Coe v. Dist. of Columbia Dep't of Human Servs.

• Docket Number: 17-AA-590
• Decision Date: 01 September 2022
• Citation: 281 A.3d 603
• Parties: Ebony COE, Petitioner, v. DISTRICT OF COLUMBIA DEPARTMENT OF HUMAN SERVICES, Respondent.
• Court: D.C. Court of Appeals

281 A.3d 603

Ebony COE, Petitioner,

v.DISTRICT OF COLUMBIA DEPARTMENT OF HUMAN SERVICES, Respondent.

No. 17-AA-590

District of Columbia Court of Appeals.

Argued May 16, 2019

Decided September 1, 2022

Chelsea Sharon, Legal Aid Society for the District of Columbia, with whom David Carpman, Jonathan H. Levy, and Jennifer Mezey, Legal Aid Society for the District of Columbia, were on the brief, for petitioner.

Richard S. Love, Senior Assistant Attorney General, with whom Karl A. Racine, Attorney General for the District of Columbia, Loren L. AliKhan, Solicitor General at the time the brief was filed, and Caroline S. Van Zile, Deputy Solicitor General, were on the brief, for respondent.

Before Beckwith, Associate Judge, and Ruiz and Fisher,^* Senior Judges.

Dissenting opinion by Senior Judge Fisher at page 608–09.

Beckwith, Associate Judge:

In early December 2016, the District of Columbia Department of Human Services (DHS) notified petitioner Ebony Coe that her Medicaid benefits would be terminated at the end of the month. Ms. Coe appealed the agency's determination to the Office of Administrative Hearings (OAH). She argued that DHS erred in terminating her benefits and that the error was part of an unlawful policy of terminating Medicaid coverage without conducting the pretermination assessment required by federal law. An Administrative Law Judge (ALJ) found that DHS erroneously terminated Ms. Coe's benefits due to a misapplication of federal law, but ruled that he lacked authority to order the mayor to correct the unlawful policy. He determined that such an order could be issued only by a judge of the Superior Court upon a request for equitable relief made in that court. DHS argues that this is a proper interpretation of the relevant statutes and Ms. Coe contends that it is not. We agree with Ms. Coe and we reverse and remand for further proceedings.

I.

States that participate in Medicaid must comply with federal requirements in administering the program. See Naccache v. Taylor , 199 A.3d 181, 187 (D.C. 2018).¹ Medicaid provides health care benefits to, among others, people who are "aged, blind, or disabled," as well as people whose Modified Adjusted Gross Income (MAGI) falls below a certain level. See 42 U.S.C. § 1396-1. Some people qualify for Medicaid under more than one provision. The District must reevaluate the eligibility of individuals who are enrolled in Medicaid due to disability at least every twelve months. See 42 C.F.R. § 435.916(b). Before terminating an enrolled person from Medicaid, the Department of Human Services (DHS) "must consider all bases of eligibility." Id. § 435.916(f)(1). Until DHS has found an enrolled individual to be ineligible, it must "[c]ontinue to furnish Medicaid regularly" to that person. 42 C.F.R. § 435.930(b).

Ms. Coe was receiving Medicaid coverage due to her disability when she received a notice that she would "not be eligible for medical assistance of any type" as of January 2017 because she was "neither aged or disabled." The notice also stated, "[Y]ou can apply for Medicaid at DC Health Link." Believing that she might qualify for Medicaid based on her MAGI, Ms. Coe began the online DC Health Link application. She was stopped by an error message that said she could not apply because she had active Medicaid coverage. A DHS caseworker confirmed that she could not apply until her current benefits expired, and a DHS supervisor suggested that she apply once her disability-based coverage ended.

Ms. Coe filed a request for a hearing with OAH, seeking reversal of the agency's termination decision on the ground that DHS had failed to screen her for MAGI eligibility as it was legally required to do. She also requested an order pursuant to D.C. Code § 4-210.16 directing DHS to correct its policy of terminating non-MAGI Medicaid coverage without conducting the necessary pretermination review of MAGI eligibility. DHS conceded that it failed to evaluate alternate bases for Ms. Coe's Medicaid eligibility because of a "technological barrier"—namely, a "built-in failsafe to prevent fraud and duplicate case creation." DHS asserted that it would address cases "on an ad-hoc basis as they are brought to the Agency's attention" while it modified the certification process. DHS also stated that it would help Ms. Coe obtain a determination of her income-based eligibility and "ensur[e] that she [would] not experience a break in coverage" if she still qualified for Medicaid.

The ALJ reversed DHS's termination of Ms. Coe's benefits because DHS violated Ms. Coe's right under 42 C.F.R. § 435.930(b) to receive benefits until "found to be ineligible." The ALJ also found that the termination was "based on ‘a misapplication of law’ within the meaning of [s]ection 4-210.16." It declined, however, to issue an order directing the mayor to take corrective action. Stating that ALJs have "expressly-defined statutory and regulatory powers" that are distinct from the "broad, equitable powers of a court," the ALJ concluded that an order directing the mayor to correct the unlawful policy would constitute "purely declaratory relief that may overstep the boundaries of [his] authority as an administrative law judge."

II.

On petition for review, Ms. Coe argues that D.C. Code § 4-210.16(b) gives ALJs authority to issue an order directing the mayor to correct a policy that does not comply with federal law. DHS counters that § 4-210.16(b) does not confer such authority and that in the absence of explicit statutory authorization, ALJs are limited to sustaining or reversing a mayoral action.²

"The proper construction of a statute raises a question of law, and our review is de novo." Washington v. District of Columbia Dep't of Pub. Works , 954 A.2d 945, 948 (D.C. 2008). "Because the OAH is simply an all-purpose adjudicatory body, without a particular subject-matter focus, its legal interpretations do not command deference." United Dominion Mgmt. Co. v. District of Columbia Rental Hous. Comm'n , 101 A.3d 426, 430 (D.C. 2014) (citing Williams v. District of Columbia Dep't of Pub. Works , 65 A.3d 100, 104 (D.C. 2013) ).

The OAH Establishment Act gives ALJs the power to issue "interlocutory orders and orders." D.C. Code § 2-1831.09(b)(5). (An order is defined as "the whole or any part of the final disposition (whether affirmative, negative, injunctive, or declaratory in form) of the Mayor or of any agency in any matter other than rulemaking, but including licensing."³ See id. § 2-1831.01(12) (stating that for purposes of the act establishing OAH, "order" has the "meaning provided that term in § 2-502(11)"). D.C. Code § 2-1831.09(e) provides that an ALJ, "or a party in interest in an adjudicated case, may apply to" a Superior Court judge "for an order issued on an expedited basis to show cause why a person should not be held in civil contempt for refusal to comply with an order or an interlocutory order issued by an Administrative Law Judge." Further, a "party in interest may also bring an action for any other equitable or legal remedy authorized by law to compel compliance with the requirements of an order or interlocutory order of an Administrative Law Judge." Id. The government argues that this language signifies that the Superior Court is the only proper forum for requesting and receiving equitable relief relevant to an OAH order. That the Superior Court is empowered to provide relief, however, does not mean an ALJ is barred from doing so, as long as the ALJ's actions are authorized by statute. See Paschall v. District of Columbia Dep't of Health , 871 A.2d 463, 467, 469 n.6 (D.C. 2005).

The Public Assistance Act allows any aggrieved applicant for or recipient of public assistance to request a hearing, which will "be conducted in accordance with the provisions of this subchapter." D.C. Code § 4-210.01. One such provision instructs that "the Mayor will correct" a challenged policy when (1) the petitioner "challenges a departmental policy"; (2) the petitioner's claim for relief is granted; and (3) the relief is based on "a misapplication of law contained in the policy." Id. § 4-210.16(b).

It is undisputed that the ALJ who heard Ms. Coe's case found that all three requirements were met: (1) Ms. Coe challenged the departmental policy⁴ of terminating Medicaid benefits without conducting the pretermination review required by 42 C.F.R. § 435.930(b) ; (2) the ALJ granted Ms. Coe's request for relief by reversing her termination from Medicaid; and (3) the ALJ granted such relief because DHS had terminated Ms. Coe's benefits "based on a misapplication of the law." The question, then, is whether the statutory scheme authorizes an ALJ to order the Mayor to "correct" the proscribed policy. D.C. Code § 44-1003.09.

DHS argues that the ALJ here was limited to either "sustaining or reversing the challenged mayoral action aggrieving Ms. Coe—the proposed termination of benefits." It posits this as the logical extension of the principle that "administrative law tribunals ... do not have the inherent ‘equitable authority’ " of courts in the judicial branch. District of Columbia Off. of Tax & Revenue v. Shuman , 82 A.3d 58, 70 (D.C. 2013) (quoting Ramos v. District of Columbia Dep't of Consumer & Regul. Affs. , 601 A.2d 1069, 1073 (D.C. 1992) ). In Shuman , an OAH ALJ considered a "glitch" in a District computer system that caused a series of erroneous tax bills and notices to be sent to a household. Id. at 61. The ALJ prohibited the tax agency from sending further incorrect notices or bills to the couple, imposed "conditional monthly fines potentially adding up to many tens of thousands of dollars," and ordered "the unconditional transfer of a large amount of money from one District agency" to another. Id. at 61–62. This court reversed the ALJ's decision, finding that the "totally unprecedented" order by the ALJ was based on a subjective "sense of justice" rather than "the provisions of the statute in question." Id. at 69–70.

But Shuman does not bar...