Waskul v. Washtenaw Cnty. Cmty. Mental Health

• Decision Date: 14 August 2018
• Docket Number: No. 16-2742,16-2742
• Citation: 900 F.3d 250
• Parties: Derek WASKUL; Cory Schneider ; Kevin Wiesner; Washtenaw Association for Community Advocacy, Plaintiffs-Appellants, v. WASHTENAW COUNTY COMMUNITY MENTAL HEALTH; Nick Lyon, in his official capacity as Director of the Michigan Department of Health and Human Services ; Jane Terwilliger, in her official capacity as Director of Community Mental Health Partnership of Southeast Michigan; Trish Cortes, in her official capacity as Director of Washtenaw County Community Mental Health; Community Mental Health Partnership of Southeast Michigan, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

900 F.3d 250

Derek WASKUL; Cory Schneider ; Kevin Wiesner; Washtenaw Association for Community Advocacy, Plaintiffs-Appellants,

v.WASHTENAW COUNTY COMMUNITY MENTAL HEALTH; Nick Lyon, in his official capacity as Director of the Michigan Department of Health and Human Services ; Jane Terwilliger, in her official capacity as Director of Community Mental Health Partnership of Southeast Michigan; Trish Cortes, in her official capacity as Director of Washtenaw County Community Mental Health; Community Mental Health Partnership of Southeast Michigan, Defendants-Appellees.

No. 16-2742

United States Court of Appeals, Sixth Circuit.

Argued: October 11, 2017

Decided and Filed: August 14, 2018

ARGUED: Edward P. Krugman, NATIONAL CENTER FOR LAW AND ECONOMIC JUSTICE, New York, New York, for Appellants. Stefani A. Carter, STEFANI A. CARTER, PLLC, Ypsilanti, Michigan, for Appellees Washtenaw County Community Mental Health and Trish Cortes. Marcelyn A. Stepanski, JOHNSON, ROSATI, SCHULTZ & JOPPICH, P.C., Farmington Hills, Michigan, for Appellees Community Mental Health Partnership and Jane Terwilliger. ON BRIEF: Edward P. Krugman, Gregory L. Bass, NATIONAL CENTER FOR LAW AND ECONOMIC JUSTICE, New York, New York, Nicholas A. Gable, LEGAL SERVICES OF SOUTH CENTRAL MICHIGAN, Ann Arbor, Michigan, for Appellants. Stefani A. Carter, STEFANI A. CARTER, PLLC, Ypsilanti, Michigan, for Appellees Washtenaw County Community Mental Health and Trish Cortes. Margaret Debler, Laura Bailey Brown, JOHNSON, ROSATI, SCHULTZ & JOPPICH, P.C., Farmington Hills, Michigan, for Appellees Community Mental Health Partnership and Jane Terwilliger. William R. Morris, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Appellee Nick Lyon.

Before: KEITH, McKEAGUE, and STRANCH, Circuit Judges.

McKEAGUE, J., delivered the opinion of the court in which KEITH, J., joined, and STRANCH, J., joined in the result. STRANCH, J. (pp. 10–12), delivered a separate opinion concurring in the judgment.

McKeague, Circuit Judge.

An association generally has standing if "at least one of [its] members would have standing to sue on his own." United Food & Commercial Workers v. Brown , 517 U.S. 544, 554–55, 116 S.Ct. 1529, 134 L.Ed.2d 758 (1996) (citing Warth v. Seldin , 422 U.S. 490, 511, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ). In this interlocutory appeal, the Washtenaw Association for Community Advocacy identifies at least one named member who appears to have suffered an initial deprivation of due process in connection with reductions in Medicaid disability benefits. At first blush, then, it appears that one named member, and thus the Association, has "standing to sue." Id. Nevertheless, the Association seeks an injunction requiring two discrete types of relief for its 166 unnamed members—(1) fresh notices and (2) hearing rights with respect to reductions in their budgets—even though its three named members received hearings before filing suit.

Mindful that "standing is not dispensed in gross," Lewis v. Casey , 518 U.S. 343, 358 n.6, 116 S.Ct. 2174, 135 L.Ed.2d 606 (1996), we hold today what necessarily follows from converging lines of precedent: just as an individual "must demonstrate standing for each claim he seeks to press" and "for each form of relief sought," DaimlerChrysler Corp. v. Cuno , 547 U.S. 332, 352, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006), so too must an association that relies upon an individual member for standing purposes. See Summers v. Earth Island Inst. , 555 U.S. 488, 493, 498, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009) (holding an organization must "establish[ ] that at least one identified member had suffered or would suffer harm"). And because the Association has not shown that any named member had standing to seek fresh notices and hearing rights when it filed its complaint, we AFFIRM the district court’s denial of the Association’s motion for a preliminary injunction, and REMAND this matter for further proceedings.

I

The State of Michigan operates a Medicaid waiver program called the Habilitation Supports Waiver (the Program) that provides community-based services to individuals with developmental disabilities.¹ Prior to 2012, individuals receiving services under the Program in Washtenaw County received a service budget based on a single, all-inclusive rate that was intended to cover both the personnel and the program delivery costs. In 2012, the predecessor agency to Washtenaw County Community Mental Health, Washtenaw Community Health Organization, changed the budget calculation method to allow for billing of the personnel costs and the associated costs as separate line items. Amid budgeting struggles in 2015, WCCMH moved to revert to a single, all-inclusive budget method that allocated $13.88 to cover both personnel and the delivery costs of the Program. The reversion was to occur on May 15, 2015. The budgeting change did not reduce the total number of service hours recipients were authorized to receive. The effect of utilizing an all-inclusive rate, however, was to reduce the total budget amount for each recipient. As a practical matter, service recipients had to reduce the hourly rate they paid service providers to maintain the level of hours authorized prior to the budget change. The notice to recipients acknowledged this reality, stating that "[w]hile this is not a reduction in your current level of services, it may reduce the amount you can pay your staff."

The Washtenaw Association for Community Advocacy (the Association), a nonprofit community organization assisting individuals with developmental disabilities, joined with three individual plaintiffs to challenge these budget reductions and the alleged lack of due process preceding them. They filed suit in federal district court against several entities involved in various capacities with the administration, funding, and oversight of the Program. Relevant to this interlocutory appeal, the plaintiffs sought a preliminary injunction pending determination of the merits of their claims. The district court held a two-day evidentiary hearing prior to ruling on the motion for a preliminary injunction.

For the limited purpose of reviewing the district court’s preliminary finding regarding associational standing, two pieces of the record stand out. First, the Association’s Chief Executive Officer, Kathleen Homan, testified that 169 individuals had received notices from the defendants informing them of impending budget reductions. Second, Ms. Homan testified that the three named plaintiffs were among the individuals who received adverse budget notices and that each of them was a dues-paying member of the Association. The district court nevertheless concluded that the Association "fails to have associational standing because the 169 people for whom it claims associational standing to bring the lawsuit have not been shown to be members of the organization."

The court also held that the Association’s named members in their individual capacities were not entitled to injunctive relief. Among other things, the district court noted "it is undisputed that all named plaintiffs did in fact appeal the reduction[s] and received ... favorable decision[s] from the administrative law judge." "Therefore," the district court held, "there can be no irreparable harm suffered by the named Plaintiffs as a result of the inadequate notice."

The Association—but not the individual plaintiffs² —now asks us to reverse the district court’s denial of a preliminary injunction. Our inquiry is limited to that issue, and we do not address the merits of any claim.

II

"An association has standing to bring suit on behalf of its members when [1] its members would otherwise have standing to sue in their own right, [2] the interests at stake are germane to the organization’s purpose, and [3] neither the claim requested nor the relief requested requires the participation of individual members in the lawsuit." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc. , 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citing Hunt v. Wash. State Apple Advert. Comm’n , 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977) ).

Regarding the first element, it generally suffices for an association to demonstrate "at least one of [its] members would have standing to sue on his own." United Food , 517 U.S. at 554–55, 116 S.Ct. 1529 (citing Warth , 422 U.S. at 511, 95 S.Ct. 2197 ). But let us not forget: "standing is not dispensed in gross." Lewis , 518 U.S. at 358 n.6, 116 S.Ct. 2174. That is, "a plaintiff must demonstrate standing for each claim he seeks to press," DaimlerChrysler , 547 U.S. at 352, 126 S.Ct. 1854, and "a plaintiff must demonstrate standing separately for each form of relief sought." Id. (quoting Friends of the Earth , 528 U.S. at 185, 120 S.Ct. 693 ).

An association must follow these same black-letter rules. In Summers v. Earth Island Institute , the Supreme Court affirmed "plaintiff-organizations [must] make specific allegations establishing that at least one identified member had suffered or would suffer harm." 555 U.S. at 498, 129 S.Ct. 1142. Any other "novel approach," the court wrote, "would make a mockery of our prior cases." Id. We believe this principle applies equally with regard to each standing element.

Thus, the Association must show that one of its named members "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (citing Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ).³

The parties vigorously dispute whether the Association through any named member has standing to pursue its due process claim . As we see it, however, the dispositive question here is whether the Association through any named member has standing to seek its requested relief on this...