Shakhnes v. Eggleston

• Decision Date: 30 September 2010
• Docket Number: Nos. 09 Civ. 4103(RJH),Nos. 06 Civ. 04778(RJH),s. 06 Civ. 04778(RJH),s. 09 Civ. 4103(RJH)
• Parties: Boris SHAKHNES by his next friend Alla SHAKHNES, Mikhail Feldman, Fei Mock, Chaio Zhang, and Mayra Valle by her next friend, Shirley Campos-Valle, individually and on behalf of all others similarly situated, Plaintiffs, v. Verna EGGLESTON, as Commissioner of the New York City Human Resources Administration, Robert Doar, as Commissioner of the New York State Office of Temporary and Disability Assistance; and Antonia C. Novello, as Commissioner of the New York State Department of Health, Defendants. Marie Menking, by her attorney-in-fact William Menking, on behalf of herself and all others similarly situated, Plaintiff, v. Richard F. Daines, M.D., in his official Capacity as Commissioner, New York State Department of Health, and David A. Hansell, in his official capacity as Commissioner, New York State Office of Temporary and Disability Assistance, Defendants.
• Court: U.S. District Court — Southern District of New York

740 F.Supp.2d 602

Boris SHAKHNES by his next friend Alla SHAKHNES, Mikhail Feldman, Fei Mock, Chaio Zhang, and Mayra Valle by her next friend, Shirley Campos-Valle, individually and on behalf of all others similarly situated, Plaintiffs,

v.Verna EGGLESTON, as Commissioner of the New York City Human Resources Administration, Robert Doar, as Commissioner of the New York State Office of Temporary and Disability Assistance; and Antonia C. Novello, as Commissioner of the New York State Department of Health, Defendants.

Marie Menking, by her attorney-in-fact William Menking, on behalf of herself and all others similarly situated, Plaintiff,

v.Richard F. Daines, M.D., in his official Capacity as Commissioner, New York State Department of Health, and David A. Hansell, in his official capacity as Commissioner, New York State Office of Temporary and Disability Assistance, Defendants.

Nos. 06 Civ. 04778(RJH), 09 Civ. 4103(RJH).

United States District Court,

S.D. New York.

Sept. 30, 2010.

Jane Greengold Stevens, Caroline Jane Hickey, New York Legal Assistance Group, Michael Scott Gugig, Eva Lopez-Paredes, Lydia Ann Keaney, Sandra Denise Hauser, Sonnenschein Nath & Rosenthal LLP, Jennifer Beth Magida, Urban Justice Center, New York, NY, for Plaintiffs in No. 06 Civ. 04778.

Robert Lewis Kraft, Office of the Attorney General, Deborah Ellen Hochhauser, Office of Attorney General, Andrew Como, Attorney General of the State of New York, New York, NY, for Defendants in No. 06 Civ. 04778.

Aytan Y. Bellin, Bellin & Associates LLC, White Plains, NY, for Marie Menking and all others similarly situated.

MEMORANDUM OPINION AND ORDER

RICHARD J. HOLWELL, District Judge:

This opinion disposes of five motions filed in two related actions. Plaintiffs in both Shakhnes v. Eggleston, No. 06 Civ. 04778 (" Shakhnes ") and Menking v. Daines, No. 09 Civ. 04103 (" Menking ") allege procedural deficiencies in the processing of Medicaid appeals by the New York agencies responsible for Medicaid administration. In both, the plaintiffs assert that the agencies are legally obligated to resolve appeals from adverse determinations within ninety days after those appeals are made, and in both, the plaintiffs contend that the agencies systematically fail to meet that ninety-day deadline. The agency defendants in both actions have moved to dismiss the plaintiffs' claims, primarily on the grounds that there is no cause of action for the alleged deficiencies in Medicaid Fair Hearing procedures. (06-cv-04778 [84]; 09-cv-04103 [12].) The Court consolidates the actions solely for the purposes of this opinion because both motions are largely disposed of by the Court's holding, set forth below, that there is a cause of action under 42 U.S.C. § 1983 for failure to resolve Medicaid appeals within ninety-days after they are filed. Fed.R.Civ.P. 42(a)(3).

The principal differences between the Shakhnes and Menking cases are their procedural posture, the scope of their claims, and the breadth of the classes that they wish to certify. Shakhnes, filed in 2006, has completed discovery and has (in addition to the motion to dismiss), a pending motion for class certification and pending cross-motions for summary judgment. (06-cv-04778 [86], [88], [93].) The Shakhnes complaint asserts causes of action for ninety-day violations as well as failures to provide either adequate notice of the right to appeal or temporary interim services pending a decision by the fair hearing officer. Moreover the putative Shakhnes class includes only a subset of Medicaid recipients—those who requesthome health services and who are not challenging decisions merely relating to their financial eligibility for Medicaid. On the other hand Menking, filed in 2009, is only at the motion to dismiss stage, states claims only for ninety-day violations (that is, excluding claims for inadequate notice and failure to provide interim services), and seeks to represent a class including all types of Medicaid recipients, home health service and otherwise.

For the reasons that follow the motion to dismiss in Menking is denied in its entirety, and the motion to dismiss in Shakhnes is denied in part and granted in part. Additionally as to the Shakhnes action: (1) plaintiff's motion for class certification is granted and a class is certified pursuant to Federal Rule of Civil Procedure 23(b)(2); (2) plaintiffs' motion for partial summary judgment is granted in part; and (3) the New York City Human Resources Administration's motion for summary judgment is denied.

I. BACKGROUND

The following undisputed facts are provided for background purposes only. Because this opinion addresses several motions carrying different standards of factual review, the Court addresses material disputes and their relevant review standards as necessary in the body of the opinion.

A. Medicaid Fair Hearings

Medicaid is a joint federal-state program, established under Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq., which supplies federal funding for State programs that provide medical assistance to certain qualified individuals. States are not required to participate in the program, but if they elect to participate they must comply with federal law and regulations in order to remain qualified for federal financial support under the program. Id. Among other things a participating state must adopt an approved State plan that meets certain statutory and regulatory requirements, and must administer its program through a "single State agency." In New York, that single State agency is the New York State Department of Health ("DOH"), a defendant in both actions. N.Y. Soc. Serv. Law § 363-a(1).

As occurs in any social service system, there are times when the Medicaid administrating agency issues a decision adverse to the interests of a particular participant. The Medicaid system permits the appeal of those decisions: the statute States that "[a] State plan for medical assistance must provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for medical assistance under the plan is denied or is not acted upon with reasonable promptness." 42 U.S.C. § 1396a(a)(3). Although as the "single State agency" responsible for Medicaid administration the DOH has ultimate responsibility with respect to fair hearings, it has delegated aspects of the process to other agencies. The DOH has delegated the responsibility to schedule, conduct, and decide fair hearings to the New York State Office of Temporary and Disability Assistance, also a defendant in this action ("OTDA" or, collectively with the DOH, the "State" or "State defendants"). After they are issued decisions after fair hearing ("DAFHs") are returned to DOH, which forwards them to the relevant local social services district for implementation. 42 U.S.C. § 1396a(a)(1); N.Y. Soc. Serv. Law § 365(1). The New York City Human Resources Administration ("HRA" or "City"), also a defendant, is the local social services administrator for New York City, and thus has been delegated the responsibility for implementing DAFHs for applicants in this area. The State and City agencieshave a policy in place for implementing DAFHs within ninety days of an applicants' request: OTDA is allocated sixty days in which to hold the hearing and issue a decision, and HRA is allocated thirty days in which to implement it. (Hauser Decl., Ex. H, HRA Memorandum, dated March 8, 1994.)

B. Shakhnes

The Shakhnes named plaintiffs all fall within a subset of Medicaid recipients: they are individuals who assert a need for home health services, for example assistance with eating, toileting, ambulating, food shopping, or turning over in bed. (Pltfs. SJ Mem. 5.) Their complaint states four causes of action. Three are brought against the OTDA, the DOH, and the New York City HRA. They allege: (1) a custom and practice of failing to take and/or ensure final administrative action within ninety days after fair hearing requests in home health cases; (2) a custom and practice of failing to provide and/or ensure the provision of timely and adequate notice of denials, reductions, or terminations of home health services; and (3) a custom and practice of failing to provide, and/or ensure the provision of home health services pending decisions on fair hearings for individuals who request hearings. Each of these first three causes of action asserts claims, which plaintiffs seek to enforce through 42 U.S.C. § 1983, under the Medicaid statute and its implementing regulations, the Due Process Clause of the Fourteenth Amendment to the United States Constitution, and state law. The fourth cause of action is brought against only the State defendants, the OTDA and the DOH; it alleges an unlawful custom and practice of failing to properly oversee and supervise City defendants' performance of their notice, ninety-day, and aid-continuing objections.

Defendants have moved against all four causes of action. State defendants' motion to dismiss asserts that: (1) the Eleventh Amendment bars aspects of this action, (2) there is no § 1983 cause of action for the rights plaintiffs seek to vindicate, (3) plaintiffs have received due process of law, (4) the State cannot be held vicariously liable for the City's misconduct, and (5) plaintiffs have failed to demonstrate the elements of an inadequate supervision claim. Additionally the City has moved for summary judgment, asserting that: (1) plaintiffs lack standing to bring certain claims against the City, (2) there is no § 1983 cause of action for the rights plaintiffs seek to vindicate, and (3) plaintiffs' claims lack evidentiary support.

Plaintiffs have cross moved only with respect to their ninety-day claim. Notably, plaintiffs seek certification of a class of Medicaid home health recipients only with respect to the ninety-day claims. Furthermore plaintiffs have moved for partial summary judgment against both the City and the State only with respect to those claims, asserting...