O.B. v. Norwood

• Decision Date: 21 March 2016
• Docket Number: 15 C 10463
• Citation: 170 F.Supp.3d 1186
• Parties: O.B., et al., individually and on behalf of a class, Plaintiffs, v. Felicia F. Norwood, in her official capacity as Director of Healthcare and Family Services, Defendant.
• Court: U.S. District Court — Northern District of Illinois

170 F.Supp.3d 1186

O.B., et al., individually and on behalf of a class, Plaintiffs,

v.Felicia F. Norwood, in her official capacity as Director of Healthcare and Family Services, Defendant.

15 C 10463

United States District Court, N.D. Illinois, Eastern Division.

Signed March 21, 2016

Robert Hugh Farley, Jr., Robert H. Farley, Jr., Ltd., Naperville, IL, Martha Jane Perkins, Sarah J. Somers, National Health Law Program, Inc., Carrboro, NC, Shannon Marie Ackenhausen, Thomas D. Yates, Legal Council for Health Justice, Chicago, IL, for Plaintiffs.

John E. Huston, Karen Elaine Konieczny, Illinois Attorney General's Office, Chicago, IL, for Defendant.

MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge:

Plaintiffs O.B., C.F., J.M., S.M., Sa.S., and Sh.S. (collectively, “Plaintiffs”) bring this four-count action pursuant to 42 U.S.C. § 1983 and various provisions of Title XIX of the Social Security Act (the “Medicaid Act”), 42 U.S.C. §§ 1396 et seq . (Counts I and II); the Americans with Disabilities Act (the “ADA”), 42 U.S.C. §§ 12101 et seq . (Count III); and the Rehabilitation Act, 29 U.S.C. §§ 701 et seq . (Count IV). Plaintiffs allege that they are Medicaid-eligible children with disabling and chronic health conditions who are “eligible for Medicaid-funded in-home shift nursing services.” Compl., Dkt. 1, ¶¶ 1-2. According to Plaintiffs' Complaint, Defendant Felicia F. Norwood (“Norwood”), the Director of the Illinois Department of Healthcare and Family Services (“HFS”), “has failed to arrange for adequate in-home shift nursing services” for Plaintiffs and the class they seek to represent. Id.

Now before the Court are two motions: Norwood's motion to dismiss Plaintiffs' Complaint (Dkt. 21), and Plaintiffs' motion for a preliminary injunction (Dkt. 6). For the following reasons, Norwood's motion to dismiss is granted as to plaintiffs Sa.S. and Sh.S.,¹ and otherwise denied; and Plaintiffs' motion for preliminary injunction is granted in part, and otherwise continued for status and to allow Norwood to identify any disputed issues of fact requiring a hearing.

DISCUSSION

The factual and statutory background underlying both Norwood's motion to dismiss and Plaintiffs' motion for preliminary injunction is undisputed. As Norwood's Memorandum explains, “to qualify for federal financial participation, HFS was required to adopt and obtain federal approval of a Title XIX State Medicaid plan.” Dkt. 22, at 5. “Title XIX requires a state participating in the Medicaid program, as a condition of its participation, to include early and periodic screening, diagnostic, and treatment services ('EPSDT') as part of its State Medicaid plan.” Id. “State law requires that children seeking Medicaid-funded in-home nursing services request prior authorization for such services from HFS and demonstrate the medical necessity for the services.” Id. at 1-2. “Each Plaintiff has been approved for [EPSDT] in-home shift nursing services.” Id. at 1; Dkt. 7, at 9.

“When HFS grants prior approval for in-home shift nursing services it issues a written notice to the participant that either grants prior approval of a specific number of nursing hours per week, or grants approval of a specific monthly budget to enable the family to pay for nursing services.” Dkt. 22, at 2. While Norwood disputes whether Plaintiffs will be irreparably injured as a result of not receiving the full component of in-home shift nursing services that HFS approved for them (see Dkt. 25, at 11-12), at no point does she dispute that Plaintiffs are not receiving all such approved services, much less with the “reasonable promptness” required by 42 U.S.C. § 1396a(a)(8).

I. Norwood's Motion to Dismiss

Norwood's motion to dismiss has two prongs. She argues first that the Supreme Court's recent decision in Armstrong v. Exceptional Child Ctr. , –––U.S. ––––, 135 S.Ct. 1378, 191 L.Ed.2d 471 (2015), “forecloses” any private right of action seeking to enforce the Medicaid Act provisions Plaintiffs assert (Counts I and II), and similarly precludes relief under the ADA and Rehabilitation Act (Counts III and IV). See Dkt. 22, at 4-12, 15. Second, Norwood argues that Plaintiffs' ADA and Rehabilitation Act claims further fail under Seventh Circuit precedent. Id. at 12-14. Both arguments are unavailing.

A. The Medicaid Act Claims

Plaintiffs' Medicaid Act claims fall into two categories. “Count I alleges that the Defendant violated EPSDT provisions of the Medicaid Act, 42 U.S.C. §§ 1396a(a)(10)(A), 1396d(a)(4)(B), and 1396a(a)(43)(C),” and Count II seeks “to enforce the reasonable promptness provision, 42 U.S.C. § 1396a(a)(8).” Dkt. 32, at 2-4. Plaintiffs correctly assert that the Seventh Circuit and Illinois district courts “have specifically held these provisions create federal rights under § 1983 that Medicaid beneficiaries can enforce.” Id. (citing, inter alia , Bontrager v. Ind. Fam. & Soc. Servs. Admin. , 697 F.3d 604, 607 (7th Cir.2012) (regarding § 1396a(a)(10)(A) ); Bertrand ex rel. Bertrand v. Maram , 495 F.3d 452, 457–58 (7th Cir.2007) (regarding § 1396a(a)(8) ); Miller v. Whitburn , 10 F.3d 1315, 1319 (7th Cir.1993) (regarding § 1396a(a)(10)(A) and § 1396d(a)(4)(B) ); N.B. v. Hamos , No. 11 C 06866, 2013 WL 6354152, at *3–6 (N.D.Ill. Dec. 5, 2013) (regarding § 1396a(a)(43) )).²

In Bontrager, the Seventh Circuit reaffirmed this holding in light of more recent Supreme Court decisions stating “a new analytical approach” for determining whether a federal statute affords a private right of action—Blessing v. Freestone , 520 U.S. 329, 340, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997), and Gonzaga Univ. v. Doe , 536 U.S. 273, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002). In so doing, the court observed that “post-Blessing and Gonzaga, several circuit courts have held that the Medicaid provision at issue creates an enforceable federal right.” Bontrager , 697 F.3d at 606–07. Plaintiffs make the same point: “every circuit court to have decided the question has concluded that Medicaid beneficiaries can enforce the EPSDT provisions” and “the reasonable promptness provision.” Dkt. 32, at 3.

Norwood admits to being “well aware” of these holdings (Dkt. 34, at 5), but insists they are not controlling here. According to Norwood, Plaintiffs' Medicaid-related claims do not arise under the foregoing sections of the Medicaid Act, but instead arise under § 1396a(a)(30)(A), which governs “Medicaid reimbursement rates and access to Medicaid providers.” Id. So, the argument goes, Plaintiffs' Medicaid claims must be dismissed both “for Plaintiffs' failure to invoke the statute that governs Defendant's alleged obligations respecting these subjects,” and because the Supreme Court's recent ruling in Armstrong “completely forecloses Plaintiffs from pursuing any claims that arise out of 42 U.S.C. § 1396a(a)(30)(A).” Dkt. 22, at 9. There are several problems with this argument.

For one thing, Armstrong was a plurality opinion, with only a minority of Justices joining in the portion on which Norwood relies (Part IV). Thus, as several district courts have now recognized, its analysis “is not part of the majority decision and is therefore not binding.” Unan v. Lyon , NO. 2:14–cv–13470, 2016 WL 107193, at *11 (E.D.Mich. Jan. 11, 2016).³ But as important, this discussion in Armstrong is also inapposite here, because it addresses a different statutory provision, asserted by different plaintiffs, under a different theory. The Wong court summarized these distinctions in language equally applicable to this case:

First, Plaintiffs are Medicaid beneficiaries entitled to EPSDT services, not Medicaid providers. Second, Plaintiffs' suit relies on 42 U.S.C. § 1983. Plaintiff does not rely on the Supremacy Clause or an equity theory. Third, Plaintiffs sue for EPSDT services pursuant to individual rights conferred by 42 U.S.C. §§ 1396a(a)(10) and (43), not for higher provider reimbursement rates based on the federal agency directive in 42 U.S.C. § 1396a(a)(30).

Wong , 125 F.Supp.3d 1099, 1107, 2015 WL 5116774, at *7.

Armstrong emphasizes the first of these differences in the very passage on which Norwood relies: “We doubt, to begin with, that providers are intended beneficiaries (as opposed to mere incidental beneficiaries) of the Medicaid agreement, which was concluded for the benefit of the infirm whom the providers were to serve, rather than for the benefit of the providers themselves.” Armstrong , 135 S.Ct. at 1387. Given this clarification in Armstrong itself that Medicaid-eligible participants (such as Plaintiffs here) are intended beneficiaries of the Act, and the different statutory provisions at issue in this case (EPSTD and reasonable promptness provisions), this Court concurs with those holding “that the Armstrong decision is distinguishable from the present case and does not dictate that Plaintiffs are deprived of a private right of action to enforce their rights to EPSDT services.” Wong , 125 F.Supp.3d at 1107, 2015 WL 5116774, at *7 ; Unan , 2016 WL 107193, at *11 (“The discussion in Armstrong regarding the private enforcement of Medicaid provisions is therefore not binding and is inapposite to the present action.”).

Arguing against this result, Norwood contends that the statutes “nominally” asserted by Plaintiffs are not dispositive, Dkt. 22, at 12, because their claims really seek “to raise Medicaid reimbursement rates to in-home shift nursing agencies in order that they may secure Medicaid services.” Dkt. 34, at 4. According to Norwood, “the subjects of Medicaid reimbursement rates and access to Medicaid providers are expressly included in Section 1396a(a)(30)(A),” and “Armstrong bars any attempt to privately enforce any provision of the Medicaid Act when it would require the Court to undertake the activities included in Section 1396a(a)(30)(A).” Id. at 5. Plaintiffs may not circumvent this prohibition, Norwood argues, “by invoking other general statutes that have been held to confer rights to Medicaid 'services.”' Id. But Norwood's support...