UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next )

friend CLINTON L., SR., and

)

TIMOTHY B. by his guardian and next )

friend ROSE B., and others similarly

)

situated,

)

)

Plaintiffs,

)

)

v.

)

)

LANIER CANSLER, in his official

)

capacity as Secretary of the Department )

of Health and Human Services, and DAN )

COUGHLIN, in his official capacity as )

CEO and Area Director of the Piedmont )

Behavioral Healthcare Local

)

Management Entity,

)

)

Defendants

)

CIVIL ACTION NO. 10-CV-00123

COMPLAINT – CLASS ACTION ________________________________________________________________________
INTRODUCTION 1. Plaintiff Clinton L. is 46 years old. Among other diagnoses, he is dually diagnosed with a developmental disability and mental illness. He lives in Lexington, North Carolina. 2. Plaintiff Timothy B. is 44 years old. Among other diagnoses, he is dually diagnosed with a developmental disability and mental illness. Plaintiff Timothy B. is also deaf. He currently lives in Raleigh, North Carolina, but he is originally from Lexington, North Carolina, where his guardian still resides.

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3. In North Carolina, adults dually diagnosed with mental retardation and mental illness are part of a target population that may be eligible to receive state mental health, developmental disability, and substance abuse services funds designated as MR/MI funds, formerly called Thomas S. funds. Plaintiffs are both eligible for and have previously received MR/MI funds. See Thomas S. v. Morrow, 601 F. Supp. 1055, 1984 U.S. Dist. LEXIS 23537 (W.D.N.C. 1984), aff’d in part and modified in part, remanded, 781 F.2d 367, 1986 U.S. App. LEXIS 21712 (4th Cir. 1986), cert. denied sub nom., Kirk v. Thomas S., 476 U.S. 1124 (1986), cert. denied sub nom., Childress v. Thomas S., 479 U.S. 869 (1986); later proceeding, Thomas S. v. Flaherty, 699 F.Supp. 1178, 1988 U.S. Dist. LEXIS 13086 (W.D.N.C. 1988), aff’d, 902 F.2d 250, 1990 U.S. App. LEXIS 7044 (4th Cir. 1990), rehearing, en banc, denied, 1190 U.S. App. LEXIS 19875 (4th Cir. 1990), cert denied, 498 U.S. 951 (1990).
4. Named Plaintiffs have been successfully living in the community with a combination of federal Medicaid waiver funds (provided through the Innovations Waiver, as described infra, at Paragraphs 46-48) and supplemental state funds; Plaintiff Clinton L. for over eight years, and Plaintiff Timothy B. for more than a decade.
5. Named Plaintiffs Clinton L. and Timothy B. are representative of a class of individuals within the Piedmont Behavioral Healthcare, also known as PBH, geographical service area, for whom a clinical treatment team has determined that their current Individual Support Plans (ISPs) require independent, state-funded, Supervised Living services to assure adequate staffing and appropriate care to maintain these
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individuals in the community, and they are entitled to class relief as set out in the

proposed class definition, infra, at Paragraphs 25-32.

6. Defendant Dan Coughlin operates the Innovations Waiver program and also

exercises discretion over allocation of supplemental state funds. The Innovations Waiver

is a 42 U.S.C. § 1915(c) Home and Community Based Waiver which offers services to

individuals with developmental disabilities who would otherwise qualify for services in

an Intermediate Care Facility for the Mentally Retarded (ICF/MR).

7. Recently, Defendant Coughlin drastically reduced the availability of state

funds for Plaintiffs’ care, as well as for all others similarly-situated, by reducing the

amounts that providers are reimbursed for this service by at least 30%. The practical

effect of this reduction will be the elimination of providers that offer the service that

maintains both Named Plaintiffs in the community. Plaintiffs are at risk of

institutionalization, a placement that would be more costly than Plaintiffs’ care in the

community. As a result of this arbitrary decision, both Named Plaintiffs will be at risk of

displacement from their long-term community placements on February 15, 2010, the

effective date of the reduction.

8.

Defendants’ actions violate the Americans with Disabilities Act (ADA), Title

II, 42 U.S.C. § 12132, and its implementing regulations, and Section 504 of the

Rehabilitation Act, 29 U.S.C. § 794a, and its implementing regulations. Among other

things, these laws require Defendant to administer its services and programs in the most

integrated setting appropriate to the needs of individuals with disabilities.

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9. Named Plaintiffs seek declaratory and injunctive relief to preserve their receipt of care in the community until adequate Innovations Waiver and state-funded services are made available to them to ensure that they receive services in the most integrated setting appropriate to their needs and conditions, which has been demonstrated to be in their own homes.
10. Plaintiffs further seek class relief for all those individuals who are similarly situated, as described infra, at Paragraph 25, in the proposed class definition.
JURISDICTION AND VENUE 11. This is an action for declaratory and injunctive relief for violation of Title II of the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. § 12132; and Section 504 of the Rehabilitation Act of 1973 (Section 504), 29 U.S.C. § 794. 12. The Court has jurisdiction over Plaintiff’s claims under 28 U.S.C. §§ 1331, 1343(a)(3) & (4). Declaratory and injunctive relief is authorized by 28 U.S.C. §§ 2201 and 2202 and Fed. R. Civ. P. 65. Plaintiff’s causes of action for disability discrimination are authorized by 42 U.S.C. 12133 and 29 U.S.C. § 794a. 13. Venue is proper because Defendant Coughlin resides in this district. 28 U.S.C. § 1391(b)(1).
DEFENDANTS 14. Defendant Dan Coughlin is the CEO and Area Director of the PBH Local Management Entity (LME), with a geographic service area encompassing Cabarrus, Davidson, Rowan, Stanly, and Union Counties. Within the Medicaid-funded system of
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mental health, developmental disabilities, and substance abuse services in North Carolina, the LMEs are the locus of coordination for services at the community level. See N.C.G.S. § 122C-101; N.C.G.S. § 122C-115.4(a).
15. Defendant Coughlin’s responsibilities include financial management and accountability for the use of State and local funds and information management for the delivery of publicly funded services. See N.C.G.S. § 122C-115.4(b)(7). Defendant Coughlin also bears responsibility for the implementation and management of PBH’s Medicaid Home and Community-Based Services (HCBS) Community Alternatives Program Waivers (the Innovations Waiver), consistent with federal law. See Social Security Act § 1915, 42 U.S.C. § 1396n (b) and (c). Defendant Coughlin is sued in his official capacity.
16. Defendant Lanier Cansler is the Secretary of the North Carolina Department of Health and Human Services (DHHS). DHHS is the “single state agency” responsible for the administration and supervision of North Carolina’s Medicaid program under Title XIX of the Social Security Act. 42 C.F.R. § 431.10. Defendant Cansler is also responsible for the ultimate oversight of the LMEs to make sure that they provide publicly funded services in accordance with the law. See N.C.G.S. § 122C-111, et seq. Defendant Cansler is sued in his official capacity.
NAMED PLAINTIFFS 17. The two Named Plaintiffs are adults with dual diagnoses of mental retardation and mental illness (MR/MI).
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18. Plaintiff Clinton L.’s diagnoses include Schizoaffective Disorder, Bipolar Disorder, Intermittent Explosive Disorder, and Moderate Mental Retardation.
19. Prior to his current placement, Plaintiff Clinton L. lived in various group homes and institutions throughout North Carolina. Because of Clinton L.’s diagnosis, many of his previous facilities have been unable to provide the necessary level of staff to both address his condition and ensure a safe environment for other residents. Clinton L. has been discharged from both coed and all-male facilities because of his inappropriate and explosive behaviors that many times affect other residents. Clinton L. has often engaged in destructive outbursts that can only be effectively controlled with one-on-one assistance to provide verbal prompting and redirection when needed. In 2000, Clinton L. was discharged from his last group home placement because this group home could not accommodate his behaviors.
20. Since then, Clinton L. has lived in his own apartment located in Lexington, North Carolina. Clinton L. lives in this apartment with one other individual. Both Clinton L. and the other individual are supervised by a rotating schedule of residential workers twenty-four hours a day. Plaintiff Clinton L.’s home has been substantially modified with a system of sensors and alarms because Clinton L. has a tendency to wander at night.
21. Plaintiff Timothy B.’s diagnoses include Intermittent Explosive Disorder, Major Depressive Disorder, Epilepsy, and Severe Mental Retardation. Timothy B. is also deaf.
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22. Plaintiff Timothy B., prior to his community placement, lived in various group homes and institutions throughout North Carolina. Very few of these facilities employed qualified personnel capable of communicating with Timothy B. through use of American Sign Language or other means. Because of his inability to communicate with facility staff, Timothy B. often engaged in destructive outbursts. In 1998, Timothy B. was discharged from his last group home placement because they could not accommodate his behaviors.
23. In 1999, Timothy B. was approved to receive MR/MI funds. Plaintiff Timothy B.’s current community placement is his own home in Raleigh, North Carolina, where he lives alone and independently with a rotating schedule of residential workers twenty-four hours a day.
24. Plaintiffs Clinton L. and Timothy B. are eligible for the Innovations Waiver operated by PBH. Plaintiffs Clinton L. and Timothy B. are also eligible for nonMedicaid state funded services paid for entirely with state funds made available to persons with Mental Retardation/Mental Illness (MR/MI), formerly called Thomas S. funds.
CLASS ACTION ALLEGATIONS 25. This action is brought as a statewide class action pursuant to Fed. R. Civ. P. 23(a) and (b)(2) on behalf of: all current or future PBH consumers for whom a clinical treatment team has determined that their Individual Support Plan requires independent, state-funded, Supervised Living services (to wit, YM 811 and YM 812) to assure adequate staffing and appropriate care to maintain these individuals in the community.
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26. Upon information and belief, the class is so numerous that joinder of all members is impracticable. A public records request revealed that approximately 35 class members are currently served by the PBH LME.
27. All individuals served by PBH for whom their ISP requires that they receive state-funded Supervised Living services share a common claim with the Named Plaintiffs in that their services will be denied, delayed, terminated, interrupted, or reduced by PBH or DHHS directly or through their agents or assigns as a direct result of the rate cuts PBH plans to implement on February 15, 2010.
28. There are questions of law and fact as to the permissibility of the Defendants’ policies and practices with respect to denying, reducing, or terminating Supervised Living services that are common to all members of the class. The factual questions common to the entire class include whether Defendants’ proposed rate cuts to Supervised Living services would result in an elimination of Supervised Living services. The legal questions common to the entire class include whether Defendants’ proposed rate cuts to Supervised Living services would result in a violation of the Americans with Disabilities Act and/or Section 504 of the Rehabilitation Act.
29. The claims of the class representative plaintiffs are typical of the claims of the class. Despite other differences among Individual Support Plans, Plaintiffs currently enjoy independent living arrangements that, like all other members of the proposed class, would be eliminated by Defendants’ proposed rate cuts. Doing away with this service for all class members amounts to pulling the rug from beneath a system of care that has been individually tailored to each class member’s needs.
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30. The Named Plaintiffs will fairly and adequately represent the interests of all members of the class. Plaintiffs know of no conflicts of interest among class members.
31. Prosecution of separate actions by individual class members would create a risk of inconsistent or varying adjudications with respect to individual class members which would establish incompatible standards of conduct for the party opposing the class or could as a practical matter be dispositive of the interests of the other members or substantially impair or impede their ability to protect their interests.
32. Defendants’ actions and omissions have affected and will affect the class generally, thereby making appropriate injunctive and declaratory relief with respect to the class as a whole.
FACTUAL BACKGROUND 33. Defendant PBH operates under a Memorandum of Agreement with the North Carolina Department of Health and Human Services Division of Medical Assistance (DMA) under which, inter alia, DMA sets the reimbursement rates for PBH providers. 34. On January 11, 2010, Defendant PBH issued a memorandum to providers describing cuts to the state-funded “Supervised Living – 1 Resident” service and the state-funded “Supervised Living – 2 Resident” service (collectively, the “Supervised Living services”). These services are also identified by their procedure codes, which are YM811 and YM812, respectively. According to the memorandum, the cuts to the Supervised Living services will take effect on February 15, 2010. The memorandum does not state whether PBH will permit any exception to these rate cuts. A copy of this memorandum is included as Plaintiffs’ Exhibit 1.
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35. Plaintiff Clinton L. is currently authorized to receive the “Supervised Living – 2 Resident” service. Providers of “Supervised Living – 2 Resident” services are reimbursed by PBH at a standard rate of $161.99 per day.
36. Effective February 15, 2010, the rate for “Supervised Living – 2 Resident” will be reduced by PBH to $116.15, a reduction of nearly 30%.
37. Plaintiff Timothy B. is currently authorized to receive the “Supervised Living – 1 Resident” service. Providers of “Supervised Living – 1 Resident” services are reimbursed by PBH at a variable per diem rate. In Timothy B.’s case, the rate for the service is $250.00 per day. This rate was designed to correspond with the service provider’s costs in hiring staff capable of communicating with Timothy B. through the use of American Sign Language or other means.
38. Effective February 15, 2010, the rate for “Supervised Living – 1 Resident” will be reduced by PBH to $116.15 per day. This represents a reduction of nearly 55% for this service in Timothy B.’s case.
39. Defendant PBH did not notify Plaintiffs of the proposed rate cuts. Plaintiffs have not been provided with any right to appeal the rate cuts. The new rate structure for Supervised Living services will not permit the providers of this service to operate at a profit. Moreover, the new rate structure will cause those providers currently offering the service to operate at a loss. Consequently, these providers will terminate the Supervised Living services for Plaintiffs and other recipients of this service in areas served by PBH.
40. Plaintiffs are able to maintain their long-time and successful community placements through a combination of MR/MI funds and Innovations Waiver funds.
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41. Although, Plaintiffs will still be eligible to continue receiving Innovations Waiver funding after the rate reduction on February 15, 2010, since Plaintiffs cannot be maintained in the community on these funds alone, they will also lose their Innovations Waiver funding if they are admitted to an institution.
42. On January 29, 2010, Plaintiffs’ counsel wrote to Defendants demanding a postponement of the implementation of the new Supervised Living rate structure. This delay was requested so that Defendants can reach an accord with Supervised Living providers as to an appropriate per diem rate for Supervised Living services to assure that Plaintiffs will be maintained in their community placements. To date, Defendants have not responded.
THE INNOVATIONS WAIVER PROGRAM 43. The Department of Health and Human Services (DHHS) is designated as the state Medicaid agency responsible for the administration and supervision of North Carolina’s Medicaid Program under Title XIX of the Social Security Act. DHHS delegated chief responsibility for administering the federal Medicaid program to its Division of Medical Assistance (DMA). 44. The Medicaid Act authorizes states to obtain Home and Community Based Services waivers (HCBS waivers) upon approval from the Centers for Medicare and Medicaid Services (CMS). See 42 U.S.C. § 1396n(c) (also known as Section 1915(c) of the Social Security Act). These programs allow the State to provide home-based habilitative services to persons who would otherwise require care in an Intermediate Care Facility for Persons with Mental Retardation (ICF-MR). Id. The CAP-MR/DD waiver is
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one such program. Pursuant to a Memorandum of Understanding (MOU) with the Division of Medical Assistance (DMA), the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (DMHDDSAS) is the lead agency for operation of the CAP-MR/DD waiver program.
45. Until 2005, Medicaid-eligible individuals residing in Piedmont Behavioral Healthcare’s catchment area were eligible to participate in the CAP-MR/DD waiver program. In July 2004, the State of North Carolina applied for Piedmont Behavioral Healthcare to operate its own Medicaid health plan and HCBS waiver program, as a pilot project for the State. The Centers for Medicare and Medicaid Services approved PBH’s managed care Medicaid plan and HCBS waivers in October 2004. Both the PBH Medicaid plan (now called the “Cardinal Health Plan”) and its HCBS waiver (now called the “Innovations” Waiver) became effective on April 1, 2005.
46. The Innovations Waiver program is substantially similar to the CAP-MR/DD waiver program. Like the CAP-MR/DD waiver, periodic utilization reviews are conducted to continually determine an individual’s level of support under the waiver and eligibility for services offered under the waiver. Unlike the CAP-MR/DD waiver programs, where DHHS contracts with an outside agency to conduct periodic utilization reviews for CAP-MR/DD waiver clients, Piedmont Behavioral Healthcare conducts its own internal utilization management for recipients of the Innovations Waiver.
47. The Innovations Waiver does not impose a maximum budget or cost limit upon any Innovations Waiver participant.
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48. Residential staffing services available through the Innovations Waiver cannot be combined in any way to achieve twenty-four hour staffing and supervision without reasonable modification of the service definitions. Consequently, an Individual Support Plan under the Innovations Waiver must be supplemented with additional stated funded services if twenty-four hour staffing is required.
MENTAL RETARDATION/MENTAL ILLNESS (MR/MI) – STATE FUNDED SERVICES
49. In addition to operating the Innovations Waiver, Defendant Coughlin bears responsibility for the coordination of MR/MI and other state-funded services. See N.C.G.S. § 122C-101; N.C.G.S. § 122C-115.4(a) & (b)(7). Both Timothy B. and Clinton L. are eligible for services paid through MR/MI funds.
50. MR/MI funding is provided to eligible State residents who have applied for mental health, developmental disabilities, and substance abuse services through their Local Management Entity (LME). MR/MI funds are made available to promote successful community living, and are used to extend the services and supports provided through Medicaid and other public and private funding. Accordingly, Plaintiffs and others similarly situated rely upon these MR/MI funds to access necessary supplemental residential staffing services for the hours that are not provided for by the Innovations Waiver. Two such state-funded supplemental staffing services are called “Supervised Living – 1 Resident” and “Supervised Living – 2 Resident.”
51. Supervised Living is a “residential service which includes room and support care for one individual who needs 24-hour supervision; and for whom care in a more
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intensive treatment setting is considered unnecessary on a daily basis.” Division of Mental Health/Developmental Disabilities/Substance Abuse Services, MH/DD/SA Service Definitions 164 (January 1, 2003). Medical necessity for this service is satisfied when a recipient has an Axis I or II diagnosis or the person has a developmental disability, meets certain Level of Care Criteria, Level NCSNAP/ASAM, is at risk for placement outside the natural home setting, and has intensive verbal and limited physical aggression due to symptoms associated with a diagnosis, which are sufficient to create functional problems in a community setting. MH/DD/SA Service Definitions at 165.
52. Plaintiff Clinton L. is authorized to receive Supervised Living services until May 31, 2010. Plaintiff Timothy B. is authorized to receive Supervised Living services until November 31, 2010. Plaintiffs will continue to meet medical necessity criteria for these services after their current authorizations expire.
53. Upon information and belief, providers of Supervised Living services incur numerous costs related to the staffing of supervisory personnel needed for the care of Named Plaintiffs and other similarly situated individuals.
54. The costs incurred by the providers of residential services for Supervised Living consumers such as Timothy B. and Clinton L. will exceed PBH’s proposed per diem rate of $116.15. Because providers would only be able to provide Supervised Living services at a loss, they will no longer offer it in the five counties served by PBH. The rate cuts create a substantial certainty that all Supervised Living service providers in the five counties served by PBH will withdraw from offering the services.
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55. With no providers in the areas served by PBH, Plaintiffs and other similarly situated individuals would be effectively denied access to the Supervised Living services currently authorized in their plans of care.
56. Upon information and belief, some providers of Supervised Living services have begun to eliminate staff and services needed to adequately supervise Plaintiffs and other similarly situated individuals in anticipation of the February 15, 2010 rate cuts.
57. As a consequence of losing access to Supervised Living services, Plaintiffs will no longer be able to maintain their long-term community placements. After February 15, 2010, both Plaintiffs will be at risk of relocating to alternative congregate or institutional placements.
58. It is not expected that the congregate placements will be successful for either Plaintiff. Both Plaintiffs require constant one-on-one supervision and attention, which congregate placements do not provide. If and when Plaintiffs’ placement in a congregate setting are determined to have failed (as is expected), it is believed that both Plaintiffs will face forced institutionalization.
59. For individuals, such as Timothy B., who have additional medical or support needs, certain supplemental services, such as an American Sign Language interpreter, must be provided in the institutional setting, at an additional cost to the State.
FIRST CLAIM FOR RELIEF (Title II of the Americans with Disabilities Act) 60. Plaintiffs adopt and restate the allegations set forth in paragraphs 1 – 59 of this complaint.
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61. Title II of the Americans with Disabilities Act (ADA) provides that “no
qualified individual with a disability shall, by reason of disability, be excluded from
participation in or be denied the benefits of the services, programs, or activities of a
public entity or be subject to discrimination by such entity.” 42 U.S.C. § 12132.
62. A “public entity” is defined as any State or local government or other
instrumentality of a State or local government. See 42 U.S.C. § 12131 (1)(A)&(C).
63. Regulations implementing Title II of the ADA require that a public entity
administer its services, programs and activities in “the most integrated setting
appropriate” to the needs of qualified individuals with disabilities. 28 C.F.R. § 35.130
(d).
64. Regulations implementing Title II provide that
“a public entity may not, directly through contractual or other arrangements, utilize criteria or other methods of administration: (i) that have the effect of subjecting qualified individuals with disabilities to discrimination on the basis of disability; [or] (ii) that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the entity’s program with respect to individuals with disabilities…” 28 C.F.R. § 35.130(b)(3).
65. Regulations implementing Title II further provide:
“(b)(1) A public entity, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of disability: (iii) Provide a qualified individual with a disability with an aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others; (iv) Provide different or separate aids, benefits, or services to individuals with disabilities or to any class of individuals with disabilities than is provided to others unless such action is necessary to provide qualified individuals with disabilities with aids, benefits, or services that are as effective as those provided to others;
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(v) Aid or perpetuate discrimination against a qualified individual with a disability by providing significant assistance to an agency, organization, or person that discriminates on the basis of disability in providing any aid, benefit, or service to beneficiaries of the public entity’s program. 28 C.F.R. § 35.130(b)(1). 66. The United States Supreme Court in Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999), held that unnecessary institutionalization of individuals with disabilities is a form of discrimination under Title II of the ADA. In doing so, the high Court interpreted the ADA’s “integration mandate” as requiring persons with disabilities to be served in the community when: (1) the state determines that community-based treatment is appropriate; (2) the individual does not oppose community placement; and, (3) community placement can be reasonably accommodated. 527 U.S. at 607. 67. The North Carolina General Assembly designated LMEs such as PBH as “local political subdivisions” of the State. See N.C.G.S. § 112C-116(a). The Legislature further vested the Secretary of DHHS with responsibility for ensuring LMEs’ compliance with applicable laws. See N.C.G.S. § 112C-111. Through contractual, licensing, or other arrangement with the State, PBH is responsible for providing a public aid and benefit through its management of the public mental health, developmental disabilities, and substance abuse system in its catchment area. The Piedmont Behavioral Healthcare Local Management Entity is an instrumentality and contractor of the State, and a public entity covered by Title II of the ADA and its implementing regulations. See 28 C.F.R. § 35.130 (b)(1). 68. Plaintiffs are individuals with disabilities in that they have physical and other impairments that substantially limit one or more of their major life activities, including
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but not limited to, thinking, communicating, learning, working, caring for themselves, and concentrating. See 42 U.S.C. § 12102.
69. Plaintiffs are qualified individuals with disabilities in that they are capable of safely living at home with necessary services and they meet the essential eligibility requirements for the receipt of services from the State Medicaid program, the Innovations Waiver program, and State-funded mental health, developmental disabilities, and substance abuse services programs with or without reasonable modifications to the rules, polices, and practices of those programs. See 42 U.S.C. § 12131(2).
70. Plaintiffs’ community placements were the result of, inter alia, PBH’s determination that community-based treatment was appropriate for them. Plaintiffs do not oppose community placement. Plaintiffs’ community placement can be reasonably accommodated, as demonstrated by their continuous care in the community for many years; Plaintiff Clinton L. for more than eight years and Plantiff Timothy B. for more than a decade.
71. Without reasonable modification of the rules, policies, and procedures governing the Innovations Waiver program, Plaintiffs will be forcibly isolated and segregated. Plaintiffs are facing forced institutionalization as a direct result of Defendants’ actions.
72. Defendant Coughlin’s failure to make reasonable modifications to the service definitions applicable to the Innovations Waiver program denies Plaintiffs the full twenty-four hour per day residential staffing they need to remain in their homes. The failure to make reasonable modifications to the Innovations Waiver service definitions to
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allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Title II of the Americans with Disabilities Act, 42 U.S.C. § 12132 and its implementing regulation, 28 C.F.R. § 35.130(d).
73. Defendant Cansler is the Secretary of the North Carolina DHHS, the “single state agency” responsible for the administration and supervision of North Carolina’s Medicaid program under Title XIX of the Social Security Act. 42 C.F.R. § 431.10 (2009). LMEs such as PBH cannot “change or disapprove any administrative decision of that [single state agency], or otherwise substitute their judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency.” 42 C.F.R. § 431.10(e)(3) (2009). Additionally, Defendant Cansler is responsible for the ultimate oversight of the LMEs to make sure that they provide publicly funded services in accordance with the law. See N.C.G.S. § 122C-111, et seq.
74. Defendant Cansler’s failure to make reasonable modifications to the service definitions applicable to the Innovations Waiver service definitions to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Title II of the Americans with Disabilities Act, 42 U.S.C. § 12132 and its implementing regulation, 28 C.F.R. § 35.130(d).
75. Defendant Coughlin has also failed to exercise his discretion in a nondiscriminatory manner and has exceeded his authority by drastically reducing the rate for Supervised Living services, denying Plaintiffs the services necessary to make up the staffing shortfall under the Innovations Waiver.
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76. PBH’s proposed rate cuts would result in the elimination of all Supervised Living services in the five counties served by PBH. Plaintiffs would no longer have access to services that were originally created for their use.
77. Defendant Coughlin failed to properly exercise his discretion and authority in reducing rates and, thereby, eliminating adequate state funds for Plaintiffs’ residential staffing services. Defendant Coughlin’s failure to make sufficient funds available to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Title II of the Americans with Disabilities Act, 42 U.S.C. § 12132 and its implementing regulation, 28 C.F.R. § 35.130(d).
78. Defendant Cansler’s failure to adequately supervise the actions of PBH and to make these funds available to Plaintiffs to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Title II of the Americans with Disabilities Act, 42 U.S.C. § 12132 and its implementing regulation, 28 C.F.R. § 35.130(d).
SECOND CLAIM FOR RELIEF (Section 504 of the Rehabilitation Act) 79. Plaintiffs adopt and restate the allegations set forth in paragraphs 1 – 78 of this complaint. 80. Section 504 of the Rehabilitation Act of 1973 provides, “no otherwise qualified individual with a disability in the United States...shall, solely by reason of her or his disability, be excluded from participation in, be denied the benefits of, or be subjected to
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discrimination under any program or activity receiving Federal financial assistance.” 29 U.S.C. § 794(a).
81. “Individual with a disability” is one who has a disability as defined by the Americans with Disabilities Act. 29 U.S.C. § 705(20)(B), referencing 42 U.S.C. 12102.
82. “Program or activity” includes a department, agency, special purpose district, or other instrumentality of a State or of a local government. 29 U.S.C. § 794(b)(1)(A).
83. “Recipient” of federal financial assistance also includes any public or private agency or other entity to which Federal financial assistances is extended directly or through another recipient. 28 C.F.R. § 41.3(d).
84. Regulations implementing Section 504 require a recipient of federal financial assistance to administer its services, programs, and activities in the “most integrated setting appropriate” the needs of qualified individuals with disabilities. 28 C.F.R. § 41.51(d).
85. The State of North Carolina has delegated to LMEs such as PBH the function of administering programs and services to clients in its geographical area in need of Mental Health, Developmental Disabilities, or Substance Abuse services. PBH receives appropriations of money from the North Carolina state legislature, including a substantial portion of federal Medicaid funds and State funds.
86. PBH is a recipient of Federal financial assistance under Section 504 and its implementing regulations.
87. Plaintiffs are “qualified person[s] with disabilities” within the meaning of Section 504 because they have physical and/or mental impairments that substantially
21
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limit one or more major life activities, and they meet the essential eligibility requirements for the Innovations Waiver program. See 29 U.S.C. § 705(9)
88. Defendant Coughlin’s failure to reasonably modify the Innovations Waiver service definitions to allow Plaintiffs to combine residential staffing services to achieve a full twenty-four hours of continuous staffing constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and its implementing regulation, 28 C.F.R. 41.51(d). Without a reasonable accommodation of the rules, policies, and procedures governing the Innovations Waiver program, Plaintiffs will be been forcibly isolated and segregated. Plaintiffs are also facing forced institutionalization. Plaintiffs are entitled to reside in the most integrated setting appropriate to their needs. Plaintiffs, with reasonable modifications to the Innovations Waiver service definitions that allow them to combine residential staffing services, can successfully maintain their community placement in their own homes, each of which is the most integrated setting appropriate to their needs.
89. Defendant Coughlin has also failed to exercise his discretion in a nondiscriminatory manner and has exceeded his authority by drastically reducing the rate for Supervised Living services, denying Plaintiffs the services necessary to make up the staffing shortfall under the Innovations Waiver.
90. PBH’s proposed rate cuts would result in the elimination of all Supervised Living services in the five counties served by PBH. Plaintiffs would no longer have access to services that were originally created for their use.
22
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91. Defendant Coughlin failed to properly exercise his discretion and authority in reducing rates and, thereby, eliminating adequate state funds for Plaintiffs’ residential staffing services. Defendant Coughlin’s failure to make sufficient funds available to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and its implementing regulation, 28 C.F.R. 41.51(d).
92. Defendant Cansler’s failure to adequately supervise PBH’s actions and instruct PBH to reasonably modify the Innovations Waiver service definitions to allow Plaintiffs to combine residential staffing services to achieve a full twenty-four hours of continuous staffing constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and its implementing regulation, 28 C.F.R. 41.51(d).
93. Additionally, Defendant Cansler’s failure to adequately supervise PBH’s actions and instruct PBH to exercise its discretion to make available non-Medicaid state funds for the residential staffing services that Plaintiffs require to avoid segregation and institutionalization, and to remain in their integrated home settings that are appropriate to their needs constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and its implementing regulation, 28 C.F.R. 41.51(d).
RELIEF REQUESTED WHEREFORE, Plaintiffs respectfully request that the Court grant the following relief:
1. Certify this action as a class action pursuant to Fed. R. Civ. P. 23.
23
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2. Declare Defendant Coughlin’s failure to offer a reasonable per diem rate for Supervised Living services to be unlawful discrimination in violation of Title II of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act.
3. Declare Defendant Coughlin’s and Cansler’s failure to make reasonable modifications to the service definitions in the Innovations Waiver to be unlawful discrimination in violation of Title II of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act.
4. Grant preliminary and permanent injunctions enjoining Defendant Coughlin Defendant Cansler and their officers, agents, employees, attorneys, and all persons who are in active concert or participation with him from implementing the proposed rate reduction to Supervised Living Services, and requiring Defendant Coughlin and Defendant Cansler and their officers, agents, employees, attorneys, and all persons who are in active concert or participation with him to continue the provision of coverage of Plaintiffs’ service needs in the least restrictive, most integrated setting.
5. Waive the requirement for the posting of a bond as security for the entry of preliminary relief.
6. Award the Plaintiffs the costs of this action and reasonable attorney’s fees pursuant to 29 U.S.C. § 794a and 42 U.S.C. § 12133 and any other applicable provision of law.
7. All such other and further relief as the Court deems to be just and equitable.
24
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Dated: February 11, 2010

Respectfully submitted,

/s/ John R. Rittelmeyer John R. Rittelmeyer john.rittelmeyer@disabilityrightsnc.org N.C. State Bar No. 17204

Jennifer L. Bills jennifer.bills@disabilityrightsnc.org N.C. State Bar No. 37467

Andrew B. Strickland andrew.strickland@disabilityrightsnc.org N.C. State Bar No. 40490

DISABILITY RIGHTS NC

2626 Glenwood Avenue, Suite 550

Raleigh, NC 27608

Phone:

(919) 856-2195

Fax: (919) 856-2244

Attorneys for Plaintiffs

25 Case 1:10-cv-00123-JAB-JEP Document 1 Filed 02/11/10 Page 25 of 25

 
 UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next )

friend CLINTON L., SR., and

)

TIMOTHY B. by his guardian and next ) CIVIL CASE NO. 1:10-CV-00123

friend ROSE B., and others similarly

)

situated,

)

)

Plaintiffs,

)

)

v.

)

)

LANIER CANSLER, in his official

)

capacity as Secretary of the Department )

of Health and Human Services, and DAN )

COUGHLIN, in his official capacity as )

CEO and Area Director of Piedmont

)

Behavioral Healthcare Local

)

Management Entity,

)

)

Defendants

MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
__________________________________________________________________

Plaintiff Clinton L., by his guardian and next friend Clinton L., Sr., and

Timothy B., by his guardian and next friend Rose B., hereby move the court for a

Temporary Restraining Order and a Preliminary Injunction, pursuant to Fed. R.

Civ. P. 65, prohibiting Defendants from implementing any reductions to the daily

reimbursement rate for Supervised Living services currently in effect as of the date

of this filing, otherwise known by their service codes YM811 and YM812, to

preserve Plaintiffs’ level of care and community placements in their own homes.

In support of their motion, Plaintiffs state as follows:

Case 1:10-cv-00123-JAB-JEP Document 4 Filed 02/11/10 Page 1 of 7

Background 1. Plaintiffs suffer from a variety of chronic and disabling conditions, including mental retardation and some form of mental illness (MR/MI) that require twenty-four hours of care and supervision each day. Additionally, Named Plaintiff Timothy B. is deaf. 2. Plaintiffs are recipients of Thomas S. funding (now called MR/MI funding) who have been receiving state-funded Supervised Living services through North Carolina’s DHHS Division of Mental Health, Developmental Disabilities, and Substance Abuse Services. In addition, Plaintiffs receive health care and other services through the Cardinal Health Plan and Innovations Waiver programs offered by their Local Management Entity (LME). Piedmont Behavioral Healthcare is the Plaintiffs’ LME. 3. Defendant Lanier Cansler is the Secretary of the North Carolina Department of Health and Human Services (DHHS). DHHS is the “single state agency” responsible for the administration and supervision of North Carolina’s Medicaid program under Title XIX of the Social Security Act. 42 C.F.R. § 431.10 (2008). Defendant Cansler is also responsible for the ultimate oversight of Local Management Entities to ensure that they provide publicly-funded services in accordance with the law. See N.C.G.S. § 122C-111, et seq. 4. Defendant Dan Coughlin is the CEO and Area Director of Piedmont Behavioral Healthcare (PBH), an LME with a geographic service area encompassing Cabarrus, Davidson, Rowan, Stanly, and Union Counties. Within
2
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the State and Medicaid-funded system of mental health, developmental disabilities, and substance abuse services in North Carolina, LMEs are the locus of coordination for these services at the community level. See N.C.G.S. § 122C-101; N.C.G.S. § 122C-115.4(a). Defendant Coughlin’s responsibilities include financial management and accountability for the use of State and local funds and information management for the delivery of publicly funded services. See N.C.G.S. § 122C-115.4(b)(7).
5. Defendant Coughlin is also responsible for the implementation and management of PBH’s Medicaid Home and Community-Based Services (HCBS) Community Alternatives Program Waivers (the Innovations Waiver), consistent with federal law.
6. These Medicaid and State-funded services have allowed Plaintiffs to live successfully and independently in their own homes and to participate in family and community life; Named Plaintiff Clinton L. for more than eight years and Named Plantiff Timothy B. for more than a decade. The Plans of Care for Named Plaintiffs Clinton L. and Timothy B. both call for these services to be delivered, reflecting a determination by their treatment teams that the service is medically necessary. This determination of medical necessity has been ratified by PBH by its authorization for delivery of the service.
7. On January 11, 2010, PBH issued a memorandum to providers describing cuts to the Supervised Living services. Effective February 15, 2010, the per diem rate for Supervised Living services will decrease to $116.15. The memorandum
3
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does not state that PBH will permit any exception to these rate cuts. PBH did not notify Plaintiffs of these rate cuts, choosing instead to give notice only to providers.
8. For Named Plaintiff Clinton L., the proposed rate is nearly 30% less than the current rate. For Named Plaintiff Timothy B., the proposed rate is nearly 55% less than the current rate.
9. The costs incurred by the providers of residential services for Supervised Living consumers such as Clinton L. and Timothy B. will substantially exceed PBH’s proposed per diem rate of $116.15. Because providers would only be able to operate Supervised Living services at a loss, they will no longer offer it in the five counties served by PBH. The rate cuts create a substantial certainty that all Supervised Living providers in the five counties served by PBH will withdraw from offering the services.
10. As a result of the provider elimination, Plaintiffs will no longer have access to Supervised Living services. Plaintiffs will then be forced out of their community placement in their own homes into more restrictive congregate placements and/or institutions.
11. Residential staffing services available through the Innovations Waiver cannot be combined in any way to achieve twenty-four hour staffing and supervision without reasonable modification of the service definitions. Consequently, a plan of care under the Innovations Waiver must be supplemented
4
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with additional state-funded services, such as Supervised Living services, if twenty-four hour staffing is required.
12. Currently, Plaintiffs are faced with two equally discriminatory options when the rate cut becomes effective on February 15, 2010: (1) transition to congregate placements that cannot meet Plaintiffs’ need for constant care, support, and supervision or (2) enter institutions.
13. Pursuant to Fed. R. Civ. P. 65(b)(1)(B), Plaintiffs’ counsel certifies that it made efforts to give notice to Defendants of its intent to litigate this matter. On January 29, 2010, Plaintiffs’ counsel faxed a copy of a demand letter to Defendant Coughlin at his place of business and delivered a copy of the same demand letter to Defendant Cansler.
14. The Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101, et seq. and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, require that individuals with disabilities, such as Plaintiffs, be served in the least restrictive environment in the community when that option is cost-neutral as compared to an institution. Plaintiffs’ placements have been successful and cost-effective as compared to their care in an institution for many years.
15. Defendant Coughlin has failed to properly exercise his authority and discretion to assess Plaintiffs’ individual needs and maintain their state MR/MI funding and keep them in their long-time community placements. By his actions in sharply reducing the reimbursement rate for Plaintiffs’ Supervised Living
5
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services, Defendant Coughlin has effectively abolished this necessary service in the area served by PBH.
16. Plaintiffs will suffer irreparable injury if the Defendants are permitted to eliminate or significantly reduce their funding and services. Plaintiffs will exchange the safety and independence of their individual community placements, where they have been able to receive regular and reliable treatment and care, for more restrictive and inappropriate institutional or congregate settings that do not meet their needs. In addition, the entire system of care that Plaintiffs have enjoyed for years will be dismantled and is in danger of being permanently lost.
WHEREFORE, Plaintiffs seek a Temporary Restraining Order and a Preliminary Injunction to enjoin Defendants from implementing any reductions to the daily reimbursement rate currently in effect for Supervised Living services to allow Plaintiffs to preserve their access to twenty-four hour care and supervision and to maintain their community placements in their own homes.
Pursuant to Local Rule 65.1(b), Plaintiffs also request leave to present oral argument and testimony in support of their Motion for a Temporary Restraining Order and Preliminary Injunction.
6
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Dated: February 11, 2010

/s/ John R. Rittelmeyer
John R. Rittelmeyer john.rittelmeyer@disabilityrightsnc.org N.C. State Bar No. 17204
Jennifer L. Bills jennifer.bills@disabilityrightsnc.org N.C. State Bar No. 37467
Andrew B. Strickland andrew.strickland@disabilityrightsnc.org N.C. State Bar No. 40490
DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244 Attorneys for Plaintiffs

7 Case 1:10-cv-00123-JAB-JEP Document 4 Filed 02/11/10 Page 7 of 7

 
 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next )

friend CLINTON L., SR., and

)

TIMOTHY B. by his guardian and next ) CIVIL CASE NO. 1:10-CV-00123

friend ROSE B., and others similarly

)

situated,

)

) MEMORANDUM IN SUPPORT OF

Plaintiffs,

) PLAINTIFFS’ MOTION FOR A

) TEMPORARY RESTRAINING

v.

) ORDER AND PRELIMINARY

) INJUNCTION

LANIER CANSLER, in his official

)

capacity as Secretary of the Department )

of Health and Human Services, and DAN )

COUGHLIN, in his official capacity as )

CEO of the Piedmont Behavioral

)

Healthcare Local Management Entity,

)

)

Defendants.

_______________________________________________________________________

This is a class action suit challenging the Defendants’ actions in effectively

eliminating medically necessary services that the Plaintiffs have long received. In order

to maintain the status quo and preserve the funding for their community placements,

Plaintiffs seek a Temporary Restraining Order and a Preliminary Injunction. Injunctive

relief is required in order to prevent the constructive elimination of the state-funded

services that allow Plaintiffs to remain in the community. Defendants’ proposed

reduction of the reimbursement rate for Plaintiffs’ state-funded services would indirectly

but effectively eliminate these services in the five counties served by Piedmont

Behavioral Healthcare, also known as PBH. Without these state-funded services,

Plaintiffs (and all other recipients of this necessary service) are at risk of

institutionalization and the simultaneous dismantling of their systems of care.

Case 1:10-cv-00123-JAB-JEP Document 5 Filed 02/11/10 Page 1 of 19

SUMMARY OF THE CASE Plaintiffs are adults with dual diagnoses of a developmental disability and mental illness, as well as other chronic conditions. Plaintiffs require continuous supervision and support in nearly all aspects of their lives, which need is met through a combination of services. Some of these services are paid with state funds; some are federally funded through the Medicaid system. Defendant Dan Coughlin is the CEO and Area Director of PBH, a Local Management Entity (LME) with a geographic service area encompassing Cabarrus, Davidson, Rowan, Stanly, and Union Counties. Within the Medicaid system of mental health, developmental disabilities, and substance abuse services in North Carolina, LMEs are the locus of coordination for services at the community level. N.C.G.S. §§ 122C-101, 122C-115.4. Defendant Coughlin’s responsibilities include financial management and accountability for the use of state and local funds for the delivery of publicly funded services. See N.C.G.S. § 122C-115.4(b)(7). Defendant Coughlin also bears responsibility for the implementation and management of the Medicaid-funded Home and Community-Based Services (HCBS) Community Alternatives Program Waivers (the Innovations Waiver). See Social Security Act § 1915, 42 U.S.C. § 1396n (b) and (c). Defendant Lanier Cansler is the Secretary of the North Carolina Department of Health and Human Services (DHHS). DHHS is the “single state agency” responsible for the administration and supervision of North Carolina’s Medicaid program under Title XIX of the Social Security Act. 42 C.F.R. § 431.10. Defendant Cansler is also
2
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responsible for the ultimate oversight of the LMEs to make sure that they provide publicly funded services in accordance with the law. See N.C.G.S. § 122C-112.1(a).
On February 15, 2010, as announced in a PBH “Communications Bulletin” dated January 11, 2010, Defendant Coughlin will implement a drastic cut to the daily rate paid by the LME for the “Supervised Living – 1 Resident” service, otherwise known as service code YM811, and “Supervised Living – 2 Resident” service, otherwise known as service code YM812. These Supervised Living services are considered to be “wraparound” services, paid with state funds and intended to augment the residential staffing services available to participants in the Innovations Waiver program. As of the date of this filing, the current rate for the “Supervised Living – 1 Resident” service is variable. Named Plaintiff Timothy B. has been authorized to receive “Supervised Living – 1 Resident” services at a rate of $250 per day. As of the date of this filing, the current rate for the “Supervised Living – 2 Resident” service is a standard rate of $161.99 per day; Named Plaintiff Clinton L. has been authorized to receive this service at the standard rate.
The proposed reduction is substantial – from $161.99 per day and $250 per day to $116.15 per day. Providers’ costs in offering Supervised Living services exceed the new daily rate for Supervised Living services effective on February 15, 2010. There is a substantial certainty that, because providers will only be able to offer Supervised Living services at a loss, they will no longer offer the services in the five counties served by PBH. Without these Supervised Living services, Plaintiffs are at a considerable risk of being forced out of their current placements into group homes or other congregate living
3
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arrangements, which will not provide the continuous supervision and support that Plaintiffs require to live in the community.
If Plaintiffs are no longer able to access Supervised Living services, the only remaining source of funding available to them would be the Innovations Waiver. However, the limitations in the service definitions and utilization guidelines governing the Innovations Waiver prohibit Plaintiffs from benefitting from the full array of services to which Plaintiffs should otherwise be entitled. Without the required supervision, it is likely that Plaintiffs would be forced into an institution, in violation of the Americans with Disabilities Act and the Rehabilitation Act of 1973. See 42 U.S.C. § 12101 et seq.; 29 U.S.C. § 794.
Defendant Coughlin has failed to properly exercise his discretion to assess Plaintiff’s individual needs and maintain their state-funded services and permit them to remain in their long-time community placements. Defendant Cansler, who bears the ultimate responsibility for the administration of mental health services in the state, has failed to exercise his authority and direct Defendant Coughlin to maintain state-funded services for Plaintiffs.
Plaintiffs request a temporary restraining order and preliminary injunction directing Defendants to maintain Plaintiffs’ Supervised Living rates at their current level ($161.99 per day and $250 per day) pending a final resolution of Plaintiffs’ claims by this Court.
4
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STATEMENT OF FACTS Timothy B. and Clinton L. are adults with dual diagnoses of mental retardation and mental illness (MR/MI) and other chronic and disabling conditions that require twenty-four hours of care and supervision. Plaintiffs receive health care and other federally-funded services through the PBH Medicaid Plan (the “Cardinal Health Plan”), as well as services through the Innovations Waiver. Plaintiffs are also eligible for and receive state-funded mental health, developmental disabilities, and substance abuse services in addition to Medicaid services. Plaintiffs rely on a combination of Medicaid, Innovations Waiver, and statefunded services to live successfully in their own home and to participate in family and community life. Plaintiffs especially depend on the state-funded Supervised Living service to supplement the limited hours of residential staffing services available through the Innovations Waiver. Supervised Living is a “residential service which includes room and support care for one individual who needs 24-hour supervision; and for whom care in a more intensive treatment setting is considered unnecessary on a daily basis.” North Carolina’s Department of Health and Human Services Division of Mental Health/Developmental Disabilities/Substance Abuse Services MH/DD/SA Service Definitions 164 (January 1, 2003). Currently, it is only through a combination of statefunded Supervised Living services and federally-funded Innovations Waiver services that Plaintiffs can access the twenty-four hours of care and supervision they require to live in their own homes.
5
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Clinton L.’s diagnoses include Schizoaffective Disorder, Bipolar Disorder, Intermittent Explosive Disorder, and Moderate Mental Retardation. Lockhart Declaration ¶ 4. Clinton L.’s community placement is his own apartment in Lexington, North Carolina. This apartment has been modified by the addition of a system of alarms and sensors, due to Clinton L.’s tendency to wander at night. Clinton L. lives independently in his apartment with a rotating schedule of residential workers twentyfour hours a day. Id. at ¶ 5.
Timothy B.’s diagnoses include Intermittent Explosive Disorder, Major Depressive Disorder, Epilepsy, Deafness, and Severe Mental Retardation. Bryan Declaration ¶ 4. Timothy B.’s community placement is his own house in Raleigh, North Carolina, where he lives independently with a rotating schedule of residential workers twenty-four hours a day. Timothy B. also requires staff capable of communicating with him using American Sign Language. Id. at ¶ 6. On prior occasions when Timothy B. was unable to communicate with his supervisory staff, he often engaged in destructive outbursts. Timothy B. has a history of placements in group homes which have failed, such failures resulting in his institutionalization at the O’Berry Center in Goldsboro. Id. at ¶ 8. One of Timothy B.’s institutional placements was seven years in length. Id. Both Plaintiffs have successfully lived in their own homes for several years, Clinton L. for more than eight years and Timothy B. for more than a decade.
Plaintiffs require twenty-four hour care because of their disabilities. Plaintiff Clinton L. requires one-on-one staffing due to his mental illness and developmental disabilities. Plaintiff Timothy B. requires one-on-one staffing due to his erratic
6
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behaviors, epilepsy, communication difficulties and mental retardation. Other available services, such as Day Supports, that do not provide the individualized care and attention provided by residential staffing are not appropriate to meet Plaintiffs’ needs and will jeopardize the independence and community living that Plaintiffs have long enjoyed.
Plaintiffs’ successful community placements are threatened by the Supervised Living rate cuts to be effective on February 15, 2010. If implemented, there exists a considerable risk that providers of Supervised Living services will discontinue these services because they will suffer a financial loss if they continue to offer them. Plaintiffs would be constructively denied access to a service that has been deemed necessary for their care. Plaintiffs would then be forced to find other, more congregate placements due to the loss of state funds and concurrent inability to fully meet their staffing needs. Because both Plaintiffs have previously failed at similar placements, it can be reasonably predicted that these congregate placements will likewise fail, at which time they will then be forced into an institution placement.
Defendant Dan Coughlin is the Area Director of PBH. PBH operates under a contract with DHHS and its agent, the Division of Medical Assistance (DMA). Both DHHS and DMA are overseen by Defendant Cansler. The current Memorandum of Agreement (MOA) between PBH and DHHS/DMA obligates PBH to provide a comprehensive system of mental health, developmental disability, and substance abuse services within the geographic area served by PBH.1 “Covered Services” under the PBH
1 The Memorandum of Agreement between PBH and the DHHS/DMA can be found at http://www.pbhcare.org/b3_services/PBH-DMA%20contract%2008%20FINAL%20APPROVED.pdf
7
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plan are “defined in the State’s Medicaid Provider manuals, Bulletins, and Clinical Coverage Policies.” PBH serves Cabarrus, Davidson, Rowan, Stanly, and Union Counties in North Carolina.
According to the MOA, PBH cannot “arbitrarily deny or reduce the amount, duration, or scope of a required service solely because of diagnosis, type of illness, or condition.” Additionally, PBH must “establish and maintain a Provider Network with a sufficient number, mix, and geographic distribution of Providers to ensure that medically necessary Covered Services are delivered in a timely and appropriate manner.” PBH’s obligations under the MOA reflect the “access to care” and “quality of care” provisions in the federal Medicaid statute and regulations. 42 U.S.C. § 1396a(a)(30)(A). See Orthopaedic Hosp. v. Belshe, 103 F.3d 1491, 1496 (9th Cir. 1997) (“a state plan must establish reimbursement rates for health care providers that are both consistent with highquality medical care…and sufficient to enlist enough providers to ensure that medical services are generally available to Medicaid recipients”).
In a “Communication Bulletin” dated January 11, 2010, PBH announced that the rate for Supervised Living services, also known by their service codes YM811 and YM812, would both decrease to $116.15 per day. The new rates would take effect on February 15, 2010. For Named Plaintiff Clinton L., the new rate represents a cut of nearly 30%. For Named Plaintiff Timothy B., the new rate represents a cut of nearly 55%. The costs incurred by providers in the delivery of Supervised Living services exceed the new proposed rate. Given the gap between costs and reimbursement rate, providers can no longer be expected to offer the Supervised Living services in the five
8
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counties served by PBH. Easter Seals UCP, the provider of Clinton L.’s Supervised Living services, has stated that it cannot offer the service at the new rate announced by PBH. Sovierno Declaration at ¶ 7; Lockhart Declaration ¶ 11. The provider of Timothy B.’s Supervised Living services has already informed his guardian that he will lose that service (and his current placement) in April 2010. Bryan Declaration ¶ 17.
Meanwhile, Plaintiffs continue to meet medical necessity criteria justifying their need for the Supervised Living service. Plaintiffs’ current Individual Support Plans (ISPs), drafted by their treatment teams and approved by PBH, reflect a need to continue Supervised Living services. Supervised Living has appeared on Named Plaintiff Clinton L.’s ISPs for more than eight years, and has appeared on Named Plaintiff Timothy B.’s ISPs for more than a decade. The effect of the newly announced rates would be to eliminate Plaintiffs’ access to a service that is currently approved and has been approved for their care in past years.
As a result of the announced rate cuts, Plaintiffs will be forced to vacate their current placements and move to other, inappropriate congregate placements that do not provide Plaintiffs with one-on-one supervision and care twenty-four hours a day. Without twenty-four hours of care and supervision, it is anticipated that Plaintiffs will be forced into more restrictive, segregated, institutional settings. Away from their homes and communities, Plaintiffs will face increased risk of community-acquired infections, malnutrition, and depression. They also face immediate risk of loss of the independence and dignity they have enjoyed living successfully in the community.
9
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ARGUMENT A. Standard of Review. To prevail in a motion for a preliminary injunction the trial court must consider (1) whether plaintiffs are likely to succeed on the merits; (2) whether they are likely to suffer irreparable harm in the absence of the preliminary relief; (3) if the balance of hardships tips in their favor; and (4) whether the injunction is in the public interest. See Winter v. Natural Res. Def. Council, Inc., 555 U.S. __ , 129 S.Ct. 365, 374 (2008); The Real Truth About Obama, Inc. v. FEC, 575 F.3d 342, 346 (4th Cir. 2009), adopting Winter and overruling Blackwelder Furniture Co. v. Seilig Mfg. Co., 550 F.2d 189 (4th Cir. 1977) . The same standard must be met to obtain a temporary restraining order. U.S. Dep't of Labor v. Wolf Run Mining Co., 452 F.3d 275, 281 n.1 (4th Cir. 2006) (“A preliminary injunction, which may be entered only after notice, is distinguished from a TRO, which may be entered without notice, only by its duration – a preliminary injunction is of indefinite duration extending during the litigation, while a TRO is limited in duration to 10 days plus one 10-day extension.”). As will be discussed, Plaintiffs meet all four requirements and should be granted the requested injunctive relief. As recently as one month ago, a district court in North Carolina decided a similar issue in Marlo M. v. Cansler, No. 5:09-CV-535-BO, 2010 U.S. Dist. LEXIS 3426 (E.D.N.C. Jan. 17, 2010). In that case, the Court granted a temporary restraining order and a preliminary injunction against the defendant LME and Secretary Cansler where the two plaintiffs faced a termination of the same services at issue in the present case. PBH’s
10
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drastic cuts to the Supervised Living rates in the present case would have the same effect on Plaintiffs’ care as an outright termination of Plaintiffs’ Supervised Living services.
B. Plaintiffs Are Likely To Succeed On The Merits. 1. The unwarranted termination of Plaintiffs’ funding and services places Plaintiffs at risk of institutionalization and violates the Americans with Disabilities Act.
On February 15, 2010, Plaintiffs’ ability to access state-funded Supervised Living services will be drastically reduced or eliminated, which will force Plaintiffs to transition to institutional placements, either immediately or imminently. Title II of the Americans with Disabilities Act (ADA) protects qualified individuals with disabilities from discrimination by public entities such as DHHS and PBH. “Qualified individuals with disabilities” are those who “with or without reasonable modifications to rules, policies, or practices . . . mee[t] the essential eligibility requirements for the receipt of services or the participation in programs or activities provided by a public entity.” 42 U.S.C. § 12131(2). Prohibited discrimination by public entities includes the failure to provide persons with disabilities a community-based placement when such placement is appropriate; the individual wishes to reside in the community; and the placement can be reasonably accommodated. Olmstead v. L.C., 527 U.S 581, 587 (1999).
Plaintiffs are qualified individuals with disabilities who are being illegally discriminated against by the two defendant public entities. Defendant Cansler is the Secretary of the North Carolina Department of Health and Human Services, which is unquestionably a public entity. Defendant Coughlin is the CEO and Area Director of
11
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PBH, a local political subdivision of the State and a public entity. See N.C.G.S. § 122C116(a). As the director of PBH, Defendant Coughlin is vested with the authority to manage state-funded services in the area served by his LME and to oversee the operation of the PBH Innovations Waiver. N.C.G.S. § 122C-115.4(a). Plaintiffs are individuals with disabilities in that they are diagnosed with mental retardation and mental illness. Plaintiffs are qualified persons with disabilities in that they meet the essential eligibility requirements for and are in receipt of services from the PBH Medicaid program, the Innovations Waiver program, and State-funded mental health, developmental disabilities, and substance abuse services programs with or without reasonable modification to the rules, policies, and practices of those programs. See 42 U.S.C. §12131(2).
Defendants’ actions constitute illegal discrimination under Olmstead. The community-based placements for both Clinton L. and Timothy B. have been deemed to be appropriate as demonstrated by their long history of living safely and successfully in their own homes – Clinton L. for eight years and Timothy B. for over a decade. Community-based treatment is especially appropriate for Plaintiffs as it guarantees them the required level of one-on-one attention that is otherwise unavailable in any congregate or institutional setting. Plaintiffs’ continued residential placement can be reasonably accommodated through continuation of their state-funded services or, alternatively, through modifications to the Innovations Waiver service definitions. However, despite Plaintiffs’ successful integration into their communities and their continued eligibility for the Innovations Waiver and state-funded Supervised Living services, Plaintiffs could be forced to leave their homes after the new rate structure is implemented on February 15,
12
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2010. Defendant Coughlin’s threatened abolition of Plaintiffs’ Supervised Living services violates Plaintiffs’ rights to be free from discrimination based on their disability under the ADA, as recognized in Olmstead.
2. Defendants’ reduction of Plaintiffs’ funding and services will result in Plaintiffs’ unnecessary institutionalization in violation of Section 504 of the Rehabilitation Act of 1973.
The reduction of Plaintiffs’ access to state-funded Supervised Living services places them at immediate risk of unnecessary institutionalization in violation of the Rehabilitation Act of 1973. In the Rehabilitation Act of 1973, Congress stated that “[n]o otherwise qualified individual with a disability in the United States . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.” 29 U.S.C. § 794(a), referencing 29 U.S.C. § 705(2). “Program or activity” includes a department, agency, special purpose district, or other instrumentality of a State or of a local government. 29 U.S.C. § 794(b)(1)(A). The Rehabilitation Act defines disability as a physical or mental impairment that substantially limits one or more major life activities. 29 U.S.C. § 705(20)(B), referencing 42 U.S.C. § 12102(1). Prohibited discrimination includes denial of the opportunity to participate in or benefit from an aid, benefit, or service. 28 C.F.R. § 41.51(b). Moreover, a recipient of federal funds must administer its services, programs, and activities in the “most integrated setting appropriate” to the needs of the qualified individual. 28 C.F.R. § 41.51(d).
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Plaintiffs are qualified persons with disabilities in that they meet the essential eligibility requirements for and are in receipt of services from the PBH Medicaid program, the Innovations Waiver program, and state-funded mental health, developmental disabilities, and substance abuse services programs with or without reasonable modification to the rules, policies, and practices of those programs. See 42 U.S.C. §12131(2); 29 U.S.C. § 794(a). Defendant Cansler is the Secretary of the North Carolina Department of Health and Human Services, a state agency receiving federal financial assistance. Defendant Coughlin is the CEO and Area Director of PBH, an instrumentality of the State of North Carolina receiving federal financial assistance.
Defendant Coughlin has failed to properly exercise his authority and discretion by reducing the rate for Supervised Living services so drastically that the network of providers that currently offer these services will terminate the service rather than operate at a substantial loss. Sovierno Declaration ¶ 7. Defendant Coughlin’s constructive termination of all Supervised Living services substantially increases Plaintiffs’ risk of institutionalization or other placement in a segregated setting. Year after year, by its approval of Plaintiffs’ plans of care, PBH had determined that the state-funded services used to augment the core Medicaid services were medically necessary for both Clinton L. and Timothy B. Now, owing to budgetary pressures alone, PBH proposes to effectively abolish a service that is essential for Plaintiffs’ continued community placement – an action that constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act. 29 U.S.C. § 794.
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In sum, plaintiffs are likely to prevail on their claim that the planned elimination of Supervised Living services, forcing Plaintiffs from their longstanding community placements and into eventual institutional settings, is a violation of the ADA and the Rehabilitation Act. As made clear by the Court in Olmstead, a State is required to provide community-based services for eligible persons with disabilities based upon professional assessments. Olmstead, 527 U.S. at 602. To ignore this “integration mandate,” the Court found, constituted “unjustified institutional isolation of persons with disabilities,” and thus prohibited discrimination under the ADA. Id.
C. Plaintiffs will Suffer Irreparable Injury without Injunctive Relief. A temporary restraining order and preliminary injunction are necessary to prevent Plaintiffs from being institutionalized due to the drastic reduction in state-funded services, scheduled to become effective on February 15, 2010. Plaintiffs seeking preliminary relief must demonstrate that they are likely to suffer irreparable injury in the absence of an injunction. Winter v. Natural Res. Def. Council, Inc., 555 U.S. __ , 129 S.Ct. 365, 374 (2008); Los Angeles v. Lyons, 461 U.S. 95, 103, 103 S.Ct. 1660 (1983). Irreparable injuries are those that cannot be adequately compensated by money damages, such as emotional, psychological, and physical damage. L.J. v. Massinga, 838 F.2d 118, 121-22 (4th Cir. 1988) (finding that monetary costs and administrative inconvenience to city from grant of preliminary injunction was outweighed by preventing continuing harm to plaintiffs caused by defendants’ mismanagement of foster care system); see also LaForest v. Former Clean Air Holding Co., Inc., 376 F.3d 48, 55 (2d Cir. 2004) (stating
15
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that reduction of medical benefits and consequent negative impacts on an individual’s health is an irreparable injury).
Plaintiffs are likely to suffer irreparable injury if this Court does not grant them injunctive relief preventing the termination or reduction of their residential staffing services. If Plaintiffs lose residential staffing services, Plaintiffs will imminently face the prospect of institutionalization or forced transition to congregate placements. These placements will cause Plaintiffs emotional, psychological, and physical harm that cannot be compensated by an award of monetary damages. For Timothy B., the harm arising from the loss of his current placement would be particularly acute, as it would also mean the loss of staff capable of communicating with him using American Sign Language.
Both Plaintiffs would face a substantial risk of institutionalization without immediate injunctive relief. Both will lose their homes, their staff and an entire system of care that was crafted to meet their unique clinical needs. As a result, both will suffer irreparable injury should they be removed from their current placements.
D. The Balancing of Hardships Tips in Favor of the Plaintiffs. The balance of hardships tips decidedly in Plaintiffs’ favor. As discussed, Plaintiffs face a substantial risk of institutional placement if the injunction is denied. In contrast, the harm that may accrue to Defendants if the injunction is granted is slight. PBH will be required only to maintain funding Plaintiffs’ services at a rate and in an amount that PBH has authorized and provided for years. Little harm, if any, will accrue
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to DHHS – no preliminary relief is required of the Secretary in order to maintain the status quo.
E. The Public Interest Demands that the Injunction be Granted. Enforcement of laws passed by Congress is in the public interest, even when that means enjoining allegedly illegal actions by another government body. Glenwood Bridge, Inc. v. City of Minneapolis, 940 F.2d 367, 372 (8th Cir. 1991). The public interest is served when laws passed by Congress are enforced and the rights of persons with disabilities are vindicated. “While achieving budgetary savings is also in the public interest of state and federal taxpayers, that interest must give way if it is in conflict with federal substantive law.” Kansas Hosp. Assn, v. Whiteman, 835 F. Supp. 1548,1553 (D. Kan. 1993); see also Haskins v. Stanton, 794 F.2d 1273, 1277 (7th Cir. 1986) (where an injunction requires defendants to comply with existing law, the injunction imposes no burden but “merely seeks to prevent the defendants from shirking their responsibilities”). The interest of the citizens of North Carolina are best served by enjoining Defendants from enforcing arbitrary cuts and denials of necessary services for Plaintiffs. The ADA requires that persons with disabilities be cared for in the most integrated settings possible, a requirement that is being undermined by Defendants’ actions. F. The Court Should not Require a Bond. In the exercise of their discretion under FRCP 65(c), federal courts frequently waive bond requirements in suits brought by citizens to enforce their important federal rights. See, e.g., Barahona-Gomez v. Reno, 167 F.3d 1228, 1237 (9th Cir. 1999) (noting
17
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that “[t]he district court is in a far better position to determine the amount and appropriateness of the security required under Rule 65”); Doctor's Associates, Inc. v. Stuart, 85 F.3d 975, 985 (2d Cir. 1996) (affirming the district court's decision not to require bond); Moltan Co. v. Eagle-Picher Industries, Inc., 55 F.3d 1171, 1176 (6th Cir. 1995) (a district court has discretion to require posting of security).
Important federal rights are at stake in this litigation. See, e.g., Temple Univ. v. White, 941 F.2d 201, 220 n.27 (3d Cir. 1991) (“Public policy under [federal law governing state modification of Medicaid programs] mandates that parties in fact adversely affected by improper administration of programs pursuant thereto be strongly encouraged to correct such errors”). Given the likelihood that Plaintiffs will succeed on the merits, Plaintiffs’ status as public assistance recipients, as well as the fact that the injunction seeks merely to require PBH and DHHS to comply with federal law, no bond should issue.
CONCLUSION Plaintiffs have met their burden of showing (1) a strong likelihood of success on the merits, (2) a substantial likelihood of irreparable harm, (3) that the balance of hardships tips in Plaintiffs favor, and (4) that the public interests demands that the injunction be granted. As such, the Court should grant Plaintiffs’ Motion for a Temporary Restraining Order and Preliminary Injunction, prohibiting Defendant Coughlin from implementing the reduced reimbursement rates for the Supervised Living Services that Plaintiffs rely upon for their independence.
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Dated: February 11, 2010

/s/ John R. Rittelmeyer John R. Rittelmeyer john.rittelmeyer@disabilityrightsnc.org N.C. State Bar No. 17204
Jennifer L. Bills jennifer.bills@disabilityrightsnc.org N.C. State Bar No. 37467
Andrew B. Strickland andrew.strickland@disabilityrightsnc.org N.C. State Bar No. 40490
DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244
Attorneys for Plaintiffs

19 Case 1:10-cv-00123-JAB-JEP Document 5 Filed 02/11/10 Page 19 of 19

 
 UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by her guardians and next

)

friend CLINTON L., SR. and

)

TIMOTHY B., by his guardian and next

)

friend ROSE B., and others similarly situated, )

)

Plaintiffs,

)

v.

)

)

LANIER CANSLER, in his official capacity )

as Secretary of the Department of Health and )

Human Services, and DAN COUGHLIN, in )

his official capacity as CEO and Area Director )

of the Piedmont Behavioral Healthcare

)

Local Management Entity,

)

Defendants.

)

CIVIL ACTION NO. 1:10CV00123

STATEMENT OF INTEREST OF THE UNITED STATES OF AMERICA

Preliminary Statement

The United States files this Statement of Interest, pursuant to 28 U.S.C. § 517,

because this litigation implicates the proper interpretation and application of Department

of Justice regulations implementing the Americans with Disabilities Act, 42 U.S.C. §

12101 et. seq., (“ADA”) and compliance with the mandate of community integration

under Olmstead v. L.C., 527 U.S. 581 (1999). Accordingly, the United States has a strong

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interest in the resolution of this matter.1 Defendants, in pleadings filed Feb. 16, 2010,
raise new facts intending to dispute plaintiffs’ claims. Given the short time and the need
to provide this memorandum to the Court, the United States lacks sufficient time to
independently verify defendants’ most recent statements. However, the United States
supports plaintiffs’ arguments that their record of successful care in the community and
their record of suffering harm while in group settings in the past are enough for the Court
to grant a preliminary injunction to preserve the status quo for these individuals.2 In
addition, the Court should refuse defendants’ invitation to approve broad brush budget
cuts, made without regard to individual needs of people whose medical histories
demonstrate serious harm if they are unable to maintain their current living situations.
This lawsuit challenges defendants’ reductions to reimbursement rates that will
have the effect of eliminating medically necessary services that support plaintiffs in their
homes in the community. Plaintiffs have successfully resided in the community for years
1 The Administration’s commitment to realizing the goals of community integration as set forth in Olmstead has led the United States to file briefs in a number of Olmstead enforcement cases. See “President Obama Commemorates Anniversary of Olmstead and Announces New Initiatives to Assist Americans with Disabilities,” June 22, 2009, Office of the Press Secretary, available at http://www.whitehouse.gov/the_press_office/President-Obama-Commemorates-Anniversary-ofOlmstead-and-Announces-New-Initiatives-to-Assist-Americans-with-Disabilities/). 2 Defendants seek to moot out this lawsuit, and to that end, Defendant Coughlin filed a letter from the attorney for provider Easter Seals UCP saying that it has agreed to maintain current services to Plaintiff Clinton L. below cost, but only if a certain number of hours are reimbursed, and that if the number of hours or other terms of this twelfth-hour deal are altered, the provider “might need to reconsider this position.” Coughlin Response, Ex. 2. The fact that defendants submitted such a letter, rather than a sworn statement, and that it includes conditional statements by ESUCP casts doubt about what is going unreported here, and, provides no effective rebuttal to plaintiffs’ evidence.
2
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and cuts to their services will drive them into institutional settings that are likely to harm them. Defendants have provided services in the community through a combination of state Medicaid waiver funding3 and state supplemental funds.4 However, Defendant Piedmont Behavioral Healthcare Local Management Entity (PBH LME) recently issued a memorandum informing providers of significant rate cuts (ranging from nearly 30% to over 50% cuts to the existing reimbursement rates).5 Driving plaintiffs into segregated facilities as a result of reductions in funding that violate the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973 would directly contravene the requirement to integrate persons with disabilities into the community as mandated by the Supreme Court in Olmstead v. L.C., 527 U.S. 581 (1999).
The facts alleged in the Complaint, together with the declarations submitted in support of the motion for preliminary injunction, demonstrate a likelihood of success on the merits of plaintiffs’ title II integration claim. In addition, it is likely that even short term placement in a congregate setting or an institutional setting, even for a period of two months while funding schemes are adjusted in the case of Timothy B., will cause
3 North Carolina Piedmont Innovations HCBS Waiver, effective April 1, 2008. The waiver supports people with intellectual and other developmental disabilities in a five county service area. 4 State-funded Supervised Living 811 and 812 services available through the North Carolina’s Department of Health and Human Services (DHHS) Division of Mental Health, Developmental Disabilities, and Substance Abuse Services. 5 The LMEs are the locus of coordination for Medicaid-funded mental health, developmental disability, and substance abuse services in North Carolina. (Complaint ¶ 14.)
3
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irreparable harm; the balance of hardships weighs in favor of plaintiffs; and granting the injunction is in the public interest. The motion for preliminary injunction should be granted.
Statutory and Regulatory Background Congress enacted the ADA in 1990 “to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities.” 42 U.S.C. § 12101(b)(1). Congress found that “historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social problem.” 42 U.S.C. § 12101(a)(2). For those reasons, Congress prohibited discrimination against individuals with disabilities by public entities. [N]o qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity. 42 U.S.C. § 12132. As directed by Congress, 42 U.S.C. § 12134, the Attorney General issued regulations implementing Title II, which are based on regulations issued under section 504 of the Rehabilitation Act.6 See 42 U.S.C. § 12134; 28 C.F.R. § 35.190(a); Executive Order 12250, 45 Fed. Reg. 72995 (1980), reprinted in 42 U.S.C. § 2000d-1. The Title II regulations, 28 C.F.R. § 35.130(d), require public entities to “administer services, programs, and activities in the most integrated setting appropriate to the needs of
6 Section 504 prohibits entities that receive federal funds from discriminating against individuals with disabilities. 29 U.S.C. § 794.
4
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qualified individuals with disabilities.” The preamble to the “integration regulation” explains that “the most integrated setting” is one that “enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible.” 28 C.F.R. §35.130(d), App. A, at 571 (2009).
Ten years ago, in a landmark decision, the Supreme Court held that unjustified segregation of individuals with disabilities by public entities constitutes unlawful discrimination under Title II of the ADA and its integration regulation. Olmstead v. L.C., 527 U.S. 581, 586 (1999). The duty to provide integrated services, however, is not absolute. A public entity is required only to make reasonable modifications that do not “fundamentally alter the nature of the service, program, or activity.” 28 C.F.R. § 35.130(b)(7) (2009). Thus, a public entity violates Title II if it segregates individuals in institutions when those individuals could be served in the community through reasonable modifications to its program, unless it is able to demonstrate that doing so would result in a “fundamental alteration” of its program. Olmstead, 527 U.S. at 595-596.
Summary of Facts Plaintiffs Clinton L. and Timothy B. are adults dually diagnosed with developmental disabilities and mental illness who require care and supervision twentyfour hours a day. (Bryan Dec. ¶¶ 4, 5; Lockhart Dec. ¶¶ 4, 5.) Plaintiff Clinton L. has been living in the community for over eight years and Plaintiff Timothy B. has been living in the community for more than a decade. (Lockhart Dec. ¶ 7; Bryan Dec. ¶¶ 13,
5
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14.) Plaintiffs receive support services in their home, including residential workers twenty-four hours a day. (Bryan Dec. ¶ 5; Lockhart Dec. ¶ 7.) Before living at home, plaintiffs have lived in various group homes, but were discharged because the placements could not accommodate their behaviors. (Bryan Dec. ¶¶ 10-12; Lockhart Dec. ¶¶ 7, 10.)
Named plaintiffs are representative of a class of individuals within the geographical service area served by the PBH LME who have Individual Support Plans (ISPs) which call for state-funded “Supervised Living” services affected by the cut at issue in this case. Plaintiffs have been successfully living in the community with appropriate supports and services funded through a combination of Medicaid waiver funding (Innovations Waiver) and state supplemental funds.7 (Complaint ¶¶ 4, 24.) The particular services subject to the cut in reimbursement rate – Supervised Living services – are “residential service[s] which include[] room and support care for one to six individuals who need 24-hour supervision; and for whom care in a more intensive setting is considered unnecessary on a daily basis.” (Soviero Dec. ¶ 4.) These services are currently provided to plaintiffs through state funding (rather than through Medicaid funding) available to a target population of individuals dually diagnosed with mental illness and developmental disabilities. (Complaint ¶ 24.)8 7 The Innovations Waiver is a pilot project for the state operated only by the LME in this region and does not impose a maximum budget or cost limit upon any individual . (Complaint ¶ 45, 47.) 8 These services needed by plaintiffs are only available through the supplemental state funding, and cannot currently be provided through the Innovations Waiver (existing service definitions do not allow for the twenty-four hour staffing needed by plaintiffs). (Complaint ¶ 48.)
6
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DHHS is the “single state agency” responsible for administering and supervising the State’s Medicaid program. (Id. ¶ 16.) Defendant Cansler is the Secretary of DHHS and thus bears responsibility for the administration and management of DHHS’ programs. (Id. ¶ 16.) The State employs Local Management Entities (LMEs) to coordinate services on a local level. (Id. ¶¶ 14, 16.) Defendant Coughlin is the CEO and Area Director of the PBH LME and is responsible for the management of State and local funds. (Id. ¶ 15.)
Despite having funded services to the dually-diagnosed plaintiffs in appropriate community-based settings for long periods of time under the system described above, the reduction in the rate to be paid to providers was set to take effect on February 15, 2010. Prior to the proposed rate cut, Plaintiff Timothy B. was authorized to receive Supervised Living services at a rate of $250 per day and Plaintiff Clinton L. was authorized to receive services at the standard rate of $161.99 per day.9 (Bryan Dec. ¶16; Lockhart Dec. ¶ 10.) The new rate, $116.15 per diem, thus represents a reduction of nearly 30% for Clinton L. and a reduction of more than 55% for Plaintiff Timothy B. (Complaint ¶¶ 36, 38.) Plaintiffs allege that the reimbursement rate will have the effect of eliminating the ability of consumers to access a medically necessary service and is an indirect way of achieving the same result as a direct cut to the service (“PBH’s proposed rate cuts would result in the elimination of all Supervised Living services in the five counties served by
9 The differences in reimbursement rates for the named plaintiffs correspond to differences in staffing costs for plaintiffs’ individualized needs (e.g. staff capable of communicating with him using American Sign Language. (Mem. in Supp. of Prelim. Injunc. at 6.))
7
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PBH. Plaintiffs would no longer have access to services that were originally created for their use.” (Id. ¶76.))
This cut to the rate paid by the LME to the provider is so substantial that plaintiffs claim it will force providers to lose money and plaintiffs allege that there is a “substantial certainty that, because providers will only be able to offer Supervised Living services at a loss, they will no longer offer the services in the five counties served by PBH.” (Mem. in Supp. of Prelim. Injunc. at 3; Lockhart Dec. ¶ 11; Bryan Dec. ¶ 17.) Plaintiffs have provided evidence in support of this assertion from a current provider, Easter Seals UCP North Carolina (“[i]f this rate cut takes effect, Easter Seals UCP North Carolina will no longer be able to offer this service to our clients.” (Soviero Dec. ¶ 7.))10
Without these wraparound services, the Complaint alleges that plaintiffs will be displaced from their community settings into institutional placements. (Complaint ¶ 7.) Because plaintiffs require a high level of care, including round-the-clock supervision, that cannot be provided with the services authorized under the waiver alone, plaintiffs “will be forced out of their community placement in their own homes into more restrictive congregate placements and/or institutions.” (Mot. for Temporary Restraining Order and Prelim. Injunc. ¶ 10.) Prior attempts to place Plaintiff Clinton L. and Timothy B. in congregate settings have failed, and thus it is almost certain that they will ultimately be placed in an institution unless services in the community are restored for them. (Bryan 10 Defendant PBH submitted a letter attempting to modify the import of the Soviero declaration, however the contingencies within the letter and the facts surrounding the letter do not clearly eliminate the factual issues of the impact of the reimbursement rate on availability of the service.
8
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Dec. ¶ 7; Lockhart Dec. ¶ 6; Complaint ¶¶ 19, 22.) Plaintiffs further allege that the costs
for comparative institutional care will be greater than the cost of serving plaintiffs
appropriately in the community, should plaintiffs be forced into institutional placements
due to the unavailability of community support services . (Complaint ¶ 7.)
Argument
In determining whether to grant a motion for preliminary injunction, the trial court
must consider (1) the likelihood of success on the merits; (2) whether plaintiffs are likely
to suffer irreparable harm without the grant of a preliminary injunction; (3) if the balance
of hardship tips in plaintiffs’ favor; and (4) whether the injunction is in the public interest.
Winter v. Natural Res. Def. Council, Inc., 555 U.S. ___, ___, 129 S. Ct. 365, 374 (2008);
Real Truth about Obama, Inc. v. Federal Election Commission, 575 F.3d 342, 346 (4th
Cir. 2009); In re Microsoft Corp. Antitrust Litig., 333 F.3d 517, 526 (4th Cir. 2003).
Plaintiffs have satisfied the requirements for a preliminary injunction, showing (1) a
likelihood of success on the merits of their Title II claim;11 (2) a likelihood that even short
11 Title II was modeled closely on Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, which prohibits discrimination on the basis of disability in federally conducted programs and in all of the programs and activities of entities, including public entities, that receive federal financial assistance. The ADA and the Rehabilitation Act are generally construed to impose the same requirements. See Baird ex rel. Baird v. Rose, 192 F.3d 462, 468-69 (4th Cir, 1999); Davis v. University of North Carolina, 263 F.3d 95, 99 (4th Cir. 2001); Crawford v. Union Carbide Corp., 202 F.3d 257 (4th Cir. 1999). This principle follows from the similar language employed in the two acts. It also derives from the Congressional directive that implementation and interpretation of the two acts “be coordinated to prevent[ ] imposition of inconsistent or conflicting standards for the same requirements under the two statutes.” Baird, 192 F.3d at 468 (citing 42 U.S.C. § 12117(b)) (alteration in original). See also, Yeskey v. Com. of Penn. Dep’t of Corrections, 118 F.3d 168, 170 (3d Cir. 1997) (“[A]ll the leading cases take up the statutes together, as will we.”), aff’d, 524 U.S. 206 (1998).
9
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term placement in congregate setting or institutional setting during the pendency of this litigation will cause irreparable harm; (3) that the balance of hardships weighs in favor of plaintiffs; and (4) granting an injunction is in the public interest.
1. Plaintiffs Are Likely to Succeed on the Merits of their Title II Claim Congress enacted the ADA in 1990 to “provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities.” 42 U.S.C. § 12101(b)(1). Title II of the ADA prohibits discrimination in access to public services by requiring that “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C. § 12132. In Olmstead, the Supreme Court construed the ADA’s integration mandate and concluded that the discrimination forbidden under title II of the ADA includes “unnecessary segregation” and “[u]njustified isolation” of individuals with disabilities. Olmstead v. LC ex rel. Zimring, 527 U.S. 581, 582, 600-601 (1999). The integration mandate specifies that persons with disabilities receive services in the “most integrated setting appropriate to their needs.” 28 C.F.R. § 35.130(d) (“[a] public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.”). The “most integrated setting” is defined as “a setting that enables individuals with disabilities to interact with non-disabled persons to the fullest extent possible.” 28 C.F.R. pt. 35 App.
10
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A, at page 571 (2009); Olmstead, 527 U.S. at 592. This mandate advances one of the principal purposes of title II of the ADA, ending the isolation and segregation of disabled persons. See Arc of Wash. State Inc. v. Braddock, 427 F.3d 615, 618 (9th Cir.2005).
Other courts to review Olmstead claims have consistently analyzed these cases within the framework of the typical requirements for an ADA title II claim. The general foundational requirements of a title II claim require a plaintiff to allege that he or she (1) is a “qualified individual with a disability”; (2) was either excluded from participation in or denied the benefits of a public entity’s services, programs, or activities or was otherwise discriminated against by the public entity; and (3) such exclusion, denial of benefits, or discrimination was by reason of his disability. See Townsend v. Quasim, 328 F.3d 511, 517 n.3 (9th Cir.2003). So, for example, if a state fails to provide services to a qualified person in a community-based setting, as opposed to a nursing home, a plaintiff can present a title II violation. See Townsend at 517; Fisher v. Oklahoma Health Care Auth., 335 F.3d 1175, 1181-82 (10th Cir.2003) (imposition of cap on prescription medications placed on participants in community-based program a high risk for premature entry into nursing homes in violation of the ADA).
Crucially, a plaintiff need not wait until he is placed in the institutional setting: the risk of institutionalization itself is sufficient to demonstrate a violation of title II. Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (2003). In Fisher, the Tenth Circuit rejected defendants’ argument that plaintiffs could not make an integration mandate
11
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challenge until they were placed in the institutions. The Court reasoned that the protections of the integration mandate “would be meaningless if plaintiffs were required to segregate themselves by entering an institution before they could challenge an allegedly discriminatory law or policy that threatens to force them into segregated isolation.” Id. at 1181. The Court went on to conclude that “Olmstead does not imply that disabled persons, who, by reason of a change in state policy, stand imperiled with segregation, may not bring a challenge to the state policy under the ADA’s integration regulation without first submitting to institutionalization.” Id. at 1182. See also Marlo M. v. Cansler, No. 5:09-CV-535, 2010 WL 148849 (E.D. N.C. Jan. 17, 2010) (granting preliminary injunction in case where plaintiffs were at risk of institutionalization); Ball v. Rogers, No. 00-67 (D. Ariz. April 24, 2009) (holding that failure to provide plaintiffs with needed services “threatened Plaintiffs with institutionalization, prevented them from leaving institutions, and in some instances forced them into institutions in order to receive their necessary care” in violation of the ADA and Rehabilitation Act).
Plaintiffs here have alleged such high risk for entry into segregated institutions and the consequential threat to their health that such institutionalization presents. Plaintiffs Clinton L. and Timothy B. are currently still in the community, however the proposed cuts mean they will likely need to leave their homes and, in light of their failures in group home settings, are at a high risk of institutionalization. (Bryan Dec. ¶ 7; Lockhart Dec. ¶ 6; Complaint ¶¶ 19, 22.) The availability of the Supervised Living service is critical to
12
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plaintiffs’ physical and mental health and their continuing ability to remain in the community, as opposed to being isolated in an institution. (Mem. in Supp. of T.R.O. and Prelim. Injunc. at 1.) Plaintiffs have alleged a strong likelihood that they will succeed in showing that the rate cut for the Supervised Living service that allows them to remain in the community will place them at serious risk of institutionalization.
The State of North Carolina has already determined that plaintiffs are qualified to receive services in less restrictive settings. In fact, they have been providing these very services in community settings for many years. (Bryan Dec. ¶ 13; Lockhart Dec. ¶ 7.) Despite the State’s long history of supporting plaintiffs in integrated settings, defendants have recently decided to constructively cut services through a rate cut, forcing plaintiffs out of the community settings where they have resided for many years. This cut was made without communicating with the guardians of individuals being served about the potential damaging effect of forcing plaintiffs into institutional settings in order to receive the services they need. (Id. ¶15.) The Court in Olmstead explained the ADA’s integration mandate, recognizing that “unjustified isolation . . . [is] discrimination based on disability” and that “institutional placement of persons who can handle and benefit from community settings perpetuates unwarranted assumptions that persons so isolated are incapable or unworthy of participating in community life . . . and institutional confinement severely diminishes individuals’ everyday activities.” Olmstead, 527 U.S. at 597, 600, 601.
13
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A State’s obligation to provide services in the most integrated setting is not unlimited, however, and may be excused in instances where a state can prove that the relief sought would result in a “fundamental alteration” of the state’s service system. Id. at 601-03. While a state may attempt to claim budgetary shortages as alleviating their responsibilities under Olmstead, the Tenth Circuit held in Fisher v. Oklahoma Health Care Authority that “the fact that [a state] has a fiscal problem, by itself, does not lead to an automatic conclusion” that providing the community services that plaintiffs sought would be a fundamental alteration. Fisher, 335 F.3d 1175, 1181 (10th Cir. 2003). See also Pennsylvania Protection and Advocacy, Inc. v. Pennsylvania Dept. Of Public Welfare, 402 F.3d 374, 380 (3d. Cir. 2005).
The Tenth Circuit observed further that Congress was aware when it passed the ADA that “‘[w]hile the integration of people with disabilities will sometimes involve substantial short-term burdens, both financial and administrative, the long-range effects of integration will benefit society as a whole.’ ... If every alteration in a program or service that required the outlay of funds were tantamount to a fundamental alteration, the ADA’s integration mandate would be hollow indeed.” Fisher, 335 F.3d at 1183. The fundamental alteration determination involves a more searching analysis “involv[ing] a specific, fact-based inquiry ... taking into account Defendants’ efforts to comply with the integration mandate with respect to the population at issue and the fiscal impact of the requested relief, including the impact on the State’s ability to provide services for other
14
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individuals with mental illness.” Disability Advocates, Inc. v. Paterson, 653 F. Supp. 2d 184, 192 (E.D.N.Y. 2009). Plaintiffs allege that providing services in the community is less costly than serving plaintiffs in an institution. (Complaint ¶ 7.) The appropriate costcomparison for an institutional setting would need to take into account plaintiffs’ particular needs, for instance Timothy B. would need an American Sign Language interpreter if placed in an institution, thus any cost-comparison would need to incorporate such additional costs. (Complaint ¶ 59.)
In Disability Advocates Inc. v. Paterson, 598 F. Supp. 2d 289, 319 (E.D.N.Y. 2009), the court held that the defendants’ allocation of state resources favoring institutional settings over community-based settings supported an actionable title II claim. The court found “if Defendants allocated their resources differently, [plaintiffs] could receive services in a more integrated setting.” Id. at 319. In finding a violation of title II, the court in Disability Advocates focused on the way in which the State administered its mental health service system by “plan[ning] the settings in which mental health services are provided, and allocat[ing] resources within the mental health service system.” Id. at 318. Here, defendants can make a reasonable modification to their proposed administration of services by choosing to fund care in the community setting, rather than the more expensive cost of caring for plaintiffs in unnecessarily segregated institutional settings. Defendants have been administering such services to the individuals involved in this case for lengthy periods of time, demonstrating their ability to administer services in
15
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a manner that complies with the integration regulation without causing a fundamental alteration to the state’s operation of its programs. Plaintiffs thus have a strong likelihood of success on the merits of their claim for an Olmstead violation.12
2. Plaintiffs Are Likely to Suffer Irreparable Harm if Rate is Cut The services plaintiffs receive in the community to support their physical and mental health needs are critical to ensuring that their conditions remain stable and enable them to remain in the community. There is no question that removing plaintiffs from the community settings in which they have been successfully living for lengthy periods of time will disrupt their current status and have negative consequences for their conditions.13 The physical and mental health conditions of both plaintiffs heighten the disruptive effect of inappropriate placements such that even a temporary placement may lead to dire consequences. The negative effects of institutionalization that plaintiffs will likely experience if placed in more restrictive settings exemplify the concerns driving the Supreme Court’s analysis in Olmstead that unnecessary segregation is a violation of the ADA.14 In
12Contrary to the state’s argument, the Fourth Circuit interpretation of Winter, 129 S.Ct. at 374, does not dramatically alter the application of Blackwelder Furniture Co. of Statesville v. Seilig Manufacturing Co., 550 F.2d 189 (4th Cir. 1977). 13 In gauging the harm that the moving party will experience should a preliminary injunction not be granted, courts have looked at the specific nature of the plaintiff in relation to the injury that is anticipated. Nieves-Marquez v. Commonwealth of Puerto Rico, et al, 353 F.3d 108, 121-22 (1st Cir. 2003). 14 The Supreme Court described the adverse effects that occur with a State’s institutional placement of persons with qualifying disabilities:
16
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granting a preliminary injunction, a court in Florida looked to the emotional impact of
institutionalization: “this will inflict an enormous psychological blow...each day he is
required to live in the nursing home will be an irreparable harm.” Long v. Benson, No.
08cv26, 2008 WL 4571903 *2 (N.D. Fla. Oct. 14, 2008).
Irreparable harm was also established recently in an Olmstead case in this state
where the court noted that
Plaintiffs...have lived successfully in their community based apartments. In the absence of an injunction, both Plaintiffs will lose funding and be forced from these community settings. The evidence at this point is strong that Plaintiffs will suffer regressive consequences if moved, even temporarily. Plaintiffs have behavioral and special needs, and benefit from a stable environment and personalized treatment.
Marlo M. v. Cansler, No. 5:09-CV-535, 2010 WL 148849 (E.D. N.C. Jan. 17, 2010). A
court in Tennessee also was persuaded by the detrimental effects that institutionalization
would have on plaintiffs: “forcing these Plaintiffs into nursing homes that would be
detrimental to their care, causing, inter alia, mental depression, and for some Plaintiffs, a
shorter life expectancy or death.” Crabtree v. Goetz, No. 08-0939, 2008 WL 5330506
*25 (M.D. Tenn. Dec. 19, 2008). The same concerns motivating the court in Crabtree are
First, institutional placement of persons who can handle and benefit from community settings perpetuates unwarranted assumptions that persons so isolated are incapable or unworthy of participating in community life.... Second, confinement in an institution severely diminishes the everyday life activities of individuals, including family relations, social contacts, work options, economic independence, educational advancement, and cultural enrichment.... In order to receive needed medical services, persons with mental disabilities must, because of those disabilities, relinquish participation in community life they could enjoy given reasonable accommodations, while persons without mental disabilities can receive the medical services they need without similar sacrifice. Olmstead, 527 U.S. at 600-01.
17
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present here, as this case exemplifies the very harm that the ADA sought to address: the isolation and segregation of disabled persons. Plaintiff Timothy B.’s ability to remain in the community hinges on the availability of these Supervised Living Services: “Timothy could not live independently in his own home but for the residential staff that cares for him twenty-four hours a day, seven days a week. Timothy has thrived in an independent living environment because he is now supervised by individuals capable of communicating with him.” (Bryan Dec. ¶ 5.) Plaintiff Timothy B.’s physical health was jeopardized when he was previously placed in group homes that lacked adequate supervision. (Id. ¶ 10.) Timothy B.’s conditions are exacerbated in group settings where he has difficulties communicating: “he often becomes agitated and engages in destructive outbursts.” (Id. ¶ 6.) Staff at one group home inappropriately medicated Timothy B. and he became “unable to walk, feed himself, or perform every day living and self-care tasks” and had “toxic levels of psychotropic medication in his system.” (Id. ¶¶ 11, 12.)
Similarly, Plaintiff Clinton L.’s ability to remain in the community is directly related to the Supervised Living Services he has been receiving in his home: “Clinton has thrived in an independent living environment because he is [] supervised by individuals capable of addressing his medical needs.” (Lockhart Dec. ¶ 5.) Further, in his community setting, the “frequency and severity of Clinton’s outbursts have sharply decreased” and he has “progressed and gain[sic] many skills.” (Id. ¶¶ 7, 8.) In prior group placements, Clinton L. became “extremely agitated” related to his living situation. (Id. ¶
18
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6.) Clinton L. is “safer, happier, and healthier” receiving care in his home than in the unnecessarily segregated settings he has resided in prior to his current placement. (Id. ¶ 12.) Inappropriate segregated placements threaten to jeopardize the physical and emotional well-being of both plaintiffs who have demonstrated their ability to live successfully in the community with necessary supports.
3. The Balance of Hardship Tips in Plaintiffs’ Favor The hardship to defendants of maintaining the rate at which providers are reimbursed for Supervised Living Services that has allowed plaintiffs to remain in the community for many years is outweighed by the harm that will be inflicted on plaintiffs should they be forced out of their community settings during the pendency of this litigation. The State has paid for plaintiffs to reside in these settings for lengthy periods of time and to suggest now that reimbursing the exact same services at the existing rate would create a great hardship to the defendants belies the long history of funding that has been repeatedly approved by the state.15 4. Granting a Preliminary Injunction is in the Public Interest There is a strong public interest in granting a preliminary injunction to allow plaintiffs to remain in their community settings. There is a public interest in eliminating the discriminatory effects that arise from segregating persons with disabilities into
15 A recent decision in this state found the grant of a preliminary injunction minimal where “Defendants will only have to maintain the funding they have provided to Plaintiffs for years and which they have authorized year after year in the past.” Marlo M. v. Cansler, No. 5:09-CV-535, 2010 WL 148849 (E.D. N.C. Jan. 17, 2010).
19
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institutions when they can be appropriately placed in community settings. As noted in Olmstead v. L.C., the unjustified segregation of persons with disabilities can stigmatize them as incapable or unworthy of participating in community life. Olmstead 527 U.S. at 600. Such reasoning grounded a grant of preliminary injunction in Long, where the court held that the public interest favored allowing the plaintiff to remain in the community:
This is what Congress intended when it adopted the Americans with Disabilities Act. If, as it ultimately turns out, treating individuals like [plaintiff] in the community would require a fundamental alteration of the Medicaid program, so that the Secretary prevails in this litigation, little harm will have been done. To the contrary, [plaintiff’s] life will have been better, at least for a time... Long, 2008 WL 4571903 *3. And while 10 years have passed since the Olmstead case was decided, the same goals underlying that case and underlying the ADA are present today: a goal of “full participation, independent living, and economic self-sufficiency for such individuals.” 42 U.S.C. 12101(a)(8).
Conclusion For the above stated reasons, the Court should grant Plaintiffs’ Motion for Temporary Restraining Order and Preliminary Injunction. With the Court’s permission, counsel for the United States will be present at the hearing on February 17, 2010.
20
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Respectfully submitted this the 16th day of February 2010
ERIC H. HOLDER, JR. Attorney General of the United States
THOMAS E. PEREZ Assistant Attorney General Civil Rights Division
SAMUEL R. BAGENSTOS Deputy Assistant Attorney General Civil Rights Division
/s/ Renee M. Wohlenhaus JOHN L. WODATCH, Chief PHILIP L. BREEN, Special Legal Counsel RENEE M. WOHLENHAUS, Deputy Chief Disability Rights Section Civil Rights Division U.S. Department of Justice 950 Pennsylvania Avenue, N.W. - NYA Washington, D.C. 20530 Telephone: (202) 307-0663 Facsimile: (202) 307-1198 renee.wohlenhaus@usdoj.gov
/s/Gill P. Beck Gill P. Beck NCSB #13175 Assistant U.S. Attorney PO Box 1858 Greensboro, NC 27402 (336) 333-5351 Gill.Beck@usdoj.gov
Counsel for United States
21
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UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by her guardians and next

)

friend CLINTON L., SR. and

)

TIMOTHY B., by his guardian and next

)

friend ROSE B., and others similarly situated, )

)

Plaintiffs,

)

v.

)

)

LANIER CANSLER, in his official capacity )

as Secretary of the Department of Health and )

Human Services, and DAN COUGHLIN, in )

his official capacity as CEO and Area Director )

of the Piedmont Behavioral Healthcare

)

Local Management Entity,

)

Defendants.

)

CIVIL ACTION NO. 1:10CV00123

CERTIFICATE OF SERVICE
I hereby certify that on February 16, 2010 the foregoing Statement of Interest was electronically filed with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: John R. Rittelmeyer at john.rittelmeyer@disabilityrightsnc.org; Jennifer L. Bills at jennifer.bills@disabilityrighrsnc.org; Andrew B. Strickland at andrew.strickland@disabilityrightsnc.org; Wallace Hollowell, III at chuck.hollowell@nelsonmullins.com; Stephen D. Martin at steve.martin@nelsonmullins.com.
Respectfully submitted,
ANNA MILLS WAGONER United States Attorney
/s/Gill P. Beck Gill P. Beck NCSB #13175 Assistant U.S. Attorney PO Box 1858,Greensboro, NC 27402 (336) 333-5351; Gill.Beck@usdoj.gov

Case 1:10-cv-00123-JAB-JEP Document 14 Filed 02/16/10 Page 22 of 22

 
 UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next )

friend CLINTON L., SR., and

)

TIMOTHY B. by his guardian and next ) CIVIL CASE NO. 1:10-CV-00123

friend ROSE B., VERNON W., by his

)

guardian and next friend VERNON D.

)

W., STEVEN C.,

)

)

Plaintiffs,

)

) RENEWED MOTION FOR

v.

) PRELIMINARY INJUNCTION

)

LANIER CANSLER, in his official

)

capacity as Secretary of the Department )

of Health and Human Services, and DAN )

COUGHLIN, in his official capacity as )

CEO and Area Director of Piedmont

)

Behavioral Healthcare Local

)

Management Entity,

)

)

Defendants

)

)

__________________________________________________________________

Plaintiff Timothy B., by his guardian and next friend Rose B., and four

additional Plaintiffs: Plaintiff Vernon W., by his guardian and next friend Vernon

D. W., and Plaintiff Steven C., as well as Plaintiff-Intervener Jason A., by his

guardian and next friend Brenda Arthur, and Diane D., by her guardian and next

friend Thomas Smith, hereby renew their February 11 Motion for Preliminary

Injunction, pursuant to Fed. R. Civ. P. 65, prohibiting Defendants from

implementing any current or planned reductions to the daily reimbursement rate

for Supervised Living services, otherwise known by their service codes YM-811

Case 1:10-cv-00123-JAB-JEP Document 22 Filed 04/07/10 Page 1 of 10

and YM-812, to preserve Plaintiffs’ level of care and community placements in their own homes.
Plaintiffs Timothy B. and Vernon W. both face the elimination of this service and discharge by their residential provider on April 15, 2010, based on the provider’s inability to continue the Supervised Living services at the new rate. On April 13, 2010, Plaintiff Steven C. faces eviction from his home and a forced move to a group home without any clinical determination as to the appropriateness of the group home placement. Plaintiff-Intervener Jason A. has already experienced a reduction in his level of support. The addition of another resident to what had been his two-bed group home has already resulted in an increase in his violent and self-injurious behaviors. Plaintiff-Intervener Diane D already has experienced a cut to her staffing level resulting from the rate cut on February 15, 2010. The provider of her services, Monarch, has informed Diane’s guardian that, due to PBH’s Supervised Living rate cuts and the elimination of other state-funded services, they will no longer be able to meet Diane’s need for constant supervision. They have scheduled a meeting for April 8, 2010 to discuss alternative, more restrictive placements, such as a group home or an institution, and Monarch will terminate their services to Diane as of May 1, 2010.
In support of their motion, Plaintiffs state as follows: 1. Plaintiffs and Plaintiff-Interveners (“Plaintiffs”) suffer from a variety of chronic and disabling conditions, including mental retardation and some form of
2
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mental illness (MR/MI) that require twenty-four hours of care and supervision each day. In addition, Plaintiff Timothy B. is deaf.
2. Plaintiffs are recipients of state-funded Supervised Living services, or Thomas S. funding (now called MR/MI funding), through North Carolina’s DHHS Division of Mental Health, Developmental Disabilities, and Substance Abuse Services. In addition, Plaintiffs receive health care and other services through the Cardinal Health Plan and Innovations Waiver programs offered by their Local Management Entity (LME), Piedmont Behavioral Healthcare (PBH).
3. Defendant Lanier Cansler is the Secretary of the North Carolina Department of Health and Human Services (DHHS). DHHS is the “single state agency” responsible for the administration and supervision of North Carolina’s Medicaid program under Title XIX of the Social Security Act. 42 C.F.R. § 431.10 (2008). Defendant Cansler is also responsible for the ultimate oversight of Local Management Entities to ensure that they provide publicly-funded services in accordance with the law. See N.C.G.S. § 122C-111, et seq.
4. Defendant Dan Coughlin is the CEO and Area Director of PBH, an LME with a geographic service area encompassing Cabarrus, Davidson, Rowan, Stanly, and Union Counties. Within the State and Medicaid-funded system of mental health, developmental disabilities, and substance abuse services in North Carolina, LMEs are the locus of coordination for these services at the community level. See N.C.G.S. § 122C-101; N.C.G.S. § 122C-115.4(a). Defendant Coughlin’s responsibilities include financial management and accountability for the use of
3
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State and local funds and information management for the delivery of publicly funded services. See N.C.G.S. § 122C-115.4(b)(7).
5. Defendant Coughlin is also responsible for the implementation and management of PBH’s Medicaid Home and Community-Based Services (HCBS) Community Alternatives Program Waivers (the Innovations Waiver), consistent with federal law.
6. These Medicaid and State-funded services have allowed Plaintiffs to live successfully and independently in their own homes and to participate in family and community life; Plaintiff Timothy B. for more than a decade, Plaintiff Vernon W. for over five years, Plaintiff Steven C. for over seven years, Plaintiff-Intervener Jason A. for nearly a decade, and Plaintiff-Intervener Diane D. for more than a decade. The Plans of Care for all Plaintiffs call for YM-811 or YM-812 services to be delivered, reflecting a determination by their treatment teams that the service is medically necessary. This determination of medical necessity has been ratified by PBH through its authorization for delivery of the service.
7. On January 11, 2010, PBH issued a memorandum to providers describing cuts to the Supervised Living services. Effective February 15, 2010, the per diem rate for Supervised Living services decreased to $116.15. The memorandum does not state that PBH will permit any exception to these rate cuts. PBH did not notify Plaintiffs of these rate cuts, choosing instead to give notice only to providers.
4
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8. For all Plaintiffs except Timothy B. and Diane D., the proposed rate is nearly 30% less than the current rate. For Plaintiff Timothy B. and PlaintiffIntervener Diane D., the proposed rate is nearly 55% less than the current rate.
9. On April 15, 2010, Plaintiffs Timothy B. and Vernon W. will face discharge from their respective providers. The discharge letters for both Plaintiffs specifically cite the rate reduction as the reason for discharging Plaintiffs. No plan is in place for the transfer of Timothy B.’s plan of care to the Wake County LME; to the contrary, Wake LME has not been appropriated sufficient state funds for his care, and it has not agreed to accept any transfer.
10. Plaintiff Steven C. was originally scheduled to be discharged from his current provider on March 21, 2010. In response to both the provider’s discharge letter and to PBH’s persistent threats to revoke Steven’s guardianship, Steven applied to various group homes in the area. One of these group homes accepted Steven and has now offered him a place in their group home. Meanwhile, Steven’s current provider has informally agreed to keep Steven in his current living arrangement until April 13, 2010, at which time Steven must accept the group home placement.
11. Plaintiff-Intervener Jason A. has already experience a cut to his staffing level resulting from the rate cut to YM-812 services on February 15, 2010. His provider, RHA, added another resident to what had previously been a two-bed group home, transforming it into a three-bed group home. This change has already resulted in an increase in Jason’s violent and self-injurious behaviors.
5
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Jason is already in a more restrictive and less supportive and integrated environment, and he is at imminent risk of failing in this placement, and having to be institutionalized.
12. Plaintiff-Intervener Diane D. has already experienced a cut to her staffing level resulting from the rate cut to YM-811 services on February 15, 2010. The provider of her services, Monarch, has informed Diane’s guardian that, due to the Supervised Living rate cuts and the elimination of other state-funded services, they will no longer be able to meet Diane’s need for constant supervision. Monarch has scheduled a meeting with Diane’s family for April 8, 2010 to discuss alternative, more restrictive placements, such as a group home or an institution. Monarch will terminate its services to Diane as of May 1, 2010.
13. The costs incurred by the providers of residential services for Supervised Living consumers substantially exceed PBH’s new per diem rate of $116.15. Because their providers would only be able to operate Supervised Living services at a loss, they are refusing to offer Plaintiffs the specified level of service in the five counties served by PBH. The rate cuts force providers to either offer a reduced level of service for these clients, or withdraw from offering the Supervised Living services altogether. Neither choice provides a level of care appropriate to Plaintiffs’ needs.
14. As a result of the reduced rate, Plaintiffs will no longer have access to the level of care provided by Supervised Living YM-811 and YM-812 services.
6
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Plaintiffs will then be forced out of their community placement in their own homes into more restrictive congregate placements and/or institutions.
15. Residential staffing services available through the Innovations Waiver cannot be combined in any way to achieve twenty-four hour staffing and supervision without reasonable modification of the service definitions. Consequently, a plan of care under the Innovations Waiver must be supplemented with additional state-funded services, such as Supervised Living services, if twenty-four hour staffing is required.
16. Currently, Plaintiffs are faced with two equally discriminatory options after their planned discharge date: (1) transition to congregate placements that cannot meet Plaintiffs’ need for constant care, support, and supervision or (2) enter institutions.
17. Pursuant to Fed. R. Civ. P. 65(b)(1)(B), Plaintiffs’ counsel certifies that it made efforts to give notice to Defendants of its intent to litigate this matter. On January 29, 2010, Plaintiffs’ counsel faxed a copy of a demand letter to Defendant Coughlin at his place of business and delivered a copy of the same demand letter to Defendant Cansler.
18. The Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101, et seq. and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, require that individuals with disabilities, such as Plaintiffs, be served in the least restrictive environment in the community when that option is cost-neutral as compared to an
7
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institution. For many years, Plaintiffs’ placements have been successful and costeffective as compared to their care in an institution.
19. Defendant Coughlin has failed to properly exercise his authority and discretion to assess Plaintiffs’ individual needs and maintain their state MR/MI funding and keep them in their long-time community placements. By his actions in sharply reducing the reimbursement rate for Plaintiffs’ Supervised Living services, Defendant Coughlin has effectively abolished this necessary service in the area served by PBH.
20. Plaintiffs will suffer irreparable injury if the Defendants are permitted to eliminate or significantly reduce their funding and services. Plaintiffs will exchange the safety and independence of their individual community placements, where they have been able to receive regular and reliable treatment and care, for more restrictive and inappropriate institutional or congregate settings that do not meet their needs. In addition, the entire system of care that Plaintiffs have enjoyed for years will be dismantled and is in danger of being permanently lost.
WHEREFORE, Plaintiffs renew their motion for a Preliminary Injunction to enjoin Defendants from implementing any current or planned reductions to the daily reimbursement rate for Supervised Living services to allow Plaintiffs to preserve their access to twenty-four hour care and supervision and to maintain their community placements in their own homes.
8
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Dated: April 7, 2010

/s/ John R. Rittelmeyer John R. Rittelmeyer john.rittelmeyer@disabilityrightsnc.org N.C. State Bar No. 17204
Jennifer L. Bills jennifer.bills@disabilityrightsnc.org N.C. State Bar No. 37467
Andrew B. Strickland andrew.strickland@disabilityrightsnc.org N.C. State Bar No. 40490
DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244 Attorneys for Plaintiffs

9 Case 1:10-cv-00123-JAB-JEP Document 22 Filed 04/07/10 Page 9 of 10

Certificate of Service The undersigned hereby certifies that on April 7, 2010, I electronically filed the foregoing Plaintiffs’ Renewed Motion for Preliminary Injunction with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following: Counsel for Defendant Dan Coughlin Stephen D. Martin (steve.martin@nelsonmullins.com) Counsel for Lanier Cansler Lisa Corbett, Esq. (lcorbett@ncdoj.gov)
Respectfully submitted,
/s/ John R. Rittelmeyer John R. Rittelmeyer DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244 john.rittelmeyer@disabilityrightsnc.org
10
Case 1:10-cv-00123-JAB-JEP Document 22 Filed 04/07/10 Page 10 of 10

 
 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next )

friend CLINTON L., SR., and

)

TIMOTHY B., by his guardian and next ) CIVIL CASE NO. 1:10-CV-00123

friend ROSE B., VERNON W., by his

)

guardian and next friend VERNON D.

)

W., and STEVEN C.,

)

)

Plaintiffs,

) MEMORANDUM IN SUPPORT OF

) PLAINTIFFS’ RENEWED MOTION

v.

) FOR PRELIMINARY INJUNCTION

)

LANIER CANSLER, in his official

)

capacity as Secretary of the Department )

of Health and Human Services, and DAN )

COUGHLIN, in his official capacity as )

CEO of the Piedmont Behavioral

)

Healthcare Local Management Entity,

)

)

Defendants.

)

_______________________________________________________________________

In accordance with this Court’s previous order dated February 19, 2010, Plaintiffs’

counsel has located four additional individuals subject to the rate cut who are at risk for

institutionalization owing to the reductions in their level of care. On March 30, 2010, a

First Amended complaint was filed that added two additional clients, Steven C. and

Vernon W. Filed together with this Renewed Motion for Injunctive Relief is a Motion to

Intervene two additional clients, Jason A. and Diane D. Plaintiffs Timothy B., Vernon W., Steven C., and Plaintiff-Interveners Jason A. and Diane D.,1 move the Court for a

1 Clinton L. remains a Plaintiff in the case, but as the Court previously noted, “the evidence before the Court indicates that Clinton L. will receive the same services even after the rate cuts are imposed.” Should Clinton L. receive notice from his provider discharging him from his current placement, he may return to the Court for further relief.

Case 1:10-cv-00123-JAB-JEP Document 23 Filed 04/07/10 Page 1 of 24

Preliminary Injunction prohibiting PBH from applying the $116 per day rate for YM 811 and YM 812 services.
This suit challenges the Defendants’ actions in effectively eliminating medically necessary services that the Plaintiffs and Plaintiff-Interveners (collectively, “Plaintiffs”) have long received. In order to maintain the status quo and preserve the funding for their community placements, Plaintiffs renew their motion for a Preliminary Injunction. Injunctive relief is required in order to prevent the elimination of the state-funded services that allow Plaintiffs to remain in the community. Defendants’ proposed reduction of the reimbursement rate for Plaintiffs’ state-funded services would indirectly but effectively eliminate these services in the five counties served by Defendant Piedmont Behavioral Healthcare, also known as PBH. Without these state-funded services, Plaintiffs are at risk of institutionalization and the simultaneous dismantling of their systems of care.
SUMMARY OF THE CASE Plaintiffs are adults with dual diagnoses of a developmental disability and mental illness, as well as other chronic conditions. Plaintiffs require continuous supervision and support in nearly all aspects of their lives, which need is met through a combination of services. Some of these services are paid with state funds; some are federally-funded through the Medicaid system. On February 15, 2010, as announced in a PBH “Communications Bulletin” dated January 11, 2010, Defendant Coughlin implemented a drastic cut to the daily rate paid by
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PBH for the “Supervised Living – 1 Resident” service, otherwise known as service code YM811, and “Supervised Living – 2 Resident” service, otherwise known as service code YM812. These Supervised Living services are considered to be “wrap-around” services, paid with state funds and intended to augment the residential staffing services available to participants in the Innovations Waiver program. Prior to February 15, 2010, the rate for the “Supervised Living – 1 Resident” service was variable, while the rate for “Supervised Living – 2 Resident” service was a standard rate of $161.99 per day. Plaintiff Timothy B. has been authorized to receive “Supervised Living – 1 Resident” services at a rate of $250 per day. Plaintiff Diane D. has been authorized to receive “Supervised Living – 1 Resident” services at a rate of approximately $240 per day. All other Plaintiffs have been authorized to receive this service at the standard rate.
The rate reduction announced on February 15 was substantial, representing a 30% reduction for most recipients of the service. For Timothy B. and Diane D. the rate for Supervised Living services would be cut by more than 50%. The providers of Plaintiffs Timothy B. and Vernon W.’s Supervised Living services have informally agreed to continue providing Supervised Living services until April 15, 2010. Plaintiff Steven C.’s provider has agreed to continue providing Supervised Living services at the current level of support until April 13, 2010. As will be discussed below, the new rates for Supervised Living services have already affected the plans of care for both Plaintiff Jason A. and Plaintiff Diane D.
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Providers’ costs in offering Supervised Living services exceed the daily rate for Supervised Living services that became effective on February 15, 2010. By April 15, 2010, the providers of Plaintiffs’ Supervised Living services will be forced to either offer Plaintiffs a reduced level of services, or will withdraw from offering the Supervised Living services altogether.
Neither choice provides a level of care appropriate to Plaintiffs’ needs. Without these Supervised Living services, Plaintiffs are at a risk of being forced out of their current placements into group homes or other congregate living arrangements, which will not provide the continuous supervision and support that Plaintiffs require to live in the community.
If Plaintiffs are no longer able to access Supervised Living services, the only remaining source of funding available to them would be the Innovations Waiver. However, the limitations in the service definitions and utilization guidelines governing the Innovations Waiver prohibit Plaintiffs from benefitting from the full array of services to which Plaintiffs should otherwise be entitled. Without the required supervision, it is likely that Plaintiffs would be forced into an institution, in violation of the Americans with Disabilities Act and the Rehabilitation Act of 1973. See 42 U.S.C. § 12101 et seq.; 29 U.S.C. § 794.
Defendant Coughlin has failed to properly exercise his discretion to assess Plaintiff’s individual needs and maintain their state-funded services and permit them to remain in their long-time community placements. Defendant Cansler, who bears the
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ultimate responsibility for the administration of mental health services in the state, has failed to exercise his authority and direct Defendant Coughlin to maintain state-funded services for Plaintiffs.
In a hearing before this Court on February 17, 2010, Defendants assured this Court that its actions have only affected a small number of individuals and purported to explain why each recipient of Supervised Living services had no need for these services. See Docket Entry 10-5, Declaration of Anna Yon. Since the hearing, counsel has located four individuals whose current residential setting will also be uprooted due to Defendants’ cuts to Supervised Living services. In none of these cases have the Defendants conducted an individualized assessment of need or offered any alternate means of addressing the individual’s need for one-on-one, 24-hour supervision and support. At the February 17 hearing, Defendants also represented that the process of re-assigning Timothy B. to the Wake County LME was already in motion and would be completed prior to his scheduled discharge date of April 15. Since then, Defendants have made no progress on this proposed transfer. As of the date of this filing, Timothy B. remains a client of the PBH LME, and there is no clear plan to transfer his plan of care to any other LME. Therefore, Plaintiffs renew their motion for a preliminary injunction directing Defendants to maintain Plaintiffs’ Supervised Living rates at their current level ($161.99 per day and $240/$250 per day) pending a final resolution of Plaintiffs’ claims by this Court.
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STATEMENT OF FACTS Plaintiffs are adults with dual diagnoses of mental retardation and mental illness (MR/MI) and other chronic and disabling conditions that require twenty-four hours of care and supervision. Plaintiffs receive health care and other federally-funded services through the PBH Medicaid Plan (the “Cardinal Health Plan”), as well as services through the Innovations Waiver. Plaintiffs are also eligible for and receive state-funded mental health, developmental disabilities, and substance abuse services in addition to Medicaid services. Plaintiffs rely on a combination of Medicaid, Innovations Waiver, and statefunded services to live successfully in their own home and to participate in family and community life. Plaintiffs especially depend on the state-funded Supervised Living service to supplement the limited hours of residential staffing services available through the Innovations Waiver. Supervised Living is a “residential service which includes room and support care for one individual who needs 24-hour supervision; and for whom care in a more intensive treatment setting is considered unnecessary on a daily basis.” See North Carolina’s Department of Health and Human Services Division of Mental Health/Developmental Disabilities/Substance Abuse Services MH/DD/SA Service Definitions 164 (January 1, 2003). Currently, it is only through a combination of statefunded Supervised Living services and federally-funded Innovations Waiver services that Plaintiffs can access the twenty-four hours of care and supervision they require to live in their own homes.
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Timothy B. Timothy B.’s diagnoses include Intermittent Explosive Disorder, Major
Depressive Disorder, Epilepsy, Deafness, and Severe Mental Retardation. See Timothy B. Annual Plan, attached as Plaintiffs’ Exhibit 1. Timothy’s community placement is his own house in Raleigh, North Carolina, where he lives independently with a rotating schedule of residential workers twenty-four hours a day. See Docket Entry 4-1. Timothy also requires staff capable of communicating with him using American Sign Language. On prior occasions when Timothy was unable to communicate with his supervisory staff, he often engaged in destructive outbursts. Id.
Timothy B. has a history of placements in group homes which have failed, such failures resulting in his institutionalization at the O’Berry Center in Goldsboro. One of Timothy’s institutional placements was seven years in length. Id. Timothy has successfully lived in his own home for more than a decade. Timothy’s current Individual Support Plan (ISP) calls for Timothy’s continued receipt of one-on-one staff support 24 hours per day. See Ex. 1. In 2009, a clinician concluded that Timothy’s current placement should be maintained, so long as “there [is] a caregiver who knows sign language.” March 10 Letter and Evaluation from Dr. George Popper, Plaintiffs’ Ex. 2. A recent evaluation, conducted by a psychologist with particular expertise in treating deaf clients, also concluded that Timothy. “will be best served by continuing to live in his current residence with staff supporting him 24 hours each day.” See Declaration of Barrie Morganstein, Ph.D. ¶8, attached. The evaluation also states that it is
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“exceptionally unlikely that [Timothy] will be able to successfully share a residence with another individual, especially another individual with special needs.” Id. at ¶9.
In response to the original filing of this action, Defendants alleged that, based on his residence, Timothy should properly be a client of the Wake County LME. Defendants assured the Court that this transition to Wake LME would be made shortly. As of the date of this filing, Defendants have completed no such transition. In fact, no plan is in place for Timothy to be transferred to the responsibility of the Wake LME; to the contrary, Wake LME has not been appropriated sufficient federal and state funds for his care, and has resisted any transfer. See March 26 letter from Wake LME, attached as Plaintiffs’ Exhibit 3.
Meanwhile, Timothy’s family would prefer that Timothy B. live closer to his relatives, all of whom live in Davidson County, so long as his “current staffing could be maintained.” See Declaration of Rose Bryan ¶13, attached. However, no arrangements have been made to provide an equivalent level of care in the Davidson County. While the Wake LME and PBH debate which LME should be responsible for Timothy’s care, Timothy remains at imminent risk of discharge from his current home on April 15, 2010. Id. at ¶12.
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Vernon W. Plaintiff Vernon W.’s diagnoses include Depressive Disorder, Severe Mental
Retardation, and Epilepsy. See Vernon W. Worrell Annual Plan, attached as Plaintiff’s Exhibit 4, page 15.
Vernon’s community placement is his own house in Lexington, N.C., where he lives independently with a rotating schedule of workers twenty-four hours a day. Id. at ¶11-12. Prior to his current placement, Vernon had a history of failed group home placements due to his behaviors. Id. at ¶7-10. Vernon experienced multiple institutionalizations at Dorothea Dix Hospital, and spent approximately five years in the O’Berry Center in Goldsboro, N.C. Id. at ¶ 7-8.
An independent clinician recently concluded that “Vernon’s current staffing pattern should be maintained if at all possible,” due to Vernon’s risk of self-harm and the likely disruption of his current stability. See Oct. 2010 Evaluation by Jane Kelman, Attached as Plaintiffs’ Exhibit 5. Nonetheless, due to the reduction in Supervised Living services, the provider of Vernon’s Supervised Living services will no longer offer those services to Vernon W. on April 15, 2010. See January 21 Letter from Youth/Adult Care Management, attached as Plaintiffs’ Exhibit 6. Because Vernon owns his current home, Vernon’s provider has offered Vernon’s family a choice between a group home placement or a reduced level of staffing in the home. Worrell Declaration ¶ 16.
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Steven C. Plaintiff Steven C.’s diagnoses include Depressive Disorder and Mild Mental
Retardation. Steven’s current community placement is his own home in Lexington, N.C., where he lives independently with a rotating schedule of workers twenty-four hours a day. See Declaration of Steven C. ¶2, attached. Prior to his current placement, Steven was discharged from a group home because of his behaviors. At that time, Steven would engage in explosive outbursts, often resulting in injuries to staff or other residents. On at least one occasion, Steven was criminally charged with assaulting another resident. Id. at ¶4. Steven’s most recent ISP reflects a clinical judgment that “Steven requires highly trained staff for 1:1 habilitative training” to “prevent injury to him or others, and especially to obey laws.” See Steven C. Annual Plan, attached as Plaintiffs’ Exhibit 7.
Due to PBH’s recent cuts to Supervised Living services, Steven’s provider issued a notice to Steven that they can “no longer support [his] need for 24-hour supervision.” See January 21 letter from Monarch, attached as Plaintiffs’ Exhibit 8. As a result of this letter and PBH’s threats to Steven’s guardianship, Steven C. applied to a local group home, which has provisionally offered a placement to him; however, Steven is concerned that the level of support he will receive in the group home will cause him to revert to his earlier behaviors. See Steven C. Declaration, ¶8-12. Jason A.
Plaintiff-Intervener Jason A.’s diagnoses include Mood Disorder with aggression, Obsessive-Compulsive Disorder, Attention Deficit Hyperactivity Disorder with Autistic
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Tendencies, and Moderate Mental Retardation. See Declaration of Brenda Arthur ¶5, attached. For nearly 10 years, Jason has lived in a two-person group home where he lives with one other resident and a rotating schedule of workers twenty-four hours a day. Id. at ¶14. Because he has difficulty expressing his needs and frustrations and has virtually no impulse control, Jason has a long history of severe verbal and physical aggression, as well as self-injurious behavior. See Jason A. Annual Plan, attached as Plaintiffs’ Exhibit 9.
Clinical evaluations of Jason have consistently determined that he should not live with more than one roommate. See Arthur Declaration ¶17; see also Ex. 9. Jason has several documented incidents of physical aggression towards his current roommate. See Ex. 9; see also, Declaration of Deborah Thome ¶9, attached; and Arthur Declaration ¶19. As a result of PBH’s rate cut to Supervised Living funds, it was no longer financially feasible for Jason’s provider to serve only two people living in the home. The provider therefore moved a third resident into the home, which has resulted in a reduced staffing level for Jason. See Arthur Declaration, ¶26. It appears that the addition of another resident has upset Jason, and has led to an increase in his maladaptive behaviors. See Thome Declaration ¶ 9; see also, Arthur Declaration at ¶26 and 27. Diane D.
Plaintiff-Intervener Diane D.’s diagnoses include Intermittent Explosive Disorder, Mild Mental Retardation, Scoliosis, and Cohen Syndrome. See Declaration of Thomas Smith ¶4, attached. When agitated, Diane engages in destructive behaviors, which have
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included destroying furniture, hitting and kicking others, cursing at staff members, and self-injurious behavior. Id. at ¶5 and ¶11. Additionally, Diane is at risk of elopement from the home; when she attempts to leave the home, she does not have any concerns for her safety and will place herself in dangerous situations such as walking in front of traffic. See Diane D. Annual Plan, attached as Plaintiffs’ Exhibit 10.
For at least the past 10 years, Diane has lived in her own apartment where she lives alone under supervision by a rotating schedule of workers twenty-four hours a day. See Smith Declaration ¶10. Prior to her current placement, Diane attempted to live in two different group homes. However, due to her behaviors, she was discharged from both group homes. Id. at ¶8-9. Diane also spent multiple periods of time at different psychiatric hospitals. Id. As a result of PBH’s rate cut to Supervised Living services, Diane’s provider attempted to provide a reduced level of staffing for Diane; however, the provider has since informed Diane’s family that they must discontinue Diane’s Supervised Living services due to financial concerns. Id. at ¶14-15.
As a result of the announced rate cuts, Plaintiffs will be forced to vacate their current placements and move to other, inappropriate congregate placements that do not provide Plaintiffs with the close supervision and care, twenty-four hours a day, that they all require. Without twenty-four hours of care and supervision, it is anticipated that Plaintiffs will be forced into more restrictive, segregated, institutional settings. Away from their homes and communities, Plaintiffs will face increased risk of community-
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acquired infections, malnutrition, and depression. They also face immediate risk of loss of the independence and dignity they have enjoyed living successfully in the community.
ARGUMENT A. Standard of Review To prevail in a motion for a preliminary injunction the trial court must consider (1) whether plaintiffs are likely to succeed on the merits; (2) whether they are likely to suffer irreparable harm in the absence of the preliminary relief; (3) if the balance of hardships tips in their favor; and (4) whether the injunction is in the public interest. See Winter v. Natural Res. Def. Council, Inc., 555 U.S. __ , 129 S.Ct. 365, 374 (2008); The Real Truth About Obama, Inc. v. FEC, 575 F.3d 342, 346 (4th Cir. 2009), adopting Winter and overruling Blackwelder Furniture Co. v. Seilig Mfg. Co., 550 F.2d 189 (4th Cir. 1977) . As will be shown, Plaintiffs meet all four requirements and should be granted the requested injunctive relief.
B. Plaintiffs Are Likely To Succeed On The Merits. 1. The unwarranted termination of Plaintiffs’ funding and services places Plaintiffs at risk of institutionalization and violates the Americans with Disabilities Act.
On April 15, 2010, Plaintiffs’ ability to access state-funded Supervised Living services will be drastically reduced or eliminated, which will force Plaintiffs to transition to institutional placements, either immediately or imminently. Title II of the Americans with Disabilities Act (ADA) protects qualified individuals with disabilities from discrimination by public entities such as DHHS and PBH. “Qualified individuals with
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disabilities” are those who “with or without reasonable modifications to rules, policies, or practices . . . mee[t] the essential eligibility requirements for the receipt of services or the participation in programs or activities provided by a public entity.” 42 U.S.C. § 12131(2). Prohibited discrimination by public entities includes the failure to provide persons with disabilities a community-based placement when such placement is appropriate; the individual wishes to reside in the community; and the placement can be reasonably accommodated. Olmstead v. L.C., 527 U.S 581, 587 (1999).
Plaintiffs are qualified individuals with disabilities who are being illegally discriminated against by the two defendant public entities. Defendant Cansler is the Secretary of the North Carolina Department of Health and Human Services, which is unquestionably a public entity. Defendant Coughlin is the CEO and Area Director of PBH, a local political subdivision of the State and a public entity. See N.C.G.S. § 122C116(a). As the director of PBH, Defendant Coughlin is vested with the authority to manage state-funded services in the area served by his LME and to oversee the operation of the PBH Innovations Waiver. N.C.G.S. § 122C-115.4(a). Plaintiffs are individuals with disabilities in that they are diagnosed with mental retardation and mental illness. Plaintiffs are qualified persons with disabilities in that they meet the essential eligibility requirements for and are in receipt of services from the PBH Medicaid program, the Innovations Waiver program, and State-funded mental health, developmental disabilities, and substance abuse services programs with or without reasonable modification to the rules, policies, and practices of those programs. See 42 U.S.C. §12131(2).
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Defendants’ actions constitute illegal discrimination under Olmstead. The community-based placements for Timothy B., Vernon W., Steven C., Jason A., and Diane D. have been deemed to be appropriate as demonstrated by their long history of living safely and successfully in their own homes –Timothy B. for over a decade, Vernon W. for over five years, Steven C. for over seven years, Jason A. for over nine years, and Diane D. for over a decade. Community-based treatment is especially appropriate for Plaintiffs as it guarantees them the required level of one-on-one attention that is otherwise unavailable in any congregate or institutional setting.
Plaintiffs’ continued residential placement can be reasonably accommodated through continuation of their state-funded services or, alternatively, through modifications to the Innovations Waiver service definitions. However, despite Plaintiffs’ successful integration into their communities and their continued eligibility for the Innovations Waiver and state-funded Supervised Living services, Plaintiffs could be forced to leave their homes after the new rate structure is applied to Plaintiffs’ care by April 15, 2010. Defendant Coughlin’s threatened abolition of Plaintiffs’ Supervised Living services violates Plaintiffs’ rights to be free from discrimination based on their disability under the ADA, as recognized in Olmstead.
2. Defendants’ reduction of Plaintiffs’ funding and services will result in Plaintiffs’ unnecessary institutionalization in violation of Section 504 of the Rehabilitation Act of 1973.
The reduction of Plaintiffs’ access to state-funded Supervised Living services places them at immediate risk of unnecessary institutionalization in violation of the
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Rehabilitation Act of 1973. In the Rehabilitation Act of 1973, Congress stated that “[n]o otherwise qualified individual with a disability in the United States . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.” 29 U.S.C. § 794(a), referencing 29 U.S.C. § 705(2). “Program or activity” includes a department, agency, special purpose district, or other instrumentality of a State or of a local government. 29 U.S.C. § 794(b)(1)(A). The Rehabilitation Act defines disability as a physical or mental impairment that substantially limits one or more major life activities. 29 U.S.C. § 705(20)(B), referencing 42 U.S.C. § 12102(1). Prohibited discrimination includes denial of the opportunity to participate in or benefit from an aid, benefit, or service. 28 C.F.R. § 41.51(b). Moreover, a recipient of federal funds must administer its services, programs, and activities in the “most integrated setting appropriate” to the needs of the qualified individual. 28 C.F.R. § 41.51(d).
Plaintiffs are qualified persons with disabilities in that they meet the essential eligibility requirements for and are in receipt of services from the PBH Medicaid program, the Innovations Waiver program, and state-funded mental health, developmental disabilities, and substance abuse services programs with or without reasonable modification to the rules, policies, and practices of those programs. See 42 U.S.C. §12131(2); 29 U.S.C. § 794(a). Defendant Cansler is the Secretary of the North Carolina Department of Health and Human Services, a state agency receiving federal
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financial assistance. Defendant Coughlin is the CEO and Area Director of PBH, an instrumentality of the State of North Carolina receiving federal financial assistance.
Defendant Coughlin has failed to properly exercise his authority and discretion by reducing the rate for Supervised Living services so drastically that the network of providers that currently offer these services will terminate or dilute the service rather than operate at a substantial loss. Defendant Coughlin’s constructive termination of all Supervised Living services substantially increases Plaintiffs’ risk of institutionalization or other placement in a segregated setting. Year after year, by its approval of Plaintiffs’ plans of care, PBH determined that the state-funded services used to augment the core Medicaid services were medically necessary for Plaintiffs’ care. Plaintiffs’ ISPs and additional clinical documentation demonstrate the continued need for this service for each Plaintiff. Now, owing to budgetary pressures alone, PBH proposes to effectively abolish a service that is essential for Plaintiffs’ continued community placement – an action that constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act. 29 U.S.C. § 794.
In sum, plaintiffs are likely to prevail on their claim that the planned elimination of Supervised Living services, forcing Plaintiffs from their longstanding community placements and into eventual institutional settings, is a violation of the ADA and the Rehabilitation Act. As made clear by the Court in Olmstead, a State is required to provide community-based services for eligible persons with disabilities based upon professional assessments. Olmstead, 527 U.S. at 602. To ignore this “integration
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mandate,” the Court found, constituted “unjustified institutional isolation of persons with disabilities,” and thus prohibited discrimination under the ADA. Id.
C. Plaintiffs will Suffer Immediate and Irreparable Injury without Injunctive Relief.
A preliminary injunction is necessary to prevent Plaintiffs from being institutionalized due to the drastic reduction in state-funded services, scheduled to become effective on February 15, 2010. Plaintiffs seeking preliminary relief must demonstrate that they are likely to suffer irreparable injury in the absence of an injunction. Winter v. Natural Res. Def. Council, Inc., 555 U.S. __ , 129 S.Ct. 365, 374 (2008); Los Angeles v. Lyons, 461 U.S. 95, 103, 103 S.Ct. 1660 (1983). Irreparable injuries are those that cannot be adequately compensated by money damages, such as emotional, psychological, and physical damage. L.J. v. Massinga, 838 F.2d 118, 121-22 (4th Cir. 1988) (finding that monetary costs and administrative inconvenience to city from grant of preliminary injunction was outweighed by preventing continuing harm to plaintiffs caused by defendants’ mismanagement of foster care system); see also LaForest v. Former Clean Air Holding Co., Inc., 376 F.3d 48, 55 (2d Cir. 2004) (stating that reduction of medical benefits and consequent negative impacts on an individual’s health is an irreparable injury).
Plaintiffs are likely to suffer irreparable injury if this Court does not grant them injunctive relief preventing the termination or reduction of their Supervised Living services. If Plaintiffs lose residential staffing services, Plaintiffs will imminently face the prospect of institutionalization or forced transition to congregate placements. Absent
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further intervention by this court, the transition to institutional or congregate settings must take place one day after the next scheduled hearing before this court on April 14, 2010, for Plaintiffs Timothy B. and Vernon W. For Plaintiff Steven C., his transition to a larger group home is scheduled to occur on April 13, 2010. For Plaintiff Diane D., she must find a new placement by May 1. For Plaintiff Jason A., he has already been placed in a situation where harm is imminent and the injunction is necessary to restore the level of service he was receiving in his previous 2-person placement.
Defendants’ assurances to this Court, as described in Anna Yon’s declaration, are called into question by the facts of the new Plaintiffs’ cases and by DRNC’s monitoring efforts. The monitoring efforts have revealed that several transfers of former Supervised Living clients to more congregate placements are not operating in the successful manner that PBH claims. See Declaration of Cas Shearin, attached. For example, several providers plan to request an additional service, supervised employment, as a substitute for the one-on-one supervision consumers no longer receive during portions of each day. However, this additional service, if granted, does not address the situation of some of the consumers we encountered in our monitoring visits, such as “J.B.” and “L.,” who cannot find employment or whose prior employment efforts have failed even with the presence of one-on-one supervision on the job. Id., ¶12 and ¶20.
These congregate or institutional placements will cause Plaintiffs emotional, psychological, and physical harm that cannot be compensated by an award of monetary damages. Plaintiffs would face a substantial risk of institutionalization without
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immediate injunctive relief. Plaintiffs will lose their homes, their staff and an entire system of care that was crafted to meet their unique clinical needs. As a result, Plaintiffs will suffer irreparable injury should they be removed from their current placements.
D. The Balancing of Hardships Tips in Favor of the Plaintiffs. The balance of hardships tips decidedly in Plaintiffs’ favor. As discussed, Plaintiffs face a substantial risk of institutional placement if the injunction is denied. In contrast, the harm that may accrue to Defendants if the injunction is granted is slight. PBH will be required only to maintain funding Plaintiffs’ services at a rate and in an amount that PBH has authorized and paid for years. Little harm, if any, will accrue to DHHS – no preliminary relief is requested of Secretary Cansler. Defendants’ apparent plan to group Plaintiffs with other individuals with disabilities in a group home or other congregate living arrangement does not satisfy the State’s obligation to provide services “in the most integrated setting appropriate to [Plaintiffs’] needs.” Forcing Plaintiffs to move to a congregate living arrangement, such as a group home, will result in the loss of independence, self-direction, and safety they have accumulated over the course of several years. Instead, Plaintiffs’ daily schedules and routines would be inevitably tied to the schedules and routines of other individuals residing at the group home. Additionally, as demonstrated in the case of Jason A., the particular combination of certain consumers’ behaviors may prove dangerous when those consumers are placed together in the same home. Plaintiffs’ histories of failed group home placements also
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demonstrate a clear risk of their eventual placement in an even more restrictive environment, such as a psychiatric hospital or developmental disability center. In sum, Defendants’ actions would rob Plaintiffs of their current residential settings that “enables [them] to interact with non-disabled persons to the fullest extent possible.” Olmstead, 527 U.S. at 592.
E. The Public Interest Demands that the Injunction be Granted. Enforcement of laws passed by Congress is in the public interest, even when that means enjoining allegedly illegal actions by another government body. Glenwood Bridge, Inc. v. City of Minneapolis, 940 F.2d 367, 372 (8th Cir. 1991). The public interest is served when laws passed by Congress are enforced and the rights of persons with disabilities are vindicated. “While achieving budgetary savings is also in the public interest of state and federal taxpayers, that interest must give way if it is in conflict with federal substantive law.” Kansas Hosp. Assn, v. Whiteman, 835 F. Supp. 1548,1553 (D. Kan. 1993); see also Haskins v. Stanton, 794 F.2d 1273, 1277 (7th Cir. 1986) (where an injunction requires defendants to comply with existing law, the injunction imposes no burden but “merely seeks to prevent the defendants from shirking their responsibilities”) and Independent Living Center v. Maxwell-Jolly, 572 F.3d 644, 659 (concluding that financial considerations due to the state’s fiscal crisis were outweighed by the “robust public interest” in safeguarding access to healthcare). The interest of the citizens of North Carolina are best served by enjoining Defendants from enforcing arbitrary cuts and denials of necessary services for Plaintiffs.
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The ADA requires that persons with disabilities be cared for in the most integrated settings possible, a requirement that is being undermined by Defendants’ actions.
F. The Court Should not Require a Bond. In the exercise of their discretion under FRCP 65(c), federal courts frequently waive bond requirements in suits brought by citizens to enforce their important federal rights. See, e.g., Barahona-Gomez v. Reno, 167 F.3d 1228, 1237 (9th Cir. 1999) (noting that “[t]he district court is in a far better position to determine the amount and appropriateness of the security required under Rule 65”); Doctor’s Associates, Inc. v. Stuart, 85 F.3d 975, 985 (2d Cir. 1996) (affirming the district court's decision not to require bond); Moltan Co. v. Eagle-Picher Industries, Inc., 55 F.3d 1171, 1176 (6th Cir. 1995) (a district court has discretion to require posting of security). Important federal rights are at stake in this litigation. See, e.g., Temple Univ. v. White, 941 F.2d 201, 220 n.27 (3d Cir. 1991) (“Public policy under [federal law governing state modification of Medicaid programs] mandates that parties in fact adversely affected by improper administration of programs pursuant thereto be strongly encouraged to correct such errors”). Given the likelihood that Plaintiffs will succeed on the merits, Plaintiffs’ status as public assistance recipients, as well as the fact that the injunction seeks merely to require PBH to comply with federal law, no bond should issue.
CONCLUSION Plaintiffs have met their burden of showing (1) a strong likelihood of success on the merits, (2) a substantial likelihood of immediate and irreparable harm, (3) that the
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balance of hardships tips in Plaintiffs favor, and (4) that the public interests demands that the injunction be granted. As such, the Court should grant Plaintiffs’ Motion for a Preliminary Injunction, prohibiting Defendant Coughlin from implementing the reduced reimbursement rates for the Supervised Living services on which Plaintiffs rely.

Dated: April 7, 2010

Respectfully submitted,
/s/ John R. Rittelmeyer John R. Rittelmeyer john.rittelmeyer@disabilityrightsnc.org N.C. State Bar No. 17204
Jennifer L. Bills jennifer.bills@disabilityrightsnc.org N.C. State Bar No. 37467
Andrew B. Strickland andrew.strickland@disabilityrightsnc.org N.C. State Bar No. 40490
DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244
Attorneys for Plaintiffs

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Certificate of Service The undersigned hereby certifies that on April 7, 2010, I electronically filed the foregoing Memorandum in Support of Plaintiffs’ Renewed Motion for Preliminary Injunction with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following: Counsel for Defendant Dan Coughlin Stephen D. Martin (steve.martin@nelsonmullins.com) Counsel for Lanier Cansler Lisa Corbett, Esq. (lcorbett@ncdoj.gov)
Respectfully submitted,
/s/ John R. Rittelmeyer John R. Rittelmeyer DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244 john.rittelmeyer@disabilityrightsnc.org
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 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next friend CLINTON L., SR., and TIMOTHY B., by his guardian and next friend ROSE B., and others similarly situated,
Plaintiffs,
v.
LANIER CANSLER, in his official capacity as Secretary of the Department of Health and Human Services, and DAN COUGHLIN, in his official capacity as CEO and Area Director of Piedmont Behavioral Healthcare Local Management Entity,
Defendants.

) ) ) ) ) ) ) ) ) 1:10CV123 ) ) ) ) ) ) ) ) ) )

ORDER

This matter is before the Court on Plaintiffs’ Supplemental Motion for Preliminary

Injunction [Doc. #22]. The Court previously denied the original Motion for Preliminary

Injunction filed by Plaintiffs Clinton L. and Timothy B., but the Court set the matter on for a

supplemental hearing to consider additional evidence from the parties. Prior to the

supplemental hearing, Plaintiffs filed an Amended Complaint adding Vernon W. and Steven C.

as Plaintiffs. Plaintiffs also filed the present Supplemental Motion for Preliminary Injunction,

again asking the Court to prohibit Defendants from reducing the rates paid to non-party service

providers for certain Supervised Living services provided to Plaintiffs. The Court held a hearing

on the Supplemental Motion on April 14, 2010.

Plaintiffs Clinton L., Timothy B., Vernon W., and Steven C. suffer from a variety of

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disabling conditions, including dual diagnoses of mental retardation and mental illness. They receive health care and other services through North Carolina’s Department of Health and Human Services Division of Mental Health, Developmental Disabilities, and Substance Abuse Services. The health care and other services are administered and managed by Piedmont Behavioral Healthcare (“PBH”), which is the Local Management Entity for Cabarrus, Davidson, Rowan, Stanly and Union Counties. One type of service administered by PBH is the “Supervised Living” service, which is a residential service that includes room and support care for individuals who need 24-hour supervision and for whom care in a more intensive treatment setting is considered unnecessary on a daily basis. The Plaintiffs in this case currently receive Supervised Living services that allow them to live alone with 24-hour care and supervision. Thus, although Plaintiffs live alone, they have a staff person with them in their home 24 hours a day. However, as a result of recent state budget cuts, PBH announced on January 11, 2010 that it was changing the rates that it would pay to providers for Supervised Living services for 1-person and 2-person placements (that is, placements where individuals lived on their own or with one other person with 24-hour staff supervision). Under this change, PBH will reduce the rates for 1- or 2-person placements down to $116.15 per day, which is the current rate for 3person placements (that is, placements in an apartment or residence where an individual lives with two other people with 24-hour staff supervision). This change only affects the statefunded portion of what PBH coordinates; it does not relate to the Medicaid funding for Supervised Living, which PBH administers as the “Innovations Waiver” program.
Plaintiffs bring the present suit against Defendant Dan Coughlin in his official capacity
2
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as CEO and Area Director of PBH (referred to as “Defendant PBH” or “PBH” for ease of reference) and against Defendant Lanier Cansler in his official capacity as the Secretary of the North Carolina Department of Health and Human Services. Plaintiffs contend that due to the reduction in the reimbursement rates for the state funding, Plaintiffs will be “forced into congregate living environments”, and “[i]f and when Plaintiffs’ placement in a congregate setting are determined to have failed (as is expected), it is believed that Plaintiffs will face forced institutionalization because they would not have the level of support required to maintain their community placements.” (Am. Compl. ¶ 71-72).
Under Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 119 S. Ct. 2176, 144 L. Ed. 2d 540 (1999), unnecessary institutionalization of individuals is a form of discrimination under the Americans with Disabilities Act (“ADA”), and persons must be served in the community when (1) the state determines that community-based treatment is appropriate; (2) the individual does not oppose community placement; and (3) community placement can be reasonably accommodated. Title II of the ADA provides that “no qualified individual with a disability shall, by reason of disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity or be subject to discrimination by such entity.” 42 U.S.C. § 12132. Regulations implementing Title II of the ADA require that a public entity administer its services, programs and activities in “the most integrated setting appropriate” to the needs of qualified individuals with disabilities. 28 C.F.R. § 35.130(d). The Rehabilitation Act imposes similar obligations on recipients of federal financial assistance. 29 U.S.C. § 794; 28 C.F.R. § 41.51(d). Plaintiffs bring claims in this case under both the ADA and the Rehabilitation
3
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Act.1 In their present Supplemental Motion for Preliminary Injunction, Plaintiffs contend that
their single-person community placements will change as a result of the proposed rate cuts, and that “Plaintiffs are faced with two equally discriminatory options after their planned discharge date: (1) transition to congregate placements that cannot meet Plaintiffs’ need for constant care, support, and supervision or (2) enter institutions.” (Supp. Mot. [Doc. #22] at 7). Plaintiffs therefore seek a preliminary injunction enjoining Defendant PBH2 from implementing the rate reduction “to allow Plaintiffs to preserve their access to twenty-four hour care and supervision and to maintain their community placements in their own homes.” (Supp. Motion [Doc. #22] at 8).
In response, Defendant PBH contends that clinically-appropriate community-based residential treatment options remain available to each of the Plaintiffs, and that therefore Plaintiffs are not at risk of institutionalization. To the extent that Plaintiffs contend that the rate reduction will result in the elimination of Supervised Living services, Defendant PBH notes that 9 out of the 10 providers of these services in PBH’s network are continuing to provide the services. Defendant PBH has also conducted and presented clinical reviews as to each of the four Plaintiffs. As to Plaintiff Clinton L., Clinton L. is diagnosed with Schizoaffective Disorder, Bipolar Disorder, Intermittent Explosive Disorder, and Moderate Mental Retardation. Clinton L. lives in a home that he rents, with 24-hour care and supervision. As noted in this Court’s
1 Plaintiffs do not assert any Constitutional claims in this case, and instead assert only statutory claims under the ADA and the Rehabilitation Act.
2 Plaintiffs seek a preliminary injunction only as to Defendant PBH. 4
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previous Order, Clinton L.’s provider has determined that it will continue providing services to Clinton L. even after the rates are reduced, with supplementation of other services as necessary to maintain coverage. Therefore, Clinton L. will be able to remain in his current living situation with 24-hour care even after the rates are reduced. At the supplemental preliminary injunction hearing before this Court, Plaintiffs did not present any additional information or concerns with respect to Plaintiff Clinton L., and Defendant PBH noted that Clinton L. has experienced no changes in his services and continues to reside in his single-person placement.
With respect to Plaintiff Vernon W., Vernon W. is diagnosed with Depressive Disorder, Severe Mental Retardation, and Epilepsy. Vernon W. lives in a mobile home purchased for him by his family and has been receiving 24-hour-per-day staffing, although previous assessments have noted a goal of reducing reliance on staff and utilizing other community programs and “assistive technologies.” Plaintiffs contend that due to the rate cut, Vernon W.’s guardian has been given a choice between 12-hour-per-day staffing or a move to a 3-person home. However, at the hearing before this Court, Defendant PBH indicated that it had located a provider who was willing to provide 24-hour-per-day supervision to Vernon W. in his current residence at the reduced rate. Therefore, like Clinton L., Vernon W. will continue to receive services in a single person placement even at the reduced rates.
With respect to Plaintiff Stephen C., Stephen C. has been diagnosed with Depressive Disorder, Impulse Control Disorder, and Mild Mental Retardation. Plaintiffs note that Stephen C. is his own guardian and had been living in an apartment with 24-hour supervision, but has agreed to move to a 3-person home. PBH conducted a clinical assessment of Stephen C. and
5
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concluded that it was clinically appropriate and safe to move him to a 3-person home as long as certain conditions were followed, including 1:1 supervision initially to see if any less intense supervision would be appropriate. All of these conditions will be included as part of the new placement. Plaintiffs nevertheless note that Stephen C. has a history of group home failures, and therefore contend that Stephen C. is at greater risk of institutionalization or arrest in a 3-person home.
Finally, with respect to Plaintiff Timothy B., Timothy B. is diagnosed with Intermittent Explosive Disorder, Epilepsy, Deafness, and Moderate Mental Retardation. Timothy B. has been living in an apartment in Wake County with 24-hour staff services. Timothy B. was previously considered to be within PBH’s jurisdiction, but due to an amendment to the relevant regulations, it now appears that as of May 1, 2010, his Medicaid county of residence will change to Wake County, which is outside PBH’s coverage area. Thus, if Timothy B. continues to reside in Wake County, he may ultimately become the responsibility of the Local Management Entity for Wake County, and PBH will no longer have funding jurisdiction over him. Plaintiffs have raised concerns that Timothy B. is at risk because neither PBH nor the Wake County LME will “take ownership” of him. However, during the hearing before this Court, PBH indicated that it will take responsibility for Timothy B. and will provide a community placement for him in a county within PBH’s jurisdiction. PBH has conducted a clinical review and determined that a 3- to 6-person home would be a clinically appropriate placement for Timothy B. and would provide potential social benefits. In particular, prior evaluations have concluded that Timothy B. “would like to have a more structured day” and “needs more interaction with peers in his
6
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community” [Doc. #23-1], and a recent third party evaluation noted that “Timothy’s major problem is that of extreme daily boredom.” Because Timothy B. is deaf, PBH’s proposed placement for Timothy B. would be in a 3- to 6-person home with staff trained in sign language. At the hearing before this Court, PBH noted that it currently has three potential placement options for Timothy B. with staff who communicate in sign language, and one of those placement options is in a home with another deaf individual close in age to Timothy B. In response, Plaintiffs contend that Timothy B.’s treatment plan calls for placement in a singleperson residence, and that a psychologist who conducted a recent evaluation of Timothy B. concluded that Timothy B.’s “level of intellectual, emotional, and interpersonal functioning make it exceptionally unlikely that he will be able to successfully share a residence with another individual, especially another individual with special needs.” (Morganstein Aff. [Doc. #23-11] at ¶ 9). As noted during the hearing in this matter, Plaintiffs primary concern is that Timothy B. has a history of placements in group homes that have failed, resulting in his institutionalization. Thus, the concern is that his placement in a 3-person home will fail and that he will ultimately be institutionalized. Therefore, Plaintiffs seek an injunction to require PBH to continue funding single-resident services at the previous rate.
A preliminary injunction is an extraordinary and drastic remedy. A movant must establish four elements before a preliminary injunction may issue: (1) he is likely to succeed on the merits; (2) he is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in his favor; and (4) and injunction is in the public interest. Winter v. Natural Resources Defense Council, Inc., 129 S. Ct. 365, 172 L. Ed. 2d 249 (2008). In
7
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considering the Motion for Preliminary Injunction in the present case, the Court notes that two separate issues have been raised: (1) a challenge to rate cuts that will purportedly lead to “congregate placements that cannot meet Plaintiffs’ need for constant care, support, and supervision,” and (2) a challenge that as a result of the rate cuts and change in services, Plaintiffs will ultimately be forced to “enter institutions.” (Am. Compl. ¶ 71-72). Thus, the first issue relates to Plaintiffs’ opposition to a reduction in services and opposition to moving into a different type of community-based placement, while the second issue relates to the allegation that PBH’s actions will ultimately result in institutionalization of Plaintiffs.
On the first issue, Plaintiffs contend that the rate cuts should be enjoined because the rate cuts will result in a reduction in services, requiring Plaintiffs to move to 3-person community placements rather than the single-person placements where Plaintiffs have previously lived. On this point, the Court notes that Plaintiffs Clinton L. and Vernon W. will remain in their present homes, and the only Plaintiffs who are changing community placements are Stephen C., who is moving to a new home that he will share with two other individuals, and Timothy B., who needs to move back into a county within PBH’s jurisdiction and who has several potential placements in homes that he would share with two to five other people. PBH has conducted medical reviews to ensure that these proposed placements are clinically appropriate, and Supervised Living services will still be provided in the new placements. Although Stephen C. and Timothy B. contend that they should be allowed to maintain their current placements with their current providers, Plaintiffs have pointed to no case or authority that would support the conclusion that they are entitled to a particular provider or type of
8
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community-based placement under the ADA. Plaintiffs do note that the ADA requires placement in “the most integrated setting appropriate” in order to prevent isolation or segregation of individuals with disabilities. However, Plaintiffs have not established that for individuals such as Plaintiffs who require 24-hour care and supervision, a community placement in a home or apartment with two housemates is “segregated” or “isolated”. Instead, based on the information presently before the Court, it appears that a 3- to 6-person home in the community would actually be “more integrated” because it would provide more opportunities for involvement in community activities and social interaction for Plaintiffs.3 Therefore, Plaintiffs have failed to make a clear showing of likelihood of success on their contention that being offered community placement in a residence with two housemates in order to meet their needs for 24-hour supervision would violate the ADA or Rehabilitation Act.
Moreover, the balance of equities and public interest would not support this Court intervening to set the rates paid to non-party service providers. On this issue, the Court notes that most of PBH’s local service providers have agreed to continue to provide the same services at the reduced rate, with some restructuring or supplementation with other services to maintain
3 Indeed, based on the information presently before the Court, it appears that individuals may be more likely to experience isolation if they are living alone with 24-hour supervision, since their only daily interaction is often with their care staff. For example, prior Individual Support Plans for Vernon W. noted that “[h]e currently only receives home supports, with very limited interaction with the community.” Similarly, prior evaluations have concluded that Timothy B. “would like to have a more structured day” and “needs more interaction with peers in his community.” In addition, it appears that as a general matter, a 3- to 6-person home is a commonly-used community placement for individuals requiring 24-hour care and supervision, and single-person placements are only utilized for individuals who cannot successfully live with other housemates. Plaintiffs have not attempted to establish that this general use of 3- to 6person homes violates the ADA.
9
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sufficient coverage. As a result, almost all of the individuals who were receiving Supervised Living Services at the 1- or 2-person level will stay in their current living situation, even after the rate cuts take effect. The public interest would not be served by requiring PBH to pay higher rates for these services, where most of the providers of these services have been able to continue providing services at the reduced rates, thus saving money that can be used for other mental health services in the PBH area. Therefore, Plaintiffs have failed to establish a likelihood of success and have failed to establish that the balance of equities and public interest support issuance of an injunction that would set the rates of reimbursement for third party service providers. Therefore, the preliminary relief requested by Plaintiffs seeking to enjoin the reimbursement rate reduction will not be granted.
However, as to the second issue, the Court notes that Plaintiffs contend that they are ultimately at risk of being institutionalized. On this issue, based on the information that has been presented, it appears that institutionalization of Plaintiffs would violate the ADA. As noted above, under Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 119 S. Ct. 2176, 144 L. Ed. 2d 540 (1999), unnecessary institutionalization of individuals is a form of discrimination, and persons must be served in the community when (1) the state determines that community-based treatment is appropriate; (2) the individual does not oppose community placement; and (3) community placement can be reasonably accommodated. In the present case, Plaintiffs have been successfully living in community-based placements for many years. The state has determined that community-based treatment is appropriate for Plaintiffs, and Plaintiffs want to remain in a community placement. In addition, the community placement can be reasonably
10
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accommodated, particularly in light of the fact that community placement of the Plaintiffs has been accommodated for many years. Therefore, Plaintiffs have established a likelihood of success on their ultimate claim that Defendants must provide appropriate community-based placements rather than institutionalizing Plaintiffs. Plaintiffs have also established that they will suffer irreparable harm if they are placed into institutions during the pendency of this suit, and the balance of equities and public interest weighs in favor of ensuring that clinically-appropriate community-based placements are available for Plaintiffs. Defendants contend that there is no risk of institutionalization to any of the Plaintiffs as a result of these rate cuts, and at the first hearing before this Court, PBH represented to the Court that if a 3- to 6-person community placement is not suitable or fails for any of the Plaintiffs, PBH will arrange for a suitable alternative placement. However, during the supplemental hearing, Plaintiffs argued that there is no guarantee that PBH would provide an alternative placement if a 3- to 6-person placement fails. In addition, Plaintiffs note that with respect to Timothy B., the placement options are unsettled because of the potential change in Timothy B.’s county of residence. Plaintiffs contend that the risk of institutionalization is high for both Timothy B. and Stephen C., particularly in light of the prior group home failures that led to their institutionalization in the past. Plaintiffs therefore argued at the supplemental hearing before this Court that PBH should be held responsible for ensuring that community-based placements are available for all of the Plaintiffs during the pendency of this suit. This Court agrees that a limited injunction is appropriate to ensure that Plaintiffs are not institutionalized during the pendency of this lawsuit as a result of PBH’s actions. Therefore, although this Court will not set reimbursement rates
11
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for particular types of services, the Court will nevertheless require Defendant Coughlin, as CEO of PBH, to continue to ensure that a clinically-appropriate community-based placement alternative is available for each of the Plaintiffs during the pendency of this suit, as an alternative to institutionalization. Thus, if a change in any of the Plaintiffs’ community-based placements is unsuccessful, Defendant Coughlin must arrange for and ensure that that Plaintiff is provided with an alternative community-based placement that is clinically appropriate based on professional recommendations. This could include a single person placement, another 3- to 6person placement, or some other alternative community-based placement that is consistent with Defendants’ obligation to provide clinically-appropriate community-based care and treatment.
Finally, the Court notes that Plaintiffs Counsel has also filed a separate Motion to Intervene [Doc. #21] on behalf of two additional individuals, Jason A. and Diane D. Because these individuals were not previously identified, the Court did not address any claims related to these potential Intervenors at the hearing on the preliminary injunction. Therefore, the Court enters the present Order related to the Plaintiffs presently in this case. The Court will separately consider the Motion to Intervene when it has been fully briefed.4
IT IS THEREFORE ORDERED that Plaintiffs’ Supplemental Motion for a Preliminary Injunction [Doc. #22] is DENIED to the extent that Plaintiffs ask this Court to set reimbursement rates for certain types of Supervised Living services. However, IT IS ORDERED that Plaintiffs’ Supplemental Motion for a Preliminary Injunction [Doc. #22] is
4 The Court notes that it may be more appropriate to add these parties by way of a Second Amended Complaint rather than by Intervention, but the Court need not reach that issue in the present Order.
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GRANTED to the extent that Plaintiffs request that Defendant Coughlin be required to ensure that Plaintiffs are provided with community-based treatment as an alternative to institutionalization during the pendency of this suit.
IT IS THEREFORE ORDERED that Defendant Coughlin, as CEO and Area Director of the PBH Local Management Entity, ensure that each Plaintiff is provided with a clinicallyappropriate community-based placement option during the pendency of this suit.
This, the 12th day of May, 2010. United States District Judge
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 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next friend CLINTON L., SR., and TIMOTHY B., by his guardian and next friend ROSE B., VERNON W., by his guardian and next friend VERNON D. W., STEVEN C., JASON A., by his guardian and next friend BRENDA A., and DIANE D. by her guardian and next friend THOMAS S.,

Civil Action No. 1:10-cv-123-JAB
DEFENDANTS’ MOTION TO DISMISS

Plaintiffs,

vs.

LANIER CANSLER, in his official capacity as Secretary of the Department of Health and Human Services, and DAN COUGHLIN, in his official capacity as CEO and Area Director of the Piedmont Behavioral Healthcare Local Management Entity,

Defendants.

Defendants Lanier Ca nsler and Dan C oughlin, by a nd through their undersigne d attorneys and pursuant to Ru les 12(b)(1) and 12(b)(6) of the F ederal Rules of Civil Procedure and Local Rule 7. 3 (MDNC), respectfully move this Court to dismiss Plaintiffs’ Second Amended Complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) and for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). Defenda nts submit a memorandum of law in support of their motion contemporaneously.

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Respectfully submitted, this the 16th day of August, 2010.
NELSON MULLINS RILEY & SCARBOROUGH LLP
By: /s/ Stephen D. Martin Wallace C. Hollowell III N.C. State Bar No. 24304 Stephen D. Martin N.C. State Bar No. 28658 4140 Parklake Avenue, Suite 200 Raleigh, NC 27612 Telephone: (919) 877-3800 Facsimile: (919) 877-3799 E-Mail Address: chuck.hollowell@nelsonmullins.com E-Mail Address: steve.martin@nelsonmullins.com
Counsel for Defendant Dan Coughlin
ROY COOPER
By: /s/ Lisa G. Corbett (by permission) Lisa G. Corbett Assistant Attorney General N.C. State Bar No. 15877 P.O. Box 629 Raleigh, North Carolina 27602-0629 Telephone: (919) 716-6880 Facsimile: (919) 716-6756 E-Mail Address: lcorbett@ncdoj.gov
Counsel for Defendant Lanier Cansler
2
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CERTIFICATE OF SERVICE
I, the undersigned attorn ey of the law offices of Nelson Mullins Riley & Scarborough LLP, attorne ys for Defendant Dan Coughlin do hereby certify that on August 16, 2010, I electronically filed the foregoing DEFENDANTS’ MOTION TO DISMISS with the Clerk of the Court us ing the CM/ECF system which will send notification of such filing to the following:
• John R. Rittelmeyer (john.rittelmeyer@disabilityrightsnc.org) • Jennifer L. Bills (jennifer.bills@disabilityrightsnc.org) • Andrew B. Strickland (andrew.strickland@disabilityrights.org)
Attorneys for the Plaintiffs • Lisa G. Corbett (lcorbett@ncdoj.gov)
Attorney for Defendant Lanier Cansler
/s/ Stephen D. Martin Stephen D. Martin N.C. State Bar No. 28658 4140 Parklake Avenue, Suite 200 Raleigh, NC 27612 Telephone: (919) 877-3800 Facsimile: (919) 877-3799 E-Mail Address: steve.martin@nelsonmullins.com Counsel for Defendant Dan Coughlin
3
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 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next friend CLINTON L., SR., and TIMOTHY B., by his guardian and next friend ROSE B., VERNON W., by his guardian and next friend VERNON D. W., STEVEN C., JASON A., by his guardian and next friend BRENDA A., and DIANE D. by her guardian and next friend THOMAS S.,

Civil Action No. 1:10-cv-123-JAB
DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS

Plaintiffs,

vs.

LANIER CANSLER, in his official capacity as Secretary of the Department of Health and Human Services, and DAN COUGHLIN, in his official capacity as CEO and Area Director of the Piedmont Behavioral Healthcare Local Management Entity,

Defendants.

Defendants Lanier Cansler (“Cansle r”) and Da n Coughlin (“Coughlin”) (collectively, the “Defendants”), by and t hrough their respective undersigned attor neys and pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure and Local Rule 7.3 (MDNC), resp ectfully submit this memora ndum in support of thei r motion to dismiss Plaintiffs’ case for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted [D.E. 44].

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SUMMARY
Effective February 15, 2010, PBH re duced the rate at which it reimburses
providers in its network of providers for certain Supervised Living services, referred to
by the billing codes YM-811 and YM-812. At the time of the filing of the Complaint,
Plaintiffs all received Superv ised Living services that th eir providers billed to PBH as
YM-811 or YM-812 s ervices. Plaintiffs have asserted two claims in this case: (1) that
Defendants’ actions violate T itle II of the Americans w ith Disabilities Act; and (2) that
Defendants’ actions violate Section 504 of the Rehabilitation Act of 1973. Com mon to
both claims are two separate issues, which this Court has previously summarized:
[T]wo separate issues have been raised: (1) a challenge to rate cuts that will purportedly lead to “congregate placements that cannot meet Plaintiffs’ ne ed for const ant care, support, and supervision,” and (2) a chal lenge that as a result o f the rate cuts and change in servic es, Plaintiffs will ultimately be forced to “enter institutions.” (Am. Compl. ¶ 71-72) Thus, the first issue relates to Plaintiffs’ opposition to a reduction in services and opposition to movi ng into a different type of community-based placement, while the second issue relates to the allegation that PBH’s acti ons will ultimately result in institutionalization of Plaintiffs.
[D.E. 36, p. 8] See also Second Am. Compl. ¶ 95-96.
Plaintiffs’ claims should be dismissed pursuant to Rule 12(b)(1) for lack of subject
matter jurisdiction based on lack of standing and ripeness. To satisfy the Article III “case
or controversy” requirement, Plaintiffs m ust show that they have suffered an injury in
fact that is actual or imminent, not conjectu ral or hypothetical. Further, Plaintiffs’ clai m
for relief is not ripe if it rests on contingent fut ure events that may not occur as
anticipated, or may not occur at all. Lack of standing and lack of ripeness each deprive
2
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this Court of subject matter jurisdiction over Plaintiffs’ claims. Because Plaintiffs do not face any imminent threat of institutionalization, they lack standing and their claims are not ripe.
Further, Plaintiffs’ claim s should be dismissed pursuant to R ule 12(b)(6) for failure to state a claim upon which relief can be granted. There is no federal right to be served in a particular placement or by a particular provider. There is no federal right to be served in a single-person placement. Plaintiffs’ desire to avoid moving to a clinicallyappropriate 2 to 6 person, community-based congrega te placement does not present any cognizable federal claim.
STATEMENT OF FACTS The Defendants
Defendant Cansler is the dul y appointed Secretary of the North Carolina Department of Health and Hu man Services (the “Departm ent”). The duti es of the Department are to “provi de the necessary management, development of policy, a nd establishment and enforcement of standards for th e provisions of services in the fields of public and mental health and rehabilitation w ith the intent to assi st all citizens – as individuals, families, and co mmunities – to achieve and main tain an adequate level of health, social and economic well-being, and dignity.” N.C. Gen. Stat. § 143B-137.
In addition to these general duties, Se cretary Cansler also has specific duties assigned by the General Asse mbly in relation to the pr ovision of Me ntal Health, Developmental Disability and Substance Abuse Services. Those duties are generally set out in N.C. Gen. Stat. §§ 122C-112.1 and 124.1.
3
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Defendant Coughlin i s the CEO and Ar ea Director of PBH. PBH is a multicounty area mental health, developmental disabilities, and substance abuse authority (“area authority”) established pursuant to N.C. Gen. Stat. § 122C-115(c) by the Boards of Commissioners of Cabarrus, Davidson, Rowan, Stanly, and Union Counties. As an area authority, PBH is a “ local political subdi vision of the State.” N.C. Ge n. Stat. § 122C116. As an area authority, PBH is also re ferred to as a “local m anagement entity” (“LME”). N.C. Gen. Stat. § 122C-3(20b).
LMEs are local political subdivi sions that provide oversight of private mental healthcare providers by planning and coordinating certain behavioral health services in a defined area. See N.C. Gen. St at. § 122C -115.4. PBH does not provi de health care services itself; rather, PBH is a local manage r of care provided by a network of providers who provide services to consumers.
Pursuant to an agreement between PBH, the Centers for Medicare and Medic aid Services (“CMS”) and the Department, PBH operates under fe deral Medicaid waiver s pursuant to Sections 1915(b) and 1915(c) of the Social Security Act (42 U.S.C. §§ 1396n(b) and (c)). The waiver under section (b) is PBH’s managed care waiver (the “Cardinal Health Plan”), and the waiver under section (c) is PBH’s com munity-based waiver (the “Innovati ons waiver”). The Cardinal Health Plan establishes PBH as a Prepaid Inpatient Health Plan (“PIHP”), and it also outlines the benefits for mental health and substance abuse cons umers in PBH’s catchment area. The Innovati ons waiver outlines the benefits for developmental disabilities consumers in PBH’s five-county area.
4
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PBH’s operation as a PIHP means that it is prepaid by the St ate to provide care, and it accepts the financial risk for providing that care. Th is arrangement intentionally creates an incentive for PBH to provide the most efficient and cost-effective care. Any cost savings generated by P BH as a result of providing efficient and c ost-effective care are required t o be used to provi de additional medical care for Medicaid beneficiaries enrolled in the plan. See 42 C.F.R. § 431.55(e).
PBH also has a contract with the De partment’s Division of Mental Health, Developmental Disabilities and Substance Abuse Services (“DMH”) to serve as the LME for the five counties. Pursuant to this contract, PBH receives state funds (i.e., nonMedicaid funds) to provide mental health , developmental disabilities, and substance abuse services to indigent consumers. PBH’s agreement with DMH imposes a number of responsibilities on PBH, includi ng that PBH w ill “[e]stablish rates for serv ices.” See DMH Contract, § 10.0(7) [D.E. 10-1]. See also , 42 C. F.R. § 438.12 ( PIHPs are authorized to use “diff erent reimbursement amounts” and to establi sh “measures that are designed to . . . control costs”).
Secretary Cansler and Director Coughlin e ach play a role in the State’s plan for provision of services: Secretary Cansler overs ees the State operated facilities; Director Coughlin oversees the functions of PBH, w hich is a separate, distinct legal entity with its own statutory powers and duties. Secretary Cansler cannot in terfere in the operation of PBH except as provided in N.C. Gen. Stat. § 122C-124.1.
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PBH Reduced Certain Reimbursement Rates In response to reductions in its fundi ng (see Snipes Declaration, D.E. 10-4), PBH exercised its authority to establish rates for services and changed the rates for two particular services: Supervised Li ving – 1 re sident (YM-811) and Supervised Living – 2 residents (YM-812). As a result of this rate change by PBH, effective February 15, 2010 PBH pays the same rate for Supervised Living services, regardless of whet her the placement is in a facility with one, two, or three beds . The new rate is $116. 15/day. PBH notified its providers of these services of this rate change in a Com munication Bulletin dated January 11, 2010, a copy of which was att ached to the Complaint as Exhibit 1. Further, PBH spoke with each of these providers to discuss the upcoming rate change to determine how, if ay all, it might impact the services that they were currently providing to PBH consumers.
The Plaintiffs Plaintiffs Clinton L. and Timothy B. br ought this action on Fe bruary 11, 2010. Plaintiffs Vernon W. and Stev en C. joined this action on Ma rch 30, 2010 with the filing of the First Amended Complaint. [D.E. 20]. Plaintiffs Jason A. and Diane D. were permitted to join this action on June 2, 2010 with the filing of the Second Amende d Complaint. [D.E. 39]. Plaintiffs’ respective current residential placements are detailed in the Declaration of Anna Yon, PBH’s Developmen tal Disabilities Director, attach ed hereto as Exhibit A. To summarize:
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• Clinton L. and Ver non W. bot h continue to receive Supervised Living services in the same single-person community placements in which they were living when the Comp laint was filed. See Yon Decl., ¶¶ 4-7, 19- 23. While the provider of Ver non W.’s services has ch anged, the services he receives and the location in which he re ceives them has remained constant and unbroken. Id., ¶¶ 21-23.
• Timothy B. was rem oved from the single- person apartment in Ra leigh in which he was living whe n the Complaint was file d by his guardian, Rose B., on April 30, 2010, w ho brought Timothy B. back to her hom e in Lexington, NC. Tim othy B. remained living with Rose B. until June 23, 2010, when he bega n living i n a 2-person group hom e in Lexi ngton, NC where he receives 24-hour super vision from staff that have been trained to communicate using Ameri can Sign Language . From April 26 until his placement on June 23, PBH offered numerous clinically-appropriate community placements for Timothy B., all of which Rose B. declined. From May 18 through June 22, PBH also provi ded periodic supports in Rose B.’s home through a provider in its network, while Rose B. and PBH worked to find a permanent residential placement for Timothy B. Id., ¶¶ 818.
• Steven C. m oved from the single-person apartment in Lexington, NC in which he was living when the First Amended Comp laint was filed to a 3person group home in Le xington, NC, where he continues to receive Supervised Living services. Id., ¶¶ 24-26.
• Jason A. continues to live in the same 3-person group home in which he has been living for severa l years, w here he continues to receive Supervised Living services. On March 5, 2010, a third housemate – F. – m oved into the home that Jason A. ha d shared for m any years with his other housemate, A. O n April 13, 2010, Jason A. was rem oved from the home and placed in a respite care facility due to an outburst that Jason A.’s provider indicates was unrelated to th e presence of the third housemate. Since returning to the ho me on April 20, 2010, Jason A. has ha d minor issues related to his own disability, but continues to get along with the third housemate. Id., ¶¶ 27-35.
• Diane D. was m oved by her guardian, Thomas S., fro m the single-person apartment in which she was living wh en the Com plaint was filed to a 3person group home in Lexington, NC on May 1, 2010, where she continues to receive Supervised Living services. Diane D.’s provider indicates that Diane D. has made a successful tran sition to the 3-bed group hom e, and
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that she has lived there with no major incident si nce May 1, 2010. I d., ¶¶ 36-39. Plaintiffs respective comm unity-based residential pl acements are clinically appropriate for each of the Plaintiffs. See Hummel Decl. [D.E. 10- 7]; Second Hummel Decl. [D.E. 24-1]; and Exhib it 1 to Coughlin’s Verified Answer to Second Amended Complaint [D.E. 42-1].
STANDARDS OF REVIEW Defendants bring this Motion to Dismiss pursuant to Rules 12(b)(1) and 12(b)(6). A. Standard of Review for 12(b)(1) Motions. “Standing, of course, is jurisdictional; its existence is a prerequisite to finding that a court has the power to adju dicate the cause. As such, standing is appr opriately challenged via a m otion pursuant to Rule 12(b)(1), Fed. R. Civ. P., a nd it is a plaintiff 's burden to establish standing.” Manage ment Ass’n for Private Photogram metric Surveyors v. U.S. , 467 F.Supp.2d 596, 600 (E.D. Va. 2006). Si milarly, “[r]ipeness is jurisdictional in nature and th erefore properly considered on a motion to dismiss for lack of subject matter jurisdiction pu rsuant to Rule 12(b)(1) of the Federal Rules .” Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 261 F.Supp.2d 293, 294 (S.D.N.Y. 2003). A question of subject matter jurisdiction ca n be raised at any tim e during a case, and the burden is on the Plain tiffs to show that the Court has subject matter jurisdiction over the case. McNutt v. Ge n. Motors Acceptance Corp. , 298 U.S. 178, 189 (1936) (under Rule 12(b)(1), the plaintiff bears th e burden of showing that federal jurisdiction
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exists when that is challenged by the de fendant). Furt her, the Court m ay consider
affidavits in connection with a motion to dismiss for lack of subject matter jurisdiction.
Subject matter jurisdiction is, as we know, an issue that should be resolved early but must be considered at any stage of the litigation. . . . [I]f the co mplaint is formally sufficient but the contention is that there is in fact no subject matter jurisdiction, the movant may use affidavits and other material to support the motion. The bu rden of proof on a 12(b)(1) issue is on the party asserting ju risdiction. Mortensen v. First Fed. Sav. & Loa n Ass'n, 549 F. 2d 884 (3d Cir.1977). And the court is free to weigh the evidence to determine w hether jurisdiction has been established.
United Phosphorus, Ltd. v. Angus Chemical Co., 322 F.3d 942 (7th Cir. 2003). See also,
Thigpen v. U.S., 800 F.2d 393, 401 n. 15 (4th Cir. 19 86) (district court may consider
extrinsic information beyond the complaint to determ ine whether subject matter
jurisdiction exists.); Materson v. Stokes , 166 F.R.D. 368, 371 (E. D. Va. 1996) (because
the court’s “very power to hear the case” is at issue, the trial court is free to weigh the
evidence to determine the existence of its jurisdiction).
The analysis of standing and ripeness are similar. “Although t he phrasing makes
the questions of w ho may sue a nd when they sue seem distin ct, in practice there is an
obvious overlap betw een the doctrines of st anding and ripeness.” Erwi n Chemerinsky,
Federal Jurisdiction § 2.4 (4th ed. 2003).
1. The Standing Doctrine Requires a Showing of “Injury In Fact”.
The United States Supreme Court has explained:
[T[hose who seek to invoke th e jurisdiction of the federal courts must satisfy the threshol d requirement imposed by Article III of the Constitution by alleging an actual case or controversy. . . . The plaintiff must show that h e has
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sustained or is immediately in danger of sustaining some direct injury as the result of the challenged official co nduct and the inj ury or threat of injury must be both real and immediate, not conjectural or hypothetical.

City of Los Angeles v. Lyons , 461 U.S. 95, 101- 102 (1983) (emphasis added). “[P]ast

wrongs do not in themselves amount to that real and immediate threat of injury necessary

to make out a case or contr oversy.” Id. at 103. “It is the reality of the threat of repeated

injury that is relevant to the standing

inquiry, not the plaintiff’s subjective

apprehensions.” Id. at 107 n.8 ( emphasis in origi nal). See also Lujan v. D efenders of

Wildlife, 5034 U.S. 555, 560-561 (1992) (plaintiff bears burden of showing injury in fact

that is “actual or imminent, not conjectural or hypothetical”).

“Allegations of possible future injury do not satisfy the requirement of Art. III. A

threatened injury must be ‘certainly impending’ to constitute injury in fact.” Whitmore v.

Arkansas, 495 U.S. 149, 158 (1990) (quoting Babbit v. Farm Workers, 442 U.S. 289, 298

(1979)).

The Fourth Circuit Court of Appeals has likewise explained:

Doctrines like standing, m ootness, and ripeness are sim ply subsets of Article III’s comm and that the courts resolve disputes, rather than e mit random advice. The courts shoul d be especially mindful of this limited role when they are asked to award prospective relief inst ead of damages for a concrete past harm. . . .

. . . The pl aintiff must show that he has “ha s sustained or is immediately in danger of sustaining som e direct injury” as a result of the challenged offici al conduct and the inj ury or threat of injury must be both “real and im mediate,” not “conjectural” or “hypothetical.”

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Bryant v. Che ney, 924 F.2d 525, 529 (4 th Cir. 1991) (quoting C ity of Los Angeles v.
Lyons, 461 U.S. 95, 101-102 (1983)). “The purpose of the imminence requirement is ‘to
ensure that the alleged injury is not too speculative for Article III purposes.’” Friends for
Ferrell Parkway v. Stasko, 282 F.3d 315, 322 (4th Cir. 2002) (quoting Lujan v. Defenders
of Wildlife, 5034 U.S. 555, 564-565 n.2 (1992)).
The Fourth Circuit Court of Appeals has further instructed:
The standing requirement . . . “te nds to assure that the legal questions presented to the cour t will be resolved, not in the rarefied atmosphere of a debati ng society, but in a c oncrete factual context conducive to a realistic appreciation of the consequences of judicial action.”
* * *
. . . [The standing] requirements . . . ensure that the judiciary, and not another branch of gove rnment, is the appropriate forum in which to address a plaintiff’s complaint.
Friends of the Earth v. Gaston Copper Recycling Corp., 204 F.3d 149, 153-154 (4th Cir.
2000) (quoting Valley Forge Christian College v. Am ericans United for Se paration of
Church and State, 454 U.S. 464, 472 (1982)).
2. For a Claim to Be Ripe, It Must Not Rely on Conti ngent Future Events.
The ripeness doctrine likewise turns on whether the claimed injury is real,
immediate, and certain to occur. “A claim is not ripe for adj udication if it rests upon
‘contingent future events that may not occur as an ticipated, or indeed may not occur at
all.’” Texas v. United States , 523 U. S. 296, 300 (1998). See also, Retail Industr y
Leaders Assoc. v. Fielder , 475 F.3d 180, 188 (4 th Cir. 2007) (“An issue is not fit for
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review if ‘it rests upon contingent future e vents that m ay not occu r as anticipated, or
indeed may not occur at all.’”); Educ. Credit Mgmt. Corp. v. Coleman , 560 F.3d 1000,
1005 (9th Cir. 20 09) (“Where a dispute ha ngs on future contingencies that may or may
not occur, it may be too impermissibly speculative to present a justiciable controversy.”).
The Fourth Circuit has explained:
Abbott set forth the t wo-prong test now us ed by c ourts for determining ripeness: (1) whether the issues are fit for judicial decision and (2) whether hardsh ip will fall to the petitioning party on withholding court consideration. 387 U.S. at 149, 87 S.Ct. at 1515. Although there is no precise list of factors a court should entertain in appl ying this test, the Court in Abbott listed several for consi deration. A case is fit fo r judicial decision where the issues to be considered are purely legal ones and where the . . . action gi ving rise to the controversy is final and not dependent upon future uncertainties . . . . Id. at 149, 87 S.Ct. at 1515. The hardship prong is measured by the immediacy of t he threat and t he burden imposed on the petitioner who would be compelled to act under threat of enforcement of the c hallenged law. Id. at 153, 87 S.Ct. at 1517.
Charter Federal Sav. Bank v. Office of Thrift Supervision , 976 F.2d 203, 208-209 (4th
Cir. 1992) (emphasis added) (c iting Abbott Laboratories v. Gardner , 387 U.S. 136
(1967)).
B. Standard of Review for 12(b)(6) Motions.
A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure tests the legal sufficiency of the complaint. See Randall v. U.S., 30 F.3d 518,
522 (4th Cir. 1994). A plaintiff m ay survive a motion to dismiss only if he has pleade d
facts with enough specificity to “raise a right to relief above the speculative level.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974 (2007). The Com plaint
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must be di smissed if it does not allege “enough facts to state a claim to relief that is plausible on its face.” Id. The court is not bound by plaintiffs’ unsupported legal conclusions. Thom as v. N orthern Telecom, Inc., 157 F. Supp. 2d 627, 632 ( M.D.N.C. 2000). If the Court can not infer that the required ele ments of a cause of action are present, then the m otion to dismiss should be granted. Garris on v. R. H. Barringer Distrib. Co., 152 F. S upp. 2d 856 , 859 (M.D.N.C. 2001) (citing Wolman v. Tose , 467 F.2d 29 (4th Cir. 1972)). “The heavy costs of modern federal litigation . . . counsel against launching the parties into pretrial discovery if there is no reasonable pr ospect that the plaintiff can make out a caus e of action from the events narrated in the complaint.” Nixon v. Individual Head of the St. Joseph Mortgage Co ., 615 F. Supp. 898, 899 (N.D. Ind. 1985).
ARGUMENT Plaintiffs allege that the Defendants’ actions with respect to PBH’s reduction of the rate at which it reimburse s providers in its networ k for certain S upervised Living services will ultimately result in each of th em being forced out of placements in the community and into institutio ns where they will be se gregated from society and discriminated against on the basis of their respective disabilities. Plaintiffs assert that this prospect of forced institutionalization violates Title II of the ADA and § 504 of the Rehabilitation Act1. Plaintiffs claim s should be di smissed pursuant to Rul e 12(b)(1)

1

Although for purposes of this Motion pursuan t to Rule 12(b)(6) the Court m ay take

Plaintiffs’ allegations as true, the Court should take note that Plaintiffs ’ allegations that the

Supervised Living services PBH provides implicate § 504 of the Rehabilitation Act are false. As

explained more fully in the Declarations of Dan Coughlin and Renee Snipes subm itted to th e

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because their alleged harm is speculative in nature, and fails to satisfy the standing
requirements of an actual “case or contro versy” pursuant to Ar ticle III. Further,
Plaintiffs’ claims should be dismissed pursuant to Rule 12(b)(6) because the only actua l
“harm” that is alleged to have affected a ny of t he Plaintiffs – t hat as a result of
Defendants’ actions some of the Plaintiffs now live in clinically-appropriate, community-
based, congregate placements with between 1 and 5 other peop le – fails to state a claim
under either the ADA or the Rehabilitation Act upon which relief can be granted.
“The elements of a cause of action under Title II of the ADA or § 504 of the
Rehabilitation Act are: the plaintiff has a disability; the plaintiff is otherwise qualified for
the employment or benefit in question; and t he plaintiff w as excluded from the
employment or benefit because of discriminati on based solely on her disability.” Doe v.
Univ. of Md. Med. Sys. Corp. , 50 F.3d 1261, 1264- 5 (4th Cir. 1995). The l eading case
on the construction of the anti-discrimination provision of Title II of the ADA at issue in
this case is Olmstead v. L.C. ex rel. Zimring , 527 U.S. 581 (1999), in which the Supreme
Court confronted the question of “whether the proscription of discrimination may require
placement of persons with mental disabilitie s in community setting rather than in
Court on February 16, 2010, PBH operates a fede ral Medicaid waiver pursuant to Section 1905(b) of the Social Security Act, known as the Innovations Waiver. The Innovations W aiver is funded through federal and stat e tax dollars, and would therefor e come within the scope of Section 504. PBH has not changed the reimburse ment rate for re sidential living services provided to Plaintiffs through the Innovations Waiver.
PBH also receives state non-Med icaid funds through a co ntract between PBH and the Department of Health and Hum an Services, Di vision of Mental Hea lth. These state nonMedicaid funds are the funds that P BH uses to provide the Supervised Living YM-811 and YM812 services at issue in this cas e. The reduction in reimbursement rates for these specific services is a reduc tion in state funding only , and therefore facially fa lls outside the scope of Section 504.
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institutions.” Id. at 587. “The answer, we hol d, is a qualified yes.” Id. In Olmstead ,
institutionalized mentally disabled persons brought an action claiming that Title II of the
ADA required the State of Geor gia to pr ovide them with a comm unity placement to
integrate them into the community rather than placement in an institution. The Olmstead
Court held that under Title II of the ADA:
States are required to provide community-based treatment for persons with mental disabilitie s when the States treatment professionals determine that such placem ent is appr opriate, the affected persons do not oppo se such treatment, and the placement can be reasonably ac commodated, taking into account the resources available to the State and the needs of others with mental disabilities.
Id. at 607.
I. Plaintiffs’ Claims T hat They Are at Risk of Forced Institutionalization Are Speculative, Thus, Plaintiffs Have No t Suffered Any Injury In Fact, They Lack Standing, and Their Claims Are Not Ripe.
A. Plaintiffs’ Cannot Show that Ther e is Any Immine nt Risk that They Will Be Institutionalized.
In their Second Amended Comp laint, Plaintiffs allege ea ch of the Plaintiffs “will
be forcibly isolated and segregated” and that each of the Plai ntiffs “are facing the risk of
forced institutionalization as a di rect result of Defendants’ actions. ” [D.E. 39, ¶ 109]
(emphasis added). An examination of Plaintiffs’ legal theory, and a review of what has
actually transpired s ince the Plaintiffs first made th ese allegations of forced
institutionalization in February 2010, show that these a llegations are nothing more than
rank speculation.
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First, the theory on which Plaintiffs’ allegations of imminent, forced institutionalization is set out in paragraphs 94-96 of the Second Amended Complaint is grossly speculative, and s hould be dism issed pursuant to R ule 12(b)(1). In essence, Plaintiffs argue that as a result of PBH’s reduction in the rate at which it reimburses providers in its netw ork for YM811 and YM812 services, each of the fol lowing will occur:
1. All providers of YM811 and YM812 services will operate at a loss; causing 2. All providers in PB H’s network to cease providi ng YM811 and YM812
services; meaning that 3. Each of the Plaintiffs will be forc ed to live in c ongregate community
placements with 1 to 5 other people; 4. That each of the Plaintiffs will fail in their first, and each subsequent,
congregate community placement available in PBH’s network; resulting in 5. The forced institutionalization of each of the Plaintiffs. Facially, the speculative nature of Plain tiffs’ the alleged harm is too grea t to withstand the rigors of the standing doctrine as set forth in Lyons, Whitmore, and Bryant. Plaintiffs do not, and cannot, sh ow that any of them “has su stained or is im mediately in danger of sustaining some direct injury” as a result of Defenda nts’ actions, or that their injury is “real and im mediate,” not “conjectural” or “hypothetical.” Bryant, 924 F.2d at 529. Indeed, Plaintif fs’ own allegations tacitly acknow ledge the speculative nature of their alleged harm . S ee, e.g., D.E. 39, ¶ 96 (“ If and whe n Plaintiffs’ placement in a congregate setting . . . are determined to have failed ( as is expected), it is believed that Plaintiffs will face forced institutionalization . . . ”)(emphases added).
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Second, an examination of wh at has actually transpired w ith each of the Plaintiffs since PBH’s rate reduction took effect on February 15, 2010 further highlights the grossly speculative and unfounde d nature of Plaint iffs’ allegations, and compels the Court to dismiss Plaintiffs’ case pursuant to Rule 12(b)(1). Two of the Plaintiffs – Clinton L. and Vernon W. – both continue to receive Supervised Living se rvices in the same 1-person community placements in which they were living when the Co mplaint was filed. While the provider of Vernon W.’s services has ch anged, the services he receives and the location in which he receives them has remained constant and unbroken. See Yon Decl., ¶¶ 4-7, 19-23.
Three of the Plaintiffs – Timothy B., St even C., and Di ane D. – have all m oved from single-person placements to commun ity-based, 2 or 3 person group home placements. Timothy B. and Steven C. each live in 2-person group homes with one other roommate where they receive 24-hour supervision. Di ane D. lives in a 3-pe rson group home with two other roommates, where sh e and her roommate all receive 24- hour supervision. See Yon Decl., ¶¶ 8-18, 24- 26, 36-39. The last Plaintiff – Jason A. – has at all times relevant to this litigation lived in a commu nity-based, 3-person group hom e. The only c hange has been t hat, where Jason A. and one ot her person had lived in t his group home and received 24-hour supervision, Jason A. now lives with two other persons -and receives 24-hour supervision. See Yon Decl., ¶¶ 27-35.
At all times from before this litigation wa s initiated to the pres ent, each of the Plaintiffs has had available to him or her a community-based residential placement with 24-hour supervision that is appropriate to th eir individual clinical needs. At all times
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from before this litigation was initia ted to the present, five of the six Plaintiffs have lived continuously in community-based residential placements with 24-hour supervision appropriate to his or her individual clinical needs. The one exception is Timothy B. who, from April 30 t hrough June 23, 2010, lived w ith his guar dian, Rose B. at her choice , although there were community -based residential placements available to Timothy B. at all times.2 Simply put, there is no cr edible showing that Plaintiffs have been, or are now, in any sort of imminent danger of forced institutionalization as a result of Defendants’ actions, and thus, there is no “case or controve rsy” under Title II of the ADA or § 504 of the Rehabilitation Act sufficient to m eet the requirements of Article III. 3 The Court should therefore dismiss Plaintiffs’ claims pursuant to Rule 12(b)(1). II. Plaintiffs’ Claim for Declarat ory and Injunctive Relief Regar ding Their
Transitions to More Congregate Plac ements Fail to St ate a Clai m Upon Which Relief Can Be Granted. Of the two issues in this case identified by this Court in its Order on Plaintiffs’ Motion for Preliminary Injunction, only one – the alle gation that Plaintiffs will be forced

2

At all tim es during this period, PBH offered several available community-based

placements for Timothy B. to his guardian, Ro se B. PBH also autho rized 300 hours of respite

care services for Timothy B. during this period at his guardian’ s home. On June 23, 2010, Rose

B. placed T imothy B. in a 2-perso n group ho me operated by Am bleside, Inc., where he once

again began receiving 24-hour supervision, and where the staff has been and continues to b e

trained in Am erican Sign Language and in Ti mothy B.’s own unique signs in order to

communicate with him . As of August 16, 2010, Ti mothy B. continues to live in the 2-person

group home operated by Ambleside, Inc. See, Yon Decl., ¶¶ 8-18.

3

To the extent the Court finds that, at the tim e the Complaint was filed, there existed the

possibility that Plaintiffs may have been institutionalized, the events of the past six months have

rendered such a possibility m oot. “[A]n actual controversy m ust exist during all stages of

review, not merely at the time the complaint is filed.” White Tail Park, Inc. v. Stroube, 413 F.3d 451, 457 (4 th Cir. 2005) (quoting Arizonans for Official English v. Arizona , 520 U.S. 43, 67

(1997)). To the extent the Court believes that P laintiffs initially m et their Article III standing

requirements, the Court should now dismiss Plaintiffs’ suit as moot.

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into institutions – states a co gnizable claim pursuant to T itle II of the ADA or § 504 of the Rehabilitation Act. As discussed above, however, this issue fails for lack of subject matter jurisdiction, as Plaintiffs’ claims are entirely speculative and therefore the Plaintiffs lack standing and their claims are not ripe. The other issue – the allegation that the Defendants’ actions will ca use the Plaintiffs to leave their single-person community placements and live in communi ty-based congregate placemen ts with between 1 and 5 other people – fails to state a cognizable claim pursuant to Title II of the ADA or § 504 of the Rehabilitation act. As such, this Court should deny Plaintiffs claims pursuant to Rule 12(b)(6).
A. Plaintiffs’ Fail to Assert Any Co gnizable Right that Would Entitle Them to Relief Under Federal Law.
The leading case on the construction of the anti-discrimination provision of Title II of the ADA is Olmstead . Even under an e xpansive reading of Olmstead , states are not required to provi de any and all community-based placements that m ay be desired by persons with mental disa bilities. Nor does Olmstead require that com munity-based services be provided by any particular provider. “We do not in this opinion hold . . . that the ADA requires States to ‘p rovide a certain level of be nefits to indivi duals with disabilities.’” Olmstead, 527 U.S. at 603, n.14.
Plaintiffs allege that Defendants’ acti ons violate the implementing regulations for Title II of the ADA, 28 C.F.R. § 35.130(d), which provide that “[a] public entity shall administer services, programs, and activities in the most integrated setting appropriate to
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the needs of the qualified i ndividuals with disabilities.”4 Plaintiffs argue that the “most integrated setting” for five of t he Plaintiffs5 is a single-person pl acement with 24- hour

supervision, and that placement in 2-6 pe rson community-based, congregate placements

with 24-hour supervision fails to comport with the regulation.

The focus of Olmstead , and the regulations it was in terpreting, was to address a

specific type of discrimination against pe rsons with disabilities – “segregation” i n

institutions. 527 U.S. at 588- 89. As explained by the C ourt: “In the ADA, Congress for

the first time referred expressly to ‘segregati on’ of persons with disabilities as a ‘for[m]

of discrimination,’ and to discrimination that persists in the area of ‘institutionalization.’”

527 U.S. at 589, n.1. The Court explained: “Unjustified isolation, we hold, is properly

regarded as discrimination based on disability.” 527 U.S. at 588-89, 597.

Interpreting 28 C.F.R. § 35. 130(d) in light of Olmstead , persons with disabilities

need to be served in the most integrated – or least segr egated – setting that is clinically

appropriate in order to avoi d discrimination in the form of “unjustified institutional

isolation.” 527 U.S. at 600. When this particular rule was published in final form in th e

Federal Register, the Department of Justice e xplained that “the most integrated setting”

means “a setting that enables individuals with disabilities to interact with nondisable d

persons to the fullest extent possible.” 56 Fed. Reg. 35694 (Jul y 26, 1991). See also ,

4

Likewise, Plaintiffs argue that Defendants’ actions violate the im plementing regulations

for § 504 of the Rehabilitation Act, 28 C.F.R. § 41.51(d), which provide that recipients of federal

funds pursuant to § 504 “shall administer programs and activities in the m ost integrated setting

appropriate to the needs of qualified handicapped persons.”

5

Plaintiffs, apparently, do not contend that a single-person placem ent is the “most

integrated setting” for Jason A. Rather, Plaintiffs appear to ar gue that a 2-person p lacement, as

opposed to a 3-person placement, is the most integrated setting appropriate for Jason A.

20
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Disability Advocates, Inc. v. Paterson , 598 F.Supp. 289, 320 (E.D.N.Y. 2009) (“[T]he proper interpretation of ‘most integrated se tting’ is . . . whether a particular setting ‘enables individuals with disa bilities to interact w ith nondisabled pers ons to the fullest extent possible.’”)
During the preliminary injunction phase of this case, this Court noted that Plaintiffs were unable to identify any case in which a court had found that a “community placement in a home or apartment with two housemates is ‘segregated’ or ‘isolated,’” and thus violates Title II of the AD A or § 504 of the Rehabilitation Act. [D.E. 36, p. 9]. This is not surprising; after extensive research on the implementing regul ations for the ADA, and of cases following the Olmstead decision, counsel for Defendants have not found any case in which any court in the country has re cognized a violation of Title II of the ADA (or of § 504 of the Rehabilita tion Act) where, as h ere, the disabled parties live in clinically-appropriate, community-based congregate placements of betwee n 2 and 6 persons.
Indeed, as this Court has already noted, “it appears that individuals may be more likely to experience isolation if they are living alone with 24-hour supervision, since their only daily interaction is often with their care staff.” [D.E. 36, p. 9, n. 3]. A single-person placement can be one of the most segregated living situations imaginable. Further, there is no reason to assume that a disabled person who is receiving community-based treatment in a two-to-three person group hom e would have any less opportunity to interact with nondisabled persons than would an individual in a single-person placement. A person i n a two-to-three person group hom e is not se gregated from nondisabled
21
~Doc# 150020.2~
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persons to any greater extent than is a person in a single-p erson placement; if anything, the opposite is true in practice: persons are more integrated in th e community in group home placements given the mean ingful community activities th at group home residents participate in with people other than those paid to be with them. As a result, to the extent that Plaintiffs are arguing that, by defi nition, a singl e-person placement is a “m ore integrated” form of community treatment, this simply is not so.
If this were the case, it would prove fa r too m uch. If the Court were to deem single-person placement to always be the “most integrated” type of community treatment, then presumably all disabled persons would have a federal right to be treated in a singl eperson placement. If it was clinically appropriate to provide these services to a particular disabled person in a group hom e setting, th en presumably there would be no clinica l reason why that person coul d not be served in a single-person placem ent. Thus, by deeming a single-person placement to be “the most integrated setting” for purposes of the ADA, the Court would, in effect, be mandating that all individuals who are served in the community be served in this setting, which is, by far, the most expensive setting to provide these services. To Defe ndants’ knowledge, no c ourt has ever inte rpreted the ADA to mandate that all community-based tr eatment be provided only in a single-person placement setting; this Court shoul d dismiss Plaintiff’s request that it be the first to so hold.
CONCLUSION For the reasons stated above, this Cour t should dismiss Plaintiffs’ claims pursuant to Rule 12(b)(1) for lack of subject matter ju risdiction, as Plaintiffs have failed to show
22
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that any of them face an actual and immine nt threat of forced institutionalization in violation of Title II of the ADA or § 504 of the Rehabilitation Act. Further, the Court should dismiss Pla intiffs’ claims pursuant to Rule 12(b)(6) for failure to state a claim upon which relief m ay be gran ted, as the m ove of s ome of t he Plaintiffs from singleperson placements to community-based two-to-three person group home placements does not state a cognizable claim under either Title II of the ADA or § 504 of the Rehabilitation Act.

Respectfully submitted, this the 16th day of August, 2010.
NELSON MULLINS RILEY & SCARBOROUGH LLP
By: /s/ Stephen D. Martin Wallace C. Hollowell III N.C. State Bar No. 24304 Stephen D. Martin N.C. State Bar No. 28658 4140 Parklake Avenue, Suite 200 Raleigh, NC 27612 Telephone: (919) 877-3800 Facsimile: (919) 877-3799 E-Mail Address: chuck.hollowell@nelsonmullins.com E-Mail Address: steve.martin@nelsonmullins.com
Counsel for Defendant Dan Coughlin

ROY COOPER

~Doc# 150020.2~

By: /s/ Lisa G. Corbett (by permission) Lisa G. Corbett Assistant Attorney General
23

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N.C. State Bar No. 15877 P.O. Box 629 Raleigh, NC 27602-0629 Telephone: (919) 716-6880 Facsimile: (919) 716-6756 E-Mail Address: lcorbett@ncdoj.gov
Counsel for Defendant Lanier Cansler
24
~Doc# 150020.2~
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CERTIFICATE OF SERVICE
I, the undersigned attorn ey of the law offices of Nelson Mullins Riley & Scarborough LLP, attorne ys for Defendant Dan Coughlin do hereby certify that on August 16, 2010, I electronically file d the foregoing DEFENDANT COUGHLIN’S MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following:
• John R. Rittelmeyer (john.rittelmeyer@disabilityrightsnc.org) • Jennifer L. Bills (jennifer.bills@disabilityrightsnc.org) • Andrew B. Strickland (andrew.strickland@disabilityrights.org)
Attorneys for the Plaintiffs
• Lisa G. Corbett (lcorbett@ncdoj.gov) Attorney for Defendant Lanier Cansler
/s/ Stephen D. Martin Stephen D. Martin N.C. State Bar No. 28658 4140 Parklake Avenue, Suite 200 Raleigh, NC 27612 Telephone: (919) 877-3800 Facsimile: (919) 877-3799 E-Mail Address: steve.martin@nelsonmullins.com Counsel for Defendant Dan Coughlin
25
~Doc# 150020.2~
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 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
No. 10-CV-00123

CLINTON L., by his guardian and next )

friend CLINTON L., SR., TIMOTHY B., )

by his guardian and next friend ROSE B., )

VERNON D.W., STEVEN C., JASON )

A., by his guardian and next friend

)

BRENDA A., DIANE D., by her

)

guardian and next friend THOMAS S., )

)

Plaintiffs,

)

)

v.

)

)

LANIER CANSLER, in his official

)

capacity as Secretary of the Department )

of Health and Human Services, and DAN )

COUGHLIN, in his official capacity as )

CEO and Area Director of the Piedmont )

Behavioral Healthcare Local

)

Management Entity,

)

)

Defendants.

1:10-CV-00123

PLAINTIFF’S MOTION TO APPOINT A SPECIAL MASTER Plaintiffs Clinton L., Timothy B., Vernon W., Steven C., Jason A. and Diane D., pursuant to Fed.R.Civ.P. 53(a)(C), hereby move this Court for the appointment of a special master to enforce the Court’s Injunction by ensuring appropriate community supports that will prohibit Plaintiffs’ institutionalizations, to ensure their continued right to live in the community, and to prevent further harm by Defendants’ arbitrary actions. In support of their motion, Plaintiffs state:

Case 1:10-cv-00123-JAB-JEP Document 56 Filed 03/15/11 Page 1 of 4

1. By this Court’s Order dated May 5, 2010, the Court ordered Defendants to provide “clinically-appropriate community-based placements” to Plaintiffs.
2. Since the entry of this Court’s Order, the care provided to the Plaintiffs has deteriorated to the point where each of them faces an increased risk of institutionalization. One Plaintiff, Diane D., has in fact been placed in a psychiatric hospital as a result of her reduced services.
3. A Special Master should be appointed to review Plaintiffs’ plans of care to make certain that the care provided by Defendants is both clinicallyappropriate and sufficient to maintain Plaintiffs in their community placements. This task is best performed by an individual who is an expert in making such professional determinations.
WHEREFORE, Plaintiffs request that the Court enter an Order appoints a Special Master to oversee compliance with this Court’s Order.

Dated: March 15, 2011

Respectfully submitted,
/s/ John R. Rittelmeyer John R. Rittelmeyer john.rittelmeyer@disabilityrightsnc.org N.C. State Bar No. 17204
Jennifer L. Bills jennifer.bills@disabilityrightsnc.org N.C. State Bar No. 37467

Case 1:10-cv-00123-JAB-JEP Document 56 Filed 03/15/11 Page 2 of 4

DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244 Attorneys for Plaintiffs
Case 1:10-cv-00123-JAB-JEP Document 56 Filed 03/15/11 Page 3 of 4

CERTIFICATE OF SERVICE The undersigned herby certifies that on March 15, 2011, I electronically filed the foregoing Memorandum in Support of Plaintiff’s Motion to Appoint a Special Master with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following: Counsel for Defendant Dan Coughlin Stephen D. Martin (steve.martin@nelsonmullins.com) Chuck Hollowell (chuck.hollowell@nelsonmullins.com) Counsel for Lanier Cansler Lisa Corbett, Esq. (lcorbett@ncdoj.gov)
Respectfully submitted,
/s/ John R. Rittelmeyer John R. Rittelmeyer Jennifer L. Bills 2626 Glenwood Ave., Suite 550 Raleigh, North Carolina 27608 (919) 856-2195 (Telephone) (919) 856-2244 (Facsimile) john.rittelmeyer@disabilityrightsnc.org jennifer.bills@disabilityrightsnc.org
Case 1:10-cv-00123-JAB-JEP Document 56 Filed 03/15/11 Page 4 of 4

 
 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
No. 10-CV-00123

CLINTON L., by his guardian and next )

friend CLINTON L., SR., TIMOTHY B., )

by his guardian and next friend ROSE B., )

VERNON D.W., STEVEN C., JASON )

A., by his guardian and next friend

)

BRENDA A., DIANE D., by her

)

guardian and next friend THOMAS S., )

)

Plaintiffs,

)

)

v.

)

)

LANIER CANSLER, in his official

)

capacity as Secretary of the Department )

of Health and Human Services, and DAN )

COUGHLIN, in his official capacity as )

CEO and Area Director of the Piedmont )

Behavioral Healthcare Local

)

Management Entity,

)

)

Defendants.

MEMORANDUM IN SUPPORT OF PLAINTIFF’S MOTION TO APPOINT A SPECIAL MASTER

Introduction Plaintiffs seek relief from the Court because, despite this Court’s Order requiring Defendants to ensure adequate services are provided to retain Plaintiffs in community placements, Defendants have failed to appropriately coordinate Plaintiffs’ care to avoid their institutionalization. As detailed in Plaintiff’s Motion for a Status Conference, one Plaintiff is currently confined in a psychiatric hospital after having been jailed for three nights, and the police have been called to the scene of many of the other Plaintiff’s residences. An emergency hospitalization was necessary for a Plaintiff who is deaf

Case 1:10-cv-00123-JAB-JEP Document 57 Filed 03/15/11 Page 1 of 7

because of the staff’s failure to effectively communicate with him. Five out of six Plaintiffs have seriously regressed and have been either victims or aggressors in violent confrontations with housemates and staff. Stability in community placements has been upended for all of the Plaintiffs, who each now bear a substantial risk of institutionalization. Defendant PBH is currently in violation of this Court’s Order. Pursuant to Fed.R.Civ.P. 53(a)(C), Plaintiffs hereby request the appointment of a Special Master to review Plaintiffs’ plans of care and ensure their continued right to live in the community and to prevent further harm by Defendants’ arbitrary actions.
Appointment of a Special Master Defendants’ initial decision to reduce state funds available to Plaintiffs’ plans of care endangered their continued community-based placements, thus placing them at risk of institutionalization. This Court entered a Preliminary Injunction requiring Defendants to “continue to ensure that a clinically-appropriate community-based placement alternative is available for each of the Plaintiffs during the pendency of this suit, as an alternative to institutionalization.” Docket Entry # 36, Order dated May 5, 2010 at p. 12. Despite this Order, PBH has moved five of six Plaintiffs to more congregate, less integrated settings. This action has detrimentally affected their care and substantially increased their risk of failure. As adults with dual diagnoses of a developmental disability and mental illness, as well as other chronic conditions, Plaintiffs require continuous supervision and support in nearly all aspects of their lives. Their clinical profiles are complicated and require specialized knowledge and attention. Rather than affording individualized assessments and necessary resources, Defendant PBH has
2
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marched blithely ahead, reducing funding for all Plaintiffs’ Plans of Care. The results were predictable, and two Plaintiffs have already experienced institutionalizations.
In circumstances such as this, the Federal Rules of Civil Procedure provide a remedy: Fed.R.Civ.P. 53(a)(C) states, “…a court may appoint a master… to… address pretrial… matters that cannot be effectively and timely addressed by an available district judge or magistrate judge of the district.” Each of the six Plaintiffs live in different homes, with different residential providers, roommates, activities, medical needs, and schedules. Their moves to more congregate settings have negatively affected their daily lives and increased the violent incidents and lack of appropriate, medically-necessary services they receive.
PBH has failed to demonstrate that it is taking steps to comply with its obligations under the ADA, Olmstead, and this Court’s Order. See, e.g., Jamie S. v. Milwaukee, 519 F.Supp.2d 870(E.D. Wis. 2007). “There is considerable room for appointing special masters when the purpose of the master is to enforce a judicial decree.” Crowin v. Browner, 90 F.Supp.2d 364, 377 (S.D.N.Y. 2000); see also, Trull v. Dayco, 178 Fed. Appx. 247, 251, 2006 U.S.App. LEXIS 10640, at **9 (4th Cir. 2006). As the Fourth Circuit Court of Appeals recognized in Thomas S. v. Flaherty, 902 F.2d 250, 255 (4th Cir. 1990), each Plaintiff “requires individual consideration.” This statement remains pertinent for these Plaintiffs (all of whom were Thomas S. class members). Exceptional cases such as this warrant the appointment of a master. As in Thomas S., the general responsibility of a master in this case would be to hear and report on “the adequacy of treatment” of the individual Plaintiffs. PBH has already reduced the levels of support so
3
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as to cause at least two Plaintiffs’ moves to institutions, i.e., brief stays in a jail and a hospital, and to endanger and jeopardize the remaining Plaintiffs’ stability, subjecting them to a substantial risk of institutionalization, including imprisonment, hospitalization, or other more restrictive interventions.
At every turn, including the filing of their Motion to Dismiss, Defendant PBH has claimed it is abiding by its legal obligations to provide appropriate services to each client; however, discovery has not yet commenced and Plaintiffs have had minimal opportunity to probe the assertions and to investigate the circumstances surrounding Plaintiffs’ care. Nevertheless, the facts now speak for themselves, and the Court’s Order has clearly been violated with Diane D.’s moves to jail and then a psychiatric hospital and Timothy B.’s temporary hospital stay caused by his staff’s inability to communicate with him. A Special Master could evaluate and determine whether a particular Individual Service Plan of care, or proposed changes thereto, would be sufficient to avoid placing each Plaintiff into jeopardy of institutional placement. This is a specialized role at a more detailed level of involvement than would be expected of a District Court Judge; however, it is necessary to ensure compliance with this Court’s Order.
In weighing the appointment of a Special Master, the Court should consider factors including fairness and likely expense on the parties. In this case, Defendant PBH appears to be following a path that would inexorably lead to the Plaintiffs’ institutional placement, which cannot be countenanced under the ADA. Even if it is unintentional, the impact of PBH’s funding reductions is leading to improper and avoidable institutionalizations, which is unfair to the Plaintiffs and prohibited by Olmstead.
4
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CONCLUSION At the outset of this case, Plaintiffs requested injunctive relief in order to prevent the constructive elimination of the state-funded services that allow Plaintiffs to remain in the community. Despite the Court’s clear Order that Plaintiff’s were to remain in the community during the pendency of the case, Defendant has systematically chipped away at their plans of care, moved Plaintiffs to more congregate settings, and risked their decompensation and continued community placement. The results we are currently seeing were predictable: increased violence, the involvement of law enforcement, referral to the criminal justice system, and failed community integration. Plaintiffs therefore seek an Order appointing a Special Master to ensure compliance with the Court’s Injunctive Order. Plaintiffs have met their burden of showing (1) each Plaintiff requires individual consideration and specialized clinical knowledge is required to assess each Plaintiff’s differing circumstances and risk of institutionalization, (2) PBH has failed to take steps to comply with its obligations under the ADA and this Court’s Order, and (3) an independent monitor is necessary to supervise and ensure compliance with the courtordered injunction. As such, the Court should grant Plaintiffs’ Motion to Appoint a Special Master, who will enforce the Court’s Injunction by ensuring appropriate community supports that will prohibit Plaintiffs’ institutionalizations.
5
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Dated: March 15th 2011.

Respectfully submitted,
/s/ John R. Rittelmeyer John R. Rittelmeyer john.rittelmeyer@disabilityrightsnc.org N.C. State Bar No. 17204 Jennifer L. Bills jennifer.bills@disabilityrightsnc.org N.C. State Bar No. 37467 DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244
Attorneys for Plaintiffs

6 Case 1:10-cv-00123-JAB-JEP Document 57 Filed 03/15/11 Page 6 of 7

CERTIFICATE OF SERVICE The undersigned herby certifies that on March 15th 2011, I electronically filed the foregoing Memorandum in Support of Plaintiff’s Motion to Appoint a Special Master with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following: Counsel for Defendant Dan Coughlin Stephen D. Martin (steve.martin@nelsonmullins.com) Chuck Hollowell (chuck.hollowell@nelsonmullins.com) Counsel for Lanier Cansler Lisa Corbett, Esq. (lcorbett@ncdoj.gov)
Respectfully submitted,
/s/ John R. Rittelmeyer John R. Rittelmeyer Jennifer L. Bills 2626 Glenwood Ave., Suite 550 Raleigh, North Carolina 27608 (919) 856-2195 (Telephone) (919) 856-2244 (Facsimile) john.rittelmeyer@disabilityrightsnc.org jennifer.bills@disabilityrightsnc.org
7
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 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF NORTH CAROLINA
Civil Action No. 1:10-cv-123-JAB

CLINTON L., by his guardian )

and next friend CLINTON L., )

SR., and TIMOTHY B. by his )

guardian and next friend ROSE )

B., VERNON W., by his

)

guardian and next friend,

)

VERNON D.W., STEVEN C., )

JASON A. by his guardian and )

next friend Brenda A., and

)

DIANE D. by her guardian and )

next friend THOMAS SMITH )

)

Plaintiffs,

)

)

v.

)

)

LANIER CANSLER, in his

)

official capacity as Secretary of )

the Department of Health and )

Human Services, and DAN

)

COUGHLIN, in his official

)

capacity as CEO and Area

)

Director of the Piedmont

)

Behavioral Healthcare Local )

Management Entity

)

)

Defendants,

)

DEFENDANT CANSLER'S MOTION FOR SUMMARY
JUDGMENT Fed. R. Civ. P. 56

Lanier Cansler, in his official Capacity as Secretary of the North

Carolina Department of Health and Human Services, by and through his

attorneys, Roy Cooper, Attorney General of the State of North Carolina, Lisa

G. Corbett and Richard E. Slipsky, Special Deputy Attorneys General,

respectfully moves this Court for summary judgment on all claims, on the
grounds that the pleadings, depositions, and sworn testimony of the
witnesses show that there is no genuine issue as to any material fact and that
Defendant is entitled to judgment on each claim as a matter of law pursuant
to Fed. R. Civ. P. 56. Defendant Cansler is filing with this motion his
memorandum in support and, in addition, joins and adopts the motion and
memorandum by Defendant Coughlin which will be filed today.
WHEREFORE , Defendant Cansler prays the Court to grant
summary judgment in his favor as to all claims. Respectfully submitted, this the 17th day of January, 2012.
Roy Cooper Attorney General
/s/ Lisa G. Corbett Lisa G. Corbett Special Deputy Attorney General N.C. Bar No. 15877 lcorbett@ncdoj.gov
/s/ Richard E. Slipsky Special Deputy Attorney General N.C. Bar No. 22324 rslipsky@ncdoj.gov
North Carolina Department of Justice P.O. Box 629 Raleigh, NC 27602-0629 (919) 716-6860
2
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CERTIFICATE OF SERVICE I hereby certify that on this day, January 17, 2012, I electronically filed the forgoing DEFENDANT CANSLER'S MOTION FOR SUMMARY JUDGMENT with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: John R. Rittelmeyer, Andrew B. Strickland and Jennifer L. Bills, attorneys for Plaintiff; and Stephen D. Martin and Wallace C. Hollowell, III, attorneys for Defendant Coughlin. I hereby certify that I have mailed the document to the following non CM/ECF participates: none.
/s/Lisa G. Corbett Lisa G. Corbett Special Deputy Attorney General
Case 1:10-cv-00123-JAB-JEP Document 86 Filed 01/17/12 Page 3 of 3

 
 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., et al.,

Civil Action No. 1:10-cv-123-JAB

Plaintiffs, vs. LANIER CANSLER, et al.,

DEFENDANT COUGHLIN’S MEMORANDUM IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

Defendants.

Defendant Dan Coughlin (“Coughlin”), by and through his undersigned attorneys, and pursuant to Local Rule 56. 1 (MDNC), respectfully submits th is memorandum in support of his Motion for Summary Judgment [D.E. 88].
CASE SUMMARY Defendant Coughlin adopts the “Case Summary” set forth in Def endant Cansler’s Memorandum in Support of his Motion for Summary Judgment [D.E. 87, pp. 1-4].
FACTS A. PBH PBH is a multi-county area mental he alth, developmental disabilities, and substance abuse authority (“area authority”) establish ed pursuant to N.C. Gen. Stat. § 122C-115(c) by t he Boards of C ommissioners of Alam ance, Cabarrus, Caswell, Davidson, Rowan, Stanly a nd Union Counties.1 PBH is a “local po litical subdivision of the State,” N.C. Gen. Stat. § 122C-116, and is also re ferred to as a “local m anagement

1

When this lawsuit began, PBH served 5 c ounties – Cabarrus, Davidson, Rowan, Stanly

and Union. Effective O ctober 1, 2011, Alam ance and Caswell counties are now also a part of

PBH’s catchment area, although none of the Plaintiffs reside in either of these counties.

Case 1:10-cv-00123-JAB-JEP Document 89 Filed 01/17/12 Page 1 of 32

entity” (“LME”). N.C. Gen. Stat. § 122C-3(20b). See Coughlin Decl. [D.E. 10-3] ¶ 3. Upon Defendant Coughlin retirement, Pamela Shipman became the CEO of PBH effective July 1, 2011. Id. ¶ 1.
LMEs are local political subdivi sions that provide oversight of private mental health care providers by planning and coordi nating certain behavioral health services in a defined area. See N.C. Gen. Stat. § 122C-115.4. PBH does not pr ovide health care services itself, but instead is a local manage r of care provided by a netw ork of providers who provide services to consumers. Coughlin Decl. [D.E. 10-3] ¶ 4.
Pursuant to an agreemen t between PB H, the federal Centers for Medicar e and Medicaid Services (“C MS”), and the North Carolina Department of Health and Hum an Services (the “Department”), PBH operates under Federal waivers pursuant to Sections 1915(b) and (c) of the Social Security Act (42 U.S.C. § 1396n(b) and (c)). These waivers establish PBH as a Prepaid Inpatient Health Plan (“PI HP”), and it al so outline the benefits for developmental disabilities, mental health and s ubstance abuse consumers in PBH’s catchment area. See Coughlin Decl. [D.E. 10-3] ¶ 5.
PBH’s operation as a PIHP means that PB H is pre-paid by the State to provide care, and that it accepts the financial risk of providing that care. This arrangement intentionally creates an incentive for PBH to provide the most efficient and cost-effective care. However, PBH is not a for-profit entity ; any cost savings ge nerated by PBH as a result of provi ding efficient and cost-effectiv e care are required to be used to provi de additional medical care for Medicaid be neficiaries enrolled in the plan. See 42 C.F.R. § 431.55(e); Coughlin Decl [D.E. 10-3] ¶ 6.
2
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PBH also has an agreement with the Department’s Di vision of Mental He alth, Developmental Disabilities and Substance Abuse Services (“DMH”) to serve as the LME for the seven counties. Purs uant to this agreement, PBH receives state funds (i.e., nonMedicaid funds) to provide mental health , developmental disabilities, and substance abuse services to indigent consumers. PBH’s agreement with DMH imposes a number of responsibilities on PBH, includi ng that PBH will “[e]stablish rates for services” with its contractors. See DMH Contract § 10.0(7). 2 See also 42 C.F.R. § 438.12 ( PIHPs are authorized to use “diff erent reimbursement amounts” and to establi sh “measures that are designed to . . . c ontrol costs.”); Coughlin Decl. [D.E. 10-3] ¶ 8. Pur suant to its agreements with the Department , PBH has a finite am ount of funds to provide all of the necessary behavioral health services to eligible consumers in this seven-county area. 3
B. The February 2010 Reduction in Reimbursement Rates to Providers for Certain Supervised Living Billing Codes.
As a result of the State’s economic condition and the budget pressures faced by the General Assembly, PBH’s alloc ation of st ate funds has been s ignificantly reduced i n recent years. In FY 2006-2007, PBH was alloca ted $35,645,918 in state service funds. PBH’s allocation was reduced by $3.6 million in FY20 07-08, and as of the filing of the Complaint, by an additional $4 .3 million in FY2009-10. See Snipes Decl. [D.E. 10-4] ¶ 3. While PBH’s funds for providing services were drastically reduced, its responsibilities

2

The Contract between the DMH and PBH can be found at D.E. 88-7, with the amendment

extending the contract through June 2013 filed at D.E. 88-8.

3

The 2010 U.S. Census reflects that the populat ion of PBH’s seven-county catchment area

is 916,044 people. See http://quickfacts.census.gov/qfd/states/37000.html (accessed January 17,

2012).

3

Case 1:10-cv-00123-JAB-JEP Document 89 Filed 01/17/12 Page 3 of 32

remained the same. PBH is still required to manage and pay f or all of the necessary

mental health, developmental disabilities, a nd substance abuse services for eligible

consumers in its catchment area.

Faced with significantly less funding from the State, PBH took steps to rein in

costs in order to continue to be able to provide a ppropriate services for eligible

consumers. One of P BH’s responses to the reductions in its fundi ng was to exercise its

authority to establish rates for services. Snipes Decl. [D.E. 10- 4] ¶ 4. At issue in this

litigation is PBH’s change of two specific se rvice billing codes – Su pervised Living – 1

resident (YM811) and Supervised Living – 2 Reside nts (YM812). Prior to February 15,

2010, PBH reimbursed providers at a rate of $161.99/day for Supervised Living services

provided in a 2-resident placement, and re imbursed providers at a negotiated rate for

Supervised Living services provi ded in a single-resident placement. Yon Dep. 72:5-7.

Effective February 15, 2010, PBH reduced the reimbursement rate for Supervised Living

services billed under the YM81 1 and YM812 service codes to $116.15/day, which is the

rate at which PB H reimburses providers for Supervised Living services provide in 3-

resident placements and is b illed under the YM813 service c ode. Snipes Decl. [D.E. 10-

4] ¶ 4; January 11, 2010 PBH Finance Communication Bulletin [D.E. 1-1].

C. Plaintiffs

All of the Plaintiffs are dually-diagnosed with a developmental or intellectual

disability and a mental illness. Prior to th

e February 2010 reduction in the

reimbursement rates for two specific billing codes for Supervised Living services, each of

the Plaintiffs was living in th e community, as opposed to in an institutional placement.

4

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Nearly two years later, all of the Plainti ffs continue to live in community-based

placements where they continue to receive 24-hour supervision. Since the February 2010

rate reduction, none of the Plaintiffs has been forced from their community-based

placement into an institutional placement.

1.

Clinton L.

Clinton L. is a 48 year-old m an who is diagnosed with M oderate Mental

Retardation, Schizoaffective Disorder, Bi polar Disorder, and Intermittent Explosive

Disorder. 2d Am. Compl. ¶¶ 1, 30. Prior to the February 2010 rate reduction, Clinton L.

lived alone in a 2-bed group home in Davi dson County operated by Easter Seals UCP

North Carolina, where he was supervised 24 hours per day. Id. ¶ 32; Yon Decl. [D.E. 88-

1] ¶ 5. Clinton L. received a number of services from Easter Seals, including Supervised

Living services. Yon Decl. [D.E. 88- 1] ¶ 5. Clinton L. continues to live in this same

community placement, where he continues to receive Supervised Living services from

Easter Seals at the reduced rate of $116.15/day. Id. ¶ 6. Si nce the February 2010 rate

reduction, Clinton L. has not been institutionalized.

2.

Vernon W.

Vernon W. is a 49 year-old m an who is diagnosed with Severe Mental

Retardation, Depressive Disorder, and Epilepsy. 2d Am. Compl. ¶¶ 3, 52. Prior to the

February 2010 rate reduction, Vernon W. lived in a single-person placement in a house in

Davidson County owned by hi s father and guardian, Ve rnon D.W., whe re he was

supervised 24 hours per day by his provider, Youth Adult Care Management. Yon Decl.

[D.E. 88-1] ¶ 27. Vernon W. received a num ber of services from YACM, including

5

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Supervised Living services. Id. In April 2010, Omni Visions, Inc. replaced YACM as

Vernon’s provider, and be gan providing Supervised Living services for Vernon at the

reduced rate of $116.15/day. Id. ¶ 28. Effective February 1, 2012, Monarch, Inc. will

replace OmniVisions as Vernon’s provider, a nd will continue to provide Supervised

Living services for Vernon at th e reduced rate of $116. 15/day. Id. ¶ 29; Shaver Decl.

[D.E. 88-4] ¶ 9. Since the February 2010 rate reduction, Vernon W. has not been

institutionalized.

3.

Steven C.

Steven C. is a 34 year-old man who is diagnosed with Mild Me ntal Retardation

and Depressive Disorder. 2d A m. Compl. ¶¶ 4, 43. Prior t o the February 2010 rate

reduction, Steven C. lived in a single-person placement in Davidson County operated by

Monarch, Inc., where he was su pervised 24 hours per day. Yon D ecl. [D.E. 88-1] ¶ 16.

In April 2010, Steven C. moved into a licensed 3-bed group home operated by Y ACM

where he lived with one other housemate, and where YACM provided Supervised Living

services for Steven C. at the reduced rate of $116.15/day. Id. ¶¶ 16, 22. In December

2010, Steven C. moved into a 2-bed Altern ative Family Living (“AFL”) placement in

Cabarrus County where he liv ed with one other housema te, and where he received

Supervised Living services at the $116. 15/day rate. Id. ¶¶ 18, 22. In August 2011, at

Steven’s request to move closer to his parents in Davidson County, Steven m oved into a

single-person AFL placement in Thomasville, NC, where he received Supervised Living

services through his new pr ovider, Building Bridges. Id. ¶¶ 19, 20. In December 2011,

Steven C. and his staff pers on changed providers, and m oved into a single-person AFL

6

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placement in Lexington operat ed by Alberta Home Care. Id. ¶ 21. Since t he February

2010 rate reduction, Steven C. has not been institutionalized.

4.

Jason A.

Jason A. is a 37 year-old m an who is diagnosed with Moderate Mental

Retardation, Mood Disorder with Aggression, Obsessive-Compulsive Disorder, Attention

Deficit Hyperactivity Disorder, and Autism. 2d Am . Compl. ¶¶ 5, 61; Yon Decl. [D.E.

66-1] ¶ 22. Prior to the Febr uary 2010 ra te reduction, Jason A. lived with one ot her

housemate in a licensed 3-bed group home in Rowan County operated by RHA, where he

received 24-hour supervision. Yon Decl. [D.E. 88-1] ¶ 23; Earl Decl. [D.E. 88-3] ¶ 3. In

this placement, Jason A.’s provider, RHA, pr ovided a number of s ervices for Jason A.,

including Supervised Living services. Yon Decl. [D.E. 88-1] ¶ 23; Earl Decl. [D.E. 88-3]

¶ 4. In March 2010, a third resident moved into the vacant bedroom in the licensed 3-bed

group home. Yon Decl . [D.E. 88-1] ¶ 24. A t all times during this lawsuit, Jason A. has

continued to receive Supervis ed Living services in the sa me 3-bed group home operated

by RHA at the reduced rate of $116.15/day. Id. ¶ 26.

In April 2010, Jason spent one week at the NC START crisis respite center due to

a cycle of beha viors, as he has done in th e past. Earl Decl. [D .E. 88-3] ¶ 6. Since

returning to the 3-bed group home in April 2010, Jason has not had to return to the crisis

respite center due to his behaviors. Id. ¶ 7. Since the February 2010 rate reduction, Jason

A. has not been institutionalized.

7 Case 1:10-cv-00123-JAB-JEP Document 89 Filed 01/17/12 Page 7 of 32

5.

Timothy B.

Timothy B. is a 46 year-ol d man who is diagnosed with Severe Mental

Retardation, Intermittent Explosive Disorder, Major Depressi ve Disorder, and Epilepsy.

2d Am. Compl. ¶¶ 2, 35. Timothy B. is also deaf. Id. ¶ 35. Prior to the February 2010

rate reduction, Timothy B. lived in a singl e-person apartment in Wake Count y operated

by his pr ovider, Community Alternatives, where he received 24-hour s upervision. In

April 2010, Timothy B.’s guardian, his mother Rose B., moved Timothy B. back to her

home in Davidson County . Although PBH made nu merous community-based

placements available for Timothy, his guardia n chose to care for Timothy at her home

until June 2010. On June 23 , 2010, Timothy B. moved into a licensed 2-bed group home

in Davidson County operated by Ambleside, Inc., where he received 24-hour supervision.

Yon Decl. [D.E. 88-1] ¶ 10. Although it was available for Ti mothy B., his provider di d

not bill PBH for Supervised Living services for Timoth y from J une 2010 until April

2011, with the provider indi cating that it was able to pr ovide 24-hour s upervision for

Timothy B. without the supplemental Supervised Living funding. Id. ¶ 11. In April 2011,

Ambleside requested that PBH authorized reim bursement for Supervised Living services

for Timothy, which PBH did at the reduced rate of $116.15/day. Id. ¶¶ 12, 15. Tim othy

B. continues to live in the 2-be d group home operated by Ambleside, where he continues

to receive Supervised Living services. Id. ¶ 10, 15. Since the February 2010 rate

reduction, Timothy B. has not been institutionalized.

8 Case 1:10-cv-00123-JAB-JEP Document 89 Filed 01/17/12 Page 8 of 32

6.

Diane D.

Diane D. is a 38 year-old woman who is diagnosed with Mild Mental Retardation,

Intermittent Explosive Disorder, Scoliosis, and Cohen Syndro me, a rare genetic disorder

characterized by low muscle t one. 2d Am. Compl. ¶¶ 6, 73. Prior to the Februar y 2010

rate reduction, Diane lived in a single-person placement in Davidson County operated by

Monarch, Inc., where she received 24-hour s upervision. Yon Decl. [D.E. 88- 1] ¶ 31. O n

May 1, 2010, Diane’s guar dian, her brother Thomas S., moved Diane into a l icensed 3-

bed group home with two other housemates in Davidson County operated by M onarch,

where she receives 24-hour supervision from st aff (including many of her staff from her

single-person placement). Id. ¶ 32; Shaver Decl. [D.E. 88-4] ¶ 4. Diane continues to live

in this 3-bed group home with 2 other housem ates, and continues to receive Supervised

Living services from Monarch. Shaver Decl. [D.E. 88-4] ¶ 4.

Beginning in May 2010 and continuing to the present, Monarch has requested that

PBH approve an enhanced reimbursement rate for Supervised Living services for Diane.

Yon Decl. [D.E. 88-1] ¶ 34; Sh aver Decl [D.E. 88-4] ¶ 6. PBH has approved each of

these requests. Ids. From May 11, 2010 through May 31, 2011, PBH reimbursed

Monarch for Supervised Living services for Diane D. at the rate of $250.00/da y. Yon

Decl. [D.E. 88-1] ¶ 35; Sh aver Decl. [D.E. 88-4] ¶ 7. From June 1, 2011 to the present,

PBH has reimbursed Monarch for Supervised Living services for Diane D. at the rate of

$391.15/day. Ids.

In January 2011, as has occurred in Diane’s past, Diane was arrested for assaulting

one of her housemates and spent a few nights in jail. Assau lt charges against Diane were

9

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later dropped. In March/April 2011, Diane spent several days in the psychiatric ward of a local hospital following her refusal to take her medication for her mental illnesses for several days, as she has in the past. Si nce returning from the hospital in April 2011, Diane has remained in the 3-bed grou p home and has not required any furt her hospitalization. Since the February 2010 rate reduction, Diane D. has not been institutionalized.
ARGUMENT I. STANDARD FOR SUMMARY JUDGMENT
The Court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” F ed. R. Civ. P. 56(a). On a motion for summary judgment, the Court reviews the facts and draws reasonable inferences there from in the light most favorable to the non-moving party. Bonds v. Leavitt , 629 F.3d 369, 380 (4t h Cir. 2011). “However, summary judgment is appropriate ‘where th e facts an d the law will reasonably support only one c onclusion.’” PSINet, Inc. v. Chapman , 362 F. 3d 227, 233 (4th Cir. 2004) (quoting Hawkins v. PepsiC o, Inc., 203 F.3d 274, 279 (4th Ci r. 2000)). If the movant meets its burden, then the non-moving party must provide the Court with specific facts demonstrating a ge nuine issue for trial in order to survive summary judgment. Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986). The non- moving party is not perm itted to rest on conclusory allegations or denials, and a mere “scin tilla of evidence’ will not be considered sufficient to defeat a summary judgment motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986) ; see also Scott v. Harris , 550 U.S. 372, 380 (2007)
10
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(“Where the record taken as a w hole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” (internal quotation marks omitted)). II. THE PROPER STANDARD FOR JUDGING A REVERSE-OLMSTEAD
CLAIM ON THE MERITS. Plaintiffs bring t heir claim under Title II of the Americans with Disabilities Act (“ADA”), which provides:
[N]o qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, pr ograms, or activities of a public entity, or be subjected to discrimination by any such entity. 42 U.S.C. § 12132. Plaintiffs’ Second Cla im for Relief is brought under Se ction 504 of the Rehabilitation Act of 1973 (2 9 U.S.C. § 794), an d is substantively identical to their First Claim. The Fourth Circuit has explained: “The elements of a cause of action under Title II of the ADA or § 504 of the Rehabilitation Act are: the plaintiff has a disability; the plaintiff is otherwise qualified for the employment or be nefit in question; and the plaintiff was excluded from the employment or benefit because of discrimination based solely on her disability.” Doe v. Univ. of Md. Med. Sys. Corp., 50 F.3d 1261, 1264-1265 (4th Cir. 1995).4 In this cas e, Plaintiffs have pres ented a specific type of A DA claim, commonly referred to as an Olmstead claim, that the unjustified segr egation of disabled persons in institutions is a form a discrimination prohib ited by the ADA. The seminal case on this issue is Olmstead v. L.C. ex rel. Zimring , 527 U.S. 581 (1999), in which two mentally

4

Because the Fourth Circuit and other Courts of Appeals hav e held that the requirements

for showing a violation of Title II of the ADA and Section 504 of the Re habilitation Act are the

same, Defendant Coughlin hereinafter refers to both of these claims as Plaintiffs’ “ADA claim.”

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disabled persons who were institutionalized brought an action claiming that Title II of the ADA required the State of Geor gia to pr ovide them with a comm unity placement to integrate them into the community rather than placement in an institution.
As explained by the Court: “In the AD A, Congress for the first time referred expressly to ‘segregation’ of persons with disabilities as a ‘for[m] of discrimination,’ and to discrimination that persists in the area of ‘institutionalization.’” Id. at 589, n. 1. The Court explained: “Unjustified is olation, we hold, is properly regarded as discrim ination based on disability.” Id. at 597.
The Olmstead Court held that under Title II of the ADA: States are required to provide community-based treatment for persons with mental disabilitie s when the States treatment professionals determine that such placem ent is appr opriate, the affected persons do not oppo se such treatment, and the placement can be reasonably acc ommodated, taking into account the resources available to the State and the needs of others with mental disabilities.
Id. at 607. A significant difference between th e present case and the situation in Olmstead is
that none of the Plaintiffs in this case are currently residi ng in an institution. All live and receive their services in the community. Thus, the instant case presents what may be called a “reverse- Olmstead” claim. That is, Plaintiffs have asserted that Defenda nts’ actions will result in them being remo ved from the community and placed i nto institutions, in violation of the ADA and Rehabilitation Act.
It is, therefore, critical that this Cour t determine at the ou tset what the proper standard is for judging a revers e-Olmstead claim on the merits. To prevail on their
12
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reverse-Olmstead claim, do Plaintiffs need to show th at there are services Plaintiffs need that are not available in the community, but only in an institutional setting? Do they need to show that they face a “serious risk” of institutionalization? Or, does some other standard apply? Although this question of the appropriate reverse-Olmstead standard has not yet been addressed by the Fourth Circuit or by the Middle District of North Carolina, several other federal courts have addressed this issue, some more fully than others.
In many of the reported reverse-Olmstead cases, there has not been a great deal of analysis regarding what is the correct standa rd that should be applied w hen considering the claim on the merits. In several cases, the prim ary issue addressed wa s whether a plaintiff who resided in the com munity even had standing to bri ng an Olmstead claim. These courts generally found that a plaintiff need not submit to institutionalization before having standing to bring suc h a claim . See, e.g., Fisher v. Oklahoma Health Care Authority, 335 F. 3d 1175, 1181 (10t h Cir. 2003) (“[N]othing in the Olmstead decision supports a conclusion that institutionalizati on is a prerequisite to enforcement of the ADA's integration requirements .”). Many other report ed cases arise at the prelim inary injunction stage and, therefore, address i ssues apart from the me rits, such as the likelihood of irreparable harm. Consequently, a lack of clarity exists among the reported cases regarding the proper standard for judging a reverse-Olmstead claim on the merits.
A review of these decisions shows that fe deral courts have ge nerally used one of two different standards for judging a reverse-Olmstead claim on the merits. For purposes of the discussion below, they can be described as the “only in an institution” standard and
13
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the “serious risk” standard. Under either standard, the record demonstrates that summary judgment is appropriate for Defendant Coughlin.
A. The “Only In An Institution” Standard. This standard requires a plai ntiff to show that she is qualified to receive a needed service or benefit, but that the service or benefit is only provided in an institution, when it could be reasonably provided in the community. As a result, she is faced with a situation where she must choos e between residing in an institution and receiving the service or benefit, or residing i n the community and not receiving the service or benefit for which she is qualified. Although the Olmstead Court did not expres sly address the situation of a plaintiff who is in the community and is seeking to avoid institutionalization due to State actio n, the Court did describe the problem as one in which a disabled person is forced to seek care in an institution because ne eded services are only provid ed in the institution and not in the community. As described by the Court:
In order to receive needed me dical services, persons with mental disabilities must, beca use of those disabilities, relinquish participation in c ommunity life they c ould enjoy given reasonable accommodations, while persons without mental disabilities can receive th e medical services they need without similar sacrifice. Id. at 601. In one of the earliest reverse-Olmstead cases, the Tenth Circuit addressed this type of situation in Fisher v. Oklahoma He alth Care Authority , 335 F.3d 1175 (10th Cir. 2003). In Fisher, the State changed its Medicaid benefits such that unlimited
14
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prescriptions were provi ded to patients in nursing facilitie s, but patients residing in the

community could only receive a maximum of five prescriptions per month. Id. at 1178.

As part of its analysis reve rsing summary judgment in favor of the defendants, the Tenth

Circuit explained:

Because [defendant] does not allow the plaintiffs to receive services for which they are qualified unless they agree to enter a nursing home, the plaintiffs have presented a ge nuine issue of material fact as to whether they c an prove t hat the defendants have violated the in tegration requirement of Title II of the ADA.

Id. at 1182 (emphasis added).

Similarly, in another early reverse- Olmstead case, the Ninth Circuit focused on

whether the State was only prov iding needed services in an institutional setting as

opposed to the community. See Townsend v. Quasim, 328 F.3d 511 (9th Cir. 2003). The

Ninth Circuit reasoned as follows:

[W]here the issue is the location of servi ces, not whether services will be provided, Olmstead controls.

Here, the precise issue is not whether the state must

provide the long term care serv ices sought by Mr. Townsend

and the class members -- the stat e is already pr oviding these

services -- but in what location these services w

ill be

provided. Mr. Townsend simply requests that the services he

is already eligible to receive under an existing state program

(assistance in dressing, bathi ng, preparing meals, taking

medications, and so on) be prov ided in the community-based

adult home where he lives, ra ther than th e nursing home

setting the state requires.

Id. at 517 (emphasis in original).

15 Case 1:10-cv-00123-JAB-JEP Document 89 Filed 01/17/12 Page 15 of 32

Likewise, there are several federal district court decisions t hat, for purposes of a

reverse-Olmstead claim, have focused on whether se rvices were only being provided in

an institution. The District of Hawaii addressed a reverse- Olmstead case just a few

months after the Olmstead decision cam e down. See Makin v. Hawaii , 114 F.Supp.2d

1017 (D. Hawaii 1999). Makin involved a class of develo pmentally disabled persons

living at home who were on a w ait list for community-based services. Id. at 1020. The

Court explained as follows:

It is important to note that the services sought by Plaintiffs are available in institutions. However, Plaintiffs do not want to avail themselves to this option because they wish to continue to live in the community.

* * *

[T]he only alternative for

Plaintiffs presently is

institutionalization if they seek treatment under the statute.

* * *

Other cases hol d that denying di sabled individuals a choice between institutional and home-b ased care violates the ADA non-discrimination policy since it unnecessarily segregates the individuals.
Id. at 1023, 1033-1034.5

5

See also M.A.C. v. Betit, 284 F.Supp.2d 1298, 1309 (D. Utah 2003) (“[T]he placem ent of

Plaintiffs on the HCBS waiver waiting lis t threatens Plaintiffs with institutionalization because it

forces Plaintiffs to choose between staying in the community w ithout any services or entering an

institution in order to receive services. Thus, Plaintiffs have properly stated a claim for violating

the integration m andates of AD A and § 504.”) (em phasis added); Gaines v. Hadi , 2006 WL

6035742, p. *28 (S.D. Fla. Jan. 30, 2006) (“What rem ains to be shown is that the requested

reductions will afford such inadequate services that it will likely force Plaintiffs to drop from the

community-based program in order to seek proper care in an ins titutional setting. In oth er

words, Plaintiffs need to show that the only way th ey can get needed services is to submit to an

institutional facility.”) (emphasis added); Hiltibran v. Levy , 793 F. Supp 2d 1108, 1116 ( W.D.

16

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This standard for judging reverse-Olmstead claims also readily fits with the Fourth Circuit’s existing juri sprudence regarding cl aims under Title II o f the ADA. As not ed above, the Fourth Circuit has expl ained that there are three elements to a caus e of action under Title II of the ADA:
1. The plaintiff has a disability; 2. The plaintiff is other wise qualified for the employment or benefit in
question; and 3. The plaintiff was excluded from the em ployment or benefit bec ause of
discrimination based solely on her disability. Doe v. Univ. of Md. Med. Sys. Corp., 50 F.3d 1261, 1264-1265 (4th Cir. 1995).
This three-prong analysis can easily be m odified to take into account the nature of a reverse-Olmstead claim. Rather than being “exclud ed” from the benefit because of the disability, the plaintiff would s how that he was required to enter an institution to obtain these services. Thus, th e elements that would be required for a reverse- Olmstead claim can be summarized as follows:
1. The plaintiff has a disability that ca n be treated in a community-based placement;
2. The plaintiff is otherwise qualified for the services or benefit in question; and
3. The plaintiff can only obtai n the services or benefit in question by leaving the community and entering an institution.
The “Only In An Institution” standard is most consistent with the Court’s ruling in Olmstead and Fisher, and most consistent with the Fourth Circuit’s existing
Mo. 2011) (Plaintiffs “ must be institutionalized in order to obtain Medicaid coverage of their medically necessary incontinence briefs.”) (emphasis added).
17
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jurisprudence regarding claims under Title II of the ADA, and should be adopted by this Court here.
B. Plaintiffs Cannot Satisfy the “Only In An Institution” Standard. In this case, there is no evidence that there is any service or benefit that any Plaintiff requires, but that is only availabl e in an institution. Rather, the Supervised Living service that is the subj ect of Plaintiffs’ claims is av ailable only in the community, and would not be available to the Plaintiffs in an ins titutional setting. Supervised Living is a “residential service . . . for one individual who needs 24-hour supervision; and for whom care in a more intensive trea tment setting is considered unnecessary on a daily basis.” 2d Am. Compl. ¶ 91; MH/DD/SA Service Definitions at 165 (emphases added). The record shows that each of the Plaintiffs have receiv ed and continue to receive 24-hour supervision in their respective community placements, notwithstanding the reduction in the reimbursement rate for cer tain Supervised Li ving billing codes in February 2010. See Lockhart Dep. 24:14-26:14 (Clinton L. receives 24-hour supervision); Brock Decl. ¶ 3 (Timothy B. receives 24-hour supervision); Brenda A. Dep. 126:10-21 (Jason A. r eceives 24-hour supervision); Yon Decl. [D.E. 88-1] ¶¶ 21, 28, 33 (Steven C., Vernon W., and Diane D. all receive 24-hour supervision). Indeed, Plaintiffs’ expert witness testified that he was not aware of any service that the Plaintiffs needed, but which were only available to them if they left the community and entered an institution. Bodfish Dep. 146: 21-147:1 (Q. Are there services that Diane presently needs – services or resources that sh e currently needs that she would be able to get in an i nstitutional setting that she cannot get in a community setting? A. I’m not
18
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aware of any.); 181:9-14. Under the applicable “only in an institution” standard set out in Olmstead, Fisher, and their progeny, the re cord clearly shows that none of the Plaintiffs can meet their burden of proof, rendering summary judgment appropriate.
C. The “Serious Risk” Standard. While Defendants contend that the standa rd discussed above is the appr opriate standard for reverse-Olmstead cases, several courts ha ve applied a different standard that focuses on the “risk” of institutionalization caused by defendants’ actions. Several of these cases even cite to Fisher and other cases discussed above in support of this “risk” standard. However, the analysis of several of these cases appears flawed for at least three reasons. First, some courts have conflated a plaintiff’s standing to bring a reverse-Olmstead claim with the standard that mu st be met to prevail on the me rits of such a claim. While Fisher held that a plaintiff need not wait to be come institutionalized to have standing to bring an Olmstead claim, this does not mean that th e mere risk of institutionalization is sufficient to prevail on the me rits of such a claim. See Fisher, 335 F.3d at 1181. Understandably, the risk of institutionalization a plaintiff must show to survive an inquiry into the plaintiff’s standing is much lower than the risk of institutionalization a plaintiff must prove to survive summary judgment and prevail at trial. Second, some courts have conf used the analysis regarding likelihood of irreparable harm at the preliminary injunction stage with the standard to be applied when judging the merits of a reverse- Olmstead claim at the final disposition s tage. For example, the court in Fisher considered t he question of w hether plaintiffs had m ade a
19
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sufficient showing of irreparable harm at the preliminary injunction stage and, solely in this context, noted that “the five-prescription cap places them at ‘h igh risk for premature entry into a nursing home.’” Id. at 1184. Some courts have erroneously cited this portion of Fisher as support for a reverse- Olmstead merits standard that considers the “risk” of institutionalization. See, e.g., Brantley v. Maxwell-Jolly , 656 F. Supp 2d 1161, 1170 (N.D. Cal. 2009) (quoting th e “high risk” language from Fisher for the proposition that “the risk of institutionalization is sufficient to demonstrate a violation of Title II.”).
Third, a standard that is based on the mere “risk” of ins titutionalization would prove too much. Individuals with mental ill ness and developmental disabilities, such as the Plaintiffs in this case, are always at some risk of instituti onalization. Even the Olmstead Court recognized that “[s]ome individuals . . . may need institutional care fro m time to time ‘to stabilize acute psychiatric symptoms.’” 527 U. S. at 605. Moreover, potentially any cha nge in the status quo for th is population could incr ease their risk of institutionalization. For some individuals with these disabilitie s, something as simple as not providing their favorite soft drink could cause them to exhibit aggressive behaviors, thus, increasing by some measure their risk of institutionalization. 6 It simply cannot be the standard that any change in the status quo amounts to a violation of the ADA.

6

See, e.g., Rose B. Dep. 159:5-161:17 (describing that one of the known triggers for

Timothy B.’s aggressive behaviors is when “he don’t get his way,” and that the only exam ple of

when Timothy B. acts aggressively when he does not get his way that she could recall is whe n

Timothy B. wants to drink Mountain Dew and is not allowed to do so. Rose B. further testified

that she has asked Timothy B.’s staff not to give him Mountain Dew out of concern for his teeth,

notwithstanding that she knows when he does not get Mountain Dew he gets “very, very mad.”).

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To the extent that the Court is persuaded that the correct standard to employ in judging the merits of a reverse- Olmstead claim is one t hat considers the risk of institutionalization, then this standard must include a component of materiality. The risk must be quantified to som e reasonable, m aterial level, or the standar d is m eaningless. Various courts have used lan guage indicating that the risk of institutionalization caused by the state defendants’ actions must be “serious,” “severe,” “substantial,” or “likely.”7
It does not so much matter what exact qualifying language is employed; it could be substantial, significant, serious, severe, likely, etc. What matters is that there must be a materiality component included if the C ourt is going to judge Plaintiffs’ reverseOlmstead claim based on whether defendants have created a “risk” of institutionalization. To show a violation of Title II of the ADA, the risk of institu tionalization causally created by Defendants’ actions must be real, serious, and material.

7

See, e.g., M.R. v. Dreyfus, 663 F.3d 1100, 1116 (9th Cir. 2011) (“[A] plaintiff need only

show that the challeng ed state action creates a serious risk of ins titutionalization.”) (emphasis

added); Brantley v. Maxwell-Jolly, 656 F. Supp 2d 1161, 1171 (N.D. Cal 2009) (“Plaintiffs have

sufficiently demonstrated for purposes of the instant motion that the proposed reduction in

ADHC services will place them at serious risk of institutionalization”) (emphasis added); V.L. v.

Wagner, 669 F. Supp 2 d 1106, 111 9 (N.D. Cal. 2009) (“Plaintiffs have subm itted substantial

evidence . . . showing that class m embers face a severe risk of in stitutionalization . . . ”)

(emphasis added); Marlo M. v. Can sler, 679 F. Supp. 2d 635, 638 (E.D.N.C. 2010) (“It appears

that if forced from their presen t settings, both Plaintiffs face a substantial risk of

institutionalization.”) (emphasis added); G. v. Hawaii , 676 F. Supp 2d 1046, 1057 (D. Haw.

2009) (“A state’s reduction in services may violate the integration mandate where it unjustifiably

forces or will lik ely force beneficiaries from an integrated en vironment into institutional care.”)

(emphasis added); Peter B. v. Sanford , 2011 U.S. Dist. LEXIS 22790 (D.S.C. March 7, 2011)

(“The court finds that this evid ence demonstrates that institutionalization is sufficiently likely;

and therefore, the issuance of a preliminary injunction is warranted.”).

21

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D. The Plaintiffs Do Not Satisfy the “Serious Risk” Standard. Assuming arguendo that the Court shou ld decide that the proper standard for judging a reverse-Olmstead claim on the merits is whether the Defendants’ action created a “serious risk” of institutionalization, Plainti ffs do not meet this st andard. Pursuant to this “serious risk” standard, the central que stion would be whether PBH’s February 2010 reduction of the rate that it pays to non- party service providers has created a serious risk of institutionalization for any of these Plaintiffs. The record developed in discovery in this case contains no credible evidence that any of the Plain tiffs is presently at a serious risk of institutionalization. Even assumi ng that the Court were to find any of the Plaintiffs to be at a serious risk of institutio nalization, there is no cr edible evidence that such a condition is the result of the February 2010 rate reduction, and not as the result of other factors outside of Defendants’ control.
1. None of the Plaintiffs Are at Serious Risk of Institutionalization. Plaintiffs’ case is premised on the theory that if the February 2010 rate reduction went into effect, all of the Plaintiffs would no l onger be able to be ser ved in the community and all would be forced into institutional placements. The fact that two years have now elapsed since the PBH’s February 2010 rate reduction and none of the Plaintiffs have been institu tionalized speaks volumes about whether the rate reduction caused them to be at serious risk of institutionalization. 8 It has not. In addition, the

8

As used in this context, “institu tionalization” refers to a lon g-term placement in a State

institutional setting, and does not include short-term stays in a respite crisis center or the

psychiatric ward of a local hospital. See Covert Dep. 133:7-22 (“Institutionalization is long-term

22

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evidence that was revealed th rough discovery in this case shows that none of the Plaintiffs is at serious (or significant) risk of institutionalization. Each plaintiff is addressed in turn.
a. Clinton L. Plaintiff Clinton L. continues to live by himself in the sam e licensed 2-bed group home in which he was living, with 24-hour supervision provided by Easter Seals, as he was before the reimbursement rate changed effective February 15, 2010. Yon Decl. [D.E. 88-1] ¶ 6. Clinton’s guardian (his mother, Lillian) testified that all of Clinton’s needs are presently being m et in his curre nt placement, and that no one ha s indicated to her that Clinton is likely to be institu tionalized. Lockhart Dep. 107:16-21. Additionally, all of the expert witnesses who have submitted reports in this ca se agree that notwithstanding the change in reimbursement rate for Supervised Living services, Clinton is not at significant risk of institutionalization. See Bodfish Dep. 291: 20-24; Forrest Expert Report [D.E. 88-5] pp. 29-32; Hummel Expert Report [D.E. 88-6] p. 2 ¶ 3.
b. Vernon W. Plaintiff Vernon W. continues to live by himself in the sam e single-person placement in which he was living with 24 -hour supervision as he was before the reimbursement rate changed eff ective February 15, 2010. When th e lawsuit was filed, Vernon received Supervised Living services from Youth Adult Care Management. From April 2010 through J anuary 31, 2012, O mniVisions has provi ded these services to
placement, somewhere where som eone goes to live because they cannot be maintained in the community.”).
23
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Vernon, and beginning February 1, 2012, Monarch, Inc. will begin to provide Supervised Living services for Vernon, all in the same placement in which he has lived for many years. Yon Decl. [D.E. 88-1] ¶¶ 27-29; Shaver Decl. [D.E. 88- 4] ¶ 9. All of the expert witnesses who have submitted re ports in this case agree th at notwithstanding the change in reimbursement for Supervised Living serv ices, Vernon presently is not at significant risk of institutionalization. See Bodfish Dep. 260:24-262:4; Forrest Expert Report [D.E. 88-5] pp. 52-56 ; Hummel Expert Report [D.E. 88-6] p. 3 ¶ 9.
c. Steven C. Plaintiff Steven C. presently lives in a single-person AFL placement with 24-hour supervision provided by Alberta Care. Yon Decl. [D.E. 88-1] ¶ 21. Since this lawsuit was filed, Steven has lived in a licensed 2- bed group hom e with one other housem ate, and has lived in a 2-person AF L placement with a different housem ate. Id. ¶¶ 16-18. In August 2011, in response to St even’s expressed desire to live closer to his family in Davidson County, Steven has l ived in a single-person AFL placement with 24-hour supervision provided either through Bu ilding Bridges or Alberta Hom e Care. Id. ¶¶ 1920. At all times sin ce the February 2010 ra te reduction, Steven C. has lived in a clinically-appropriate community placement with 24-hour supervision. Id. ¶ 22. Steven C., who is his own guardian, testified that he is not at any risk of institutionalization, and that anyone who suggested he was at such a risk was wrong. Steven C. Dep. 58:24-59: 3; 61:4-7. Additionally, expert witnesses Drs. Forrest and Hummel both concluded that Steven C. is not at risk of institutionalization, much less at a “serious risk.” See Forrest Expert Report [D.E. 88-5] pp. 41-46 (“Steven is not felt to be
24
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currently at risk for harm or out-of-home placement”); Hummel Expert Report [D.E. 886] p. 3, ¶ 12 (“[T] here is no evidence that Plaintiff Steven C. is presently at risk for institutionalization.”).
d. Jason A. Jason A. presently lives in the same li censed 3-bed group home in which he lived prior to the February 2010 rate r eduction. Earl Decl. [D.E. 88-3] ¶ 3. Prior to the rate reduction, there were two residents in th e 3-bed group hom e; in March 2010, the provider, RHA, moved a third resident into the vacant bedroom. Yon Decl. [D.E. 88-1] ¶ 23. At all times since the February 2010 rate reduction, Jason A. has received and continues to receive 24- hour supervision. Id. ¶ 26; Earl Decl. [D.E. 88-3] ¶¶ 3-5. Following a cycle of behaviors in April 2010, Jason A. did spend a week at a respite care center, which was a part of the Crisis Preventi on Plan in place for Jason A. at the tim e. Earl Decl. [D.E. 88-3] ¶ 6. Jason returned to the 3- bed group home on April 20, 2010, and has not had any behavioral episode which has required him to go back t o a respite care center since. Id. ¶ 7. Jason’s guardian, his mother Brenda A., testified that she doe s not believe that Jason is presently at risk of institutionalizati on, and that she would fight to keep him out of an institutional placement. Brenda A. De p. 138:16-139:3. Ja son’s provider, RHA, states that it is not aware of any reason why Jason A. cannot continue to be safely served in the com munity and would ne ed to be placed in an ins titutional setting. Earl Decl. [D.E. 88-3] ¶ 8. Additionally, expert witnesses Drs. Forrest and Hummel both concluded that Jason A. is not at risk of institutiona lization, much less at a “serious risk.” See
25
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Forrest Report [D.E. 88-5] pp. 38-40 (“Jason is not felt to be currently at risk for harm or out-of-home placement.”); Hum mel Report [D.E . 88-6] p. 3, ¶ 15 (“[T]here is no evidence that Plaintiff Jason A. is presently at risk for institutionalization.”).
e. Timothy B. When this case was initiated, Plaintiff Timothy B. wa s living in a single-person placement in Raleigh, NC, with 24-hour supervision provide by his provider, Community Alternatives. Yon Decl. [D.E. 45-1] ¶ 8. Independent of the February 2010 rate reduction at issue in this litigation, a change in an unrelated Nort h Carolina Medicaid regulation made it so that Tim othy B. would either have to leave Raleigh and move to one of t he then-five (5) counties in PBH’s catchment area, or Wake C ounty would become his Medicaid “county of residence” effective May 1, 2010 and Timothy B. would no longer be a PB H consumer. Id. ¶ 11. Tim othy B.’s guardian, his mother Rose B., elected to bring Timothy back to Davidson County on April 30, 2010. Id. ¶ 13. Although PBH had arranged for Timothy B. to sp end up to 30 days in a resp ite care facility while his guardian explored potential community placements, Timothy’s guardian opted to care for Timothy at her home. Id. ¶¶ 12-13. PBH authorized respite services to assist Timothy’s guardian care for Timothy in her home. Id. ¶ 15. Between late April and mid June 2010 , PBH offered numerous clinicallyappropriate potential community placements with 24-hour supervision for Timothy to his guardian, all of which Rose B. rejected. Id. ¶¶ 11, 14, 16, 17. In mid-June 2010, Rose B. identified an opening in a licensed 2-bed group home, and on June 23, 2010, Tim othy B. moved into this group hom e operated by A mbleside, Inc. Yon D ecl. [D.E. 88-1] ¶ 10.
26
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Timothy B. has lived in this group home con tinuously since that date, and has received 24-hour supervision throughout. Id.
Donna Brock, the regional director for Ti mothy’s provider, Am bleside, states in her Declaration that “[a] s long as Tim othy B. rem ains on an appropriate regimen of medications as prescribed by his psychiatrist for his mental illness issues, Ambleside is not aware of any reas on why Timothy B. cannot continue to be safely and appropriately served in the community and would need to be placed in an institutional setting.” Brock Decl. [D.E. 88-2] ¶ 7. 9 Expert witness Dr. Forrest co ncluded that Timothy B. “is not currently at risk for harm or out-of-home placement.” See Forrest Report [D.E. 88-5] pp. 47-51. Expert witnes s Dr. Hum mel concluded that Timothy B. “is capable of bei ng safely maintained in the community in his current pla cement with his current level of services,” but echoing the concern of Ms. Br ock, opined that “Timothy should be treated with appropriate medication for his diagno ses, including appr opriate psychotropic medication.” See Hummel Report [D.E. 88-6] p. 3, ¶¶ 7-8.
f. Diane D. When this case was initiated, Diane D. lived in a single-person placement with 24hour supervision provided by Monarch. Yon Decl. [D.E. 88-1 ] ¶ 31. On M ay 1, 2010, Diane’s guardian, her brot her Thomas S., placed Diane in a licensed 3- bed group home operated by M onarch, where Diane received 24-hour supe rvision from staff, many of

9

In August 2011, Tim othy’s guardian, Rose B., rem oved Timothy from all of his

medication, including medication prescribed to treat his m ental illness issues. Having been

removed from his medication, Timothy had an aggressive incident in which law enforcement had

to be involved. Since that incident, Tim othy B. has changed psychiatrists, and his new

psychiatrist has put Timothy back on medication for his mental illness issues. Brock Decl. ¶ 6.

27

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whom were the same staff who had wor ked with Diane for many years. Id. ¶ 32. Diane has lived i n this 3-bed group hom e since May 1, 2010, and continues to live there presently, with 24-hour supervision. Id.
In January 2011, Diane spent a few nights in jail following her arrest for assaulting one of her housem ates; the housemate dropped all charges. In March/April 2011, after she had re fused her m edication for several days, Diane spent several days in the psychiatric ward at a local hospital to be stabilized and to have he r medication adjusted. Covert Decl. [D.E. 62-2] ¶ 8. Following her discharge from the local hos pital and her return to the 3-bed group home, Diane’s treatment team made several changes in an effort to address som e of the triggers for Diane’s behaviors. At that tim e, Diane’s provi der, Monarch, requested an additio nal enhanced funding level fo r Supervised Living services for Diane, which was approved by PBH. Covert Dep. 89:10-93:2210 Additional services were requested and a uthorized, including reimbursement for Monarch’s medical director to visit Diane at her group home placement if she was refusing to take her medication. Id. at 92:1-93:9. Furthe r, Diane changed medication for he r mental illness issues, and her guardian permitted Diane to recei ve one of her medications vi a injection rather than in pill form. Id. at 90:8-21. These changes have resulted in fewer behaviors by Diane. Id. at 131:15-24.
10 Ms. Covert testif ied that Diane D. is not the only PBH consum er for whom PBH has approved a provider’s request for an enhanced reim bursement rate. See Covert Dep. 34:21-37:8. Ms. Covert f urther testified that Diane D. was not receiving sp ecial or unique treatm ent with PBH’s approval of her provider’s request for an enhanced reim bursement rate because she is a plaintiff in this action. Id. 132:3-23.
28
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Christy Shaver, the Regional Director for Diane’s provider, Monarch, testified that

“Monarch is not aware of a ny reason w hy Diane D. cannot continue to be safely and

appropriately served in the co mmunity and would ne ed to be placed in an institutional

setting.” Shaver Decl. [D.E. 88-4] ¶ 8. Expe rt witness Dr. Forrest concluded that “Diane

is not felt to be currently at risk for harm or out-of-home placement.” See Forrest Report

[D.E. 88-5] pp. 33-37. Dr. Hum mel concluded that presently, Dian e is actually “at a

decreased level of risk for institutionalization than she was prior to February 15, 2010.”

See Hummel Report [D.E. 88-6] p. 4, ¶ 18.

2. Assuming Arguendo that a Plaintiff is at Serious Risk

of

Institutionalization, Plaintiffs Ca nnot Show that S erious Risk was

Caused by the February 2010 Rate Reduction.

Even if a n individual Plaintiff were able to show that he or s he is presentl y at

significant risk of institutionalization (whi ch they cannot), ther e is a fundamental

causation problem with Plaintiffs’ claims in this case. The action taken by PBH that is at

issue is the reduction of the rate it reim burses non-party service providers for Supervised

Living services under the billing codes YM811 and YM812. All of these service

providers are currently providing services to five of the Plaintiffs at the reduced rate. See

Yon Decl. [D.E. 88-1] ¶¶ 6, 9, 12, 15, 21, 22, 26, 30, 35, 36; Brock Decl. [D.E. 88-2] ¶ 5;

Earl Decl. [D.E. 88-3] ¶ 5; Shaver Decl. [D.E. 88-4] ¶¶ 6-7, 9. Si nce May 2010, Diane

D.’s provider has requested, and PB H has continued to approve, a higher, enhance d

reimbursement rate t o meet Diane’s specifi c needs. Yon Decl. [D.E. 88- 1] ¶¶ 34-35;

Shaver Decl. [D.E. 88-4] ¶¶ 6-7. None of the Plaintiffs have been institutionalized,

almost two years after the February 2010 rate reduction.

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Moreover, there is no evidence that an increased rate of any amount will guarantee or even reduce any ris k of institutionalization. Bald assertions in the Plaintiffs’ pleading that they may be at risk of institutionaliza tion due to the rate reduction may have been sufficient to withstand a motio n to dism iss, but the y are insufficient to withstand summary judgment and prevail at trial.
CONCLUSION As set out above, there are no is sues of material fact in di spute, and Defendant Coughlin is entitled to summary judgment on Plaintiffs’ claims . The proper standard of review for Plaintiffs’ reverse- Olmstead claim is the “only in an institution” standard set forth in Olmstead, Fisher, and recognized by num erous other courts. There is no evidence that there is a needed service for which any of the Plaintiffs is eligible that is not available in the community, but only availabl e if they were to enter an institutional setting. As such, Plaintiffs fail to show a violation of Title II of the ADA or Section 504 of the Rehabilitation Act. Alternatively, if the Court finds that the “serious risk of institutionalization” standard is the proper standard, there is no credible evidence that any of the Plaintiffs meets this standard. Assuming arguendo that any of the Plaintiffs is able to raise a question of fact as to whether he or she is at seri ous risk of institutionalization, there is no credible evidence that their level of risk is causally (as opposed to coincidentally) related to the February 2010 reduction in reimbursement rates for certain Supervised Living service billing codes. Therefore, Defendant Coughlin is entitled to summary judgment under either standard.
30
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Respectfully submitted, this the 17th day of January, 2012. NELSON MULLINS RILEY & SCARBOROUGH LLP By: /s/ Stephen D. Martin Wallace C. Hollowell III N.C. State Bar No. 24304 Stephen D. Martin N.C. State Bar No. 28658 4140 Parklake Avenue, Suite 200 Raleigh, NC 27612 Telephone: (919) 877-3800 Facsimile: (919) 877-3799 E-Mail Address: chuck.hollowell@nelsonmullins.com E-Mail Address: steve.martin@nelsonmullins.com Counsel for Defendant Dan Coughlin
31 Case 1:10-cv-00123-JAB-JEP Document 89 Filed 01/17/12 Page 31 of 32

CERTIFICATE OF SERVICE I, the undersigned attorn ey of the law offices of Nelson Mullins Riley & Scarborough LLP, attorne ys for Defendant Dan Coughlin do hereby certify that on January 17, 2012, I electronically file d the fo regoing DEFENDANT COUGHLIN’S MEMORANDUM IN SUPPORT OF MOTI ON FOR SUMMARY JUDGME NT with the Clerk of the Court using the CM/ECF sy stem which will send notification of such filing to the following:
• John R. Rittelmeyer (john.rittelmeyer@disabilityrightsnc.org) • Jennifer L. Bills (jennifer.bills@disabilityrightsnc.org) • Andrew B. Strickland (andrew.strickland@disabilityrights.org)
Attorneys for the Plaintiffs
• Lisa G. Corbett (lcorbett@ncdoj.gov) Attorney for Defendant Lanier Cansler
/s/ Stephen D. Martin Stephen D. Martin N.C. State Bar No. 28658 4140 Parklake Avenue, Suite 200 Raleigh, NC 27612 Telephone: (919) 877-3800 Facsimile: (919) 877-3799 E-Mail Address: steve.martin@nelsonmullins.com Counsel for Defendant Dan Coughlin
32
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 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., et al.,

Civil Action No. 1:10-cv-123-JAB

Plaintiffs,

DEFENDANT COUGHLIN’S

MOTION FOR SUMMARY

vs.

JUDGMENT

LANIER CANSLER, et al.,

Defendants.

Defendant Dan Coughlin (“Coughlin”), by and through his respective undersigned attorneys, pursuant to Fed. R. Civ. P. 56 and Local Rule 56.1 (MDNC) respectfully submits this motion for the entr y of summary judgment in his favor on Plaintiffs’ claims for relief. As will be show n by the pleadings; the discovery materials on file; and the exhibits attached hereto ( which the undersigned certifies are true an d accurate copies of documents produced in discovery), there is no i ssue as to any material fact on Plaintiffs’ claims for relief, and Defendant Coughlin is entitled, as a ma tter of law, to judgment on these claims.
In support of this Motion, Defendant Coughlin refers to , and incorporates herein by reference, Exhibits 1-8 attached hereto and identified as follows:
Exh. 1 – Declaration of Anna Yon Exh. 2 – Declaration of Donna Brock Exh. 3 – Declaration of LaTasha S. Earl Exh. 4 – Declaration of Christy Shaver Exh. 5 – Expert Report of Bonny J. Forrest, J.D., Ph.D.

Case 1:10-cv-00123-JAB-JEP Document 88 Filed 01/17/12 Page 1 of 4

Exh. 6 – Expert Report of Craig B. Hummel, M.D. Exh. 7 – Agreem ent between Nort h Carolina Department of H ealth and
Human Services, Division of Me ntal Health/Developmental Disabilities/Substance Abuse Services and PBH Exh. 8 – Amendment to Agreement attached as Exhibit 7. Exh. 9 – Excepts of Deposition of Rose B. (Nov. 8, 2011) Exh. 10 – Excerpt of Deposition of Brenda A. (Nov. 15, 2011) Exh. 11 – Excerpts of Deposition of Steven C. (Nov. 21, 2011) Exh. 12 – Excerpts of Deposition of Lillian L. (Nov. 22, 2011) Exh. 13 – Excerpts of Deposition of Melissa Covert (Nov. 29, 2011) Exh. 14 – Excerpts of Deposition of Dr. James Bodfish (Dec. 13, 2011) Exh. 15 – Excerpts of Deposition of Anna Yon (Dec. 15, 2011)
Defendant Coughlin also refers to and incorporates by reference a Memorandum in Support of his Motion for Summary Judgment, filed contemporaneously herewith.
WHEREFORE, Defendant Dan Coughlin requests the Court enter summary judgment in his favor on Plai ntiffs’ Claims in the Second Amended Complaint [D.E. 39] and to grant such other relief as the Court deems just and proper.
2 Case 1:10-cv-00123-JAB-JEP Document 88 Filed 01/17/12 Page 2 of 4

Respectfully submitted, this the 17th day of January, 2012.
NELSON MULLINS RILEY & SCARBOROUGH LLP By: /s/ Stephen D. Martin Wallace C. Hollowell III N.C. State Bar No. 24304 Stephen D. Martin N.C. State Bar No. 28658 4140 Parklake Avenue, Suite 200 Raleigh, NC 27612 Telephone: (919) 877-3800 Facsimile: (919) 877-3799 E-Mail Address: chuck.hollowell@nelsonmullins.com E-Mail Address: steve.martin@nelsonmullins.com
Counsel for Defendant Dan Coughlin
3 Case 1:10-cv-00123-JAB-JEP Document 88 Filed 01/17/12 Page 3 of 4

CERTIFICATE OF SERVICE
I, the undersigned attorn ey of the law offices of Nelson Mullins Riley & Scarborough LLP, attorne ys for Defendant Dan Coughlin do hereby certify that on January 17, 2012, I electronically file d the fo regoing DEFENDANT COUGHLIN’S MOTION FOR SUM MARY JUDGMENT with th e Clerk of the Court using t he CM/ECF system which will send notification of such filing to the following:
• John R. Rittelmeyer (john.rittelmeyer@disabilityrightsnc.org) • Jennifer L. Bills (jennifer.bills@disabilityrightsnc.org) • Andrew B. Strickland (andrew.strickland@disabilityrights.org)
Attorneys for the Plaintiffs
• Lisa G. Corbett (lcorbett@ncdoj.gov) Attorney for Defendant Lanier Cansler
/s/ Stephen D. Martin Stephen D. Martin N.C. State Bar No. 28658 4140 Parklake Avenue, Suite 200 Raleigh, NC 27612 Telephone: (919) 877-3800 Facsimile: (919) 877-3799 E-Mail Address: steve.martin@nelsonmullins.com Counsel for Defendant Dan Coughlin
4 Case 1:10-cv-00123-JAB-JEP Document 88 Filed 01/17/12 Page 4 of 4

 
 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next friend CLINTON L., SR.; TIMOTHY B., by his guardian and next friend ROSE B.; VERNON W., by his guardian and next friend VERNON D.W.; STEVEN C.; JASON A., by his guardian and next friend BRENDA A.; and DIANE D., by her guardian and next friend THOMAS S.,
Plaintiffs,
v.
ALBERT DELIA, in his official capacity as Secretary of the Department of Health and Human Services, and PAM SHIPMAN, in her official capacity as CEO and Area Director of Piedmont Behavioral Healthcare Local Management Entity,
Defendants.

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1:10CV123

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MEMORANDUM OPINION AND ORDER BEATY, Chief Judge.
This matter is before the Court on Motions for Summary Judgment [Doc. #86 & #88] by Defendants Albert Delia and Pam Shipman.1 For the reasons discussed below, Defendants’

1Albert Delia is the Acting Secretary of the North Carolina Department of Health and Human Services and was substituted for Lanier M. Cansler as a named Defendant in this action by an Order of this Court [Doc. #99]. Pam Shipman is the current CEO of Piedmont Behavioral Healthcare and was substituted for Dan Coughlin as a named Defendant in this action by an Order of this Court [Doc. #99].

Motions for Summary Judgment [Doc. #86 & #88] are DENIED. I. FACTUAL BACKGROUND2
Plaintiffs Clinton L., Timothy B., Vernon W., Steven C., Jason A., and Diane D. suffer from a variety of disabling conditions, including dual diagnoses of mental retardation and mental illness. They receive health care and other services through North Carolina’s Department of Health and Human Services (“DHHS”). Pursuant to contracts with DHHS, the health care and other services are administered and managed by Piedmont Behavioral Healthcare (“PBH”), which is the Local Management Entity (“LME”) for Cabarrus, Davidson, Rowan, Stanly, Union, Alamance, and Caswell Counties. One type of service administered by PBH is the “Supervised Living” service, which is a residential service that includes room and support care for individuals who need 24-hour supervision and for whom care in a more intensive treatment setting is considered unnecessary on a daily basis. Prior to the initiation of this lawsuit, five of the Plaintiffs, namely Clinton L., Timothy B., Vernon W., Steven C., and Diane D., previously received Supervised Living services that allowed them to live alone with 24-hour care and supervision, while one of the Plaintiffs, namely Jason A., received 24-hour care and supervision in a three-bedroom home shared with one roommate. In these Supervised Living arrangements, each Plaintiff had at least one staff person with them in their residence 24 hours a day.
However, as a result of state budget reductions implemented through North Carolina Session Law 2009-451, PBH announced on January 11, 2010, that it was changing the rates that
2 Portions of this Factual Background were previously set out in the Court’s Order granting a preliminary injunction in this case [Doc. #36], but are restated here to provide background information as part of the present Order.
2

it would pay to providers for Supervised Living services for one-person and two-person placements (that is, placements where individuals lived on their own or with one other person with 24-hour staff supervision). Under this change, PBH reduced the rates for one-person or two-person placements down to $116.15 per day, which was the rate for three-person placements (that is, placements where an individual lives with two other people with 24-hour staff supervision). This change only affected the state-funded portion of what PBH coordinates and did not relate to the Medicaid funding for Supervised Living, which PBH administers as the “Innovations Waiver” program.
Plaintiffs allege that due to the reduction in the reimbursement rates for the state funding, Plaintiffs will be “forced into congregate living environments that have already been found to be inappropriate for their case,” and “[i]f and when Plaintiffs’ placement in a congregate setting . . . are determined to have failed (as is expected), it is believed that Plaintiffs will face forced institutionalization because they would not have the level of support required to maintain their community placements.” (Second Am. Compl. ¶ 95-96). Accordingly, Plaintiffs brought the present suit asserting claims under both Title II of the Americans with Disabilities Act (“ADA”) and Section 504 of the Rehabilitation Act against Defendant Pam Shipman in her official capacity as CEO and Area Director of PBH (referred to as “Defendant PBH” or “PBH” for ease of reference) and against Defendant Albert Delia in his official capacity as the Secretary of the North Carolina Department of Health and Human Services.
Since the rate reductions for one-person and two-person placements, each Plaintiff’s care plan has been modified to varying degrees. Specifically, Clinton L. and Vernon W. have
3

continued to reside by themselves in their own homes with 24-hour staffing, just as before the rate cuts, but the number of rotating staff available has been reduced for both Plaintiffs. Timothy B. has moved from a single-person placement with staff proficient in American Sign Language to a two-person placement where the American Sign Language abilities of the staff members are disputed by the parties. Steven C.’s placement has changed four times since the rate reductions, with his most recent placement being in a single-person residence. Jason A. has continued to reside in the same three-person group home as before the rate reductions, but a third roommate was added to his residence. Finally, Diane D. has moved from a single-person placement into a three-person group home. Generally, these modifications to each Plaintiff’s care services subsequent to the rate reductions are undisputed by both Plaintiffs and Defendants.
However, Plaintiffs and Defendants take opposing positions regarding the overall effects of these modifications on each Plaintiff, namely, the level of risk of institutionalization each Plaintiff faces after the rate reductions. Specifically, Defendants offer an Expert Report from psychologist Bonny J. Forrest, J.D., Ph.D., and an Expert Report from psychiatrist Craig B. Hummel, Medical Director at PBH. Both Reports contain an evaluation of each Plaintiff and generally conclude that no Plaintiff identified herein currently faces a serious risk of institutionalization. Instead, both Reports conclude that each Plaintiff is successfully adapting to his or her new care environment and further note that many of the Plaintiffs are benefitting from the social interaction and integration available in group settings. In contrast, Plaintiffs offer an Expert Report from psychologist James W. Bodfish, M.A., Ph.D., which contains an
4

evaluation of each named Plaintiff and generally concludes that each Plaintiff faces a serious risk of institutionalization due to the modifications to each Plaintiff’s care services. In his Report, Dr. Bodfish details specific changes to each Plaintiff’s care plan and specific factors creating a serious risk of institutionalization for each Plaintiff.
Defendants have each filed a separate Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56 in response to the Plaintiffs’ claims. Defendant PBH’s Motion for Summary Judgment contends that there are no genuine issues of material fact regarding the level of risk of institutionalization facing the Plaintiffs, and Defendants are entitled to judgment as a matter of law on Plaintiffs’ ADA and Rehabilitation Act claims. Defendant Delia, who joins and adopts Defendant PBH’s Motion for Summary Judgment regarding Plaintiffs’ ADA and Rehabilitation Act claims, also advances a separate argument in his Motion for Summary Judgment, contending that there are no genuine issues of material fact regarding whether, as Secretary of DHHS, Defendant Delia satisfied his duty of oversight and monitoring of PBH. The Court will consider these contentions in turn. II. ANALYSIS
A. Standard of Review Pursuant to Federal Rule of Civil Procedure 56, summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202
5

(1986). The movant bears the initial burden of demonstrating “the absence of any genuine issues
of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). Once the movant has met the initial burden, the nonmoving party must “present evidence from which a jury might return a verdict in his favor.” Anderson, 477 U.S. at 257, 106 S. Ct. at 2514. There can be no genuine issue as to any material fact if the non-movant fails to “make a showing sufficient to establish the existence of an element essential” to his case. Celotex, 477 U.S. at 322-23, 106 S. Ct. at 2552. While all justifiable inferences are drawn in favor of the non-movant, he “may not rest upon the mere allegations or denials of his pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 248, 106 S. Ct. at 2510.
Moreover, the Court should not grant a motion for summary judgment “‘unless the entire record shows a right to judgment with such clarity as to leave no room for controversy and establishes affirmatively that the adverse party cannot prevail under any circumstances.’” Campbell v. Hewitt, Coleman & Assocs., 21 F.3d 52, 55 (4th Cir. 1994) (quoting Phoenix Sav. & Loan, Inc. v. Aetna Casualty & Sur. Co., 381 F.2d 245, 249 (4th Cir. 1967)). A mere scintilla of evidence is insufficient to withstand a motion for summary judgment. Anderson, 477 U.S. at 252, 106 S. Ct. at 2512. Instead, there must be evidence “on which the jury could reasonably find for the plaintiff.” Id. With this standard in mind, the Court will evaluate the merits of Plaintiffs’ claims to determine whether summary judgment in favor of Defendants is proper in this case.
6

B. Title II of the ADA and Rehabilitation Act Claims Title II of the ADA provides that “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C. § 12132. Regulations implementing Title II of the ADA require that a public entity administer its services, programs and activities in “the most integrated setting appropriate” to meet the needs of qualified individuals with disabilities.3 28 C.F.R. § 35.130(d). The Rehabilitation Act imposes similar obligations on recipients of federal financial assistance. 29 U.S.C. § 794; 28 C.F.R. § 41.51(d). Specifically, the Plaintiffs here are alleging a violation of the integration mandate as addressed in Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 119 S. Ct. 2176, 144 L. Ed. 2d 540 (1999). Under Olmstead, unjustified institutional isolation of individuals with disabilities is a form of discrimination under the ADA. Id. at 597, 119 S. Ct. at 2185. Accordingly, to comply with the ADA’s integration mandate, states must provide community-based treatment for persons with mental disabilities when: (1) the state determines that community-based placement is appropriate; (2) the individual does not oppose community placement; and (3) community placement can be reasonably accommodated. Id. at 607, 119 S. Ct. at 2190. Further, institutionalization is not a prerequisite to enforcement of the ADA’s integration mandate. Fisher v. Oklahoma Health Care Auth., 335 F.3d 1175, 1181 (10th Cir. 2003). Here,
3This regulation is commonly referred to as the “integration mandate” and will be referred to as such in this Order.
7

each Plaintiff is currently living in a community setting, and the Expert Reports described in the Factual Background above address each Plaintiff’s risk of institutionalization following PBH’s rate reductions. Overall, the Experts provided by Plaintiffs and Defendants used different methods to evaluate the severity of the risk facing each Plaintiff and reached different conclusions regarding the ultimate level of risk facing each Plaintiff. Specifically, Dr. Bodfish’s Report notes that the reduction in the number of rotating staff for Clinton L. and Vernon W. places them both at a higher risk of institutionalization due to documented staff shortages and insufficient funding to provide for emergency back-up staff. As to Timothy B., Dr. Bodfish’s Report concludes that frequent staff turnover, longer staff shifts, and a lack of staff proficient in American Sign Language have all contributed to Timothy B. facing a serious risk of institutionalization. Further, Dr. Bodfish’s Report determines that Steven C.’s multiple changes in residency involving both group and single-person placements increased his historical behavior problems, thus creating a serious risk of institutionalization. Similarly, Dr. Bodfish’s Report concludes that a reduction in staff supervision and an addition of a new roommate into Jason A.’s group home led to an increase in Jason A.’s historical behavior problems, placing him at a serious risk of institutionalization. Finally, as to Diane D., Dr. Bodfish’s Report determines that Diane D. faces a serious risk of institutionalization since her transition into a group placement as evidenced by specific outbursts and incidents with her roommate, one of which led to Diane D. being incarcerated for four days.
However, the Expert Reports submitted by the Defendants conclude that none of the Plaintiffs face a serious risk of institutionalization due to the modifications to their care services.
8

Instead, the Reports determine that the Plaintiffs are successfully adjusting to any changes in their care services. Due to these contrasting conclusions, the expert evidence submitted indicates that summary judgment is not appropriate, and the case would be most properly decided at the trial stage, where a judge or jury could “weigh the evidence and the credibility of each expert.” Mosser v. Fruehauf Corp., 940 F.2d 77, 83 (4th Cir. 1991); see also Webster v. Offshore Food Serv., Inc., 434 F.2d 1191, 1193 (5th Cir. 1970) (“[T]he grant of a motion for summary judgment is often inappropriate where the evidence bearing on crucial issues of fact is in the form of expert opinion testimony.”).
In addition to the differing Expert Reports, depositions of family members and caregivers, affidavits, contract documents, correspondence, and internal forms contain conflicting accounts of the level of risk of institutionalization facing each Plaintiff. Thus, the entirety of the evidence submitted to the Court indicates that a jury could “reasonably find for the plaintiff.” Anderson, 477 U.S. at 252, 106 S. Ct. at 2512. Accordingly, the Court finds that genuine issues of material fact exist with respect to Plaintiffs’ ADA and Rehabilitation Act Claims. As such, the Court will deny Defendant PBH’s Motion for Summary Judgment.
C. Defendant Albert Delia’s Motion for Summary Judgment As noted above, while Defendant Delia joins the arguments advanced by Defendant PBH regarding Plaintiffs’ ADA and Rehabilitation Act claims, Defendant Delia also advances a separate argument regarding his duty of oversight as Secretary of the North Carolina DHHS, contending that Plaintiffs have provided no evidence or case law to support a claim that he failed to adequately supervise the actions of PBH.
9

The North Carolina DHHS is the single state agency responsible for the administration and supervision of North Carolina’s Medicaid program. Under the North Carolina General Statutes, the Secretary of DHHS is specifically required to establish “comprehensive, cohesive oversight and monitoring procedures and processes to ensure continuous compliance by area authorities, county programs, and all providers of public services with State and federal policy, law, and standards.” N.C. Gen. Stat. § 122C-112.1(a)(6). Additionally, under federal regulations, the State must ensure that each Prepaid Inpatient Health Plan4 “complies with any other applicable Federal and State laws,” including Title II of the ADA and the Rehabilitation Act. See 42 C.F.R. § 438.100(d).
Further, PBH receives its state and federal funding pursuant to contracts with various divisions of the North Carolina DHHS, including the Division of Mental Health, Behavioral Health, and Substance Abuse Services (“Division”) and the Division of Medical Assistance (“DMA”). These contracts both incorporate a duty to comply with federal law. The contract between the Division and PBH contains a provision specifically noting that both PBH and the Division “shall comply with all laws . . . that are applicable to the conduct of its business, including those of federal, state, and local agencies having jurisdiction and/or authority.” (Contract between North Carolina DHHS, Division of Mental Health, Behavioral Health, and Substance Abuse Services and PBH [Doc. #10-1], at 4). Further, the contract between PBH and DMA specifically states that PBH “shall comply with all Federal and State laws which prohibit
4PBH is organized as a Prepaid Inpatient Health Plan and is thus included within the regulation’s express language.
10

discrimination” including the ADA and the Rehabilitation Act. (Contract between North Carolina DHHS, Division of Medical Assistance and PBH dated May 1, 2011 [Doc. #91-2], at 8). However, while the contract between PBH and DMA places the duty to comply with federal law on PBH, Defendant Delia cannot contract away his own duty to ensure compliance with federal law as recognized in state statutes and federal regulations. See McCartney ex rel. McCartney v. Cansler, 608 F. Supp. 2d 694, 701 (E.D.N.C. 2009), aff’d sub nom. D.T.M. ex rel. McCartney v. Cansler, 382 F. App’x 334 (4th Cir. 2010) (“As North Carolina’s ‘single state agency,’ it is the duty of [DHHS], and defendant as Secretary of [DHHS], to ensure that North Carolina’s Medicaid program is administered in compliance with federal law.”); J.K. ex rel. R.K. v. Dillenberg, 836 F. Supp. 694, 699 (D. Ariz. 1993) (“It is patently unreasonable to presume that Congress would permit a state to disclaim federal responsibilities by contracting away its obligations to a private entity.”).
While the reductions at issue here are to the state-funded portion of Supervised Living services and not to the federally-funded Medicaid portion, that does not absolve Defendant Delia of responsibility for any potential violations of federal law by PBH in its administration of state funds. Accordingly, to the extent that the Court has found that genuine issues of material fact exist with regard to PBH’s liability on Plaintiff’s ADA and Rehabilitation Act claims, such liability may be imputed to Defendant Delia. See McCartney ex rel. McCartney, 608 F. Supp. 2d at 701 (“[DHHS] may not disclaim its responsibilities under federal law by simply contracting away its duties.”). As such, the Court will deny Defendant Delia’s Motion for Summary Judgment.
11

III. CONCLUSION After having considered all of Defendants’ contentions, the Court finds that there are
genuine issues of material fact precluding summary judgment for Defendants as to the Plaintiffs’ claims. IT IS THEREFORE ORDERED that Defendants’ Motions for Summary Judgment [Doc. #86 & #88] are DENIED.
This, the 31st day of October, 2012. United States District Judge
12

 
 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next friend CLINTON L., SR.; TIMOTHY B., by his guardian and next friend ROSE B.; VERNON W., by his guardian and next friend VERNON D.W.; STEVEN C.; JASON A., by his guardian and next friend BRENDA ARTHUR; and DIANE D., by her guardian and next friend THOMAS SMITH,
Plaintiffs,
v.
LANIER CANSLER, in his official capacity as Secretary of the Department of Health and Human Services, and DAN COUGHLIN, in his official capacity as CEO and Area Director of Piedmont Behavioral Healthcare Local Management Entity,
Defendants.

) ) ) ) ) ) ) ) ) ) ) ) ) 1:10CV123 ) ) ) ) ) ) ) ) ) )

ORDER

This matter is before the Court on Defendants’ Motion to Dismiss [Doc. #44] and

Motion to Stay Discovery [Doc. #49] and Plaintiffs’ Motion for a Status Conference [Doc. #54]

and Motion for Appointment of a Special Master [Doc. #56]. For the reasons set forth below,

Defendants’ Motion to Dismiss will be denied, and Defendants’ Motion to Stay Discovery will

be denied as moot. Plaintiffs’ Motion for Status Conference will be granted to the extent that

this matter has been scheduled for a status conference on June 21, 2011 at 9:30 a.m., and

Plaintiffs may raise their contentions at that hearing. Finally, Plaintiffs’ Motion for Appointment

of Special Master will be denied.

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I. FACTUAL BACKGROUND1 Plaintiffs Clinton L., Timothy B., Vernon W., Steven C., Jason A., and Diane D. suffer
from a variety of disabling conditions, including dual diagnoses of mental retardation and mental illness. They receive health care and other services through North Carolina’s Department of Health and Human Services Division of Mental Health, Developmental Disabilities, and Substance Abuse Services. The health care and other services are administered and managed by Piedmont Behavioral Healthcare (“PBH”), which is the Local Management Entity for Cabarrus, Davidson, Rowan, Stanly and Union Counties. One type of service administered by PBH is the “Supervised Living” service, which is a residential service that includes room and support care for individuals who need 24-hour supervision and for whom care in a more intensive treatment setting is considered unnecessary on a daily basis. The Plaintiffs in this case previously received Supervised Living services that allowed them to live alone with 24-hour care and supervision. Thus, although Plaintiffs lived alone, they had a staff person with them in their home 24 hours a day. However, as a result of state budget cuts, PBH announced on January 11, 2010 that it was changing the rates that it would pay to providers for Supervised Living services for 1-person and 2-person placements (that is, placements where individuals lived on their own or with one other person with 24-hour staff supervision). Under this change, PBH reduced the rates for 1- or 2-person placements down to $116.15 per day, which was the rate for 3-person placements (that is, placements in an apartment or residence where an individual lives with two
1 This Factual Background was previously set out in the Court’s Order granting a preliminary injunction in this case, but is restated here to provide background information as part of the present Order.
2
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other people with 24-hour staff supervision). This change only affected the state-funded portion of what PBH coordinates; it did not relate to the Medicaid funding for Supervised Living, which PBH administers as the “Innovations Waiver” program.
Plaintiffs brought the present suit against Defendant Dan Coughlin in his official capacity as CEO and Area Director of PBH (referred to as “Defendant PBH” or “PBH” for ease of reference) and against Defendant Lanier Cansler in his official capacity as the Secretary of the North Carolina Department of Health and Human Services. Plaintiffs contend that due to the reduction in the reimbursement rates for the state funding, they are being “forced into congregate living environments that have already been found to be inappropriate for their care” and that when the congregate placements fail, “Plaintiffs will face forced institutionalization.” Plaintiffs have asserted claims under both the Americans with Disabilities Act (“ADA”) and the Rehabilitation Act.2 Under Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 119 S. Ct. 2176, 144 L. Ed. 2d 540 (1999), unnecessary institutionalization of individuals is a form of discrimination under the ADA, and persons must be served in the community when (1) the state determines that community-based treatment is appropriate; (2) the individual does not oppose community placement; and (3) community placement can be reasonably accommodated. Title II of the ADA provides that “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity or be subjected to discrimination by any such entity.” 42 U.S.C.
2 Plaintiffs do not assert any Constitutional claims in this case, and instead assert only statutory claims under the ADA and the Rehabilitation Act.
3
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§ 12132. Regulations implementing Title II of the ADA require that a public entity administer its services, programs and activities in “the most integrated setting appropriate” to the needs of qualified individuals with disabilities. 28 C.F.R. § 35.130(d). The Rehabilitation Act imposes similar obligations on recipients of federal financial assistance. 29 U.S.C. § 794; 28 C.F.R. § 41.51(d).
Defendants have filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6), contending that this Court lacks subject matter jurisdiction over these claims and that Plaintiffs have failed to state a claim upon which relief can be granted. The Court will consider these contentions in turn. II. MOTION TO DISMISS PURSUANT TO RULE 12(b)(1) FOR LACK OF SUBJECT
MATTER JURISDICTION A. Legal Standards Defendants first bring their Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. In evaluating a Motion to Dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), “when a defendant asserts that the complaint fails to allege sufficient facts to support subject matter jurisdiction, the trial court must apply a standard patterned on Rule 12(b)(6) and assume the truthfulness of the facts alleged. On the other hand, when the defendant challenges the veracity of the facts underpinning subject matter jurisdiction, the trial court may go beyond the complaint, conduct evidentiary proceedings, and resolve the disputed jurisdictional facts. And when the jurisdictional facts are inextricably intertwined with those central to the merits, the court should resolve the relevant factual disputes only after appropriate discovery, unless the
4
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jurisdictional allegations are clearly immaterial or wholly unsubstantial and frivolous.” Kerns v. U.S., 585 F.3d 187, 193 (4th Cir. 2009).
In the present case, Defendants contend that this Court lacks subject matter jurisdiction because there is no risk of institutionalization to any of the Plaintiffs as a result of the rate cuts, and that as such, Plaintiffs lack standing and the case is not ripe. In this regard, the Court notes that under Article III of the Constitution, this Court only has jurisdiction over actual “cases” or “controversies.” See City of Los Angeles v. Lyons, 461 U.S. 95, 101, 103 S. Ct. 1660, 1665, 75 L. Ed. 2d 675 (1983). As part of this “case or controversy” requirement, “Plaintiffs must demonstrate a personal stake in the outcome,” often referred to as “standing.” Id. “To meet the constitutional minimum for standing, a plaintiff must allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief. This formula includes three elements: (1) injury in fact; (2) traceability; and (3) redressability. The injury in fact prong requires that a plaintiff suffer an invasion of a legally protected interest which is concrete and particularized, as well as actual or imminent. The traceability prong means it must be likely that the injury was caused by the conduct complained of and not by the independent action of some third party not before the court. Finally, the redressability prong entails that it must be likely, and not merely speculative, that a favorable decision will remedy the injury.” Friends of the Earth, Inc. v. Gaston Cooper Recycling Corp., 204 F.3d 149, 154 (4th Cir. 2000) (internal quotations and citations omitted). With respect to the “injury in fact” requirement, the Fourth Circuit has noted that “[t]he Supreme Court has consistently recognized that threatened rather than actual injury can satisfy Article III standing requirements,” and
5
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“[t]hreats or increased risk thus constitutes cognizable harm.” Id. at 160; cf. Lyons, 461 U.S. at 101-02, 103 S. Ct. at 1665 (holding that a plaintiff seeking declaratory or injunctive relief must show present harm or a likelihood of future harm). “If the plaintiff can show that his claim to relief is free from excessive abstraction, undue attenuation, and unbridled speculation, the Constitution places no further barriers between the plaintiff and an adjudication of his rights.” Friends of the Earth, 204 F.3d at 155.
In addition to establishing standing, Plaintiffs must also establish that the claims asserted in their Complaint are “ripe.” Typically, questions of ripeness arise when plaintiffs attempt to challenge a statute or regulation that they have not been prosecuted for violating, and “[a] claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.” Texas v. U.S., 523 U.S. 296, 300, 118 S. Ct. 1257, 1259, 140 L. Ed. 2d 406 (1998) (internal quotations omitted). “Ripeness ‘requires us to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.’” Id. at 300-01, 118 S. Ct. at 1260 (citing Abbott Laboratories v. Gardner, 387 U.S. 136, 148, 87 S. Ct. 1507, 1515, 18 L. Ed. 2d 681 (1967)). The rationale of the ripeness requirement is “to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements,” and to ensure an adequate record to allow for effective judicial review. Abbott Laboratories v. Gardner, 387 U.S. 136, 148, 87 S. Ct. 1507, 1515, 18 L. Ed. 2d 681 (1967).
B. Application in the Present Case In this case, Plaintiffs have alleged that Defendants violated the ADA by imposing rate
6
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cuts that “forced [Plaintiffs] into congregate living environments that have already been found to be inappropriate for their care.” Plaintiffs further allege that when the congregate placements fail, “Plaintiffs will face forced institutionalization” in violation of the ADA. In their Motion to Dismiss for lack of subject matter jurisdiction, Defendants contest these allegations, essentially arguing that the allegations are not true, and that Plaintiffs do not, in fact, face a risk of institutionalization in the circumstances. Because Defendants challenge the veracity of Plaintiffs’ allegations as part of the Motion to Dismiss for lack of subject matter jurisdiction, the Court may go beyond the Complaint in considering the jurisdictional issues, based on the framework set out in Kerns, as noted above. See Kerns v. U.S., 585 F.3d at 193; see also Benham v. City of Charlotte, 635 F.3d 129, 136 n.5 (4th Cir. 2011) (noting that the Kerns framework would apply in evaluating potential standing issues). However, in this case, the dispute over the potential risk of institutionalization is inextricably intertwined with the underlying claims of illegal forced institutionalization in violation of the ADA. Under Kerns, this Court therefore may “resolve the relevant factual disputes only after appropriate discovery, unless the jurisdictional allegations are clearly immaterial or wholly unsubstantial and frivolous.” Kerns v. U.S., 585 F.3d at 193 (noting that “when the jurisdictional facts and the facts central to a tort claim are inextricably intertwined, the trial court should ordinarily assume jurisdiction and proceed to the intertwined merits issues, [and] . . . a trial court should dismiss under Rule 12(b)(1) only when the jurisdictional allegations are ‘clearly . . . immaterial, made solely for the purpose of obtaining jurisdiction or where such a claim is wholly unsubstantial and frivolous.’” (quoting Bell v. Hood, 327 U.S. 678, 682-83, 66 S. Ct. 773, 776, 90 L. Ed. 939 (1946))).
7
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Therefore, the Court will only dismiss the case at this stage for lack of subject matter jurisdiction if the jurisdictional allegations are “clearly immaterial or wholly unsubstantial and frivolous.”
Here, the Court concludes that Plaintiffs’ jurisdictional allegations are not clearly immaterial or wholly unsubstantial or frivolous. In this regard, although Defendants contend that Plaintiffs have not suffered any “injury in fact,” and that the case is not “ripe,” the Court concludes that Plaintiffs have made material, non-frivolous allegations that they are suffering immediate injury from Defendants’ conduct, which allegedly resulted in congregate placements with an expected result of forced institutionalization. To the extent that Defendants contend that these allegations are “rank speculation,” Plaintiffs have presented evidence to support these allegations, including evidence that indicates that each of the Plaintiffs has previously been institutionalized when their community placements failed, and all of them face a current risk of institutionalization should their present community placements fail. Some of that evidence was presented as part of the previous hearing in this case on Plaintiffs’ Motion for Preliminary Injunction, and following that hearing, the Court concluded that Plaintiffs had established a likelihood of success on their claim that institutionalization of Plaintiffs would violate the ADA. Thus, this Court has already agreed that Plaintiffs could establish a sufficient risk of institutionalization to warrant issuance of a preliminary injunction in this matter. In addition, Plaintiffs have now presented additional evidence in support of their allegation that they have already been and continue to be directly impacted by the funding cuts, including evidence regarding their moves to new congregate placements. Indeed, Plaintiffs contend in their Response that at least one of the Plaintiffs has required crisis respite care and several of the
8
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Plaintiffs have had more violent outbursts as a result of their forced moves into more congregate placements, resulting in some instances in the involvement of law enforcement officers. Any remaining question as to whether that injury is sufficiently likely to lead to their institutionalization in violation of the ADA is part of the ultimate determination on the merits, and is not appropriately resolved on a motion to dismiss for lack of subject matter jurisdiction prior to discovery.
Finally, the Court notes to the extent that Defendants have presented affidavits, medical records, and expert opinions and conclusions in support of their position, Plaintiffs contend that discovery is required to enable them to adequately respond to these substantive allegations and conclusions. As noted above, where these evidentiary disputes related to jurisdictional issues are intertwined with the underlying substantive claims, the appropriate course under the Fourth Circuit’s decision in Kerns is to allow discovery to proceed and then consider these issues on a full record at summary judgment. In these circumstances, the Court concludes that Plaintiffs’ jurisdictional allegations are not “clearly immaterial or wholly unsubstantial and frivolous” in alleging an “injury in fact” for purposes of establishing standing and a sufficiently concrete and present injury for purposes of establishing ripeness. Any further analysis of Defendants’ contentions must be made after an appropriate period of discovery. Therefore, Defendants’ Motion to Dismiss pursuant to Rule 12(b)(1) will be denied. III. MOTION TO DISMISS PURSUANT TO RULE 12(b)(6) FOR FAILURE TO STATE
A CLAIM Defendants have also asserted a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), contending that Plaintiffs have failed to state a claim upon which relief can
9
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be granted. In reviewing a Motion to Dismiss for failure to state a claim pursuant to Rule 12(b)(6), the Fourth Circuit has directed that “we ‘take the facts in the light most favorable to the plaintiff,’ but ‘we need not accept the legal conclusions drawn from the facts,’ and ‘we need not accept as true unwarranted inferences, unreasonable conclusions, or arguments.’” Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P’ship, 213 F.3d 175, 180 (4th Cir. 2000)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929 (2007)).
In this case, the Court already considered similar contentions as part of the request for a Preliminary Injunction. In considering that Motion for Preliminary Injunction, the Court noted that two separate issues have been raised in this case: (1) a challenge to rate cuts that will force Plaintiffs into “congregate living environments that have already been found to be inappropriate for their care” and (2) a challenge that as a result of the rate cuts and change in services, Plaintiffs will ultimately face forced institutionalization. In ruling on the Motion for Preliminary Injunction, the Court noted that the first issue was related to Plaintiffs’ opposition to a reduction in services and opposition to moving into a different type of community-based placement, while the second issue was related to the allegation that PBH’s actions would ultimately result in institutionalization of Plaintiffs. On the first issue, the Court noted that Plaintiffs had not pointed to any authority that would support the conclusion that they were
10
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entitled to a particular provider or type of community-based placement under the ADA. However, as to the second issue, the Court concluded that Plaintiffs had established a likelihood of success on their claim that institutionalization of Plaintiffs would violate the ADA. Defendants have presented no basis to change that conclusion, other than to contend that Plaintiffs do not face any risk of institutionalization as a factual matter. However, as discussed above, Plaintiffs have alleged, at this stage in the case, that they face institutionalization as a result of Defendants’ actions, and those contentions are not implausible under that standards set out above. Further analysis of these competing factual contentions may only come as part of a summary judgment determination after Plaintiffs have been provided an opportunity for discovery. Therefore, Defendants’ Motion to Dismiss pursuant to Rule 12(b)(6) will be denied. IV. REMAINING MOTIONS
In addition to filing the Motion to Dismiss, Defendants also moved to stay discovery pending the Court’s ruling on the Motion to Dismiss. Having concluded that the Motion to Dismiss should be denied, the Court concludes that the Motion to Stay Discovery [Doc. #49] is now moot and will be denied. As such, discovery in this case may now proceed.
For their part, Plaintiffs have filed a Motion for Status Conference and Motion for Appointment of a Special Master. With respect to the Motion for a Status Conference [Doc. #54], Plaintiffs contend that a status conference is necessary to determine whether Defendants are in compliance with the Preliminary Injunction entered by the Court in this case. The Preliminary Injunction entered by the Court required that Defendant Coughlin, as CEO and Area Director of the PBH Local Management Entity, ensure that each Plaintiff was provided
11
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with a clinically-appropriate community-based placement option, as an alternative to institutionalization, during the pendency of this suit. Plaintiffs now contend that Defendants have implemented additional reductions in Plaintiffs’ plans of care, resulting in temporary institutionalization for two of the Plaintiffs and a substantial increase in the risk of institutionalization for each of them. In considering this matter, the Court notes that a status conference in this case has been scheduled for June 21, 2011 at 9:30 a.m. Therefore, Plaintiffs’ Motion for Status Conference will be granted, and any concerns regarding Defendant Coughlin’s compliance with the Preliminary Injunction may be raised at the status conference.
Finally, Plaintiffs have also filed a Motion for Appointment of Special Master [Doc. #56], requesting that the Court appoint a Special Master to review Plaintiffs’ plans of care to ensure that the plans are clinically appropriate and sufficient to maintain Plaintiffs’ community placements as an alternative to institutionalization. Under Federal Rule of Civil Procedure 53, a reference to a Special Master to recommend findings of fact is appropriate if the appointment is warranted by “some exceptional condition.” In addition, under Rule 53, the Court may appoint a Special Master to “address pretrial and post trial matters that cannot be effectively and timely addressed by an available district judge or magistrate judge of the district.” Finally, the Court also has inherent authority to appoint a special master for the purpose of enforcing a judicial decree. However, having considered Plaintiffs’ request, the Court concludes that it does not appear that appointment of a Special Master is necessary or appropriate in this case at this time. There are no “exceptional conditions,” nor any pretrial matters that cannot be addressed by this Court. It also does not appear that a Special Master is necessary for enforcement of this
12
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Court’s Orders at this time. Plaintiffs are free to retain their own expert to review the plans of care, without requiring reference to a Special Master. Plaintiffs’ Motion for Appointment of a Special Master will therefore be denied. V. CONCLUSION
For the reasons set forth above, IT IS ORDERED that Defendants’ Motion to Dismiss [Doc. #44] is DENIED, and Defendants’ Motion to Stay Discovery [Doc. #49] is DENIED as moot. IT IS FURTHER ORDERED that Plaintiffs’ Motion for Status Conference [Doc. #54] is GRANTED to the extent that this case has been scheduled for a status conference on June 21, 2011, at 9:30 a.m. FINALLY, IT IS ORDERED that Plaintiffs’ Motion for Appointment of a Special Master [Doc. #56] is DENIED.
This, the 15th day of June, 2011.
United States District Judge
13
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 UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., by his guardian and next )

friend CLINTON L., SR., TIMOTHY B. )

by his guardian and next friend ROSE B., )

VERNON W., by his guardian and next )

friend VERNON D. W., and STEVEN

)

C., JASON A., by his guardian and next )

friend BRENDA A., DIANE D. by her )

guardian and next friend THOMAS S., )

)

Plaintiffs,

)

)

v.

)

)

LANIER CANSLER, in his official

)

capacity as Secretary of the Department )

of Health and Human Services, and DAN )

COUGHLIN, in his official capacity as )

CEO and Area Director of the Piedmont )

Behavioral Healthcare Local

)

Management Entity,

Defendants

CIVIL ACTION NO. 10-CV-00123

PLAINTIFFS’ THIRD AMENDED COMPLAINT ________________________________________________________________________
INTRODUCTION 1. Plaintiff Clinton L. is 46 years old. Among other diagnoses, he is dually diagnosed with a developmental disability and mental illness. He lives in Lexington, North Carolina. 2. Plaintiff Timothy B. is 44 years old. Among other diagnoses, he is dually diagnosed with a developmental disability and mental illness. Plaintiff Timothy B. is

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also deaf. He currently lives in Raleigh, North Carolina, but he is from Lexington, North Carolina, where his guardian still resides.
3. Plaintiff Vernon W. is 47 years old. Among other diagnoses, he is dually diagnosed with a developmental disability and mental illness. He lives in Lexington, North Carolina.
4. Plaintiff Steven C. is 32 years old. Among other diagnoses, he is dually diagnosed with a developmental disability and mental illness. He lives in Lexington, North Carolina.
5. Plaintiff Jason A. is 35 years old. Among other diagnoses, he is dually diagnosed with mental retardation and mental illness. He lives in Salisbury, North Carolina
6. Plaintiff Diane D. is 36 years old. Among other diagnoses, she is dually diagnosed with mental retardation and mental illness. She lives in Lexington, North Carolina.
7. In North Carolina, adults dually diagnosed with mental retardation and mental illness are part of a target population that may be eligible to receive state mental health, developmental disability, and substance abuse services funds designated as MR/MI funds, formerly called Thomas S. funds. Plaintiffs are eligible for and have previously received MR/MI funds. See Thomas S. v. Morrow, 601 F. Supp. 1055, 1984 U.S. Dist. LEXIS 23537 (W.D.N.C. 1984), aff’d in part and modified in part, remanded, 781 F.2d 367, 1986 U.S. App. LEXIS 21712 (4th Cir. 1986), cert. denied sub nom., Kirk v. Thomas S., 476 U.S. 1124 (1986), cert. denied sub nom., Childress v. Thomas S., 479
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U.S. 869 (1986); later proceeding, Thomas S. v. Flaherty, 699 F.Supp. 1178, 1988 U.S. Dist. LEXIS 13086 (W.D.N.C. 1988), aff’d, 902 F.2d 250, 1990 U.S. App. LEXIS 7044 (4th Cir. 1990), rehearing, en banc, denied, 1190 U.S. App. LEXIS 19875 (4th Cir. 1990), cert denied, 498 U.S. 951 (1990).
8. Plaintiffs have been successfully living in the community with a combination of federal Medicaid waiver funds (provided through the Innovations Waiver, as described infra, at Paragraphs 83-88) and supplemental state funds; Plaintiff Clinton L. for over eight years, Plaintiff Timothy B. for more than a decade, Plaintiff Vernon W. for over five years, Plaintiff Steven C. for over a decade, Plaintiff Jason A. for approximately a decade, and Plaintiff Diane D. for over a decade.
9. Plaintiffs reside within the geographical service area of the Piedmont Behavioral Healthcare Local Management Entity, also known as PBH. For each of these Plaintiffs, a clinical treatment team has determined that their current Individual Support Plans (ISPs) require independent, state-funded, Supervised Living services to assure adequate staffing and appropriate care to maintain these individuals in the community.
10. Defendant Dan Coughlin operates the Innovations Waiver program and also exercises discretion over allocation of supplemental state funds. The Innovations Waiver is a 42 U.S.C. § 1915(c) Home and Community Based Waiver, which offers services to individuals with developmental disabilities who would otherwise qualify for services in an Intermediate Care Facility for the Mentally Retarded (ICF-MR).
11. Recently, Defendant Coughlin drastically reduced the availability of state funds for Plaintiffs’ care, as well as for all others similarly-situated, by reducing the
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amounts that providers are reimbursed for this service by at least 30%. The practical effect of this reduction will be that either the provider will withdraw from the service or they will only offer a reduced level of support and supervision compared to that which has been successfully maintaining Plaintiffs in the community. Plaintiffs are at risk of institutionalization, a placement that would be more costly than Plaintiffs’ care in the community. As a result of this arbitrary decision, Plaintiffs will be at risk of displacement from their long-term community placements.
12. Defendants’ actions violate the Americans with Disabilities Act (ADA), Title II, 42 U.S.C. § 12132, and its implementing regulations, and Section 504 of the Rehabilitation Act, 29 U.S.C. § 794a, and its implementing regulations. Among other things, these laws require Defendant to administer its services and programs in the most integrated setting appropriate to the needs of individuals with disabilities.
13. Plaintiffs seek declaratory and injunctive relief to preserve their receipt of care in the community until adequate Innovations Waiver and state-funded services are made available to them to ensure that they receive services in the most integrated setting appropriate to their needs and conditions, which has been demonstrated to be in their own homes.
JURISDICTION AND VENUE 14. This is an action for declaratory and injunctive relief for violation of Title II of the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. § 12132; and Section 504 of the Rehabilitation Act of 1973 (Section 504), 29 U.S.C. § 794.
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15. The Court has jurisdiction over Plaintiffs’ claims under 28 U.S.C. §§ 1331, 1343(a)(3) & (4). Declaratory and injunctive relief is authorized by 28 U.S.C. §§ 2201 and 2202 and Fed. R. Civ. P. 65. Plaintiffs’ causes of action for disability discrimination are authorized by 42 U.S.C. 12133 and 29 U.S.C. § 794a.
16. Venue is proper because Defendant Coughlin resides in this district. 28 U.S.C. § 1391(b)(1).
FACTUAL BACKGROUND 17. Defendant PBH operates under a Memorandum of Agreement with the North Carolina Department of Health and Human Services Division of Medical Assistance (DMA) under which, inter alia, DMA sets the reimbursement rates for PBH providers. 18. On January 11, 2010, Defendant PBH issued a memorandum to providers describing cuts to the state-funded “Supervised Living – 1 Resident” service and the state-funded “Supervised Living – 2 Resident” service (collectively, the “Supervised Living services”). These services are also identified by their procedure codes, which are YM811 and YM812, respectively. According to the memorandum, the cuts to the Supervised Living services were to take effect on February 15, 2010. The memorandum does not state whether PBH will permit any exception to these rate cuts. 19. All Plaintiffs except Timothy B. and Diane D. are currently authorized to receive the “Supervised Living – 2 Resident” service. Of the four Plaintiffs receiving the “Supervised Living – 2 Resident” service, three lived alone and one lived with one other
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resident in a group home setting prior to February 15, 2010. Until February 15, 2010, providers of this service were reimbursed by PBH at a standard rate of $161.99 per day.
20. Effective February 15, 2010, the rate for “Supervised Living – 2 Resident” has been reduced by PBH to $116.15, a reduction of nearly 30%. As a result of the rate reduction, one Plaintiff currently lives with one other resident in a group home setting and another Plaintiff now lives with two other residents in a group home setting.
21. Plaintiffs Timothy B. and Diane D. are currently authorized to receive the “Supervised Living – 1 Resident” service. Providers of “Supervised Living – 1 Resident” services are reimbursed by PBH at a variable per diem rate. In both Timothy B.’s case and Diane D.’s case, the rate for the service was between $240.00 and $250.00 per day. This rate was designed to correspond with the service provider’s costs in hiring, training, and retaining staff capable of the special needs of the Plaintiffs. These include communicating with Timothy B. through the use of specialized sign language and supervising Diane D. with two staff members twenty-four hours a day.
22. Effective February 15, 2010, the rate for “Supervised Living – 1 Resident” has been reduced by PBH to $116.15 per day. This represents a reduction of nearly 55% for this service in Timothy B.’s and Diane D.’s cases. However, PBH informally agreed to maintain Timothy B.’s current rate for “Supervised Living – 1 Resident” services, $250 per day, until April 15, 2010. The provider of Diane D.’s Supervised Living services attempted to maintain Diane’s residential placement at the reduced rate, but Diane was ultimately moved into a 3-bed group home on May 1, 2010.
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23. Defendant PBH did not notify Plaintiffs of the proposed rate cuts. Plaintiffs have not been provided with any right to appeal the rate cuts. The new rate structure for Supervised Living services will not permit the providers of this service to operate at a profit and still provide Plaintiffs with the level of service specified in their plans of care. Moreover, the new rate structure will either cause those providers currently offering the service to operate at a loss, or to change the nature of the service that they provide to Plaintiffs. Consequently, these providers will dilute the level of support provided by Supervised Living services for Plaintiffs and other recipients of this service in areas served by PBH.
24. Although Plaintiffs will still be eligible to continue receiving Innovations Waiver funding after the rate reduction on February 15, 2010, they will likely lose their Innovations Waiver funding if they cannot adjust to the lesser level of support and are admitted to an institution.
25. On January 29, 2010, Plaintiffs’ counsel wrote to Defendants demanding a postponement of the implementation of the new Supervised Living rate structure. This delay was requested so that Defendants can reach an accord with Supervised Living providers as to an appropriate per diem rate for Supervised Living services to assure that Plaintiffs will be maintained in their community placements. Defendants did not respond to this letter and Plaintiffs replied by filing this action.
DEFENDANTS 26. Defendant Dan Coughlin is the CEO and Area Director of the PBH Local Management Entity (LME), with a geographic service area encompassing Cabarrus,
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Davidson, Rowan, Stanly, and Union Counties. Within the Medicaid-funded system of mental health, developmental disabilities, and substance abuse services in North Carolina, the LMEs are the locus of coordination for services at the community level. See N.C.G.S. § 122C-101; N.C.G.S. § 122C-115.4(a).
27. Defendant Coughlin’s responsibilities include financial management and accountability for the use of State and local funds and information management for the delivery of publicly-funded services. See N.C.G.S. § 122C-115.4(b)(7). Defendant Coughlin also bears responsibility for the implementation and management of PBH’s Medicaid Home and Community-Based Services (HCBS) Community Alternatives Program Waivers (the Innovations Waiver), consistent with federal law. See Social Security Act § 1915, 42 U.S.C. § 1396n (b) and (c). Defendant Coughlin is sued in his official capacity.
28. Defendant Lanier Cansler is the Secretary of the North Carolina Department of Health and Human Services (DHHS). DHHS is the “single state agency” responsible for the administration and supervision of North Carolina’s Medicaid program under Title XIX of the Social Security Act. 42 C.F.R. § 431.10. Defendant Cansler is also responsible for the ultimate oversight of the LMEs to make sure that they provide publicly-funded services in accordance with the law. See N.C.G.S. § 122C-111, et seq. Defendant Cansler is sued in his official capacity.
PLAINTIFFS 29. All Plaintiffs are adults with dual diagnoses of mental retardation and mental illness (MR/MI).
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Clinton L. 30. Plaintiff Clinton L.’s diagnoses include Schizoaffective Disorder, Bipolar Disorder, Intermittent Explosive Disorder, and Moderate Mental Retardation. 31. Prior to his current placement, Plaintiff Clinton L. lived in various group homes and institutions throughout North Carolina. Because of Clinton L.’s diagnoses, many of his previous facilities have been unable to provide the necessary level of staff to both address his condition and ensure a safe environment for other residents. Clinton L. has been discharged from both coed and all-male facilities because of his inappropriate and explosive behaviors that many times affect other residents. Clinton L. has often engaged in destructive outbursts that can only be effectively controlled with one-on-one assistance to provide verbal prompting and redirection when needed. In 2000, Clinton L. was discharged from his last group home placement because this group home could not accommodate his behaviors. 32. Since then, Clinton L. has lived in his own apartment located in Lexington, North Carolina. Clinton L. is supervised by a rotating schedule of residential workers twenty-four hours a day. Plaintiff Clinton L.’s home has been substantially modified with a system of sensors and alarms because Clinton L. has a tendency to wander at night. 33. On August 27, 2009, PBH received an update to Clinton L.’s Individual Support Plan (“ISP”). Clinton L.’s Support Coordinator, Ms. Kristine Best, prepared the update and recommended an increase in Clinton L.’s services due to his behaviors and need for constant monitoring. With the exception of Ms. Best’s recommendation
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regarding the level of Home Supports hours, PBH otherwise approved the ISP update on September 21, 2009.
34. In response to the cut in Supervised Living rates, Clinton L.’s provider, Easter Seals UCP, originally stated that it would be unable to continue to provide Supervised Living services to Clinton L. However, since the original filing of this action, Easter Seals UCP has informally and temporarily agreed to maintain Clinton L.’s present living arrangement. This agreement is expressly contingent upon “continued approval of at least 40 hours of Home Supports.” Even with PBH’s authorization for this additional service, Easter Seals UCP will not maintain a profit on Clinton L.’s care. In addition, since this level of support is above PBH’s own utilization review guidelines, PBH policies require titration, or a reduction of this level of service over time.
Timothy B. 35. Plaintiff Timothy B.’s diagnoses include Intermittent Explosive Disorder, Major Depressive Disorder, Epilepsy, and Severe Mental Retardation. Timothy B. is also deaf. 36. Plaintiff Timothy B., prior to his community placement, lived in various group homes and institutions throughout North Carolina. Very few of these facilities employed qualified personnel capable of communicating with Timothy B. through use of American Sign Language or other means. Because of his inability to communicate with facility staff, Timothy B. often engaged in destructive outbursts. In 1998, Timothy B. was discharged from his last group home placement because they could not accommodate his behaviors.
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37. In 1999, Timothy B. was approved to receive MR/MI funds. Plaintiff Timothy B.’s current community placement is his own home in Raleigh, North Carolina, where he lives alone and independently with a rotating schedule of residential workers twenty-four hours a day.
38. On January 8, 2009, PBH performed a Supports Intensity Scale (SIS) assessment on Timothy B. This assessment measures the client’s level of ability to function independently. The results of the assessment indicated that Timothy B. has a SIS score of 114, which places Timothy B. in the 82nd percentile of support needs. The SIS report also indicates that “it is highly likely that [Timothy B.] has greater support needs than others with a similar SIS [score].”
39. Dr. George Popper, a licensed psychologist in the PBH catchment area, conducted an assessment of Timothy B.’s needs and abilities on February 14, 2009. Dr. Popper’s report recommended that “a caregiver who is proficient with sign language be made available to [Timothy B.]” Dr. Popper’s report included a letter, dated March 10, 2009, to Timothy B.’s guardian. The letter concluded that “Timothy appears quite comfortable with his current living circumstance and I see no reason to change it at this time,” with the proviso that “there should be a caregiver who knows sign language.”
40. On November 2, 2009, PBH received Timothy B.’s proposed annual ISP. Timothy B.’s Support Coordinator, Ms. Paula Clements, prepared the update and concluded that Timothy B. needs the “continued support of his 24 hour awake staff and provider agency.” PBH approved the annual ISP on November 9, 2009.
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41. Community Alternatives of North Carolina (Community Alternatives) is Timothy B.’s current provider of Supervised Living services. On January 15, 2010, Community Alternatives notified Timothy B.’s guardian that, effective April 15, 2010, Community Alternatives will no longer be able to “provide services to Tim in his current service model.” Community Alternatives specifically cited the cut to the Supervised Living reimbursement rate as the reason for discharging Timothy B.
42. Since the original filing of the present action, Defendants contended that Timothy B. should be a client of the Wake County LME and assured this Court that, so long as Timothy B. remains a Wake County resident, “this transition to Wake LME will be made shortly.” .
43. In 2010, Plaintiff Timothy B. was discharged from his residential placement in Wake County, and he moved back to Davidson County. Timothy’s plans of care at that time and until the present have all clearly indicated his need for staff who communicate with him by using American Sign Language (ASL) and his home signs.
44. Since Timothy B.’s move to Davidson County, he has received services in which providers fail to communicate adequately or effectively with him using ASL or other appropriate sign language, or to otherwise consistently make sign language (ASL) interpretation available to him.
45. Timothy B. is at increased risk of institutionalization due to receiving services that fail to adequately address his need for community based services with effective communication.
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Steven C. 46. Plaintiff Steven C.’s diagnoses include Depressive Disorder and Mild Mental Retardation. 47. Steven C. has lived in his current residential setting for at least the last decade, following a failed group home placement. While at the group home, Steven would engage in explosive outbursts, often resulting in injuries to staff or other residents. On at least one occasion, Steven C. was criminally charged with assaulting another resident. A prior felony conviction has also thwarted many attempts to place Steven in a congregate living arrangement. 48. Today, Steven C. is his own guardian and has successfully lived in his community for a number of years. Nonetheless, many of Steven C.’s behaviors remain. On October 6, 2006, Steven was evaluated by George Popper. Dr. Popper’s report concludes that “Steven’s behavior and his lack of impulse control continue to be significant problems” and that Steven cannot “live independently without close supervision.” 49. On September 1, 2009, PBH received Steven’s proposed annual ISP. The annual plan concludes that “Steven requires highly trained staff for 1:1 habilitative training to…prevent injury to him or others, and especially to obey laws.” The annual ISP recommended continued Supervised Living services. PBH approved this recommendation on September 11, 2009. 50. Monarch, Inc. (Monarch) is Steven C.’s current provider of Supervised Living services. On January 21, 2010, Monarch notified Steven that they could “no longer
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support [Steven’s] need for 24 hour supervision” as of March 21, 2010. Monarch cited the recent reduction in Steven’s services as its reason for discharging Steven.
51. Because Steven did not have any alternate housing options available to him, at the behest of PBH, Steven applied to several local group homes. Ms. Lori Fuller, a case manager at PBH, has threatened Steven that PBH would seek to involuntarily place him under guardianship if he did not comply with PBH’s demand to accept a group home placement.
52. One group home, operated by Youth and Adult Care Management (YACM), provisionally accepted Steven, pending YACM’s receipt of a license to operate a group home from the Division of Health Service Regulation (DHSR).
53. DHSR has since issued a license to this group home, which has now offered a placement to Steven. YACM indicated to Steven that it would hold this placement open for an indefinite period of time; however, Steven understands from his current staff members that his current placement will end on April 14, 2010.
54. Steven does not want to move into a group home and remains fearful that he will revert to his earlier behaviors once he moves into a group home. Steven’s current staff members have noted that Steven has “talked about walking out of the group home and being homeless.” Additionally, Steven risks losing contact with his current staff members, whom Steven trusts because he has known them for several years.
Vernon W. 55. Plaintiff Vernon W.’s diagnoses include Depressive Disorder, Severe Mental Retardation, and Epilepsy.
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56. In 1984, Vernon W. moved to his first group home. While at the group home, Vernon engaged in various violent outbursts, resulting in injuries to staff and other residents, as well as damage to property. In 1991, Vernon was discharged from this group home due to his behaviors. From 1984 to 1991, Vernon was institutionalized on three occasions—twice at the Thomasville General Hospital psychiatric unit and once at Dorothea Dix Hospital in Raleigh, N.C.
57. Following a two-month institutionalization at Dorothea Dix Hospital in 1991, Vernon was transferred to the O’Berry Center in Goldsboro, NC. Vernon remained there for approximately five years. During this time, Vernon became a class member of the original Thomas S. litigation.
58. Upon Vernon’s release from the O’Berry Center in 1996, Vernon began to receive Thomas S. services. Between 1996 and 2000, Vernon lived in two congregate living arrangements. Vernon’s behaviors, which at that time included assaulting staff members and residents, throwing objects at staff and residents, and kicking holes in the house walls, continued to pose a threat Vernon’s own safety and to the safety of others.
59. In 2000, Vernon began to live in his own apartment, supervised by staff members on a twenty-four hour basis. In 2004, Vernon moved into a house that his father purchased for him. Vernon’s Supervised Living services have been provided by YACM for approximately the past three years. Since he began to live in his own home, the intensity of Vernon’s behaviors has declined.
60. Without supervision, Vernon continues to pose a hazard to himself and others. When agitated, Vernon will often hit walls and windows, as well as yell and curse at staff
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members. Vernon also has difficulty sleeping at night; he rarely sleeps more than three hours at a time. When awake at night, Vernon will often roam around the house. If unsupervised, Vernon will unwittingly place himself in dangerous situations, such as using the stove, tampering with light fixtures, and walking out the front door of the house.
61. On October 13, 2009, PBH referred Vernon for a psychological evaluation conducted by Jane Kelman, L.P.A. The evaluation concluded that “Vernon’s current staffing pattern should be maintained if at all possible” due to the safety concerns and the rapport he has built with his staff members over several years. Ms. Kelman opined that this rapport has “greatly contributed to his current stability.”
62. On January 21, 2010, Vernon’s father was notified that, due to the Supervised Living rate cuts, YACM could not support his need for one-on-one, 24-hour supervision. On April 15, 2010, YACM will no longer be able to offer Vernon’s current level of support. Vernon’s father has attempted to locate other providers who may provide the Supervised Living services at the reduced rate, but none are available.
63. Vernon’s current ISP, dated March 1, 2010, states that Vernon will receive “Supervised Living – 2 Resident” services until April 15, 2010; according to the ISP, a team decision will be made at that time because the “Supervised Living – 2 Resident” rate will end.
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Jason A. 64. Plaintiff Jason A.’s diagnoses include Mood Disorder with Aggression, Obsessive-Compulsive Disorder, Attention Deficit Hyperactivity Disorder, Autistic Tendencies, and Moderate Mental Retardation. 65. Although Jason communicates verbally, he has difficulty expressing his needs and frustrations. Jason has a history of violent, severe physical aggression resulting in property damage and physical harm to himself and others. Jason’s behaviors are very volatile because Jason has little to no impulse control. 66. Jason’s guardian and caregivers cannot always identify what causes his behaviors, as his precise behavioral triggers often change. However, group settings frequently agitate Jason, leading to an increased risk that Jason will engage in violent and destructive behaviors. 67. Jason was first placed in a group home at age 12 and failed in that placement because of his severe behaviors. On several occasions throughout his lifetime, Jason has been hospitalized in psychiatric hospitals. 68. For approximately 10 years, Jason has lived in a two-person group home operated by RHA Howell with one other resident, A. Jason receives a combination of Innovations Waiver services and state-funded “Supervised Living- 2 Resident” services. 69. Clinical evaluations of Jason have consistently determined that he should not live with more than one roommate, and that one-on-one staffing 24 hours a day is medically necessary for Jason’s care.
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70. As a result of PBH’s rate cut to Supervised Living funds, it was no longer financially feasible for the provider, RHA, to house only two people in Jason’s home. In order to afford Jason’s care, RHA moved a third resident, F., into the home, which has resulted in reduced supervision for Jason. F.’s presence in the home is likely to exacerbate an already volatile situation with Jason’s existing roommate.
71. After Jason’s behavioral incidents, Jason becomes upset and agitated to the point that he must be removed from the home and taken to a crisis respite center. Jason’s temporary placement in the crisis respite center ensures his own safety as well as the safety of his roommates.
72. Following the addition of a third roommate, staff called 9-1-1 in response to a crisis in which Jason chased his one-on-one worker to the house next door, where he damaged the screen door. After Jason observed the staff calling 9-1-1, he calmed down to the point where emergency response personnel did not have to intervene.
73. As recently as April 13, 2010, Jason’s behaviors increased so drastically that he necessitated placement in a crisis respite center where he stayed for one week before returning to the group home.
74. Jason also has a history of self-injurious behavior, which has cycled over the years and increased in recent months, likely related to the new roommate. Jason’s provider recently approved “body checks” to be administered on Jason A. twice daily in order to prevent the self-injurious behavior.
75. With the reduced staffing support for Jason, he is not being served in a clinically appropriate or the most integrated community placement. Due to Jason’s
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history of violent and inappropriate behaviors, his previous group home failure, his preexisting conflict with his existing roommate, and his frequent hospitalization, Jason is at risk of institutionalization.
Diane D. 76. Plaintiff Diane D.’s diagnoses include Mild Mental Retardation, Intermittent Explosive Disorder, Scoliosis and Cohen Syndrome. Cohen Syndrome is a rare genetic disorder that is characterized by low muscle tone. 77. When agitated, Diane engages in destructive behaviors; the cause of these behaviors is often unknown. These behaviors have included destroying furniture, hitting and kicking others, and cursing at staff members. Additionally, Diane has attempted to leave the home when agitated. When Diane elopes from the home, she does not have any concerns for her safety and will place herself in dangerous situations such as walking in front of traffic. 78. Diane also frequently exhibits symptoms of depression, which most frequently includes a refusal to eat, take medications, or get out of bed. When left unsupervised, Diane will often isolate herself in her room and engage in self-injurious behaviors, such as digging at her skin until it bleeds or pulling off fingernails and toenails. 79. At age 16, Diane was approved to receive Willie M. services; at age 18 she began to receive Thomas S. services. For the past 10 to 12 years, Diane has received “Supervised Living – 1 Resident” services which have allowed Diane to live in her own home under close supervision 24 hours per day.
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80. As a teenager, Diane lived in various group homes, but was often discharged from these homes due to her behaviors. On several occasions, Diane was institutionalized at Dorothea Dix Hospital in Raleigh, NC and John Umstead Hospital in Butner, NC.
81. As an adult, Diane attempted to live in two group homes. However, due to her behaviors, Diane was discharged from both group homes. Upon her last group home discharge, Diane was arrested and spent time in prison for assaulting a police officer that responded to a 911 call at the group home.
82. The frequency of Diane’s more intense behaviors have declined since Diane moved into her own home. Nonetheless, Diane continues to exhibit difficulties with managing verbal aggression towards others, managing her depressive symptoms, and controlling her self-injurious behaviors. In May 2008, Diane was hospitalized in the psychiatric unit at Frye Regional Medical Center in Hickory, N.C. This institutionalization followed a brief stay in jail for assaulting a staff member.
83. Prior to February 15, 2010, the rate for Diane’s services was approximately $240 per day. Before this date, Diane had two staff members monitoring her during the day and two monitoring her during the night. On February 15, 2010, the rate for Diane’s services was reduced to $116.15 per day. After this point, Diane’s staffing level was reduced to two staff members during the day and only one staff member during the night.
84. On or about May 1, 2010, Diane was placed in a group home with two roommates. One roommate, Jane Doe, has lived with Diane in the past, and Diane has had previous conflicts with Jane at a different group home. The provider of Diane’s
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Supervised Living services attributed the change in residential placement to both the Supervised Living rate cuts and the total elimination by PBH of a related service called “Personal Assistance.”
85. Due to the history of Diane’s violent and self-injurious behaviors, her previous group home failures and hospitalizations, her previous arrests and incarcerations, and her need for constant supervision, she is at risk of institutionalization due to the disruption of her residential placement.
THE INNOVATIONS WAIVER PROGRAM 86. The North Carolina Department of Health and Human Services (DHHS) is designated as the state Medicaid agency responsible for the administration and supervision of North Carolina’s Medicaid Program under Title XIX of the Social Security Act. DHHS delegated chief responsibility for administering the federal Medicaid program to its Division of Medical Assistance (DMA). 87. The Medicaid Act authorizes states to obtain Home and Community Based Services waivers (HCBS waivers) upon approval from the Centers for Medicare and Medicaid Services (CMS). See 42 U.S.C. § 1396n(c) (also known as Section 1915(c) of the Social Security Act). These programs allow the State to provide home-based habilitative services to persons who would otherwise require care in an Intermediate Care Facility for Persons with Mental Retardation (ICF-MR). Id. The CAP-MR/DD waiver is one such program. Pursuant to a Memorandum of Understanding (MOU) with the Division of Medical Assistance (DMA), the Division of Mental Health, Developmental
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Disabilities, and Substance Abuse Services (DMHDDSAS) is the lead agency for operation of the CAP-MR/DD waiver program.
88. Until 2005, Medicaid-eligible individuals residing in Piedmont Behavioral Healthcare’s catchment area were eligible to participate in the CAP-MR/DD waiver program. In July 2004, the State of North Carolina applied for PBH to operate its own Medicaid health plan and HCBS waiver program, as a pilot project for the State. The Centers for Medicare and Medicaid Services approved PBH’s managed care Medicaid plan and HCBS waiver in October 2004. Both the PBH Medicaid plan (now called the “Cardinal Health Plan”) and its HCBS waiver (now called the “Innovations” Waiver) became effective on April 1, 2005.
89. The Innovations Waiver program is substantially similar to the CAP-MR/DD waiver program. Like the CAP-MR/DD waiver, periodic utilization reviews are conducted to continually determine an individual’s level of support under the waiver and eligibility for services offered under the waiver. Unlike the CAP-MR/DD waiver programs, where DHHS contracts with an outside agency to conduct periodic utilization reviews for CAP-MR/DD waiver clients, PBH conducts its own internal utilization management for recipients of the Innovations Waiver.
90. The Innovations Waiver does not impose a maximum budget or cost limit upon any Innovations Waiver participant.
91. Residential staffing services available through the Innovations Waiver cannot be combined in any way to achieve twenty-four hour staffing and supervision without reasonable modification of the service definitions. Consequently, an Individual Support
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Plan under the Innovations Waiver must be supplemented with additional state-funded services if twenty-four hour staffing is required.
MENTAL RETARDATION/MENTAL ILLNESS (MR/MI) – STATE FUNDED SERVICES
92. In addition to operating the Innovations Waiver, Defendant Coughlin bears responsibility for the coordination of MR/MI and other state-funded services. See N.C.G.S. § 122C-101; N.C.G.S. § 122C-115.4(a) & (b)(7). All of the named Plaintiffs are eligible for services paid through MR/MI funds.
93. MR/MI funding is provided to eligible State residents who have applied for mental health, developmental disabilities, and substance abuse services through their Local Management Entity (LME). MR/MI funds are made available to promote successful community living, and are used to extend the services and supports provided through Medicaid and other public and private funding. Accordingly, Plaintiffs and others similarly situated rely upon these MR/MI funds to access necessary supplemental residential staffing services for the hours that are not covered by the Innovations Waiver. Two such state-funded supplemental staffing services are called “Supervised Living – 1 Resident” and “Supervised Living – 2 Resident.”
94. Supervised Living is a “residential service which includes room and support care for one individual who needs 24-hour supervision; and for whom care in a more intensive treatment setting is considered unnecessary on a daily basis.” Division of Mental Health/Developmental Disabilities/Substance Abuse Services, MH/DD/SA Service Definitions 164 (January 1, 2003). Medical necessity for this service is satisfied
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when a recipient has an Axis I or II diagnosis or the person has a developmental disability, meets certain Level of Care Criteria, is at risk for placement outside the natural home setting, and has intensive verbal and limited physical aggression due to symptoms associated with a diagnosis, which are sufficient to create functional problems in a community setting. MH/DD/SA Service Definitions at 165.
95. In 2009, the General Assembly eliminated the availability of state-funded services for clients already receiving CAP MR/DD services. See Session Law 2009-451 § 10.21B. However, the General Assembly legislation explicitly provided that “former Thomas S. recipients currently living in community placements may continue to receive State-funded services.” See supra paragraph 7 (equating the terms “Thomas S.” funds and “MR/MI” funds).
96. All Plaintiffs are currently authorized to receive Supervised Living services. Plaintiffs will continue to meet medical necessity criteria for these services after their current authorizations expire.
97. Upon information and belief, the costs incurred by the providers of residential services for Supervised Living consumers will exceed PBH’s proposed per diem rate of $116.15. Because providers would only be able to provide Supervised Living services at a loss, they will no longer offer that level of support in the five counties served by PBH. Either providers will offer a reduced level of services for these clients, or they will withdraw from offering the Supervised Living services altogether.
98. Plaintiffs and other similarly situated individuals would be effectively denied access to the Supervised Living services currently authorized in their plans of care.
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Instead, they will be forced into congregate living environments that have already been found to be inappropriate for their care. If, as expected, Plaintiffs decompensate in a congregate living environment and again require a higher level of community support, the level of support provided by Supervised Living services will no longer be available to Plaintiffs because of the inadequate Supervised Living rates currently in effect.
99. It is not expected that the congregate placements will be successful for any Plaintiff. Plaintiffs require constant one-on-one supervision and attention, which congregate placements do not provide. If and when Plaintiffs’ placement in a congregate setting—or, in Plaintiff Jason A.’s case, a more congregate setting—are determined to have failed (as is expected), it is believed that Plaintiffs will face forced institutionalization because they would not have the level of support required to maintain their community placements.
100. Individuals such as Timothy B. and Diane D. require certain supplemental services because of their unique medical or support needs, such as a specialized sign language interpreter or additional supervisory staffing. If Timothy B. or Diane D. were institutionalized, these services must be provided in the institutional setting, at an additional cost to the State.
FIRST CLAIM FOR RELIEF (Title II of the Americans with Disabilities Act) 101. Plaintiffs adopt and restate the allegations set forth in paragraphs 1 – 100 of this complaint.
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102. Title II of the Americans with Disabilities Act (ADA) provides that “no
qualified individual with a disability shall, by reason of disability, be excluded from
participation in or be denied the benefits of the services, programs, or activities of a
public entity or be subject to discrimination by such entity.” 42 U.S.C. § 12132.
103. A “public entity” is defined as any State or local government or other
instrumentality of a State or local government. See 42 U.S.C. § 12131 (1)(A)&(C).
104. Regulations implementing Title II of the ADA require that a public entity
administer its services, programs and activities in “the most integrated setting
appropriate” to the needs of qualified individuals with disabilities. 28 C.F.R. §35.130 (d).
105. Regulations implementing Title II provide that
“a public entity may not, directly through contractual or other arrangements, utilize criteria or other methods of administration: (i) that have the effect of subjecting qualified individuals with disabilities to discrimination on the basis of disability; [or] (ii) that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the entity’s program with respect to individuals with disabilities…” 28 C.F.R. § 35.130(b)(3).
106. Regulations implementing Title II further provide:
“(b)(1) A public entity, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of disability: (iii) Provide a qualified individual with a disability with an aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others; (iv) Provide different or separate aids, benefits, or services to individuals with disabilities or to any class of individuals with disabilities than is provided to others unless such action is necessary to provide qualified individuals with disabilities with aids, benefits, or services that are as effective as those provided to others; (v) Aid or perpetuate discrimination against a qualified individual with a disability by providing significant assistance to an agency, organization, or
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person that discriminates on the basis of disability in providing any aid, benefit, or service to beneficiaries of the public entity’s program. 28 C.F.R. § 35.130(b)(1). 107. The United States Supreme Court in Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999), held that unnecessary institutionalization of individuals with disabilities is a form of discrimination under Title II of the ADA. In doing so, the high Court interpreted the ADA’s “integration mandate” as requiring persons with disabilities to be served in the community when: (1) the state determines that community-based treatment is appropriate; (2) the individual does not oppose community placement; and, (3) community placement can be reasonably accommodated. 527 U.S. at 607. 108. The North Carolina General Assembly designated LMEs such as PBH as “local political subdivisions” of the State. See N.C.G.S. § 112C-116(a). The Legislature further vested the Secretary of DHHS with responsibility for ensuring LMEs’ compliance with applicable laws. See N.C.G.S. § 112C-111. Through contractual, licensing, or other arrangement with the State, PBH is responsible for providing a public aid and benefit through its management of the public mental health, developmental disabilities, and substance abuse system in its catchment area. The Piedmont Behavioral Healthcare Local Management Entity is an instrumentality and contractor of the State, and a public entity covered by Title II of the ADA and its implementing regulations. See 28 C.F.R. § 35.130 (b)(1). 109. Plaintiffs are individuals with disabilities in that they have physical and other impairments that substantially limit one or more of their major life activities, including
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but not limited to, thinking, communicating, learning, working, caring for themselves, and concentrating. See 42 U.S.C. § 12102.
110. Plaintiffs are qualified individuals with disabilities in that they are capable of safely living at home with necessary services and they meet the essential eligibility requirements for the receipt of services from the State Medicaid program, the Innovations Waiver program, and State-funded mental health, developmental disabilities, and substance abuse services programs with or without reasonable modifications to the rules, polices, and practices of those programs. See 42 U.S.C. § 12131(2).
111. Plaintiffs’ community placements were the result of, inter alia, PBH’s determination that community-based treatment was appropriate for them. Plaintiffs do not oppose community placement. Plaintiffs’ community placement can be reasonably accommodated, as demonstrated by their continuous care in the community for many years; Plaintiff Clinton L. for over eight years, Plaintiff Timothy B. for more than a decade, Plaintiff Vernon W. for over five years, Plaintiff Steven C. for over a decade, Plaintiff Jason A. for approximately a decade, and Plaintiff Diane D. for more than a decade.
112. Without reasonable modification of the rules, policies, and procedures governing the Innovations Waiver program, Plaintiffs will be forcibly isolated and segregated. Plaintiffs are facing the risk of forced institutionalization as a direct result of Defendants’ actions.
113. Defendant Coughlin’s failure to make reasonable modifications to the service definitions applicable to the Innovations Waiver program denies Plaintiffs the full
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twenty-four hour per day residential staffing they need to remain in their homes. The failure to make reasonable modifications to the Innovations Waiver service definitions to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Title II of the Americans with Disabilities Act, 42 U.S.C. § 12132 and its implementing regulation, 28 C.F.R. § 35.130(d).
114. Defendant Cansler is the Secretary of the North Carolina DHHS, the “single state agency” responsible for the administration and supervision of North Carolina’s Medicaid program under Title XIX of the Social Security Act. 42 C.F.R. § 431.10 (2009). Additionally, Defendant Cansler is responsible for the ultimate oversight of the LMEs to make sure that they provide publicly funded services in accordance with the law. See N.C.G.S. § 122C-111, et seq.
115. Defendant Cansler’s failure to make reasonable modifications to the service definitions applicable to the Innovations Waiver service definitions to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Title II of the Americans with Disabilities Act, 42 U.S.C. § 12132 and its implementing regulation, 28 C.F.R. § 35.130(d).
116. Defendant Coughlin has also failed to exercise his discretion in a nondiscriminatory manner by drastically reducing the rate for Supervised Living services, denying Plaintiffs the services necessary to make up the staffing shortfall under the Innovations Waiver.
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117. PBH’s proposed rate cuts would result in the partial elimination or dilution of Supervised Living services to clients served by PBH. Plaintiffs would no longer have access to services that were originally created for their use.
118. Defendant Coughlin failed properly to exercise his discretion and authority in reducing rates and, thereby, diminished adequate state funds for Plaintiffs’ residential staffing services. Defendant Coughlin’s failure to make sufficient funds available to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Title II of the Americans with Disabilities Act, 42 U.S.C. § 12132 and its implementing regulation, 28 C.F.R. § 35.130(d).
119. Defendant Cansler’s failure to adequately supervise the actions of PBH and to make these funds available to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Title II of the Americans with Disabilities Act, 42 U.S.C. § 12132 and its implementing regulation, 28 C.F.R. § 35.130(d).
SECOND CLAIM FOR RELIEF (Section 504 of the Rehabilitation Act) 120. Plaintiffs adopt and restate the allegations set forth in paragraphs 1 – 119 of this complaint. 121. Section 504 of the Rehabilitation Act of 1973 provides, “no otherwise qualified individual with a disability in the United States...shall, solely by reason of her or his disability, be excluded from participation in, be denied the benefits of, or be subjected to
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discrimination under any program or activity receiving Federal financial assistance.” 29 U.S.C. § 794(a).
122. “Individual with a disability” is one who has a disability as defined by the Americans with Disabilities Act. 29 U.S.C. § 705(20)(B), referencing 42 U.S.C. 12102.
123. “Program or activity” includes a department, agency, special purpose district, or other instrumentality of a State or of a local government. 29 U.S.C. § 794(b)(1)(A).
124. “Recipient” of federal financial assistance also includes any public or private agency or other entity to which federal financial assistances is extended directly or through another recipient. 28 C.F.R. § 41.3(d).
125. Regulations implementing Section 504 require a recipient of federal financial assistance to administer its services, programs, and activities in the “most integrated setting appropriate” the needs of qualified individuals with disabilities. 28 C.F.R. § 41.51(d).
126. The State of North Carolina has delegated to LMEs such as PBH the function of administering programs and services to clients in its geographical area in need of Mental Health, Developmental Disabilities, or Substance Abuse services. PBH receives appropriations of money from the North Carolina state legislature, including a substantial portion of federal Medicaid funds and State funds.
127. PBH is a recipient of federal financial assistance under Section 504 and its implementing regulations.
128. Plaintiffs are “qualified person[s] with disabilities” within the meaning of Section 504 because they have physical and/or mental impairments that substantially
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limit one or more major life activities, and they meet the essential eligibility requirements for the Innovations Waiver program. See 29 U.S.C. § 705(9)
129. Defendant Coughlin’s failure to reasonably modify the Innovations Waiver service definitions to allow Plaintiffs to combine residential staffing services to achieve a full twenty-four hours of continuous staffing constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and its implementing regulation, 28 C.F.R. 41.51(d). Without a reasonable accommodation of the rules, policies, and procedures governing the Innovations Waiver program, Plaintiffs will be forcibly isolated and segregated. Plaintiffs are also at risk of forced institutionalization. Plaintiffs are entitled to reside in the most integrated setting appropriate to their needs. Plaintiffs, with reasonable modifications to the Innovations Waiver service definitions that allow them to combine residential staffing services, can successfully maintain their community placement in their own homes, each of which is the most integrated setting appropriate to their needs.
130. Defendant Coughlin has also failed to exercise his discretion in a nondiscriminatory manner by drastically reducing the rate for Supervised Living services, denying Plaintiffs the level of care necessary to make up the staffing shortfall under the Innovations Waiver.
131. PBH’s proposed rate cuts would eliminate the high level of care contemplated by Supervised Living services for consumers served by PBH. Plaintiffs would no longer have access to services that were originally created for their use.
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132. Defendant Coughlin failed to properly exercise his discretion and authority in reducing rates and, thereby, diminished adequate state funds for Plaintiffs’ residential staffing services. Defendant Coughlin’s failure to make sufficient funds available to allow Plaintiffs to remain in their integrated home settings constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and its implementing regulation, 28 C.F.R. 41.51(d).
133. Defendant Cansler’s failure to adequately supervise PBH’s actions and instruct PBH to reasonably modify the Innovations Waiver service definitions to allow Plaintiffs to combine residential staffing services to achieve a full twenty-four hours of continuous staffing constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and its implementing regulation, 28 C.F.R. 41.51(d). Additionally, Defendant Cansler’s failure to adequately supervise PBH’s actions and instruct PBH to exercise its discretion to make available non-Medicaid state funds for the residential staffing services that Plaintiffs require to avoid segregation and institutionalization, and to remain in their integrated home settings that are appropriate to their needs constitutes unlawful discrimination in violation of Section 504 of the Rehabilitation Act, 29 U.S.C. § 794 and its implementing regulation, 28 C.F.R. 41.51(d).
THIRD CLAIM FOR RELIEF (Violation of ADA regulation 28 C.F.R. § 35 requiring effective communications) 134. Plaintiffs adopt and restate the allegations set forth in paragraphs 1 – 133 of this complaint.
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135. 28 C.F.R. § 35.160(a)(1) provides, “ A public entity shall take appropriate steps to ensure that communications with applicants, participants, members of the public, and companions with disabilities are as effective as communications with others.”
136. 28 C.F.R. § 35.160(b)(1) provides “A public entity shall furnish appropriate auxiliary aids and services where necessary to afford individuals with disabilities, including applicants, participants, companions, and members of the public, an equal opportunity to participate in, and enjoy the benefits of, a service, program, or activity of a public entity.”
137. 28 C.F.R. § 35.160 (b)(2) defines:
The type of auxiliary aid or service necessary to ensure effective communication will vary in accordance with the method of communication used by the individual; the nature, length, and complexity of the communication involved; and the context in which the communication is taking place. In determining what types of auxiliary aids and services are necessary, a public entity shall give primary consideration to the requests of individuals with disabilities. In order to be effective, auxiliary aids and services must be provided in accessible formats, in a timely manner, and in such a way as to protect the privacy and independence of the individual with a disability. 138. By their failure to ensure effective, accessible communication in the delivery of behavioral health services and their failure to provide appropriate auxiliary aids and services to Plaintiff Timothy B., Defendants have violated 28 C.F.R. § 35.160.
139. 28 C.F.R. § 35.130 (a) provides “No qualified individual with a disability shall, on the basis of disability, be excluded from participation in or be denied the
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benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any public entity.”
140. 28 C.F.R. § 35.130(b)(1) prohibits states from providing some individuals with disabilities “an opportunity to participate in or benefit from the aid, benefit, or service that is not equal to that afforded others” because of their disability, and requires, inter alia, that mental health services must be equally available to people who are deaf.
141. 28 C.F.R. § 35.130 (b)(1)(iii) states: “A public entity, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of disability… [p]rovide a qualified individual with a disability with an aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others”
142. By their failure to take into account Plaintiff Timothy B.’s deafness in the provision of aids and services, Defendants have provided a “service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others” who are not deaf or hard of hearing.
143. Defendants have excluded Plaintiff Timothy B. from participation and or denied him the benefits of the services, programs, or activities of a public entity, on the basis of his disability, deafness.
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RELIEF REQUESTED WHEREFORE, Plaintiffs respectfully request that the Court grant the following relief:
1. Declare Defendant Coughlin’s failure to offer a reasonable per diem rate for Supervised Living services to be unlawful discrimination in violation of Title II of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act.
2. Declare Defendant Coughlin’s and Defendant Cansler’s failure to make reasonable modifications to the service definitions in the Innovations Waiver to be unlawful discrimination in violation of Title II of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act.
3. Grant preliminary and permanent injunctions enjoining Defendant Coughlin Defendant Cansler and their officers, agents, employees, attorneys, and all persons who are in active concert or participation with him from implementing the proposed rate reduction to Supervised Living Services, and requiring Defendant Coughlin and Defendant Cansler and their officers, agents, employees, attorneys, and all persons who are in active concert or participation with him to continue the provision of coverage of Plaintiffs’ service needs in the least restrictive, most integrated setting.
4. Ensure any benefits and services are delivered to Plaintiff Timothy B. in an effective and accessible manner, so as to afford him the opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others who are not deaf or hard of hearing (i.e., ensure Defendants do not discriminate against Plaintiff Timothy B. based on his disability of deafness).
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5. Ensure effective, accessible communication, including if necessary auxiliary aids

and services, in the delivery of behavioral health services to Plaintiff Timothy B.

6. Waive the requirement for the posting of a bond as security for the entry of

preliminary relief.

7. Award the Plaintiffs the costs of this action and reasonable attorney’s fees

pursuant to 29 U.S.C. § 794a and 42 U.S.C. § 12133 and any other applicable provision

of law.

8. All such other and further relief as the Court deems to be just and equitable.

Dated: June 28, 2013

Respectfully submitted,

/s/ John R. Rittelmeyer John R. Rittelmeyer john.rittelmeyer@disabilityrightsnc.org N.C. State Bar No. 17204
Jennifer L. Bills jennifer.bills@disabilityrightsnc.org N.C. State Bar No. 37467
Andrew B. Strickland andrew.strickland@disabilityrightsnc.org N.C. State Bar No. 40490
DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244 Attorneys for Plaintiffs

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Certificate of Service The undersigned hereby certifies that on June 28th, 2013, I electronically filed the foregoing Plaintiffs’ Third Amended Complaint with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following: Counsel for Defendant Dan Coughlin Stephen D. Martin (steve.martin@nelsonmullins.com) Counsel for Lanier Cansler Lisa Corbett, Esq. (lcorbett@ncdoj.gov)
Respectfully submitted, /s/ John R. Rittelmeyer John R. Rittelmeyer DISABILITY RIGHTS NC 2626 Glenwood Avenue, Suite 550 Raleigh, NC 27608 Phone: (919) 856-2195 Fax: (919) 856-2244 john.rittelmeyer@disabilityrightsnc.org
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 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., et al.,

)

)

Plaintiffs,

)

)

v.

)

)

ALDONA WOS, in her official capacity )

as Secretary of the Department of

)

Health and Human Services, and

)

PAMELA SHIPMAN, in her official

)

capacity as CEO and Area Director

)

of the Piedmont Behavioral Healthcare )

Local Management Entity,

)

)

Defendants.

)

1:10CV123

MEMORANDUM OPINION This case involves the reduction of a state-funded service available to community-based individuals suffering from mental retardation and/or mental illness. Plaintiffs filed the instant action contending that the reduction would either cause their service providers to withdraw from providing the relevant service or to offer the service at a reduced level, thus placing them at risk of institutionalization in violation of Title II of the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12132, and Section 504 of the Rehabilitation Act, 29 U.S.C. § 794. Moreover, Plaintiff Timothy B., who, in addition to mental retardation and mental illness, suffers from deafness, separately claims that Defendants have failed to provide him effective, accessible communication or appropriate auxiliary aids in the delivery of services in violation of 28 C.F.R. § 35.160. Following thirty-nine days of evidence and argument, it is concluded that Plaintiffs have been unable to carry their burden as to each of their claims.

This Memorandum Opinion states the Court’s findings of fact and conclusions of law.1
I. The North Carolina Department of Health and Human Services (“DHHS”) uses both Medicaid and non-Medicaid (i.e., state and local) funds to provide mental health, developmental disability, and substance abuse services to qualifying individuals. See N.C. Gen. Stat. §§ 143B-137.1; 122C-112.1. Pursuant to N.C. Gen. Stat. § 122C-115.4, as well as contracts with the DHHS Division of Mental Health, Developmental Disabilities and Substance Abuse Services (“NCDMH”) (DX-2) and the DHHS Division of Medical Assistance (“NCDMA”) (DX-15), Piedmont Behavioral Healthcare (“PBH”) operates as a local management entity (“LME”) to manage those funds and to plan, develop, implement and monitor mental health and developmental disability services within its catchment area. See N.C. Gen. Stat. § 122C-115.4(b)(7); N.C. Gen. Stat. § 122C-115.4(a); DX-15.2 As an LME, PBH does not provide services
1 Plaintiffs bring their claims against Aldona Wos and Pamela Shipman in their official capacities. See Doc. #1. “[A] suit against a state official in his or her official capacity is not a suit against the official but rather is a suit against the official’s office.” Will v. Michigan Dep’t of State Police, 491 U.S. 58, 71 (1989).
2 During the pendency of this action, PBH became Cardinal Innovations Healthcare Solutions (“Cardinal Innovations”). Because a majority of the documentary and testimonial evidence in this action references PBH as opposed to Cardinal Innovations, for the sake of clarity and consistency, this Memorandum Opinion will refer solely to PBH. At the time Plaintiffs filed this action, PBH’s catchment area consisted of five counties: Cabarrus, Davidson, Rowan, Stanly and Union. As of the most recent information presented to the Court, PBH now serves a catchment area of fifteen counties which, in addition to the previously-named five, includes Alamance, Caswell, Chatham, Franklin, Granville, Halifax, Orange, Person, Vance and Warren counties.
-2-

itself, but rather contracts with a network of providers who administer those
services. DX-2; 10/10/13 Tr. at 8:22-9:3 (Yon).3
At issue in this case is PBH’s decision, effective February 15, 2010, to
reduce the reimbursement rate it pays to its service providers for Supervised
Living services - a state-funded service available to individuals diagnosed with
mental retardation and/or mental illness living in community settings who need
24-hour supervision and for whom care in a more intensive treatment setting
is considered unnecessary on a daily basis (PX-201 at 2). See Doc. #1.4 Prior
to February 2010, PBH reimbursed providers in its network for Supervised
Living services they provided to consumers living in one-, two- or three-person
placements on a tiered basis.5 A one-person placement (that is, a residential
placement in which there is only one consumer) received a variable rate (see
3 An LME is a “local political subdivision of the State.” N.C. Gen. Stat. § 122C-116(a).
4 On the afternoon of the final day of closing arguments, Plaintiffs argued that the Court need not consider solely the Supervised Living reimbursement rate reduction, but all service deficiencies which might place Plaintiffs at significant risk of institutionalization. See 11/14/13 Tr. at 131:2-9. This action, however, was filed and tried on the theory of risk of institutionalization caused specifically by the reduction in the Supervised Living reimbursement rate. Accordingly, the Court declines Plaintiffs’ invitation to expand the theory of liability at such a late stage and focuses only on the effects of the Supervised Living rate reduction. As to the criteria for reception of Supervised Living services, although the relevant documentation, as well as the testimony of Melissa Covert, a manager within PBH, identified the requirements that an Axis I or Axis II diagnosis is present (see PX-201 at 3; 9/19/13 Tr. at 176:6-8 (Covert)), Anna Yon, PBH’s Regional Executive Director, testified that of the 31 recipients of Supervised Living services of whom she was aware within PBH’s network, all were dually diagnosed with a developmental disability and a mental health issue (10/11/13 Tr. at 54:8-19 (Yon)).
5 Providers billed Supervised Living services provided to consumers living in one-, two-, and three-person placements under codes YM811, YM812, and YM813, respectively. (See DX-1). Although supervised living services are also available in four-, five- and six-person placements (billed under service codes “YM814,” “YM815,” and “YM816," respectively (see 10/10/13 Tr. at 58:2-7 (Yon)), those are not at issue in the instant action.
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DX-1), a two-person placement (that is, a residential placement in which the consumer lives with one additional housemate) received a rate of $161.99 per day (see id.), and a three-person placement (that is, a residential placement in which the consumer lives with two additional housemates) received a rate of $116.15 per day (see id.). Effective February 15, 2010, as a result of state budget cuts, PBH reduced the reimbursement rate paid providers for the provision of Supervised Living services in one- and two-person placements to the same $116.15 per day rate it pays for Supervised Living services provided in three-person placements. See id.; 10/10/13 Tr. at 76:15-20 (Yon). Despite this reduced rate, providers remain eligible to receive a higher rate if they submit, and PBH approves, an Enhanced Rate Request. See 9/20/13 Tr. at 4:87:5 (Covert). Approved Enhanced Rate Requests are valid only for a temporary period, but, through review and re-approval, they can extend indefinitely. See id. at 8:20-9:1 (Covert), 28:15-29:4 (Covert).
Plaintiffs, all of whom are dually diagnosed with mental illness and developmental disability, lived in one- or two-person placements prior to the February 15, 2010 reimbursement rate reduction, and the providers serving each of the Plaintiffs received a reimbursement rate greater than $116.15 per day for the provision of Plaintiffs’ Supervised Living services. Originally consisting of only Clinton L. and Timothy B., Plaintiffs filed this action on February 11, 2010, contending that the reduced reimbursement rate for Supervised Living services would force them into congregate placements and that, “[i]f and when Plaintiffs’ placement in a congregate setting are [sic] determined to have failed (as is expected), it is believed that [] Plaintiffs will
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face forced institutionalization.” Doc. #1, ¶¶ 56-58.6 On that same day, Plaintiffs filed a Motion for Temporary Restraining Order and Preliminary Injunction seeking to “prohibit[] Defendants from implementing any reductions to the daily reimbursement rate for Supervised Living services.” Doc. #4 at 1. Following a hearing on that Motion held on February 17, 2010, then-Chief United States District Judge James A. Beaty denied Plaintiffs’ Motion as to Clinton L. without prejudice to refiling on the basis that Clinton’s provider at the time determined that it would continue providing Clinton’s Supervised Living services after the rate reduction. See Doc. #16 at 3-4. With respect to Timothy, Judge Beaty set a supplemental hearing on April 16, 2010 - the date up to which PBH agreed to maintain Timothy’s pre-rate reduction rates. See id. at 4-6.
On April 7, 2010, Plaintiffs - by this time consisting of Clinton L., Timothy B., Vernon W., and Steven C.7 - filed a Renewed Motion for Preliminary Injunction which again sought to “prohibit[] Defendants from implementing any current or planned reductions to the daily reimbursement rate for Supervised Living services . . . to preserve Plaintiffs’ level of care and community placements in their own homes.” Doc. #22 at 1-2. Judge Beaty held a hearing on Plaintiffs’ Renewed Motion on April 14, 2010 (see Docket Entry dated April
6 Plaintiffs did not present Timothy B.’s separate accommodation claim until they filed their Third Amended Complaint on June 28, 2013. See Doc. #139.
7 Plaintiffs added Vernon W. and Steven C. by way of Plaintiffs’ First Amended Complaint dated March 30, 2010. See Doc. #20. Plaintiffs then sought to add Jason A. and Diane D. by way of a Motion to Intervene filed on April 7, 2010. See Docket Entry 21. Judge Beaty did not grant Plaintiffs’ Motion to Intervene until May 19, 2010. See Doc. #38. Accordingly, although Plaintiffs’ Renewed Motion for Preliminary Injunction indicates that Jason A. and Diane D. are parties, they had not yet been formally added to this action.
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14, 2010), and, on May 12, 2010, denied the Renewed Motion to the extent Plaintiffs sought to prohibit implementation of the reimbursement rate reduction, but granted it “to the extent that Plaintiffs request that [Defendants] be required to ensure that Plaintiffs are provided with community-based treatment as an alternative to institutionalization during the pendency of this suit.” Doc. #36 at 12-13.8 Accordingly, Plaintiffs have lived in community settings under the effects of the reduced Supervised Living reimbursement rate during the pendency of this action.9
II. Plaintiffs’ claims arise under Title II of the ADA and Section 504 of the Rehabilitation Act. See Doc. #139, ¶¶ 101-43. Title II of the ADA provides that “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by such entity.” 42 U.S.C. § 12132. Similarly, Section 504 of the Rehabilitation Act provides: “No otherwise qualified individual with a disability in the United States . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance.” 29 U.S.C. § 794. These provisions impose the same requirements on Defendants. See Pashby v. Delia, 709 F.3d 307, 321 (4th Cir. 2013) (“We consider [the
8 In subsequently granting Plaintiffs’ Motion to Intervene, Judge Beaty specifically noted that the previously-entered preliminary injunction applied to Jason A. and Diane D. as well. See Doc. #38 at 5.
9 As expounded on in Section III, the reduced Supervised Living reimbursement rate took effect at different times depending on the unique situations faced by Plaintiffs, and, in some cases, has been restored to a rate equal to, or exceeding, the reimbursement rates prior to February 2010.
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plaintiffs’] Title II and section 504 claims together because these provisions impose the same integration requirements.”) (citing Henrietta D. v. Bloomberg, 331 F.3d 261, 272 (2d Cir. 2003)); Birmingham v. Omaha Sch. Dist., 220 F.3d 850, 856 (8th Cir. 2000) (“We have held that the enforcement, remedies, and rights are the same under both Title II of the ADA and § 504 of the Rehabilitation Act.”).
In what is commonly referred to as the “integration mandate,” regulations implementing Title II of the ADA require that a public entity administer its services in “the most integrated setting appropriate” to meet the needs of qualified individuals with disabilities. 28 C.F.R. § 35.130(d). Plaintiffs’ claims regarding the February 2010 rate reduction to the Supervised Living reimbursement rate allege a violation of the integration mandate as addressed in Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999). In Olmstead, the United States Supreme Court held that the unjustified institutionalization of individuals with disabilities is a form of discrimination under the ADA. Id. at 597. Although the plaintiffs in Olmstead resided in institutions at the time of filing suit and complained of the state’s failure to provide services that would enable them to enter into the community, institutional placement is not a prerequisite to pursuing an Olmstead claim. See Fisher v. Oklahoma Health Care Auth., 335 F.3d 1175, 1181 (10th Cir. 2003) (“[N]othing in the Olmstead decision supports a conclusion that institutionalization is a prerequisite to enforcement of the ADA’s integration requirements.”); see also Pashby, 709 F.3d at 322 (citing same). Rather, as in this case, community-based individuals may pursue a claim on the theory that a public entity’s reduction or elimination of a necessary service places them at risk of institutionalization. See, e.g.,
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Pashby, 709 F.3d at 322; Marlo M. ex. rel. Parris v. Cansler, 679 F. Supp. 2d 635, 637-38 (E.D.N.C. 2010).
At a basic level, this analysis is complicated by the need to consider what is an “institution” or an “institutionalization.”10 “Nowhere in Title II, its implementing regulations, or in Olmstead is there a definition of what constitutes an ‘institution’ or ‘community-based’ setting.” Disability Advocates, Inc. v. Paterson, 598 F. Supp. 2d 289, 320 (E.D.N.Y. 2009). “While it is clear that, ‘where appropriate for the patient, both the ADA and the [Rehabilitation Act] favor integrated, community-based treatment over institutionalization,’ Olmstead and lower courts considering Olmstead claims have typically confronted situations in which the ‘institutional’ or ‘community-based’ nature of particular settings was not in dispute.” Id. at 320-21 (quoting Frederick L. v. Department of Pub. Welfare, 364 F.3d 487, 491-92 (3d Cir. 2004)).
Here, however, whether hospitals, crisis respite centers, intermediate care facilities for the mentally retarded (“ICFMRs”), prisons, or large congregate facilities qualify as “institutions,” and whether admissions/incarcerations of various lengths and for various reasons in those facilities qualify as “institutionalizations,” is relevant to the inquiry, and it is necessary to give additional substance to those terms. In examining various descriptions of “institutions” in this context, there is some consistency as to the defining
10 The Parties agree that the large psychiatric hospitals and developmental centers maintained by the state of North Carolina qualify as institutions. See 11/13/13 Tr. at 6:14-7:16; 11/13/13 Tr. at 50:24-51:3; see also N.C. Gen. Stat. § 122C-181. The Parties also appear in agreement that the one-, two-, and three-person community placements in which Plaintiffs currently reside or have resided do not qualify as institutions. See 11/13/13 Tr. at 51:4-13. There is, however, a vast gap between those opposite ends of the spectrum.
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qualities. Plaintiffs’ expert, Dr. James Bodfish,11 testified to his view of
institutions as follows:
Those would be congregate settings, so very large living settings. Living with individuals who you don’t choose to live with. Living primarily, if not exclusively within a disabled community as opposed to a non-disabled community.
Institutional settings [are] also associated with diminished opportunity to be in greater proximity to have interactions with one’s family.
9/24/13 Tr. at 187:14-22 (Dr. Bodfish). At least one district court decision
analyzing qualities representative of an institution similarly focused on the size,
isolation, segregation and lack of choice common to those facilities. See
Disability Advocates, Inc. v. Paterson, 653 F. Supp. 2d 184, 199 (E.D.N.Y.
2009) (“The court uses the term ‘institution’ as defined by . . . one of [the
plaintiffs’] experts, who explained that: ‘[An] [i]nstitution, in my mind, and in
my experience, and in the literature, is a segregated setting for a large number
of people that through its restrictive practices and its controls and
individualization and independence limits a person’s ability to interact with other
people who do not have a similar disability.”). Moreover, this view comports
with proposed rules offered by the Centers for Medicare & Medicaid Services
(“CMS”):
We note that home and community-based settings do not include nursing facilities, institutions for mental diseases, intermediate care facilities for the mentally retarded, hospitals, or any other locations that have the qualities of an institutional setting as determined by the Secretary. In considering whether a setting has the qualities of an institutional setting, we will exercise a rebuttable presumption that a setting is not a home and
11 Plaintiffs tendered, and the Court qualified, Dr. Bodfish as an expert generally in the care and treatment of individuals dually diagnosed with intellectual disabilities and mental illness and, more specifically, an expert in services and supports necessary to ensure successful community integration and to avoid unnecessary institutionalization for this population. See 9/24/13 Tr. at 157:13-19; 185:6-12.
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community-based setting, and will engage in heightened scrutiny, for any setting that is located in a building that is also a publicly or privately operated facility that provides inpatient institutional treatment, or in a building on the grounds of, or immediately adjacent to, a public institution, or disability specific housing complex. . . . Other characteristics that could cause CMS to consider a setting as “institutional” or having the qualities of an institution would include, but not be limited to, settings which are isolated from the larger community, do not allow individuals to choose whether or with whom they share a room, limit individuals’ freedom of choice on daily living experiences such as meals, visitors, and activities, or limit individuals’ opportunities to pursue community activities.
Medicaid Program; State Plan Home and Community-Based Services, 5-Year
Period for Waivers, Provider Payment Reassignment, and Setting Requirements
for Community First Choice, 77 Fed. Reg. 26362-01, 26379 (proposed May 3,
2012).
Furthermore, in examining Olmstead and its progeny, it becomes clear
that, although the term “institution” may commonly refer to a large number of
general facilities in normal parlance, the “institutions” that are relevant to the
instant action are facilities for the treatment of mental health and/or
developmental disabilities. Indeed, as noted, Plaintiffs’ claims spawn from the
integration mandate of Title II of the ADA and its requirement that a public
entity “administer services, programs, and activities in the most integrated
setting appropriate to the needs of qualified individuals with disabilities.” 28
C.F.R. § 35.130(d) (emphasis added). At the heart of any such a claim is the
argument that an individual is at “significant risk” of entering an “institution”
because a lack of services in the community makes the “institution” the only
facility sufficiently able to maintain the individual’s health and safety. To hold,
as Plaintiffs urge, that certain facilities not focused on providing mental health
or developmental disability treatment, such as prisons, qualify as an
“institution” for purposes of the instant claims loses sight of the regulatory
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language and significant precedent that focus on where services are available.12
Accordingly, for the purposes of applying the relevant standard in this context,
an “institution” is a large, congregate facility for the treatment of mental health
and/or developmental disabilities that exhibits qualities such as isolation,
segregation and lack of personal choice and which is exemplified by the large,
congregate facilities run by the state of North Carolina as defined in statutes
and also by intermediate care facilities for the mentally retarded and hospitals.
However, not every admission to such a facility can be considered an
“institutionalization.” The length of admission and the reasons for the
institutional placement must be considered. As an initial matter, it would seem
clear that a hospital admission for a medical necessity unrelated to the mental
health or developmental disabilities suffered by Plaintiffs is irrelevant to
Plaintiffs’ ADA and Rehabilitation Act claims. Similarly, a future risk of
admission to a nursing facility for unrelated medical conditions would not weigh
on Plaintiffs’ claims. As to length of admission, as Defendants’ expert, Dr. Bonny Forrest,13
noted in her Expert Report, there is a “need to separate out sporadic or brief
12 Unlike the mental health or developmental disability institutions previously described, provision of services in a prison is incidental to an individual’s otherwise being there for a criminal violation. Plaintiffs’ argument that the state’s provision of services is so deficient that it will likely lead to the incarceration of a person receiving such services is more in line with a negligence-based theory of liability and is not the subject of this action. Indeed, over the course of trial, Plaintiffs’ evidence and arguments often blurred the lines between the ADA and Rehabilitation Act claims based on the rate reduction that were presented in the Complaint and that are at issue in this case with complaints regarding general inadequacy of services that would be more in line with a negligence-based theory of liability.
13 Defendants tendered, and the Court qualified, Dr. Forrest as an expert in psychology, neuropsychology and the assessment and treatment and care of dually diagnosed individuals. See 10/28/13 Tr. at 44:15-18; 74:23-75:22.
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periods of hospitalization or institutionalization, which are not unusual for this population, from situations that create the significant risk of long-term institutionalization.” DX-33 at 14. In her Report, Dr. Forrest went on to describe the relevant issue as whether Plaintiffs are at risk “of being institutionalized long-term,” id., and during the course of trial, she testified to a definition of institutionalization that involved placement in a facility without a plan to return to the community (see 10/30/13 Tr. at 157:15-17 (Dr. Forrest)). In a similar vein, Plaintiffs’ expert, Dr. Bodfish, testified:
In my opinion, risk of institutionalization refers to the risk that an individual, against their will, will be placed out of a community integrated setting, and will be living and receiving services in an institution or congregate setting. 9/24/13 Tr. at 191:4-8 (Dr. Bodfish) (emphasis added); see also 10/4/13 Tr. at 53:25-54:2 (Dr. Bodfish) (“In terms of my my task, my final task in terms of risk of institutionalization, I would see that as a risk for a longer out of the home placement”). Moreover, in “Definitions relating to institutional status” (albeit in a section of the Code of Federal Regulations addressing “Federal Financial Participation”) CMS has defined “[i]n an institution” as referring “to an individual who is admitted to live there and receive treatment or services there that are appropriate to his requirements.” 42 C.F.R. § 435.1010 (emphasis added). Accordingly, the institutionalization at issue would focus on the long-term placement of an individual in an institution for the treatment of his/her mental health or developmental disability. Simply demonstrating any risk of institutionalization is insufficient, however. The Department of Justice (“DOJ”) - “the agency directed by Congress to issue regulations implementing Title II,” Olmstead, 527 U.S. at 597-98 - determined that “the ADA and the Olmstead decision extend to
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persons at serious risk of institutionalization or segregation,” U.S. Dep’t of Justice, Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C., http://www.ada.gov/olmstead/q&a_olmstead.htm (last updated June 22, 2011) (emphasis added); see also Olmstead, 527 U.S. at 597-98 (“Because the [DOJ] is the agency directed by Congress to issue regulations implementing Title II, its views warrant respect.” (citation omitted)). Courts addressing similar claims have used differing terminology to describe the level of risk of institutionalization necessary for a plaintiff to succeed on such a claim. See, e.g., M.R. v. Dreyfus, 697 F.3d 706, 734 (9th Cir. 2012) (“We conclude that Plaintiffs have demonstrated a likelihood of irreparable injury because they have shown that reduced access to personal care services will place them at serious risk of institutionalization.”) (emphasis added); Marlo M., 679 F. Supp. 2d at 638 (“It appears that if forced from their present settings, both Plaintiffs face a substantial risk of institutionalization.”) (emphasis added); V.L. v. Wagner, 669 F. Supp. 2d 1106, 1119 (N.D. Cal. 2009) (“Plaintiffs have submitted substantial evidence . . . showing that class members face a severe risk of institutionalization . . . .”) (emphasis added). Recently, the United States Court of Appeals for the Fourth Circuit weighed in on the matter, when, in reviewing the granting of a preliminary injunction on similar claims, it held that, by demonstrating a “significant risk of institutionalization,” the plaintiffs in that case had shown a likelihood of success on the merits. Pashby, 709 F.3d at 322 (emphasis added).
Given its applicability here, the Pashby decision warrants further attention. As an initial matter, despite the Pashby court’s ultimate indication that the plaintiffs exhibited a likelihood of success on the merits through
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declarations demonstrating a “significant risk” of institutionalization, the Pashby decision began its discussion of the law with the statement that it was “swayed by the DOJ’s determination that the ADA and the Olmstead decision extend to persons at serious risk of institutionalization or segregation and are not limited to individuals currently in institutional or other segregated settings.” Pashby, 709 F.3d at 322 (emphasis added) (internal quotation marks and citation omitted). There is no subsequent suggestion in the Pashby decision that the Fourth Circuit intended to substantively alter the standard espoused by the DOJ by replacing “serious” with “significant,” and, accordingly, authority applying either terminology appears relevant to the inquiry necessary here. Moreover, in Pashby, with the exception of one cited declaration stating that the plaintiff “‘will have no choice but to enter a facility,’” the declarations that the Fourth Circuit held demonstrated a “significant risk of institutionalization” were equivocal in that they stated the plaintiffs “‘may,’” “‘might,’” “‘probably’ would,” or “were ‘likely’ to” enter an institution due to the termination of their in-home personal care services. Pashby, 709 F.3d at 322. The Pashby court, however, involved a class action and sat in a significantly different procedural posture than the instant matter in that it applied an abuse of discretion standard to the district court’s decision on appeal. See id. at 319. Accordingly, it would read too much into the Fourth Circuit’s holding to determine that Plaintiffs in the instant matter can demonstrate a “significant risk of institutionalization” by showing only that they “may” or “might,” as opposed to “probably would” or “are likely to,” enter an institution due to the reduction in the reimbursement rate that PBH pays for Supervised Living services.
The DOJ has provided some guidance on the applicable standard in stating that the risk need not be “imminent.” See U.S. Dep’t of Justice,
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Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C., http://www.ada.gov./olmstead/q&a_olmstead.htm (last updated June 22, 2011). “For example, a plaintiff could show sufficient risk of institutionalization to make out an Olmstead violation if a public entity’s failure to provide community services or its cut to such services will likely cause a decline in health, safety, or welfare that would lead to the individual’s eventual placement in an institution.” Id. There is, however, no simple formula to determine whether an individual is at “significant risk” of institutionalization. Indeed, the necessary inquiry is fact-intensive and is affected by numerous variables.
As it relates to the instant matter, the Parties’ experts, whose qualifications leave no doubt as to their abilities in this field, set forth their own frameworks for assessing risk of institutionalization and how to determine whether that risk is significant. Defendants’ expert, Dr. Forrest, opined that removal from a community setting is indicated where the individual poses an imminent danger to self or others, outpatient support has been unsuccessful in halting a psychiatric decompensation, or psychiatric issues or maladaptive behaviors have progressed to the point where that individual can no longer function in the community (see DX-33 at 13), and defined “significant risk of institutionalization” as a situation where, because of those factors, “facility placement is being (or is very likely to be) sought” (id.). Plaintiffs’ expert, Dr. Bodfish, testified to a three-part test for determining risk of institutionalization: (1) “determining clinical characteristics of the individuals being evaluated” including “looking for the presence or absence of severe and persistent mental illness . . . [,] severe behavioral problems, severe medical conditions[, and] . . . the presence of psychotropic medications, in particular, complicated
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prescription,” 9/24/13 Tr. at 191:12-19 (Dr. Bodfish); (2) “evaluating the plan of care and the adequacy of the plan of care for . . . managing or treating those clinical conditions,” id. at 192:2-4 (Dr. Bodfish); and (3) “looking for evidence that there is a mismatch, that the plan of care is not adequate[, such as] . . . [p]rotracted episodes of behavioral problems or psychiatric symptoms[,] [i]njuries to the individual or to the others around them[,] [n]eed to be placed in a hospitalization[,] [i]nvolvement with the police[, and] [s]taff changes or staff turnover for more difficult clients associated with that and then changes in the residence,” id. at 193:3-12 (Dr. Bodfish). Thus, under this framework, a Plaintiff would be at risk of institutionalization when the plan of care cannot adequately manage his or her behaviors.
There is some merit to both experts’ opinions as each addresses a slightly different aspect of the relevant inquiry. That is, in order to determine whether any of the six individual Plaintiffs here are at significant risk of institutionalization, the analysis requires, similar to what Dr. Bodfish sets out, examining the clinical characteristics of Plaintiffs and weighing those against the provider’s ability to manage those characteristics. Any opinion as to this aspect is informed from the past three and a half years of biographical data presented during trial. In examining this information as a whole, of particular relevance are, as Dr. Forrest indicated, whether any of the Plaintiffs pose a danger to self or others, whether outpatient support has been unsuccessful in halting a psychiatric decompensation, or whether psychiatric issues or maladaptive behaviors have progressed to the point where that Plaintiff can no longer function in the community. Finally, in granting the DOJ the respect commensurate with its role as the agency issuing the regulations implementing Title II, the ultimate inquiry is whether the reduction in the Supervised Living
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reimbursement rate has caused or “will likely cause a decline in health, safety,
or welfare that would lead to the individual’s eventual placement in an
institution.” U.S. Dep’t of Justice, Statement of the Department of Justice on
Enforcement of the Integration Mandate of Title II of the Americans with
Disabilities Act and Olmstead v. L.C., http://www.ada.gov./olmstead/
q&a_olmstead.htm (last updated June 22, 2011).
Finally, for Plaintiffs to succeed on their claims, any significant risk of
institutionalization must be causally related to PBH’s Supervised Living reimbursement rate reduction.14 In giving some structure to the causation
analysis, at least one court has applied tort concepts of proximate causation to
the ADA and the Rehabilitation Act. See Henrietta D. v. Bloomberg, 331 F.3d
261, 278-79 (2d Cir. 2003). Although the Henrietta D. decision focused on
explaining multiple causation, see id. at 279 n.8, because the instant action
also addresses potential issues of multiple causation, as well as attributions of
harm to only tangentially related events, application of proximate cause
concepts is well-suited to the instant analysis as well. Accordingly, the
causation inquiry will focus on whether PBH’s reduction to the Supervised
14 Generally speaking, “one of the only differences between claims under the ADA and the Rehabilitation Act is their standards for causation.” Lamberson v. Pennsylvania, 561 F. App’x 201, 207 (3d Cir. 2014); see also Coursey v. University of Md. E. Shore, ___ F. App’x ___, ___, 2014 WL 2937084, at *6 (4th Cir. July 1, 2014). “‘The [Rehabilitation Act] allows a plaintiff to recover if he or she were deprived of an opportunity to participate in a program solely on the basis of disability, while the ADA covers discrimination on the basis of disability, even if there is another cause as well.’” Lamberson, 561 F. App’x at 207 (quoting C.G. v. Pennsylvania Dep’t of Educ., 734 F.3d 229, 235-46 (3d Cir. 2013)). This, however, is not the analysis of causation at issue here. Given the nature of the claims, the question is rather whether the reimbursement rate reduction will likely cause the harm alleged, as opposed to whether the reimbursement rate reduction was imposed because of Plaintiffs’ disabilities. Accordingly, the application of traditional concepts of causation is appropriate.
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Living service reimbursement rate is “substantially related” to Plaintiffs’ significant risk of institutionalization, or “too remote or insignificant to the harm to be a legal basis for liability.” Id. (internal quotation marks omitted). In other words, Plaintiffs cannot succeed on their claims merely by demonstrating that the Supervised Living reimbursement rate reduction led to some remote change unrelated to the service or reimbursement rate, but rather must demonstrate that a reduction in services itself led to the decline in Plaintiffs’ health, safety, or welfare that would lead to Plaintiffs’ eventual placement in an institution.
This framework will guide the analysis of each of the six Plaintiff’s risk of institutionalization.
III. A. Plaintiff Diane D. represents “one of [PBH’s] most difficult consumers by history.” PX-67 at PBH010526. Her diagnoses include unspecified psychotic disorder, mild mental retardation, intermittent explosive disorder, scoliosis and Cohen syndrome. DX-348 at PBH011614.15 Prior to the February 2010 rate reduction, Diane lived in a single-person placement in Davidson County operated by Monarch, Inc. (“Monarch”) where she received 24-hour supervision consisting of a 2:1 staff to consumer ratio during the day and a 1:1 ratio of awake staffing at night. See PX-60 at PBH008114. At that time, PBH paid
15 Certain documents classify Diane’s mental health diagnosis as “schizoaffective disorder.” See., e.g., PX-68 at PBH008076. Per the testimony of Ms. Covert, Diane’s symptoms do not fall neatly into any category, making Diane difficult to classify. See 9/20/13 Tr. at 61:5-15 (Covert). With respect to Cohen syndrome, the National Institute of Health’s website defines that condition as “an inherited disorder that affects many parts of the body and is characterized by developmental delay, intellectual disability, small head size (microcephaly), and weak muscle tone.” Genetics Home Reference, Cohen syndrome, Nat’l Inst. of Health (January 2008), http://ghr.nlm.nih.gov/condition/cohen-syndrome (last visited Aug. 18, 2014).
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Monarch a reimbursement rate of $250.00 per day for the provision of Diane’s Supervised Living services. Id.
The February 2010 rate reduction remained in place for only a short period for Diane. In April 2010, the reimbursement rate PBH paid for Supervised Living services provided to Diane returned to the pre-rate reduction rate of $250.00 per day. See DX-292 at PBH009947. Moreover, an Enhanced Rate Request in June 2011 resulted in Diane’s provider receiving a rate of $391.15 per day from PBH for providing Diane’s Supervised Living services. See PX-37; PX-38; PX-63; see also DX-292 at PBH009958. Regardless, the direct impact of the February 2010 rate reduction was that it forced Diane from her single-person placement with a 2:1 staff to consumer ratio into a threeperson congregate placement in May 2010 with a 2:3 staff to consumer ratio. PX-60 at PBH008114.
Since her move to a three-person placement, Diane has experienced incidents of physical and verbal aggression, medication refusals, police involvement and placements outside of the home, including a particularly tumultuous period in 2011. As to that 2011 period, in January 2011, one of Diane’s housemates pressed charges against Diane after Diane, without warning, punched her in the arms and legs. DX-171 at PBH002138, PBH002140; DX-62. As a result, Diane spent a brief period in jail for simple assault. See 10/8/13 Tr. at 72:20-23; 10/31/13 Tr. at 26:12-17. On March 9, 2011, Diane’s staff referred Diane to Frye Hospital for increased psychotic symptoms (DX-278), and Diane remained at Frye Hospital until April 5, 2011 (DX-277 at PBH008001). Immediately upon her return from Frye Hospital, Diane resumed “threatening behaviors toward staff and her housemate, verbal aggression, and physical aggression where she was pounding the walls, etc.”
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DX-277 at PBH008001. On April 6, 2011, Diane’s direct care staff brought Diane to NC START crisis respite - a community-based placement that provides short term emergency respite stay to individuals in crisis situations in an effort to help those individuals avoid institutionalization (see 10/4/13 Tr. at 58:1559:2 (Dr. Bodfish)). The following morning, however, NC START informed Diane’s direct care staff that they were unable to handle Diane’s behaviors and asked that staff return to pick her up. DX-277 at PBH008001. During this same period, staff reflected that “it is very difficult for them to manage Diane.” Id. On June 29, 2011, Diane’s treatment team requested a reimbursement rate of $391.15 per day for providing Diane’s supervised living services (see PX-63; PX-64), noting that, “without additional supports and funding[,] Diane would not be able to maintain living in her community” (PX-64 at PBH008110). Shortly thereafter, in July 2011, Monarch’s qualified professional for Diane’s placement, who is the supervisor for Diane’s direct care staff, sent emails to her own supervisors and to healthcare professionals with Monarch seeking assistance with Diane’s treatment and noting that she “is at a total loss” as to how to handle Diane’s behaviors and that they are “facing health issues on top of safety issues for Diane as well as her housemates.” DX-480 at DDM00736.
Although Diane’s behaviors subsequently dissipated to some extent, they did not cease after 2011. For example, on January 22, 2012, Diane’s staff took her to Lexington Medical Center for behavioral issues including “unusual behavior and suicidal thoughts.” DX-84 at DDOT00003. And, even during the course of trial, Diane exhibited behavioral concerns warranting renewed attention. That is, in the latter half of October 2013, Diane’s treatment team noted that Diane “started to decompensate.” DX-919 at PBH012266. In addition to “falling and refusing to get up from the floor more frequently,”
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“refus[ing] to go to her day activity,” and “demonstrat[ing] headbanging” (id.), the Executive Director of Diane’s then-current service provider, Elite Care Services, Inc. (“Elite Care”), observed Diane eating her own feces (id.; 11/5/13 Tr. at 104:6-12 (Bennet)).
Although there is a gap in documented behavioral incidents from late 2012 to mid-2013, Diane’s longest placement outside of her home in the postrate reduction period occurred during this time. Specifically, on November 21, 2012, after several attempts to stand from a seated position at the edge of her bed, Diane fell onto the floor of her community placement. PX-48 at DDM07537. She remained on the floor for nearly 24 hours before her direct care staff sought emergency medical assistance and hospitalization. See id. at DDM07537 - DDM07539. Subsequent x-rays taken at Lexington Medical Center revealed severe end-stage osteoarthritis of Diane’s knees. DX-90 at DDOT00058. According to the Lexington Medical Center Discharge Summary, after observing that Diane was unable to stand even briefly without severe pain, “it was determined [Diane] would no longer be able to reside in her group home and would benefit with being placed in a skilled nursing facility.” Id. Accordingly, Diane went to “UPAC” for rehabilitation.16
Diane’s subsequent departure from UPAC was affected by the recommendations of her physician, which also resulted in a change in providers. On January 11, 2013, Diane’s treating physician at UPAC, Dr. Thomas-Slade, issued a form referred to as an “FL-2" recommending continued skilled nursing
16 Although UPAC was identified as a skilled nursing facility, the full name of UPAC was not clarified during trial. However, certain of the documents in evidence refer to UPAC as “Unihealth PAC in High Point,” see, e.g., PX-59 at PBH012062, and, accordingly, it would appear that UPAC refers to UniHealth Post-Acute Care - High Point.
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facility level of care for Diane. See PX-52 at PBH012136. In an apparent response to that recommendation, on January 21, 2013, Diane’s then-current provider, Monarch, issued a letter to Diane’s guardian noting that it “does not provide nursing level of care and therefore must issue notification of immediate discharge from residential services.” PX-49 at DDM07509. That letter continued: “It is most important for Diane to live somewhere that can accommodate all of her needs and ensure her health and safety at the level of care determined in her assessments.” Id. A subsequent FL-2, dated January 29, 2013, recommended “Other: Custodial Care” for Diane (see PX-52 at PBH012137) - a level of care not recognized by PBH (see 9/24/13 Tr. at 62:1463:22 (Jennings); 110:6-18 (Jennings)). Three more FL-2s followed - one dated February 25, 2013, failing to provide a recommendation for Diane’s care (see PX-52 at PBH012138), another dated February 25, 2013, recommending “Assisted Living” (see PX-52 at PBH012139), and one dated May 3, 2013, again recommending “Assisted Living” (see PX-51 at PBH012135) - before Dr. Thomas-Slade issued an FL-2 on May 22, 2013, recommending that Diane return to a group home (see PX-53 at PBH012140). On May 27, 2013, Diane moved into a three-person group home operated by Elite Care. See PX-59 at PBH012062. Almost immediately, Elite Care indicated that it had underestimated Diane’s needs (see PX-59 at PBH012064) and, shortly thereafter, moved Diane to another home it operated where, as of the most recent information presented during trial, Diane currently resides with one male and one female housemate (see 11/5/13 Tr. at 140:13-142:4 (Bennett); 101:7102:6 (Bennett)).
Although Diane’s post-rate reduction behaviors are concerning, they are similar to Diane’s pre-February 2010 behaviors. An April 10, 2008, note from
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Daymark Recovery Services (“Daymark”), a provider of medical and professional mental health treatment, indicates that “[s]taff encouraged [Diane] to open up and tell [her psychiatrist] that she has been having more problems with her explosive anger behavior.” DX-894 at DDM07185. It describes “an episode where [Diane] locked herself in the car and the police had to be called. When she got home, she started throwing things, turned over the entertainment center, wiped things off the counter and threw her hamster across the room.” Id. On June 10, 2008, a follow-up note from Daymark noted that Diane “ha[d] been involuntarily hospitalized twice” in the previous two months. Id. at DDM07183. It elaborates: “Apparently, she was not taking her medications and she was having escalating aggressive behavior, destroying things and allegedly saying that voices were telling her to do these things.” Id. Diane spent June 24, 2008 to August 18, 2008, September 30, 2008 to October 8, 2008, and October 11, 2008 to December 9, 2008, in jail for separate episodes of assault and communicating threats. See DX-471; DX-472; DX-473. A psychological evaluation conducted on January 28, 2009, noted Diane’s “extreme behavioral issues, which include: physical aggression; property destruction/tantrumming; self-injurious behavior; and[] elopement.” DX-270 at PBH007740. Of note, that same assessment concluded with the following recommendation:
Consider group home placement with people her own age and functioning level. [Diane] is very isolated in her own home, particularly when she refuses community outings. Having a few other peers in your home can provide opportunities for social interaction, friendships and immediate feedback from someone your own age and not staff. Peers can be positive role models for [Diane] in terms of getting up, going to work, having fun and appropriate behavior in general. The positives outweigh the negatives at this time. Her current isolation does not appear to be helpful in addressing many of her needs.
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Id. at PBH007748. The Parties’ experts - each of whom conducted an initial Report in 2011,
a Supplemental Report in 2013, and, specifically with respect to Diane, testified regarding a final opinion on risk after examining behaviors arising during the course of trial - came to opposite conclusions with respect to Diane’s risk of institutionalization. Defendants’ expert, Dr. Forrest, concluded at the time of her initial Report, dated October 30, 2011, that Diane was not at risk of institutionalization (see DX-33 at 40), and, at the time of her Supplemental Report, dated May 30, 2013, that “[t]he February 2010 rate reduction has not caused a reduction in services that places Diane at a greater risk of institutionalization than she was prior to the rate reduction” (see DX-34 at 11). In contrast, Plaintiffs’ expert, Dr. Bodfish, concluded in his September 30, 2011 initial Report, that Diane was “currently at significant risk for institutionalization,” that her “current situation is immanently [sic] dangerous for her and for those around her,” and that “her current decompensation and increased risk for institutionalization is most likely causally related to the recent changes in her living situation.” PX-184 at D5-D6.17 At the time of his Supplemental Report, dated July 17, 2013, Dr. Bodfish further concluded that “Diane’s risk of institutionalization ha[d] significantly increased relative to the time period of [his] last evaluation of her.” PX-185 at D1. Finally, at trial, after
17 Because Dr. Bodfish’s Reports were unnumbered, during the course of trial, the Court adopted a numbering system by which the section of the relevant Report is indicated by the appropriate Plaintiff’s initial, followed by the specific page number. Thus, for example, “PX-184 at D6" refers to page 6 of Dr. Bodfish’s section on Diane as found in Plaintiffs’ Exhibit No. 184. Where multiple Plaintiffs are addressed on the same page, that is reflected accordingly. For example, in Dr. Bodfish’s Supplemental Report, where the second page of Clinton’s section is also the first page of the section addressing Diane, that page is “C2 D1.”
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review of Diane’s most recent behaviors, Dr. Bodfish testified that he didn’t
think Diane’s risk of institutionalization “could be any higher.” 11/8/13 Tr. at
23:20-21 (Dr. Bodfish).
While the Parties’ experts agreed that a comparison of a simple count of
behaviors pre- and post-reimbursement rate reduction would be both inadequate
and likely infeasible (see 10/4/13 Tr. at 78:9-79:8 (Dr. Bodfish); 10/28/13 Tr.
at 143:7-10, 218:4-6 (Dr. Forrest)), they settled on differing methods to
develop, or at least to support, their opinions of risk of institutionalization. In
conducting his initial evaluation, Dr. Bodfish observed and interacted with each
of the Plaintiffs on one occasion, where available, spoke with their guardian
and/or a care provider, and, finally, reviewed the documentation provided to him
by Plaintiffs’ counsel. See 9/24/13 Tr. at 199:20-200:13 (Dr. Bodfish). For his
supplemental review, Dr. Bodfish, per the resolution of a discovery dispute
between the Parties, relied on a review of documents.18 With this information,
18 During the initial course of discovery, both experts were afforded the opportunity to evaluate and interview Plaintiffs and their providers in person in addition to reviewing Plaintiffs’ healthcare records. See Doc. #111 at 2. Those in-person evaluations and discussions occurred in fall 2011. In early 2013, Defendants sought consent from Plaintiffs to conduct further in-person discussions with Plaintiffs’ healthcare providers on the grounds that “there is a significant difference between what can be gleaned from a review of written clinical records versus also having direct conversations with healthcare providers.” Doc. #105, ¶ 13. Plaintiffs declined that consent. See id., ¶ 11. On April 29, 2013, Defendants filed a Motion to Compel, moving the Court to allow Dr. Forrest to be able to speak with Plaintiffs’ providers in order to adequately update her expert opinions. See Doc. #105. Plaintiffs opposed that Motion on the grounds that “(a) the proposed site visits . . . could take weeks and require dozens of attorney hours and hundred of dollars in travel expenses; (b) if Dr. Forrest were to substantially revise her report or opinions in light of data recently obtained, Plaintiffs’ expert would need an opportunity to do likewise; and (c) reopening expert discovery would likely require a second deposition of each expert witness and lead to a delay of trial.” See Doc. #106 at 3. Defendants’ Motion was denied, see Docket Entry dated 5/10/2013, Doc. #111, restricting both Parties’ experts to a ‘paper review’ of Plaintiffs’ records with which to supplement their initial Reports. Accordingly, neither expert has
(continued...)
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Dr. Bodfish simply relayed his impression of each of the Plaintiff’s risk of institutionalization and the cause of that risk.
This approach, however, raised some concerns. Dr. Bodfish’s apparent lack of knowledge of the underlying facts, as evidenced by his testimony, raised serious questions regarding the weight his opinions warrant, especially to the extent they address causation. For example, where Dr. Bodfish testified that Diane’s pre-rate reduction period “was a period of stability, success for her” (10/9/13 Tr. at 20:16-21:13 (Dr. Bodfish)), he acknowledged that he had not spoken with anyone who had known Diane prior to her move caused by the rate reduction, including Diane’s guardian. Instead, he had relied on statements made by that guardian to Plaintiffs’ counsel (see id. at 20:16-25 (Dr. Bodfish)). When presented with specific examples of pre-rate reduction behaviors and provider discharges, including hospitalizations, incarcerations, and numerous serious behavioral events described in the documentary evidence, Dr. Bodfish exhibited only a vague familiarity with those incidents. See, e.g., id. at 21:642:21 (Dr. Bodfish).
Along these same lines, Dr. Bodfish seemingly attributed every negative event that followed the reimbursement rate reduction to a mismatch in the plan of care caused by the rate reduction without regard to, and seemingly without conducting further inquiry into, whether said event was related to the plan of care at all, much less the more specific Supervised Living service central to this action. For instance, Dr. Bodfish highlighted Diane’s out-of-home UPAC placement as an indicator of increased risk caused by the reimbursement rate reduction with little knowledge of the reasons Diane entered UPAC. See
18(...continued) evaluated Plaintiffs in person since fall 2011.
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10/8/13 Tr. at 151:4-11 (Dr. Bodfish); 152:13-23 (Dr. Bodfish). That is, despite evidence that Diane’s UPAC placement was a result of needed rehabilitation for end-stage osteoarthritis, Dr. Bodfish testified that he saw it “as part of a chain of events that happened after [the rate reduction]” (id. at 153:19-20 (Dr. Bodfish)) and opined that “if [Diane] weren’t demonstrating that pattern of behaviors at all, there would be no need for her to go to UPAC” (id. at 155:21-23 (Dr. Bodfish)). Similarly, Dr. Bodfish highlighted Monarch’s discharge of Diane during this time period, which he described in his Report as “a result of increasing and persistent behavioral decompensation” (PX-185 at C2 D1), as evidence of the ill-effects of the reimbursement rate reduction. However, Monarch’s own discharge notice provides only that said discharge was a result of Diane’s treating physician at UPAC recommending a level of care that Monarch did not provide (see PX-49), and Dr. Bodfish offered no reasons to call Monarch’s stated reasons for its discharge into doubt. When asked to review Monarch’s discharge notice, Dr. Bodfish expressed that he did not believe Diane needed a skilled nursing level facility (see 10/8/13 Tr. at 158:2-5 (Dr. Bodfish)) and that any rehabilitation could be done in a community setting (see id. at 161:15-19 (Dr. Bodfish)) despite his apparent lack of knowledge of Diane’s underlying medical concerns, or even the recommended level of rehabilitation (see id. at 158:8-15 (Dr. Bodfish)), and the fact that Dr. Bodfish is not a medical doctor (see id. at 158:16-17 (Dr. Bodfish)).
Dr. Forrest applied a somewhat different approach. For her initial Report, Dr. Forrest evaluated each of the Plaintiffs at least twice, attempting to make one visit at a home placement and one in the community, if appropriate (see 10/28/13 Tr. at 115:19-116:2 (Dr. Forrest); DX-33 at 4). Moreover, Dr. Forrest testified that she requested every document for review as opposed to
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allowing Defendants’ counsel to make a selection of documents for her. See
10/28/13 Tr. at 80:6-12 (Dr. Forrest). Finally, Dr. Forrest appears to have
attempted to speak with as many individuals available to her as possible. As
for her Supplemental Report, like Dr. Bodfish, and as a result of the resolution
of the previously-noted discovery dispute between the Parties, Dr. Forrest relied
on documentary evidence, although Dr. Forrest also continued to speak to as
many individuals available to her to the extent she could without violating the
resolution of the Parties’ discovery dispute. To support her interpretation of
this data as a whole, Dr. Forrest attempted to apply three objective measures.
The first, the Aberrant Behavior Checklist, involved a survey, completed by a
person familiar with the behaviors of the Plaintiff, which was then scored and
normalized as closely as possible against the target population to determine
whether Plaintiffs exhibit certain types of behaviors at a clinically significant level. See 10/28/13 Tr. at 128:23-131:11 (Dr. Forrest).19 The second was the
Adaptive Behavior Assessment System-II - a scale used to measure, as Dr.
Forrest explained, “the social, the practical and conceptual skills that you need
to navigate your world on daily basis.” Id. 135:5-7 (Dr. Forrest). Lastly, at the
time of her Supplemental Report, restricted with respect to her access to
Plaintiffs or their providers and thus her ability to use her previously-applied
19 Although the Aberrant Behavior Checklist gives a range of scores in behavior categories including “Irritability,” “Lethargy,” “Stereotypy,” “Hyperactivity,” and “Inappropriate Speech,” Dr. Forrest testified that she interpreted just the Irritability scale as relevant to Plaintiffs’ risk of institutionalization, and, even more specifically, a question on the checklist relevant to the Irritability scale designed to account for Plaintiffs’ level of aggression. See 10/28/13 Tr. at 113:3-24. According to Dr. Forrest, she made this decision based on her assessment that the Irritability scale would most likely capture the behaviors relevant to a risk of institutionalization as drawn from her review of relevant literature. See id.; see also id. at 123:10-12 (“[T]he single best predictor of challenging behavior is what we talked about aggression.”).
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indicators again for purposes of a direct comparison at two points in time, Dr. Forrest instead looked to a measure already applied by PBH - the Supports Intensity Scale - which PBH had completed prior to the rate reduction and at a time closer to trial for all Plaintiffs except for Diane. See id. at 139:18-140:20 (Dr. Forrest).
This, however, is not to say that Dr. Forrest’s opinion was free from concern, though those concerns were minor in comparison. Where Dr. Bodfish appeared inclined to attribute every potentially negative post-February 2010 event to the reimbursement rate reduction, Dr. Forrest seemingly hesitated at times to attribute arguably negative outcomes to the rate reduction. For example, Dr. Forrest described Diane’s move into the three-person group as resulting from Diane’s then almost year-old January 2009 psychological assessment recommending congregate living instead of as a result of the reimbursement rate reduction. Dr. Forrest did so despite documentation that budgetary issues more directly precipitated that transition and despite the fact that individuals intimately involved in Diane’s care saw the move as likely negative. See 10/31/13 Tr. at 67:4-68:13 (Dr. Forrest). Indeed, Dr. Forrest’s seemingly positive view of this move aligned with her expressed belief that individual placements are isolating in comparison to more congregate facilities that allow additional opportunity for growth through increased social integration (see id. at 14:23-15:11 (Dr. Forrest); 23:7-11 (Dr. Forrest)). Moreover, as evidenced more clearly in her analysis of other Plaintiffs, where Dr. Forrest’s objective scales did not support her own conclusions regarding risk of institutionalization, particularly with respect to the Aberrant Behavior Checklist, she at times downplayed those contradictory scores as resulting from deficiencies on the part of the caretaker or guardian who completed the survey
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(see, e.g., id. at 145:23-146:19 (Dr. Forrest); 10/29/13 Tr. at 8:1-9:9 (Dr. Forrest)) - an effort Plaintiffs seemingly highlighted as a demonstration of bias.
Regardless, Dr. Forrest’s opinion as a whole, including specifically with respect to Diane, presented as one founded on a more thorough and detailed evaluation of Plaintiffs, and, indeed, better supported by the evidence, than did Dr. Bodfish’s. In each instance, including those where Dr. Forrest adopted her own clinical judgment in the face of somewhat contradictory objective scores, her conclusions were well supported and withstood scrutiny. In contrast to Dr. Bodfish’s testimony, which raised questions regarding his knowledge of the underlying facts on which he based his conclusion, Dr. Forrest conducted an exhaustive evaluation into the lives of each Plaintiff - at least to the extent possible in the course of the current litigation.
On this showing, Plaintiffs have failed to demonstrate that Diane is at significant risk of institutionalization generally or that the Supervised Living reimbursement rate reduction specifically “will likely cause a decline in health, safety, or welfare that would lead to [Diane’s] eventual placement in an institution,” U.S. Dep’t of Justice, Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C., http://www.ada.gov./olmstead/ q&a_olmstead.htm (last updated June 22, 2011). All Plaintiffs are at some risk of institutionalization by the very nature of their underlying conditions and difficult pasts, and, of them, Diane’s risk of institutionalization comes closest to warranting the label of “significant.” However, the evidence remains insufficient to draw that conclusion. Although Diane continues to exhibit concerning behavior, there is insufficient evidence that those behaviors have progressed to the point where she can no longer function in the community,
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that her health, safety or welfare have declined, or that such is the trend. Even with respect to Diane’s behaviors that arose during trial, and specifically as to eating her own feces, although alarming in nature, such behavior is not inherently dangerous. See 11/8/13 at 49:9-50:4 (Dr. Bodfish); 51:7-14 (Dr. Bodfish). Moreover, to the extent an analysis of whether Diane can continue to be maintained in the community is informed by past experiences, it is of some significance that Diane’s most recent behaviors are an improvement from those she exhibited in early 2011, and, even at that time, Diane’s providers were able to avoid long-term institutional placement.20
Perhaps even more damaging to Plaintiffs’ claim, however, is the lack of demonstrated causation between the Supervised Living reimbursement rate reduction and Diane’s behaviors. That is, even if it were concluded that Diane is at significant risk of institutionalization, no basis exists to conclude that the Supervised Living rate reduction affected that risk. Plaintiffs have been unable to connect any of Diane’s behaviors to the reduced staffing ratio or the presence of additional housemates caused by the Supervised Living reimbursement rate reduction. Moreover, there is no discernable distinction between Diane’s pre- and post-reimbursement rate reduction behaviors. In the face of more than three years of Diane’s behaviors that seemingly do not depart from those she exhibited prior to the rate reduction, hypothesized deleterious effects carry little weight.
20 Although there was some suggestion by Plaintiffs and Dr. Bodfish that Diane’s ability to avoid institutionalization throughout the post-rate reduction period is owed in no small part to the effect of the preliminary injunction, Plaintiffs have offered no evidence that the preliminary injunction played any likely role in PBH’s decisions regarding Diane’s care and/or placement.
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B. Plaintiff Timothy B.’s diagnoses include unspecified psychotic disorder, adjustment disorder, diabetes, glaucoma, severe mental retardation, epilepsy, and deafness. PX-1 at PBH006065. In addition, Timothy is non-verbal and communicates through a combination of American Sign Language (“ASL”) and “home signs” - i.e., signs unique to Timothy that are not recognized in ASL. A 2009 psychological assessment estimated Timothy’s IQ at 30 - placing him in the lowest one percent of the population. PX-1 at PBH006066; 11/1/13 Tr. at 169:2-170:25 (Dr. Forrest); 10/1/13 Tr. at 89:7-11 (Dr. Bodfish).21 Indeed, Timothy is among the lowest cognitive functioning, if not the lowest, of Plaintiffs. See 10/1/13 Tr. at 90:7-13 (Dr. Bodfish). Prior to the February 2010 reimbursement rate reduction, Timothy lived alone in an apartment in Raleigh, North Carolina, where he received 1:1 staffing during the day and 1:1 awake staffing during the night. His provider at the time, Community Alternatives North Carolina Southeast (“Community Alternatives”), received a reimbursement rate of $250.00 per day for the provision of Timothy’s Supervised Living services. PX-22 at PBH006106; DX-691 at PBH010187. On January 15, 2010, Community Alternatives informed Rose B., Timothy’s mother and guardian, that, effective April 15, 2010, it would no longer be able to provide services to Timothy in his current living situation under the reduced Supervised Living reimbursement rate. See DX-691 at
21 Specifically, the 2009 psychological assessment listed Timothy’s “Full IQ” as “30,” and, under “Percentile,” listed “<0.1". PX-1 at PBH006066. Dr. Bodfish testified that this indicated Timothy is “functioning at a level less than 1 percent of the population.” 10/1/13 Tr. at 89:9-11 (emphasis added). Dr. Forrest, in response to the question whether this indicated that Timothy “is in the percentile of less than 1/10 of 1 percent of his peers, that being men in their mid-forties,” responded “[i]t does.” 11/1/13 Tr. at 170:4-8 (Dr. Forrest). This distinction is immaterial.
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PBH010187. In addition, according to the testimony of PBH’s Regional Executive Director, Anna Yon, new interpretations of currently existing regulations meant that PBH could no longer serve Timothy in his Raleigh placement because it was outside of PBH’s catchment area. See 10/10/13 Tr. at 92:1-93:22 (Yon). PBH began exploring two options for Timothy: (1) moving Timothy into PBH’s catchment area; or (2) transferring responsibility for Timothy’s care to the LME that served Wake County. See id. at 93:23-97:19 (Yon). Recognizing the need to find a new placement in a relatively short period of time, on February 12, 2010, Paula Clements, a support coordinator with People Driven Supports (“PDS”), a division of PBH, sent a letter to Rose informing her of potential options. See PX-31. Rose, however, hopeful that the instant litigation would resolve the issue, and interested in only single-person placements for Timothy, delayed making a decision on Timothy’s placement.
On April 9, 2010, PBH extended the pre-rate reduction rate paid for Timothy’s Supervised Living services to April 30, 2010, giving a short extension to the period Timothy could remain in Raleigh. DX-17 at 3. Even with this extension, it was only four to five days before the new deadline when Rose informed PBH that she had made the decision to bring Timothy back to Davidson County. See 10/10/13 Tr. at 104:1-18 (Yon); DX-666 at PBH006715; PX-32 at PBH006708. PBH located and provided options for Timothy’s placement in PBH’s catchment area to Rose, who, as Timothy’s guardian, was responsible for making the ultimate decision regarding Timothy’s placement. Included among those options was a group home with a deaf resident and staff ready to work with another deaf consumer, but Rose “went back and forth with this suggestion and [] indicated she did not want Timothy in a group home setting.” PX-32 at PBH006709; see also 10/10/13 Tr. at
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104:24-105:8 (Yon). As of April 30, 2010, Rose had not finalized a placement for Timothy. See 10/10/13 Tr. at 109:2-9 (Yon). PBH arranged for Timothy to reside at respite for 30 days to allow Rose additional time to decide on a placement (see id. at 109:12-23 (Yon)), but, on the day Timothy was leaving Raleigh, Rose decided instead to bring Timothy to reside with her and Timothy’s father (see id. at 110:2-7 (Yon); see also id. at 110:13-25 (Yon)).
At his parents’ home, Timothy exhibited a number of behaviors that Rose struggled to manage. DX-651 at PBH006616. As Rose described it:
And then after we kept him from April to I think it was June, it got pretty bad. Timothy [] was very upset when he had to leave Raleigh and he give [sic] us a run for our money those months. I mean we really went through some terrible behavioral problems. 9/10/13 Tr. at 77:7-11 (Rose B.). Realizing that caring for Timothy and the medical needs of Timothy’s father, who had just had heart surgery, were too much, Rose sought a different placement for Timothy. PX-18 at PBH006222; DX-651 at PBH006616. In June 2010, Timothy moved into a two-person residential placement operated by Ambleside (PX-18 at PBH006222) - a placement not offered by PBH, but identified and chosen by Rose after conversations with caretakers who supported Timothy while he lived with his parents (10/10/13 Tr. at 111:17-112:21 (Yon)). Timothy’s period in the two-person placement was replete with behavioral incidents as displayed by the multiple DHHS Incident and Death Reports (“Incident Reports”) that span 2010 and 2011. See generally PX-194. Those incidents often involved property destruction in the form of pulling down blinds and curtains (see id. at TBAS00875, TBAS00881, TBAS00915, TBAS00954) hitting and sometimes breaking windows (see id. at TBAS00887, TBAS00903, TBAS00942, TBAS01008), and knocking over the television (see id. at
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TBAS00881, TBAS00996, TBAS01000). In addition, Timothy exhibited physical aggression in the form of hitting and biting staff and his fellow housemate (see id. at TBAS00907, TBAS00930, TBAS00954, TBAS00958). Several of these incidents resulted in personal injury (see id. at TBAS00903, TBAS00907, TBAS00930, TBAS00942, TBAS00958, TBAS00972, TBAS1052) and police involvement in the form of assistance to handle Timothy during particularly aggressive outbursts (see id. at TBAS00930, TBAS01052).
At the height of these behaviors, in August 2011, Timothy engaged in a physical altercation with Rose during an orthopedist appointment, and, immediately thereafter, staff sought to have Timothy involuntarily committed due to a cumulation of physical aggression, property destruction and medication refusals that they were unable to control. See DX-306 at PBH010987. Rose reported at the time that Timothy “ha[d] not slept the past 24 hours [and] ha[d] refused to take his medications.” Id. Moreover, Rose “state[d] that she followed up with Ms[.] Parker the group home manager [], and that they were very concerned that [Timothy] was aggressive to the extent (verbally, ongoing and intense gestures, property destruction, refusal to eat, and take medications) that they felt he needed some emergency intervention.” Id.
A Daymark Progress Note from August 3, 2011, regarding that potential involuntary commitment states: “Patient’s mother [Rose] calls and reports the patient, ‘is in withdrawal from that Xanax.’ She says the patient has had increased behavioral outbursts since he took the last Xanax on Saturday. She said she went to the ‘foot doctor and he has tried to fight all of us.’” DX-460 at 1. In the “Description of Intervention” section, that Note continues: “Discussed with mom the problems we have had starting and stopping meds
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and that this recent change was per her request.” Id. A day later, on August
4, 2011, another Daymark Note provides:
[Timothy’s] [p]arents continue to be somewhat difficult and uncooperative to deal with. They do not want [Timothy] to go to the hospital but recognize that they cannot manage him and somehow think the group home staff should manage him. They do not want him all doped up but then states [sic] he needs a ‘behavior medicine.’ They were upset that he was handcuffed. They do not want him going to Broughton but after discussion are willing for him to be hospitalized somewhere. . . . I believe he did benefit from low dose benzos but family felt that made him too ataxic. Group home staff and I did not think it made him that ataxic. At any rate, he needs to be stabilized as an inpatient so involuntary papers were taken out.
Id. at 4.
Indeed, Rose’s intervention in Timothy’s care, especially her desire to
remove Timothy from his psychotropic medications - a desire driven by
concerns regarding over-medication often not shared by staff or treatment
professionals - is a consistent theme in Timothy’s life. A December 1, 2012,
Progress Note indicates concern by Rose that Valium may be affecting
Timothy’s gait. See PX-13 at PBH011149. Likewise, a December 9, 2012,
Progress Note documents Rose expressing concerns that Timothy’s
psychotropic medications were affecting Timothy’s gait and mobility and
making him lethargic despite Timothy’s care coordinator’s impression that
“Timothy is not lethargic, responds very well to others around him, is more alert
to his surroundings, and is much more happier as he is not always angry and
engaging in property destruction and physical aggression that not only puts his health and safety at risk but others.” Id. at PBH011154.22 Per a December 15,
2011, Progress Note, Rose indicated that “she is not happy with the
22 A care coordinator is an employee of PBH who serves as a liaison, or point person, for the consumer and his or her guardian. See, e.g., 10/10/13 Tr. at 41:21-44:4.
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psychotropic medications, however [she] opted not to go to the [psychiatry] appointment as she knows the group home manager Ms Parker is going to tell the psychiatrist has [sic] improved Timothy’s behaviors.” Id. at PBH011162. Later, as noted in a December 19, 2011, Progress Note, Rose indicated that “she and her husband are going to start Timothy with a new neurologist, and that if they like him, they may let this physician prescribe both medications for seizures and Timothy’s behaviors” and that “she is not happy with either Timothy’s seizure or behavioral medications and feel they may be impacting his gait.” Id. at PBH011164. A subsequent Progress Note recounts that, in response to this suggestion by Rose, Timothy’s care coordinator asserted that “the team and providers will be concerned if Timothys’ [sic] resorts back to behaviors, when [they] have experienced an extended period of time where Timothy has had a significant decrease in aggressive behaviors and is functioning adequately in all of his settings.” Id. at PBH011170. Regardless, Rose continued with the neurologist appointment and indicated a desire that Ms. Parker, the manager of Timothy’s group home, not attend, an apparent effort to prevent Ms. Parker from asserting an opinion contrary to her own. Id. at PBH011165.
Rose has also consistently expressed concerns over staff’s inability to effectively communicate with Timothy - both before and after the February 2010 reimbursement rate reduction. A September 17, 2009, Progress Note indicates that Rose felt Timothy’s behaviors were increasing and that “this can be related to communication (staff - inability to communicate with [Timothy] and understand his needs).” DX-248 at PBH006890. Similarly, an October 5, 2009 Progress Note describes Rose’s concerns that “the Community Alternative staff, are not fully trained to communicate or to address Timothy’s
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behaviors as she feels they should be able too [sic].” DX-247 at PBH006877. Rose’s views as to the correlation between Timothy’s behaviors and staff’s ability to communicate with Timothy appear to reflect her own belief of Timothy’s ability to communicate through ASL. When asked whether she agreed with a 2010 Psychological Consultation Report, conducted by a Ph.D. level psychiatrist who is deaf and communicates using ASL (see 9/11/13 Tr. at 74:9-14 (Dr. Morganstein)), that described Timothy’s signs and stories as “frequently unclear, lack[ing] fluency, and demonstrat[ing] a limited vocabulary or knowledge of sign language” (9/10/13 Tr. at 139:21-140:2 (Rose B.); PX-24 at PBH006045), Rose, although admitting that she is not proficient in ASL (see 9/10/13 Tr. at 140:13-14 (Rose B.)), responded that she did not agree “[b]ecause [she] know[s] Tim[othy] knows his ASL” (id. at 140:3-7 (Rose B.)).
In 2013, as a result of Rose’s complaints regarding the condition of Timothy’s group home (see PX-13 at PBH011174; 11/4/13 Tr. at 150:9-11 (Dr. Forrest); see also 9/10/13 Tr. at 90:14-20 (Rose B.)), Timothy moved into a single-person apartment where, as of the most recent information provided during trial, he continues to receive services from Ambleside (9/10/13 Tr. at 109:21-110:14 (Rose B.)). He receives 24-hour 1:1 staffing, including awake staffing at night. Id. Thus, as of the most recent information presented during trial, Timothy currently resides in substantially the same circumstances as he did prior to the February 2010 reimbursement rate reduction.
Not only is Timothy’s living situation similar, but Timothy’s postreimbursement rate reduction behaviors are also similar to those he exhibited pre-February 2010. Indeed, as Rose testified, Timothy “has always had behavioral problems, and . . . [Timothy] will always have behavioral problems.” 9/10/13 Tr. at 60:14-16 (Rose B.). As noted in Timothy’s Individual Support
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Plan for December 1, 2008, to November 30, 2009, “Timothy [] had several inappropriate behaviors over the past year. The behaviors have occurred when Timothy was upset about not getting his way. Timothy has pulled window curtain and shower curtains down, turned over a fish tank, knocked over items on the table, threw items, attempted to hit staff, and signed inappropriate signs.” DX-455 at TBID01163-64. A subsequent Individual Support Plan, for the period beginning December 1, 2009, describes that “[b]ehaviors reported per Timothy’s staff include pulling window and shower curtains, refusing to get up in the morning to start his day, throwing items, threatening staff via gestures/inappropriate signs, hitting walls/doors, breaking buttons off of his shirt, attempting to break household items, disposing of his equipment and supplies in the commode, packing his shoes and clothing in trash bags, and sometimes spitting at staff. Timothy’s provider indicate [sic] that this usually happens when Timothy does not get his way or is mad at staff for some reason.” PX-22 at PBH006117. As recounted in a September 10, 2009, Progress Note, Rose “discussed her concerns regarding what she feels are increased behaviors. [She] indicates she is not sure if it is related to Timothy’s seizures or what she feels are communication deficits, as Tim signs, but would like to see staff have more communication training.” DX-823 at TBID 000201.
The Parties’ experts, Dr. Bodfish and Dr. Forrest, again came to opposite conclusions with respect to Timothy’s risk of institutionalization. Dr. Forrest concluded, at the time of her initial Report, that Timothy “is not felt to be currently at risk for harm or out-of-home placement,” that “[t]here is no evidence of psychiatric decompensation,” and that “Timothy’s health status and in-home supports have not significantly changed and no facility placement is actively being sought.” DX-33 at 54. Likewise, at the time of her
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Supplemental Report, Dr. Forrest concluded that “Timothy’s situation is about the same as the last time [she] reviewed his case.” DX-34 at 13. Dr. Bodfish, however, concluded, at the time of his initial Report, that “Timothy is currently at significant risk of institutionalization,” and that “[t]he change in the type of community residence (from own home to group living) and the decrease in supervision and staff support level have produced a clear decompensation in Timothy’s status.” PX-184 at T6. At the time of his Supplemental Report, Dr. Bodfish concluded that “Timothy’s risk of institutionalization is still considered by this examiner to be significant.” PX-185 at T2.
The concerns over the depth of Dr. Bodfish’s evaluation that plagued his opinions regarding Diane re-emerge with Timothy (and, indeed, the remainder of Plaintiffs in this action). For example, Dr. Bodfish points to the near involuntary commitment of Timothy as evidence of the deficiencies of his care post February 2010 without apparent consideration of the evidence that this event was more directly influenced by Rose’s attempts to intervene in Timothy’s psychotropic medications. See 9/27/13 Tr. at 124:17-128:15 (Dr. Bodfish). Dr. Bodfish also cited Timothy’s staff’s use of Valium as amounting to “chemical restraint” (see 9/27/13 Tr. at 16:25-17:8 (Dr. Bodfish), 115:22-25 (Dr. Bodfish)) and in his initial Report stated that “the primary approach for attempting to manage Timothy’s increasing behavior problems following [Timothy’s] move was through psychiatric medication as opposed to programmatic or staff changes” (PX-184 at T5), but his own detailed review during trial of medication administration records revealed that staff’s use of Valium was sparse at best (see 10/2/13 Tr. at 33:18-49:18 (Dr. Bodfish)) and Dr. Bodfish could not support a conclusion that staff attempted to use other
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medications to over-medicate Timothy (see id. Tr. at 49:19-54:18 (Dr. Bodfish)).
Moreover, Dr. Bodfish’s opinion of Timothy’s pre-reimbursement rate reduction circumstances, especially as it is presented in his Reports, seemingly relies heavily on his apparent un-questioning acceptance of Timothy’s history as relayed by Rose and reflects a more positive view of that time period than the evidence otherwise suggests. For instance, Dr. Bodfish’s initial Report, in describing Timothy’s pre-reimbursement rate reduction placement in Raleigh, notes: “Critically, as this home program and these staff persons were set-up specifically for Timothy, all staff in this program during this time were trained in and used ASL and thus could effectively communicate with Timothy.” PX184 at T3. When asked about the source of this information, Dr. Bodfish testified: “Again, this was from Rose.” 10/1/13 Tr. at 75:24 (Dr. Bodfish). However, documentary evidence from that time period reflects Rose’s concern that Timothy’s Raleigh staff in fact were not fully trained to communicate with Timothy (see,e.g., DX-248 at PBH006890; DX-247 at PBH006877). In several other instances on cross-examination, in response to inquiries directed at similar inconsistencies between Dr. Bodfish’s understanding of Timothy’s past and that presented by Timothy’s records, Dr. Bodfish explained that the information he possessed was in large part as Rose relayed it to him. See, e.g., 10/1/13 Tr. at 59:23-61:7 (Dr. Bodfish), 73:14-22 (Dr. Bodfish). Although Dr. Bodfish testified that he found Rose to be credible in this regard (see id. at 59:23-61:7 (Dr. Bodfish)), Rose not only presented during trial as a clear advocate for her son, but also offered testimony that reflected a questionable memory, as demonstrated both by failures to recall events and by statements of the past that conflicted with documentary evidence.
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Dr. Forrest’s opposite conclusion again presents as more persuasive. Although, as with Diane, Dr. Forrest exhibited some reluctance to attribute negative effects to the reimbursement rate reduction, for example, by seemingly crediting primarily Ms. Yon’s report that new interpretations of currently existing regulations forced Timothy from his Raleigh placement despite documentation from Timothy’s providers that the rate reduction precipitated this move (see 11/4/13 Tr. at 53:4-54:4 (Dr. Forrest)), her analysis was overall both exhaustive and better supported. Of particular note, Dr. Forrest highlighted the similarity of Timothy’s current living situation to his pre-February 2010 Raleigh placement (see 11/4/13 Tr. at 145:4-9 (Dr. Forrest); 167:10-18 (Dr. Forrest)), examined the correlation of Timothy’s periods of instability with medication changes prompted by Rose as opposed to a change in his services (11/1/13 Tr. at 202:15-21 (Dr. Forrest); 11/4/13 Tr. at 59:5-14 (Dr. Forrest)), and observed that, even during Timothy’s past periods of instability or behavioral outbursts, which resemble Timothy’s current behavioral concerns, Timothy’s staff has been able to redirect Timothy and maintain him in the community without long-term institutional placement (see 11/4/13 Tr. at 77:1520 (Dr. Forrest); 114:25-115:19 (Dr. Forrest); 137:8-10 (Dr. Forrest); 177:2-22 (Dr. Forrest)). Moreover, Dr. Forrest’s caution regarding the information regarding Timothy as relayed by Rose reflected the impression Rose left during her own testimony. See 11/1/13 Tr. at 185:10-17 (Dr. Forrest) (“I thought she was an incredible advocate for Tim and my sense is from the way she provided things to me that she had been an advocate from the day he hit ground. . . . I questioned when I went back to the record whether it was accurate and so I had some question about her credibility at times or what we say in the clinical terms of whether she was a reliable historian or not.”).
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The Court again finds Plaintiffs have failed to demonstrate that Timothy
is at significant risk of institutionalization or that the February 2010
reimbursement rate reduction affected Timothy’s risk. In general, there is
insufficient evidence to conclude that Timothy’s behaviors present a danger to
himself or others, that he is unable to be maintained in the community, or that
he is likely on a path to those outcomes. Moreover, there is again a lack of
demonstrated causation between the behaviors Timothy has exhibited since the
reimbursement rate reduction and any change in his Supervised Living services.
The evidence fails to bear out Plaintiffs’ primary argument that Timothy’s
behaviors are connected to Timothy’s period of congregate living. In fact,
Rose, Timothy’s primary advocate, testified that Timothy “and [his housemate]
got along fine. They only had one incident in the whole time they lived together . . . .” 9/10/13 Tr. at 90:7-8 (Rose B.).23 Moreover, Rose was effusive in her
praise of Timothy’s primary caretakers and has demonstrated little desire to
locate an alternate placement. Id. at 82:23-83:13 (Rose B.). And again, there
is substantial similarity in the behaviors Timothy exhibited prior to and after the Supervised Living rate reduction.24
23 Despite suggestion that Timothy’s ability to avoid institutionalization to this point is an effect of the preliminary injunction, Plaintiffs have again failed to present evidence to support that conclusion.
24 During the course of trial, Plaintiffs, and, to some extent, Dr. Bodfish, focused on a grievance filed by Rose, and later substantiated, against certain of Timothy’s staff. In particular, a March 9, 2011 letter summarized an investigation substantiating that: 1) “[s]taff training in [ASL] is not met as evidenced by lack of documentation; 2) “[two] narcotic medications were unaccounted for”; 3) Timothy “was left with a person that was not an employee of Ambleside or [his] guardian”; and 4) “staff is not implementing the behavior support plan.” See DX-597 at PBH005979. It is unclear what significance either the inability to account for narcotics or staff’s decision to leave Timothy with an unauthorized person has on an analysis of the Supervised Living reimbursement rate reduction central to the instant action as
(continued...)
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C.
Plaintiff Clinton L.’s mental health and developmental disability diagnoses
include schizoaffective disorder, moderate mental retardation, and intermittent
explosive disorder. DX-33 at 32. In addition, Clinton suffers from
hypertension, type II diabetes, obesity, sleep apnea, gastroesophageal reflux,
and urinary incontinence. Id. Before the February 2010 reimbursement rate
reduction, Clinton lived alone in a single-person placement operated by Easter
Seals UCP North Carolina (“Easter Seals”) which received a reimbursement rate
of $161.99 per day from PBH for the provision of Clinton’s supervised living
services. PX-109 at PBH002806. At the time of the 2010 reimbursement rate
reduction, Easter Seals initially informed Clinton that it would not be able to
maintain his Supervised Living services; however, Easter Seals subsequently
decided to continue Clinton’s services, “albeit at a financial loss,” contingent
on PBH’s continued approval of a minimum of 40 hours of a separate, federallyfunded service - Home Supports. PX-102 at 2.25 Accordingly, the February
24(...continued) those issues relate not to the service provided, but to individual employees carrying out Timothy’s services. To the extent Plaintiffs simply argue the deficiency of Timothy’s care, this argument seems more accurately presented as one of negligence, which is not the focus of this action. To the extent Plaintiffs somehow contend that the reduced Supervised Living reimbursement rate resulted in the employment of staff who would conduct the activities complained of in the grievances, the connection is tenuous at best, the discreet acts complained about having no tendency to affect Timothy’s risk of institutionalization. Moreover, it is worth noting that it appears staff was terminated for these transgressions. As to staff’s implementation of Timothy’s behavior plan, the circumstances of Timothy’s care, and specifically aspects affecting Timothy’s risk of institutionalization, is better addressed by the evidence outline above. Finally, as to staff training in ASL, the evidence regarding such training is addressed briefly in Section IV.
25 In 2011 or 2012, the Home Supports service became two separate services called In-Home Skill Building and Personal Care. See 10/10/13 Tr. at
(continued...)
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2010 reimbursement rate reduction did not cause an immediate change to Clinton’s provider or to Clinton’s residence.
However, as Plaintiffs point out, Easter Seals did transition Clinton from awake staff to sleep staff at night for budgetary reasons. See PX-115 at PBH003579; PX-116 at PBH003545. Of note, discussions regarding that transition began in June 2009 after what a Progress Note from that time references as “the denial of personal care services through state funded services.” See PX-115 at PBH003579. It thus appears that this transition was prompted by a budgetary issue separate from the Supervised Living rate reduction central to this action. See 9/12/13 Tr. at 119:9-18 (Soviero); 200:20-201:11 (Soviero). Regardless, the transition was of concern to Sandy Edmonds, Clinton’s sister and guardian, because Clinton had at least some history of being taken advantage of by individuals when without adequate supervision. See 9/12/13 Tr. at 10:8-19 (Edmonds). That is, on one occasion, Clinton allowed a woman into his home early in the morning who stole “[j]ust about everything [Clinton] had.” 9/12/13 Tr. at 35:9-10 (Edmonds).
Plaintiffs also contend that staff shortages and increased behavioral issues that followed the reimbursement rate reduction evidence the downgrade of services experienced by Clinton. Indeed, numerous Progress Notes make reference to staff shortages from late 2010 to early 2011. A November 4, 2010, Progress Note, written by Clinton’s Care Coordinator, Kristine Best, indicates a “potential concern by Easter Seals [] of not being able to provide the necessary coverage for Clinton with the six staff that Clinton has,” but concluded with the statement: “[Margaret Soviero, the Qualified Professional

25(...continued) 89:9-18 (Yon).

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with Easter Seals,] informed [Ms. Best] that at this time this in [sic] not a concern about being able to provide services to Clinton but if it becomes a concern then Clinton’s services will be reviewed by Easter Seals UCP.” DX-200 at PBH03290. A January 6, 2011, Progress Note addresses Clinton “not having support staff” and notes that Easter Seals’ failure to provide back up staff “seems to be happening more often.” PX-122 at PBH003262. An April 15, 2011, Progress Note recounts Clinton “not having staffing . . . on a Saturday night.” PX-133 at PBH003230. Moreover, a March 28, 2012, Progress Note discusses several days in 2010 and 2011 on which Easter Seals did not provide Supervised Living services to Clinton due to a lack of back up staffing. See PX-113 at PBH011405-PBH011406. Although Ms. Soviero testified that, because Clinton’s staff included his family members, some staffing issues were the result of family taking time off during a period when Clinton’s father was ill and later passed away in 2011, and, while Progress Notes detailing staff shortages do decline after mid-2011, staffing shortages appear to have continued much later. This is evidenced, in part, by an Enhanced Rate Request from May 13, 2013, more than 2 years after Clinton’s father’s passing, noting that physical aggression by Clinton and serious allegations made by Clinton against staff “have led to severe staffing shortages which puts Clinton at further risk.” DX-436 at PBH012246.
The increased behaviors referenced in that Enhanced Rate Request, along with the continued reduced reimbursement rate, prompted Easter Seals to discharge Clinton in 2013. The Enhanced Rate Request itself noted:
Clinton has had several level III incidents in the past year. Physical aggression has included choking, pushing and brandishing scissors. Clinton has made several unsubstantiated allegations in the past 6 months against staff. Two of these allegations were sexual in nature. Staff have begun reporting feeling increasingly unsafe
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working with Clinton due to his size (300+ lbs), intimidating physical behaviors (including cornering staff,) and increasing sexual preoccupation with female staff. DX-436 at PBH012246. Supporting this statement, a September 2012 Progress Note documents Clinton “hurt[ing] his staff with a pair of scissors” and “chok[ing] his staff.” DX-888 at PBH011435. A November 2012 Progress Note describes Clinton hitting his staff and telling staff “that he wanted to hurt himself, to kill himself.” Id. at PBH011453. Ms. Soviero similarly testified as to staff’s concerns regarding sexual behaviors, false allegations against staff, safety issues around Clinton’s attempts to block the path of staff or to intimidate staff (9/12/13 Tr. at 150:14-151:24 (Edmonds)), and noted that similar behavioral issues continued into 2013 (see id. at 201:23-202:17 (Edmonds)). Through the Enhanced Rate Request, submitted on May 13, 2013, Easter Seals requested an increase to the reimbursement rate for the In-Home Skill Building and Personal Care services that they provided Clinton. See DX-436 at PBH012246. Easter Seals, however, did not seek to increase the rate PBH reimbursed them for provision of Clinton’s Supervised Living services. Id. PBH reviewed Clinton’s Enhanced Rate Request and, without approving or denying the Request, asked for additional information from Easter Seals to support the need for the enhanced rate. See DX-885 at 2. Easter Seals did not provide the additional information, leaving the Enhanced Rate Request unresolved. See 9/12/13 Tr. at 143:22-144:19 (Soviero), 187:2-10 (Soviero); 10/10/13 Tr. at 150:16-152:20 (Yon). Despite this lack of resolution, by way of letter dated June 12, 2013, Easter Seals cited PBH’s “decision . . . that these additional resources are not needed” when informing PBH that it was not able to continue to support Clinton effective August 11, 2013. DX-884. In addition, Easter
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Seals noted “the intense nature of Clinton’s needs and the complex nature of his natural supports” in concluding that it “can no longer afford to risk the health and safety of [its] staff or Clinton.” Id. Easter Seals further provided: “As you are aware, we have operated at a deficit in the past in order to provide needed supports. We can no longer financially afford to provide the needed supports with the Innovations and State Funded Services currently available to Clinton.” Id.
On August 11, 2013, Monarch took over Clinton’s care without a change in residence and while maintaining Clinton’s single-person placement status. With the exception of testimony from Ms. Best that Clinton has not exhibited any “out of the norm” behaviors since that transition (see 9/13/13 Tr. at 115:14-16 (Best)), there is little evidence of Clinton’s status under Monarch’s care. There is also no evidence regarding whether Monarch operates at a financial deficit to provide Clinton’s care.
As with all Plaintiffs, Clinton was not without behavioral issues prior to the reimbursement rate reduction. According to a June 2008 Individual Support Plan, “Clinton has difficulty controlling his temper when he is upset or he does not get his way. He will become verbally aggressive with his workers. He has also in the past thrown things toward his worker, such as a phone. Clinton has also become physically aggressive for example pushing a worker out of the way.” DX-185 at PBH002837. Similarly, a Behavioral Support Plan dated August 2009 documents that “Clinton has a history of becoming aggressive towards others when he does not get his way, when he does not understand situations or circumstances that involve him, as well as when he believes he is being treated unfairly.” DX-192 at PBH003157. Data sheets used to track Clinton’s behavior note incidents from June 2009 to September 2009 of
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Clinton threatening staff with physical aggression (see DX-466 at CLES02654, CLES02657, CLES02658) and refusing medications (see id. at CLES02655, CLES02656). Clinton’s sister and guardian, Sandy, likewise confirmed Clinton’s history of aggressive, and sometimes violent, behaviors:
Q. Now I want to touch on some of other testimony from this morning. Now, did you testify that [Clinton] has had violent outbursts throughout his lifetime?
A. Yes. Q. So [Clinton] [has] a long history of that type of aggressive
behavior from time to time? A. Yes. Q. And [Clinton] has a history of becoming so violent at times, that
law enforcement might have to be involved? A. Yes. 9/12/13 Tr. at 67:20-68:4 (Edmonds). With respect to the Parties’ experts, Dr. Forrest again concluded that Clinton is not at significant risk of institutionalization while Dr. Bodfish again concluded the opposite, at least at the time of his most recent evaluation. Specifically, at the time of her initial Report, Dr. Forrest concluded that “Clinton’s hypothesized placement with others will not ultimately cause his placement in an institution,” that “Clinton is not felt to be currently at risk for harm or out-of-home placement,” and that “[t]here is no evidence of psychiatric decompensation.” DX-33 at 34-35. At the time of her Supplemental Report, Dr. Forrest concluded that, “[o]verall, Clinton is doing well in his current placement. He is in the exact same placement as before the rate reductions and he has not experienced any service reductions as a result of the rate reductions.” DX-34 at 10. Dr. Bodfish, at the time of his initial Report, concluded that “Clinton is felt to be currently at risk for harm or out-of-home
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placement due to the cut back in the number of staff for his program and the lack of an emergency plan for back-up staff” (PX-184 at C4) but clarified during trial that, at the time of his initial Report, he did not feel that Clinton was at “significant” risk of institutionalization (see 9/25/13 Tr. at 158:4-18 (Dr. Bodfish)). However, at the time of his Supplemental Report, Dr. Bodfish concluded that “Clinton’s risk of institutionalization has increased relative to the time period of [his] last evaluation of him.” PX-185 at C1.
In support of his ultimate conclusion that Clinton was at significant risk of institutionalization, Dr. Bodfish stated in his Supplemental Report that “Clinton exhibited a pattern of persistent behavioral disturbance beginning in January 2012 for approximately 2 months” (PX-185 at C1), but, during trial, Dr. Bodfish struggled to cite behaviors from this period that would support that conclusion (see generally 9/25/13 Tr. at 161:7-219:10 (Dr. Bodfish)). Indeed, one of the incidents that Dr. Bodfish portrayed as an indication of Clinton’s increased behaviors during this time was an emergency call, with respect to which he testified: “when I see 911 being called and that wasn’t happening previously, that’s part of the concern for me” (id. at 167:7-8 (Dr. Bodfish)). However, notes documenting that call provide that it was for severe back pain experienced by Clinton (id. at 166:2-10 (Dr. Bodfish)) and Dr. Bodfish conceded that he has no information indicating that Clinton’s staff called 911 for anything other than a physical ailment (id. at 166:12-23 (Dr. Bodfish)).
Dr. Bodfish’s Supplemental Report also expressed concern that “[t]wo additional similar but more prolonged patterns of behavioral problems began again in June 2012 (persisting through November 2012) and also January 2013 (persisting through February 2013)” (PX-185 at C1) and noted that “[a]s a result of these recurrent behavioral decompensations, Clinton’s PBH Care
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Coordination team decided that Clinton required a change in his psychiatric medication in November 2012, suggesting a recognition that Clinton’s condition has worsened” (id.). In writing that statement, however, Dr. Bodfish, did not appear to consider the inverse possibility that medication changes for reasons unrelated to Clinton’s behaviors precipitated those behavioral events. See 9/26/13 Tr. at 14:6-17:9 (Dr. Bodfish). In fact, despite explicitly describing Clinton’s change in medication as driven by increased behaviors in his Supplemental Report, and even inferring that this sequence of events signified a “recognition that Clinton’s condition has worsened” (PX-185 at C1), when asked whether he had an understanding “of whether behaviors are following changes in medication or whether changes in medication are following behaviors” (9/26/13 Tr. at 23:4-6 (Dr. Bodfish)), Dr. Bodfish responded: “That’s the speculative part. It is always hard to sort that out.” (id. at 23:7-8 (Dr. Bodfish)). When subsequently asked whether he made an attempt to sort that out, Dr. Bodfish testified that “he wasn’t able to make a definitive conclusion on that.” Id. at 24:4-5 (Dr. Bodfish).
As noted, Dr. Forrest reached the opposite conclusion. As with Timothy, Dr. Forrest described the similarity of Clinton’s current living situation and services to those he experienced prior to the February 2010 rate reduction. See 10/29/13 Tr. at 15:2-23 (Dr. Forrest). And Dr. Forrest’s analysis of the effects of medication changes on Clinton’s behaviors (see id. at 15:24-19:17 (Dr. Forrest)) was both more comprehensive and better aligned with the documentary evidence than the position offered by Dr. Bodfish. Plaintiffs criticized Dr. Forrest for downplaying one of her objective measures, the Aberrant Behavior Checklist, which ranked Clinton’s irritability as high, in favor of her own clinical judgement after, as she testified, subsequent conversations
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with the survey taker and Clinton’s direct care staff led her to believe that the results of the Aberrant Behavior Checklist did not accurately reflect Clinton’s situation. Dr. Forrest, however, adequately and persuasively described her reasons for doing so. See 10/29/13 Tr. at 8:1-9:9 (Dr. Forrest).
Although the evidence in Clinton’s case arguably supports a finding that Clinton’s behaviors have increased since February 2010, it is found that the evidence is insufficient to conclude either that Clinton is at significant risk of institutionalization or that the Supervised Living reimbursement rate reduction “will likely cause a decline in health, safety, or welfare that would lead to [Clinton’s] eventual placement in an institution,” U.S. Dep’t of Justice, Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C., http://www.ada.gov./olmstead/q&a_olmstead.htm#ftnref14 (last updated June 22, 2011). In fact, of Plaintiffs, Clinton’s circumstances are among the least affected by the Supervised Living reimbursement rate reduction. Clinton continues to live in the same physical location, without housemates, and enjoys a similar level of services. Compare PX-108 at PBH002817 and PX-125 at PBH003148, with DX-886 at 9.26 Moreover, even if Clinton’s transition from awake staff to sleep staff at night can be attributed to the Supervised Living reimbursement rate reduction as opposed to an earlier denial of personal care services, there is no evidence that Clinton has suffered adverse affects since that change, and Plaintiffs point primarily to a single event - when a woman allowed into his residence one night took advantage of Clinton - as evidence that awake staff is necessary, giving little indication that a future incident is a
26 Per Ms. Soviero, state funded personal assistance is the same as personal care. See 9/12/13 Tr. at 114:6-18.
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viable concern. In sum, on the evidence presented, there is no basis to conclude that Clinton is any more imminent danger to himself or others than prior to the rate reduction, that he has decompensated to a point that he can no longer be maintained in the community, or that such is likely. Accordingly, Plaintiffs have failed to carry their burden.
D. Plaintiff Jason A.’s mental health and developmental disability diagnoses include mood disorder with aggression, obsessive compulsive disorder, attention deficit/hyperactivity disorder, moderate mental retardation, and autism. DX-35 at 41-42; 9/18/13 Tr. at 33:12-15 (Benton). Prior to the February 2010 reimbursement rate reduction, Jason lived with one housemate, Anderson, in a three-person home operated by RHA Health Services, Inc. (“RHA”). PX-172 at JAID 000361. At that time, RHA received a reimbursement rate of $161.91 per day from PBH for the provision of Jason’s Supervised Living services. Id.; 9/18/13 Tr. at 64:13-18 (Benton). As a result of the reimbursement rate reduction, on March 5, 2010, a third housemate joined Jason’s home. DX-539 at JAID 000207. Jason’s behaviors post-rate reduction include numerous incidents of verbal and physical aggression, especially during a period in spring 2010. That is, in April 2010, Jason visited crisis respite after several days of increased agitation and aggression. Many of Jason’s behavioral incidents during this time involved conflicts between Jason and his housemates over use of the washing machine, a frequent trigger for Jason’s behaviors (see, e.g., DX-590 at PBH004549; DX-583 at PBH004533; DX-585 at PBH004537), but also included other acts of physical aggression unrelated to that trigger (see, e.g.,
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DX-584 at PBH004535-36; DX-589 at PBH004547-48; DX-586 at PBH004541-42; DX-588 at PBH004545-46).
Of note, however, Jason exhibited perhaps more severe behaviors in 2009 - prior to the reimbursement rate reduction and when Anderson was his only housemate. An update to Jason’s Individual Support Plan from a meeting in June 2009 notes that “Jason is easily agitated and has severe physical aggression and property damage when upset. He recently broke his mother’s finger during a time that she was visiting with him at his home, due to being upset with his housemate. Jason also recently required stitches due to cutting himself on the dinning [sic] room light fixture when arguing with his housemate.” DX-202 at PBH003740. A subsequent Individual Support Plan for Jason from August 2009 notes that “Jason’s behaviors have increased since 1/09" and that “Jason was seen at Rowan Regional Medical Center on 7/9/09 for displaying out of control behaviors. He was assessed by NC Start program and admitted to RHA Respite Home in Statesville from 7/10/097/15/09 and again from 8/27/09-8/30/09 due to displaying out of control behaviors. RHA Respite Program has prevented Jason from being hospitalized in a psychiatric hospital.” DX-204 at PBH004048.
With respect to Jason, Defendants’ expert, Dr. Forrest, concluded, at the time of her initial Report, that “Jason is not felt to be currently at risk for harm of out-of-home placement,” that “Jason does not pose an imminent danger to self or others,” and that “[t]here is no evidence of psychiatric decompensation.” DX-33 at 43. At the time of her Supplemental Report, Dr. Forrest concluded that “Jason is doing well in his placement” and that “[t]he February 2010 rate reduction has not caused a reduction in services that places Jason at greater risk of institutionalization than he was prior to the rate reduction.” DX-34 at
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12. Plaintiffs’ expert, Dr. Bodfish, concluded at the time of his initial Report
that “Jason is currently at significant risk of institutionalization” and that “[t]he
change in type of community residence (from 2 to 3 person group home) and
the decrease in supervision and staff support level have produced a clear
decompensation in Jason’s status.” PX-184 at J5. At the time of his
Supplemental Report, Dr. Bodfish concluded that “Jason’s risk of
institutionalization has not changed since [his] last evaluation of him.” PX-185
at D2 J1 V1. However, despite that language, as well as testimony consistent
with an opinion that Jason is at significant risk of institutionalization, Dr.
Bodfish’s entire “Conclusion” in his Supplemental Report reads much
differently. In full, it states:
Jason’s risk for institutionalization has not changed since my last evaluation of him. He has continued to progress and have his habilitation and personal needs met in his home community. He continues to manifest the kinds of psychiatric symptoms (autism) and occasional challenging behaviors (episodic agitation and aggression) that he has throughout much of his history, and he continues to require intense staffing (1:1 during waking hours and occasionally 1:1 for 24 hrs.) and individualized behavior programming and a low density, consistent and predictable living arrangement. These features have been able to remain part of his plan of care under his current funding arrangement and thus significantly diminish the likelihood that he will be institutionalized in the future as long as this plan of care and intensity of services remains in place in the community.
Id. (emphasis added).
Other inconsistencies appear in Dr. Bodfish’s opinion as well. In
describing Jason’s pre-rate reduction placement in his initial Report, Dr. Bodfish
stated: “Critically, as this home and these staff persons were set-up specifically
for Jason, all staff in this program during this time were trained in autism and
in Jason’s unique needs and rituals and thus could effectively communicate
with Jason, accommodate his idiosyncratic needs, and effectively prevent his
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behavior problems from occurring.” PX-184 at J3. Similarly, Dr. Bodfish’s initial Report noted that Jason “lived successfully in his community” during the period prior to the rate reduction. PX-184 at J5. However, during trial, Dr. Bodfish agreed that 2009 was a particularly difficult year for Jason (see 10/4/13 Tr. at 69:12-14 (Dr. Bodfish)) and, in fact, opined that Jason was at significant risk of institutionalization during that period as well (see id. at 96:1824 (Dr. Bodfish)). In attempting to explain how this position conformed with his overall positive view of Jason’s pre-rate reduction period as expressed in his Reports, Dr. Bodfish elaborated that, in his Reports, he was providing an overall picture of Jason’s circumstances prior to the reimbursement rate reduction and was not focused on any single year in particular (see id. at 71:14-22 (Dr. Bodfish)). However, the evidence reflects scarce detailed documentary records of Jason’s behavior prior to 2008 on which to base such a conclusion. See PX198; 10/4/13 Tr. at 3:23-4:15 (Dr. Bodfish), 69:3-11 (Dr. Bodfish).
Moreover, there was little demonstrated other evidence on which Dr. Bodfish could rely to inform his opinion of Jason’s pre-rate reduction period. Dr. Bodfish testified that he did not speak to Jason’s mother and guardian, Brenda, but merely read an affidavit she provided. (See 10/4/13 Tr. at 48:1221 (Dr. Bodfish)). Instead, Dr. Bodfish expressed a heavy reliance on reports from Jason’s long-time caregiver, Mary. See id. at 115:4-19 (Dr. Bodfish). However, during her own testimony, Mary reflected difficulty recalling details of events that occurred at any significant time in the past. See, e.g., 9/23/13 Tr. at 28:15-29:7, 30:6-20, 30:24-31:14 (Rothwell). In addition, Dr. Forrest reported receiving information from Mary somewhat in tension with the information Dr. Bodfish relayed (compare 10/30/13 Tr. at 101:7-20 (Dr.
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Forrest), with 10/4/13 Tr. at 115:4-19 (Dr. Bodfish)), which further calls into question the accuracy of Mary’s information.27
In addition, Dr. Bodfish testified that he felt the primary trigger after the rate reduction was the addition of a third housemate and the resulting changes in Jason’s staffing pattern (see 10/4/13 Tr. at 98:12-17 (Dr. Bodfish)); however, evidence of direct conflict between Jason and his newer housemates was limited, especially in comparison to multiple documented incidents between Jason and his long-time housemate Anderson (see, e.g., id. at 103:16-104:15, 105:16-106:3, 123:15-23, 137:9-25 (Dr. Bodfish)), who Dr. Bodfish felt was an appropriate living housemate (see id. at 62:12-19 (Dr. Bodfish)). As to the source of his information regarding the issues between Jason and his newer housemates, Dr. Bodfish here, again, expressed a reliance on Mary’s reports, but also as to his own impression, drawn from a single meeting, that Jason’s level of agitation noticeably increased when his third housemate was present. See id. at 99:2-20 (Dr. Bodfish).
Dr. Forrest’s opinion again presented as more thorough and based on a more comprehensive view of the Plaintiff. Dr. Forrest highlighted that Jason’s direct conflicts with a housemate more likely involved his long time housemate Anderson (see 10/30/13 Tr. at 102:16-22 (Dr. Forrest)), noted Jason’s recent lack of physically aggressive behaviors and, indeed, the removal of physical aggression as a problem behavior needing to be addressed in Jason’s annual plan (see id. at 101:25-102:9 (Dr. Forrest)). She also pointed to Jason’s relative stability in that Jason remains in the same home, has retained at least one long time staff member and, despite some staffing changes, as of the most
27 Mary’s testimony was insufficiently detailed to determine which, if either, expert more accurately reflects her view.
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recent information she reviewed, continues to receive 1:1 staffing during the day (see id. at 110:6-111:15 (Dr. Bodfish)). In addition, Dr. Forrest noted staff’s ability to maintain Jason in the community even during previous periods of behavioral outbursts. See id. at 123:22-124:4 (Dr. Forrest). Concerns raised by Dr. Forrest’s testimony were again minor in comparison to those presented by Dr. Bodfish. For example, Dr. Forrest again displayed some hesitancy to attribute negative events to the Supervised Living reimbursement rate reduction. When presented a document stating, somewhat explicitly, that “[o]n 3/5/10 Jason got a new housemate (due to a cut in his Supervised Living funding) and has had difficulty with the change and additional person in the home” (PX-166 at JAID 000209), Dr. Forrest refused to conclude that the author drew any connection between the addition of a housemate and Jason’s difficulties at the time, stating instead: “I don’t know. She’s got a lot of and’s in there. She said he got a new housemate due to a cut in supervised living and has difficulty with change and additional person in the home” (10/30/13 Tr. at 126:2-5 (Dr. Forrest)).
On this showing, Plaintiffs have failed to demonstrate that Jason is at significant risk of institutionalization or that the February 2010 rate reduction has resulted in events affecting that risk. Jason’s post-February 2010 behaviors are equally, if not less, severe than his immediately pre-February 2010 behaviors. In fact, both experts agreed that 2009 was a particularly bad year for Jason. See 10/4/13 Tr. at 69:12-14 (Dr. Bodfish); 10/30/13 Tr. at 99:23-100:2 (Dr. Forrest). Moreover, per the testimony of Jason’s mother and guardian, Brenda A., Jason’s violent behaviors have decreased in the post ratereduction period (see 9/19/13 Tr. at 60:8-14 (Brenda A.)), and, furthermore, during the post-rate reduction period, Jason’s staff has removed “physical
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aggression” as one of the top two behaviors that need to be addressed through Jason’s behavioral plans. See DX-294 at PBH010853. The evidence that Dr. Bodfish cites as exhibiting a mismatch in Jason’s plan of care fails to demonstrate that Jason is, or is on a path to be, an imminent danger to himself or others or that his providers will no longer be able to maintain him in the community. There is an insufficient basis to conclude that Jason is at significant risk of institutionalization or that the Supervised Living rate reduction will likely lead to his eventual placement in an institution.
E. Plaintiff Steven C.’s diagnoses include depressive disorder, intermittent explosive disorder, oppositional defiant disorder, mild mental retardation with intermittent antisocial behavior, and pedophilia. DX-439 at SCID 000052; DX122 at PBH000201. Steven is unique among Plaintiffs in that he is his own guardian. PX-83 at PBH000675; DX-770 at SCOT00033. Prior to the February 2010 reimbursement rate reduction, Steven resided alone with Supervised Living services provided by Monarch who received a reimbursement rate of $161.99 from PBH for providing those services. PX-83 at PBH000675; DX-122 at PBH000197. In January 2010, Monarch informed Steven that it would no longer be able to provide his Supervised Living services in his single-person home under the reduced rate and that “they could only continue to support Steven in a group home setting or in an [Alternative Family Living (“AFL”)] setting.” PX-83 at PBH000675.28 As a result, in April 2010, Steven moved into a group home operated by Youth Adult Care Management (“YACM”) which, although licensed
28 An AFL “is like [a] foster care family.” 10/31/13 Tr. at 144:4-5 (Dr. Forrest).
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as a three-person home, he shared with only one additional housemate. See 10/10/13 Tr. at 185:5-13 (Yon). Steven’s time in the YACM group home was unsuccessful and short-lived. An Incident Report from July 19, 2010, reflects that Steven refused to come out of his room during first shift, attempted to provoke his housemate, and had made three-months of long distance phone calls to a “sex chat line.” PX-72 at SC000014-15. Steven did not hide his dissatisfaction with this placement and, in fact, “stated [that] if he got [YACM] shut down, then he wouldn’t have to live in a group home.” Id. at SC000015.
Steven left the YACM home in December 2010 after YACM decided to close that home due to an inability to fill its open vacancy for a third resident (see 10/10/13 Tr. at 188:15-25 (Yon)), and Steven moved into an AFL placement in Cabarrus County supervised by Mr. Clark with RHA as his provider (see id. at 189:9-18 (Yon)). Steven’s AFL placement in Cabarrus County, which also had an additional housemate (see id.), was, in contrast to Steven’s previous placement, successful (see id. at 191:13-15 (Yon)). Regardless, Steven desired to be closer to his family and, in August or September of 2011, moved into a new AFL placement supervised by an individual named Josh with Building Bridges as his provider. See id. at 192:2-9 (Yon). In September 2011, several failures in Josh’s supervision of Steven including, on one occasion, leaving Steven unattended, resulted in a young woman named Jamie taking over Steven’s AFL placement. See PX-70 at PBH010975; 10/10/13 Tr. at 192:12-25 (Yon). Shortly thereafter, Steven and Jamie moved residences and switched providers to Alberta Professional Services, Inc. (“Alberta”). See 10/10/13 Tr. at 198:9-200:7 (Yon). Steven’s placement with Jamie ended in August 2012 after their relationship deteriorated and after Steven’s long-time staff, Gena, filed a grievance against Jamie on August 24, 2012. See PX-74;
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10/11/13 Tr. at 9:12-10:17 (Yon). That grievance complained that Jamie was “verbally abusive towards [Steven],” that Jamie “was making suicidal statements while [Steven] was in the house,” and that Jamie “attempted to give away [Steven’s] dog by putting a listing on Craigslist.” PX-74 at SCAL00012. An investigation conducted by Alberta’s Quality Management department as a result of this grievance concluded that “the original reported concerns were not substantiated; however, Quality Management determined that health and safety issues exist at the AFL house which jeopardizes the therapeutic relationship.” Id. at SCAL00012.
With this, “[a]s of August 27, 2012, neither natural supports nor Alberta were able to continue to care for [Steven] 24 hours a day, and Steven had no place to go.” DX-770 at SCOT00033. As a result, Monarch provided respite services to Steven in a hotel setting. Id. Of note, “Steven[, as his own guardian,] had been presented with four options for temporary placement . . .[, but] Steven felt that these were not feasible for him as they were too far away from Lexington.” Id. Without a placement, on August 31, 2012, Steven moved in with his father (DX-443 at SCOT00025), where, as of the most recent information provided during trial, Steven currently resides. Steven is ineligible to receive Supervised Living services while residing with his father (id.), and there is little evidence of Steven’s status during the time he has resided with his father.
Steven’s requirements for his placement have made finding a suitable location difficult. As noted in a May 23, 2013 Progress Note, those requirements are somewhat specific: Steven wants to live in Lexington, to be able to see his family, to have cable and internet and for his AFL worker to be white, to be a non-smoker, to be active, to be responsible, and not to talk about
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politics. PX-96 at PBH012041. Moreover, according to Ms. Yon, Steven has rejected multiple placements for personal reasons unrelated to the placement’s ability to adequately meet Steven’s needs. See 10/10/13 Tr. at 183:11-20 (Yon). Those reasons have included the clothes of the AFL worker and a placement displaying a picture of the President. See id.
With respect to Steven, the Parties’ experts not only reached opposite conclusions regarding risk of institutionalization, but also came to opposite conclusions as to Steven’s direction between the time of their initial and supplemental Reports. Defendants’ expert, Dr. Forrest, concluded at the time of her initial Report that Steven “is not felt to be currently at risk for harm or out-of-home placement,” that “Steven does not pose an imminent danger to self or others,” and that “[t]here is no evidence of psychiatric decompensation.” DX-33 at 48. At the time of her Supplemental Report, Dr. Forrest concluded that “Steven appears to be more stabilized and integrated into the community than he was at the time of [her] initial Report.” DX-34 at 12. On the other hand, Dr. Bodfish, Plaintiffs’ expert, concluded at the time of his initial Report that “Steven is currently at significant risk of institutionalization” and that “[t]he change in the type of community residence (from a home alone to a 2 person group home), the decrease in supervision and staff support level, and the need for multiple placements have produced a decompensation in Steven’s status.” PX-184 at S-5. At the time of his Supplemental Report, Dr. Bodfish concluded that “Steven’s risk for institutionalization has significantly increased since [his] last evaluation of him.” PX-185 at S2 TB1.
Steven, by way of deposition taken November 21, 2011, offered his own opinion of his risk of institutionalization:
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Q. Do you think there’s any reason that you would have to go to an institution instead of staying at your own house?
A. Huh-uh, there ain’t no reason. . . . . Q. Do you think there is any time in the past couple of years
where you have been at risk for being going to an institution? A. No. . . . . Q. If someone had told you that you were at risk of going into an institution, would you think they were wrong, Steven? A. Yeah, because, because they would be wrong. 10/22/13 Tr. at 147:13-149:22; Dep. of Steven C., Nov. 21, 2011 at 58:24 61:7. Steven’s belief that he is not in danger of suffering the injury alleged in the Complaint undermines his claims. Regardless, there is no reason to disagree with Steven’s own assessment. That the focus during trial was on Steven’s frequent residency changes and his current lack of placement (as described above), as opposed to difficult behaviors or any decompensation in Steven’s status, is a reflection of the lack of circumstances that would suggest Steven is at risk of institutionalization. Perhaps realizing this deficiency, Plaintiffs argued during closing arguments not that Steven may require placement in a facility for the treatment of his mental health or developmental disability diagnoses, but that Steven’s lack of an adequate supervisory environment will result in Steven’s incarceration - an outcome Plaintiffs equated with institutionalization for purposes of their claim. See 11/13/13 Tr. at 104:14-22. During their closing arguments, Plaintiffs stressed that “one impulsive act” by Steven could make that outcome a reality. See id. at 128:7-21. However, as an initial matter, a jail or prison environment is not the type of institution which is properly the focus of Plaintiffs’ instant
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ADA and Rehabilitation Act claims. Regardless, Plaintiffs’ “impulsive act” argument cannot carry their claims in the face of multiple years of evidence demonstrating Steven’s ability to function without indulging such hypothetical impulses. To hold otherwise would disregard the evidence in favor of an entirely unpredictable future event that the evidence does not support. In sum, there is no basis to conclude that Steven is at significant risk of institutionalization or that the February 2010 reimbursement rate reduction “will likely cause a decline in health, safety, or welfare that would lead to [Steven’s] eventual placement in an institution,” U.S. Dep’t of Justice, Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C., http://www.ada.gov./olmstead/ q&a_olmstead.htm (last updated June 22, 2011).
F. Finally, Plaintiff Vernon W.’s diagnoses include severe mental retardation (DX-136 at PBH000952), as well as depressive disorder and seizure disorder (DX-142 at PBH001327). Prior to the February 2010 reimbursement rate reduction, Vernon lived alone in a mobile home purchased by his father where YACM provided Vernon’s Supervised Living services at a rate of $161.99 per day. DX-144 at PBH001340. In a letter addressed to Vernon’s father and guardian, Vernon Sr.,29 dated January 21, 2010, YACM informed Vernon Sr. of the following: We have received notification from People Driven Supports that Vernon will continue to receive his Supervise [sic] Living, but will
29 Vernon Sr. serves as Vernon W.’s co-guardian along with Vernon W.’s mother, Angeline Martin. See PX-145 at PBH010950. Ms. Martin did not testify during trial.
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have a rate reduction effective April 15, 2010. [YACM] will continue to provide current service (Home Supports, Specialized Consultative Services and Supervise [sic] Living) until April 15, 2010. Due to these unfortunate changes, [YACM] will no longer provide 24hr. supervision to Vernon. [YACM] will continue to provide Home Support and Specialized Consultative Services for the allotted hours in his Plan/Authorization. We have presented the option of [Vernon] receiving services in a group home setting, which would allow him to receive Residential Support Service and would guarantee 24 hour supervision daily from our staff. PX-140 at PBH001716. PBH subsequently granted an extension for YACM to continue Vernon’s services at a pre-rate reduction rate until April 29, 2010 (see PX-138 at PBH001832), and, although guardian Vernon Sr. faced difficulty finding a replacement provider due to the rate reduction (see 09/16/13 Tr. at 48:1650:19 (Vernon W., Sr.)), on April 30, 2010, Omni Visions, Inc. (“Omni Visions”) took over the responsibility of providing supervision for Vernon in Vernon’s home at the reduced reimbursement rate (PX-155 at VWDV00096). Under Omni Vision’s care, Vernon experienced two primary negative effects: (1) staff shortages; and (2) a transition from awake staff at night to sleep staff at night (see 09/16/13 Tr. at 62:8-12). With respect to the transition from awake staff to sleep staff, Vernon Sr. cited concerns over Vernon’s behavior at night, including possible elopement, as necessitating awake staff. Id. at 74:21-75:9 (Vernon W., Sr.), 41:22-42:4 (Vernon W., Sr.). Vernon Sr. was provided with alarms intended to alert staff if Vernon awoke and attempted to leave his room or the home. Vernon Sr., however, has elected not to install those alarms, citing concerns over their quality. See id. at 75:12-18 (Vernon W., Sr.).
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With respect to staff shortages, an August 24, 2011 Progress Note indicates that only two staff members served Vernon at that time. See PX-145 at PBH010941. An August 29, 2011 Progress Note indicates that only Jeff, one of Vernon’s long-time staffers, was working along with “fill in” staff as Vernon’s other regular staff member was out on medical leave. Id. at PBH010942. An October 6, 2011 Progress Note indicates that if Omni Visions is unable to find additional staff relatively soon, they would have to serve Vernon a discharge notice. Id. at PBH010950. Shortly thereafter, Omni Visions did in fact provide Vernon W., Sr. a discharge notice indicating that it would cease providing services to Vernon on December 31, 2011, “[d]ue to the limitations of funding and staffing.” PX-136 at 1; PX-145 at PBH010959. In light of Omni Visions’ upcoming discharge, PBH began attempting to locate alternate providers for Vernon. See, e.g., PX-145 at PBH010959. Omni Visions extended their discharge date to January 31, 2012, and Monarch took over Vernon’s services as of February 1, 2012. There is no evidence that Vernon’s staff shortages continued after Monarch became Vernon’s provider.
Both Dr. Forrest and Dr. Bodfish ultimately came to the same conclusion with respect to Vernon’s risk of institutionalization. At the time of their initial Reports, Dr. Forrest concluded that “Vernon is not felt to be currently at risk for harm or out-of-home placement” (DX-33 at 58) and Dr. Bodfish concluded that “Vernon would likely be at increased risk for institutionalization if his current independent living program were discontinued or if his level of staffing were decreased” (PX-184 at V4). At the time of their Supplemental Reports, Dr. Forrest concluded that “[t]he February 2010 rate reduction has not caused a reduction in services that places Vernon at a greater risk of institutionalization than he was prior to the rate reduction” (DX-34 at 13) and Dr. Bodfish
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concluded that “Vernon’s risk of institutionalization has decreased since [his] last evaluation of him” (PX-185 at V2 S1) and, at trial, testified that “at this point with the plan of care the way it was and the way it was being operationalized that he that I did not see [Vernon] at a significant risk” (10/3/13 Tr. at 131:4-6 (Dr. Bodfish)).
There is no reason to reject the opinions of both experts with respect to Vernon’s risk of institutionalization. Vernon currently lives in the same home he occupied prior to the reimbursement rate reduction, has retained Jeff, a longtime staff member, and enjoys similar services. There is a lack of evidence of increased behavioral incidents, and staff shortages that existed at one point, to the extent they can be attributed to the Supervised Living rate reduction, appear to be resolved. Despite hypothesized concerns regarding Vernon’s eloping or engaging in unsafe activity in his home at night absent awake staff, those concerns have not come to fruition since the February 2010 reimbursement rate reduction became effective, and there is no plausible indication that such activity is likely in the future or would be sufficiently pervasive or severe so as to create a significant risk of institutionalization. See 9/16/13 Tr. at 105:24-106:9 (Vernon W., Sr.), 121:8-19 (Vernon W., Sr.). There is, in general, a lack of evidence of a mismatch in Vernon’s plan of care or of any inability on the part of Vernon’s providers to continue to maintain him in the community. Accordingly, an insufficient basis exists to conclude that Vernon is at significant risk of institutionalization due to the Supervised Living reimbursement rate reduction or that the Supervised Living reimbursement rate reduction “will likely cause a decline in health, safety, or welfare that would lead to [Vernon’s] eventual placement in an institution,” U.S. Dep’t of Justice, Statement of the Department of Justice on Enforcement of the Integration
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Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C., http://www.ada.gov./olmstead/q&a_olmstead.htm#ftnref14 (last updated June 22, 2011).
IV. Timothy B. separately claims that Defendants have violated Regulations implementing Title II of the ADA by failing to provide effective, accessible communication and appropriate auxiliary aids in the delivery of services to accommodate his deafness. See Doc. #139, ¶¶ 134-143. Generally, as it is relevant here, Regulations implementing Title II provide that “[a] public entity, in providing any aid, benefit, or service, may not, directly or through contractual licensing, or other arrangements, on the basis of disability. . . [p]rovide a qualified individual with a disability with an aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach to same level of achievement as that provided to others[.]” 28 C.F.R. § 35.130(b)(1)(iii). Specifically as it relates to communications, the Regulations go on to provide that “[a] public entity shall take appropriate steps to ensure that communications with applicants, participants, members of the public, and companions with disabilities are as effective as communications with others,” 28 C.F.R. § 35.160(a)(1), and, similarly, that “[a] public entity shall furnish appropriate auxiliary aids and services where necessary to afford individuals with disabilities . . . an equal opportunity to participate in, and enjoy the benefits of, a service, program, or activity of a public entity,” 28 C.F.R. § 35.160(b)(1). In this regard, [t]he type of auxiliary aid or service necessary to ensure effective communication will vary in accordance with the method of communication used by the individual; the nature, length, and
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complexity of the communication involved; and the context in which the communication is taking place. . . . In order to be effective, auxiliary aids must be provided in accessible formats, in a timely manner, and in such a way as to protect the privacy and independence of the individual with a disability.
28 C.F.R. § 35.160(b)(2). “In determining what type of auxiliary aid and
service is necessary, a public entity shall give primary consideration to the
requests of the individual with disabilities.” Id. Specifically, “[t]he public entity
shall honor the [disabled individual’s] choice [of auxiliary aid] unless it can
demonstrate another effective means of communication exists or that use of
the means chosen would not be required under § 35.164.” 28 C.F.R. pt. 35,
app. A.30
As an initial matter, with respect to Timothy’s accommodation claim,
Plaintiffs’ argument focuses almost entirely on the discrepancy in the ASL
abilities of Timothy and his staff as opposed to other deaf-oriented
accommodations such as fire alarms, doorbells, and telephone systems.31
Accordingly, the success of Plaintiffs’ accommodation claim turns on whether
any communication deficit, based on ASL proficiency, between Timothy and his
30 In interpreting the Rehabilitation Act, the Supreme Court has held that qualified persons with disabilities must receive “meaningful access” to a public entity’s services. See Alexander v. Choate, 469 U.S. 287, 301 (1985) (“[A]n otherwise qualified handicapped individual must be provided with meaningful access to the benefit that the grantee offers. . . . [T]o assure meaningful access, reasonable accommodations in the grantee’s program or benefit may have to be made.”). Other courts have extended this to Title II as well. See Bahl v. County of Ramsey, 695 F.3d 778, 784 (8th Cir. 2012) (“We have construed Title II of the ADA and its implementing regulations as requiring that qualified persons with disabilities receive effective communication that results in ‘meaningful access’ to a public entity’s services.”).
31 Neither ASL expert discussed other deaf-oriented accommodations and, although Dr. Bodfish testified in some degree as to the existence of those items (see 10/3/13 Tr. at 28:22-31:9 (Dr. Bodfish)), more specific questioning on cross examination revealed the cursory nature of his investigation (see, e.g., 10/3/13 Tr. at 31:15-33:2 (Dr. Bodfish)).
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staff denies Timothy the necessary participation in the state’s mental health and developmental disability services.32
Such an analysis is not straightforward, however, because “the method
of communication used by [Timothy],” 28 C.F.R. § 35.160(b)(2), is affected by
his severe cognitive deficits. While both Parties’ experts acknowledged that
Timothy’s cognitive impairments impact his ability to communicate, their
conclusions differed regarding what level of ASL Timothy is able to employ and
what skill, in turn, would be required of a caregiver in order to allow Timothy
to enjoy services in his home and community. Defendants’ expert, Ms. Mariann Carter,33 found that “Timothy has very limited language vocabulary and ability,
and overall he uses language for function and to attempt topical relationships
with those around him” (DX-870 at 6) and concluded that, “[b]ased on his
current language level and abilities, and given his current age, Timothy’s results
demonstrate that he needs caregivers who are able to sign basic information,”
(id. (emphasis added)). She further concluded that “ensuring that a person has
minimally adequate conversational sign language skill would be sufficient in
addressing Timothy’s language needs as well as stimulating his ideas and topics
of conversation, albeit repetitive in nature.” Id. at 7 (emphasis added).
32 Plaintiffs do not point to any discrete instance, or even particular service, for which they contend that communication is lacking. Instead, they broadly focus on Timothy’s general living and supervisory environment. Thus, consideration of the “the nature, length, and complexity of the communication involved[] and the context in which the communication is taking place,” 28 C.F.R. § 35.160(b)(2), requires evaluating Timothy’s supervisory and rehabilitative needs on a daily basis.
33 Defendants tendered, and the Court qualified, Ms. Carter as an expert in sign language communication, education for the deaf and hard-of-hearing, including in education for deaf and hard-of-hearing who also have learning or developmental disabilities, and in the assessment of communication and language development in individuals who are deaf and hard-of-hearing. See 10/24/13 Tr. at 20:3-16 (Ms. Carter).
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Plaintiffs’ expert, Dr. Barrie Morganstein,34 found that Timothy had “more than basic knowledge of ASL vocabulary” and that “almost 100% of the signs used by [Timothy] during the four-hour evaluation with [her] were ‘traditional’ ASL and were not signs of his own creation.” PX-186 at 10. She concluded that, “given his level of ASL and communication ability, [Timothy] should be provided with direct-care staff members who are sign fluent and are able to easily carry on conversations in ASL.” Id.
The evidence presented during trial better supports Ms. Carter’s assessment of Timothy’s abilities and needs. Indeed, Ms. Carter’s findings corroborate a January 2010 assessment conducted by Dr. Juliann Brunson, a Ph.D. level psychiatrist who is deaf and communicates using ASL, which concluded that Timothy’s “signs and stories were frequently unclear, lacked fluency, and demonstrated a limited vocabulary or knowledge of sign language.” PX-24 at PBH006045.35 Specifically, Ms. Carter observed that Timothy “is able to stay on topic most of the time for maybe two signs, sometimes not even two signs,” 10/24/13 Tr. at 99:14-15 (Carter), and lacked the ability to engage in any in-depth conversation. Even Dr. Morganstein, in reviewing her conversations with Timothy, acknowledged that Timothy’s signing lacked fluency (see 11/7/13 Tr. at 44:1-9 (Dr. Morganstein)), and expressed difficulty following Timothy’s thoughts (see, e.g., id. at 33:25-34:14 (Dr. Morganstein)). In fact, in both experts’ attempts to interpret Timothy’s ASL during trial (as it
34 Plaintiffs tendered, and the Court qualified, Dr. Morganstein as an expert in sign language communication with deaf clients, particularly those who also have other disabilities such as mental illness or a developmental disability. See 9/11/13 Tr. at 24:9-25:7 (Dr. Morganstein).
35 Ms. Carter testified that she had not seen the January 2010 assessment before completing her report. 10/24/13 Tr. at 105:24-106:1 (Carter).
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was displayed from videos created during Ms. Carter’s in-person evaluation of Timothy), it was apparent that, as Ms. Carter noted, Timothy “hops with no reason to go from one topic to another, and [that] he is unable, most of the time, to answer any questions and respond back in an appropriate way.” 10/24/13 Tr. at 99:22-23 (Carter). Even in response to questions from Ms. Carter, who it was clear that Timothy was fond of and wished to engage with, Ms. Carter noted that Timothy “a few times [] answer[ed] [her] and says, yes, or something like that, but most of the time there [was] no more information than that.” Id. at 100:7-9 (Carter). Ms. Carter further observed: “I don’t think he ever said no to anything I said. He’s able to do that, but he’s not able to give me more information.” Id. at 100:9-10 (Carter).
Rather, as is referenced in nearly every discussion of Timothy’s communication, it appears Timothy is more intent in repeating stories from his past than engaging in two-way conversation. In her January 2010 assessment, Dr. Brunson noted that “Timothy eagerly sought . . . attention by re-telling problematic incidents from the past.” PX-24 at PBH006045. In a follow-up assessment from January 2011, Dr. Brunson noted that “Timothy’s dialogue tends to be repetitive and concrete.” DX-287 at PBH008719. Ms. Carter noted that “[Timothy] seems to like to repeat the same topics over and over again and revisit those a lot.” 10/24/13 Tr. at 100:12-13 (Carter). Dr. Morganstein also noted that Timothy “has some go-to phrases and things that he repeats a lot” though she did not believe that necessarily reflected a limitation of Timothy’s overall communication abilities. 9/11/13 Tr. at 58:1459:9 (Dr. Morganstein). In videos observed during trial, Timothy made several repetitive references. And Ms. Parker, Timothy’s group home manager, testified that “Timothy pretty much says the same thing over and over.”
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9/10/13 Tr. at 178:7-14 (Parker). The repetitive nature of Timothy’s communication allows staff to better understand Timothy based on longevity of service as opposed to ASL ability. For example, when asked whether Jayvon, who the evidence shows is the least adept at ASL of Timothy’s primary three caregivers, understood one of Timothy’s repeated stories, Dr. Morganstein responded: “I think that [he] understands it, because he had experience with Timothy.” 11/7/13 Tr. at 21:20-24 (Dr. Morganstein). Moreover, even if Timothy were able to learn new signs, a task which would likely present Timothy with considerable difficulty (see 10/24/13 at 61:7-19, 154:6-15 (Carter); 11/7/13 Tr. at 32:9-18 (Dr. Morganstein)), it appears problematical whether many, if any, would actually be employed.
Thus, Ms. Carter’s conclusions that “[b]ased on his current language level and abilities, and given his current age, Timothy’s results demonstrate that he needs caregivers who are able to sign basic information,” and that “ensuring that a person has minimally adequate conversational sign language skill would be sufficient in addressing Timothy’s language needs as well as stimulating his ideas and topics of conversation, albeit repetitive in nature” (DX-870 at 6-7 (emphasis added)) take Timothy’s cognitive functioning into account in determining the necessary level of communication in the provision of Timothy’s supervisory and rehabilitative services and thus are in line with the requirements of the Regulations.
With this conclusion, evidence that accommodations currently in place are providing staff with the skills necessary to adequately meet Timothy’s supervisory and rehabilitative needs to the same or similar degree as another individual with a similar cognitive deficit precludes a finding for Plaintiffs on this claim. That is, Timothy’s staff currently undergo some level of ASL training.
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During closing arguments, by way of accommodation should they succeed on this claim, Plaintiffs requested that “the Court . . . order . . . the completion of a basic course in ASL at a local community college with passing grade” for Timothy’s primary three caregivers (i.e., Ms. Parker, Tierre, and Jayvon) (11/14/13 Tr. at 34:18-21), but there has been no showing how a basic course at a local community college would compare to the mentoring currently in place or even what it might consist of.36 Moreover, as of trial, Ambleside had hired a deaf caretaker, fluent in ASL, who works with Timothy weekly. 9/10/13 Tr. at 101:5-10 (Rose B.). Rose, who as Timothy’s guardian brings this claim on his behalf, described the communication in Timothy’s placement as “fair.” Id. at 101:21-23 (Rose B.). In fact, generally, as previously noted, Rose expressed
36 In fact, the minimal testimony regarding either the training in place or what a basic course at a local community college would entail reflects their apparent similarity. That is, the only description of a basic ASL course at a community college came from Rose, who testified: “Like they do at the you know, like well, say Davidson County Community College, they have the classes that lasted so many just hour or so, but they go like once a week for so many weeks. That’s how you get your basic course.” 9/10/13 Tr. at 61:16-20 (Rose B.). Ms. Parker described the training currently received by staff as follows:
A. . . . . We also contacted Reuben Leon from the deaf and hard-of-hearing services over here in Greensboro and he would come out.
Q. How often do you think Reuben A. He came out once a week for four weeks. Q. And that was to train the new staff? A. Yes. Q. How long was each session that he conducted with the staff[?] A. A hour. 9/10/13 Tr. at 182:4-13 (Parker).
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effusive praise for Ms. Parker and Tierre (id. at 82:23-83:13 (Rose B.)) as well as Jayvon, who, at the time of her testimony, was relatively new in working with Timothy. Indeed, Rose singled out Jayvon’s desire to learn ASL, including his attendance in a course at “deaf school.” See id. at 108:4-109:2 (Rose B.).37
Moreover, there is little evidence of adverse effects from a discrepancy in the ASL abilities of Timothy and his primary three caregivers. Rose failed to recall any consequences of Timothy’s ability or inability to communicate with staff. See id. at 102:2-5 (Rose B.). Plaintiffs suggest that adequate communication would have prevented possible pain experienced by Timothy from an abscessed tooth, but there is little detail regarding the circumstances surrounding that event to reach that conclusion. In fact, Rose testified only: “He had an abscess tooth one time, and he was showing his self big time. I went down there and then he told me what the problem was, he had an abscess tooth. We got him to the dentist and got it fixed and that took care of that problem.” Id. at 102:8-12 (Rose B.).
Plaintiffs also point to documentary and testimonial evidence that Timothy’s behaviors are triggered, in part, generally by communication difficulties. For instance, Rose testified that “the behavior starts” when “Timothy can’t communicate with another person or staff member or anyone else.” Id. at 95:20-24 (Rose B.). Similarly, Dr. Bodfish testified that staff’s “inability to communicate” with Timothy “directly caused increases or would contribute to inabilities to manage his behavior.” 9/27/13 Tr. at 16:9-12 (Dr.
37 Because Jayvon is not an employee of Ambleside, he does not attend the training offered within Timothy’s home. However, there is no evidence of the substance of the ASL training that Jayvon is receiving.
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Bodfish). Similarly, Plaintiffs point to a 2009 psychological assessment of Timothy which noted: “There have been reports that at least some of [Timothy’s] acting out behavior occurs when there is no one available who could understand him, and this is probably true.” PX-1 at PBH006067; 9/27/13 Tr. at 60:1-19 (Dr. Bodfish). However, there is also evidence that Timothy’s behaviors were no better controlled around staff more proficient in ASL (see, e.g., PX-13 at 11269 (describing incident in January 2013 where a caretaker who is “fluent in many signs” and “who does signing” was unable to calm Timothy down and Timothy hit that caretaker in the stomach and attempted to elope and engage in property destruction)). Other reports describe difficult behaviors as a result of numerous suspected or unknown factors. See generally PX-194. Such reports highlight the difficulty of attributing Timothy’s behavioral outbursts solely to communication difficulties, or, even more problematical, of attributing communication difficulties to ASL as opposed to cognitive functioning. Simply put, the evidence demonstrates that because of his cognitive functioning deficits, Timothy would gain little benefit from accommodations beyond those currently provided.
As a final note, Plaintiffs argue that Belton v. Georgia, No. 1:10-CV0583-RWS, 2012 WL 1080304 (N.D. Ga. Mar. 30, 2012) (unpublished), should guide the instant analysis and a finding in their favor. However, the inquiry in Belton differed from that faced here in that the plaintiffs in Belton complained of a complete inability to enjoy group home services due to a dearth of staff with ASL abilities. Moreover, in Belton, the director of the Georgia Department of Behavioral health and Developmental Disabilities (“DBHDD”) conceded the state’s “‘severe shortage’” of ASL fluent health care practitioners and testified that this shortage was “due to a lack of State resources and institutional
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placements,” see id. at *4.38 In contrast, in the instant action, not only has
there been no similar concession regarding the insufficiency of the state’s
services for deaf individuals, but the evidence does not demonstrate that the
ASL abilities of Timothy’s staff fail to offer Timothy communication “as
38 It is of some note that, even in Belton, where there did not appear to be a similar concern that the cognitive functioning of the plaintiffs significantly affected their ASL abilities, to the extent the Court addressed the need for ASL proficient practitioners in its Remedy Order, it provided:
C. Sign Language Instruction
i. The Department shall provide sign language instruction for those Providers where persons who use sign language or, in the case of persons with severe language deficits, would benefit from sign language exposure, are present for more than two hours a day at least two days a week. This would include, but is not limited to, Prevocational programs and intensive outpatient programs.
ii. At a minimum, this instruction should be provided until one-half working with Deaf persons are able to communicate at the “Survival” level of ASL proficiency, as defined by the [Sign Language Proficiency Interview (“SLPI”)].
Belton, No. 1:10-CV-0583-RWS, Docket Entry 172 at 24 (N.D. Ga. Mar. 30, 2012) (unpublished) (emphasis added). Defendants in that action have appealed that Order, see id., Docket Entry 185, filed a Motion to Stay Implementation of Sections of Remedy Order, see id., Docket Entry 187, and, subsequently, an Amended Motion to Stay Implementation of Sections of the Remedy Order, see id., Docket Entry 191. With respect to the section of the Remedy Order regarding “Sign Language Instruction,” the defendants argued:
Requiring the Department to provide sign language instruction for providers with the stated goal is financially burdensome, potentially unwarranted as duplicative and contrary to the Department’s limited resources for service as the Department would have to track, monitor and report individual staff sign language competencies of the 569 members of the provider network. Also, there is no evidence in this case that the Deaf and/or the named Plaintiffs have been denied access to services in the areas of prevocational programs and intensive outpatient programs.
Id., Docket Entry 191-1 at 13 (internal citation omitted). The Court denied the defendants’ Amended Motion to Stay, see id., Docket Entry 203, and the defendants’ appeal of the Remedy Order remains pending.
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effective as” with others who function at a similar cognitive level. Thus, Belton offers little guidance.
V. For the foregoing reasons, the Court finds in favor of Defendants. A final judgment will issue in favor of Defendants and against Plaintiffs. This the 28th day of August, 2014.
/s/ N. Carlton Tilley, Jr. Senior United States District Judge
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 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CLINTON L., et al.,

)

)

Plaintiffs,

)

v.

)

)

RICK BRAJER1, in his official capacity )

as Secretary of the Department of

)

Health and Human Services, and

)

PAMELA SHIPMAN, in her official

)

capacity as CEO and Area Director of )

the Piedmont Behavioral Healthcare )

Local Management Entity,

)

)

Defendants.

)

1:10CV123

MEMORANDUM ORDER Following this Court’s Memorandum Opinion and Judgment filed on August 28, 2014 (Docs. #161, 162), Plaintiffs moved pursuant to Rule 59(e) of the Federal Rules of Civil Procedure for an Order altering or amending the Judgment (Doc. #163). Plaintiffs argue that the Court committed clear errors of law and also request that the Court direct the parties to bear their own costs. For the reasons stated below, Plaintiffs’ Motion to Alter or Amend Judgment is DENIED.
I. First, Plaintiffs argue that the Court committed a clear error of law when it “modified the standard” from Pashby v. Delia, 709 F.3d 307 (4th Cir. 2013),

1 Secretary of the North Carolina Department of Health and Human Services Rick Brajer is substituted for Aldona Wos, the Secretary at the time the action was tried. See Fed. R. Civ. P. 25(d); Doc. #114.

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demanded “a higher standard of proof than that which is explicitly set out by the Fourth Circuit,” and required Plaintiffs to show that they are at “substantial,” “serious,” or “severe” risk of institutionalization.2 (Doc. #164 at 1-2.) According to Plaintiffs, the Pashby court required a showing of a “significant” risk of institutionalization, which could be shown by evidence that a plaintiff “may, might, probably would, or [was] likely to enter [an institutional placement] due to the termination of their [community-based services].” (Id. at 2 quoting Pashby, 703 F.3d at 322.)
Plaintiffs correctly note that the Pashby plaintiffs successfully supported their argument for a preliminary injunction with declarations that they may, might, probably would or were likely to be institutionalized as a result of the defendant’s actions. However, the Pashby court sat in a different posture than this Court. It was reviewing for abuse of discretion the district court’s grant of a preliminary injunction, which only requires that a plaintiff show, among other things, a likelihood of success on the merits. See Pashby v. Cansler, 279 F.R.D. 347, 354 (E.D.N.C. 2011). In addition, on appeal, the defendant argued that the plaintiffs were unlikely to succeed on the merits because the policy change at issue had not “resulted in the actual institutionalization” of the plaintiffs and, instead, they were only at risk of institutionalization. Pashby, 709 F.3d at 321-22. Therefore, the
2 In their response to Plaintiffs’ Motion to Alter or Amend Judgment, Defendants argue that this issue is not properly before the Court. (Doc. #166 at 2-3.) The Court disagrees and addresses Plaintiffs’ arguments.
2
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court had to determine, first, if the law required actual institutionalization and, second, if the plaintiffs had proffered enough support to show a likelihood of success on the merits.
As to the first issue, the Fourth Circuit explained that direction from the Department of Justice, among others, “refuted [the defendant’s] argument” that actual institutionalization was required. Id. at 322 (citing U.S. Dep’t of Justice, Statement of the Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C., http://www.ada.gov/olmstead/q&a olmstead.htm (last updated June 22, 2011) (“Enforcement Statement”)). In other words, “individuals who must enter institutions to obtain . . . services for which they qualify may be able to raise successful Title II and Rehabilitation Act claims because they face a risk of institutionalization.” Id.
As to the second issue, for purposes of the preliminary injunction they sought, the Pashby plaintiffs, as a whole, demonstrated a significant risk of institutionalization. Id. While some plaintiffs declared that they may or might enter an institution, others declared that they probably would or were likely to do so. Id. One plaintiff declared that he would have no choice but to do so. Id.
Moreover, not only did the Department of Justice determine that the ADA and Olmstead apply to individuals “at serious risk of institutionalization,” a determination that “especially swayed” the Pashby court, id., but the Department of Justice further explained that an individual can show “sufficient risk of
3
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institutionalization . . . if a public entity’s . . . cut to . . . services will likely cause a decline in health, safety, or welfare that would lead to the individual’s eventual placement in an institution.” Enforcement Statement Answer 6 (emphasis added). Here, Plaintiffs have not presented sufficient evidence that the reduction in the reimbursement rate for supervised living services likely caused or was likely to cause a decline in any of their health, safety, or welfare that would lead to institutionalization.
Despite the important differences between the Pashby case and this case, Plaintiffs were not held to a higher standard of proof or a higher standard of risk than the law requires. The difference in the applicable standard of proof is the difference between a plaintiff’s burden at the preliminary injunction stage to show a likelihood of success on the merits (as in Pashby) and the burden at trial to succeed on the merits (as is the case here). After a review of the evidence, and for all of the reasons stated in the Court’s Memorandum Opinion, none of Plaintiffs was able to meet the burden that he or she faced a significant risk of institutionalization as a result of the reduction in the reimbursement rate for supervised living services. Therefore, Plaintiffs’ motion to amend or alter the judgment as to this issue is denied.
II. Next, Plaintiffs argue that the Court committed a clear error of law when, in two footnotes in the Memorandum Opinion, it noted in response to Plaintiffs’ suggestions otherwise that Plaintiffs offered no evidence that the preliminary
4
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injunction entered on May 12, 2010 played any likely role in Diane’s or Timothy’s care and/or placement.3 (Doc. #164 at 7 (citing Mem. Op. p. 31 n. 20, p. 43 n. 23).) Plaintiffs argue that Defendants bear the burden of proof to establish that any change in their actions was not the result of the preliminary injunction. (Doc. #164 at 7.) Regardless of who bears the burden of proof, the evidence does not show that Plaintiffs’ care or placement was the result of the preliminary injunction. Instead, the care and placements were determined by the individuals’ care needs and personal guardian preferences.
Effective October 17, 2010 through January 15, 2011, a special rate request form was submitted for Diane seeking a continued reimbursement rate of $250.00 a day.4 (PX-61.) The justification for the request described Diane’s difficulties adjusting to different staffing levels and continued outbursts of aggression towards others, property damage, verbal aggression, and self-injurious behaviors and medication refusals. (Id. at PBH008117.) Melissa Covert, a care manager for Cardinal Healthcare, testified that she considered those to be valid clinical justifications for the special rate request. (9/20/13 Tr. 42:1-22 (Covert).)
3 As they did earlier, Defendants argue that this issue is not properly before the Court. (Doc. #166 at 8-9.) The Court disagrees and addresses Plaintiffs’ arguments. 4 Prior to February 2010, the reimbursement rate for Diane’s supervised living service was $250.00 a day. (PX-60 at PBH008114.) The February 2010 rate reduction was in place a short time, because, in April 2010, the reimbursement rate returned to $250.00 a day. (DX-292 at PBH009947.)
5
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Similarly, effective January 16, 2011 through April 16, 2011, a special rate request form sought a continued $250.00 a day. (PX-62.) Diane’s continued difficulty adjusting to her new living situation, outbursts, and violent behavior were provided as justifications for the request. (9/20/13 Tr. 43:1-18 (Covert) (testifying that a special rate may be extended if a client exhibits maladaptive behavior in a new setting and with a new staffing pattern that are atypical for the normal adjustment period); PX-62 at 008088-89.) These justifications supported “extending the enhanced rate for a long period of time[.]” (9/20/13 Tr. 43:2144:24 (Covert).)
Effective June 1, 2011, a special rate request form sought a new rate of $391.15 per day. (PX-37.) The justifications for the increased rate included Diane’s medical necessity criteria, long history of physical and verbal aggression, legal charges, property destruction, self-injurious behavior, and medication refusal. (Id. at PBH007801; 9/20/13 Tr. 45:2-46:9 (Covert).) As Plaintiffs point out, in addition to explaining Diane’s care needs, there is a note stating, “This is a case we’re involved in litigation with over decrease in rate for services. The patient has decompensated since services were decreased.” (PX-37 at PBH007801.) Nevertheless, after detailing the justifications for the enhanced rate request, Covert was asked, “And was this sufficient justification for the specific enhanced rate?” to which she responded, “Yes. At that point in time, to me it sounds very justified.” (9/20/13 Tr. 46:22-25 (Covert); see also id. at 47:1-11.)
6
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Effective June 30, 2011 to September 28, 2011, a special rate request form sought the continued enhanced rate of $391.15 per day. (PX-38.) The form notes that the enhanced rate was previously approved from June 1 to June 30 and, “It was determined by the clinical teams with Monarch and PBH UM, that Diane would receive an additional increase of $319.15 [sic] per day. This agreement was based upon extensive behaviors and psychiatric need.” (Id. at PBH008108.) After reviewing the stated justifications for the continued enhanced rate, Covert testified that “Everything on here supports a request for this rate.” (9/20/13 Tr. 49:3-8 (Covert).) Specifically, Covert noted a housemate who had moved out, another who had moved in, and continued outbursts, aggression, property damage, selfinjurious behaviors, and danger to self and community. (Id. at 49:9-20 (Covert).) In sum, the evidence shows that the provision of care to and placements for Diane were consequences of her care needs, not of the preliminary injunction.
Timothy’s care during the pendency of the preliminary injunction was affected by the reduced supervised living reimbursement rate, new regulatory interpretations for Medicaid, and his mother. (See, e.g., DX-691 at PBH010187; 10/10/13 Tr. 92:1-93:22 (Yon) (explaining effect of Medicaid interpretations); id. at 92:23-96:11, 97:14-19, 104:17-105:25 (explaining efforts to arrange Medicaid compliant residential options for Timothy); id. at 96:7-97:10, 104:14-16, 105:2125, 109:5-9, 110:5-7, 110:16-17 (explaining the role of Timothy’s mother in pursuing residential options for Timothy).) After his mother decided to bring Timothy to reside with his father and her, Piedmont Behavioral Healthcare
7
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continued to pursue community placement for Timothy outside of his home. (Id. at 111:7-9.) In June 2010, Timothy moved into a two-person home under the care of Ambleside (PX-18 at PBH006222), a placement identified and chosen by Timothy’s mother after conversations with caretakers in her home (10/10/13 Tr. 111:17-112:21). As a result of complaints by Timothy’s mother regarding the condition of the group home, in 2013, Timothy moved into a single-person apartment where he continued to receive services from Ambleside. (PX-13 at PBH011174; 9/10/13 Tr. 90:14-23 (Rose B).) In sum, the evidence shows that Timothy’s care and placements did not result from the preliminary injunction.
Although Plaintiffs’ focus is on the Court’s specific findings as to Diane and Timothy, the evidence also does not support a finding that the preliminary injunction affected the care or placements of any of the other Plaintiffs. (See, e.g., Mem. Op. 44-53 (analyzing evidence concerning Clinton), 53-59 (analyzing evidence concerning Jason), 59-64 (analyzing evidence concerning Steven), 64-68 (analyzing evidence concerning Vernon); 9/18/13 Tr. 70:6-71:1, 78:24-80:11, 105:1-9 (Benton) (testifying about Jason); 10/10/13 Tr. 183:11-20, 185:15-19, 188:15-192:25 (Yon) (testifying about Steven).) Therefore, Plaintiffs’ motion to alter or amend the judgment based on this issue is denied.
III. Finally, Plaintiffs request that the Court amend the Judgment to direct the parties to bear their own costs. (Doc. #164 at 9-13.) This request is not properly before the Court. The Court did not award costs to Defendants as part of the
8
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Judgment (see Doc. #162), nor have Defendants moved for costs. Therefore, Plaintiffs’ motion to alter or amend the judgment based on this issue is denied.
IV. For the reasons stated herein, Plaintiffs’ Motion to Alter or Amend Judgment (Doc. #163) is DENIED. This the 29th day of March, 2016.
/s/ N. Carlton Tilley, Jr. Senior United States District Judge
9 Case 1:10-cv-00123-NCT-JEP Document 168 Filed 03/29/16 Page 9 of 9

 
 18BC,CLOSED,MEDIATION,TRIAL
U.S. District Court North Carolina Middle District (NCMD) CIVIL DOCKET FOR CASE #: 1:10−cv−00123−NCT−JEP

CLINTON L., et al v. WOS, et al Assigned to: JUDGE N. C. TILLEY, JR Referred to: MAG/JUDGE JOI ELIZABETH PEAKE Cause: 42:12112 Americans with Disabilities Act
Plaintiff

Date Filed: 02/11/2010 Date Terminated: 08/28/2014 Jury Demand: None Nature of Suit: 446 Civil Rights: Americans with Disabilities − Other Jurisdiction: Federal Question

CLINTON L. by his Guardian and Next Friend, Clinton L., Sr., and others similarly situated

represented by ELIZABETH DALEY EDWARDS DISABILITY RIGHTS NORTH CAROLINA 3724 NATIONAL DRIVE, SUITE 100 RALEIGH, NC 27612 919−856−2195 Email: edwards@healthlaw.org ATTORNEY TO BE NOTICED

JENNIFER LEAH BILLS DISABILITY RIGHTS NORTH CAROLINA 2626 GLENWOOD AVE., STE. 550 RALEIGH, NC 27608 919−856−2195 Fax: 919−856−2244 Email: jennifer.bills@disabilityrightsnc.org ATTORNEY TO BE NOTICED

MORRIS FONVILLE MCADOO DISABILITY RIGHTS NORTH CAROLINA 3724 NATIONAL DRIVE, SUITE 100 RALEIGH, NC 27612 919−824−8286 Fax: 919−856−2244 Email: mfmcadoo@mcadoolawfirm.com ATTORNEY TO BE NOTICED

JOHN R. RITTELMEYER DISABILITY RIGHTS NORTH CAROLINA 2626 GLENWOOD AVE., STE. 550 RALEIGH, NC 27608 919−856−2195 Fax: 919−856−2244 Email: john.rittelmeyer@disabilityrightsnc.org ATTORNEY TO BE NOTICED

Plaintiff
TIMOTHY B. by his Guardian and Next Friend, Rose B., and others similarly situated

represented by ELIZABETH DALEY EDWARDS (See above for address) ATTORNEY TO BE NOTICED

JENNIFER LEAH BILLS (See above for address) ATTORNEY TO BE NOTICED

MORRIS FONVILLE MCADOO (See above for address)

Case: 1:10-cv-123 document<docnum> filed <datefiled> 1 of 24

Plaintiff VERNON W. by his Guardian and Next Friend Vernon D. W.
Plaintiff STEVEN C.
Plaintiff JASON A. by his Guardian and Next Friend Brenda A.
Plaintiff DIANE D. by her Guardian and Next Friend Thomas S.

ATTORNEY TO BE NOTICED
JOHN R. RITTELMEYER (See above for address) ATTORNEY TO BE NOTICED
represented by ELIZABETH DALEY EDWARDS (See above for address) ATTORNEY TO BE NOTICED
JENNIFER LEAH BILLS (See above for address) ATTORNEY TO BE NOTICED
JOHN R. RITTELMEYER (See above for address) ATTORNEY TO BE NOTICED
MORRIS FONVILLE MCADOO (See above for address) ATTORNEY TO BE NOTICED
represented by ELIZABETH DALEY EDWARDS (See above for address) ATTORNEY TO BE NOTICED
JENNIFER LEAH BILLS (See above for address) ATTORNEY TO BE NOTICED
JOHN R. RITTELMEYER (See above for address) ATTORNEY TO BE NOTICED
MORRIS FONVILLE MCADOO (See above for address) ATTORNEY TO BE NOTICED
represented by ELIZABETH DALEY EDWARDS (See above for address) ATTORNEY TO BE NOTICED
JENNIFER LEAH BILLS (See above for address) ATTORNEY TO BE NOTICED
JOHN R. RITTELMEYER (See above for address) ATTORNEY TO BE NOTICED
MORRIS FONVILLE MCADOO (See above for address) ATTORNEY TO BE NOTICED
represented by ELIZABETH DALEY EDWARDS (See above for address) ATTORNEY TO BE NOTICED

Case: 1:10-cv-123 document<docnum> filed <datefiled> 2 of 24

V. Defendant LANIER CANSLER in his official capacity as Secretary of the Department of Health and Human Services TERMINATED: 03/26/2012
Defendant DAN COUGHLIN in his official capacity as CEO and Area Director of the Piedmont Behavioral Healthcare Local Management Entity TERMINATED: 03/26/2012
Defendant PAM SHIPMAN CEO of Piedmont Behavioral Healthcare

JENNIFER LEAH BILLS (See above for address) ATTORNEY TO BE NOTICED
JOHN R. RITTELMEYER (See above for address) ATTORNEY TO BE NOTICED
MORRIS FONVILLE MCADOO (See above for address) ATTORNEY TO BE NOTICED
represented by LISA GRANBERRY CORBETT N. C. DEPARTMENT OF JUSTICE POB 629 RALEIGH, NC 27602−0629 919−855−4900 Fax: 919−733−3854 Email: lisa.corbett@dhhs.nc.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by WALLACE HOLLOWELL , III CARDINAL INNOVATIONS HEALTHCARE SOLUTIONS 550 S. CALDWELL STREET, STE. 1500 CHARLOTTE, NC 28202 919−649−3088 Email: chuck.hollowell@cardinalinnovations.org LEAD ATTORNEY ATTORNEY TO BE NOTICED
LISA GRANBERRY CORBETT (See above for address) ATTORNEY TO BE NOTICED
STEPHEN D. MARTIN CARDINAL INNOVATIONS HEALTHCARE SOLUTIONS 550 S. CALDWELL STREET, STE. 1500 CHARLOTTE, NC 28202 919−913−4194 Email: steve.martin@cardinalinnovations.org ATTORNEY TO BE NOTICED
represented by WALLACE HOLLOWELL , III (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
CANDACE SCOTT FRIEL NELSON MULLINS RILEY & SCARBOROUGH LLP THE KNOLLWOOD, STE. 530 380 KNOLLWOOD ST. WINSTON−SALEM, NC 27103 336−774−3331

Case: 1:10-cv-123 document<docnum> filed <datefiled> 3 of 24

Defendant ALDONA WOS in her official capacity as Secretary of the Department of Health and Human Services
Interested Party UNITED STATES OF AMERICA

Fax: 336−774−3379 Email: candace.friel@nelsonmullins.com ATTORNEY TO BE NOTICED
STEPHEN D. MARTIN (See above for address) ATTORNEY TO BE NOTICED
represented by LISA GRANBERRY CORBETT (See above for address) TERMINATED: 08/30/2013 LEAD ATTORNEY ATTORNEY TO BE NOTICED
SCOTT THOMAS STROUD N. C. DEPARTMENT OF JUSTICE POB 629 RALEIGH, NC 27602−0629 919−716−6880 Fax: 919−716−6759 Email: ststroud@ncdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
THOMAS EDWARD KELLY NORTH CAROLINA DEPARTMENT OF JUSTICE POST OFFICE BOX 629 RALEIGH, NC 27602 919−716−6860 Fax: 919−716−6756 TERMINATED: 10/20/2014 LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by GILL P. BECK U. S. ATTORNEY'S OFFICE U. S. COURTHOUSE 100 OTIS ST. ASHEVILLE, NC 28801 Email: Gill.Beck@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Date Filed 02/11/2010
02/11/2010 02/11/2010 02/11/2010

# Docket Text
1 COMPLAINT against LANIER CANSLER, DAN COUGHLIN ( Filing fee $ 350 receipt number 0418−716668.), filed by CLINTON L., TIMOTHY B. (Attachments: # 1 Exhibit PBH Communication Bulletin dated January 11, 2010) (RITTELMEYER, JOHN) (Entered: 02/11/2010)
2 Corporate Disclosure Statement by CLINTON L. (RITTELMEYER, JOHN) (Entered: 02/11/2010)
3 Corporate Disclosure Statement by TIMOTHY B. (RITTELMEYER, JOHN) (Entered: 02/11/2010)
4 MOTION for Temporary Restraining Order and Preliminary Injunction by TIMOTHY B., CLINTON L. Responses due by 3/8/2010. (Attachments: # 1 Affidavit Declaration of Rose Bryan, # 2 Affidavit Declaration of Clinton Lockhart, Sr., # 3 Affidavit Declaration of Margaret Soviero) (RITTELMEYER, JOHN) (Entered: 02/11/2010)

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02/11/2010 02/11/2010 02/11/2010 02/11/2010 02/11/2010 02/11/2010 02/11/2010 02/11/2010 02/16/2010
02/16/2010 02/16/2010 02/16/2010 02/16/2010
02/17/2010
02/17/2010

5 MEMORANDUM re 4 MOTION for Temporary Restraining Order and Preliminary Injunction filed by TIMOTHY B., CLINTON L. (RITTELMEYER, JOHN) Modified on 2/11/2010 to edit duplicate text. (Lloyd, Donna) (Entered: 02/11/2010)
6 NOTICE of Appearance by attorney STEPHEN D. MARTIN on behalf of Defendant DAN COUGHLIN. (MARTIN, STEPHEN) (Entered: 02/11/2010)
7 NOTICE of Appearance by attorney WALLACE HOLLOWELL, III on behalf of Defendant DAN COUGHLIN. (HOLLOWELL, WALLACE) (Entered: 02/11/2010)
8 Summons Issued as to LANIER CANSLER, DAN COUGHLIN. (Attachments: # 1 Additional Summons) (Lloyd, Donna) (Entered: 02/11/2010)
9 Notice of Right to Consent. Counsel shall serve the attached form on all parties. (Lloyd, Donna) (Entered: 02/11/2010)
Motions Submitted: 4 MOTION for Temporary Restraining Order and Preliminary Injunction to CHIEF JUDGE JAMES A. BEATY, JR. (Kemp, Donita) (Entered: 02/11/2010)
Telephone Notice on 2/11/2010 by Clerk of Court to Attorney John Rittelmeyer advising counsel of the Preliminary Injunction Hearing set for 2/17/2010 02:00 PM in Winston−Salem Courtroom #1 before CHIEF JUDGE JAMES A. BEATY JR. (Kemp, Donita) (Entered: 02/12/2010)
Case Assigned to MAG/JUDGE P. TREVOR SHARP as referral judge. (Powell, Gloria) (Entered: 07/23/2010)
10 RESPONSE in Opposition re 4 MOTION for Temporary Restraining Order and Preliminary Injunction filed by DAN COUGHLIN. Replies due by 3/5/2010. (Attachments: # 1 Exh 1 − Contract between PBH and NC Dept. of Health and Human Services, Division of Mental Health, Developmental Disabilities and Substance Abuse Services, # 2 Exh 2 − 2/16/2010 Letter from David C. Lindsay, # 3 Declaration of Daniel R. Couglin, # 4 Declaration of Renee Snipes, # 5 Declaration of Anna Yon, # 6 Declaration of David Jones, # 7 Declaration of Craig B. Hummel, M.D., # 8 Declaration of Peggy S. Terhune)(MARTIN, STEPHEN) (Entered: 02/16/2010)
11 RESPONSE in Opposition re 4 MOTION for Temporary Restraining Order and Preliminary Injunction filed by LANIER CANSLER. Replies due by 3/5/2010. (Attachments: # 1 Affidavit Leza Wainwright)(POWERS, DOROTHY) (Entered: 02/16/2010)
12 NOTICE of Appearance by attorney LISA GRANBERRY CORBETT on behalf of Defendant LANIER CANSLER. (CORBETT, LISA) (Entered: 02/16/2010)
13 NOTICE of Appearance by attorney GILL P. BECK on behalf of Interested Party UNITED STATES OF AMERICA. (BECK, GILL) (Entered: 02/16/2010)
14 STATEMENT of Interest of the United States of America by Interested Party UNITED STATES OF AMERICA. (Attachments: # 1 Supplement Unpublished Opinion Crabtree v. Goetz, # 2 Supplement Unpublished Opinion Long v. Benson, # 3 Supplement Unpublished Opinion Marlo M v. Cansler)(BECK, GILL) (Entered: 02/16/2010)
15 REPLY to Response to 4 MOTION for Temporary Restraining Order and Preliminary Injunction filed by TIMOTHY B., CLINTON L. (Attachments: # 1 Exhibit PBH Communications Bulletin, # 2 Exhibit Letter dated Jan. 24, 2006, # 3 Exhibit MH/DD/SAS Service Definition, # 4 Exhibit PBH Service Definition, # 5 Affidavit Declaration of Lisa Tilley)(RITTELMEYER, JOHN) (Entered: 02/17/2010)
Minute Entry for proceedings held before CHIEF JUDGE JAMES A. BEATY, JR: Motion Hearing held on 2/17/2010 re 4 MOTION for Preliminary Injunction filed by CLINTON L., TIMOTHY B. (Parties to be advised of the Court's ruling at a later date; written order forthcoming.) (Court Reporter Lori Russell; Attorney(s) John Rittelmeyer, Andrew Strickland, and Jennifer Bills appeared on behalf of plaintiff; Attorney(s) Lisa Corbett and Richard Slipsky appeared on behalf of defendant Lanier Cansler; Attorney(s) Wallace Hollowell, III and Stephen Martin appeared on behalf of defendant Dan Coughin; Attorney(s) Samuel Bagenstos and Gill Beck appeared on behalf of the United States) (Kemp, Donita) (Entered: 02/18/2010)

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02/19/2010
02/19/2010 03/01/2010 03/01/2010 03/02/2010 03/02/2010 03/29/2010 03/30/2010 04/07/2010 04/07/2010 04/07/2010 04/07/2010
04/07/2010 04/12/2010

16 ORDER signed by CHIEF JUDGE JAMES A. BEATY, JR on 2/19/10, that Plaintiffs' Motion for Preliminary Injunction is DENIED as to Plaintiff Clinton L., without prejudice to Clinton L. refiling a request for a preliminary injunction at any time during the pendency of this suit if he is notified that his living situation or level of services will be changed as a result of PBH's rate cuts. FURTHER that with respect to Plaintiff Timothy B., Plaintiffs' Motion for Preliminary Injunction is set for a supplemental hearing on April 14, 2010 at 10:00 a.m. in Courtroom 1 of the Hiram H. Ward Federal Building, Winston−Salem, North Carolina, as set out herein, and any supplemental materials may be submitted for the Court's consideration by April 7, 2010. (Law, Trina) (Entered: 02/19/2010)
Set Motion Hearing: Motion Hearing set for 4/14/2010 10:00 AM in Winston−Salem Courtroom #1 before CHIEF JUDGE JAMES A. BEATY JR. (Law, Trina) (Entered: 02/19/2010)
17 MOTION for Extension of Time to File Answer re 1 Complaint by DAN COUGHLIN. Responses due by 3/25/2010. (Attachments: # 1 Text of Proposed Order)(MARTIN, STEPHEN) (Entered: 03/01/2010)
18 MOTION for Extension of Time to File Answer re 1 Complaint by LANIER CANSLER. Responses due by 3/25/2010. (Attachments: # 1 Text of Proposed Order granting extension)(CORBETT, LISA) (Entered: 03/01/2010)
ORDER granting 17 Motion for Extension of Time to Answer for DAN COUGHLIN. Answer due by 4/1/2010. Signed by John Brubaker, Clerk of Court, on 03/02/10. (Brubaker, John) (Entered: 03/02/2010)
ORDER granting 18 Motion for Extension of Time to Answer for LANIER CANSLER. Answer due by 4/1/2010. Signed by John Brubaker, Clerk of Court, on 03/02/10. (Brubaker, John) (Entered: 03/02/2010)
19 (FILED IN ERROR)First AMENDED COMPLAINT against defendant LANIER CANSLER, filed by TIMOTHY B..(RITTELMEYER, JOHN) Modified text on 3/30/2010 (Lapira, Sharon). (Entered: 03/29/2010)
20 First AMENDED COMPLAINT against defendant LANIER CANSLER, DAN COUGHLIN, filed by CLINTON L..(RITTELMEYER, JOHN) (Entered: 03/30/2010)
Telephone Notice to Attorney(s) John Rittelmeyer, Richard Slipsky, Wallace Hollowell, III, and Gill Beck on 4/7/2010; Counsel advised that the Motion Hearing set for 4/14/2010 10:00 AM will be held in Greensboro Courtroom #1 before CHIEF JUDGE JAMES A. BEATY JR. (Kemp, Donita) (Entered: 04/07/2010)
21 MOTION to Intervene by TIMOTHY B., CLINTON L. Responses due by 5/3/2010 (Attachments: # 1 Exhibit Interveners' Complaint)(RITTELMEYER, JOHN) (Entered: 04/07/2010)
22 Supplemental MOTION for Preliminary Injunction by TIMOTHY B., CLINTON L. Responses due by 4/28/2010 (RITTELMEYER, JOHN) (Entered: 04/07/2010)
23 MEMORANDUM filed by Plaintiffs TIMOTHY B., CLINTON L. re 22 Supplemental MOTION for Preliminary Injunction filed by TIMOTHY B., CLINTON L.. (Attachments: # 1 Exhibit Exhibit 1, # 2 Exhibit Exhibit 2, # 3 Exhibit Exhibit 3, # 4 Exhibit Exhibit 4, # 5 Exhibit Exhibit 5, # 6 Exhibit Exhibit 6, # 7 Exhibit Exhibit 7, # 8 Exhibit Exhibit 8, # 9 Exhibit Exhibit 9, # 10 Exhibit Exhibit 10, # 11 Affidavit Declaration of Barrie Morganstein, Ph.D., # 12 Affidavit Declaration of Brenda Arthur, # 13 Affidavit Declaration of Cas Shearin, # 14 Affidavit Declaration of Deborah Thome, # 15 Affidavit Declaration of Rose Bryan, # 16 Affidavit Declaration of Steven C., # 17 Affidavit Declaration of Thomas Smith, # 18 Affidavit Declaration of Vernon Worrell)(RITTELMEYER, JOHN) (Entered: 04/07/2010)
24 NOTICE by DAN COUGHLIN of Filing (Attachments: # 1 Exh A − Second Declaration of Craig B. Hummel, M.D. (with clinical analyses), # 2 Exh B − Second Declaration of Anna Yon, # 3 Exh C − Declaration of Lori Fuller, # 4 Exh D − Declaration of Christy Anderson)(MARTIN, STEPHEN) (Entered: 04/07/2010)
Motions Submitted: 21 MOTION to Intervene, 22 Supplemental MOTION for Preliminary Injunction to CHIEF JUDGE JAMES A. BEATY, JR. (Kemp, Donita)

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04/13/2010 04/13/2010 04/13/2010 04/14/2010
04/15/2010 04/15/2010 04/16/2010 04/16/2010
05/03/2010 05/03/2010 05/04/2010

(Entered: 04/12/2010)
25 RESPONSE in Opposition re 22 Supplemental MOTION for Preliminary Injunction filed by DAN COUGHLIN. Replies due by 4/30/2010. (Attachments: # 1 Exhibit 1 − Amendment to Procurement Contract re Timothy B.)(MARTIN, STEPHEN) (Entered: 04/13/2010)
26 Defendant Cansler's ANSWER to Amended Complaint by LANIER CANSLER. (CORBETT, LISA) (Entered: 04/13/2010)
27 Corporate Disclosure Statement by LANIER CANSLER. (CORBETT, LISA) (Entered: 04/13/2010)
Minute Entry for proceedings held before CHIEF JUDGE JAMES A. BEATY, JR: Supplemental Motion Hearing held on 4/14/2010 re 4 MOTION for Temporary Restraining Order and Preliminary Injunction filed by CLINTON L., TIMOTHY B., 22 Supplemental MOTION for Preliminary Injunction filed by CLINTON L., TIMOTHY B. (Parties to be advised of the Court's ruling at a later date; written order forthcoming.) (Court Reporter Lori Russell; Attorney(s) John Rittelmeyer, Andrew Strickland, and Jennifer Bills appeared on behalf of plaintiff; Attorney Lisa Corbett appeared on behalf of defendant Lanier Cansler; Attorney(s) Wallace Hollowell, III and Stephen Martin appeared on behalf of defendant Dan Coughin) (Kemp, Donita) (Entered: 04/14/2010)
28 Corporate Disclosure Statement by LANIER CANSLER. (CORBETT, LISA) (Entered: 04/15/2010)
29 Amended (typographical corrections) ANSWER to Amended Complaint by LANIER CANSLER. (CORBETT, LISA) (Entered: 04/15/2010)
30 NOTICE by DAN COUGHLIN re 22 Supplemental MOTION for Preliminary Injunction Notice of Filing (Attachments: # 1 Exh A − Third Declaration of Anna Yon)(MARTIN, STEPHEN) (Entered: 04/16/2010)
31 Verified ANSWER to Amended Complaint and Affirmative Defenses by DAN COUGHLIN. (Attachments: # 1 Exh 1 − Innovations Waiver, # 2 Exh 2 − Contract between PBH and NC Dept. of Health and Human Services, Division of Medical Assistance (1 of 2), # 3 Exh 2 − Contract between PBH and NC Dept. of Health and Human Services, Division of Medical Assistance (2 of 2), # 4 Exh 3 − Contract between PBH and NC Dept. of Health and Human Services, Division of Mental Health, # 5 Exh 4 − Amendment to Procurement Contracts between PBH and providers for Steven C. and Vernon W., # 6 Exh 5 − Amendment to Procurement Contract between PBH and provider for Timothy B., # 7 Exh 6 − February 16, 2010 Letter from counsel for Easter Seals UCP re Clinton L., # 8 Exh 7 − Declaration of Lori Fuller, # 9 Exh 8 − April 15, 2010 Letter from Omni Visions, Inc. re Vernon W., # 10 Exh 9 − Second Declaration of Craig B. Hummel, M.D.)(MARTIN, STEPHEN) (Entered: 04/16/2010)
32 RESPONSE in Opposition re Motions Submitted to Intervene filed by LANIER CANSLER. Replies due by 5/13/2010. (CORBETT, LISA) (Entered: 05/03/2010)
33 RESPONSE in Opposition re 21 MOTION to Intervene filed by DAN COUGHLIN. Replies due by 5/20/2010. (Attachments: # 1 Exh 1 − Declaration of Anna Yon)(MARTIN, STEPHEN) (Entered: 05/03/2010)
34 Transcript of Proceedings held on 02/17/2010 before Judge James A. Beaty, Jr. Court Reporter Lori Russell, Telephone number 336−734−2547. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.
NOTICE RE: REDACTION OF TRANSCRIPTS: The parties have 5 business days to file a Notice of Intent to Request Redaction and 21 calendar days to file a Redaction Request. If no notice is filed, this transcript will be made electronically available to the public without redaction after 90 calendar days. Transcript may be viewed at the court public terminal or purchased through the court reporter before the 90 day deadline. After that date it may be obtained through PACER.

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05/04/2010
05/12/2010
05/14/2010 05/19/2010
06/02/2010 06/21/2010 06/21/2010 06/21/2010 06/28/2010

Redaction Request due 5/27/2010. Redacted Transcript Deadline set for 6/4/2010. Release of Transcript Restriction set for 8/2/2010. (Russell, Lori) (Entered: 05/04/2010)
35 Transcript of Proceedings held on 04/14/2010 before Judge James A. Beaty, Jr. Court Reporter Lori Russell, Telephone number 336−734−2547. Transcript may be viewed at the court public terminal or purchased through the Court Reporter before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.
NOTICE RE: REDACTION OF TRANSCRIPTS: The parties have 5 business days to file a Notice of Intent to Request Redaction and 21 calendar days to file a Redaction Request. If no notice is filed, this transcript will be made electronically available to the public without redaction after 90 calendar days. Transcript may be viewed at the court public terminal or purchased through the court reporter before the 90 day deadline. After that date it may be obtained through PACER.
Redaction Request due 5/27/2010. Redacted Transcript Deadline set for 6/4/2010. Release of Transcript Restriction set for 8/2/2010. (Russell, Lori) (Entered: 05/04/2010)
36 ORDER signed by CHIEF JUDGE JAMES A. BEATY, JR on 5/12/10, that Plaintiffs' Supplemental Motion for a Preliminary Injunction [Doc. 22 ] is DENIED to the extent that Plaintiffs ask this Court to set reimbursement rates for certain types of Supervised Living services. However, Plaintiffs Supplemental Motion for a Preliminary Injunction [Doc. 22 ] is GRANTED to the extent that Plaintiffs request that Defendant Coughlin be required to ensure that Plaintiffs are provided with community−based treatment as an alternative to institutionalization during the pendency of this suit. THEREFORE Defendant Coughlin, as CEO and Area Director of the PBH Local Management Entity, ensure that each Plaintiff is provided with a clinically appropriate community−based placement option during the pendency of this suit. (Lapira, Sharon) (Entered: 05/12/2010)
37 REPLY, filed by Plaintiffs TIMOTHY B., CLINTON L., to Response to 21 MOTION to Intervene filed by TIMOTHY B., CLINTON L.. (RITTELMEYER, JOHN) (Entered: 05/14/2010)
38 ORDER that the Motion to Intervene [Doc. 21 ] is GRANTED as set out herein, and Plaintiffs will be given 14 days to file a Second Amended Complaint adding the claims of Jason A. and Diane D. IT IS FURTHER ORDERED that the limited preliminary injunction that was previously entered in this case will apply to the new Plaintiffs Jason A. and Diane D., and Defendant Coughlin, as CEO and Area Director of the PBH Local Management Entity, must ensure that each Plaintiff, including Jason A. and Diane D., is provided with a clinically− appropriate community−based placement option during the pendency of this suit. Signed by CHIEF JUDGE JAMES A. BEATY, JR on 5/19/2010. (Lapira, Sharon) (Entered: 05/19/2010)
39 Second AMENDED COMPLAINT against defendant LANIER CANSLER, DAN COUGHLIN, filed by CLINTON L., TIMOTHY B..(RITTELMEYER, JOHN) (Entered: 06/02/2010)
40 MOTION for Extension of Time to File Answer re 39 Amended Complaint by DAN COUGHLIN. (Attachments: # 1 Text of Proposed Order)(MARTIN, STEPHEN) (Entered: 06/21/2010)
ORDER granting 40 Motion for Extension of Time to Answer Second Amended Complaint for DAN COUGHLIN. Answer due by 6/28/2010. Signed by John Brubaker, Clerk of Court, on 06/21/10. (Brubaker, John) (Entered: 06/21/2010)
41 ANSWER to Amended Complaint 39 by LANIER CANSLER. (CORBETT, LISA) Modified text to link to amended complaint on 6/22/2010 (Lapira, Sharon). (Entered: 06/21/2010)
42 Verified ANSWER to Amended Complaint and Affirmative Defenses by DAN COUGHLIN. (Attachments: # 1 Exh 1 − Clinical Case Staffing Notes on Jason A., Diane D.)(MARTIN, STEPHEN) (Entered: 06/28/2010)

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07/23/2010 08/16/2010 08/16/2010 08/20/2010 08/26/2010 08/26/2010 08/27/2010
08/27/2010 08/27/2010 09/10/2010 09/10/2010 09/10/2010 09/20/2010 09/27/2010 10/08/2010 03/15/2011

43 NOTICE of Initial Pretrial Conference Hearing: Initial Pretrial Conference Hearing set for 8/30/2010 09:30 AM in Greensboro Courtroom #1A before MAG/JUDGE P. TREVOR SHARP. (Garrett, Kim) (Entered: 07/23/2010)
44 MOTION to Dismiss by LANIER CANSLER, DAN COUGHLIN. Responses due by 9/10/2010. (MARTIN, STEPHEN) (Entered: 08/16/2010)
45 MEMORANDUM in Support re 44 MOTION to Dismiss filed by LANIER CANSLER, DAN COUGHLIN. (Attachments: # 1 Exhibit A − Declaration of Anna Yon) (MARTIN, STEPHEN) Modified on 8/20/2010 to accurately reflect document title. (Lloyd, Donna) (Entered: 08/16/2010)
46 Rule 26(f) Report (Joint) filed by all parties by TIMOTHY B., CLINTON L..(RITTELMEYER, JOHN) (Entered: 08/20/2010)
Motions Referred: 46 Rule 26(f) Report (Joint) filed by all parties to MAG/JUDGE P. TREVOR SHARP− (Garrett, Kim) (Entered: 08/26/2010)
47 Rule 26(f) Report (Joint) Corrected filed by all parties by CLINTON L.. (RITTELMEYER, JOHN) (Entered: 08/26/2010)
48 ORDER signed by MAG/JUDGE P. TREVOR SHARP on 8/27/2010 granting 47 RULE 26F (JOINT) The joint report is approved without modification. All discovery, including experts, must be completed within six (6) months after the commencement of discovery. The parties will participate in a mediated settlement conference within five months after the commencement of discovery. The parties do not consent to the trial jurisdiction of a magistrate judge. The case should be ready for trial within 90 days after the close of discovery and should take approximately five to ten days to try. A jury trial has not been requested (Lapira, Sharon) (Entered: 08/27/2010)
49 MOTION to Stay Discovery Pending Ruling on Defendants' Motion to Dismiss by LANIER CANSLER, DAN COUGHLIN. Responses due by 9/20/2010 (MARTIN, STEPHEN) (Entered: 08/27/2010)
50 MEMORANDUM IN SUPPORT RESPONSE in Support re 49 MOTION to Stay Discovery Pending Ruling on Defendants' Motion to Dismiss filed by LANIER CANSLER, DAN COUGHLIN. (MARTIN, STEPHEN) Modified to add additional text on 8/27/2010 (Lapira, Sharon). (Entered: 08/27/2010)
MEDIATION SCHEDULING ORDER − mediation to take place 5 months after the commencement of discovery. (Gammon, Cheryl) Modified on 10/28/2010 to correct clerical error. (Gammon, Cheryl). (Entered: 09/10/2010)
CASE REFERRED to Mediation pursuant to Local Rule 83.9b of the Rules of Practice and Procedure of this Court. Please go to our website form directory for a list of mediators which must be served on all parties. (Gammon, Cheryl) (Entered: 09/10/2010)
51 RESPONSE in Opposition re 44 MOTION to Dismiss filed by CLINTON L.. Replies due by 9/27/2010. (Attachments: # 1 Affidavit Declaration of Rose Bryan, # 2 Affidavit Declaration of Counsel)(RITTELMEYER, JOHN) (Entered: 09/10/2010)
52 RESPONSE to Motion to Stay filed by Plaintiff CLINTON L. re 49 MOTION to Stay Discovery Pending Ruling on Defendants' Motion to Dismiss filed by LANIER CANSLER, DAN COUGHLIN filed by CLINTON L.. Replies due by 10/7/2010. (RITTELMEYER, JOHN) (Entered: 09/20/2010)
53 REPLY, filed by Defendants LANIER CANSLER, DAN COUGHLIN, to Response to 44 MOTION to Dismiss filed by LANIER CANSLER, DAN COUGHLIN. (Attachments: # 1 Reply Decl. of Anna Yon (1 of 3), # 2 Decl. of Anna Yon (2 of 3), # 3 Decl. of Anna Yon (3 of 3))(MARTIN, STEPHEN) (Entered: 09/27/2010)
Motion(s) Submitted: 49 MOTION to Stay Discovery Pending Ruling on Defendants' Motion to Dismiss, 44 MOTION to Dismiss to CHIEF JUDGE JAMES A. BEATY, JR. (Kemp, Donita) (Entered: 10/08/2010)
54 MOTION for Status Conference by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (Attachments: # 1 Declaration of Thomas Smith, # 2 Declaration of Rose Bryan, # 3 Declaration of Barrie Morganstein, # 4 Declaration of

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03/15/2011 03/15/2011 03/15/2011 04/07/2011 04/07/2011
04/07/2011
04/08/2011 04/08/2011 04/14/2011
04/14/2011 04/15/2011 05/12/2011 06/15/2011 06/15/2011

Brenda Arthur, # 5 Declaration of Keith Call, # 6 Declaration of Lillian L.)(RITTELMEYER, JOHN) (Entered: 03/15/2011)
55 MEMORANDUM filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. re 54 MOTION for Status Conference filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 03/15/2011)
56 MOTION to Appoint Special Master by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 03/15/2011)
57 MEMORANDUM filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. re 56 MOTION to Appoint Special Master filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 03/15/2011)
58 Emergency MOTION for Entry of Default and to Deem Plaintiffs' Motions filed March 15, 2011 as Uncontested and therefore Granted by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 04/07/2011)
59 Plaintiffs' BRIEF re 58 Emergency MOTION for Entry of Default and to Deem Plaintiffs' Motions filed March 15, 2011 as Uncontested and therefore Granted by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 04/07/2011)
60 WITHDRAWAL of Motion by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. re 58 Emergency MOTION for Entry of Default and to Deem Plaintiffs' Motions filed March 15, 2011 as Uncontested and therefore Granted filed by JASON A., STEVEN C., VERNON W., CLINTON L., DIANE D., TIMOTHY B. (RITTELMEYER, JOHN) (Entered: 04/07/2011)
61 RESPONSE in Opposition re 56 MOTION to Appoint Special Master filed by LANIER CANSLER, DAN COUGHLIN. Replies due by 4/25/2011. (MARTIN, STEPHEN) (Entered: 04/08/2011)
62 RESPONSE in Opposition re 54 MOTION for Status Conference filed by LANIER CANSLER, DAN COUGHLIN. Replies due by 4/25/2011. (Attachments: # 1 Exh 1 − Declaration of Anna Yon, # 2 Exh 2 − Declaraton of Melissa M. Covert)(MARTIN, STEPHEN) (Entered: 04/08/2011)
63 REPLY, filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W., to Response to 54 MOTION for Status Conference filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (Attachments: # 1 Exhibit Letter dated April 12, 2011)(RITTELMEYER, JOHN) (Entered: 04/14/2011)
64 REPLY, filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W., to Response to 56 MOTION to Appoint Special Master filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 04/14/2011)
Motions Submitted: 54 MOTION for Status Conference, 56 MOTION to Appoint Special Master to CHIEF JUDGE JAMES A. BEATY, JR. (Kemp, Donita) (Entered: 04/15/2011)
65 NOTICE of Hearing: Status Conference set for 6/21/2011 09:30 AM in Winston−Salem Courtroom #1 before CHIEF JUDGE JAMES A. BEATY JR. (Kemp, Donita) (Entered: 05/12/2011)
66 NOTICE by DAN COUGHLIN Notice of Filing (Attachments: # 1 Exh 1 − Declaration of Anna Yon, # 2 Exh 2 − Declaration of Melissa M. Covert)(MARTIN, STEPHEN) (Entered: 06/15/2011)
67 ORDER that Defendants' Motion to Dismiss [Doc. # 44 ] is DENIED, and Defendants Motion to Stay Discovery [Doc. # 49 ] is DENIED as moot. IT IS FURTHER

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06/21/2011
06/21/2011 06/23/2011 06/24/2011 06/28/2011
06/28/2011 06/28/2011 06/28/2011 07/22/2011 07/25/2011 07/25/2011 10/21/2011

ORDERED that Plaintiffs Motion for Status Conference [Doc.# 54 ] is GRANTED to the extent that this case has been scheduled for a status conference on June 21, 2011, at 9:30 a.m. FINALLY, IT IS ORDERED that Plaintiffs Motion for Appointment of a Special Master [Doc. # 56 ] is DENIED. Signed by CHIEF JUDGE JAMES A. BEATY, JR on 6/15/2011. (Lapira, Sharon) (Entered: 06/15/2011)
Minute Entry for proceedings held before CHIEF JUDGE JAMES A. BEATY, JR: Status Conference held on 6/21/2011 as to any violations with the ongoing preliminary injunction entered 5/12/2010; parties advised that the Court will consider arguments made and the order shall remain in place until the parties are given further instructions by the Court. (Court Reporter Lori Russell; Attorney(s) John Rittelmeyer, Andrew Strickland, and Jennifer Bills appeared on behalf of plaintiff; Attorney(s) Wallace Hollowell and Stephen Martin appeared on behalf of defendant Dan Coughlin; Attorney Richard Slipsky appeared on behalf of defendant Lanier Cansler) (Kemp, Donita) (Entered: 06/21/2011)
68 ORDER that the Courts Preliminary Injunction Order dated May 12, 2010 remains in full force and effect without modification, and any further relief requested by Plaintiffs at this time is DENIED. Signed by CHIEF JUDGE JAMES A. BEATY, JR on 6/21/2011. (Lapira, Sharon) (Entered: 06/21/2011)
69 Joint MOTION to Amend/Correct 48 Rule 26f (Joint), Rule 26f (Joint), Rule 26f (Joint) by JASON A., TIMOTHY B., LANIER CANSLER, DAN COUGHLIN, DIANE D., CLINTON L., STEVEN C., VERNON W.. (Attachments: # 1 Text of Proposed Order)(MARTIN, STEPHEN) (Entered: 06/23/2011)
Motions Referred: 69 Joint MOTION to Amend/Correct 48 Rule 26f (Joint) to MAG/JUDGE P. TREVOR SHARP. (Kemp, Donita) (Entered: 06/24/2011)
70 ORDER signed by MAG/JUDGE P. TREVOR SHARP on 6/28/2011, that the joint motion (Docket No. 69 ) is GRANTED and that: 1. The Parties shall serve their Initial Disclosures pursuant to Rule 26(a)(1) on or before June 29, 2011; 2. All discovery, including experts, must be completed by December 15, 2011. Plaintiffs will designate any expert witnesses, including any reports prepared by these expert witnesses, on or before September 30, 2011. Defendants will designate any expert witnesses, including any reports prepared by these expert witnesses, on or before October 31, 2011. Disclosures of experts shall be made in accordance with Rule 26(a)(2); 3. The parties will participate in a mediated settlement conference on or before November 15, 2011; 4. All potentially dispositive motions shall be filed on or before January 16, 2012; 5. The case should be ready for trial by March 15, 2012, and should take approximately five to ten days to try. A jury trial has not been requested. Except as set forth in this Order, the Order of Approval entered on August 27, 2010 is hereby amended. (Lloyd, Donna) (Entered: 06/28/2011)
MEDIATION SCHEDULING ORDER ; Mediation due by 11/15/2011. (Gammon, Cheryl) (Entered: 06/28/2011)
Set Deadlines/Hearings: Selection of Mediator due by 7/22/2011. (Gammon, Cheryl) (Entered: 06/28/2011)
Set/Reset Scheduling Order Deadlines: Discovery due by 12/15/2011. Dispositive Motions due by 1/16/2012. (Lloyd, Donna) (Entered: 06/29/2011)
71 NOTICE by JASON A., TIMOTHY B., LANIER CANSLER, DAN COUGHLIN, DIANE D., CLINTON L., STEVEN C., VERNON W. NOTICE OF SELECTION OF MEDIATOR (MARTIN, STEPHEN) (Entered: 07/22/2011)
NOTICE of Docket Text/Event Modification − Order appointing mediator entered incorrectly − Deleted document entry. Re−entered as pldg 72.(Gammon, Cheryl) Modified on 7/25/2011 (Gammon, Cheryl). (Entered: 07/25/2011)
72 ORDER Appointing M. ANN ANDERSON as the mediator pursuant to LR 83.9d(a). Signed by John S. Brubaker, Clerk of Court. (Gammon, Cheryl) (Entered: 07/25/2011)
73 MOTION to Compel Discovery by CLINTON L.. Responses due by 11/17/2011 (Attachments: # 1 Exhibit Coughlin's Responses to Plaintiffs' Interrogatories, # 2 Exhibit Coughlin's Responses to Plaintiffs' RPDs)(RITTELMEYER, JOHN) (Entered: 10/21/2011)

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10/21/2011 11/14/2011 11/21/2011
11/22/2011 11/23/2011 11/23/2011 11/29/2011 12/05/2011 12/12/2011 12/19/2011
12/19/2011
12/20/2011
12/27/2011 12/28/2011

74 MEMORANDUM filed by Plaintiff CLINTON L. re 73 MOTION to Compel Discovery Memorandum in Support of Plaintiffs' Motion to Compel Discovery filed by CLINTON L.. (RITTELMEYER, JOHN) (Entered: 10/21/2011)
75 RESPONSE in Opposition re 73 MOTION to Compel Discovery filed by DAN COUGHLIN. Replies due by 12/1/2011. (Attachments: # 1 Exh 1 − Yon Decl (previously filed at D.E. 10−5))(MARTIN, STEPHEN) (Entered: 11/14/2011)
76 REPLY, filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W., to Response to 73 MOTION to Compel Discovery filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (Attachments: # 1 Affidavit Declaration of Counsel, # 2 Exhibit Exhibit 1 to Declaration of Counsel)(RITTELMEYER, JOHN) (Entered: 11/21/2011)
Motions Referred: 73 MOTION to Compel Discovery to MAG/JUDGE P. TREVOR SHARP. (Kemp, Donita) (Entered: 11/22/2011)
77 MOTION for Leave to File Surreply (Expedited Consideration Requested) by DAN COUGHLIN. (Attachments: # 1 Defendant Coughlin's proposed Surreply Brief)(MARTIN, STEPHEN) (Entered: 11/23/2011)
78 MEMORANDUM filed by Defendant DAN COUGHLIN re 77 MOTION for Leave to File Surreply (Expedited Consideration Requested) filed by DAN COUGHLIN. (MARTIN, STEPHEN) (Entered: 11/23/2011)
Motions Referred: 77 MOTION for Leave to File Surreply (Expedited Consideration Requested) to MAG/JUDGE P. TREVOR SHARP. (Kemp, Donita) (Entered: 11/29/2011)
79 RESPONSE in Opposition re 77 MOTION for Leave to File Surreply (Expedited Consideration Requested) filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. Replies due by 12/22/2011. (RITTELMEYER, JOHN) (Entered: 12/05/2011)
80 NOTICE of Hearing: Motion Hearing on 73 Motion to Compel set for 12/19/2011 09:30 AM in Greensboro Courtroom #1A before MAG/JUDGE P. TREVOR SHARP. (Garrett, Kim) (Entered: 12/12/2011)
Minute Entry for proceedings held before MAG/JUDGE P. TREVOR SHARP: Motion Hearing held on 12/19/2011 re 73 MOTION to Compel Discovery, 77 MOTION for Leave to File Surreply. Attorney John R. Rittelmeyer present for plaintiff, Attorneys Lisa Corbett, Wallace Hollowell, III, and Stephen Martin present for defendants. The Court ordered 73 Motion to Compel is denied as to Document Request #5, but granted as to Interrogatory #2. Defendants shall answer Interrogatory #2 in full on or before January 13, 2012. 77 Motion to File Surreply is granted and was considered by the Court. Proceedings recorded. (Garrett, Kim) (Entered: 12/19/2011)
ORAL ORDER Granted and Denying 73 Motion to Compel, denying as to Document Request #5, but granting as to Interrogatory #2. Defendants shall answer Interrogatory #2 in full on or before January 13, 2012; granting 77 Motion for Leave to File Surreply by MAG/JUDGE P. TREVOR SHARP on 12/19/11. (Garrett, Kim) (Entered: 12/19/2011)
81 ORDER signed by MAG/JUDGE P. TREVOR SHARP on 12/20/2011. For reasons announced in open court, IT IS ORDERED that Plaintiff's motion to compel discovery (Docket No. 73 ) is GRANTED as to Interrogatory #2, and DENIED as to Document Request #5. Defendant shall answer the Interrogatory by January 13, 2012. Defendant's motion to file surreply (Docket No. 77 ) is GRANTED. (Taylor, Abby) (Entered: 12/20/2011)
82 NOTICE of Intent to File Dispositive Motions by Defendant DAN COUGHLIN (MARTIN, STEPHEN) (Entered: 12/27/2011)
83 NOTICE of Intent to File Dispositive Motions by Defendant LANIER CANSLER Notice of Intent to File Motion for Summary Judgment (CORBETT, LISA) (Entered: 12/28/2011)

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01/09/2012 01/09/2012 01/10/2012
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01/17/2012 01/18/2012 02/16/2012 02/21/2012 02/21/2012

84 Joint MOTION to Exceed Page Limit by JASON A., TIMOTHY B., DAN COUGHLIN, DIANE D., CLINTON L., STEVEN C., VERNON W. (Attachments: # 1 Text of Proposed Order) (MARTIN, STEPHEN) (Entered: 01/09/2012)
Motions Submitted: 84 Joint MOTION to Exceed Page Limit to CHIEF JUDGE JAMES A. BEATY, JR. (Kemp, Donita) (Entered: 01/09/2012)
85 ORDER signed by CHIEF JUDGE JAMES A. BEATY, JR., on 1/10/2012, granting 84 Motion to Exceed Page Limit; that Defendant Coughlin shall be permitted an additional ten (10) pages (i.e., 30 pages total) in connection with his Memorandum in Support of his Motion for Summary Judgment; FURTHER, that the Plaintiffs shall be permitted an additional ten (10) pages (i.e., 30 pages total) in connection with their Memorandum in Opposition to Defendant Coughlin's Motion for Summary Judgment. (Lloyd, Donna) (Entered: 01/10/2012)
86 MOTION for Summary Judgment by LANIER CANSLER. (CORBETT, LISA) (Entered: 01/17/2012)
87 MEMORANDUM In Support of 86 MOTION for Summary Judgment filed by LANIER CANSLER. (Attachments: # 1 Exhibit 1 − Defendant Cansler's Response to Plaintiff's 1st Set of Interrogatories) (CORBETT, LISA) Modified on 1/18/2012 to remove duplicate text. (Lloyd, Donna) (Entered: 01/17/2012)
88 MOTION for Summary Judgment by DAN COUGHLIN. (Attachments: # 1 Exh 1 − Declaration of Anna Yon, # 2 Exh 2 − Declaration of Donna Brock, # 3 Exh 3 − Declaration of LaTasha Earl, # 4 Exh 4 − Declaration of Christy Shaver, # 5 Exh 5 − Expert Report of Bonny J. Forrest, J.D., Ph.D., # 6 Exh 6 − Expert Report of Craig B. Hummel, M.D., # 7 Exh 7 − DMH/PBH Agreement, # 8 Exh 8 − Amendment to DMH/PBH Agreement, # 9 Exh 9 − Deposition of Rose B., # 10 Exh 10 − Deposition of Brenda A., # 11 Exh 11 − Deposition of Steven C., # 12 Exh 12 − Deposition of Lillian L., # 13 Exh 13 − Deposition of Melissa Covert, # 14 Exh 14 − Deposition of Dr. James Bodfish, Ph.D., # 15 Exh 15 − Deposition of Anna Yon) (MARTIN, STEPHEN) (Entered: 01/17/2012)
89 MEMORANDUM In Support of 88 MOTION for Summary Judgment filed by DAN COUGHLIN. (MARTIN, STEPHEN) Modified on 1/18/2012 to remove duplicate text. (Lloyd, Donna) (Entered: 01/17/2012)
Set Response Deadlines re 86 MOTION for Summary Judgment and 88 MOTION for Summary Judgment: Responses due by 2/21/2012. (Lloyd, Donna) (Entered: 01/18/2012)
90 MOTION to Substitute Party Albert Delia and Pam Shipman by LANIER CANSLER, DAN COUGHLIN. (Attachments: # 1 Text of Proposed Order)(CORBETT, LISA) (Entered: 02/16/2012)
91 RESPONSE in Opposition re 86 MOTION for Summary Judgment of Defendant Cansler filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. Replies due by 3/9/2012. (Attachments: # 1 Exhibit Contract between DHHS and PBH dated May 1, 2011)(RITTELMEYER, JOHN) (Entered: 02/21/2012)
92 RESPONSE (entitled "Memorandum") in Opposition to 88 MOTION for Summary Judgment of Defendant Coughlin filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. Replies due by 3/9/2012. (Attachments: # 1 Exhibit 1 − Expert Reports of Dr. James Bodfish, # 2 Exhibit 2 − Curriculum Vita of Dr. James Bodfish, # 3 Exhibit 3 − Letter to Vernon W. dated Oct. 27, 2011, # 4 Exhibit 4 − Declaration of Rose Bryan, # 5 Exhibit 5 − Special Rate Request Form dated July 8, 2010, # 6 Exhibit 6 − Special Rate Request Form dated Nov. 18, 2010, # 7 Exhibit 7 − Special Rate Request Form dated Jan. 16, 2011, # 8 Exhibit 8 − Special Rate Request Form dated June 1, 2011, # 9 Exhibit 9 − Special Rate Request Form dated June 29, 2011, # 10 Exhibit 10 − Special Rate Request Form dated June 2, 2011, # 11 Exhibit 11 − Special Rate Request Form dated June 2, 2011, # 12 Exhibit 12 − Declaration of Thomas Smith, # 13 Exhibit 13 − PCP Coversheet dated Nov. 14, 2011, # 14 Exhibit 14 − Letter to Brenda A. dated Jan. 30, 2012, # 15 Exhibit 15 − Progress Note dated Nov. 23, 2011, # 16 Exhibit 16 − Progress Note dated Sept. 6, 2011, # 17 Exhibit 17 − Progress Note dated Sept. 23, 2011, # 18 Exhibit 18 − Progress Note dated Dec. 12, 2011, # 19 Exhibit 19 − Progress Note dated Apr. 14, 2010, # 20 Exhibit − Deposition of Rose Bryan, # 21 Exhibit − Deposition of Paula Clements, #

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02/22/2012 03/06/2012 03/07/2012 03/08/2012 03/09/2012 03/09/2012
03/09/2012
03/19/2012 03/19/2012
03/22/2012 03/26/2012 03/26/2012

22 Exhibit − Deposition of Dr. James Bodfish, # 23 Exhibit − Deposition of Lori Fuller, # 24 Exhibit − Deposition of Dr. Craig Hummel, # 25 Exhibit − Deposiition of Melissa Covert, # 26 Exhibit − Deposition of Brenda Arthur, # 27 Exhibit − Deposition of Dr. Peggy Terhune, # 28 Exhibit − Deposition of Steven Call, # 29 Exhibit − Deposition of Margaret Soviero, # 30 Exhibit − Deposition of Vernon Worrell, # 31 Exhibit − Deposition of Christy Anderson, # 32 Exhibit − Deposition of Anna Yon, # 33 Exhibit − Index to Exhibits) (RITTELMEYER, JOHN) Modified on 2/23/2012 to remove duplicate text. (Lloyd, Donna) (Entered: 02/21/2012)
Case Reassigned to MAG/JUDGE JOI ELIZABETH PEAKE. MAG/JUDGE P. TREVOR SHARP no longer assigned to the case. (Powell, Gloria) (Entered: 02/22/2012)
93 MOTION for Extension of Time to File Response/Reply as to 92 Response in Opposition to Motion by DAN COUGHLIN. (Attachments: # 1 Text of Proposed Order)(MARTIN, STEPHEN) (Entered: 03/06/2012)
Motions Submitted: 93 MOTION for Extension of Time to File Reply as to 92 Response in Opposition to Motion for Summary Judgment to CHIEF JUDGE JAMES A. BEATY, JR. (Kemp, Donita) (Entered: 03/07/2012)
94 MOTION for Extension of Time to File Response/Reply as to 91 Response in Opposition to Motion, by LANIER CANSLER. (Attachments: # 1 Text of Proposed Order)(CORBETT, LISA) (Entered: 03/08/2012)
Motions Submitted: 94 MOTION for Extension of Time to File Reply as to 91 Response in Opposition to Motion for Summary Judgment to CHIEF JUDGE JAMES A. BEATY, JR. (Kemp, Donita) (Entered: 03/09/2012)
95 ORDER signed by CHIEF JUDGE JAMES A. BEATY, JR on 03/09/2012. Pursuant to Rule 6(b) of the Federal Rules of Civil Procedure, the unopposed Motion for Extension of Time to File Reply Brief filed by Defendant Dan Coughlin is hereby granted. Defendant Coughlin shall have through and including March 19, 2012, within which to file a Reply to Plaintiffs Response in Opposition to the Motion for Summary Judgment. Re 93 Motion for Extension of Time to File Response/Reply. Replies due by 3/19/2012. (Taylor, Abby) (Entered: 03/09/2012)
96 ORDER signed by CHIEF JUDGE JAMES A. BEATY, JR on 03/09/2012. Pursuant to Rule 6(b) of the Federal Rules of Civil Procedure, the unopposed Motion [Doc. # 94 ] for Extension of Time to File Reply Brief filed by Defendant Lanier Cansler is hereby granted. Defendant Cansler shall have through and including March 19, 2012, within which to file a Reply to Plaintiffs' Response in Opposition to the Motion for Summary Judgment. Replies due by 3/19/2012. (Taylor, Abby) (Entered: 03/09/2012)
97 REPLY to Response to 86 MOTION for Summary Judgment filed by LANIER CANSLER. (CORBETT, LISA) (Entered: 03/19/2012)
98 REPLY to Response to 88 MOTION for Summary Judgment filed by DAN COUGHLIN. (Attachments: # 1 Exhibit 1 − Amicus Curiae brief filed by State of California in Ninth Circuit case, # 2 Exhibit 2 − Deposition of Anna Yon (excerpts), # 3 Exhibit 3 − Deposition of Dr. James Bodfish (excerpts), # 4 Exhibit 4 − Defendant Coughlin's Response to Plaintiffs' Interrogatory No. 8, # 5 Exhibit 5 − Deposition of Margaret Soviero (excerpts), # 6 Exhibit 6 − Deposition of Lillian L. (excerpts))(MARTIN, STEPHEN) (Entered: 03/19/2012)
Motions Submitted: 90 MOTION to Substitute Party Albert Delia and Pam Shipman, 88 MOTION for Summary Judgment, 86 MOTION for Summary Judgment to CHIEF JUDGE JAMES A. BEATY, JR. (Kemp, Donita) (Entered: 03/22/2012)
Motions No Longer Submitted to Judge Beaty re: 90 MOTION to Substitute Party Albert Delia and Pam Shipman. (Daniel, J) (Entered: 03/26/2012)
99 ORDER signed by CHIEF JUDGE JAMES A. BEATY, JR on 3/26/2012, that the Court substitutes Albert Delia, Acting Secretary of the North Carolina Department of Health and Human Services for Lanier M. Cansler and Pam Shipman, CEO of Piedmont Behavioral Healthcare for Dan Coughlin as parties to this proceeding. (Daniel, J) (Entered: 03/26/2012)

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04/05/2012 07/10/2012
10/31/2012 01/15/2013 02/28/2013 04/29/2013
04/30/2013 04/30/2013
05/01/2013
05/06/2013 05/07/2013 05/07/2013 05/08/2013 05/08/2013 05/09/2013 05/10/2013

100 Suggestion of Subsequently Decided Authority by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (Attachments: # 1 Exhibit Court Opinion in Belton v. Georgia)(RITTELMEYER, JOHN) (Entered: 04/05/2012)
101 Suggestion of Subsequently Decided Authority re 88 MOTION for Summary Judgment, 86 MOTION for Summary Judgment by Defendants ALBERT DELIA, PAM SHIPMAN. (Attachments: # 1 Exhibit 1 − M.R. v. Dreyfus, 2012 U.S. App. LEXIS 12322 (9th Cir., June 18, 2012))(MARTIN, STEPHEN) (Entered: 07/10/2012)
102 MEMORANDUM OPINION AND ORDER signed by CHIEF JUDGE JAMES A. BEATY, JR on 10/31/2012; that Defendants' Motions for Summary Judgment [Doc. # 86 & # 88 ] are DENIED. (Sheets, Jamie) (Entered: 10/31/2012)
103 NOTICE of Hearing: Bench Trial set for 7/1/2013 09:30 AM in Unassigned Courtroom; Trial Briefs, etc. deadline set for 6/10/2013. (Kemp, Donita) (Entered: 01/15/2013)
104 NOTICE of Appearance by attorney CANDACE SCOTT FRIEL on behalf of Defendant PAM SHIPMAN (FRIEL, CANDACE) (Entered: 02/28/2013)
105 MOTION to Compel Pursuant to LR37.1(b) for Resolution by Magistrate Judge via Telephone Conference by PAM SHIPMAN. Responses due by 5/23/2013. (Attachments: # 1 Exhibit Consent to Disclosure Form, # 2 Text of Proposed Order) (HOLLOWELL, WALLACE) (Entered: 04/29/2013)
Motions Referred: RE: 105 MOTION to Compel Pursuant to LR37.1(b) for Resolution by Magistrate Judge via Telephone Conference to MAG/JUDGE JOI ELIZABETH PEAKE. (Kemp, Donita) (Entered: 04/30/2013)
106 RESPONSE in Opposition re 105 MOTION to Compel Pursuant to LR37.1(b) for Resolution by Magistrate Judge via Telephone Conference filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. Replies due by 5/17/2013. (Attachments: # 1 Exhibit Email dated 2 4 13, # 2 Exhibit Email dated 2 5 13, # 3 Exhibit Email dated 4 24 13, # 4 Exhibit Email dated 4 25 13, # 5 Exhibit Email dated 4 26 13, # 6 Exhibit Email dated 4 26 13, # 7 Exhibit Excerpt from Report) (RITTELMEYER, JOHN) (Entered: 04/30/2013)
107 REPLY, filed by Defendant PAM SHIPMAN, to Response to 105 MOTION to Compel Pursuant to LR37.1(b) for Resolution by Magistrate Judge via Telephone Conference filed by PAM SHIPMAN. (Attachments: # 1 Exhibit Dr. Bodfish Report forTimothy B. (excerpt), # 2 Exhibit October 5, 2011 Email) (HOLLOWELL, WALLACE) (Entered: 05/01/2013)
108 Second MOTION to Substitute Party by LANIER CANSLER. (Attachments: # 1 Text of Proposed Order To allow substitution of party)(CORBETT, LISA) (Entered: 05/06/2013)
Motions Submitted: 108 Second MOTION to Substitute Party to JUDGE JAMES A. BEATY, JR. (Kemp, Donita) (Entered: 05/07/2013)
109 JOINT MOTION for protective order by ALBERT DELIA. (Attachments: # 1 Text of Proposed Order) (CORBETT, LISA) (Entered: 05/07/2013)
110 Amended JOINT MOTIONfor protective order by ALBERT DELIA. (Attachments: # 1 Text of Proposed Order Protective Order)(CORBETT, LISA) (Entered: 05/08/2013)
Motions Referred: RE: 110 Amended JOINT MOTION for protective order to MAG/JUDGE JOI ELIZABETH PEAKE. (Kemp, Donita) (Entered: 05/08/2013)
NOTICE: Telephone Conference scheduled for 5/10/2013 10:00 AM with MAG/JUDGE JOI ELIZABETH PEAKE Attorney Wallace Hollowell instructed to initiate call. (Garrett, Kim) (Entered: 05/09/2013)
Minute Entry: Telephone Conference held on 5/10/2013 by MAG/JUDGE JOI ELIZABETH PEAKE on Defendant Pam Shipman's Motion to Compel 105 . Attorney Wallace Hollowell, III represented Defendant Shipman, and Attorney John R. Rittelmeyer represented Plaintiffs. Attorney Lisa Granberry Corbett, attorney for Defendant Albert Delia, gave permission for the Conference to be held without her. After argument by the parties, the Court denied the Motion to Compel. A written order

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05/10/2013 05/13/2013
05/13/2013
05/15/2013
05/20/2013 05/22/2013 05/31/2013 05/31/2013
05/31/2013 06/10/2013 06/10/2013 06/10/2013 06/10/2013 06/11/2013 06/14/2013 06/14/2013
06/14/2013

memorializing Judge Peake's findings will be entered separately. (Boden, Barbara) (Entered: 05/10/2013)
111 ORDER signed by MAG/JUDGE JOI ELIZABETH PEAKE on 5/10/2013; that Defendant Shipman's Motion to Compel [Doc. [# 105 ] is DENIED as set out above. (Sheets, Jamie) (Entered: 05/10/2013)
112 QUALIFIED PROTECTIVE ORDER signed by MAG/JUDGE JOI ELIZABETH PEAKE on 5/13/2013, as set out herein and as limited and modified by the Supplemental Protective Order entered contemporaneously herewith. (Sheets, Jamie) (Entered: 05/13/2013)
113 SUPPLEMENTAL PROTECTIVE ORDER signed by MAG/JUDGE JOI ELIZABETH PEAKE on 5/13/2013; that the stipulated protective order is LIMITED and MODIFIED as set out herein. FURTHER that any document or item submitted to the Court in violation of this Order is subject to being stricken. (Sheets, Jamie) (Entered: 05/13/2013)
114 ORDER signed by JUDGE JAMES A. BEATY, JR., on 5/15/2013, that the Court substitutes Aldona Wos, Secretary of the North Carolina Department of Health and Human Services for Albert Delia as a party to this proceeding. (Lloyd, Donna) (Entered: 05/15/2013)
115 NOTICE of Trial Calendar Bench Trial set for 7/1/2013 09:30 AM in Greensboro Courtroom #2 before JUDGE N. C. TILLEY JR. (Williamson, Wanda) (Main Document 115 replaced on 5/21/2013) (Williamson, Wanda). (Entered: 05/20/2013)
116 NOTICE of Hearing: Settlement Conference set for 6/19/2013 04:00 PM in Greensboro Courtroom #2 before JUDGE N. C. TILLEY JR. (Winchester, Robin) (Entered: 05/22/2013)
117 FINAL PRETRIAL DISCLOSURES by ALDONA WOS.(CORBETT, LISA) (Entered: 05/31/2013)
118 FINAL PRETRIAL DISCLOSURES by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (Attachments: # 1 Exhibit Ex. A − Witness List, # 2 Exhibit Ex B. − Exhibit List)(RITTELMEYER, JOHN) (Entered: 05/31/2013)
119 PRETRIAL DISCLOSURES by PAM SHIPMAN.(HOLLOWELL, WALLACE) (Entered: 05/31/2013)
120 TRIAL BRIEF by Defendants PAM SHIPMAN, ALDONA WOS.(HOLLOWELL, WALLACE) (Entered: 06/10/2013)
121 TRIAL BRIEF by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W..(RITTELMEYER, JOHN) (Entered: 06/10/2013)
122 Proposed Findings of Fact and Conclusions of Law by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W..(RITTELMEYER, JOHN) (Entered: 06/10/2013)
123 Proposed Findings of Fact and Conclusions of Law by PAM SHIPMAN, ALDONA WOS.(MARTIN, STEPHEN) (Entered: 06/10/2013)
SETTLEMENT POSITION Documents received from Plaintiffs and Defendants 6/10/2013. (Winchester, Robin) (Entered: 06/11/2013)
124 OBJECTION − Other re 118 Final Pretrial Disclosures by Defendants PAM SHIPMAN, ALDONA WOS. (Attachments: # 1 Exhibit 1 − Defendants' Objections to Plaintiffs' 184 Trial Exhibits)(MARTIN, STEPHEN) (Entered: 06/14/2013)
125 OBJECTION − Other re 119 Pretrial Disclosures by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (Attachments: # 1 Exhibit Ex. A − Objections to Defendants Exhibits, # 2 Exhibit Ex. B − Plaintiffs' Designation of Deposition Excerpts)(RITTELMEYER, JOHN) (Entered: 06/14/2013)
126 MOTION in Limine To Exclude Portions of the Reports of Defendant's Expert by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W..

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06/14/2013 06/18/2013 06/18/2013
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06/19/2013 06/21/2013

Responses due by 7/8/2013 (Attachments: # 1 Exhibit Ex. A − Expert Report, # 2 Exhibit Ex. B − Supplemental Expert Report)(RITTELMEYER, JOHN) (Entered: 06/14/2013)
127 MEMORANDUM filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. re 126 MOTION in Limine To Exclude Portions of the Reports of Defendant's Expert filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 06/14/2013)
128 MOTION in Limine to Exclude Testimony and Evidence of Barrie Morganstein, Ph.D. by PAM SHIPMAN, ALDONA WOS. (MARTIN, STEPHEN) (Entered: 06/18/2013)
129 MEMORANDUM filed by Defendants PAM SHIPMAN, ALDONA WOS re 128 MOTION in Limine to Exclude Testimony and Evidence of Barrie Morganstein, Ph.D. filed by PAM SHIPMAN, ALDONA WOS. (Attachments: # 1 Exhibit 1 − Plaintiffs' Response to Defendant Shipman's Interrogatory No. 9 (10−17−2011), # 2 Exhibit 2 − Plaintiffs' Initial Disclosures (6−29−2011))(MARTIN, STEPHEN) (Entered: 06/18/2013)
130 MOTION in Limine to Exclude Plaintiffs' Direct Testimony and Evidence Regarding Certain Issues After December 15, 2011 by PAM SHIPMAN, ALDONA WOS. (MARTIN, STEPHEN) (Entered: 06/18/2013)
131 MEMORANDUM filed by Defendants PAM SHIPMAN, ALDONA WOS re 130 MOTION in Limine to Exclude Plaintiffs' Direct Testimony and Evidence Regarding Certain Issues After December 15, 2011 filed by PAM SHIPMAN, ALDONA WOS. (Attachments: # 1 Exhibit 1 − Plaintiffs' Responses to Defendant Shipman's Interrogatories (10−17−2011), # 2 Exhibit 2 − Plaintiffs' Counsel e−mail dated 2−4−2013, # 3 Exhibit 3 − Plaintiffs' Counsel e−mail dated 4−25−2013)(MARTIN, STEPHEN) (Entered: 06/18/2013)
132 MOTION to Shorten Time for Plaintiffs to Respond to Defendants' Motions in Limine [D.E. 128 & 130] by PAM SHIPMAN, ALDONA WOS. (Attachments: # 1 Text of Proposed Order)(MARTIN, STEPHEN) (Entered: 06/18/2013)
Motions Submitted: 132 MOTION to Shorten Time for Plaintiffs to Respond to Defendants' Motions in Limine [D.E. 128 & 130] to JUDGE N. C. TILLEY, JR. (Winchester, Robin) (Entered: 06/19/2013)
Set/Response Deadline: 128 MOTION in Limine to Exclude Testimony and Evidence of Barrie Morganstein, Ph.D., 130 MOTION in Limine to Exclude Plaintiffs' Direct Testimony and Evidence Regarding Certain Issues After December 15, 2011 : Responses due by 7/12/2013 (Taylor, Abby) (Entered: 06/19/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Settlement Conference held on 6/19/2013. Parties unable to reach a settlement. Final Pretrial Hearing will be held 7/1/2013 and 7/2/2013. Motion Hearing set for 6/25/2013 at 10:00 a.m. in Courtroom No.2, Greensboro, N.C., before Judge Tilley. Attorney(s) John Rittelmeyer and Jennifer Bills appeared with plaintiff(s) Rose B., Guardian for Timothy B., Vernon W., Guardian for Vernon D. W., Steven C., Brenda A., Guardian for Jason A., and Diane D. Attorney(s) Wallace Hollowell, III, Stephen Martin, Lisa Corbett, and Candace Friel appeared on behalf of defendant with General Counsel Emery Milliken, Richard F. Topping and Justin Richman. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 06/20/2013)
Set/Hearings: Motion Hearing set for 6/25/2013 10:00 AM in Greensboro Courtroom #2 before JUDGE N. C. TILLEY JR. and Final Pretrial Conference set for 7/1/2013 and 7/2/2013 at 10:00 AM in Greensboro Courtroom #2 before JUDGE N. C. TILLEY JR. (Winchester, Robin) (Entered: 06/20/2013)
133 MOTION to Strike 121 Trial Brief, 122 Proposed Findings of Fact and Conclusions of Law Motion to Strike Portions of Plaintiffs' Trial Brief and Proposed Findings of Fact and Conclusions of Law, and Motion in Limine to Exclude Testimony Regarding an Alleged Unpled Americans with Disabilities Act Violation Regarding Plaintiff Timothy B. by PAM SHIPMAN, ALDONA WOS. (MARTIN, STEPHEN) (Entered: 06/21/2013)

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06/21/2013
06/24/2013 06/24/2013 06/24/2013 06/24/2013
06/25/2013
06/28/2013 07/03/2013 07/03/2013 07/12/2013 07/15/2013 07/24/2013

134 MEMORANDUM filed by Defendants PAM SHIPMAN, ALDONA WOS re 133 MOTION to Strike 121 Trial Brief, 122 Proposed Findings of Fact and Conclusions of Law Motion to Strike Portions of Plaintiffs' Trial Brief and Proposed Findings of Fact and Conclusions of Law, and Motion in Limine to Exclude Testimon filed by PAM SHIPMAN, ALDONA WOS. (Attachments: # 1 Exhibit 1 − Rhodes, Inc. v. Morrow, 1997 U.S. Dist. LEXIS 3056 (M.D.N.C., Jan. 31, 1997))(MARTIN, STEPHEN) (Entered: 06/21/2013)
135 RESPONSE filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. re 128 MOTION in Limine to Exclude Testimony and Evidence of Barrie Morganstein, Ph.D. filed by PAM SHIPMAN, ALDONA WOS filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. Replies due by 7/11/2013. (RITTELMEYER, JOHN) (Entered: 06/24/2013)
136 RESPONSE in Opposition re 126 MOTION in Limine To Exclude Portions of the Reports of Defendant's Expert filed by PAM SHIPMAN, ALDONA WOS. Replies due by 7/11/2013. (HOLLOWELL, WALLACE) (Entered: 06/24/2013)
137 RESPONSE filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. re 130 MOTION in Limine to Exclude Plaintiffs' Direct Testimony and Evidence Regarding Certain Issues After December 15, 2011 filed by PAM SHIPMAN, ALDONA WOS filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. Replies due by 7/11/2013. (RITTELMEYER, JOHN) (Entered: 06/24/2013)
138 RESPONSE filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. re 133 MOTION to Strike 121 Trial Brief, 122 Proposed Findings of Fact and Conclusions of Law Motion to Strike Portions of Plaintiffs' Trial Brief and Proposed Findings of Fact and Conclusions of Law, and Motion in Limine to Exclude Testimony filed by PAM SHIPMAN, ALDONA WOS filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. Replies due by 7/11/2013. (RITTELMEYER, JOHN) (Entered: 06/24/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Attorney(s) John Rittelmeyer, Jennifer Bills and Andrew Strickland appeared as counsel for plaintiffs. Attorney(s) Wallace Hollowell, Stephen Martin, Candace Friel and Lisa Corbett appeared as counsel for the defendant. Motion Hearing held on 6/25/2013. The parties agree to take additional depositions of experts within the month of July. The defendants do not object to plaintiff filing an amended complaint to include the ADA violation pursuant to 28 C.F.R.§35.160(b)(1) with respect to plaintiff Timothy B. Third Amended Complaint due by the end of the week. For reasons stated on the record the court denies pldg. 126. The Bench Trial will be set for September, 2013; parties will be notified of date. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 06/25/2013)
139 Third AMENDED COMPLAINT against All Defendants, filed by STEVEN C., DIANE D., TIMOTHY B., JASON A., CLINTON L., VERNON W. (RITTELMEYER, JOHN) Modified on 7/1/2013 to edit text. (Sheets, Jamie) (Entered: 06/28/2013)
Set Hearing: Bench Trial set for 9/9/2013 09:30 AM in Greensboro Courtroom #2 before JUDGE N. C. TILLEY JR. (Winchester, Robin) (Entered: 07/03/2013)
Telephone/Electronic Notice on 7/3/2013 to Attorney John Rittelmeyer, Jennifer Bills and Wallace Hollowell, III. Bench Trial set for 9/9/2013 09:30 AM in Greensboro Courtroom #2 before JUDGE N. C. TILLEY JR. (Winchester, Robin) (Entered: 07/05/2013)
140 ANSWER to Amended Complaint by ALDONA WOS. (CORBETT, LISA) (Entered: 07/12/2013)
141 ANSWER to Amended Complaint and Affirmative Defenses by PAM SHIPMAN. (MARTIN, STEPHEN) (Entered: 07/15/2013)
Case Reassigned to JUDGE N. C. TILLEY, JR. JUDGE JAMES A. BEATY, JR no longer assigned to the case. (Winchester, Robin) (Entered: 07/24/2013)

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08/30/2013 09/03/2013 09/03/2013 09/04/2013 09/04/2013 09/08/2013 09/09/2013 09/09/2013
09/10/2013 09/11/2013 09/12/2013 09/13/2013 09/16/2013

142 NOTICE OF WITHDRAWAL AND SUBSTITUTION OF COUNSEL on behalf of Defendant ALDONA WOS. THOMAS KELLY is substituted as counsel for Defendant. Attorney LISA GRANBERRY CORBETT terminated. (Attachments: # 1 Text of Proposed Order)(CORBETT, LISA) (Entered: 08/30/2013)
143 NOTICE of Appearance by attorney ELIZABETH DALEY EDWARDS on behalf of Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. (EDWARDS, ELIZABETH) (Entered: 09/03/2013)
144 NOTICE of Appearance by attorney MORRIS FONVILLE MCADOO on behalf of Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. (MCADOO, MORRIS) (Entered: 09/03/2013)
145 ECF 30−Day Notice as to Attorney THOMAS E. KELLY. (Sheets, Jamie) (Entered: 09/04/2013)
146 ORDER ALLOWING WITHDRAW AND SUBSTITUTION OF COUNSEL FOR DEFENDANT WOS signed by JUDGE N. C. TILLEY, JR on 09/04/2013; that Lisa Granberry Corbett, Special Deputy Attorney General is allowed to withdraw as counsel for Defendant Wos, and that Thomas E. Kelly, Assistant Attorney General is substituted as counsel for Defendant Wos. (Garland, Leah) (Entered: 09/04/2013)
147 Joint Trial Exhibits List with Objections by PAM SHIPMAN. (Attachments: # 1 Exhibit 1 − Plaintiffs' Trial Exhibits with Defendants' Objections, # 2 Exhibit 2 − Defendants' Exhibits with Plaintiffs' Objections)(MARTIN, STEPHEN) (Entered: 09/08/2013)
148 NOTICE of Appearance by attorney JENNIFER LEAH BILLS on behalf of Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. (Winchester, Robin) (Entered: 09/09/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Attorney(s) John Rittelmeyer, Jennifer Bills, Elizabeth Edward and Morris McAdoo appeared as counsel for plaintiffs and Attorney(s) Wallace Hollowell, Stephen Martin, Candice Friel and Justin Richman appeared as counsel for defendant Pam Shipman and Attorney Thomas Kelly appeared as counsel for defendant Aldona Wos.Final Pretrial Conference held on 9/9/2013. Bench Trial set for 9/10/2013 09:30 AM in Greensboro Courtroom #2 before JUDGE N. C. TILLEY JR.(Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/09/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 1) held on 9/10/2013. Parties presented opening statements. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/11/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No.2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/11/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 2) held on 9/11/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/12/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/12/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 3) held on 9/12/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/13/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/13/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 4) held on 9/13/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/16/13 at 9:30 a.m. in Greensboro, N.C., Courtroom No.2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/13/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 5) held on 9/16/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/17/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered:

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09/17/2013 09/18/2013 09/19/2013 09/20/2013 09/23/2013 09/24/2013 09/25/2013 09/26/2013 09/27/2013 10/01/2013 10/02/2013

09/18/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 6) held on 9/17/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/18/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/18/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 7) held on 9/18/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/19/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/19/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 8) held on 9/19/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/20/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/20/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 9) held on 9/20/2013. Plaintiff presented evidence (see exhibit and witness list) Bench Trial continued to 9/23/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/20/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 10) held on 9/23/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/24/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/24/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 11) held on 9/24/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/25/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2, before Judge Tilley. (Court Reporter Jane Calhoun) (Winchester, Robin) (Entered: 09/25/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 12) held on 9/25/2013. Plaintiff presented evidence (see exhibit and witness list). Bench trial continued to 9/26/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/26/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 13) held on 9/26/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 9/27/2013 at 10:00 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/26/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 14) held on 9/27/2013. Plaintiff presented evidence (see exhibit and witness). Bench Trial continued to 10/01/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 09/27/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 15) held on 10/1/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 10/02/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun and Lori Russell.) (Winchester, Robin) (Entered: 10/02/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 16) held on 10/2/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 10/03/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/03/2013)

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10/03/2013 10/04/2013 10/07/2013 10/08/2013 10/09/2013
10/10/2013 10/11/2013 10/21/2013 10/22/2013 10/23/2013

Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 17) held on 10/3/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 10/04/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Lori Russell.) (Winchester, Robin) (Entered: 10/04/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 18) held on 10/4/2013. Plaintiff presented evidence (see exhibit and witness list). Bench Trial continued to 10/07/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/04/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 19) held on 10/7/2013. Plaintiff presented evidence (see exhibit and witness list) Bench Trial continued to 10/08/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/08/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 20) held on 10/8/2013. Plaintiff presented evidence (See exhibit and witness list). Bench Trial continued to 10/09/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2, before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/08/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day 21) held on 10/9/2013. Plaintiff presented evidence and rested (see exhibit and witness list). Oral Motion by defendants to Dismiss at conclusion of plaintiff's evidence. Defendant presented evidence (see exhibit and witness list). Bench Trial continued to 10/10/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley.(Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/10/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day #22) held on 10/10/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 10/11/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2, before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/10/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day # 23) held on 10/11/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 10/21/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun) (Winchester, Robin) (Entered: 10/11/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day #24) held on 10/21/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 10/22/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No.2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/22/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial (Day # 25) held on 10/22/2013. Defendant Shipman and Wos presented evidence (see exhibit and witness list). Bench Trial continued to 10/24/2013 at 10:00 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/22/2013)
149 Transcript of Afternoon Trial Testimony of Dr. Bodfish held on 10/01/2013 before Judge N. Carlton Tilley, Jr. Court Reporter Lori Russell, Telephone number 336−734−2547. Transcript may be viewed at the court public terminal or purchased through the Court Reporter before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.

NOTICE RE: REDACTION OF TRANSCRIPTS: The parties have 5 business days to file a Notice of Intent to Request Redaction and 21 calendar days to file a Redaction Request. If no notice is filed, this transcript will be made electronically available to the public without redaction after 90 calendar days. Transcript may be viewed at the court public terminal or purchased through the court reporter

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before the 90 day deadline. After that date it may be obtained through PACER.

10/23/2013

Redaction Request due 11/18/2013. Redacted Transcript Deadline set for 11/29/2013. Release of Transcript Restriction set for 1/24/2014. (Russell, Lori) (Entered: 10/23/2013)
150 Transcript of Trial Testimony of Dr. Bodfish held on 10/03/2013 before Judge N. Carlton Tilley, Jr. Court Reporter Lori Russell, Telephone number 336−734−2547. Transcript may be viewed at the court public terminal or purchased through the Court Reporter before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER.

NOTICE RE: REDACTION OF TRANSCRIPTS: The parties have 5 business days to file a Notice of Intent to Request Redaction and 21 calendar days to file a Redaction Request. If no notice is filed, this transcript will be made electronically available to the public without redaction after 90 calendar days. Transcript may be viewed at the court public terminal or purchased through the court reporter before the 90 day deadline. After that date it may be obtained through PACER.

10/24/2013 10/25/2013 10/28/2013 10/29/2013 10/30/2013 10/31/2013 11/01/2013 11/04/2013

Redaction Request due 11/18/2013. Redacted Transcript Deadline set for 11/29/2013. Release of Transcript Restriction set for 1/24/2014. (Russell, Lori) (Entered: 10/23/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #26 held on 10/24/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 10/25/2013 at 11:00 a.m. in Greensboro, N.C., Courtroom No.2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/25/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #27 held on 10/25/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 10/28/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/25/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #28 held on 10/28/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 10/29/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/29/2013)
151 Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #29 held on 10/29/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 10/30/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/29/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #30 held on 10/30/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 10/31/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/31/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #31 held on 10/31/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 11/01/2013 at 9:30 a.m. in Greensboro, N.C., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 10/31/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #32 held on 11/1/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 11/4/2013 at 9:30 a.m. in Greensboro, NC, Courtroom No. 2 before Judge Tilley. (Court Reporter Lori Russell.) (Winchester, Robin) (Entered: 11/01/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #33 held on 11/4/2013. Defendant Shipman presented evidence (see exhibit and

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11/05/2013
11/06/2013
11/07/2013
11/08/2013 11/13/2013
11/15/2013 11/21/2013 11/22/2013 11/25/2013 12/02/2013 12/16/2013 01/15/2014 01/16/2014 01/16/2014 02/04/2014

witness list). Bench Trial continued to 11/05/2013 at 9:30 a.m. in Greensboro, NC, Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 11/05/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #34 held on 11/5/2013. Defendant Shipman presented evidence (see exhibit and witness list). Bench Trial continued to 11/06/2013 at 9:30 a.m. in Greensboro, NC, Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 11/06/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #35 held on 11/6/2013. Defendant Shipman presented evidence and reseted. Plaintiff presented rebuttal evidence (see exhibit and witness list). Bench Trial continued to 11/07/2013 at 9:30 a.m. in Greenbsoro, NC, Courtroom No. 2 before Judge Tilley. (Court Reporter Joe Armstrong.) (Winchester, Robin) (Entered: 11/06/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #36 held on 11/7/2013. Plaintiff presented rebuttal evidence (see exhibit and witness list). Bench Trial continued to 11/08/2013 at 9:30 a.m. in Greensboro, NC, Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 11/07/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #37 held on 11/8/2013. Evidence concluded (see exhibit and witness list). Closing Arguments to begin 11/13/2013 at 9:30 a.m. in Greensboro, NC, Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Entered: 11/08/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day # 38 held on 11/13/2013. Closing Arguments held as to Steven C., Jason A., and Vernon W. Closing Arguments continued to 9:30 a.m. 11/14//2013, in Greensboro, NC., Courtroom No. 2 before Judge Tilley. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 11/13/2013)
Minute Entry for proceedings held before JUDGE N. C. TILLEY, JR: Bench Trial Day #39 completed on 11/15/2013. Closing Arguments held as to Timothy B., Clinton L. and Diane D. (Court Reporter Jane Calhoun.) (Winchester, Robin) (Entered: 11/15/2013)
152 MOTION for Leave to File by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. Responses due by 12/16/2013 (RITTELMEYER, JOHN) (Entered: 11/21/2013)
Motions Referred: RE: 152 MOTION for Leave to File , to JUDGE N. C. TILLEY, JR. (Winchester, Robin) (Entered: 11/22/2013)
153 ORDER signed by JUDGE N. C. TILLEY, JR on 11/22/2013; that for good cause shown, Plaintiff's Motion for Leave is GRANTED. Plaintiffs' counsel shall file such notice of intent no later than December 6, 2013. (Garland, Leah) (Entered: 11/25/2013)
154 NOTICE by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. of Intent to Request Redaction (RITTELMEYER, JOHN) (Entered: 12/02/2013)
155 Transcript Redaction Request re 150 Transcript, 149 Transcript, by attorney JOHN R. RITTELMEYER. (RITTELMEYER, JOHN) (Entered: 12/16/2013)
156 ORDER signed by JUDGE N. C. TILLEY, JR on 1/15/2014; the joint request is GRANTED. The Court Reporter is hereby directed to redact the October 1 and October 3 transcript as requested by the parties in their Joint Redaction Request. (Sheets, Jamie) (Entered: 01/15/2014)
157 Redaction re: 149 Transcript. (Russell, Lori) (Entered: 01/16/2014)
158 Redaction re: 150 Transcript. (Russell, Lori) (Entered: 01/16/2014)
159 Suggestion of Subsequently Decided Authority by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 02/04/2014)

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05/12/2014 08/28/2014 08/28/2014
09/25/2014 09/25/2014
10/17/2014 10/20/2014 10/20/2014 11/06/2014
11/10/2014 03/29/2016

160 NOTICE of Change of Address by WALLACE HOLLOWELL, III (HOLLOWELL, WALLACE) (Entered: 05/12/2014)
161 MEMORANDUM OPINION signed by JUDGE N. C. TILLEY, JR on 8/28/2014 as set out herein, the Court finds in favor of Defendants. A final judgment will issue in favor of Defendants and against Plaintiffs. (Sheets, Jamie) (Entered: 08/28/2014)
162 JUDGMENT signed by JUDGE N. C. TILLEY, JR on 8/28/2014. In accord with the Findings of Fact and Conclusions of Law stated in the Memorandum Opinion contemporaneously filed, IT IS HEREBY ORDERED that FINAL JUDGMENT IS ISSUED in favor of Defendants and against Plaintiffs on all claims. (Sheets, Jamie) (Entered: 08/28/2014)
163 MOTION to Alter Judgment by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. Responses due by 10/20/2014 (RITTELMEYER, JOHN) (Entered: 09/25/2014)
164 MEMORANDUM filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W. re 163 MOTION to Alter Judgment filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 09/25/2014)
165 NOTICE of Substitution and Appearance of Counsel by ALDONA WOS. (STROUD, SCOTT) Modified on 10/20/2014 to edit document title and terminate as motion. (Sheets, Jamie) (Entered: 10/17/2014)
*** Attorney THOMAS EDWARD KELLY terminated. (Sheets, Jamie) (Entered: 10/20/2014)
166 RESPONSE in Opposition re 163 MOTION to Alter Judgment filed by PAM SHIPMAN, ALDONA WOS. Replies due by 11/6/2014. (MARTIN, STEPHEN) (Main Document 166 replaced on 10/21/2014) (Sheets, Jamie). (Entered: 10/20/2014)
167 REPLY, filed by Plaintiffs JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W., to Response to 163 MOTION to Alter Judgment filed by JASON A., TIMOTHY B., DIANE D., CLINTON L., STEVEN C., VERNON W.. (RITTELMEYER, JOHN) (Entered: 11/06/2014)
Motions Submitted: 163 MOTION to Alter Judgment to JUDGE N. C. TILLEY, JR. (Winchester, Robin) (Entered: 11/10/2014)
168 MEMORANDUM ORDER. Signed by JUDGE N. C. TILLEY, JR. on 3/29/2016, that Plaintiffs' Motion to Alter or Amend Judgment (Doc. # 163 ) is DENIED. (Daniel, J) (Entered: 03/29/2016)

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