Waskul et al v. Washtenaw County Community Mental Health et al
Filing
211
ORDER denying 186 Joint Motion for Abstention. Signed by District Judge Arthur J. Tarnow. (MLan)
Case 2:16-cv-10936-AJT-EAS ECF No. 211, PageID.5666 Filed 08/09/21 Page 1 of 14
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DEREK WASKUL, ET AL.,
Case No. 16-10936
Plaintiffs,
SENIOR U. S. DISTRICT JUDGE
ARTHUR J. TARNOW
v.
WASHTENAW COUNTY COMMUNITY
MENTAL HEALTH, ET AL.,
U.S. MAGISTRATE JUDGE
ELIZABETH A. STAFFORD
Defendants.
/
ORDER DENYING DEFENDANTS’ JOINT MOTION FOR ABSTENTION [186]
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.
Before the Court is a Motion for Abstention [186] filed jointly on February 8,
2021 by Defendants Michigan Department of Health and Human Services and Nick
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Lyon (“State Defendants”), Washtenaw County Community Mental Health
(“County Defendant”), and Community Mental Health Partnership of Southeast
Michigan and Jane Terwilliger (“Regional Defendants”). Plaintiff filed a Response
[188] on February 22, 2021. Defendants filed a Reply [190] on March 1, 2021.
Pursuant to Local Rule 7.1(f)(2), the Court finds that the Motion [186] can be
determined without holding a hearing. E.D. MICH. LR 7.1. For the reasons explained
below, the Court DENIES Defendants’ Motion for Abstention [186].
FACTUAL BACKGROUND
Plaintiffs Derek Waskul, Cory Schneider, Kevin Weisner, 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 selfdetermination to structure personal plans of service according to individual medical
need. Michigan’s CLS program offers Plaintiffs the 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,
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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.
In Michigan, a CLS participant’s budget is calculated 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
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, allinclusive 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.
1
Amid budgeting struggles in 2015, WCCMH moved to revert to a single, allinclusive 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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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.
Am. Compl. Ex. 2, Appendix E-2, ¶ b(ii).
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
A PIHP is a Medicaid managed care organization responsible for making medical
assistance available and accessible to Medicaid beneficiaries within their region.
2
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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.
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.
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.
Defendant Community Mental Health Partnership of Southeast Michigan is the
PIHP that covers Washtenaw County.
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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
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
3
Plaintiffs have voluntarily dismissed Counts I and II.
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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).
Defendants filed several Motions to Dismiss [129] [130] [131] the case for
mootness and failing to state a claim under Fed. R. Civ. P. 12(b)(6). After a hearing,
the Court granted those motions and closed the case on March 20, 2019. (ECF No.
164). Upon Plaintiff’s appeal, the Sixth Circuit reversed this Court’s Order [164]
and remanded the case for further proceedings. Waskul v. Washtenaw Cty. Cmty.
Mental Health, 979 F.3d 426 (6th Cir. 2020). Defendants now ask the Court to
abstain from deciding Plaintiffs’ claims under Burford v. Sun Oil Co., 319 U.S. 315
(1943), Rooker v. Fidelity Trust, Company, 263 U.S. 413 (1923), District of
Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), Colorado River Water
Conservation District v. United States, 424 U.S. 800 (1976).
ANALYSIS
Defendants seek abstention due to Plaintiff Kevin Wiesner’s pending case in
state court. In 2019, Weisner filed an internal appeal with County Defendant,
Washtenaw County Community Mental Health (“CMH”), seeking an increase in his
CLS rate to $18/hour. (ECF No. 188-3). His request was denied on July 16, 2019.
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(Id.). On November 5, 2019, Weisner requested a state fair hearing to appeal CMH’s
decision, because his budget did not satisfy the requirements of the Michigan’s
HSW. (Id.). On January 6, 2020, following a hearing, an Administrative Law Judge
reversed CMH’s denial and ordered it to reassess the petition and authorize a
sufficient budget rate to meet the goals of Weisner’s IPOS. (ECF No. 188-4,
PageID.4970).
CMH appealed the ALJ decision to Washtenaw County Circuit Court. There,
the court vacated the ALJ decision and ruled that the ALJ had acted “beyond the
scope of authority” by determining and changing the CLS budget rate. (ECF No.
186-2, PageID.4788-90). Weisner has since sought leave to file an appeal to the
Michigan Court of Appeals. (ECF No. 186-3). In his motion, he argues that the
Circuit Court lacked jurisdiction over CMH’s appeal, the ALJ did not exceed his
authority in ordering CMH to reassess the budget, and that the Circuit Court
improperly found that there are available and suitable agency providers as
alternatives to self-determination. (Id.).
Whether the Michigan Court of Appeals ultimately reverses the Circuit Court
and approves a budget rate increase for Weisner or affirms the Circuit Court’s
vacation order and Weisner’s rate stays the same—neither decision has any bearing
on the legal questions before this Court: whether the budget calculation system
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violates various federal and state law requirements by diminishing Plaintiffs, not just
Weisner’s, access to community living services.
Other courts in this case’s procedural history agree with this interpretation of
the state court proceedings. The Circuit Court stated that “[t]he decision by the
Administrative Law Judge really went to the sufficiency of a budget.” (ECF No.
186-2, PageID.4788). While the Sixth Circuit stated on appeal that although the ALJ
ruled in Weisner’s favor to increase his budget, “the budget methodology was not
changed.” Waskul, 979 F.3d at 438-39. However, the Michigan Court of Appeals is
not considering whether or how to change the budget methodology, instead it is
primarily considering whether the Circuit Court and ALJ had proper jurisdiction and
authority for their decisions. For these reasons, the divergency between this case and
Weisner’s state case preclude all of Defendants’ purported reasons for abstention.
I.
Burford Abstention
First, Defendants seek abstention under Burford v. Sun Oil Co., which directs
abstention in light of a state’s interest in being provided the first opportunity to
interpret its own statutes. 319 U.S. 315 (1943). In the Burford case, the United States
Supreme Court found that there existed, “an overriding state concern and superior
competence to deal with a complex state regulatory scheme for controlling the
drilling of oil wells.” Hanna v. Toner, 630 F.2d 442, 444 (6th Cir. 1980).
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Under the doctrine, “[w]here timely and adequate state-court review is
available, a federal court sitting in equity must decline to interfere with the
proceedings or orders of state administrative agencies: (1) when there are ‘difficult
questions of state law bearing on policy problems of substantial public import whose
importance transcends the result in the case then at bar’; or (2) where the 'exercise
of federal review of the question in a case and in similar cases would be disruptive
of state efforts to establish a coherent policy with respect to a matter of substantial
public concern.’” New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491 U.S.
350, 361 (1989) (“NOPSI”) (quoting Colo. River Water Conservation Dist. v. United
States, 424 U.S. 800, 814 (1976)).
Here, the Court finds that no such timely and adequate state review exists of
the CLS budget methodology to warrant abstention under Burford. While this case
touches on state policy, it makes no attempt to shape it or “jigger with [its] inner
workings,” it merely questions whether the budget system violates federal and state
law. Zynda v. Arwood, 175 F. Supp. 3d 791, 802 (E.D. Mich. 2016) (rejecting
defendants’ Burford abstention argument).
Regardless, “there is, of course, no doctrine requiring abstention merely
because resolution of a federal question may result in the overturning of a state
policy.” Zablocki v. Redhail, 434 U.S. 374, 379 n. 5 (1978). Furthermore, “[w]hile
Burford is concerned with protecting complex state administrative processes from
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undue federal interference, it does not require abstention whenever there exists such
a process, or even when there is a ‘potential for conflict’ with state regulatory law
or policy.” NOPSI, 491 U.S. at 362 (quoting Colo. River Water Conservation Dist.,
424 U.S. at 815-816).
In addition, Weisner’s state court case pertains to state courts’ jurisdiction
over administrative decisions. If state courts themselves are not convinced of their
own jurisdiction to entertain Weisner’s claim for an increased budget, then there
exists no adequate review of Plaintiffs’ budget concerns in this case. Burford
abstention is therefore inappropriate.
II.
Rooker-Feldman Abstention
The Rooker-Feldman doctrine, as articulated in Rooker v. Fidelity Trust Co.,
263 U.S. 413 (1923), and then, 60 years later, in District of Columbia Court of
Appeals v. Feldman, 460 U.S. 462 (1983) bars federal district courts from hearing
“cases brought by state-court losers complaining of injuries caused by state-court
judgments . . . and inviting district court review and rejection of those judgments.”
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). Put
simply, “[i]f the source of the injury is the state court decision, then the RookerFeldman doctrine would prevent the district court from asserting jurisdiction.”
McCormick v. Braverman, 451 F.3d 382, 393 (6th Cir. 2006). No such source of
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injury exists here. Plaintiffs’ case in this court was filed years before Weisner’s state
court proceedings began and it seeks relief that no state court has previously denied.
Further, although Plaintiff challenges the sufficiency of his CLS budget in
both actions—they are not “inextricably intertwined” for purposes of abstention.
Feldman, 460 U.S. 462 at 486 (finding that federal courts may not decide claims that
are “inextricably intertwined” with state court denials). In state court, Weisner
sought an increase in his budget rate. Here, he seeks a finding that the budget
calculation method is unlawful and insufficient to meet his needs. As the Sixth
Circuit has already noted, an increase in Weisner’s rate does not change the
methodology used to calculate the rate for all Plaintiffs. These claims are admittedly
related—but one does determine the other. Therefore, the Rooker-Feldman
abstention doctrine is inapplicable here.
III.
Colorado River Abstention
Finally, Defendants seek abstention under the Colorado River doctrine. Under
this doctrine, “despite the virtually unflagging obligation of the federal courts to
exercise the jurisdiction given them, considerations of judicial economy and federalstate comity may justify abstention in situations involving the contemporaneous
exercise of jurisdiction by state and federal courts.” United Am. Healthcare Corp. v.
Backs, 997 F. Supp. 2d 741, 751 (E.D. Mich. 2014) (quoting Romine v. Compuserve
Corp., 160 F.3d 337, 339 (6th Cir. 1998)). “When a district court decides to dismiss
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or stay under Colorado River, it presumably concludes that the parallel state-court
litigation will be an adequate vehicle for the complete and prompt resolution of the
issues between the parties. If there is any substantial doubt as to this, it would be a
serious abuse of discretion to grant the stay or dismissal at all.” Id. at 751-52 (quoting
Moses H. Cone Memorial Hosp. v. Mercury Const. Co., 460 U.S. 1, 28 (1983)).
The United States Supreme Court has recognized that, “abstention from the
exercise of federal jurisdiction is the exception, not the rule.” Colorado River Water
Conservation District v. United States, 424 U.S. 800, 813 (1975).
The doctrine of abstention, under which a District Court may decline to
exercise or postpone the exercise of its jurisdiction, is an extraordinary
and narrow exception to the duty of a District Court to adjudicate a
controversy properly before it. Abdication of the obligation to decide
cases can be justified under this doctrine only in the exceptional
circumstances where the order to the parties to repair to the state court
would clearly serve an important countervailing interest.
Id. (citing County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-189
(1959)). Since the highest court has deemed abstention to be an exception to be
applied in narrow circumstances, the presumption is that the District Courts will
exercise their jurisdiction to hear cases properly brought before them. This
presumption must be followed here. This Court does not find that exceptional
circumstances, complex issues, or evidence of greater expertise in the Michigan
Courts exist to warrant abstention in this case. In addition, for the reasons previously
stated, Weisner’s state court proceedings are not parallel to this case, because they
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are not substantially similar. Total Renal Care, Inc. v. Childers Oil Co., 743 F. Supp.
2d 609, 613-14 (E.D. Ky. 2010) (“Suits are parallel if substantially the same parties
litigate substantially the same issues.”) (quoting New Beckley Mining Corp. v. Int'l
Union, United Mine Workers of Am., 946 F.2d 1072, 1073 (4th Cir.1991)).
Application of the Colorado River abstention doctrine here is therefore unwarranted.
CONCLUSION
Accordingly,
IT IS ORDERED that Defendants’ Motion for Abstention [186] is DENIED.
SO ORDERED.
Dated: August 9, 2021
s/Arthur J. Tarnow
Arthur J. Tarnow
Senior United States District Judge
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