Poindexter v. State ex rel. Dept., 4-05-0709.
| Decision Date | 12 December 2006 |
| Docket Number | No. 4-05-0709.,4-05-0709. |
| Parties | Robert N. POINDEXTER, Mirl W. Whitaker, Maurice S. Hardy, Virginia T. McCulley, Roger O. Meredith, Orville Davis, Catherine Josephson, Margaret Gonet, and Mary Lou Dickens, Plaintiffs-Appellees, v. STATE of Illinois, Acting Through The DEPARTMENT OF HUMAN SERVICES, Carol Adams, Its Director; The Illinois Department of Public Aid, n/k/a The Illinois Department of Healthcare And Family Services; and Barry S. Maram, Its Director, Defendants-Appellants. |
| Court | United States Appellate Court of Illinois |
Appeal from Circuit Court Sangamon County, No. 04MR305, Leo J. Zappa, Jr., Judge Presiding.
MODIFIED UPON DENIAL OF REHEARING
On May 3, 2005, the trial court issued a memorandum decision and judgment in favor of plaintiffs, which enjoined the Illinois Department of Public Aid (DPA) and the Illinois Department of Human Services (DHS) from seeking any support from the income plaintiffs earned while their spouses were in long-term-care facilities and receiving Medicaid. The State of Illinois, acting through DHS and DPA, appeals the court's order, arguing (1) plaintiffs failed to exhaust their administrative remedies, (2) plaintiffs forfeited their claims by failing to raise them before the administrative agency, and (3) the court erred in finding the Medicare Catastrophic Coverage Act of 1988 (MCCA) (42 U.S.C. § 1396r-5 (2000)) preempted the spousal-support provisions of article X of the Illinois Public Aid Code (305 ILCS 5/10-1 through 10-27 (West 2004)). We reverse the trial court's decision with respect to the third issue regarding preemption and remand.
On July 22, 2004, the original plaintiffs (Robert N. Poindexter, Mirl W. Whitaker, Maurice S. Hardy, Virginia T. McCulley, and Roger O. Meredith), each of whom was a "community spouse" of an "institutionalized spouse" as those terms are defined by the MCCA (42 U.S.C. § 1396r-5(h) (2000)), filed a complaint for declaratory and injunctive relief against the State, arguing the State was illegally attempting to collect support from them for the support of their respective "institutionalized spouses" who were in long-term-care facilities and had received or were receiving medical assistance under the Medicaid program.
On August 23, 2004, the State moved to dismiss plaintiffs' complaint, alleging plaintiffs had not exhausted their administrative remedies before seeking judicial review. On October 25, 2004, the trial court denied defendant's motion to dismiss.
On January 24, 2005, Orville Davis, Catherine Josephson, and Margaret Gonet filed a motion, asking to join this action as plaintiffs. That same day, the original plaintiffs filed a motion titled "Argument," which was treated by the trial court as a motion for summary judgment. Plaintiffs argued the central issue in this case was whether the State could seek support from the "community spouse" of an "institutionalized spouse" in a long-term-care facility and receiving Medicaid. Under authority found in the Illinois Administrative Code (89 Ill. Adm.Code § 103.10 (Conway Greene CD-ROM June 2003)), the State sought spousal support from a "community spouse's" income for the amount his or her income exceeded the minimum monthly maintenance needs allowance (monthly needs allowance) established by the MCCA (42 U.S.C. § 1396r-5(d)(3) (2000)). Plaintiffs argued the State does not have the authority to do this pursuant to the MCCA.
On February 28, 2005, the trial court granted Davis, Josephson, and Gonet's motion to join the case as plaintiffs. On March 29, 2005, Mary Lou Dickens sought leave to join this case as a plaintiff. On May 3, 2005, the court issued its memorandum decision and judgment. In its findings of fact, the court stated the parties had agreed no genuine issues of material fact needed to be decided and the case should be decided on the pleadings. The court found federal law preempted state law governing the issue in this case. The court found pursuant to the MCCA a state is not allowed to seek spousal support from a community spouse's income after the institutionalized spouse has been declared eligible for Medicaid. In support of its finding, the court stated the MCCA does not distinguish between eligibility and posteligibility support. As a result, the court (1) found the State's support claims and collection efforts against the plaintiffs were wrongful and unlawful, (2) enjoined the State from seeking any support from the community spouses for any month in which his or her institutionalized spouse receives Medicaid, and (3) awarded plaintiffs their costs and expenses.
On May 6, 2005, the trial court allowed Dickens' motion to join the case as a plaintiff. On August 1, 2005, the trial court entered a Supreme Court Rule 304(a) (155 Ill.2d R. 304(a)) finding regarding its orders of May 3 and May 6, 2005.
This appeal followed.
The State first argues the trial court should have dismissed plaintiffs' complaint because plaintiffs failed to exhaust their administrative remedies before bringing this claim before the trial court. Our supreme court has stated:
"The exhaustion doctrine includes administrative review in the circuit court. [Citation.] Where the Administrative Review Law [citation] is applicable and provides a remedy, a circuit court may not redress a party's grievance through any other type of action. [Citation.] The circuit court's power to resolve factual and legal issues arising from an agency's decision must be exercised within its review of the agency's decision and not in a separate proceeding. [Citation.]
This court has, however, recognized several exceptions to the doctrine of exhaustion of administrative remedies. [Citation.] An aggrieved party may seek judicial review of an administrative decision without complying with the exhaustion[-]of[-]remedies doctrine where a statute, ordinance[,] or rule is attacked as unconstitutional on its face. [Citation.] A party may also seek review where issues of fact are not presented and agency expertise is not involved. [Citation.] Moreover, exhaustion is not required if the administrative remedy is inadequate or futile or in instances where the litigant will be subjected to irreparable injury due to lengthy administrative procedures that fail to provide interim relief." Canel v. Topinka, 212 Ill.2d 311, 321, 288 Ill.Dec. 623, 818 N.E.2d 311, 319 (2004).
Our supreme court has also held:
"Exhaustion is not required where a statute or rule under which an administrative body purports to act is challenged as unauthorized, since the judicial determination will affect the jurisdiction of the administrative body in all matters, not only in the instant circumstances [citation].
* * * Where an agency's statutory authority to promulgate a rule and exercise jurisdiction is in issue, no questions of fact are involved. The agency's particular expertise is not implicated in statutory construction. Further, there is virtually no chance the aggrieved party will succeed before an agency where the issue is the agency's own assertion of authority." Landfill, Inc. v. Pollution Control Board, 74 Ill.2d 541, 550-51, 25 Ill.Dec. 602, 387 N.E.2d 258, 260-61 (1978).
The trial court did not err in denying the State's motion to dismiss based on plaintiffs' alleged failure to exhaust their administrative remedies. The issue in this case is purely one of law. The parties agree no questions of fact are at issue. As a result, this is not an issue that falls within the particular expertise of an administrative agency, especially considering it involves the interpretation of a federal statute.
The State next argues plaintiffs forfeited their argument because they did not raise it before the administrative body. The State relies on our supreme court's decision in Arvia v. Madigan, 209 Ill.2d 520, 283 Ill.Dec. 895, 809 N.E.2d 88 (2004).
In Arvia, the supreme court stated the general proposition "issues or defenses not raised before the administrative agency are deemed waived and cannot be raised for the first time on administrative review." Arvia, 209 Ill.2d at 526, 283 Ill. Dec. 895, 809 N.E.2d at 93. According to the supreme court, this rule has been applied to constitutional issues, even though administrative agencies lack the authority to decide constitutional issues. Arvia, 209 Ill.2d at 526, 283 Ill.Dec. 895, 809 N.E.2d at 93 ( ). However, the court in Arvia refused to find that the plaintiffs in that case forfeited their claims. The court noted that raising constitutional issues before the agency is not a bright-line rule and that the court will not require it, stating, "Rather, we have held that it is `advisable' to assert a constitutional challenge before the administrative tribunal" Arvia, 209 Ill.2d at 527, 283 Ill.Dec. 895, 809 N.E.2d at 94.
The Arvia court made clear it was not deciding whether the rule applied in cases where a party seeks a separate declaratory action in circuit court, as opposed to administrative review. Arvia, 209 Ill.2d at 526, 283 Ill.Dec. 895, 809 N.E.2d at 93 (). In Arvia, the plaintiff had a hearing in front of an administrative law judge, which resulted in an adverse ruling. The statute under which the...
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