Rolland v. Romney, 02-1697.

• Decision Date: 28 January 2003
• Docket Number: No. 02-1697.,02-1697.
• Parties: Loretta ROLLAND; Terry Newton; Bruce Ames; Frederick Cooper; Margaret Pinette; Leslie Francis; Timothy Raymond; The Arc of Massachusetts; Stavros Center for Independent Living, Plaintiffs, Appellees, v. Mitt ROMNEY; Frederick Laskey; William O'Leary; Bruce M. Bullen; Gerald Morrissey; Elmer C. Bartels; Howard Koh; Teresa O'Hare, Defendants, Appellants.
• Court: U.S. Court of Appeals — First Circuit

318 F.3d 42

Loretta ROLLAND; Terry Newton; Bruce Ames; Frederick Cooper; Margaret Pinette; Leslie Francis; Timothy Raymond; The Arc of Massachusetts; Stavros Center for Independent Living, Plaintiffs, Appellees, v. Mitt ROMNEY; Frederick Laskey; William O'Leary; Bruce M. Bullen; Gerald Morrissey; Elmer C. Bartels; Howard Koh; Teresa O'Hare, Defendants, Appellants.

No. 02-1697.

United States Court of Appeals, First Circuit.

Heard November 6, 2002.

Decided January 28, 2003.

Peter T. Wechsler, Assistant Attorney General, with whom Thomas F. Reilly, Attorney General, was on brief for appellants.

Steven J. Schwartz with whom Cathy E. Costanzo, Center for Public Representation, Matthew Engel, Disability Law Center, Richard d'A Belin, Kristi Hatrick, Foley, Hoag & Eliot LLP, Frank Laski, and Mental Health Legal Advisors were on brief for appellees.

Buckmaster De Wolf, Howrey Simon Arnold & White, LLP, and Ethan B. Andelman on brief for The Arc of the United States, National Association of Protection and Advocacy Systems, Judge David L. Bazelon Center for Mental Health Law, National Health Law Program, and National Senior Citizens Law Center, amici curiae.

Before SELYA, Circuit Judge, COFFIN and BOWNES, Senior Circuit Judges.

COFFIN, Senior Circuit Judge.

Appellants, the governor of the Commonwealth of Massachusetts and various officials (collectively referred to as the "Commonwealth"), appeal the decision of the district court, acting through a magistrate judge, see 28 U.S.C. § 636(c), requiring them to provide certain services to appellees, a group of adults with mental retardation or other developmental disabilities who reside in nursing homes in Massachusetts.¹ Concluding that the court's interpretation of the applicable federal law was not in error, we affirm.

I. Background

Residents, then-plaintiffs, filed a section 1983 action against the Commonwealth in federal district court in 1998 on behalf of a putative class of approximately 1600 similarly disabled residents of Massachusetts nursing homes, alleging violations of a variety of federal statutes, including 42 U.S.C. § 1396r, a part of the Nursing Home Reform Amendments ("NHRA")² to the Medicaid law. The residents sought various forms of relief, but of particular relevance to this case requested an injunction requiring the Commonwealth to provide them with "specialized services," a term given particular meaning in the NHRA and its implementing regulations.³ The parties allowed a magistrate judge to conduct proceedings.

Following the judge's denial of the Commonwealth's motion to dismiss, Rolland v. Cellucci, 52 F.Supp.2d 231 (D.Mass.1999), and subsequent mediation by the parties, a settlement agreement ("Agreement") was finalized in November 1999 and operated as a stay of the litigation. After a fairness hearing, the court endorsed the Agreement and entered it as an order in January 2000. Rolland v. Cellucci, 191 F.R.D. 3 (D.Mass.2000). In the Agreement, the Commonwealth committed to provide specialized services as defined by federal regulation to all Massachusetts nursing home residents with mental retardation who had been identified as needing them through the preadmission screening and annual resident review process ("PASARR screening") required by the NHRA.

Enforcement was addressed in the following way. A proviso stated that the Agreement could not be enforced through breach of contract or contempt actions. If the residents were dissatisfied with the Commonwealth's performance, the Agreement authorized them to enter mediation, and, that failing, seek a judicial determination that the Commonwealth was in substantial noncompliance with the Agreement. The residents would only then be entitled to seek relief based upon the "then existing facts and law."

In September 2000, the residents filed a "Motion for Further Relief Concerning Specialized Services," asking the court to find the Commonwealth in noncompliance with the specialized services portion of the Agreement, contending that a significant number of class members were not receiving all necessary specialized services and some class members were not receiving any. Following a hearing, the judge entered a finding in March 2001 that the Commonwealth was in substantial noncompliance with its specialized services obligations and lifted the stay. Rolland v. Cellucci, 138 F.Supp.2d 110 (D.Mass.2001).

The residents then moved again for further relief, asking the court to order the Commonwealth to provide specialized services, which they alleged were required by both federal law and the Agreement. Following a four-day evidentiary hearing in November 2001, the court, in a well reasoned and thoughtful decision of May 2002, held that the Commonwealth was in violation of federal law as well as the Agreement by its failure to provide specialized services to residents who required them.

The court ordered the Commonwealth to take five particular remedial actions. Specifically at issue here, the district court required the Commonwealth to provide specialized services and implement a policy of "active treatment," another term of art defined by federal regulation, for all class members needing specialized services. Although the Commonwealth does not dispute the court's noncompliance findings, it contests the legitimacy of the order that it provide specialized services and implement a policy of active treatment. The Commonwealth has not sought a stay and has apparently attempted compliance.

The Commonwealth contends that the district court misconstrued both federal law and the Agreement. The language of the Agreement, disallowing contempt or breach of contract proceedings, requires the residents to seek relief based on the "then existing facts and law." The Commonwealth argues that even a finding of noncompliance by the court merely allows the residents "to reopen the litigation." The residents rejoin that such an interpretation provides them with no more than what they began with and was not what the parties intended. Rather than grapple with the question of whether the district court's order was in keeping with the enforcement provisions of the Agreement, we have assessed the court's reliance on federal law and have found that supportable.

II. The NHRA's History and Framework

The history of the NHRA is instructive. During the 1970s, numerous class action lawsuits were filed against states claiming insufficient care and treatment of mentally retarded individuals in state-run intermediate care facilities for mentally retarded individuals ("ICF/MRs"). Gen. Accounting Office, Medicaid: Addressing the Needs of Mentally Retarded Nursing Home Residents 11 (1987) [hereinafter GAO Medicaid Report]. Because of the suits, thirty states, including Massachusetts, became parties to consent decrees in which they agreed to improve the quality of care. Id. At that time, a common method to reduce overcrowding in the ICF/ MRs was to move mentally retarded individuals to Medicaid-certified nursing homes. H.R.Rep. No. 100-391, pt. 1, at 459 (1987), reprinted in 1987 U.S.C.C.A.N. 2313, 2313-279.

Residents moved to nursing homes, however, were often deprived of necessary services. The General Accounting Office found that by 1985, approximately 140,000 mentally retarded individuals resided in nursing homes nationwide. GAO Medicaid Report at 11. Because nursing homes were often not equipped to provide the services or treatment they needed, however mentally retarded residents frequently went without them. Id.

In 1987, Congress passed the NHRA, part of the Omnibus Budget Reconciliation Act, as a response to this apparently widespread problem. The report from the House of Representatives began:

Substantial numbers of mentally retarded and mentally ill residents are inappropriately placed, at Medicaid expense, in [skilled nursing facilities] or ICFs. These residents often do not receive the active treatment or services that they need. A recent [Government Accounting Office] review of mentally retarded residents in [these facilities] in Connecticut, Massachusetts, and Rhode Island concluded that the active treatment needs of these individuals were generally not being identified or met.

H.R.Rep. No. 100-391, pt. 1, at 459, reprinted in 1987 U.S.C.C.A.N. at 2313-279.

The NHRA attempted to ensure that those placed in nursing homes actually needed nursing care and that once residing in a nursing home, individuals would receive the other kinds of treatment they needed. Towards that end, the NHRA established requirements for nursing homes in their care of mentally retarded residents, 42 U.S.C. § 1396r(b); instituted specific enumerated rights for residents, id. § 1396r(c); and required states to screen and provide services to mentally retarded residents, id. § 1396r(e).

Specifically, states must perform PASARR screenings of potential nursing home admittees to determine two things: first, whether the individual requires nursing facility levels of care, addressing physical and mental conditions; second, whether the individual requires specialized services, addressing needs for training, therapies, and other means of accomplishing improvement of functioning. Id. § 1396r(e)(7)(A)(i) & (B)(ii). A nursing facility may admit a person only if the PASARR screening determines that nursing care is required. Id. § 1396r(b)(3)(F). After admittance, states must review an individual's needs for nursing facility care and specialized services whenever there is a significant change in the individual's condition. Id.

For mentally retarded individuals who were already living in nursing homes at the time of the NHRA's enactment, the statute required states to institute the same two-faceted PASARR screening process. Id. § 1396r(e)(7)(B)(ii). When then-current residents were found not to require nursing facility levels of care, the statute required states to place them elsewhere, with the exception that those residents who had lived in a nursing...