Lightfoot v. District of Columbia

• Decision Date: 23 May 2006
• Docket Number: No. 05-7028.,05-7028.
• Citation: 448 F.3d 392
• Parties: Elizabeth LIGHTFOOT, et al., Appellees v. DISTRICT OF COLUMBIA, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

448 F.3d 392

Elizabeth LIGHTFOOT, et al., Appellees v. DISTRICT OF COLUMBIA, et al., Appellants.

No. 05-7028.

United States Court of Appeals, District of Columbia Circuit.

Argued February 10, 2006.

Decided May 23, 2006.

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Appeal from the United States District Court for the District of Columbia (No. 01cv01484).

James C. McKay, Jr. argued the cause for appellants. With him on the briefs were Robert J. Spagnoletti, Attorney General, Office of the Attorney General of the District of Columbia, and Edward E. Schwab, Deputy Attorney General.

Duncan N. Stevens argued the cause for appellees. With him on the brief were Charles F.B. McAleer, Alan I. Horowitz, Jeffrey S. Gutman and Lynn E. Cunningham. Robert J. Harlan, Jr. entered an appearance.

Before: GARLAND, Circuit Judge, and SILBERMAN and WILLIAMS, Senior Circuit Judges.

Opinion for the Court filed PER CURIAM.

Concurring opinion filed by Senior Circuit Judge SILBERMAN.

PER CURIAM.

The District of Columbia (and various D.C. government officials) appeals from a decision of the district court granting partial summary judgment to appellees, a class of former D.C. government employees whose disability compensation benefits have been terminated, suspended, or reduced. The court concluded that the benefit program's lack of written guidelines and published rules caused a violation of the Due Process Clause and the D.C. Administrative Procedure Act (DCAPA). The court reinstated benefits for class members and remanded to a D.C. agency to undertake rulemaking. Immediately after oral argument we granted a stay of the district court's reinstatement order. We reverse the judgment on both claims, vacate the reinstatement order, and direct a limited remand.

I

Plaintiffs challenge the procedural adequacy of the District of Columbia's employee disability compensation program (governed by Title 23 of the District of Columbia Government Comprehensive Merit Personnel Act (CMPA) of 1978)¹ — specifically, the circumstances under which class members lose benefits. Under the CMPA, District employees who are injured in the performance of their duties are entitled to monetary compensation, medical services and appliances, and vocational rehabilitation. The compensation levels depend on whether an employee's disability is partial or total, and is further based on a statutory schedule. After an employee is determined to be disabled, "[i]f the Mayor or his or designee has reason to believe a change of condition has occurred, the Mayor or his or her designee may modify the award of compensation." (Emphasis added). For purposes relevant to this suit, a "change of condition" obviously means a reduction or elimination of the condition that caused the disability, which of course is the governing statutory standard. A beneficiary displeased with the District's determination has thirty days to request a hearing before a Department of Employment Services disability compensation administrative law judge, and at the hearing, the ALJ must "receive such relevant evidence as the claimant adduces." The agency then must notify the beneficiary of the decision in writing within thirty days of the hearing. The beneficiary may file an application for review within thirty days of receipt of that decision with the director of the Department of Employment Services, who must notify the applicant of his or her decision in writing. The beneficiary, within thirty days of that decision, may then file an application for review with the D.C. Court of Appeals.

In their initial complaint, plaintiffs alleged that despite the CMPA's rather elaborate procedures, the program provided insufficient pre-deprivation process to beneficiaries whose benefits had been reduced or terminated under the statute. They alleged that the CMPA failed to provide pre-deprivation notice and an opportunity to respond, even in writing, to a benefits termination decision and also that the District's termination procedures were inadequate in their explanations of termination decisions and beneficiaries' appellate rights. Plaintiffs moved the following month for a preliminary injunction reinstating their benefits and enjoining the termination of those benefits without a more thorough pre-termination process.

In an October 2001 opinion, the district court recognized that under Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), appellees had a property interest in their continued receipt of disability benefits. The court went on to observe that the program's formal pre-termination procedures were less elaborate than those sanctioned in Mathews. The CMPA itself provided for no pre-termination "hearing," nor time frame within which a requested post-termination hearing had to be scheduled. The District asserted that, as a matter of policy (although unwritten), beneficiaries were given thirty days of continued benefits after receiving an initial termination notice. According to the District, during that period they could seek reconsideration by written submission and receive a decision within two or three weeks. Although the initial notice did not — at least initially — give an extensive explanation of the District's "reason to believe a change of condition has occurred," it did typically provide the physician's prognosis on which the District had relied. And according to the District, the notices advised beneficiaries of the thirty-day reconsideration period as well.

The district court expressed concern that the District's pre-termination procedure was not set forth in any formal general regulation or handbook, as opposed to in the individual notices. The court found the "looseness of the reconsideration process and the lack of any enforceable grace period" problematic. (Emphasis added). The district court thought it particularly troubling that even if beneficiaries received the thirty-day grace period during which they could request reconsideration, there was no guarantee that either a beneficiary's reconsideration request would be resolved during that period or that the grace period could be extended to allow for bureaucratic delay in responding to the reconsideration request. This, coupled with the District's alleged exclusive reliance on the findings of independent medical examiners (doctors retained by the District), rather than on those of treating physicians, led the district court to conclude that appellees were substantially likely to prevail on the merits. Nevertheless, the court denied the motion for a preliminary injunction after finding that the equitable factors weighed against such relief.

Plaintiffs amended their complaint to add the administrator of the disability compensation program (an independent contractor) as a defendant² and to add a claim alleging the District's violation of the D.C. Administrative Procedure Act (claim seven). Then, more than a year later, in January 2003, plaintiffs filed a third amended complaint modifying the DCAPA claim and substituting a new claim six alleging that the District's failure to set forth its procedures in written rules violated due process.

Appellees moved for partial summary judgment on claims six and seven. Like claims one through five, claim six is premised on 42 U.S.C. § 1983. Specifically, it asserts that "[d]efendants have failed to adopt written and consistently applied standards, policies and procedures governing the termination, suspension and modification of benefits in violation of the Due Process Clause." The DCAPA claim (claim seven) alleges that defendants violated that act by adopting policies, practices, and procedures regarding the termination, suspension, or modification of disability benefits without engaging in notice-and-comment rulemaking.

This time, in September 2004, the district court granted plaintiffs' motion, see Lightfoot v. District of Columbia, 339 F.Supp.2d 78 (D.D.C.2004); and the court denied the District's motion for reconsideration in January 2005, see Lightfoot v. District of Columbia, 355 F.Supp.2d 414 (D.D.C.2005). Observing that the issue presented by claim six was "purely legal" — "whether Due Process demands that notice and the potential for arbitrary decision-making requires that written policies and procedures exist to limit discretion and guide the termination, suspension or modification process" — the court concluded that "this largely unwritten system full of guesswork and innuendo fails to meet the strictures of Due Process." The court purported to decide only claim six — that the absence of more specific guidelines governing termination procedures violated due process, and not that the procedures actually employed did so. As to claim seven, the district court concluded that "[d]efendants' reliance on unwritten `best practices' and unpublished procedures to guide the Disability Compensation Program constitute[d] rule-making under the DCAPA" and was not authorized as an exception to notice-and-comment rulemaking for internal agency procedures.³

As noted, the district court remanded the case to the District for rulemaking and ordered that disability compensation benefits of all members of the plaintiff class be reinstated until individualized termination or modification determinations could be made under validly promulgated rules. The remand order further directed the District to "strongly consider" promulgating rules on eleven procedural issues that the court implicitly considered inadequately resolved.⁴ The court referred the question of possible retroactive relief related to claims six and seven to a magistrate judge for further proceedings.

Denying the District's motion for reconsideration, the court strongly objected to the District's characterization of the ordered relief as an injunction and insisted that "[t]he [c]ourt did not issue an injunction and did not analyze the case under the legal standards for an injunction." According to the district court, it had merely "void[ed]...