Guggenberger v. Minnesota

Citation198 F.Supp.3d 973
Decision Date28 July 2016
Docket NumberCivil No. 15-3439 (DWF/BRT)
Parties Kyle GUGGENBERGER, by his parents and guardians, Keith and Ginger Guggenberger; Jay Hannon, by his parent and guardian, Patricia Hannon; Abigail Pearson, by her parents and guardians, Ellen and Jeff Pearson; Amber Brick, by her parents and agents, Robert and Anne Brick; and on behalf of others similarly situated, Plaintiffs, v. State of MINNESOTA; the Minnesota Department of Human Services, an agency of the State of Minnesota; and Emily Johnson Piper, Commissioner of the Minnesota Department of Human Services, Defendants.
CourtUnited States District Courts. 8th Circuit. United States District Court of Minnesota

Pamela S. Hoopes, Esq., Minnesota Disability Law Center; Barnett I. Rosenfield, Esq., Mid-Minnesota Legal Aid; and Mark R. Azman, Esq., and Shamus P. O'Meara, Esq., O'Meara Leer Wagner & Kohl, PA, counsel for Plaintiffs.

Alethea M. Huyser, Assistant Solicitor General, Scott H. Ikeda and Ian M. Welsch, Assistant Attorneys General, Minnesota Attorney General's Office, counsel for Defendants.


DONOVAN W. FRANK, United States District Judge


This matter is before the Court on the Motion to Dismiss filed by Defendants the State of Minnesota, the Minnesota Department of Human Services ("DHS"), and DHS Commissioner Emily Johnson Piper ("Commissioner Johnson Piper")1 (collectively, "Defendants"). (Doc. No. 35.) For the reasons set forth below, the Court grants in part and denies in part the motion.

I. Minnesota's Waiver Services for Individuals with Disabilities

The State of Minnesota participates in Medicaid, a health care program operated and funded jointly by individual states and the federal government. (Am. Compl. ¶ 24.) Plaintiffs allege that federal Medicaid requirements obligate Minnesota to provide various services, including treatment in institutional settings, for persons with developmental disabilities. (Id. ¶ 25.) As an alternative to providing care and treatment in institutional settings, Plaintiffs allege that Minnesota may provide Home and Community Based Waiver Services ("Waiver Services"), which encompass a variety of services and supports which Plaintiffs allege are "designed to help people with disabilities live in his or her own home and access his or her community." (Id. ¶ 26.) Plaintiffs allege that states that choose to offer these optional Waiver Services must do so in accordance with federal law. (Id. ¶ 27.)

Defendants operate four Waiver Services programs for individuals with disabilities as part of Minnesota's Medicaid program known as Medical Assistance ("MA"). (Id. ¶¶ 35, 36.) According to Plaintiffs, these Waiver Services programs include the Developmental Disabilities ("DD") Waiver, the Community Alternatives for Disabled Individuals ("CADI") Waiver, the Community Alternative Care ("CAC") Waiver, and the Brain Injury

("BI") Waiver. (Id. ¶ 36.) Plaintiffs allege that the State of Minnesota and DHS are responsible for administering the Medicaid Waiver Services programs. (See id. ¶ 20.) Plaintiffs allege that DHS is "an agency designated as a department of the government of the State of Minnesota," (id. ¶ 18), and that Commissioner Johnson Piper "serves as the 'single state agency' responsible for the administration of the Medicaid program in Minnesota" (id. ¶ 22). Plaintiffs allege that they, along with thousands of similarly situated individuals, have been deemed eligible for these Waiver Services but have not received services due to their placement on waiting lists. (Id. ¶ 48.)

Plaintiffs allege that Minnesota "[c]ounties act as 'local agencies' of the state" to aid in the administration of the Waiver Services programs. (Id. ¶ 36, 37.) Specifically, Plaintiffs allege that Defendants identify each county's total budget to spend for each Waiver, and the counties "create individual waiver services budgets and ... manage those budgets in the aggregate, within amounts specified by Defendants as available to serve eligible persons under each waiver." (Id. ¶¶ 38, 39.) Plaintiffs assert that both the counties and the Defendants withhold a portion of the funds available as "reserves." (Id. ¶ 40.) Plaintiffs claim that the counties are authorized by state statute "to reserve a certain portion of the available funding for unexpected situations that might arise during the year." (Id. ) In addition, Plaintiffs allege that "Defendants also withhold funds under each Waiver to address unexpected, crisis needs." (Id. ) Plaintiffs assert that these additional reserves withheld by Defendants "eas[e] the burden on counties to handle all unexpected costs at a local level." (Id. ) Plaintiffs allege that Waiver Services funds are returned to the State's general fund if unspent in a given year. (Id. ¶ 42; see also id. ¶ 49.) In particular, Plaintiffs assert that "[u]nspent Waiver funds are not carried over or otherwise reserved for the Waiver programs to remove people from the waitlists and pay for Waiver Services in future years." (Id. ¶ 42.)

II. The Named Plaintiffs

The named Plaintiffs in this case are four individuals with disabilities who allege that they have been deemed eligible for Waiver Services but have not been provided such services and have instead been placed on waiting lists for three years or more. (See id. ¶¶ 59-62.) Plaintiff Kyle Guggenberger ("Guggenberger") alleges that he was placed on a waiting list over five years ago after being found eligible for DD Waiver Services. (Id. ¶ 59.C.) Plaintiff Jay Hannon ("Hannon") also alleges that he was placed on a waiting list approximately five years ago after being found eligible for DD Waiver Services. (Id. ¶ 60.C.) Plaintiff Abigail Pearson ("Pearson") alleges that she was placed on a waiting list over fourteen years ago after being found eligible for DD Waiver Services. (Id. ¶ 61.C.) Plaintiff Amber Brick ("Brick") alleges that she was placed on a waiting list over three years ago after being found eligible for CADI Waiver Services. (Id. ¶ 62.B.) The four named Plaintiffs allege that they are between the ages of twenty-two and twenty-five and reside at home with their parents. (Id. ¶¶ 59.A, 60.A, 61.A, 62.A.)

Each of the named Plaintiffs alleges that he or she receives some services due to their disabilities. (See id. ¶¶ 59.A, 60.A, 61.A, 62.A (referencing DD Case Management Services, PCA Services, DT&H Services, employment supports, Adult Rehabilitative Mental Health Services, and job placement services).) However, each Plaintiff also alleges that he or she is in need of additional supports and services available through the DD or CADI Waivers. (See id. ¶¶ 59.A, 60.B, 61.B, 62.A.) Such services include, for example, independent housing options; services to teach the individual to live on his or her own and access the community; behavioral support services; and services aimed at developing the individual's independent living skills in areas such as budgeting, nutrition, healthcare, and employment. (See id. ¶¶ 59.A, 59.B, 60.B, 61.B, 62.A.)

Plaintiffs allege that their placement on waiting lists and their inability to access Waiver Services causes feelings of isolation and segregation from society, and has exacerbated their disabilities. (See id. ¶¶ 59.A, 59.B, 60.A, 61.A, 62.A.) All four named Plaintiffs allege that they have not received formal updates about their progress toward moving off the waiting lists to receive Waiver Services. (Id. ¶¶ 59.C, 60.C, 61.C., 62.C.) With the exception of Pearson, Plaintiffs allege that they have not received any notice or opportunity to challenge the ongoing denial of Waiver Services. (Id. ¶¶ 59.C, 60.C, 62.C.) Pearson alleges that she received one notice which "purported to abruptly and improperly deny Waiver Services to her." (Id. ¶ 61.D.) Pearson alleges that this notice failed to provide proper advance notice of the proposed action and did not articulate the legal basis justifying the proposed action. (Id. ) Aside from this one notice, Pearson alleges that she has not otherwise received any notice or opportunity to challenge the ongoing denial of Waiver Services. (Id. ¶ 61.C.) Plaintiffs allege that the counties in which they live "routinely and repeatedly maintained reserves and failed to spend all of their available Waiver funds, while Plaintiffs remained on wait lists." (Id. ¶ 63.)2

III. Plaintiffs' Claims

Plaintiffs bring their claims on their own behalf and on behalf of a putative class of similarly situated individuals with disabilities3 in Minnesota who have been deemed eligible for Waiver Services but are currently on a waiting list for such services. (Id. ¶¶ 66, 67.A.) As of April 1, 2015, Plaintiffs allege, 3,586 individuals were on the DD Waiver waiting list, and 1,430 individuals were on the CADI Waiver waiting list. (Id. ¶ 51.) Plaintiffs allege that their continued placement on waiting lists for Waiver Services violates federal law in several respects. (See generally id. ) Plaintiffs claim that Defendants have "fundamentally mismanage[d]" Minnesota's Waiver Services programs, "depriv[ing] thousands of persons with disabilities of available services and supports intended to help them live independent, inclusive lives in their communities." (Id. ¶ 1.) Plaintiffs allege that Defendants "have failed to ensure that otherwise eligible individuals are not improperly placed on wait lists for services when money is available under the Waivers to serve their needs." (Id. ¶ 50.) According to Plaintiffs, Defendants have failed to undertake necessary administrative steps to remedy underspending by Minnesota counties. (Id. ) In addition, Plaintiffs allege that Commissioner Johnson Piper does not have an effective and comprehensive plan "for ensuring that Plaintiffs and members of the Plaintiff class be provided with Waiver services within the funding appropriated by the Legislature each year, rather than placing them on wait lists, to enable them to live in the most integrated settings possible, consistent with their needs and preferences."...

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