Waskul et al v. Washtenaw County Community Mental Health et al

Filing 164

ORDER construing 129 , 130 and 131 as Defendants' Renewed Motions to Dismiss and granting Defendant's Motions to Dismiss and denying 142 Motion to Strike. Signed by District Judge Arthur J. Tarnow. (MLan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

DEREK WASKUL, ET AL.,

Case No. 16-10936
SENIOR U.S. DISTRICT JUDGE
ARTHUR J. TARNOW

Plaintiffs,
v.

U.S. MAGISTRATE JUDGE
ELIZABETH A. STAFFORD

WASHTENAW COUNTY COMMUNITY
MENTAL HEALTH, ET AL.,
Defendants.
/

ORDER CONSTRUING DEFENDANTS’ MOTIONS TO DISMISS [129, 130, 131] AS
RENEWED MOTIONS TO DISMISS THE AMENDED COMPLAINT AND GRANTING
DEFENDANTS’ MOTIONS; DENYING PLAINTIFFS’ MOTION TO STRIKE [142]; AND
CLOSING THE CASE
Plaintiffs, severely developmentally disabled individuals living in Washtenaw
County, receive Community Living Supports (“CLS”) services through Medicaid’s
Habilitation Supports Waiver (“HSW”). These services are individually planned and
budgeted for based on the participant’s medical needs. This Medicaid program
affords Plaintiffs the opportunity to live independently in the community as an
alternative to institutionalization.
The Amended Complaint [146] challenges the current budgeting method
Defendants use to implement the CLS program as insufficient to account for all of
Plaintiffs’ medically necessary services.
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Before the Court are Michigan Department of Health and Human Services
and Robert Gordon’s (“State Defendants”) Motion to Dismiss [129], Washtenaw
County Community Mental Health and Trish Cortes’ (“County Defendants”) Motion
to Dismiss or for Summary Judgment [130], and Community Mental Health
Partnership of Southeast Michigan and Jane Terwilliger’s (“Regional Defendants”)
Motion for Judgment on the Pleadings [131] filed on October 1, 2018. The Court
held a hearing on the motions on February 6, 2019. On February 11, 2019, Plaintiffs
filed an Amended Complaint [146] which rendered moot Defendants’ motions for
dismissal of the original complaint. Because the arguments raised in Defendants’
motions [129, 130, 131] apply with equal force to the Amended Complaint, the Court
construes the motions as renewed. For the reasons explained below, the Court
GRANTS Defendants’ motions to dismiss and CLOSES the case.
FACTUAL BACKGROUND
Plaintiffs Derek Waskul, Cory Schneider, Kevin Weisner, Lindsay Trabue,
and Hannah Ernst suffer from various developmental disabilities. Plaintiff
Washtenaw Association for Community Advocacy (“WACA”) is a non-profit
organization that advocates for persons with developmental disabilities.
The individually named Plaintiffs participate in CLS, a Medicaid program
predicated upon the right to self-determination to structure personal plans of service
according to individual medical need. Michigan’s CLS program offers Plaintiffs the
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opportunity to obtain in-home and community services as an alternative to
institutionalization.
On March 15, 2016, Plaintiffs commenced this action challenging the
budgeting method used to implement the program. The original impetus for this
litigation was a reduction in the CLS rate calculation, which took effect on May 15,
2015. Initially, Plaintiffs sought reinstatement of the pre-May 2015 rate.1 Since the
commencement of this action, however, the CLS rate has been raised several times
and currently exceeds the pre-May 2015 rate. Despite the fact that all named
Plaintiffs are receiving CLS rates higher than those assigned before May 2015,
Plaintiffs challenge the existing budget procedure as inadequate.

1

The Sixth Circuit has briefly summarized the CLS budget adjustments which precipitated
this litigation: “Prior to 2012, individuals receiving services under the Program in
Washtenaw County received a service budget based on a single, all-inclusive rate that was
intended to cover both the personnel and the program delivery costs. In 2012, the
predecessor agency to Washtenaw County Community Mental Health, Washtenaw
Community Health Organization, changed the budget calculation method to allow for
billing of the personnel costs and the associated costs as separate line items.
Amid budgeting struggles in 2015, WCCMH moved to revert to a single, all-inclusive
budget method that allocated $13.88 to cover both personnel and the delivery costs of the
Program. The reversion was to occur on May 15, 2015. The budgeting change did not
reduce the total number of service hours recipients were authorized to receive. The effect
of utilizing an all-inclusive rate, however, was to reduce the total budget amount for each
recipient. As a practical matter, service recipients had to reduce the hourly rate they paid
service providers to maintain the level of hours authorized prior to the budget change. The
notice to recipients acknowledged this reality, stating that ‘[w]hile this is not a reduction
in your current level of services, it may reduce the amount you can pay your staff.’”
Waskul, et al. v. Washtenaw Cnty. Cmty., et al., No. 16-2742 (6th Cir. Aug. 14, 2018).

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In Michigan, a CLS participant’s budget is calculated is through a PersonCentered Planning Process (“PCP Process”). Once the participant notifies a supports
coordinator of his or her interest in self-determination, an Individual Plan of Service
(“IPOS”) is developed based on the medical needs of the participant. The IPOS
includes the HSW services needed by and appropriate for the participant. It is
prepared after a meeting with all relevant parties including the participant’s
guardians and supports coordinator.
At issue here is the budgeting method employed to implement the IPOS. That
method provides:
An individual budget includes the expected or estimated costs of a
concrete approach of obtaining the mental health services and supports
included in the IPOS. Both the [IPOS] and the individual budget are
developed in conjunction with one another through the [PCP]. Both the
participant and the PIHP [Prepaid Inpatient Health Plan] must agree to
the amounts in the individual budget before it is authorized for use by
the participant. This agreement is based not only on the amount, scope
and duration of the services and supports in the IPOS, but also on the
type of arrangements that the participant is using to obtain the services
and supports . . . . determined primarily through the PCP process.
Michigan uses a retrospective zero-based method for developing an
individual budget. The amount of the individual budget is determined
by costing out the services and supports in the IPOS, after a IPOS that
meets the participant’s needs and goals has been developed . . . .
Once the IPOS is developed, the amount of funding needed to obtain
the identified services and supports is determined collectively by the
participant, the mental health agency (PIHP or designee), and others
participating in the PCP process.
Amend. Compl. Ex. 2, Appendix E-2, ¶ b(ii).
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The PIHP2 sets an hourly rate for the providers and services included in the
IPOS. The existing rate for all named Plaintiffs is at least $15.56/hour. That hourly
rate is then multiplied by the number of hours in the IPOS to create an all-inclusive
budget. With this all-inclusive budget, the participant has a significant degree of
flexibility in implementing his or her IPOS. This is the very purpose of the selfdetermination program.
PROCEDURAL HISTORY
Plaintiffs Derek Waskul, Cory Schneider, Kevin Wiesner, and WACA
commenced this action on March 15, 2016. On March 30, 2016, Plaintiffs filed a
Motion for Preliminary Injunction [8]. The Court held a two-day evidentiary hearing
on the Motion [8] which began on August 1, 2016 and continued on September 20,
2016. On November 22, 2016, the Court issued an Order [55] denying Plaintiffs’
Motion for Preliminary Injunction. The Court held that Plaintiffs were unlikely to
succeed on the merits of their claims that WACA had associational standing and that
Defendants had violated the Social Security Act and Mental Health Code. On
December 15, 2016, Plaintiffs filed a Notice of Appeal [57] on the issue of whether
WACA had associational standing.

2

A PIHP is a Medicaid managed care organization responsible for making medical
assistance available and accessible to Medicaid beneficiaries within their region. Defendant
Community Mental Health Partnership of Southeast Michigan is the PIHP that covers
Washtenaw County.

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While awaiting the Sixth Circuit’s ruling on the standing issue, Plaintiffs filed
a second (“Waskul II”) on July 20, 2017. Plaintiffs also filed a Motion for Leave to
File an Amended Complaint [69] on August 9, 2017. The complaint in Waskul II
and the Proposed Amended Complaint were virtually identical.
On August 14, 2018, albeit on narrow grounds, the Sixth Circuit affirmed this
Court’s ruling denying injunctive relief. The Sixth Circuit explained that because the
named Plaintiffs’ due process claims for injunctive relief were moot, WACA lacked
associational standing to sue for injunctive relief on their behalf. Waskul, No. 162742.
On October 1, 2018, Defendants filed motions to dismiss [129, 130, 131] the
complaint in Waskul II. The motions were fully briefed.
On February 6, 2019, the Court held a hearing on the motions. At the hearing,
the Court granted Plaintiffs’ Motion for Leave to file an Amended Complaint [69]
and granted Defendants’ motions for dismissal of the complaint in Waskul II as
duplicative.
On February 11, 2019, Plaintiffs filed an Amended Complaint [146] alleging:
Failure to Provide Constitutionally Adequate Notice in violation of the Due Process
Clause (Count I); Violation of Statutory Right to Notice (Count II);3 Failure to

3

Plaintiffs have voluntarily dismissed Counts I and II.

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Authorize Services in the Amount, Scope, or Duration to Reasonably Achieve their
Purpose in violation of the Social Security Act (Count III); Failure to Furnish
Medical Assistance with Reasonable Promptness in violation of the Social Security
Act (Count IV); Violation of Title II of the Americans with Disabilities Act (Count
V); Violation of Section 504 of the Rehabilitation Act (Count VI); Failure to Take
Necessary Safeguards in violation of the Medicaid Act (Count VII); Failure to
Provide a Meaningful Choice Between Institutionalization and Community Based
Services in violation of the Medicaid Act (Count VIII); Third Party Beneficiary
Claim for Violation of Assurances (Count IX); Abuse and Neglect in violation of
the Michigan Mental Health Code (Count X).
LEGAL STANDARDS
Defendants move to dismiss the Amended Complaint pursuant to Fed. R. Civ.
P. 12(b)(6). “To survive a motion to dismiss, [Plaintiffs] must allege ‘enough facts
to state a claim to relief that is plausible on its face.’” Traverse Bay Area
Intermediate Sch. Dist. v. Mich. Dep’t of Educ., 615 F.3d 622, 627 (6th Cir. 2010)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). On a Rule 12(b)(6)
motion to dismiss, the Court must “assume the veracity of [Plaintiffs’] well-pleaded
factual allegations and determine whether [they are] entitled to legal relief as a matter
of law.” McCormick v. Miami Univ., 693 F.3d 654, 658 (6th Cir. 2012) (citing
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)).
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Defendants also move for dismissal pursuant to Fed. R. Civ. P. 12(b)(1) on
the grounds that the entire action is moot. Where a case is moot, the Court lacks
subject-matter jurisdiction. “A case becomes moot when the issues presented are no
longer live or the parties lack a legally cognizable interest in the outcome.” League
of Women Voters of Ohio v. Brunner, 548 F.3d 463, 473 (6th Cir. 2008) (internal
citations and quotation marks omitted).
ANALYSIS
I.

Mootness
As an initial matter, Defendants argue that this action is moot because

Plaintiffs’ funding has been restored to, or has otherwise surpassed, the pre-May
2015 budget levels.
This argument mistakenly assumes that the only form of relief sought is an
adjustment to the hourly rate. Plaintiffs, however, have repeatedly made clear that
they are challenging the budgeting method, not simply the amount budgeted for. In
the Amended Complaint, Plaintiffs ask this Court to enjoin Defendants from
continuing to impose “any other [budgeting] method not in conformity with the
assurances given and obligations assumed under the Habilitation Supports Waiver.”
Plaintiffs’ claim—that the budgeting method denies them payment of medically
necessary services—is ripe for review.

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II.

Social Security Act (Counts III and IV)
42 U.S.C. § 1396a(a)(8) requires a state’s Medicaid plan to “provide that all

individuals wishing to make application for medical assistance under the plan [] have
[the] opportunity to do so, and that such assistance [] be furnished with reasonable
promptness to all eligible individuals.” Section 1396a(a)(10)(B)(i) further requires
that the Medicaid plan “not be less in amount, duration, or scope than the medical
assistance made available to any other such individual[.]”
Plaintiffs argue that the payments furnished pursuant to their IPOSs are
insufficient to ensure that the services provided are appropriate in amount, scope,
and duration in violation of § 1396a(a)(10)(B) and are delivered with reasonable
promptness in violation of § 1396a(a)(8).
In Westside Mothers v. Olszewski, 454 F.3d 532, 540 (6th Cir. 2006)
(“Westside Mothers II”), the Sixth Circuit held that §§ 1396a(a)(8) and 1396a(a)(10)
do not impose on states an obligation to provide direct medical services, but rather
require states to “furnish medical assistance,” i.e., financial assistance, to individuals
with reasonable promptness. The Sixth Circuit has since explained the significance
of this ruling:
Prior to Westside Mothers II, it was an open question in our circuit
whether a state’s duty to provide “medical assistance” required it to
ensure that all eligible individuals received services, and the weight of
authority in other circuits favored such an interpretation. After Westside
Mothers II and Mandy R., it is clear that no such duty exists.
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Brown v. Tenn. Dep’t of Fin. & Admin., 561 F.3d 542, 546-47 (6th Cir. 2009).
Accordingly, §§ 1396a(a)(8) and (10)(B) impose on states only the duty to pay for
services—not the duty to ensure that such services are provided. Id. at 545.
Nonetheless, Westside Mothers II left open the possibility for a private action
under these provisions on the grounds that the payments distributed are “insufficient
to enlist an adequate number of providers” and therefore “foreclos[e] the opportunity
for eligible individuals to receive the covered medical services.” 454 F.3d at 540.
However, to state this type of claim for relief under §§ 1396a(a)(8) and (a)(10)(B),
Plaintiffs must allege specific facts which establish that they have been effectively
denied their right to medical assistance as a result of inadequate payments. See id.
The Amended Complaint is devoid of allegations which would support such
a claim. Plaintiffs allege that CLS providers cannot be readily found to work at the
rates available and that some providers have quit as a result of the low pay. Amend.
Compl. ¶¶ 410-11. Plaintiffs further allege that they are unable “to budget for any
additional needs without reducing the amount [paid to] CLS providers,” ¶ 216, and
to “find CLS providers to work at the current rate,” ¶ 260.
But Plaintiffs’ difficulty finding providers is based on their individual
preferences, not based on their ability to pay. It is undisputed that Plaintiffs currently
have, and have always had, the option of using providers who contract with
Washtenaw County to deliver medically necessary services. As Defendants point
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out, that Plaintiffs may prefer to hire their own staff does not render the services
effectively unavailable. Moreover, Plaintiffs’ general claim that the budget is
inadequate is belied by the fact that they have failed to allege any specific, medically
necessary services which they are being denied under the existing budgeting scheme.
The purpose of a self-determination plan is to allow the participants
themselves to decide how to allocate the funding for their services and providers.
Inherent in this process are budgetary decisions which may require Plaintiffs to
spend less on certain services and more on others. The Court recognizes the immense
financial and emotional toll imposed on participants and their families. The Court
also recognizes, however, that requests for supplemental funding can, and should,
be made through the PCP process. The allegations in the Amended Complaint do
not support Plaintiffs’ claim that they have been denied the opportunity to receive
necessary medical services in violation of §§1396a(a)(8) and (a)(10)(B). See
Westside Mothers II, 454 F.3d at 540. Accordingly, the Court will dismiss Counts
III and IV.
III.

Free Choice Provisions (Counts VII and VIII)

Section 1396n(c)(2) authorizes state payment plans for the cost of home or
community-based services. Under a CLS plan, “[s]tates may provide beneficiaries
with assisted-living services rather than more-intrusive (and expensive) nursinghome services.” Price v. Medicaid Dir., 838 F.3d 739, 743 (6th Cir. 2016).
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Section 1396n(c)(2) provides that a HSW waiver for community-based
services shall not be granted unless the State provides assurances that:
(A) necessary safeguards (including adequate standards for provider
participation) have been taken to protect the health and welfare of
individuals provided services under the waiver and to assure financial
accountability for funds expended with respect to such services . . . .
(C) such individuals who are determined to be likely to require the level
of care provided in a hospital, nursing facility, or intermediate care
facility for the mentally retarded are informed of the feasible
alternatives, if available under the waiver, at the choice of such
individuals . . . .
Plaintiffs allege that Defendant Gordon, the Director of MDHHS, has failed
to take necessary safeguards to protect their health and welfare in violation of §
1396n(c)(2)(A) and to provide a meaningful choice between institutionalization and
home-and-community-based services in violation of § 1396n(c)(2)(C).
State Defendants argue that the Court should dismiss Counts VII and VIII
because there is no recognized private right of action to enforce § 1396n(c)(2) or its
regulations. To determine whether a statute confers a private right of action under
42 U.S.C. § 1983, the Court asks whether or not Congress intended to confer
individual rights upon the class of beneficiaries. Gonzaga Univ. v. Doe, 536 U.S.
273, 285 (2002). “Where the text and structure of a statute provide no indication that
Congress intends to create new individual rights, there is no basis for a private suit,
whether under § 1983 or under an implied right of action.” Id. at 286.

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Before the Supreme Court’s ruling in Gonzaga, the Sixth Circuit had
unambiguously held that §§ 1396n(c)(2)(A), (B), (C) and (E) gave rise to
enforceable rights. Wood v. Tompkins, 33 F.3d 600, 611 (6th Cir. 1994). In light of
Gonzaga, however, the Court can no longer rely exclusively on Wood. The issue of
whether § 1396n(c)(2) confers private rights that can be enforced via § 1983 remains
an open question in this Circuit.
Applying Gonzaga, and relying in part on Wood, the Ninth Circuit has ruled
that the free choice provisions—§§ 1396n(c)(2)(C) and (d)(2)(C)—are enforceable
under § 1983. Ball v. Rodgers, 492 F.3d 1094, 1107 (9th Cir. 2007). At least two
district courts in this Circuit have reached similar conclusions. See, e.g., Ball by
Burba v. Kasich, 244 F. Supp. 3d 662, 684 (S.D. Ohio 2017); Michelle P. ex rel.
Deisenroth v. Holsinger, 356 F. Supp. 2d 763, 769 (E.D. Ky. 2005).
The Ninth Circuit’s application of Gonzaga persuades this Court that § 1396n
confers rights that may be enforced pursuant to § 1983. The problem with Plaintiffs’
claim is that even if they may enforce §§ 1396n(c)(2)(A) and (C), they fail to state a
claim for relief under these provisions.
With respect to § 1396n(c)(2)(A), Plaintiffs allege that Defendant Gordon has
failed to take necessary safeguards to protect their health and welfare by allowing
State and County Defendants to impose a “cap” on the amount of money CLS
participants receive. Amend. Compl. ¶ 444. Plaintiffs essentially ask this Court to
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find that the Director’s conduct of setting a limit on the budget constitutes a violation
of the Act. Such a claim is entirely without merit—it is the State’s very responsibility
to set the appropriate budget.
With respect to § 1396n(c)(2)(C), Plaintiffs allege that Defendant Gordon has
failed to ensure that CLS participants have a meaningful choice between
community-living and institutionalization. In Rodgers, the Ninth Circuit explained
that § 1396n(c)(2)(C) confers upon individuals “[1] the right to be informed of
alternatives to traditional, long-term institutional care, and [2] the right to choose
among those alternatives.” 492 F.3d at 1107. Plaintiffs maintain that deciding
between in-home care and institutionalization presents them with a Hobson’s Choice
because if they opt for in-home care, they forgo “vital non-staff services” which
leave them at risk of being effectively homebound and “unable to get out into the
community.” Amend. Compl. ¶ 451.
The only factual allegation which could even support this claim pertains to
Plaintiff Waskul. Plaintiffs allege that Mr. Waskul “goes three weekdays (Monday
through Wednesday) without his normal community routine and is confined to his
home on those days. Amend. Compl. ¶ 222. Otherwise, the Amended Complaint
merely refers, in general terms, to the fact that some of Plaintiffs’ guardians pay out
of pocket for community activities and transportation expenses. Amend. Compl. ¶¶
253; 345.
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These allegations are hardly sufficient to support Plaintiffs’ claim that they
are “effectively homebound” as a result of their participation in the CLS program.
Involvement in community activities is factored into the IPOS budget determination.
Should Plaintiffs require more money for medically necessary community activities,
they may identify the vital non-staff services they are not receiving under their
current IPOS and file a request for supplemental hours through the PCP process.
IV.

Integration Mandate (Counts V and VI)

The ADA’s integration mandate provides that “[a] public entity shall
administer services, programs, and activities in the most integrated setting
appropriate to the needs of qualified individuals with disabilities.” 28 C.F.R. §
35.130(d). The Rehabilitation Act contains a near-identical regulation. See 28 C.F.R.
§ 41.51(d). “[T]he remedies, procedures, and rights available under Title II of the
ADA parallel those available under the Rehabilitation Act.” Carpenter-Barker v.
Ohio Dep’t of Medicaid, No. 17-4301, 2018 WL 4189530, at *4 (6th Cir. Aug. 31,
2018), cert. denied, No. 18-715, 2019 WL 177614 (U.S. Jan. 14, 2019).
Counts V and VI allege “essentially one claim”—that Defendants’ budgeting
method puts Plaintiffs at risk of institutionalization in violation of Olmstead v. L.C.
ex rel. Zimring, 527 U.S. 581 (1999) and the integration mandate.
In Olmstead, the Supreme Court held that unjustified isolation constitutes
discrimination based on disability in violation of the ADA and Rehabilitation Act.
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527 U.S. at 597. Courts have construed the decision broadly, finding that “Olmstead
is not limited to individuals already subject to unjustified isolation, but also
‘extend[s] to persons at serious risk of institutionalization or segregation.’” Mitchell
through Mitchell v. Cmty. Mental Health of Cent. Mich., 243 F. Supp. 3d 822, 842
(E.D. Mich. 2017) (quoting U.S. Dep’t of Justice, Statement of the Department of
Justice on Enforcement of the Integration Mandate of Title II of the Americans with
Disabilities Act and Olmstead v. L.C., Q. 6 (last updated June 22, 2011), available
at www.ada.gov/olmstead/q&a_olmstead.htm); see also K.B. by T.B. v. Mich. Dep’t
of Health & Human Servs., No. 18-11795, 2019 WL 462512, at *11 (E.D. Mich.
Feb. 6, 2019); Kasich, 244 F. Supp. 3d at 679.
“[A] plaintiff establishes a sufficient risk of institutionalization to make out
an Olmstead violation if a public entity’s failure to provide community services . . .
will likely cause a decline in health, safety, or welfare that would lead to the
individual’s eventual placement in an institution.” Mitchell, 243 F. Supp. 3d at 842
(internal citations and quotation marks omitted).
Plaintiffs cannot establish that they are at serious risk of institutionalization in
the traditional sense—this action was filed three years ago, but all of the individually
named Plaintiffs still live at home. Nevertheless, relying on a Seventh Circuit
decision, Plaintiffs argue that “isolation in the home for a person ‘who can handle
and benefit from’ time out in the general community is also inconsistent with the
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integration mandate.” Steimel v. Wernert, 823 F.3d 902, 910, 918 (7th Cir. 2016)
(holding that programs which allow “persons with disabilities to leave their homes
only 12 hours each week, cooping them up the rest of the time, or render them at
serious risk of institutionalization . . . violate the integration mandate unless the state
can show that changing them would require a fundamental alteration of its programs
for the disabled.”).
The problem with this argument is two-fold. First, assuming this Court were
to adopt the Seventh Circuit’s interpretation of the integration mandate, the relief
sought here—an overhaul of the budgeting method—would require a fundamental
alternation of Defendants’ programs for the disabled.
Second, Plaintiffs have not alleged how the current budgeting method has
rendered them effectively institutionalized at home. The only allegation supporting
this theory is that Plaintiffs Waskul and Weisner have been “confined to their home
for a substantial and unjustifiable period of time, due to the inability to hire sufficient
and appropriate staff to take them into the community.” Amend. Compl. ¶ 432. The
facts alleged here—which differ drastically from Steimel in which the plaintiffs left
their homes for only 12 hours per week—do not support a plausible claim for
deprivation of the right to receive treatment in an integrated setting. The ADA and
Rehabilitation Act neither impose a “standard of care for whatever medical services
[the state] render[s]” nor require the state to “provide a certain level of benefits to
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individuals with disabilities.” Olmstead, 527 U.S. at 603 fn.14. Though unfortunate
for Plaintiffs, Olmstead does not “specifically require that states offer all the aid a
patient wants.” Carpenter-Barker, 2018 WL 4189530, at *5. Accordingly, the Court
will dismiss Counts V and VI.
V.

Breach of Contract (Count IX)
Plaintiffs allege a third-party beneficiary claim for violation of assurances in

the HSW and the PIHP contract. Appendix E-1(b) of the HSW Application provides,
in pertinent part:
[An IPOS] will be developed through this process with the participant,
supports coordinator or other chosen qualified provider, and allies
chosen by the participant. The plan will include the HSW waiver
services needed by and appropriate for the participant. An individual
budget is developed based on the services and supports identified in the
IPOS and must be sufficient to implement the IPOS.
Plaintiffs argue that State and Regional Defendants breached their obligation
pursuant to Appendix E-1 by using a budgeting system insufficient to implement
their IPOSs. Plaintiffs concede, however, that this claim is inseparable from their
statutory claims. [Dkt. #153-1 at 4]. Because Counts III-VIII fail to state a claim for
relief, Count IX also must fail.
VI.

Michigan Mental Health Code (Count X)

M.C.L. § 330.1722 provides: “A recipient of mental health services shall not
be subjected to abuse or neglect.” This statute guarantees that “a recipient of mental
health services shall not be subjected to non-accidental physical or emotional harm
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or sexual abuse and shall not be denied ‘the standard of care or treatment to which
he or she is entitled under [Code].’” Carl v. Muskegon Cnty., No. 319017, 2015 WL
849011, at *5 (Mich. Ct. App. Feb. 26, 2015).
Plaintiffs argue that Defendants’ failure to provide them with “an actual
budget explicitly referring to transportation and recreation” amounts to neglect.
As an initial matter, Defendants argue that they are entitled to governmental
immunity pursuant to M.C.L. § 691.1407.4 Defendants further argue that Plaintiffs
are not entitled to a particular budgeting procedure under the Code.
“In order to defeat [D]efendants’ claims for qualified immunity under
Michigan law, [Plaintiffs] must offer sufficient evidence of gross negligence.”
Lanman v. Hinson, 529 F.3d 673, 690 (6th Cir. 2008). Here, Plaintiffs have not even
alleged that Defendants were grossly negligent with respect to adjusting the budget.
Moreover, as explained in prior sections of this opinion, Plaintiffs have failed to
allege sufficient facts to support their claim that Defendants subjected them to “nonaccidental physical or emotional harm” or otherwise deprived them of “the standard
of care or treatment to which [they] are entitled.” As such, Count X is dismissed.

4

Plaintiffs filed a Motion to Strike [142] the part of County Defendants’ Reply [139] in
which they assert the governmental immunity defense. Plaintiffs submit that County
Defendants improperly raised this defense for the first time in their Reply. As County
Defendants note, however, they raised this first as an Affirmative Defense, and again in
their previous Motion for Summary Judgment [19]. Accordingly, Plaintiffs’ Motion to
Strike [142] is denied.

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CONCLUSION
The importance of ensuring that the most vulnerable members of our
community are properly cared for cannot be overstated. Plaintiffs here,
understandably, seek additional funds to pay for providers and services. But based
on the general allegations in the Amended Complaint, the Court cannot award
Plaintiffs the relief they seek. Their appropriate recourse is through the PCP process.
Having dismissed all counts alleged in the Amended Complaint, the Court
need not reach the remaining issues in Defendants’ motions.
Accordingly,
IT IS ORDERED that Defendants’ motions to dismiss [129, 130, 131] are
HEREBY RENEWED and GRANTED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion to Strike [142] is
DENIED.
IT IS FURTHER ORDERED that this case is CLOSED.
SO ORDERED.

Dated: March 20, 2019

s/Arthur J. Tarnow
Arthur J. Tarnow
Senior United States District Judge

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