John B. v. Goetz

• Decision Date: 30 November 2010
• Docket Number: No. 09-6145,09-6145
• Citation: 626 F.3d 356
• Parties: JOHN B., et al., Plaintiffs-Appellees, v. Dave GOETZ, Commissioner, Tennessee Department of Finance and Administration; Darin Gordon, Deputy Commissioner, Bureau of TennCare; Viola Miller, Commissioner, Tennessee Department of Children's Services, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

626 F.3d 356 JOHN B., et al., Plaintiffs-Appellees, v. Dave GOETZ, Commissioner, Tennessee Department of Finance and Administration; Darin Gordon, Deputy Commissioner, Bureau of TennCare; Viola Miller, Commissioner, Tennessee Department of Children's Services, Defendants-Appellants. No. 09-6145. United States Court of Appeals, Sixth Circuit. Argued: April 27, 2010. Decided and Filed: Nov. 30, 2010.

ARGUED: Michael W. Kirk, Cooper & Kirk, PLLC, Washington, D.C., for Appellants. Andrew R. Dunlap, Kirkland & Ellis LLP, New York, New York, for Appellees. ON BRIEF: Michael W. Kirk, Charles J. Cooper, Brian S. Koukoutchos, Derek L. Shaffer, Cooper & Kirk, PLLC, Washington, D.C., Robert E. Cooper, Jr., Linda A. Ross, Office of the Attorney General, State of Tennessee, Nashville, Tennessee, for Appellants. Andrew R. Dunlap, Katherine L. McDaniel, Kirkland & Ellis LLP, New York, New York, Michele M. Johnson, G. Gordon Bonnyman, Jr., Tennessee Justice Center, Nashville, Tennessee, for Appellees.

Before: GIBBONS, ROGERS, and KETHLEDGE, Circuit Judges.

OPINION

PER CURIAM.¹

This appeal arises from the district court's denial of defendants' motion to vacatea consent decree entered in a 1998 class-action challenge to Tennessee's managed care program, TennCare, under the Medicaid Act. Plaintiffs alleged that defendants, Tennessee officials charged with implementing TennCare, failed to provide early and periodic screening, diagnosis and treatment (EPSDT) services in violation of the Medicaid Act, and the parties' consent decree imposes systemic remedies for these alleged violations. Defendants argue that the consent decree must be vacated under Federal Rule of Civil Procedure 60(b) because this court's intervening decisions render such systemic remedies unenforceable. Defendants also request reassignment of the case. We decline to vacate the consent decree in its entirety, but we vacate a portion of the consent decree in light of intervening decisions, and we remand the case for reassignment and further proceedings.

I.

In 1998, plaintiffs filed this 42 U.S.C. § 1983 class-action suit "on behalf of the more than half million children throughout Tennessee who depend on TennCare for essential medical and mental health services." The case was originally assigned to Judge John T. Nixon. Plaintiffs alleged that they were individually denied care and that TennCare is systemically deficient in providing EPSDT services, information about those services, and adoption assistance. Plaintiffs' claims were primarily based on Medicaid's EPSDT provision, 42 U.S.C. § 1396a(a)(43), which states that

A state plan for medical assistance must ... provide for

(A) informing all persons in the State who are under the age of 21 and who have been determined to be eligible for medical assistance including services described in section 1396d(a)(4)(B) of this title, of the availability of early and periodic screening, diagnostic, and treatment services as described in section 1396d(r) of this title and the need for age-appropriate immunizations against vaccine-preventable diseases,

(B) providing or arranging for the provision of such screening services in all cases where they are requested,

(C) arranging for (directly or through referral to appropriate agencies, organizations, or individuals) corrective treatment the need for which is disclosed by such child health screening services, and

(D) reporting to the Secretary ... [particular] information relating to early and periodic screening, diagnostic, and treatment services provided under the plan during each fiscal year.

The parties negotiated a consent decree and the district court accepted that decree in May of 2000. The consent decree requires defendants to provide screening, diagnosis, and treatment services; specifies the scope of those services; requires coordinating EPSDT and other services; and establishes monitors for compliance. One consent decree provision requires geographic comparability in the availability of services under 42 U.S.C. § 1396a(a)(30). Another provision states that, "[w]here a specific residential placement is recommended [for treatment], and there is a waiting period for such placement, during the interim [a managed care organization] ... may not simply place the child on a wait listing for the specific residential placement." The decree permits "[e]ither party [to] seek modification ... as permitted by existing law," and specifically states that

This consent decree is premised upon the assumption that the EPSDT requirementsof 42 U.S.C. § 1396a(a)(43)and 1396d(r), and 42 U.S.C. §§ 671(a)(16) and 671(1) and (5) of the Adoption Assistance Act are enforceable in an action under 42 U.S.C. § 1983. Defendants do not waive any right to seek modification of this consent decree if controlling preceden [t] establishes a lack of § 1983 enforceability as to any of these provisions.

In December of 2001, the district court determined that defendants were not in compliance with the consent decree and EPSDT requirements, and appointed a special master to assist the parties in addressing TennCare's deficiencies. In February of 2006, after the defendants alleged that Judge Nixon had engaged in improper ex parte communications with the special master, Judge Nixon voluntarily recused himself and the case was reassigned to Judge William J. Haynes, Jr. In March of 2006, Judge Haynes relieved the special master of his special master's duties, but retained the special master as a technical advisor under the district court's inherent authority and barred inquiry into the special master's ex parte communications with Judge Nixon. Defendants moved the district court to reconsider this ruling, primarily arguing that the special master's appointment as technical advisor was inappropriate given the allegations of improper ex parte communications and the court's ruling that the defendants could not investigate these communications. Defendants also noted that relief beyond that granted in the consent decree "could not be predicated, even in theory, upon any violations of underlying EPSDT law because recent jurisprudence from the Supreme Court makes clear that the Medicaid statute in this context does not confer a right that is privately enforceable by the beneficiaries." To support this argument, defendants cited Gonzaga University v. Doe, 536 U.S. 273, 282, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002), in which the Supreme Court held that "it is rights, not the broader or vaguer 'benefits' or 'interests,' that may be enforced under the authority of [§ 1983]." Therefore that statute is enforceable under § 1983 only if "Congress intended to confer individual rights upon a class of beneficiaries." Id. at 285, 122 S.Ct. 2268.

In a hearing on April 17, 2006, the district court denied defendants' motion for reconsideration and stated that appointing the former special master as technical advisor avoided "los[ing] the benefit of [his] extensive study and review of the matters." The district court rejected defendants' Gonzaga-based argument because defendants had not analyzed Gonzaga in their filing and the Sixth Circuit had not applied Gonzaga to the Medicaid Act. The district court also noted that a motion under Federal Rule of Civil Procedure 60(b) was the appropriate method for a Gonzaga-based challenge to the consent decree, but that defendants had failed to make a Rule 60(b) motion and that such a motion would be untimely at that point, more than one year after Gonzaga was decided.

In July of 2006, this court applied Gonzaga to decide a § 1983 challenge to Michigan's compliance with EPSDT provisions in Westside Mothers v. Olszewski, 454 F.3d 532 (6th Cir.2006) ( Westside Mothers II ). In Westside Mothers II, plaintiffs claimed that the state had violated the Medicaid Act by

(1) refusing to provide, and not requiring participating HMOs to provide, the comprehensive examinations required by 42 U.S.C. §§ 1396a(a)(43), 1396d(r)(1) and 42 C.F.R. § 441.57; (2) not requiring participating HMOs to provide the necessary health care, diagnostic services, and treatment required by 42 U.S.C. § 1396d(r)(5); (3) not effectivelyinforming plaintiffs of the existence of the screening and treatment services, as required by 42 U.S.C. § 1396a(a)(43); (4) failing to provide plaintiffs the transportation and scheduling help needed to take advantage of the screening and treatment services, as required by 42 U.S.C. § 1396a(a)(43)(B) and 42 C.F.R. § 441.62; and (5) developing a Medicaid program that lacks the capacity to deliver to eligible children the care required by 42 U.S.C. §§ 1396a(a)(8), 1396a(a)(30)(A), and 1396u-2(b)(5).

Id. at 536. We affirmed the district court's conclusion that plaintiffs had failed to state a claim upon which relief could be granted for defendants' "alleged failure ... to ensure the actual provision of, or arrangement for, medical services." Id. at 539-41. Although states must "provide for making medical assistance available," 42 U.S.C. § 1396a(a)(10), and "provide that ... medical assistance ... be furnished with reasonable promptness to all eligible individuals," 42 U.S.C. § 1396a(a)(8), we held that a state's obligation is only to pay for services actually rendered, not ensure the reasonably prompt provision of services, because the Medicaid Act defines "medical assistance" as "payment of part or all of the cost of the [enumerated] services," 42 U.S.C. § 1396d(a).²

Id. at 540 (insertion in original). We also dismissed plaintiffs' claim that would require the State to ensure comparable service availability because the underlying provision, 42 U.S.C. § 1396a(a)(30), was not privately enforceable under § 1983. Id. at 541-43. However, we also held that plaintiffs' allegation that defendants " 'refused or failed to effectively inform Plaintiffs and their caretakers of the existence of [EPSDT services]' " stated a claim for relief for violation of 42 U.S.C. § 1396a(a)(43). Id. at 543-44.

In November of 2006, five...