Perdue v. Gargano

• Decision Date: 22 March 2012
• Docket Number: No. 49S02–1107–PL–437.,49S02–1107–PL–437.
• Parties: Sheila PERDUE, et al., Appellants (Plaintiffs below), v. Michael A. GARGANO,1 et al., Appellees (Defendants below).
• Court: Indiana Supreme Court

964 N.E.2d 825

Sheila PERDUE, et al., Appellants (Plaintiffs below),

v.Michael A. GARGANO,1 et al., Appellees (Defendants below).

No. 49S02–1107–PL–437.

Supreme Court of Indiana.

March 22, 2012.

Gavin M. Rose, ACLU of Indiana, Jacquelyn Bowie Suess, Indianapolis, IN, Attorneys for Appellants.

Gregory F. Zoeller, Attorney General of Indiana, David L. Steiner, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellees.

On Transfer from the Indiana Court of Appeals, No. 49A02–1003–PL–250

DICKSON, Justice.

In this challenge to the Indiana Family and Social Services Administration's (FSSA) automated system of processing claims for Medicaid, Food Stamps, and Temporary Assistance to Needy Families (TANF) benefits, we reverse the judgment of the trial court and hold that the FSSA's denial notices are insufficiently explanatory but that the FSSA may deny an application for Food Stamp benefits when the applicant fails to cooperate in the eligibility determination process. We affirm in part the trial court's grant of Perdue's motion for summary judgment and hold that Sheila Perdue is entitled to reasonable accommodations in applying for benefits but that this does not necessarily require providing a caseworker or case management services.

The plaintiffs brought this class action complaint seeking declaratory and injunctive relief alleging violations of their federal statutory and constitutional rights. The plaintiffs consist of three plaintiff-classes (Class A, Sub-class A, and Class C) and Sheila Perdue individually. The plaintiffs in Class A and Sub-class A allege that the notices used by the FSSA to inform applicants ² for Medicaid, Food Stamp, and TANF benefits of an adverse determination of eligibility violate their rights under the Due Process Clause of the Fourteenth Amendment to the United States Constitution and federal Medicaid regulations.³ These plaintiffs contend that the adverse action notices do not provide a sufficient explanation of the reasons for the FSSA's eligibility determination. The plaintiffs in Class C allege that the FSSA violates federal Food Stamp law when it denies plaintiffs' applications for benefits based upon a determination that the applicant has “failed to cooperate” in the application process.⁴ These plaintiffs contend that federal law only permits an applicant to be denied benefits for affirmatively “refusing to cooperate.” Alternatively, the plaintiffs in Class C claim that, even if the FSSA's grounds for determining that the plaintiffs have “failed to cooperate” in the application process are sufficient to support a determination that the plaintiffs have “refused to cooperate,” the FSSA has violated the due process rights of the plaintiffs by providing the incorrect reason for the agency's adverse eligibility determination. Lastly, Sheila Perdue claims that, in discontinuing her Food Stamp and Medicaid benefits, the FSSA violated her rights under the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. §§ 12101– 12300, and Section 794 of the Rehabilitation Act of 1973 (“RA”), 29 U.S.C. § 794, by failing to accommodate her disability as required by the Acts.⁵

In the trial court, the plaintiffs moved for summary judgment as to all three claims. The State filed a response requesting that the trial court deny summary judgment to the plaintiffs and instead enter summary judgment in favor of the State as to all three counts in accordance with Indiana Trial Rule 56(B).⁶ The trial court denied the plaintiffs' motion as to Class A and Subclass A finding that due process was satisfied by the FSSA's “multi-step process for eligibility determination” and entered summary judgment for the State. Findings of Fact, Conclusions of Law, and Summary Judgment, Appellants' App'x at 29, 37. As to Class C, the trial court granted summary judgment to the plaintiffs, concluding that federal Food Stamp law only permits a denial of benefits where the applicant has “refused to cooperate.” See id. at 30–31, 37. Accordingly, the trial court permanently enjoined the FSSA from “terminating, denying, or discontinuing the Food Stamp applications or benefits of the members of Class C based on an alleged ‘failure to cooperate’ with the agency.” Id. at 37–38. Finally, as to Sheila Perdue, the trial court granted her motion for summary judgment, concluding that the FSSA had failed to accommodate her disabilities in violation of the ADA and the RA. Id. at 36–37. The court “permanently enjoined [the FSSA] from terminating, denying, or discontinuing the Medicaid, Food Stamp, and TANF applications or benefits of Sheila Perdue based on an alleged ‘failure to cooperate’ with the agency unless and until the agency provides [her] with a caseworker or case management services adequate to ensure that [her] individual disabilities are accommodated by the agency.” Id. at 38. The plaintiffs filed an appeal as to Class A and Sub-class A, and the State cross-appealed as to Class C and Sheila Perdue. The Court of Appeals reversed the trial court as to Class A and Sub–Class A concluding that due process entitles applicants to notice of the “specific reason for [the FSSA']s denial decision” and affirmed the trial court as to the claims of Class C and Sheila Perdue finding that the trial court had merely ordered the FSSA “to follow the law.” Perdue v. Murphy, 938 N.E.2d 766, 775–76, 778 (Ind.Ct.App.2010). We granted transfer and now reverse the trial court as to Class A and Sub–Class A and as to Class C, and also affirm in part the trial court as to Sheila Perdue.

The parties do not dispute the underlying facts of this case, which are summarized herein. The FSSA is charged with, among other things, administering the Medicaid, Food Stamp, and TANF programs for the State of Indiana. Each of these programs provide welfare benefits to individuals and families in need of financial assistance in Indiana. To be deemed eligible for a particular program, an individual must be certified as eligible by the FSSA and recertified either annually or semi-annually depending on the particular program. The processes for initial certification and recertification are virtually identical, though recertification generally requires less information from the applicant.

The first step in the certification process is an interview between an FSSA caseworker and an applicant, which is scheduled by the FSSA's computer system. The interview is conducted either over the telephone or in-person, depending on the county where the applicant resides. During the interview, the caseworker and the applicant explore potential areas of eligibility for particular programs and discuss the types of information and verification documents necessary to establish eligibility. The applicant then receives State Form 2032 entitled “Pending Verifications for Applicants/Recipients” specifying the particular documentation that is required by the agency to establish eligibility.⁷ Form 2032 lists several categories of information (e.g., “Age, Citizenship, Immigration Status”; “Relationship/Identity”; “Bank Accounts/Financial Holdings”) for which the FSSA might request documentation. Each category provides examples of the types of documents that an applicant can submit as verification of the required information. Next to each listed category is a box that can be checked to indicate the specific categories of documentation required to establish a particular applicant's eligibility. In some cases the caseworker who conducts the interview will include additional hand-written notes in the margins indicating particular documents needed for a determination. Form 2032 expressly states that applicants are permitted to submit documents other than those specifically requested that provide the same information. It also directs applicants to call their interviewer if they have questions and provides the interviewer's name and contact information.

If the applicant fails to submit all of the necessary documentation within the designated time period, the application for benefits is denied or, in the case of recertification, the applicant's benefits are discontinued.⁸ Once such a determination has been made, the FSSA sends the applicant a notice of adverse action informing the applicant of the agency's decision. The notice contains the name of the applicant, the program name for which benefits were sought, the date of the application, and the code(s) with the corresponding standardized explanation of the reason(s) for the adverse action (“reason codes”) (e.g., “Failure to cooperate in verifying income”; “Failure to cooperate in verifying the value of resources”). The notice does not provide any additional explanation of the reasons for the denial. At the top of the notice is a toll-free 1–800 telephone number and the mailing address for the FSSA.

We review an appeal of a trial court's ruling on a motion for summary judgment using the same standard applicable to the trial court. Wilson v. Isaacs, 929 N.E.2d 200, 202 (Ind.2010). Therefore, summary judgment is appropriate only if the designated evidence reveals “no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Ind. Trial Rule 56(C). Appellate review of summary judgment is limited to evidence designated to the trial court. Ind. Trial Rule 56(H). All facts and reasonable inferences drawn from the evidence designated by the parties must be construed in the light most favorable to the non-moving party. Mangold ex rel. Mangold v. Ind. Dept. of Natural Res., 756 N.E.2d 970, 973 (Ind.2001). We do not defer to the trial court's determination of the law. Wilson, 929 N.E.2d at 202–03 (citing Freidline v. Shelby Ins. Co., 774 N.E.2d 37, 39 (Ind.2002)).

1. Due Process and Adverse Action Notices

The plaintiffs in Class A and Sub-class A argue that the notices used by the FSSA to inform class member-applicants that they have been denied Medicaid, Food Stamp, or TANF program...