS FAIR, REASONABLE, AND ADEQUATE PURSUANT TO RULE 23(E) OF THE FEDERAL RULES OF CIVIL PROCEDURE - On 7/21/11, this Court held a fairness hearing, pursuant to Rule 23(e) of the Federal Rules of Civil Proced ure, to determine whether the proposed settlement is a fair, reasonable, and adequate resolution of this matter. The parties appeared by counsel at the hearing. (See Order) IT IS THEREFORE ORDERED that the parties' Stipulation to Enter Settlemen t Agreement Following Notice to the Class is hereby APPROVED pursuant to Rule 23(e) of the Federal Rules of Civil Procedure. IT IS FURTHER ORDERED that the parties shall jointly file a Status Report regarding the ultimate dismissal of this cause within sixty (60) days, if the plaintiffs have not moved to dismiss this cause before that date. Signed by Judge Jane Magnus-Stinson. (TMA)

IN THE
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
EDNA CHADWELL, et al.,
Plaintiffs,
v.
MICHAEL A. GARGANO, et al.,
Defendants.

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No. 1:10-cv-00158-JMS-DML

ORDER APPROVING STIPULATION BETWEEN PARTIES AS FAIR,
REASONABLE, AND ADEQUATE PURSUANT TO RULE 23(E)
OF THE FEDERAL RULES OF CIVIL PROCEDURE
This cause comes before the Court after the filing by the parties of their Stipulation to
Enter Settlement Agreement Following Notice to the Class (“Stipulation”) (ECF No. 46). On
July 21, 2011, this Court held a fairness hearing, pursuant to Rule 23(e) of the Federal Rules of
Civil Procedure, to determine whether the proposed settlement is a fair, reasonable, and adequate
resolution of this matter. The parties appeared by counsel at the hearing.
Having considered the Stipulation and the Report on Class Notice (ECF No. 54)
following notice to the class, as well as the arguments of counsel at the fairness hearing, and the
record in this matter,
IT IS HEREBY FOUND that:
1.

This case was filed on February 8, 2010, and alleged generally as follows:
a. That the practice or policy of the defendants whereby waiver enrollees are not
permitted to apply for services other than those approved by their case manager
violates and is preempted by federal Medicaid law; and
b. That the practice or policy of the defendants whereby waiver enrollees who request
services different from or in excess of those proposed by their case manager are not
provided with a written statement containing the information enumerated in 42 C.F.R.
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§ 431.206 or 42 C.F.R. § 431.210 violates and is preempted by federal Medicaid law
and the Fourteenth Amendment to the United States Constitution.
2.

On May 27, 2010, this Court certified this case as a class action pursuant to Rule 23(b)(2)

of the Federal Rules of Civil Procedure (ECF No. 27), with the class defined as follows:
All persons who are enrolled in or who will be enrolled in the Aged and Disabled
Waiver Program operated by the Indiana Family and Social Services
Administration.
3.

On March 17, 2011, the parties jointly filed their Stipulation, which is designed to fully

resolve all issues presented by this case (ECF No. 46).
4.

This Court has jurisdiction over the subject matter of this cause and over all the parties,

including members of the certified class.
5.

The class has been given proper and adequate notice of the proposed resolution of this

case as required by this Court’s Order of March 22, 2011 (ECF No. 48).
6.

The notice invited class members to notify class counsel as to any objections to, or

comments on, the Stipulation and the proposed dismissal as provided by the Stipulation. The
notice provided valid, due, and sufficient notice of these proceedings and the matters set forth
therein and included information regarding the procedures for making any objections to the
Stipulation.
7.

The notice given to the class fully satisfied the requirements of Rule 23 of the Federal

Rules of Civil Procedure, and the requirements of due process.
8.

Following the standards established by the Seventh Circuit in Synfuel Technologies, Inc.

v. DHL Express, Inc., 463 F.3d 646, 653 (7th Cir. 2006), the Court finds that the Stipulation, and
the subsequently planned dismissal of this action, is fair, reasonable, and adequate for the
following reasons.
A.

The first Synfuel factor requires that the strength of the plaintiffs’ case be
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compared to the settlement offer. While there has been no judgment on the merits in this
matter, and while the defendants continue to deny the merit of the plaintiffs’ allegations
made against them, this first factor does not require vigorous analysis. The reason for
this is that the plaintiffs are receiving through settlement virtually everything that they
could obtain through a final judgment in their favor in this matter. That is, the defendants
are promising through settlement that “case managers are required to submit a request for
services to the Indiana Family and Social Services Administration for whatever amount
and type of services each waiver enrollee desires” (ECF No. 46, ¶ 6), and are also
promising to provide waiver enrollees information regarding this right and a procedure
for notifying the agency directly in the event that waiver enrollees are not satisfied with
their case managers actions (ECF No. 46, ¶ 10). The Court finds that the Stipulation
grants plaintiffs as much relief as this Court would grant if it found that the plaintiffs
prevailed after trial in this cause.
B.

The complexity, length, and expense of continued litigation weigh heavily in

favor of finding the proposed dismissal to be fair, reasonable, and adequate. Continued
litigation would require significant discovery by both parties and would require either a
trial (and extensive trial preparation) or lengthy summary judgment proceedings. This
further expense, both in terms of time and money, is not in the best interests of the parties
as the proposed Stipulation realistically gives to the plaintiffs all they could hope to
achieve in this litigation.
C.

Synfuel requires that the amount of opposition to the settlement by affected parties

be evaluated. The Court has reviewed the report of class counsel and notes that no class
members have submitted comments opposing the settlement.

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D.

There is no evidence of any collusion between the parties in entering into the

Stipulation, and the parties have represented that there has been none. The Court is
satisfied that the Stipulation is the result of an arms-length negotiation between the
parties.
E.

Class counsel is experienced in class action and public benefits litigation and the

Court credits counsel’s opinion that the Stipulation is fair, reasonable, and adequate.
F.

The stage of the proceedings and the amount of discovery conducted also weigh

in favor of concluding that the Stipulation is fair, reasonable, and adequate. The parties
have represented that significant discovery, both formal and informal, has been
conducted in this case, and also credits the parties’ familiarity with the operation of the
Medicaid waiver program. The Court is satisfied that further discovery or proceedings
would not produce information that would lead to a settlement or decision that would be
more beneficial to the class.
9.

For the foregoing reasons, the Court finds that the proposed Stipulation is a fair,

reasonable, and adequate resolution of this matter.
10.

The Court notes that under the terms of the Stipulation, the defendants shall have thirty

(30) days from this order to compensate counsel for the plaintiffs for their reasonable attorneys’
fees and costs (ECF No. 46, ¶ 12), following which the plaintiffs will have fourteen (14) days to
move to dismiss, with prejudice, this cause (ECF No. 46, ¶ 13).
IT IS THEREFORE ORDERED that the parties’ Stipulation to Enter Settlement
Agreement Following Notice to the Class is hereby APPROVED pursuant to Rule 23(e) of the
Federal Rules of Civil Procedure.
IT IS FURTHER ORDERED that the parties shall jointly file a Status Report regarding

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the ultimate dismissal of this cause within sixty (60) days, if the plaintiffs have not moved to
dismiss this cause before that date.
SO ORDERED.

07/21/2011
_______________
Date

__________________________________________
Judge, United States District Court
_______________________________
Hon. Jane Magnus-Stinson, Judge
United States District Court
Southern District of Indiana

cc:

Gavin M. Rose
ACLU of Indiana
[e-mail]
Betsy M. Isenberg
Office of the Attorney General
[e-mail]
David A. Arthur
Office of the Attorney General
[e-mail]

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