Hatten-Gonzales ex rel. Situated v. Earnest

• Decision Date: 18 March 2016
• Docket Number: Civil No. 88-0385 KG/CG
• Parties: DEBRA HATTEN-GONZALES, Individually and on behalf of all Others similarly situated, Plaintiffs, v. BRENT EARNEST, Secretary of the New Mexico Human Services Department, Defendant.
• Court: U.S. District Court — District of New Mexico

DEBRA HATTEN-GONZALES, Individually and on behalf of all Others similarly situated, Plaintiffs,
v.
BRENT EARNEST, Secretary of the New Mexico Human Services Department, Defendant.

Civil No. 88-0385 KG/CG

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

March 18, 2016

MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court upon Plaintiffs' Motion for Injunctive Relief and Expedited Review and Hearing ("Motion"), (Doc. 623), filed January 27, 2016; The New Mexico Human Services Department's Response in Opposition to Plaintiffs' Motion for Injunctive Relief and Expedited Review and Hearing ("Response"), (Doc. 636), filed February 8, 2016; and Plaintiffs' Reply on Motion for Injunctive Relief and Expedited Review and Hearing ("Reply"), (Doc. 642), filed February 15, 2016. The Court heard oral argument on the Motion and received additional evidence at a hearing on March 7, 2016. Having reviewed the parties' briefs and relevant law, and considering the parties' oral arguments and evidence in the record, the Court GRANTS Plaintiffs' Motion.

I. Factual and Procedural Background

This case originally challenged certain practices of the New Mexico Human

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Services Department ("HSD"), Income Support Division ("ISD"), in processing applications for assistance under the federal Food Stamps¹ and Medicaid programs. Defendant Secretary of HSD ("Defendant") and Plaintiffs negotiated a resolution of the issues before the Court, which was memorialized in the Modified Settlement Agreement (the "Decree"), (Doc. 460), entered on August 27, 1998. As part of the agreement between the Parties, this Court retained jurisdiction over the matter to enforce the terms, conditions, and undertakings of the Decree. (Order Modifying Settlement Agreement at 2). As part of the Decree, the Parties agreed to make good faith efforts to resolve any differences that may arise in the prospective implementation of the Decree. The Decree provides that, in the event the Parties cannot resolve their differences after good faith negotiations, either party may seek a ruling from the Court. (Decree at 3).

Pursuant to this provision, Plaintiffs' filed their Motion on January 27, 2016, in which they seek a ruling from the Court regarding Defendant's implementation of NMAC § 8.139.410.12 and NMAC § 8.139.410.14, and his alleged failure to comply with the terms of the Decree. The undisputed facts are as follows: On January 1, 2016, Defendant implemented NMAC § 8.139.410.12 and NMAC § 8.139.410.14, which limit eligibility for food assistance through SNAP for certain beneficiaries, pursuant to federal regulations. (See Doc. 636-2 at 6). Federal law places special work requirements on a subgroup of SNAP participants, known as Able-Bodied Adults Without Dependents ("ABAWDs"). Under 7 C.F.R. § 273.24, after three months of receiving SNAP benefits, ABAWDs may be deemed ineligible to participate in the SNAP program, unless they fulfill specific work requirements, fall within certain exemptions and exceptions, or can show good cause for failing to comply with the requirements. 7 C.F.R. § 273.24(b) (ABAWDs "are not eligible to participate in the Food Stamp Program . . . if the individual received food stamps for more than three countable months during any three-year

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period . . . ."). Pursuant to NMAC § 8.139.410.4, eligibility criteria for whether an applicant can receive SNAP benefits beyond three months includes verifying whether the applicant is exempted from the work requirements or, if not exempt, if the applicant is fulfilling those work requirements.

In their Motion, Plaintiffs allege that the implementation of the new rule requires changes in the SNAP application process, and that Defendant has failed to implement these changes in accordance with the Decree. Because Defendant's actions jeopardize Plaintiffs' access to vital food assistance, Plaintiffs ask this Court to enjoin Defendant from implementing the new rules until he can do so in accordance with the Decree.

II. Standard of Review

To obtain a preliminary injunction under FED. R. CIV. P. 65, the moving party bears the burden of showing: (1) a substantial likelihood of success on the merits; (2) irreparable harm unless the injunction is issued; (3) the threatened injury outweighs the harm that the preliminary injunction may cause the opposing party; and (4) the injunction, if issued, will not adversely affect the public interest. Fed. Lands Legal Consortium ex rel. Robart Estate v. United States, 195 F.3d 1190, 1194 (10th Cir. 1999) (citing Chemical Weapons Working Group, Inc. v. United States Dep't of the Army, 111 F.3d 1485, 1489 (10th Cir.1997)). "As a preliminary injunction is an extraordinary remedy, the [requesting party's] right to relief must be clear and unequivocal." Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1246 (10th Cir. 2001) (citing SCFC ILC, Inc. v. Visa USA, Inc., 936 F.2d 1096, 1098 (10th Cir.1991)).

In some instances, the Court of Appeals for the Tenth Circuit has adopted a modified approach with regard to the first factor of whether the moving party has shown a substantial likelihood of success on the merits. Fed. Lands, 195 F.3d at 1194-95. Under this approach,

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where a movant has established the last three requirements for a preliminary injunction, the party may satisfy the first requirement of a substantial likelihood on the merits "by showing that questions going to the merits are so serious, substantial, difficult, and doubtful as to make the issue ripe for litigation and deserving of more deliberate investigation." Id. at 1195 (citing Walmer v. United States Dep't of Defense, 52 F.3d 851, 854 (10th Cir.1995)).

However, the Tenth Circuit has also identified three types of specifically disfavored preliminary injunctions: (1) preliminary injunctions that alter the status quo; (2) mandatory preliminary injunctions; and (3) preliminary injunctions that afford the movant all the relief that it could recover at the conclusion of a full trial on the merits. O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 977 (10th Cir. 2004). Such disfavored injunctions are subject to a heightened standard, and "'must be more closely scrutinized to assure that the exigencies of the case support the granting of a remedy that is extraordinary even in the normal course.'" Schrier v. Univ. Of Co., 427 F.3d 1253, 1259 (10th Cir. 2005) (citing O Centro, 389 F.3d at 975)).

Where the heightened standard apples, this Circuit's "less rigorous fair-ground-for-litigation standard should not be applied." Heideman v. S. Salt Lake City, 348 F.3d 1182, 1189 (10th Cir. 2003) (citing Sweeney v. Bane, 996 F.2d 1384, 1388 (2d Cir.1993)); Schrier, 427 F.3d at 1261. "Instead, a party seeking such an injunction must make a strong showing both with regard to the likelihood of success on the merits and with regard to the balance of the harms, and may not rely on our modified likelihood-of-success-on-the-merits standard." Schrier, 427 F.3d at 1261 (citing O Centro, 389 F.3d at 975-76). "By requiring this heightened showing, 'our aim is to minimize any injury that would not have occurred but for the court's intervention.'"

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Attorney Gen. of Oklahoma v. Tyson Foods, Inc., 565 F.3d 769, 776 (10th Cir. 2009) (citing RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1209 (10th Cir. 2009)).

III. Analysis

In support of their Motion, Plaintiffs state that Defendant has promulgated new conditions of eligibility for certain SNAP applicants in the form of ABAWD work requirements. Plaintiffs allege that these requirements are conditions of eligibility that must be implemented in Defendant's application processing practices, notice requirements, and other standard forms in accordance with the Decree. (Doc. 627 at 1-2). Plaintiffs argue that they are entitled to a preliminary injunction enjoining Defendant from implementing those new requirements because they have shown that: (1) they are substantially likely to prevail on the question of whether Defendant's application processing practices and standard forms violate federal law and the Decree; (2) the injunction is necessary to prevent the significant risk that class members will suffer the irreparable harm of losing food benefits for which they are eligible; (3) this irreparable harm outweighs any harm to Defendant as a result of the injunction; and (4) the public interest strongly favors enjoining Defendants from implementing the new work requirements until they can do so in accordance with the Decree. (Doc. 623 at 27-30; Doc. 642 at 11-16).

Defendants argue that Plaintiffs must satisfy a heightened standard in this case, because an injunction would disturb the status quo. Under that standard, Defendant maintains that it has promulgated the ABAWD work requirements in accordance with federal law. (Doc. 636 at 16). In addition, Defendant argues that any irreparable harm suffered by Plaintiffs is theoretical and speculative, does not outweigh the harm Defendant will suffer if it cannot implement the ABAWD program, and that the public interest favors allowing Defendant to implement a rule that is within its discretion to promulgate. (Id. at 13-18).

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Plaintiffs respond that the circumstances presented here do not necessitate a heightened standard for granting the requested relief. Plaintiffs argue that granting the injunction would not disturb the status quo as Defendant has stated that he is not currently counting months against ABAWD beneficiaries. Thus, according to Plaintiffs, a preliminary injunction would actually maintain the status quo. Because the Court finds that Plaintiffs have made a sufficient showing for a preliminary injunction, even under the heightened standard, the Court will not address this argument.

A. Substantial Likelihood of Success on the Merits

Plaintiffs argue that they have shown a substantial likelihood that they will prevail on the merits of this case because Defendant has...