Kobe v. Keck, 15-1419

• Decision Date: 15 December 2016
• Docket Number: No. 15-1419,15-1419
• Parties: KOBE; MARK, Plaintiffs - Appellants, and JOHN, Plaintiff, v. NIKKI HALEY, in her official capacity as Governor and Chairman of the South Carolina Budget and Control Board; CHRISTIAN SOURA, in his capacity as the Director of the South Carolina Department of Health and Human Services: ANTHONY KECK, in his capacity as the former Director of the South Carolina Department of Health and Human Services; BEVERLY BUSCEMI, in her official capacity as Director of the South Carolina Department of Disabilities and Special Needs; RICHARD HUNTRESS, in his capacity as Commissioner of the South Carolina Department of Disabilities and Special Needs; KATHI LACY; THOMAS P. WARING; JACOB CHOREY, in their capacities as employees of the South Carolina Department of Disabilities and Special Needs; MARY LEITNER, in her capacity as the Director of the Richland Lexington Disabilities and Special Needs Board; JUDY JOHNSON, in her capacity as the Director of the Babcock Center; DANIEL COOPER; CONVERSE A. CHELLIS, III, HUGH LEATHERMAN; RICHARD ECKSTROM; CURTIS LOFTIS; BRIAN WHITE, in their capacities as former members of the South Carolina Budget and Control Board; EMMA FORKNER, in her capacity as the former Director of the South Carolina Department of Health and Human Services; EUGENE A. LAURENT, former Interim Director of the South Carolina Department of Disabilities and Special Needs; STANLEY BUTKUS, former Director of the South Carolina Department of Disabilities and Special Needs; UNNAMED ACTORS ASSOCIATED WITH THE BABCOCK CENTER; THE BABCOCK CENTER, Defendants - Appellees, and CYNTHIA MANN, Deputy Administrator and Director of the Center for Medicaid, CHIP, and Survey & Certification, CMS; ELEANOR KITZMAN, in her official capacity as the Executive Director of the State Budget and Control Board; MCCONNELL F. GLENN, in his official capacity as the President Pro Tempore of the South Carolina Senate; ROBERT W. HARRELL, JR., in his official capacity as the Speaker of the South Carolina House of Representatives; MARK SANFORD, in his capacity as a former member of the South Carolina Budget and Control Board, Defendants.
• Court: U.S. Court of Appeals — Fourth Circuit

KOBE; MARK, Plaintiffs - Appellants,andJOHN, Plaintiff, v. NIKKI HALEY, in her official capacity as Governor andChairman of the South Carolina Budget and Control Board;CHRISTIAN SOURA, in his capacity as the Director of theSouth Carolina Department of Health and Human Services:ANTHONY KECK, in his capacity as the former Director of theSouth Carolina Department of Health and Human Services;BEVERLY BUSCEMI, in her official capacity as Director ofthe South Carolina Department of Disabilities and SpecialNeeds; RICHARD HUNTRESS, in his capacity as Commissioner ofthe South Carolina Department of Disabilities and SpecialNeeds; KATHI LACY; THOMAS P. WARING; JACOB CHOREY, in theircapacities as employees of the South Carolina Department ofDisabilities and Special Needs; MARY LEITNER, in hercapacity as the Director of the Richland LexingtonDisabilities and Special Needs Board; JUDY JOHNSON, in hercapacity as the Director of the Babcock Center;DANIEL COOPER; CONVERSE A. CHELLIS, III, HUGH LEATHERMAN;RICHARD ECKSTROM; CURTIS LOFTIS; BRIAN WHITE, in their capacitiesas former members of the South Carolina Budget and ControlBoard; EMMA FORKNER, in her capacity as the former Directorof the South Carolina Department of Health and HumanServices; EUGENE A. LAURENT, former Interim Director of theSouth Carolina Department of Disabilities and SpecialNeeds; STANLEY BUTKUS, former Director of the SouthCarolina Department of Disabilities and Special Needs;UNNAMED ACTORS ASSOCIATED WITH THE BABCOCK CENTER;THE BABCOCK CENTER, Defendants - Appellees,andCYNTHIA MANN, Deputy Administrator and Director of theCenter for Medicaid, CHIP, and Survey & Certification, CMS;ELEANOR KITZMAN, in her official capacity as the ExecutiveDirector of the State Budget and Control Board;MCCONNELL F. GLENN, in his official capacity asthe President Pro Tempore of the South Carolina Senate;ROBERT W. HARRELL, JR., in his official capacity as theSpeaker of the South Carolina House of Representatives;MARK SANFORD, in his capacity as a former member ofthe South Carolina Budget and Control Board, Defendants.

No. 15-1419

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

Argued: September 22, 2016

December 15, 2016

UNPUBLISHED

Appeal from the United States District Court for the District of South Carolina, at Columbia. Margaret B. Seymour, Senior District Judge. (3:11-cv-01146-MBS)

Before TRAXLER, DIAZ, and THACKER, Circuit Judges.

Affirmed in part, vacated in part, and remanded by unpublished per curiam opinion.

ARGUED: Patricia L. Harrison, PATRICIA LOGAN HARRISON LAW OFFICE, Columbia, South Carolina, for Appellants. Damon C. Wlodarczyk, RILEY, POPE & LANEY, LLC, Columbia, South Carolina; Vance J. Bettis, GIGNILLIAT, SAVITZ & BETTIS, Columbia, South Carolina, for Appellees. ON BRIEF: William H. Davidson, II, Kenneth P. Woodington, DAVIDSON & LINDEMANN, P.A., Columbia, South Carolina, for Appellees Buscemi, Butkus, Chorey, Huntress, Lacy, Laurent & Waring. Patrick J. Frawley, DAVIS FRAWLEY, LLC, Lexington, South Carolina, for Appellee Leitner. Joel W. Collins, Jr., Christian Stegmaier, Meghan Hazelwood Hall,COLLINS & LACY, P.C., Columbia, South Carolina, for Appellees Babcock Center, Unnamed Actors Associated with the Babcock Center & Johnson. Robin L. Jackson, SENN LEGAL, LLC, Charleston, South Carolina, for Appellees Chellis & Cooper. Leslie A. Cotter, Jr., Sheila M. Bias, RICHARDSON, PLOWDEN & ROBINSON, P.A., Columbia, South Carolina, for Appellees Leatherman & Eckstrom.

Unpublished opinions are not binding precedent in this circuit.

PER CURIAM:

"Kobe" and "Mark" ("Appellants")¹ appeal district court orders dismissing certain defendants and then granting summary judgment to others in an action primarily pertaining to the administration of a South Carolina Medicaid waiver program. Because we conclude that the district court erred in determining that no justiciable issues remain in this case, we vacate the grant of summary judgment against Appellants on Counts One through Seven. We also vacate the dismissal of Counts One and Two against Governor Nikki Haley in her official capacity. Otherwise, we affirm.

I.

The Medicaid program, 42 U.S.C.A. §§ 1396, 1396a-v, established as part of the Social Security Act in 1965, "is a cooperative federal-state public assistance program that makes federal funds available to states electing to furnish medical services to certain impoverished individuals." Mowbray v. Kozlowski, 914 F.2d 593, 595 (4th Cir. 1990); see also Harris v. McRae, 448 U.S. 297, 301 (1980). The state agency responsible for administering and supervising Medicaid in South Carolina isthe South Carolina Department of Health and Human Services ("DHHS"). See Doe v. Kidd, 501 F.3d 348, 351 (4th Cir. 2007). DHHS, in turn, contracts with the South Carolina Department of Disabilities and Special Needs ("DDSN") to operate South Carolina's treatment and training programs for people with intellectual and related disabilities. DDSN is a seven-member commission that is appointed by the Governor with the advice and consent of the Senate. DDSN contracts with local Disabilities and Special Needs Boards ("DSN Boards"), which contract with private entities to provide Medicaid services.

The Richland Lexington Disabilities and Special Needs Board ("Rich/Lex") is "the administrative, planning, coordinating, and service delivery body" for DDSN services that are provided in South Carolina's Richland and Lexington Counties. S.C. Code § 44-20-385. It is funded by DDSN and follows DHHS's and DDSN's policies and procedures.

At issue in this case is the Medicaid waiver program created by 42 U.S.C. § 1396n(c), which allows states to waive the requirement that aid recipients must live in an institution to receive particular Medicaid services. This case concerns home and community-based services that South Carolina provides through a Medicaid waiver program for eligible persons with disabilities so that they may live in the community and avoidinstitutionalization (the "ID/RD waiver").² As is relevant in this case, among the several types of services provided through the ID/RD waiver are Adult Day Health Care services ("ADHC"), respite care, and equipment and assistive technology. ADHC provides individuals with medical or therapeutic care as well as social and recreational events and meals. Respite care is "[s]ervice[] provided to individuals unable to care for themselves [that is] furnished on a short-term basis because of the absence or need for relief of those persons normally providing the care." J.A. 2894.

Administration of the ID/RD waiver services generally involves a service coordinator for each recipient, typically at the county level. The service coordinator's role is to evaluate the individual's condition and needs, including information from that person's doctors and other medical professionals, and to work with the individual's family members in order to develop a plan of care. Service coordinators may approve some servicesthemselves, but as to other services, they only make a recommendation to DDSN, which decides whether to approve them. See generally 42 C.F.R. § 440.169.

Appellants contend that for many years, DDSN has failed to spend monies appropriated by the General Assembly for the services the appropriations were intended to fund. Appellants maintain that the problem has been compounded because the failure to spend the appropriated funds caused them to miss out on the federal matching funds that spending the funds would have generated.

In late 2009, several events occurred that Appellants point to as causing a reduction of services provided under the ID/RD waiver, purportedly for budgetary reasons.³ After the General Assembly adjourned in 2009, DDSN announced that the Centers for Medicare and Medicaid Services ("CMS") had approved requested changes to the ID/RD Waiver, effective January 1, 2010. The changes included the elimination of physical therapy, occupational therapy, and speech and language services "since they [we]re covered under regular Medicaid." J.A. 2607. Also, respite hours were limited to 68 hours per month unless one ofthree specific conditions were present, in which case, the client could receive up to 240 hours per month upon DDSN approval.⁴

Appellants contend that although government officials represented that the waiver changes were motivated by budget concerns, in fact the changes increased costs significantly. They further maintain that notwithstanding the claims of budgetary restraints, DHHS actually had more funding than it even needed to avoid reducing the services it had previously been providing.

The waiver amendments were not the only cause of reductions in DDSN's expenditures on ID/RD waiver services. In December 2010, DDSN instructed the four local service coordinators in Richland and Lexington Counties to complete new assessments for ADHC service recipients in light of the requirement that ADHC services are available only if the participants either have a medically complex condition or require extensive assistance with functional activities or tasks (the "medically complex/extensive assistance requirement").⁵ Rich/Lex, in turn, informed affected consumers of the impending reassessments.⁶

Appellants allege that the effort to reduce expenditures on ID/RD waiver services was part of a plan to force them to attend Work Activity Centers ("WACs") operated by local DSN Boards. A WAC is "[a] workshop having an identifiable program designed to provide therapeutic activities for workers with intellectual disability whose physical or mental impairment is so severe as to interfere with normal productive capacity." S.C. Code Regs.88-405(K). Appellants contend that having more service recipients attend WACs financially benefited DDSN as well as local DSN Boards. They emphasize that the profits generated by WACs are paid to DDSN and may be spent at DDSN's discretion without oversight by its governing board or the General Assembly. Meanwhile, Appellants...