Frew v. Janek

• Decision Date: 28 March 2016
• Docket Number: No. 15–40229.,15–40229.
• Parties: Carla FREW; Charlotte Garvin, as next friend of her minor children Johnny Martinez, Brooklyn Garvin and BreAnna Garvin; Class Members; Nicole Carroll, Class Representative; Maria Ayala, as next friend of her minor children, Christopher Arizola, Leonard Jimenez, and Joseph Veliz; Mary Jane Garza, as next friend of her minor children, Hilary Garza and Sarah Renea Garza, Plaintiffs–Appellants v. M.D. Kyle JANEK; M.D. David L. Lakey, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

820 F.3d 715

Carla FREW; Charlotte Garvin, as next friend of her minor children Johnny Martinez, Brooklyn Garvin and BreAnna Garvin; Class Members; Nicole Carroll, Class Representative; Maria Ayala, as next friend of her minor children, Christopher Arizola, Leonard Jimenez, and Joseph Veliz; Mary Jane Garza, as next friend of her minor children, Hilary Garza and Sarah Renea Garza, Plaintiffs–Appellants

v.M.D. Kyle JANEK; M.D. David L. Lakey, Defendants–Appellees.

No. 15–40229.

United States Court of Appeals, Fifth Circuit.

March 28, 2016.

Timothy Borne Garrigan (argued), Stuckey, Garrigan & Castetter Law Offices, Nacogdoches, TX, John Robert Heard, San Antonio, TX, Jane K. Swanson, Austin, TX, for Plaintiff–Appellant.

J. Campbell Barker (argued), Sean Patrick Flammer, Esq., Deputy Solicitor General, Philip Lionberger, Austin, TX, for Defendant–Appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before HIGGINBOTHAM, SOUTHWICK, and HIGGINSON, Circuit Judges.

PATRICK E. HIGGINBOTHAM

, Circuit Judge.

This appeal represents another chapter in the long-running litigation over Texas's administration of the Early and Periodic Screening, Diagnosis, and Treatment program (“EPSDT” or “the Program”). Plaintiffs represent a class of children eligible for the Program. In 1996, they entered into a consent decree with various Texas state officials (“Defendants”) calculated to improve implementation of the Program. In 2007, the parties further agreed to a “Corrective Action Order” aimed at bringing Defendants into compliance with the consent decree. In 2013, Defendants moved under Rule 60(b)(5)

to terminate a portion of the Corrective Active Order—CAO 637–9—and several associated consent decree paragraphs. The district court granted this motion, and Plaintiffs now appeal. We AFFIRM in part, VACATE in part, and REMAND for further proceedings consistent with this opinion.

I.

The terrain is familiar.¹ In brief, in 1993, Plaintiffs as representative of a class of children eligible for EPSDT sued Defendants under 42 U.S.C. § 1983

for violations of federal Medicaid law, leading to a 78–page consent decree. In 1998, Plaintiffs' motion to enforce the consent decree was granted, resulting in a lengthy order detailing the district court's findings of non-compliance.² This Court vacated the district court's decision on the basis of Eleventh Amendment immunity.³ The Supreme Court reversed.⁴ In 2005, Defendants moved to dissolve the consent decree in its entirety under Rule 60(b)(5). The district court denied this motion,⁵ and this Court affirmed.⁶

In 2007, Plaintiffs again moved to enforce the consent decree. Rather than litigate the motion, the parties agreed to a Corrective Action Order (“CAO”), consisting of a memorandum opinion approving the overall agreement and “eleven particularized orders for enforcing specific portions” of the consent decree. The eleven particularized orders are often referred to by their district court docket number (CAO 637–1, CAO 637–2, etc.). The memorandum opinion provides that compliance with the orders is to be assessed separately. Once Defendants comply with a particular order and the part of the consent decree that the order is intended to enforce, “then the Court may terminate that part of the Consent Decree and the Corrective Action Order.” Since 2012, Defendants have moved to terminate three of the eleven orders: CAO 637–3, CAO 637–8, and CAO 637–9. The district court has granted all three of these motions. Plaintiffs appealed the termination of CAO 637–8 and CAO 637–9, but not CAO 637–3. In March 2015, this Court affirmed the district court's order terminating CAO 637–8.⁷ This appeal concerns the district court's order terminating CAO 637–9.

CAO 637–9 is entitled “Corrective Action Order: Adequate Supply of Health Care Providers.” It is organized into thirteen bullet points, most of which direct Defendants to take some action to ensure class members have access to an “adequate supply of health care providers.” In May 2013, Plaintiffs filed a renewed motion to enforce CAO 637–9. Defendants responded with a joint motion to terminate CAO 637–9 under Rule 60(b)(5)

and opposition to Plaintiffs' motion to enforce. Rule 60(b)(5) provides that “the court may relieve a party ... from a final judgment, order, or proceeding” if “the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable.” This list of reasons is “disjunctive,” that is “each of the provision's three grounds for relief is independently sufficient.”⁸ Defendants argued that they were entitled to relief under both prong 1—because they had “satisfied” the provisions of CAO 637–9—and prong 3—because “applying [CAO 637–9] prospectively is no longer equitable.”⁹ In January 2015, the district court issued a detailed order terminating CAO 637–9. The court found that relief was appropriate under both prongs 1 and 3. Plaintiffs timely appealed.

II.

“We review a district court's decision to grant or deny relief pursuant to Rule 60(b)

for abuse of discretion. Under this standard, the district court's ruling is ‘entitled to deference,’ but we review de novo ‘any questions of law underlying the district court's decision.’ ”¹⁰

III.

We first address Defendants' contention that Plaintiffs have forfeited their appeal by failing to challenge the district court's conclusion that relief is warranted under prong 3 of Rule 60(b)(5)

. The district court concluded that relief was warranted under both prong 1 and prong 3—which this Court and the Supreme Court have squarely held are “independent, alternative grounds for relief.”¹¹ Plaintiffs' opening brief is largely focused upon prong 1, offering only the following limited argument with respect to prong 3: “Plaintiffs address only the satisfied prong because the District Court relies on the satisfaction of the Decree as a basis for its findings as to the equitable prong. This makes addressing the two prongs separately unnecessary.”¹² Defendants respond that Plaintiffs are “wrong that the district court's prong-three ruling rises or falls with its prong-one ruling, legally or in application”; the district court's “prong-three ruling supports the entirety of the vacatur order”; and “appellate forfeiture suffices to affirm that order and resolve this appeal.”¹³ Plaintiffs do not reply.

This Court has held that an appellant forfeits its appeal if the district court provides several alternative grounds for its decision and the appellant fails to brief one of those grounds.¹⁴ Plaintiffs' treatment of prong 3 was brief, but adequate. Prong 3 provides that “the court may relieve a party ... from a final judgment, order, or proceeding” when “applying it prospectively is no longer equitable.” This Court has recognized “a 2–step test for determining whether modification is warranted” under prong 3: “First, the party seeking modification must show that ‘a significant change either in factual conditions or in law’ that ‘make compliance with the decree substantially more onerous [or] ... unworkable because of unforeseen obstacles [,] ... or when enforcement of the decree without modification would be detrimental to the public interest.’ Second, the court must then ‘consider whether the proposed modification is suitably tailored to the changed circumstance.’ ”¹⁵ The party seeking modification under prong 3 must meet its burden at both steps of this test.¹⁶

Addressing the second step of prong 3, the district court observed that:

The proposed modification pursued by Defendants is suitably tailored to the changed conditions because it seeks release only from certain parts of the Decree that have been either satisfied or become obsolete, and because the remaining Decree provisions and CAOs will remain in place “thereby preserving Defendants' responsibilities for ensuring adequate provision of EPSDT services to children under age 21 with Medicaid despite the switch to a managed-care model.”

There is no challenge to terminating the “obsolete” paragraphs, so the district court's prong 3 analysis—at least with respect to the consent decree paragraphs and CAO bullet points under review—is dependent upon its conclusion that these provisions have been “satisfied” under prong 1. Plaintiffs are thus correct that prong 3 cannot here serve as an independent ground for affirmance—and they have not forfeited their appeal.

IV.

We now address the district court's prong 1 findings. Before reaching the merits, it is necessary to clarify the scope of this appeal. CAO 637–9 consists of thirteen bullet points. The district court's order terminated all thirteen of these bullet points, in addition to several related paragraphs of the consent decree.¹⁷ Plaintiffs, however, only offer argument with respect to six of CAO 637–9's bullet points and one of the consent decree's paragraphs. They have, therefore, waived any challenge to the district court's decision to terminate the other seven bullet points and related paragraphs of the consent decree.¹⁸ The six bullet points and one consent decree paragraph at issue create three sets of obligations: (1) bullet points 8–10 order Defendants to perform assessments of the Medicaid provider base and develop plans to address any shortages identified by these assessments; (2) bullet points 6–7 and consent decree paragraph 93 order Defendants to maintain accurate lists of Medicaid providers; and (3) bullet point 5 orders Defendants to maintain adequate reimbursement rates for Medicaid providers.

Plaintiffs challenge the district court's conclusion that Defendants have “satisfied” all of these provisions under prong 1 of Rule 60(b)(5)

. Case law interpreting prong 1 is limited, but this Court recently clarified the applicable legal principles in our decision addressing CAO 637–8. Defendants can obtain relief under prong 1 by demonstrating “substantial compliance” with CAO 637–9 and the...