Perdue v. Murphy
| Decision Date | 15 February 2011 |
| Docket Number | No. 49A02-1003-PL-250.,49A02-1003-PL-250. |
| Citation | 938 N.E.2d 766 |
| Court | Indiana Appellate Court |
| Parties | Sheila PERDUE, et al., Appellants-Plaintiffs, v. Anne W. MURPHY, in her official capacity as Secretary of the Indiana Family and Social Services Administration, et al., Appellees-Defendants. |
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.
The ACLU of Indiana ("the ACLU") brought a class action complaint, pursuant to 42 U.S.C. § 1983, to enjoin the practice of the Indiana Family and Social Services Administration ("the FSSA") to issue adverse action notices pertaining to Medicaid, Temporary Assistance to Needy Families ("TANF"), and Supplemental Nutrition Assistance Program ("SNAP") (collectively, "public benefits programs"), which notices generically alleged a failure to cooperate but did not specify which verification document was missing (according to FSSA records). The complaint further alleged that, with respect to SNAP, the FSSA failed to comply with the federally-mandated "refusal to cooperate" standard, instead implementing a "failure to cooperate" standard. With regard to Sheila Perdue, it was alleged that the FSSA violated the Americans with Disabilities Act of 1990 ("the ADA") and the Rehabilitation Act of 1973, 29 U.S.C. § 701, et seq., when Perdue was automatically scheduled for a telephonic interview notwithstanding her known hearing impairment and was subsequently denied benefits for "failure to cooperate." Finally, the complaint sought costs and attorney's fees pursuant to 42 U.S.C. § 1988.
Upon cross-motions for summary judgment, the trial court found that, despite the lack of specificity in an adverse action notice in particular, the FSSA procedures (as a whole) satisfied procedural due process requirements and FSSA was entitled to summary judgment in that regard. However, the trial court issued a declaratory judgment and injunction against the FSSA on two bases: that the FSSA had, in violation of federal law governing SNAP, utilized a "failure to cooperate" standard as opposed to a "refusal to cooperate" standard, and had violated Perdue's rights under the ADA and the co-extensive provisions of the Rehabilitation Act.
The certified classes of persons applying for or receiving public benefits ("the Recipients") appeal the denial of relief regarding notification practices; the FSSA cross-appeals, challenging an injunction to the FSSA to comply with federal SNAP regulations and to refrain from terminating Perdue's benefits absent accommodation for her disability. We affirm in part, reverse in part, and remand with instructions to enter summary judgment for the Recipients.1
The Recipients present the issue of whether they, as opposed to the FSSA, are entitled to summary judgment because the FSSA notification practices denied them procedural due process. On cross-appeal, the FSSA presents the issue of whether the trial court erroneously granted injunctive relief.
The FSSA is responsible for public benefits programs in Indiana. This case arises from the privatization of employee functions traditionally entrusted to the FSSA. Two main changes ensued: the elimination of individually-assigned caseworkers and a drastic reduction of paper records.
In 2006 or 2007, the FSSA entered into a contract with private organizations, including IBM and Affiliated Computer Systems ("ACS"), whereby the contractors would assume responsibility for much of the daily operations of certain welfare programs, including SNAP, Medicaid, and TANF. On March 19, 2007, approximately 70% of FSSA employees became ACS employees.2 As of May 19, 2008, approximately fifty-nine counties had transitioned into the new system. See Perdue v. Murphy, 915 N.E.2d 498, 500 (Ind.Ct.App.2009).
Concurrent with this "privatization," a "modernization" process was implemented. "Modernization" included changes in the application process to include increased use of computers and the scanning of documents instead of maintaining paper documents. On October 29, 2007, twelve north central Indiana counties were "rolled out" into a "modernized" system. This was followed by an additional twenty-seven counties in western and southeastern Indiana being "rolled out" on March 24, 2008, and an additional twenty counties in southwestern and northeastern Indiana being "rolled out" on May 19, 2008.
For applicants and recipients in the "modernized" counties, there would no longer be an individually-assigned caseworker.3 Instead, there was a regional service center where certain types of applications might be taken or address changes might be made. In some regions, the service centers included a call center and a document imaging center (where documents sent by applicants or recipients could be scanned and "attached" to the electronic case file).
An individual seeking public benefits in Indiana must be "certified" as eligible and, if deemed eligible, must be "recertified" as eligible either annually or semi-annually (depending upon the particular program). The first step is an interview between a caseworker and a client, which is scheduled by the agency's computer system. The interview may occur in-person or telephonically, with a trend toward telephonic interviewing. In the "modernized" areas of Indiana, clients are simply sent a notice scheduling a telephonic interview. A client who fails to "appear" is sent a notice of missed interview, after which SNAP benefits cease or, with respect to Medicaid and TANF, a notice of adverse action is sent. If the client fails to reschedule withinthe designated time period, he or she is deemed ineligible for benefits.
Following the initial interview, the client is sent State Form 2032 entitled "Pending Verifications for Applicants/Recipients." Form 2032 includes boxes to be checked regarding the documentation to be provided by the client in the eligibility process (for example, Residence, Shelter, Utility Expense). Clients are advised to place their Social Security numbers on each document. An agency employee scans each document received, classifying it by using printed barcodes or other identifying characteristics, such as a case number or Social Security number. It is estimated that 1.2% of the total documents received remain "un-indexed."
When an adverse decision is made with respect to certification or recertification, the agency assigns a three-digit reason code. These have included such reasons as failure to cooperate in establishing eligibility, failure to cooperate in verifying income, failure to cooperate in verifying the value of resources, failure to verify Indiana residency, failure to cooperate in verifying assistance group composition, and failure to submit medical information. Depending upon the benefit program, other reasons may apply, such as failure to complete a personal interview and failure to return a signed redetermination form.4
An individual who has received an adverse decision with respect to benefits receives a denial letter which may state:
(Ex. 8, App.265.) The notices do not necessarily specify which information remains unverified or which document is missing.
On March 26, 2008, the instant Verified Class Action Complaint for Declaratory and Injunctive Relief was filed by the ACLU. The first amended complaint was filed on May 16, 2008. The parties stipulated to certain classes. Class A (represented by all plaintiffs) is defined as:
Any and all individuals, families, and/or households in Indiana who are denied from or will be denied from, or have been terminated from or will be terminated from the Medicaid program, the Food Stamp program, and/or the TANF program because the Indiana Family and Social Services Administration has determined or will determine that the individual, family, and/or household should be denied from and/or terminated from the Medicaid program, the Food Stamp program, and/or the TANF program for any of [certain] reasons.
Sub-class A consists of only those members of Class A who were denied from or will be denied from, or have been terminated from or will be terminated from, the Medicaid program. Class C consists of individuals who are denied or terminated from the SNAP program. It is represented by Kenneth Zachary. The certification of Class B was contested, the trial court denied certification, the decision was affirmed on appeal, on remand the plaintiffs withdrew the request, and ultimately, the disability discrimination claim proceeded to judgment on behalf of Perdue individually.
After cross-motions for summary judgment, the trial court issued its Findings of Fact, Conclusions of Law, and Judgment on March 1, 2009, entering summary judgment in favor of FSSA on the claims raised by Class A and Sub-class A and entering judgments for injunctive and declaratory relief in favor of the plaintiffs of Class C and in favor of Perdue (upon her individual disability discrimination claim). In relevant part, the order provided:
Because the clients are given very specific notice of what is needed to establish eligibility for the agency's welfare programs, the agency's eligibility determination process, as a whole, is adequate and "reasonably calculated ... to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Central Hanover Bank & Trust, 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950). The notice that all applicants of welfare benefits are provided in this case is sufficient under the Constitution.
(Tr. 29.) (emphasis added.)
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