Murphy et al v. Minnesota Department of Human Services et al

Filing 661

ORDER denying 480 Motion for Summary Judgment; granting in part and denying in part 495 Motion for Partial Summary Judgment. See Order for details. (Written Opinion). Signed by Judge Donovan W. Frank on 9/27/2019. (KLL)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Tenner Murphy, by his guardian
Kay Murphy; Marrie Bottelson; Dionne
Swanson; and on behalf of others
similarly situated,
Plaintiffs,

Civil No. 16-2623 (DWF/BRT)

MEMORANDUM
OPINION AND ORDER

v.
Jodi Harpstead, in her capacity
as Commissioner of The
Minnesota Department of
Human Services,
Defendant.

Joseph W. Anthony, Esq., Peter McElligott, Esq., and Steven M. Pincus, Esq., Anthony
Ostlund Baer & Louwagie PA; Laura Farley, Esq., and Steven Andrew Smith, Esq.,
Nicholas Kaster PLLP; Barnett I. Rosenfeld, Esq., and Justin H. Perl, Esq., MidMinnesota Legal Aid; Eren Ernest Sutherland, Esq., Justin M. Page, Esq., and
Steven C. Schmidt, Esq., Mid-Minnesota Legal Aid, Minnesota Disability Law Center,
counsel for Plaintiffs.
Aaron Winter, Brandon L. Boese, Janine Wetzel Kimble, and Scott H. Ikeda, Assistant
Attorneys General, Minnesota Attorney General’s Office, counsel for Defendant.
Pari McGarraugh, Esq., and Samuel D. Orbovich, Esq., Fredrikson & Byron, counsel
for amicus ARRM.

INTRODUCTION
This matter is before the Court on Plaintiffs’ motion for partial summary judgment
(Doc. No. 495), and Defendant’s motion for summary judgment (Doc. No. 480). For the

reasons set forth below, the Court grants in part and denies in part Plaintiffs’ motion, and
denies Defendant’s motion.
BACKGROUND
I.

Factual Background
The Court previously detailed the background of this case in its May 18, 2017

Memorandum Opinion and Order (Doc. No. 54 (“May 2017 Order”)) and the Court only
briefly summarizes the facts here.1 In short, Plaintiffs are individuals with disabilities
and Medicaid recipients who receive Home and Community Based Disability Waivers
(“Disability Waivers”) from the State of Minnesota under the direction of Defendant Jodi
Harpstead (“Defendant”), Commissioner of the Minnesota Department of Human
Services (“DHS”).2 Plaintiffs reside, or did reside3, in Community Residential Setting
(“CRS”) facilities, known as corporate adult foster care (“CFC”)4—and wish to access

1

The Court directs readers to its May 2017 Order and otherwise assumes familiarity
with the facts and law elaborated therein. See Murphy by Murphy v. Minn. Dep’t of
Human Servs., 260 F. Supp. 3d 1084 (D. Minn. 2017). To the extent necessary, the Court
supplements the facts with new or different information obtained subsequent to
discovery. The Court’s analysis is based on the entire record before it; it is not limited to
the facts available at the time of its May 2017 Order.
2

Defendant delegates certain Disability Waiver operational functions to Minnesota
counties and tribal entities (henceforth, “Lead Agencies”). (Doc. No. 578 (“Schmidt
Aff. 3”) ¶ 2, Doc. No. 578-1, Ex. 1 (“Bartolic Dep.”) at 3; see also Minn. Stat. § 256B.05,
subd. 1.)
3

Two of the named plaintiffs who lived in CFC facilities when this Court granted
class certification subsequently moved out of CFC facilities. (See Doc. No. 423 ¶ 6,
Ex. 5 at 230; Doc. No. 494 ¶ 29, Ex. 28, Doc. No. 535 at 110-11.)
4

CFC facilities are “licensed foster care setting[s] where the license holder does not
(Footnoted continued on next page.)
2

various individualized housing services available under the Disability Waivers to pursue
more integrated housing options (“IHO”).5 Plaintiffs assert that CFC facilities isolate and
segregate them from their communities in violation of federal law.
Plaintiffs assert the following claims against Commissioner Jodi Harpstead in her
official capacity: (1) failure to furnish Medicaid services with reasonable promptness
under 42 U.S.C. § 1396a(a)(8), enforced under 42 U.S.C. § 1983 (Count I); (2) violation
of Plaintiffs’ Due Process rights under the Fourteenth Amendment and the Medicaid
Act’s advance notice and fair hearing requirements, enforced under 42 U.S.C. § 1983
(Count II); (3) violation of Title II of the ADA (Count III); and (4) violation of § 504 of
the RA (Count IV). (Doc. No. 33 (“Am. Compl.”) ¶¶ 1-32.)

(Footnoted continued from previous page.)
reside.” (Doc. No. 503 (“Schmidt Aff. 1”) ¶ 3, Doc. No. 503-1, Ex. 2 at 253; see also
Minn. Stat. § 245D.02, subd. 4a.) Plaintiffs assert that CFC facilities typically contain
four or five unrelated Disability Waiver recipients who all receive similar services from
the same provider. (See Schmidt Aff. 1 ¶ 4, Doc. No. 503-1, Ex. 3 (“Pl. Resp. to
Interrog.”) at 263-64.)
5

Defendant claims that the term “IHO” is neither a Disability Waiver service or
setting classification, but a concept independently advanced by Plaintiffs which includes
a requirement that a Disability Waiver recipient rent or own their residence. (Doc.
No. 482 (“Def. Memo.”) at 10, n.10.) Plaintiffs contend that Defendant only recently
abandoned the term after previously stating in a document related to their Olmstead Plan
that IHOs “help more persons with disabilities live in community setting[s] of their
choice.” (Doc. No. 573 (“Pl. Opp.:) at 9, n.9.) The Court adopts Plaintiffs’ definition of
IHO: residential settings that are not provider controlled, and are purchased, rented, or
built with the intention of providing a home for a specific individual who has chosen that
specific setting. (Id. at 9.) The Court observes that the definition of IHO does not itself
require that a Disability Waiver recipient actually rent or own their residence as
Defendant contends, but simply states what an IHO is.
3

Plaintiffs assert their claims on behalf of themselves and a Class of similarly
situated individuals. (See id. ¶¶ 92-101.) Plaintiffs assert that they and the Class “have a
common remedy: modifications to Defendant’s residential service system to provide
individuals with choices and prevent needless segregation of individuals in segregated
residential settings.” (Id. ¶ 101.) Plaintiffs seek “access to Waiver services that will
allow them to plan, explore options, and ultimately move out of their CFC facilities and
into the most integrated setting appropriate to their needs.” (Doc. No. 499 (“Pl. Memo.”)
at 3-4 (citing Pl. Resp. to Interrog. at 266-269).) Plaintiffs seek declaratory and
injunctive relief to remedy Defendants’ alleged violations of the law, attorney fees and
costs, and other relief deemed necessary to protect the rights of Plaintiffs and the Class.
(See Am. Compl. at Prayer for Relief ¶¶ 2-6.)
Specifically, Plaintiffs seek declaratory judgment that: (1) Defendant is violating
the Medicaid Act by not providing services with reasonable promptness and violating
Plaintiffs’ Constitutional and Medicaid due process rights; and (2) Defendant is violating
the ADA and RA by segregating Plaintiffs “while failing to provide them with
individualized housing services for which they are eligible.” (Id. at Prayer for
Relief ¶¶ 2-3.)
Plaintiffs seek injunctive relief requiring Defendant to: (1) “[p]romptly ensure
every Disability Waiver recipient living in a CRS facility receives notice about eligibility
for and access to individualized housing services, including person-centered planning;”
(2) “[s]pecifically provide access and take prompt steps to make individualized housing
services, including person-centered planning, available to Plaintiffs in a reasonable
4

amount of time . . .”; and (3) “[t]ake such other steps as necessary to enable Plaintiffs to
receive residential services in the most integrated setting appropriate to their needs . . .”
(Id. at Prayer for Relief ¶ 4.) Under items (2) and (3), above, Plaintiffs identify in detail
the proposed relief they seek to modify the state’s residential service system. (Id.
at Prayer for Relief ¶¶ 4(b)-4(c).)
Defendant contends that of the 45,438 Disability Waiver recipients in 2018, only
31% lived in CFC facilities, and only 1.3% of those living in CFC facilities are putative
class members.6 (Def. Memo. at 9, 48.) Accordingly, she argues that she is not overrelying on CFC facilities, nor do her policies prevent individuals from moving to their
preferred setting. She further contends that her policies and practices comply with
federal law, and to the extent any alleged harm has occurred, she may not be held liable
in her official capacity.
II.

Procedural History
Plaintiffs filed an initial complaint against Defendant and Minnesota Department

of Human Services (“DHS) (collectively, “Defendants”) on August 3, 2016. (Doc.
No. 1.) Defendants filed a motion to dismiss Plaintiffs’ complaint on September 14,
2016. (Doc. No. 10.) On May 18, 2017, the Court granted Defendants’ motion to

6

Defendant further alleges that the proportion of Disability Waiver recipients who
live in CFC facilities has continued to decline since 2015. (See Def. Memo. at 9.)

5

dismiss insofar as it sought dismissal of DHS as a party and denied the motion in all other
respects.7 (May 2017 Order.)
Plaintiffs filed an Amended Complaint on February 23, 2017. (Am. Compl.) On
February 27, 2017, Plaintiffs filed a motion for class certification. (Doc. No. 35.) On
September 29, 2017, the Court granted Plaintiffs’ motion for class certification, certifying
the following class: “All individuals age 18 and older who are eligible for and have
received a Disability Waiver, live in a licensed Community Residential Setting, and have
not been given the choice and opportunity to reside in the most integrated residential
setting appropriate to their needs.” (Doc. No. 99 at 35.)
On November 15, 2018, Plaintiffs moved for partial summary judgment on
Count II of their Amended Complaint, asking the Court to declare that Defendant’s
current notice policy for Disability Waiver recipients violates federal law. (See Pl.
Memo.) On the same day, Defendant also moved for summary judgment, asking the
Court to grant summary judgment in her favor on all of Plaintiffs’ claims. (See Def.
Memo.) Also on November 15, 2018, Defendant filed a motion to decertify the class
(Doc. No. 418), and both parties moved to exclude expert testimony (Doc. Nos. 468,
488). The Court held a hearing on the motions on January 25, 2019. (Doc. No. 623.)

7

Plaintiffs alleged that the Minnesota Department of Human Services (“DHS”) also
violated § 504 of the RA (Am. Compl. ¶¶ 126-32); however, the Court found that the
same claim against both DHS and the Commissioner of DHS in her official capacity was
duplicative. (May 2017 Order at 2.) Accordingly, the Court dismissed DHS as a party
on May 18, 2017. (Id. at 63.)
6

The Court delayed ruling on the motions pending settlement discussions that ultimately
proved unsuccessful. (Doc. No. 636.)
On July 26, 2019, the Court denied Defendants’ motion to decertify the class.
(Doc. No. 640 (“July 2019 Order”).) On August 6, 2019, Defendants requested
permission for leave to file a motion for reconsideration of the July 2019 Order.
(Doc. No. 642 (“Request”).) The Court denied Defendant’s Request on August 14, 2019.
(Doc. No. 646.)
On August 7, 2019, the Court granted Plaintiffs’ motion to exclude the expert
testimony of John Patterson, and denied Defendant’s motion to exclude the expert
testimony of David Michael Mank, Ph.D., and Dennis F. Price. (Doc. No. 644.)
The Court now considers Plaintiffs’ motion for partial summary judgment (Doc.
No. 495) and Defendant’s motion for summary judgment (Doc. No. 480).
DISCUSSION
I.

Legal Standard
Summary judgment is appropriate if the “movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). Courts must view the evidence and all reasonable inferences in the
light most favorable to the nonmoving party. Weitz Co., LLC v. Lloyd’s of London, 574
F.3d 885, 892 (8th Cir. 2009). However, “[s]ummary judgment procedure is properly
regarded not as a disfavored procedural shortcut, but rather as an integral part of the
Federal Rules as a whole, which are designed ‘to secure the just, speedy, and inexpensive

7

determination of every action.’” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)
(quoting Fed. R. Civ. P. 1).
The moving party bears the burden of showing that there is no genuine issue of
material fact and that it is entitled to judgment as a matter of law. Enter. Bank v. Magna
Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). The nonmoving party must demonstrate
the existence of specific facts in the record that create a genuine issue for trial. Krenik v.
Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). A party opposing a properly
supported motion for summary judgment “may not rest upon mere allegation or denials
of his pleading, but must set forth specific facts showing that there is a genuine issue for
trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
A.

Plaintiffs’ Motion for Partial Summary Judgment

Plaintiffs move for partial summary judgment on Count II of their Amended
Complaint and ask the Court to declare that Defendant’s current notice policy for
Disability Waiver recipients violates federal law. (Pl. Memo. at 2.) Specifically,
Plaintiffs allege that Defendant’s policy violates their due process rights under both the
Fourteenth Amendment’s Due Process Clause and the Medicaid Act’s fair hearing
requirements.
Plaintiffs argue that federal law requires Defendant to provide a legally sufficient
written notice (“Notice of Action”) to Disability Waiver recipients when Defendant
denies access to Waiver Services or fails to act on a request for Waiver Services with

8

reasonable promptness.8 (Id. at 13-16.) Plaintiffs claim that while Defendant has a
formal written policy that instructs Lead Agencies to send a Notice of Action Form “each
time [the case manager/planer] takes action in the support plan that denies, terminates, or
reduces the person’s service,” the policy does not explain what constitutes an action that
denies, terminates, or reduces the person’s service, nor does it set forth any instructions
that must be sent if a request for services is not acted upon within a certain timeline or
with reasonable promptness. (Schmidt Aff. 1 ¶ 7, Doc. No. 503-1, Ex. 6 (“Notice of
Action Policy”) at 288.) Plaintiffs contend that because “Defendant has not provided a
clear and objective standard to the Lead Agencies that she is legally obligated to direct,
the denial process has been handled inconsistently and unlawfully throughout the State.”
(Pl. Memo. at 8.)
Plaintiffs argue that under Defendant’s current policy, Lead Agencies are only
required to provide a Notice of Action when they have made a formal, final decision that
they will not authorize specific Disability Waiver services and that no Notice of Action is
required while the Lead Agency purportedly attempts to assist Disability Waiver
recipients in some way with their request for services, regardless of how long their
attempt lasts. (See id. at 12.) Citing Black’s Law Dictionary, Plaintiffs argue that every
time Lead Agencies deprive or withhold individualized housing services from a
Disability Waiver recipient, or fail to act on a request in a reasonably prompt manner, the
services are effectively “denied” and Notice of Action is required. (Id. at 15-16.)

8

A Notice of Action complies with the requirements set forth in 42 C.F.R. §
431.210. See 42 C.F.R. § 431.210 (detailing required content of notice).
9

Plaintiffs allege that Defendant’s amorphous policy leaves the decision of what
constitutes a “denial” entirely within the discretion of individual Lead Agencies, and that
Defendant’s lack of guidance causes Lead Agencies to believe they are not required to
provide Notice of Action as long as they think that they are working on a Disability
Waiver recipient’s case and believe that progress is being made. (Id. at 18.)
Plaintiffs argue that the practical effect of Defendant’s policy is that Plaintiffs go
months and sometimes years without services or explanatory notice of a denial in
violation of their federal rights.9 (Id. at 12-14; 19-29.)
Plaintiffs ask the Court to direct Defendant to issue a new policy that requires a
timely, written Notice of Action to be issued whenever a Lead Agency denies any
individualized housing services or fails to act on a request for individualized housing
services with reasonable promptness. (Id. at 2.)
Defendant first contends that Plaintiffs’ claim for violation of the Medicaid Act
must be denied because the Medicaid Act contains no private right of action.10 (Doc.
No. 550 (“(Def. Opp.”) at 14-15.) Defendant relies on Does v. Gillespie, 867 F.3d 1034
(8th Cir. 2017), to argue that “nothing short of an unambiguously conferred right will

9

In relevant part, 42 C.F.R. § 431.206(c) requires that a Notice of Action be
provided at the time: (1) an individual applies for Medicaid; and (2) the agency denies an
individual’s claim for eligibility, benefits or services; or denies a request for exemption
from mandatory enrollment in an Alternative Benefit Plan; or takes other action, and
defined at § 431.201; or whenever a hearing is otherwise required in accordance with
§ 431.220(a). The parties dispute Defendant’s compliance with § 431.206(c)(2).
10

Defendant incorporates the argument in her motion for summary judgment that
there is no private right of action under the reasonable promptness section of the
Medicaid Act. (Def. Opp. at 15; see also Def. Memo. at 30-31).)
10

support a cause of action under § 1983,” and that the Medicaid Act is “phrased as a
directive to the federal agency charged with approving state Medicaid plans, not as a
conferral of the right to sue upon the beneficiaries of the State’s decision to participate in
Medicaid.”11 (Doc. No. 482 (“Def. Memo.”) at 31 (citing Does, 867 F.3d at 1040-41).)
Defendant further contends that Congress did not intend to create a private right “because
other sections of the [Medicaid] Act provide mechanisms to enforce the State’s obligation
under § 23(A),” and “statues with an ‘aggregate’ focus do not give rise to individual
rights.” (Id. (citing Does, 867 F.3d at 1041-42).)
Defendant next argues that even if the Medicaid Act was privately enforceable,
her policies comply. (Def. Opp. at 15.) Defendant contends that the plain language of
the Medicaid Act requires only that an opportunity for a fair hearing must exist and that
she provides such an opportunity through routine notices about the right to appeal.12 (Id.
at 1, 14-15.)

11

Does specifically addressed § 1396a(a)(23)(A), the “free choice provision,” of the
Medicaid Act. See generally 42 U.S.C. § 1396a(a)(23)(A).
12

Defendant contends that she provides notice about the opportunity for a fair
hearing when a Disability Waiver recipient is initially assessed or reassessed for service
eligibility, and when an action is taken in the recipient’s support plan that denies,
terminates, or reduces the recipient’s services. (Def. Opp. at 5.) She cites the following
forms: (1) DHS-1941-ENG, entitled “Your Appeal Rights” which states that “if you
have applied for or are getting financial help, medical coverage or social services through
the county or state agency,” “you can appeal” if, among other things, “[t]he agency does
not act quickly enough and you think it has gone beyond the legal time limit to act,”
“[t]he agency decides you cannot get help,” “[t]he agency providing you with assistance
or services reduces or stops them,” “[t]he agency denies you a specific medical service,”
(Footnote continued on next page.)

11

Defendant contends that Plaintiffs misinterpret the notice requirements imposed
by § 431.206(c)(2) of the Medicaid Act by using an improper definition of “denial,” and
for failing to recognize that short of denial, Notice of Action is only available to
individuals who specifically ask for it. (Id. at 15-20.)
Defendant disputes Plaintiffs’ definition of “denial” and contends that pursuant to
the Medicaid Act, “[Notice of Action] is triggered by an objectively verifiable, decisional
event: ‘[a]t the time the agency denies an individual’s claim for eligibility, benefits or
services.’” (Id. at 17 (citing 42. C.F.R. § 431.206(c)(2)).) Defendant argues that a
“claim” for “medical assistance” requires an individual to “make[] application for
assistance.” (Id.) Accordingly, Defendant argues that Plaintiffs rely on an “an
inapposite, freestanding concept of ‘denial’ unconnected to a ‘claim,’” so no denial
actually occurs when a simple request for services is deprived, withheld, or not acted
upon in a reasonable amount of time. (See id at 17-19.)
Defendant further contends that short of a denial, the plain language in 42 C.F.R.
431.220(a)(1) triggers Notice of Action only upon specific request for a hearing by an

(Footnote continued from previous page.)
or “you disagree with these and other county or state agency actions;” (2) DHS-2727Eng, entitled “Long-Term Services and Supports Assessment and Program Information
and Signature Sheet,” which asks whether the assessed person understands that they have
the right to appeal a decision that results in a denial, termination, or reduction in services;
(3) DHS-6791B-ENG, entitled “Community Support Plan with the Coordinated Services
and Supports Plan,” which includes the statement “[i]f you are dissatisfied with the
county agency/tribe or managed care organization’s action, or feel they have failed to act
on [your] request for home and community based services, you have the right to appeal,”
and sets forth appeal instructions; (4) DHS-6791D-ENG, entitled “Coordinate Services
and Supports Plan Signature Sheet” which also includes appeal information. (See Doc.
No. 553 (“Winter Decl.) ¶¶ 3-6, Exs. 2-5.)
12

individual who believes the agency has denied his or her claim for eligibility, covered
benefits or services, or has not acted upon the claim with reasonable promptness. (Id.
at 19-20 (citing 42 C.F.R. 431.220(a)(1)).) Defendant argues that because Plaintiffs do
not complain of any rejection of, or failure to act upon, any application for a Disability
Waiver service, Plaintiffs’ actual concern amounts to allegedly inadequate case manager
performance in response to a general request to explore moving, or external events
allegedly inhibiting a request to move. (Id. at 21-24.)
Moreover, Defendant contends that her policies already require notice of the right
to challenge allegedly deficient case manager performance outside of the claim denial
context so Disability Waiver recipients are not “left in limbo” as Plaintiffs contend. (Id.
at 25.) Specifically, she contends that pursuant to Minn. R. 9525.0024, subp. 3,
Disability Waiver recipients “must be informed—upon development of their required
individual service plan and at least annually thereafter—of their right to a conciliation
conference under [Minn. Stat.] section 256.045.” (Id. at 25.)
Defendant contends that because her policies comply with the Medicaid Act, any
alleged procedural due process violation also fails. (Id. at 27) Moreover, Defendant
argues that Plaintiffs do not have a property interest in any “individualized housing
service” not actually applied for, and that Plaintiffs do not identify any actual Disability
Waiver service allegedly denied. (Id. at 28) She further contends that Plaintiffs do not
have a property interest in “a guarantee” that they will move in response to a request to
do so. (Id. at 29.) Notwithstanding, Defendant argues that the routine notice she

13

provides related to reasonable promptness and challenges to case manager performance
satisfies procedural due process. (Id.)
Finally, Defendant argues that Plaintiffs’ requested injunction violates Fed. R. Civ.
P. 65 as impossibly vague because Plaintiffs: (1) do not identify which actual services
available under Defendant’s Waivers they believe qualify as “individualized housing
services,” leaving Defendant to guess whether a particular serviced allegedly denied is an
“individualized housing service;” (2) do not explain how Defendant is to know when a
case manager’s assistance with an individual’s request for moving assistance is
sufficiently delayed or deficient to constitute a deprivation or withhold; and (3) only
request notice related to moves to “a more integrated setting” which is a highly
individualized determination. (Id. at 33.)
The Court first observes that it has already addressed Defendant’s argument that
the Medicaid Act does not provide a private right action. (See May 2017 Order at 29.)
Specifically, the Court concluded that the reasonable promptness and fair hearing
provisions are privately enforceable under § 1983 for eligible individuals. (Id. at 22)
The Court again incorporates and adopts its analysis and holding in Guggenberger v.
Minnesota, 198 F. Supp. 3d 973, 1006-07, 1022 (D. Minn. 2016), and continues to find
that both §§ 1396a(a)(8) and 1396a(a)(3) are privately enforceable.13 Does does nothing
to change the Court’s analysis. As the Court previously stated, “[t]he enforceability of a

13

As discussed in its May 2017 Order, many of the allegations and arguments
specific to the above entitled matter are similar to those previously considered by the
Court in Guggenberger. See generally, Guggenberger, 198 F. Supp. 3d 973.
14

particular Medicaid Act must be independently assessed by the Court; the fact that one
provision fails to establish a private cause of action does not govern the enforceability of
a separate and distinct provision.” Guggenberger, 198 F. Supp. 3d at 1006. Does
addressed only § 23(A) of the Medicaid Act, the “freedom of choice” provision. There,
the Eighth Circuit stated, “we see significant difficulties with the contention that § 23(a)
unambiguously creates an enforceable federal right,” and ultimately concluded that it did
not. Does, 867 F.3d at 1041, 1046. Accordingly, Does has no impact on the Court’s
holding that the “reasonable promptness” or “the fair hearing” provision of the Medicaid
Act are privately enforceable.
The Court next addresses Defendant’s interpretation of the Medicaid Act. In
short, the Court finds Defendant’s narrow reading of the Medicaid Act overly restrictive.
42 U.S.C. §1396a(a)(3) states, “[a] State plan for medical assistance must provide for
granting an opportunity for a fair hearing before the State agency to any individual whose
claim for medical assistance under the plan is denied or is not acted upon with reasonable
promptness.” 42 U.S.C. §1396a(a)(3). While Defendant contends that Notice of Action
is trigged only when a specific application for eligibility, benefits, or services is denied,
this interpretation does not follow naturally from the plain language of the statute, nor
does it comport with guidance from the Center for Medicaid and Medicare Services
(“CMS”) which construes “claim” more broadly. See 81 Fed. Reg. 86382-01, 86395.
CMS explains that a “‘claim’ in § 431.220(a)(1) . . . refers broadly to any claim by
an applicant or beneficiary for Medicaid, whether such claim be for eligibility for
coverage in general, or for a particular benefit or service . . .” 81 Fed. Reg. 86382-01,
15

86395.14 CMS also provides that “‘denial’ of a claim in § 431.220(a)(1) includes
situations in which the agency authorizes an amount, duration or scope of a service which
is less than that requested by the beneficiary or provider.” (Id.) The CMS guidance does
not tie “claim” to a “specific application,” or to any specific service at all, nor does it
limit “denial” to simply rejecting an application.15
Defendant’s interpretation is also illogical; it presupposes that Disability Waiver
recipients know exactly what services are available and to specifically apply for them
before due process requirements are triggered. This “improperly places on the recipient
the burden of acquiring notice whereas due process directs [Defendant] to supply it.”
Schroeder v. Hegtsrom, 590 F. Supp. 121, 128 (D. Or. 1984) (citation omitted.) Further,
Defendant’s interpretation fails to comport with the purpose of the Medicaid Act to
“provide medical benefits to those in greatest need.” Hodson v. Bd. of Cty. Com’rs,
Hennepin Cty., 614 F.2d 601, 610 (8th Cir. 1980). Contrary to Defendant’s assertions,
the Court finds that the practical effect of her interpretation is that Disability Waiver

14

“Under Auer v. Robbins, 519 U.S. 452 (1997), an agency’s interpretation of its
own regulations is ‘controlling unless plainly erroneous or inconsistent with the
regulation.’’’ Guggenberger v. Minnesota, 198 F. Supp. 3d 973, 1027 n.21 (D. Minn.
2016). The Court finds that the CMS guidance is neither erroneous nor inconsistent with
its regulation.
15

The CMS Medicare and Medicaid Statistical Supplement defines “claim” as “a
request to a carrier, intermediary, Medicare Administrative Contractor, a State by a
beneficiary, or by a provider acting on behalf of a beneficiary for payment of benefits
under Medicare or Medicaid.” (Winter Decl. ¶ 31, Ex. 30.) Accordingly, this definition
is not linked to a “specific application” either.
16

recipients could wait indefinitely for requested services, never receiving an explanation
on the status of the request, and without an opportunity to appeal.
The Court finds that a denial under 42 C.F.R. § 431.206(c)(2) is not limited to
rejection of an application for services; a denial also occurs—and a Notice of Action is
required—when an agency does not authorize services that a beneficiary requests, and
when an agency authorizes services but does not provide the type or amount of requested
services. Pursuant to 42 C.F.R. § 431.210, a notice required under § 431.206(c)(2) must
contain: (1) a statement of what action the agency. . . intends to take and the effective
date of such action; (2) a clear statement of the specific reasons supporting the intended
action; (3) the specific regulations that support, or the change in Federal or State law that
requires, the action; (4) an explanation of the individual’s right to request a local
evidentiary hearing if one is available, or a State agency hearing; or in cases of an action
based on a change in state law, the circumstances under which a hearing will be granted;
and (5) an explanation of the circumstances under which Medicaid is continued if a
hearing is requested. 42 C.F.R. § 431.210.
The Court has reviewed the forms that Defendant alleges satisfy the Medicaid Act
fair hearing requirement. While they do include several references to appeal, they lack
the components required pursuant to 42 C.F.R. § 431.210. Importantly, they fail to
outline any reason for denial. General information about appeal rights unrelated to a
specific request is insufficient. See Daugherty v. Roob, Civ. No. 1:06-878, 2009 WL
899771, at *7 (S.D. Ind. Mar. 31, 2009) (holding that explanatory documents and making
caseworkers available to answer questions “fail[ed] to address the due process
17

requirement that the applicable standard be set forth in . . . its denial notices.”).
Accordingly, the Court finds that Defendant’s failure to provide proper notice violates the
Medicaid Act’s notice and hearing requirements outlined in 42 C.F.R. § 431.210.
As the Court explained in its May 2017 Order, the Medicaid Act’s fair hearing
requirements “support and reinforce Plaintiffs’ Fourteenth Amendment Due Process
Claim.”16 (May 2017 Order at 44.) “The fundamental requirement of due process is the
opportunity to be heard ‘at a meaningful time and in a meaningful manner.’” Mathews v.
Eldridge, 424 U.S. 319 at 333 (quoting, in part, Armstrong v. Manzo, 380 U.S. 545, 552
(1965)). The opportunity to be heard must be coupled with “notice reasonably
calculated, under all the circumstances, to apprise interested parties of the pendency of
the action and afford them an opportunity to present their objections.” Mullane v. Cent.
Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950). The requirements of notice and an
opportunity to be heard are necessarily intertwined and dependent upon one another:
“Adequate notice is integral to the due process right to a fair hearing, for the ‘right to be
heard has little reality or worth unless one is informed.’” Bliek v. Palmer, 102 F.3d 1472,
1475 (8th Cir. 1997) (quoting Mullane, 339 U.S. at 314, 70 S. Ct. 652). Accordingly,
Defendant’s violation of the due process requirements under the Medicaid Act’s fair
hearing requirements is coextensive with a procedural due process violation under the
Fourteenth Amendment. See Guggenberger, 198 F. Supp. 3d at 1022-23. Both the

16

The Court hereby adopts and incorporates its analysis and holding in its May 2017
Order that the Medicaid Act’s fair hearing requirements are enforceable in a § 1983 claim
by “any individual whose claim for medical assistance . . . is denied or is not acted upon
with reasonable promptness.” See 42 U.S.C. § 1396a(a)(3).
18

timing and content of Defendant’s routine notices fail to satisfy due process under the
Medicaid Act, or under the Fourteenth Amendment.
While Defendant also contends that Plaintiffs’ Fourteenth Amendment due
process claim fails because Plaintiffs do not have a protected property interest in a
“guarantee[] that they will move in response to a request to do so,” (Def. Opp. at 29), the
Court finds that this interpretation of Plaintiffs’ requested relief misconstrues what they
actually ask for. (See Am. Compl. at 34-37.) The Court has already concluded that
Plaintiffs have a legitimate claim of entitlement to the services they actually seek. (May
2017 Order at 40; see also Guggenberger, 198 F. Supp.3d at 1021 (“Plaintiffs have a
legitimate and important interest in the services they seek which would enable them to
more fully integrate into their communities and achieve independence in their lives like
individuals without disabilities.”).) Nothing in discovery has altered the Court’s previous
analysis.
Finally, the Court finds little merit in Defendant’s argument that Plaintiffs’
requested injunction violates Federal Rule of Civil Procedure 65 as impossibly vague.
Rule 65(d)(1) requires that every injunction must: (1) state the reasons why it is issued;
(2) state its terms specifically; and, (3) describe in reasonable detail—and not by referring
to the complaint or other document—the act or acts restrained or required. Fed. R. Civ.
P. 65(d)(1). Plaintiffs’ request for injunctive relief would enjoin Defendant to “issue a
new policy that requires that a timely, written Notice of Action form be issued whenever
a lead agency denies any individualized housing services or fails to act on a request for
individualized housing services with reasonable promptness.” (Pl. Memo. at 2.) The
19

Court finds Plaintiffs’ request is clear, straightforward, and consistent with how other
states operate their Medicaid appeal processes. See, e.g., Me. Rev. Stat. tit. 22 § 3181;
Ark. Code. Ann. § 20-77-121(b).
Nonetheless, the Court declines to grant an injunction at this time and encourages
the parties to confer and settle upon revisions to the policy that is sufficiently clear and
mutually satisfactory. To the extent the parties are unable to do so, the Court will require
further evidence to determine the proper scope of the injunctive relief.
In summary, viewing the evidence and all reasonable inferences in the light most
favorable to Defendant, the Court finds that Defendant’s policy violates Due Process
rights under the Fourteenth Amendment and the Medicaid Act’s advance notice and fair
hearing requirements, enforced under 42 U.S.C. § 1983. In lieu of issuing an injunction
at this time, the Court encourages the parties to jointly settle upon revisions to the policy
that are mutually satisfactory.
B.

Defendant’s Motion for Summary Judgment
1.

Standing and Mootness

Defendant first argues that she is entitled to summary judgment because Plaintiffs
Tenner Murphy, by his guardian Kay Murphy; (“Murphy”) Marrie Bottelson
(“Bottelson”), and Dionne Swanson (“Swanson”) (collectively, “Named Plaintiffs”) lack
standing to bring their claims, and because Plaintiffs Murphy and Bottelson’s claims are
moot.
Specifically, Defendant contends that Named Plaintiffs have no evidence that any
of the relief they request would remedy an injury they personally suffered, as opposed to
20

allegedly affecting some unknown group of other people. She argues that Plaintiffs
“simply believe themselves to have ‘the status of being subject to a governmental
institution that [i]s not organized or managed properly,’ which is insufficient for
standing.” (Def. Memo. at 29 (citing Lewis v. Casey, 518 U.S. 343, 350 (1996)).) She
argues further that because Plaintiffs Murphy and Bottelson have moved to their desired
settings, their claims are moot. (Id. at 29-30.)
To establish Constitutional Article III standing, a plaintiff must demonstrate:
(1) an injury-in-fact; (2) a causal connection between that injury and the challenged
conduct; and (3) the likelihood that a favorable decision by the court will redress the
alleged injury. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). These
requirements limit federal courts to deciding only cases where the plaintiffs can show a
“personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely
to be redressed by the requested relief.” Allen v. Wright, 468 U.S. 737, 751 (1984). At
the summary judgment stage, plaintiffs “must ‘set’ forth’ by affidavit or other evidence
‘specific facts’ which for the purposes of the summary judgment motion will be taken as
true.” Lujan, 504 U.S. at 561. “While the proof required to establish standing increases
as the suit proceeds, the standing inquiry remains focused on whether the party invoking
jurisdiction had the requisite stake in the outcome when the suit was filed.” Davis v. Fed.
Election Com’n, 554 U.S. 724, 734 (2008).
When the Court found that Plaintiffs met the redressability requirement at the
pleading stage, the Court observed that “Plaintiffs must ultimately provide evidence to
support their allegations relating to the effectiveness of individualized housing services in
21

leading to greater integration in the community.” (May 2017 Order at 24.) The Court
finds that Plaintiffs have met their burden. In addition to the expert reports and sworn
testimony of Plaintiffs’ experts Dr. David Mank and Dennis Price, Named Plaintiffs’
lived experiences indicate that effective individualized housing services leads to greater
community integration. (See Doc. No. 310 (“Schmidt Aff. 2”) ¶ 5, 310-1, Ex. 4 (“Price
Report”) at 57-75; Doc. No. 498, Ex. 40 (“Dr. Mank Report”) at 23; Doc. No. 575
(“K. Murphy Decl.”) ¶¶ 7, 9-16, 19-21, 32-39); Doc. No. 576 (“Bottelson Decl.”) ¶¶ 813, 15-18, 21-23.) Taking this evidence as true, the Court finds that Plaintiffs’ continue
to have proper standing.
Defendant also contends that Plaintiffs Murphy and Bottelson’s claims are moot
because prospective injunctive relief is inappropriate when they have already moved to
their desired settings and they cannot demonstrate that their claims are capable or
repetition. (Def. Memo. at 30.) The Court is unpersuaded. First, this is a class action
certified under Federal Rule of Civil Procedure 23(b)(2). It is well-established that
“mootness of the named plaintiff’s individual claim after a class has been duly certified
does not render the action moot.” U.S. Parole Com’n v. Geraghty, 445 U.S. 388, 397
(1980) (citing Sosna v. Iowa, 419 U.S. 393 (1980)). The Supreme Court specifically
stated that an Article III case or controversy “may exist . . . between a named defendant
and a member of the class represented by the named plaintiff, even though the claim of
the named plaintiff has become moot.” Sosna, 419 U.S. at 402.
Here, the record reflects that Plaintiffs Murphy and Bottelson did not move until
after the Class was certified, and that until they moved, their claims for systemic relief
22

were common to and typical of the members of the Class. Notwithstanding, there is no
evidence that Plaintiff Swanson’s claims are moot. Accordingly, the Court declines to
grant Defendant’s motion for summary judgment on this basis.
2.

Reasonable Promptness (Count I)

Count I of Plaintiffs’ Amended Complaint alleges a violation of 42 U.S.C. § 1983
through failure to furnish services with reasonable promptness in violation of 42 U.S.C.
§ 1396a(a)(8). The reasonable promptness requirement provides that “[a] State plan for
medical assistance must . . . provide that all individuals wishing to make application for
medical assistance under the plan shall have opportunity to do so, and that such
assistance shall be furnished with reasonable promptness to all eligible individuals.” 42
U.S.C. § 1396a(a)(8).
Payment for home and community-based Disability Waiver services is deemed
“medical assistance” under the Medicaid Act. See 42 U.S.C. § 1396n(c)(1). Regulations
also require the State to establish time standards to determine an individual’s eligibility
for Medicaid in no more than ninety days and to “[f]urnish Medicaid promptly to
beneficiaries without any delay caused by the agency’s administrative procedures.” See
42 C.F.R. § 435.912; id. § 435.930; see also Doe ex rel. Doe v. Chiles, 136 F.3d 709, 717
(11th Cir. 1998); Boulet v. Cellucci, 107 F. Supp. 2d 61, 72-73 (D. Mass. 2000).
Defendant first argues that she is entitled to summary judgment on Count I
because there is no private right of action under the “reasonable promptness” provision in
the Medicaid Act. (Def. Memo. at 30.) For the reasons discussed in section I(A) above,
the Court has already held—and continues to hold—that the “reasonable promptness”
23

provision of the Medicaid Act is privately enforceable. (See infra.) Accordingly, the
Court declines to grant summary judgment on this basis.
Defendant next argues that even if there was a private right of action, Plaintiffs
cannot meet the standard for official-capacity liability under § 1983 because any alleged
injury was inflicted solely by [her] employees or agents. (Def. Memo. at 31.)  
Defendant contends that the government as an entity is responsible under § 1983 only
when “execution of a government’s policy or custom . . . inflicts the injury.” (Id. at 32
(citing Monell v. Dept’t. of Soc. Servs. of City of N.Y., 436 U.S. 658, 694 (1978)).)
Defendant argues that because Plaintiffs allege only that she has failed to require and
ensure that moving-related services are provided with reasonable promptness, and that
they otherwise have no evidence that Defendant knew of and condoned any alleged
deficiencies in the Disability Waiver service delivery, or that she has any policy
preventing reasonably prompt service delivery, Plaintiffs’ official liability theory is
foreclosed by Monell. (Id. at 32.)
“To establish liability in an official-capacity suit under section 1983, a plaintiff
must show either that the official named in the suit took an action pursuant to an
unconstitutional governmental policy, or that he or she possessed final authority over the
subject matter at issue and used that authority in an unconstitutional manner.” Nix v.
Norman, 879 F.2d 429, 433 (8th Cir. 1989) (internal citations omitted). Here, Defendant
has “oversight authority and ultimate responsibility for administering the State’s
Medicaid plan,” and “ultimate responsibility for the State’s provision of Waiver Services
under both federal Medicaid law and Minnesota statutes.” Guggenberger, 198 F. Supp.
24

3d at 1034 (citing 42 C.F.R. §§ 431.10(b), 431.10(e), 435.903; Minn. Stat. §§ 256.01
subd. 2(a); 256B.04, subd. 1; 256B.05, subd. 1).
Defendant contends that regardless of her final authority, she can cannot be held
liable under § 1983 unless her policy was the “moving” force behind any alleged
violation. (Doc. No. 609 (“Def. Reply”) at 5-6 (citing Burlison v. Springfield Pub. Sch.,
708 F. 3d 1034, 1041 (8th Cir. 2013).) She contends that because “it is either undisputed
or indisputable that Defendant requires waiver services to be provided both reasonably
prompt services and multiple forms of notice,” Plaintiffs’ claim that she “fails to ensure”
that her subordinates act accordingly cannot sustain an official-capacity claim. (Id. at 6.)
As discussed in section I(A) above, the Court finds that Defendant’s policy
violates federal law. While the Court addressed the policy only with respect to the
Medicaid Act’s fair hearing requirement, a similar analysis applies with respect to
reasonable promptness. Specifically, because the policy does not clearly define what
constitutes “denial,” the policy itself is potentially the moving force behind a failure to
provide Disability Waiver services with “reasonable promptness.” Accordingly, the
Court finds that Defendant may be held liable in her official capacity.
Finally, Defendant argues that the Court should grant summary judgment in her
favor on Count I because Plaintiffs cannot prove that Disability Waiver services were not
provided with reasonable promptness. (Def. Memo. at 32.) Specifically, she contends
that: (1) Plaintiff Bottelson admitted that she received all necessary services for her
move, her case manager responded to these requests reasonably promptly, and she has no
evidence that any delay in moving was caused by Defendant’s administrative procedures;
25

(2) Plaintiff Swanson never asked for a Disability Waiver service that was not provided
quickly enough and has no evidence that her continued residence in a CFC is caused by
Defendant’s administrative procedures; and, (3) Plaintiff Murphy has no evidence that
any delay in moving was caused by Defendant’s administrative procedures, or that he
failed to receive any service quickly enough. (Id.)
Plaintiffs refute these assertions and maintain that Defendant’s description of the
facts is “inaccurate, misleading, and ignores relevant pieces of the record.” (Pl. Opp.
at 36.) Plaintiffs contend that Plaintiff Bottelson made clear that she was confused when
she responded to the question about whether she received all necessary services for her
move, and that she does not actually know if she received them. (Id.) Plaintiffs further
allege that despite asking for services to help move as early as 2013, Plaintiff Bottelson
was unable to finalize her move until September 2018. (Id.) Similarly, Plaintiffs contend
that Plaintiff Swanson began asking to move in 2013 but remains in her CFC facility.
(Id.) Plaintiffs also allege that Plaintiff Murphy did not receive any formal Disability
Waiver service to help him move. (Id.)
As the Court previously recognized, “‘the question of reasonable promptness is a
difficult one,’ and many variables must be considered to evaluate whether a state is
providing needed Disability Waiver services in a reasonably prompt manner.”17 (May
2017 Order at 33-34 (citing U.S. Dep’t of Health and Human Services, Olmstead Update

17

These variables include “[t]he urgency of an individual’s need, the health and
welfare concerns of the individual, the nature of the services required, the potential need
to increase the supply of providers, [and] availability of similar or alternative services.”
(May 2017 Order at 34 (citing HHS Guidance at 6).)
26

No: 4, HCFA Update (Jan. 10, 2001) (“HHS Guidance”), available at Doc. No. 13-1 at
36).) Upon careful review of the record and consideration of each parties’ argument, the
Court finds that there are disputes over several key issues of material fact. The Court
cannot conclude as a matter of law whether Defendant’s Disability Waiver Services were
provided with reasonable promptness. Accordingly, the Court declines to grant summary
judgment on Count I of Plaintiffs’ Amended Complaint.
3.

Due Process (Count II)

In Count II of their Amended Complaint, Plaintiffs allege a violation of their due
process rights under both the Fourteenth Amendment’s Due Process Clause and the
Medicaid Act’s fair hearing requirements. As discussed above, the Court finds that
Defendant’s policy violates Due Process rights under the Fourteenth Amendment and the
Medicaid Act’s advance notice and fair hearing requirements, enforced under 42 U.S.C.
§ 1983.18
4.

ADA & RA (Counts IV & V))

Counts III and IV of Plaintiffs’ Amended Complaint allege violations of Title II of
the ADA, 42 U.S.C. § 12132, and § 504 of the RA, 29 U.S.C. § 794(a), respectively. The
Court addresses Counts III and IV together, as the same analysis applies. See Gorman v.
Bartch, 152 F.3d 907, 912 (8th Cir.1998) (“The ADA . . . is [ ] similar in substance to the

18

Because Defendant has final authority over the policy, and the policy is a moving
force behind federal due process violations, Defendant may be held liable in her official
capacity. (See supra Section B(2).)
27

Rehabilitation Act, and cases interpreting either are applicable and interchangeable.”
(internal quotation marks and citation omitted)).
Title II of the ADA, applicable to public entities, provides that “no qualified
individual with a disability shall, by reason of such disability, be excluded from
participation in or be denied the benefits of the services, programs or activities of a public
entity, or be subjected to discrimination by any such entity.” 42 U.S.C. § 12132.
Further, an implementing regulation referred to as the “integration mandate” states: “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) (“Integration Mandate”).19
Defendant first argues that the Integration Mandate does not apply to individuals
who are not institutionalized or at risk of imminent institutionalization. (Def. Memo.
at 35-37.) The Court again observes that it has already addressed this argument.
Defendant raises many of the same arguments that the Court previously considered and
rejected. In its May 2017 Order, the Court found that under Olmstead v. L.C. ex rel.
Zimring, 527 U.S. 581 (1999), “[u]njustified isolation . . . is properly regarded as
discrimination based on disability beyond the limited scope of institutionalization.” (May

19

The Rehabilitation Act includes similar provisions, including its own “integration
mandate.” See 29 U.S.C. § 794(a) (“No otherwise qualified individual with a disability in
the United States . . . shall, solely by reason of his or her disability, be excluded from the
participation in, be denied the benefits of, or be subjected to discrimination under any
program or activity receiving Federal financial assistance ”); 28 C.F.R. § 41.51(d)
(“Recipients shall administer programs and activities in the most integrated setting
appropriate to the needs of qualified handicapped persons.”).
28

2017 Order (citing Guggenberger, 198 F. Supp. 3d at 1026-28).) The Court finds no
reason to deviate from its prior holding.20
Defendant argues further that even if the Integration Mandate applied to
intracommunity moves, it still does not require states to provide benefits ensuring
housing availability or moves to available housing. (Def. Memo. at 37-40.) She
contends that the plain language of the Integration Mandate requires only that a state
cannot provide existing benefits in one setting but not another and that Olmstead
explicitly rejects “that the ADA imposes on the States a ‘standard of care’ for whatever
medical services they render, or that the ADA requires States to ‘provide a certain level

20

The Court has thoughtfully considered the finding in Brown v. District of
Columbia that plaintiffs did not have a valid Olmstead claim because “Olmstead drew the
line between ‘institutions’ and ‘community settings’” and both group homes and private
homes were community settings. 928 F.3d 1070, 1087 (D.C. Cir. 2019). Recognizing
that the circuits are split on this issue, the Court respectfully disagrees with Brown on this
issue. The Court continues to agree with the Seventh Circuit’s analysis in Steimel v.
Wernet :
Olmstead dealt only with the problem of unjustified institutional segregation. Its
rationale, however, reaches more broadly . . . The Court had no occasion to
consider whether the same evils it had identified for institutional placements might
exist in some settings outside of an institution. This case presents that question:
whether isolation in the home for a person ‘who can handle and benefit from’ time
out in the general community is also inconsistent with the integration mandate.
We see no reason why the same analysis should not apply.
823 F.3d 902, 910-11 (7th Cir. 2016). The Seventh Circuit ultimately concluded the
Integration Mandate “bars unjustified segregation of persons with disabilities, wherever it
takes place.” (Id.)

29

of benefits to individuals with disabilities’” (Id. at 38 (citing Olmstead.) She contends
that Plaintiffs require “a host of new programs, services, and benefit levels,” that are
foreclosed by Olmstead and subsequent caselaw. (Id. at 38-39.)
In its May 2017 Order, the Court recognized that “[a]lthough states are not
required to ‘provide a certain level of benefits to individuals with disabilities’ under
Olmstead, they ‘must adhere to the ADA’s nondiscrimination requirement to the services
they in fact provide.’” (May 2017 Order at 56 n. 8 (citing Olmstead, 527 U.S. at 603
n. 14).) Other Courts have found that failing to provide existing services in a more
integrated setting is a violation of the ADA. See, e.g., Steimel, 823 F.3d at 913 (finding
that a state violates the ADA when it refuses to provide an existing benefit to a disabled
person that would enable that individual to live in a more community-integrated setting);
Townsend v. Quasim, 328 F.3d 511, 517 (9th Cir. 2003) (finding that “states could avoid
compliance with the ADA by characterizing services offered in one isolated location as a
program distinct from the provision of the same services in an integrated location”).
After a careful review of Plaintiffs’ requested relief, the Court finds that Plaintiffs
do not seek new services or a “certain level” of benefits. The Court finds that Plaintiffs’
requested relief does not include the “requirement” that Plaintiffs actually move, but
modifications to Defendant’s current system that will increase their opportunity to move,
will, and access to Disability Waiver services if they do. (See Doc. No. 291-1 at 61, 8084, 155-159).) “When a state’s policies discriminate against the disabled in violation of
the ADA, the ADA’s regulations mandate reasonable modifications to those policies in
order to avoid discrimination on the basis of disability, at least when such modification
30

would not fundamentally alter the nature of the services provided by the state.”
Townsend v. Quasim, 328 F.3d 511, 517 (9th Cir. 2003). As discussed below, the Court
cannot conclude as a matter of law whether Plaintiffs’ requested modifications are
reasonable; however, the request itself does not exceed the limits of the Integration
Mandate.21
Defendant next argues that Plaintiffs ADA and RA claims fail because they cannot
show that their CFC facilities cause segregation. (Def. Memo. at 40.) Defendant
contends that the Integration Mandate should be construed narrowly and only relates to
Plaintiffs’ opportunities to interact with non-disabled persons. (Id. at 40 n.20.) She
contends that while Plaintiffs may not like some things about their CFC facilities, they
have failed to show that anything unique about CFC facilities limits their ability to access
the community.22 (Id. at 40-41.)
The Court first observes that Defendant’s narrow interpretation of the Integration
Mandate does not square with other statements she has made with respect to the
definition of an integrated setting. (See, e.g., Bartolic Dep. at 166 (stating that

21

Defendant later argues that Plaintiffs’ request that she “ensure access” or provide
“unlimited staffing” is an unlawful interpretation of the Integration Mandate. (Def.
Memo. at 43.) This similarly misconstrues Plaintiffs’ requested relief. Plaintiffs’
requested relief does not include “ensuring access” to IHOs or “unlimited staffing.” The
Court finds that Plaintiffs’ request for modifications to Defendant’s existing Disability
Waiver system fall within the scope of the Integration Mandate.
22

Defendant suggests that Named Plaintiffs’ integration-related complaints are
actually just complaints over staff availability for community outings, TV-access, distaste
for housemates, and other aspects of CFC facilities they simply do not care for. (Def.
Memo. at 40 n.20.)
31

determining whether a setting is the most integrated is based on a number of factors,
including whether a person has friendships and feels valued in the community);
Schmidt Aff. 3 ¶ 35, Doc. No. 578-2, Ex. 34 at 171 (defining an integrated settings as
“settings that provide people the opportunity to live, work and receive services in the
greater community,” that “offer access to community activities when and with whom the
person chooses,” and “offer people choices in daily life activities and encourage
interaction with people who do not have disabilities . . .”).) Plaintiffs’ expert, Dr. Mank
also provides a broader definition of the Integration Mandate: “[I]ntegration is about
making informed and free choices about with whom one lives and about where and with
whom one spends their time,” and “means that an individual is a part of the community
rather than simply in the community.” (Dr. Mank Report at 11 (emphasis in original).)
Even if the Court were to accept Defendant’s narrow interpretation of the
Integration Mandate, the Court finds that there are disputes over issues of material fact
with respect to whether CFC facilities actually enable individuals to interact with nondisabled persons to the fullest extent possible. (See, e.g., Dr. Mank Report at 15-16; K.
Murphy Decl. ¶¶ 7, 9-16, 19-21, 32-39; Bottelson Decl. ¶¶ 8-13, 15-18, 21-23.) While
Defendant suggests that Plaintiffs’ complaints about CFC facilities do not relate to their
ability to interact with non-disabled persons, Plaintiffs’ evidence conveys isolation,
limited choice, and lesser quality of life in CFC facilities as compared to IHOs.
Accordingly, disputes of material fact regarding the level of integration at CFC facilities
precludes summary judgment on this issue.

32

Defendant next argues that Plaintiffs ADA and RA claims fail because Plaintiffs
do not have evidence that Defendant prevented them from moving, or from moving
sooner. (Def. Memo. at 41-43.) She cites other reasons for why Named Plaintiffs failed
to move or did not move sooner. (Id.)
The Court is unpersuaded. Plaintiffs need not show that Defendant was the “butfor” cause of their failure to move, or from failing to move sooner. Indeed, numerous
issues outside of Defendant’s control ultimately impact Plaintiffs’ ability to move.
Plaintiffs need only show that Defendant’s conduct was a substantial cause in Plaintiffs’
ability to move. See Henrietta D. v. Bloomberg, 331 F.3d 261, 278 (2d Cir. 2003)
(finding that “the existence of additional factors causing an injury does not necessarily
negate the fact that defendant’s wrong is also the legal cause of the injury”); see also
M.R. v. Dreyfus, 697 F.3d 706, 730 (9th Cir. 2012) (finding that plaintiff was not required
to show that a state regulation was “the exclusive cause of her injury”).
The determination as to whether Defendant’s conduct is a substantial cause of
Plaintiffs’ inability to obtain Disability Waiver services necessary to live in the most
integrated setting appropriate to their needs is a fact intensive inquiry. Here, the record
reflects multiple disputes of material fact, including Defendant’s policies and
management of the Disability Waiver program, that prevent the Court from concluding as
a matter of law whether or not Defendant’s conduct is a substantial cause.23

23

Specifically, Plaintiffs contend that Defendant’s use of the MnCHOICES
Assessment, the Person Center, Informed Choice and Transition Protocol, and the LAR
process have been a substantial cause of Plaintiffs’ inability to receive services. (Pl. Opp.
at 54.)
33

Similarly, Defendant argues that even if Plaintiffs’ ADA and RA claims are
cognizable, Plaintiffs have failed to request a reasonable modification because they lack
proof that the accommodations they request would cause Named Plaintiffs to move—or
to have moved sooner. (Def. Memo. at 43.) Accordingly, Defendant argues that
Plaintiffs have failed to show that their request is necessary to avoid discrimination on the
basis of disability. (Id. at 44.)
Again, Plaintiffs need not show that their requested accommodation will overcome
every single barrier Plaintiffs face in moving. See Henrietta D., 331 F.3d at 279. It is
sufficient that Plaintiffs’ requested accommodation will lead only to an increased
opportunity to move. Id.; see also Brown, 928 F.3d 1082. Notwithstanding, as discussed
above, there are disputes of material fact regarding whether Named Plaintiffs would have
moved, or would have moved sooner, if their request was implemented. Accordingly, the
Court cannot grant summary judgment on these issues.
Defendant next argues that the State’s Olmstead Plan (“Plan”) is a complete
defense to Plaintiffs’ ADA and RA claims. (Def. Memo. at 44-46.) Defendant contends
that it would be unjust for the Court to find that she may have discriminated against
Plaintiffs by implementing a comprehensive and effective Plan that the Court helped to
develop, and continues to oversee. (Id. at 46.) She also contends that it would be a
fundamental alteration to the Integration Mandate. (Id.).
In Olmstead, the Supreme Court held that a state may successfully assert a
fundamental alteration defense to an Integration Mandate if it could demonstrate that it
had “a comprehensive, effectively working plan for placing qualified persons with mental
34

disabilities in less restrictive settings, and a waiting list that moved at a reasonable pace.”
Olmstead, 527 U.S at 605-606. While it is Plaintiffs’ burden to establish that the
modifications they seek are reasonable, it is Defendant’s burden to establish whether any
reasonable modifications fundamentally alter the nature of the services she provides. See
28 C.F.R. § 35.130(b)(7); see also Gorman, 152 F.3d at 912 (describing the fundamental
alteration argument as an affirmative defense).
Defendant argues that her Plan is both comprehensive and effective because:
(1) the Court found that the Plan complies with Olmstead approved and approved it in
2015; and (2) the Plan includes goals related to the relief Plaintiffs’ seek and she is
meeting or exceeding those goals.24 (Def. Memo. at 6-7, 45-46.)
Plaintiffs argue that Defendant’s plan is neither comprehensive nor effectively
working. (Pl. Opp. at 57-59.) Plaintiffs cite their expert’s report to contend that the Plan
is not comprehensive because: (1) Defendant fails to track individual moves from CFC
facilities to IHOs; and (2) the Plan fails to include concrete and reliable commitments to
fill existing services gaps necessary to ensure that individuals can move to more
integrated IHO settings. (Id. at 58 (citing Price Report at 26-39).) Plaintiffs further
contend that because DHS employees are unfamiliar with aspects of the Plan, and

24

Defendant cites “Transition Services Goal One” that targets moves “from
segregated to more integrated settings” and “Housing and Services Goal One” that targets
“the number of people with disabilities who live in the most integrated housing of their
choice where they have a signed lease and receive financial support.” (Def. Memo.
at 44.) Defendant states that she met 98% of the Housing Services “stretch” goal in 2017,
and expected to meet 96% of the “stretch” goal in 2018. (Id. at 7.) She also states that
her Transition Services Goals are on track. (Id.)
35

because “housing” was one of the top three service gaps identified by Lead Agencies in
2017, there are questions as to whether the Plan is truly effective. (Id. at 58-59.)
To the extent that Defendant argues it would be “unjust” for the Court to find that
the Plan the Court approved is no longer comprehensive or effective, the Court reiterates
that merely implementing an Olmstead Plan is not a bar to Plaintiffs’ claims, or any other
future claims, that the Plan fails to provide a complete solution to the harms they assert.
See, e.g., Guggenberger, 198 F. Supp. 3d at 1031. As only time and lived experience
can reveal, an Olmstead Plan at one point deemed comprehensive and effective may
prove otherwise over time.
Notwithstanding, the Court acknowledges and commends the progress that
Defendant has made towards meeting the goals in its Plan. While this is laudable,
whether Defendant’s Plan is sufficiently comprehensive or effectively working such that
it serves as a total defense to Plaintiffs’ claims is a fact intensive inquiry that the Court
cannot resolve as a matter of law. Plaintiffs have raised questions of material fact over
the content and implementation of the Plan. While Defendant disagrees with Plaintiffs’
expert, and argues that her data should speak for itself, these are the very disputes that
preclude summary judgment.
In short, despite Defendant’s various arguments about the interpretation,
requirements, and exceptions to the Integration Mandate, the Court declines to grant
summary judgment in her favor on Counts IV or V.

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5.

Permissibility of Requested Relief

Finally, Defendant contends that the relief Plaintiffs seek is impermissible because
it would not solve any integration issue, and even if it did, Plaintiffs cannot prove that
any integration issue is widespread. (Def. Memo. at 47-49.)
Defendant first argues that because only one of Plaintiffs’ experts opined that
Plaintiffs’ requested relief would have some aggregate effect, and that both of their
experts conceded that a person may be segregated in any setting, the redesign of her
Disability Waiver system that Plaintiffs propose would not solve any integration issue.
(Id.at 47.) Plaintiffs again cite the Price Report and Defendant’s own statements to raise
questions of material fact with respect to whether their request for relief would remedy
their perceived flaws and inefficiencies of Defendant’s services. (Pl. Opp. at 61-62.)
As set forth above, the Court cannot conclude as a matter of law whether the relief
Plaintiffs seeks is reasonable because there are disputes over whether Plaintiffs would
have moved, or would have moved sooner, if the modifications they seek to Defendant’s
Disability Waiver system were implemented. Whether or not Plaintiffs’ request is
permissible is derivative of whether it is reasonable. Accordingly, the same disputes over
material fact that preclude summary judgment on whether Plaintiffs’ requested relief is
reasonable also preclude summary judgment on whether it is permissible.
Defendant next argues that even if Plaintiffs’ relief could provide a remedy,
Plaintiffs have no evidence that the State’s Disability Waiver Recipients do not live in the
most integrated setting on a widespread basis. She argues that “a class seeking systemic
relief must show violations are ‘widespread enough to justify systemwide relief.’” (Def.
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Memo. at 47 (citing Lewis, 518 U.S. at 359).) She alleges that “there must be proof that
the law has been violated as to all persons subject to the challenged system, not just
general allegations some unknown persons may have been harmed.” (Id. at 48.)
Defendant alleges that Plaintiff cannot meet this burden because after 18 months of
discovery, Plaintiffs can only prove that 0.4% of the State’s Disability Waiver population
and only 1.3% of the its CFC population are allegedly harmed by any alleged violation.
(See id. at 8-9, 47 (citing Lewis, 518 U.S. at 360).) Accordingly, Defendant argues that
Plaintiffs’ claims are meritless because they are little more than a “vague allegation that
any nonzero error rate at a system level entitles a litigant to a wholesale redesign of that
system.” (Id. at 48.) Defendant further contends that requiring such a wholesale redesign
of her Disability Waiver System would render her system subject to “judicial takeover.”
(Id. at 49.)
Despite Defendant’s reliance on Lewis, Plaintiffs argue that the Lewis decision
does not stand for the proposition that there must be proof that the law has been violated
as to all persons in a challenged system in order to obtain relief. (Pl. Opp. at 63.)
Plaintiffs contend that if such a requirement did exist, it would mean that the numerosity
requirement of Fed. R. Civ. P. 23(a) would require classes to contain every single person
in the challenged system. Accordingly, Plaintiffs argue that Defendant’s position is
incorrect and unsupported. (Id.)
With respect to injury, the relevant inquiry before the Court is how many people
must suffer alleged harm to require systemwide relief? Defendant argues that 1.3%, or
192 individuals, of the 13,971 Disability Waiver recipients living in CFC facilities is not
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enough. In Lewis, the United States Supreme Court concluded that “two instances [of
alleged injury in a state’s entire population of prisoners] were a patently inadequate basis
for conclusion of systemwide violation and imposition of systemwide relief.” Lewis, 518
U.S. at 359. Indeed, the Supreme Court found that “granting a remedy beyond what was
necessary to provide relief to two individuals was improper.” Id. at 360.
Here, there are purportedly nearly 192 human beings who have suffered alleged
harm resulting from Defendant’s policies and practices. While a systemwide remedy
may not be necessary to provide relief to two individuals, it surely is when it has the
potential to improve the lives of at least 200 of the State’s most marginalized citizens.
This finding is not one of “judicial takeover” but a recognition that a large number of
actual people have allegedly suffered actual harm caused by Defendant. A systemwide
remedy is the only way to provide relief. Accordingly, the Court declines to grant
summary judgment on this basis.
CONCLUSION
For the reasons set forth above, the Court grants in part and denies in part
Plaintiffs’ motion for partial summary judgment. The Court finds that Defendant’s
policy violates Due Process rights under the Fourteenth Amendment and the Medicaid
Act’s advance notice and fair hearing requirements, enforced under 42 U.S.C. § 1983.
This being said, the Court declines to issue an injunction at this time. The Court
encourages the parties to jointly establish revisions to the policy that are mutually
satisfactory.

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With respect to Defendant’s motion, the Court finds that disputes over issues of
material fact preclude summary judgment. Notwithstanding, the Court finds that
Plaintiffs continue to have standing, their claims are not moot, Defendant may be held
liable in her official capacity, and Plaintiffs’ alleged injury is sufficiently widespread to
justify widespread relief.
The Court is mindful that the parties worked diligently to reach a settlement
agreement prior to its rulings. The Court hopes that the parties may now redouble their
efforts, as continued litigation will do little to serve the interests of either party.
ORDER
Accordingly, based on the files, records, and proceedings herein, and for the
reasons set forth above, IT IS HEREBY ORDERED that:
1.

Plaintiffs’ Motion for Partial Summary Judgment (Doc. No. [495]) is

GRANTED IN PART and DENIED IN PART as follows:
a.

Defendant’s policy violates Due Process rights under the Fourteenth

Amendment and the Medicaid Act’s advance notice and fair hearing requirements,
enforced under 42 U.S.C. § 1983.
b.

In lieu of granting an injunction at this time, the Court encourages

the parties to jointly establish revisions to Defendant’s policy that are sufficiently
clear and mutually agreeable.
2.

Defendant’s Motion for Summary Judgment (Doc. No. [480]) is DENIED.

Dated: September 27, 2019

/sDonovan W. Frank
DONOVAN W. FRANK
United States District Judge
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