Bertrand ex rel. Bertrand v. Maram

• Court: U.S. Court of Appeals — Seventh Circuit
• Writing for the Court: Easterbrook
• Citation: Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452 (7th Cir. 2007)
• Decision Date: 24 July 2007
• Docket Number: No. 06-3705.,06-3705.
• Parties: Christopher BERTRAND, by his parents Inez BERTRAND and Daniel Bertrand, and Frank Patterson, Jr., by his parents Janice Patterson and Frank Patterson, Sr., Plaintiffs-Appellants, v. Barry S. MARAM, Director, Illinois Department of Healthcare and Family Services, et al., Defendants-Appellees.

495 F.3d 452

Christopher BERTRAND, by his parents Inez BERTRAND and Daniel Bertrand, and Frank Patterson, Jr., by his parents Janice Patterson and Frank Patterson, Sr., Plaintiffs-Appellants, v. Barry S. MARAM, Director, Illinois Department of Healthcare and Family Services, et al., Defendants-Appellees.

No. 06-3705.

United States Court of Appeals, Seventh Circuit.

Argued May 3, 2007.

Decided July 24, 2007.

Rehearing Denied August 27, 2007.

Robert H. Farley, Jr. (argued), Naperville, IL, for Plaintiffs-Appellants.

Mary E. Welsh (argued), Brett E. Legner, Office of the Attorney General, Civil Appeals Division, Chicago, IL, for Defendants-Appellees.

Kendra K. Hartman, Sonnenschein, Nath & Rosenthal Chicago, IL, Amicus Curiae.

Before EASTERBROOK, Chief Judge, and FLAUM and RIPPLE, Circuit Judges.

EASTERBROOK, Chief Judge.

Christopher Bertrand and Frank Patterson are developmentally disabled adults who want residential habilitation services under the Medicaid program in Illinois. "Residential habilitation" is a set of services provided in the applicant's home (or another residence) by nurses and other professionals. The goal is to see that the person remains safe and healthy; it is an alternative to institutionalization for those unable to care for themselves. Illinois covers the costs of residential habilitation and similar services through its Community Integrated Living Arrangement (CILA) program, part of the state's Home and Community-Based Services (HCBS) program.

The federal government does not require states to provide CILA services as a condition of participation. Indeed, federal law does not even allow states to provide such services as part of the Medicaid program (though states may do so separately, at their own expense) unless they apply for and receive a waiver of Medicaid's normal rules. The possibility of waiver, see 42 U.S.C. § 1396n(b), was extended to home and community-based services by 42 U.S.C. § 1396n(c)(1):

The Secretary may by waiver provide that a State plan approved under this subchapter may include as "medical assistance" under such plan payment for part or all of the cost of home or community-based services (other than room and board) approved by the Secretary which are provided pursuant to a written plan of care to individuals with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a hospital or a nursing facility or intermediate care facility for the mentally retarded the cost of which could be reimbursed under the State plan.

Illinois applied for and received a waiver entitling it to federal reimbursement for such services provided to 10,000 people.

When Bertrand and Patterson applied for residential habilitation services, however, they were turned down. Although both Bertrand and Patterson "require the level of care provided in a hospital or a nursing facility or intermediate care facility for the mentally retarded", and each already received some services under the HCBS program, each was told that he did not satisfy the state's "priority population criteria" for residential habilitation under the CILA sub-program. These are the criteria:

(1) individuals who are in crisis situations (e.g., including but not limited to, persons who have lost their caregivers, persons who are in abusive or neglectful situations); (2) individuals who are wards of the Illinois Department of Children and Family Services and are approaching the age of 22 and individuals who are aging out of children's residential services funded by the Office of Developmental Disabilities; (3) individuals who reside in State-Operated Developmental Centers; (4) Bogard class members, i.e., certain individuals with developmental disabilities who currently reside in a nursing facility; (5) individuals with mental retardation who reside in State-Operated Mental Health Hospitals; (6) individuals with aging caregivers; and (7) individuals who reside in private ICFs/MR or ICFs/DD.

Those not on the list cannot be reimbursed for residential habilitation even if medical providers are willing to offer that service at a price Illinois is willing to pay. Bertrand applied for reconsideration, arguing (via his parents as next friends) that he comes within category (6). He lives with his parents, both of whom are nearing retirement. The state reversed its decision; Bertrand has been receiving residential habilitation services at state expense since May 24, 2005. But Patterson remains outside the CILA sub-program.

Plaintiffs maintain that the state's administration of its HCBS program violates 42 U.S.C. § 1396a(a)(8), which says that every state plan 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".

Illinois argued that Bertrand's claim should be dismissed as moot. The district judge disagreed, remarking that Bertrand had moved for class certification before he was accepted into the CILA program. Paradoxically however, the judge then refused to act on Bertrand's motion, ruling that class treatment is itself moot because Illinois is entitled to prevail — not, as the state principally argued, because there is no private right of action under § 1396a(a)(8), but because the Secretary of Health and Human Services approved the state's "priority population criteria," and anyone not on the list is not "eligible" for services as § 1396a(a)(8) uses that term. Bertrand v. Maram, 2006 WL 2735494, 2006 U.S. Dist. LEXIS 68935 (N.D.Ill. Sept. 25, 2006).

The district court mishandled the issues related to class certification. Bertrand and Patterson filed this suit seeking to represent a class. Fed.R.Civ.P. 23(c)(1) directs district courts to grant or deny class certification "early" in the litigation. Yet the district court bypassed that subject, ruled on the merits almost two years after the suit had been filed, and then insisted that the class does not matter. "Early" is a plastic term that affords latitude to district judges in case management, but "never" is not within any plausible understanding of "early."

Judge Kendall, who finally resolved plaintiffs' claim, was assigned to the case about a year after its commencement and is not responsible for her predecessor's failure to make an "early" decision about the class. That the subject may have fallen between stools is unfortunate, however. Prompt decision is essential, as Bertrand's situation shows. Board of School Commissioners of Indianapolis v. Jacobs, 420 U.S. 128, 95 S.Ct. 848, 43 L.Ed.2d 74 (1975), holds that, if a class representative's personal claim becomes moot after certification, then the suit may continue — for the class as a whole retains a live claim. But if the would-be representative's claim becomes moot before certification, then the case must be dismissed, see Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975), unless someone else intervenes to carry on as the representative. Parole Commission v. Geraghty, 445 U.S. 388, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980).

Apparently the district court saw class suits as opportunities for one-way intervention: if the representative plaintiff wins, then class certification extends the victory to a larger group. That was a common view before the 1966 amendments to Rule 23, which were designed to divorce class certification from the merits. See the Committee Note to the 1966 amendment. After the 1966 amendments, treatment of plaintiffs and defendants is supposed to be symmetric, which is possible only if a class is certified (or not) before decision on the merits. Class-action status must be granted (or denied) early not only to avoid problems with mootness, and provide an opportunity for interlocutory review, see Fed.R.Civ.P. 23(f), but also to clarify who will be bound by the decision. The larger the class, the more the litigants may invest in discovery and briefing to ensure that the case is decided correctly. Until everyone knows who will, and who will not, be bound by the outcome, it is difficult to make informed decisions about how the case should proceed.

The district judge may have equated the precedential effect of a decision with its preclusive effect, but the two differ. Without a certified class, any other Medicaid applicant is free to file another suit and present the same arguments; decisions of district courts do not block successive litigation by similarly situated persons. Although decisions of appellate courts have broader authority, in the absence of class certification any other applicant may start over and try to distinguish the adverse precedent. Likewise, if the first plaintiff wins and the court of appeals affirms, the agency may try to distinguish the adverse precedent, or deny its authoritative status, when denying relief to a similarly situated applicant. It takes a class certification to produce a conclusive resolution in one proceeding. Compare United States v. Mendoza, 464 U.S. 154, 104 S.Ct. 568, 78 L.Ed.2d 379 (1984), with Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979).

In the event, however, no class was certified, and neither side seeks review of that decision. Bertrand's claim therefore must be dismissed as moot. The district court noted the motion for class certification but missed the vital qualification that the suit never became a class action. In a handful of situations, exemplified by Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980), and Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544, 546-47 (7th Cir. 2003), class certification may follow the defendant's actual or attempted satisfaction of the would-be representative's demand; the Court explained in Deposit Guaranty National Bank that this proviso is essential to...