UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
OSCAR SALAZAR, et al.,
Plaintiffs,
v. Civil Action No. 93-452 (GK)
DISTRICT OF COLUMBIA, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
On Sept. 20, 2013, Defendants filed a Motion to Modify the
January 25, 1999 Consent Order and Related Order of August 8,
2000 [Dkt. No. 1870]. Upon consideration of the Motion, the
Opposition [Dkt. No. 1876], the Reply !Dkt. No. 1879], the oral
argument held October 15, 2013, and the entire record herein,
and for the following reasons, the Court grants Defendants'
Motion.
I . BACKGROUND
This class action lawsuit filed in 1993 alleged that
Defendants, among other claims, denied Medicaid beneficiaries
due process of law in the recertification of their Medicaid
eligibility. On October 16, 1996, the Court issued an Amended
Findings of Fact and Conclusions of Law granting some claims and
denying others [Dkt. No. 402]. In 1997, the Court entered a
comprehensive remedial order [ Dkt. Nos. 4 4 4, 4 93] . The parties
On Sept. 20, 2013, Defendants filed their Motion to Modify
the January 25, 1999 Consent Order and Related Order of August
8, 2000 [Dkt. No. 1870]. They seek to modify the Consent Order
so as to no longer be bound by Section III, arguing that they
cannot simultaneously comply with both Section III and the ACA.
Plaintiffs have also filed two related motions. On
September 30, 2013, Plaintiffs filed a Motion to Partially Stay
the Recertification Provisions in the Settlement Order [Dkt. No.
1875]. On October 1, 2013, Plaintiffs filed a Motion for Limited
Discovery Related to Medicaid Renewal and Redetermination Under
the Affordable Care Act [Dkt. No. 1877]. Defendants included
their Opposition to those two Motions in their Reply of October
7, 2013 [Dkt. No. 1879]. Plaintiffs' Replies in support of both
motions are due October 17, 2013.
II. STANDARD OF REVIEW
Defendants move to modify Section III under Federal Rule of
Civil Procedure 60 (b) (5) and 60 (b) (6). Rule 60 (b) (5) provides
that a court may vacate an order if "applying it prospectively
is no longer equitable." Fed. R. Civ. P. 60(b) (5). As to consent
decrees, the moving party bears the burden of proving its need
for modification by establishing that "'a significant change
either in factual conditions or in law' renders continued
enforcement of the judgment 'detrimental to the public
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On Sept. 20, 2013, Defendants filed their Motion to Modify
the January 25, 1999 Consent Order and Related Order of August
8, 2000 [Dkt. No. 1870]. They seek to modify the Consent Order
so as to no longer be bound by Section III, arguing that they
cannot simultaneously comply with both Section III and the ACA.
Plaintiffs have also filed two related motions. On
September 30, 2013, Plaintiffs filed a Motion to Partially Stay
the Recertification Provisions in the Settlement Order [Dkt. No.
1875]. On October 1, 2013, Plaintiffs filed a Motion for Limited
Discovery Related to Medicaid Renewal and Redetermination Under
the Affordable Care Act [Dkt. No. 1877]. Defendants included
their Opposition to those two Motions in thei~ Reply of October
7, 2013 [Dkt. No. 187~ aint"ffs ~~r replies in
support of both mot~, Octo er 17, 2013.
II. STANDARD OF REVIEW
Defendants move to modify Section III under Federal Rule of
Civil Procedure 60(b) (5) and 60(b) (6). Rule 60(b) (5) provides
that a court may vacate an order if "applying it prospectively
is no longer equitable." Fed. R. Civ. P. 60(b) (5). As to consent
decrees, the moving party bears the burden of proving its need
for modification by establishing that "'a significant change
either in factual conditions or in law' renders continued
enforcement of the judgment 'detrimental to the public
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interest."' Horne ·v. Flores, 557 U.S. 433, 453 (2009) ("Flores")
(quoting Rufo v. Inmates of Suffolk Cty. Jail, 502 U.S. 367, 384
(1992)).
The Supreme Court has made it clear that courts should use
a "flexible approach" when ruling on Rule 60 (b) (5) motions which
address institutional reform decrees, such as this one, to
ensure that "'responsibility for discharging the State's
obligations is returned promptly to the State and its officials'
when the circumstances warrant." Flores, 502 u.s. at 450
(quoting Frew v. Hawkins, 540 U.S. 431, 442 (2004)); see also
Petties ex rel. Martin v. Dist. of Columbia, 662 F. 3d 564, 568-
69 (D.C. Cir. 2011) (quoting Rufo, 502 U.S. at 380-81)
("district courts must employ 'a flexible modification standard'
because such decrees 'often remain in place for extended periods
of time' such that 'the likelihood of significant changes
occurring during the life of the decree is increased.'").
Rule 60(b) (6) provides that a court may vacate an order for
"any other reason that justifies relief" provided the movant
demonstrates "extraordinary circumstances." Fed. R. Civ. P.
60 (b) ( 6); see also Salazar ex rel. Salazar v. Dist. of Columbia,
633 F.3d 1110, 1119 (D.C. Cir. 2011). Our Court of Appeals has
noted that even though "[t]he phrase 'extraordinary
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circumstances' does not appear in the text of Rule 60 (b) ( 6) ,
. the Supreme Court has added this gloss to the rule." Id.
III. ANALYSIS
Upon consideration of the submissions of counsel, the
extremely long record in this case that was filed in 1993, and
the applicable case law, the Court concludes that Defendants'
Motion shall be granted for the following reasons.
The ACA, effective March 23, 2010, and its related Medicaid
regulations have created a vast new statutory framework for
ensuring health care insurance for virtually every person in the
United States. It is an extraordinarily complex law and one
which presents many technological and logistical challenges. It
will, if successful, bring enormous benefits to Americans of all
income levels. To implement this statute in the District of
Columbia will be a massive undertaking requiring the resources,
creativity, and attention to detail of many people within the
District of Columbia Government.
The Court concludes, pursuant to Fed. R. Civ. P. 60(b) (5),
that passage of the ACA has created a "significant change in
circumstances" that justifies termination of the provisions of
Section III of the Consent Order. Indeed, there has been almost
a seismic change in the areas of health insurance, healthcare,
procedures for verifying Medicaid eligibility, and financing of
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Medicaid. As Defendants point out in their papers, passage of
the ACA has introduced enormous systemic and legal changes in
our healthcare system. There is simply no comparison between the
statutory framework that existed at the time this Court made its
factual findings in 1996 and what implementation of the ACA
envisions -- even though that implementation will undoubtedly be
both rocky and fairly long in coming. As Defendants argued at
oral argument, in comparing the two systems we are talking about
"apples and oranges."
Defendants also argue that Section III directly conflicts
with provisions of the ACA, and therefore its continued
enforcement would be "detrimental to the public interest." Rufo,
502 U.S. at 384. The Court agrees.
For example, the ACA regulations implementing a brand new
recertification procedure are in direct conflict with the
renewal process set forth in Section III. Defendants are correct
and Plaintiffs do not disagree. The regulations establish that
"an agency must make a redetermination of eligibility without
requiring information from the individual if able to do so [.]"
42 C.F.R. § 435.916(a) (2). Thus, the various notices that
Defendants must send, pursuant to Section III, warning a
Medicaid beneficiary about their failure to submit
recertification forms and information or lose their benefits
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will now be inaccurate, confusing, and unnecessary. Were
Defendants to try to comply with both Section III and the ACA,
there would be massive confusion, as well as additional expense
and use of resources at a time when Defendants are pouring money
and staff time into their efforts to comply with the new
statute.
Plaintiffs concede that the provisions of Section III are
either in conflict with the ACA or are outdated and are no
longer relevant. See Opp' n at 7-10 (noting that paragraphs 17,
19-21, 21A, 25, 25A, and 26-27 must be deleted or modified; and
that paragraphs 22-24 and 28 are no longer operative and must
also be deleted) . In sum, Plaintiffs acknowledge that there is a
conflict between Section III and the ACA, and therefore the
District government can not continue to comply with Section III
in light of the statutory language of the ACA and its
implementing regulations.
Plaintiffs' primary argument is not that Section III should
remain in effect, but that they should be provided with
additional "discovery" so that they can suggest appropriate
modifications to Section III in order to fully protect the due
process rights of the plaintiff class they represent during this
time of transition. While their concern over the continued
protection of the due process rights of their clients, members
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of the plaintiff class, is commendable, Plaintiffs' counsel has
failed to identify any tangible fact or law that suggests those
rights will not be adequately protected in this transitional
year.
Plaintiffs' fear is that the statutory and regulatory "safe
harbor" that protects individuals who must be recertified
between January and March of 2014 from losing their Medicaid
eligibility before the end of March will not be applied to
individuals evaluated between October 2013 and December 2013.
Opp'n at 15-16 (citing 42 U.S.C. § 1396a(e) (14) (D) (v) and 42
C.F.R. §435.603). Defendants' counsel represented at oral
argument that the "safe harbor" provisions apply to all those
who will be evaluated between October 2013 and December 2013,
thus providing Plaintiffs with the "binding representation" they
sought in their Opposition that the regulations would be
interpreted and applied in that fashion by the District of
Columbia government.
Moreover, the regulations specifically require agencies to
provide due process rights to those whose eligibility may be
reevaluated before the end of this year: 42 C.F.R.
§ 435.1205(b) (4) (i) (c) (requiring state agencies to "furnish
Medicaid to individuals determined eligible under this clause or
provide notice and fair hearing rights if eligibility
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effective in 2013 is denied"). Thus, the ACA regulations provide
multiple safeguards to ensure that no members of the plaintiff
class whose eligibility must be renewed in 2013 will be denied
due process. 1
As to the due process rights of the class members between
March 2014 and October 2014, Plaintiffs acknowledge that the ACA
"continues and reinforces due process protections." Opp'n
at 4 (citing regulations setting forth procedural protections) .
The regulations require an agency to provide any individual with
"notice of the agency's decision concerning renewal of
eligibility," 42 C.F.R. § 435.916(a) (3) (i) (C), and to "provide
notice and fair hearing rights for those determined
ineligible for Medicaid," id. § 435. 1205 (b) ( 2) (iii) .
Plaintiffs identify no difference between the due process
rights guaranteed by the ACA and its implementing regulations
and those contained in Section III. In fact, the ACA regulations
are more protective of due process rights than the current
Consent Order. Compare Consent Order Section III, 17
(permitting Defendants to terminate benefits after giving
beneficiaries ten days to provide requested information,
1
Defendants note that the District of Columbia has created a list of trained
and federally-approved attorneys and advocacy organizations who are available
to provide free legal assistance to individuals with "Medicaid Applications,
Renewals, Questions, and Legal Assistance Regarding the Affordable Care Act
Effective October 1, 2013." Reply, Ex. 1. Moreover, members of the plaintiff
class can also contact Plaintiffs' counsel, as they have been doing over the
years, to obtain legal assistance. Consent Order~ 64.
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provided the beneficiary receives a notice fifteen days prior to
the actual termination of benefits) with 42 C.F.R.
§ 435.916 (a) (3) (i) (B) (requiring that the beneficiary be given
"[a]t least 30 days from the date of the renewal form to respond
and provide any necessary information").
Rule 60(b) (5) provides that a court may vacate an order if
"applying it is no longer equitable." The District of Columbia
has clearly pointed out why applying Section I I I would not only
be inequitable, but would cause great confusion, additional
cost, and place even greater burdens on what is already a
limited staff at the Department of Human Services and the
Department of Health Care Finance. Obviously, it is in the
public interest to avoid violating federal law (the new
provisions of the ACA), cause confusion, and waste the limited
and precious resources of the District o:f Columbia Government.
Requiring the District of Columbia to attempt to comply with two
contradictory procedural regimes is clearly "detrimental to the
public interest." The District of Columbia Government is
burdened with orchestrating a comprehensive overhaul of its
Medicaid program. For all the reasons just stated, the public
interest will be served if that massive overhaul proceeds as
smoothly as humanly possible.
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For all these reasons, it is this ft~y of October, 2013,
hereby
ORDERED, that the Motion is granted; and it is further
ORDERED, that Defendants are relieved from complying with
Section III of the January 25, 1999 Consent Order, as amended by
Paragraphs 21A, 25A, 25B, and 27 of the Court's Order of August
8, 2000; and it is hereby
ORDERED, that Plaintiffs' Motion for a Partial Stay of the
Recertification Provisions in the Settlement Order of January
25, 1999 and the Order of August 8, 2000 [Dkt. No. 1875] is
denied as moot; and it is hereby
ORDERED, that Plaintiffs' Motion for Limited Discovery
Related to Medicaid Renewal and Redetermination Under the
Affordable Care Act [Dkt. No. 1877] is denied as moot. 2
J
rq~~~~
I }
Gladys KeSie~
United States District Judge
Copies to: attorneys on record via ECF
2
The Plaintiffs' request to take discovery lacks merit. The discovery they
have requested relates to implementation of the ACA and its regulations;
Defendants are correct that Plaintiffs' discovery is quite broad (they seek
"statements under oath" and correspondence between the District of Columbia
and the United States Department of Health and Human Services) . Plaintiffs
are simply not entitled to this information.
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