UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________

GERALD N. and JOAN B., each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs, v.

Case No.___________________

MILWAUKEE COUNTY,

Defendants. ______________________________________________________________________

NOTICE OF REMOVAL PURSUANT TO TITLE 28 U.S.C. § 1441 ______________________________________________________________________

STATEMENT OF THE GROUNDS FOR REMOVAL On January 28, 2004 the plaintiffs served on Milwaukee County a lawsuit seeking a declaration of rights as they relate to elderly disabled individuals. The most prominent among the allegations are claims that Milwaukee County has violated the Americans With Disabilities Act, 42 U.S.C. § 12131(2), et. seq., § 504 of the Rehabilitation Act, The Civil Rights Act, Title 42 § 1983 and the Equal Protection Clauses of the U.S. and Wisconsin Constitutions. The District Court has original jurisdiction over the ADA, the Rehabilitation Act, The Civil Rights Act and the U.S. Constitution.

Case 2:04-cv-00193-LA Filed 02/25/04 Page 1 of 20 Document 1-2

Therefore, the Defendant by its attorney Mary Ellen Poulos, Principal Assistant Corporation Counsel, hereby removes this action to the U.S. District Court for the Eastern District of Wisconsin.
Dated this 25th day of February, 2004.
S/Mary Ellen Poulos_______________ MARY ELLEN POULOS Principal Assistant Corporation Counsel State Bar No.: 01014190 Attorney for Defendants.
P.O. ADDRESS: Milwaukee County Courthouse, Rm. 303 901 North 9th Street Milwaukee, Wisconsin 53233 Telephone: (414)278-4295 Facsimile: (414)223-1249
Case 2:04-cv-00193-LA Filed 02/25/04 Page 2 of 20 Document 1-2

STATE OF WISCONSIN

CIRCUIT COURT

MILWAUKEE COUNTY

CIVIL JURISDICTION

______________________________________________________________________

GERALD N. and JOAN B., each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs,

v.

Case No.

MILWAUKEE COUNTY,

Case Code: 30701

Declaratory Judgment

Defendant.

______________________________________________________________________

SUMMONS ______________________________________________________________________

THE STATE OF WISCONSIN, To each person named as a Defendant:

You are hereby notified that the Plaintiff named above has filed a lawsuit or other

legal action against you. The Complaint, which is attached, states the nature and basis

of the legal action.

Within forty-five (45) days of receiving this summons, you must respond with a

written answer, as that term is used in Chapter 802 of the Wisconsin Statutes, to the

Complaint. The Court may reject or disregard an answer that does not follow the

requirements of the statutes. The answer must be sent or delivered to the Court, whose

address is 901 North Ninth Street, Milwaukee, Wisconsin 53233, and to Robert Theine

Pledl attorney for the plaintiffs, whose address is 16655 West Bluemound Road, Suite

330, Brookfield, Wisconsin 53005. You may have an attorney help or represent you.

Case 2:04-cv-00193-LA Filed 02/25/04 Page 3 of 20 Document 1-2

If you do not provide a proper answer within forty-five (45) days, the Court may grant judgment against you for the award of money or other legal action requested in the complaint, and you may lose your right to object to anything that is or may be incorrect in the complaint. A judgment may be enforced as provided by law. A judgment awarding money may become a lien against any real estate you own now or in the future, and may also be enforced by garnishment or seizure of property.
Date: January 28, 2003 SCHOTT, BUBLITZ & ENGEL, s.c. Attorneys for Gerald N. and Joan B.
_____________________________________ Robert Theine Pledl State Bar No. 1007710 Post Office Address: SCHOTT, BUBLITZ & ENGEL, s.c. 16655 West Bluemound Road, Suite 330 Brookfield, WI 53005 TEL 262-827-8916 FAX 262-827-1701
Case 2:04-cv-00193-LA Filed 02/25/04 Page 4 of 20 Document 1-2

STATE OF WISCONSIN

CIRCUIT COURT

MILWAUKEE COUNTY

CIVIL JURISDICTION

______________________________________________________________________

GERALD N. and JOAN B., each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs,

v.

Case No. 04CV000862

MILWAUKEE COUNTY,

Case Code: 30701

Declaratory Judgment

Defendant.

______________________________________________________________________

COMPLAINT ______________________________________________________________________

Plaintiffs, Gerald N. and Joan B., by their counsel, Schott, Bublitz & Engel, s.c. by

Robert Theine Pledl, hereby state the following as their complaint:

INTRODUCTION

(1) This action is brought on behalf of persons with disabilities that are now or

will in the future receive services from Milwaukee County's Family Care program. The

plaintiffs allege that the policies and practices of the program discriminate against

eligible individuals in several ways. The program funds community services for persons

60 years of age and older at a lower rate than similar services provided to persons with

similar disabilities who are under the age of 60. The program also fails to provide

adequate services based on the individual's needs and limits the choice of provider,

again in comparison to similar persons under the age of 60. The failure to provide

adequate services creates a substantial likelihood that persons covered by Family Care

Case 2:04-cv-00193-LA Filed 02/25/04 Page 5 of 20 Document 1-2

will be unable to remain in the community and will be moved to more restrictive institutional settings. The named plaintiffs bring these claims on their own behalf and also seek to represent a class defined as follows:
All Milwaukee County residents who now qualify or who will in the future qualify for services through the Family Care program. It is the position of the plaintiffs that Milwaukee County's application of discriminatory policies and practice to Family Care clients has and will violate their rights to equal protection under the United States and Wisconsin Constitutions and their rights under the Wisconsin Patients Bill of Rights, the Americans with Disabilities Act and §504 of the Rehabilitation Act.
PARTIES (2) Plaintiff Gerald N. is an adult resident of Milwaukee County. He is 71 years old. The Milwaukee County Probate Court entered an order for guardianship of the person on July 30, 1993 and an order for protective placement on March 28, 1994. The guardian has retained the undersigned to serve as Gerald N.'s counsel herein and a petition to appoint the guardian as guardian ad litem pursuant to Wis. Stat., §803.01(3) will be filed with the Court. All of the court records and information concerning Gerald N.'s disability and disability services that he has received from Milwaukee County are confidential pursuant to Wis. Stat., §§51.30, 51.61(1)(n), 55.06(17), 55.07(1) and 880.33(6). County staff will be able to identify Gerald N. from the facts contained in this complaint based on their dealings with the plaintiff. (3) Plaintiff Joan B. is an adult resident of Milwaukee County. She is 67 years old. The Dane County Probate Court entered an order for guardianship and protective
Case 2:04-cv-00193-LA Filed 02/25/04 Page 6 of 20 Document 1-2

placement on October 28, 1982. The Milwaukee County Probate Court entered an order
on June 7, 1988 naming the current guardian as successor guardian of the person. The
guardian has retained the undersigned to serve as Joan B.'s counsel herein and a
petition to appoint the guardian as guardian ad litem pursuant to Wis. Stat., §803.01(3)
will be filed with the Court. All of the court records and information concerning Joan B.'s
disability and disability services that she has received from Milwaukee County are
confidential pursuant to Wis. Stat., §§51.30, 51.61(1)(n), 55.06(17), 55.07(1) and
880.33(6). County staff will be able to identify Joan B. from the facts contained in this
complaint based on their dealings with the plaintiff.
(4) Defendant Milwaukee County is a municipal corporation with its principal
place of business located at 901 North 9th Street, City and County of Milwaukee,
Wisconsin.
FACTUAL ALLEGATIONS
Services for Persons with Disabilities
(5) Certain persons with disabilities such as developmental disabilities, mental illness, brain injury, Alzheimers, physical disabilities, etc. are unable to live independently in a single-family home or an apartment. (Others with these same disabilities are able to live independently based upon their individual skills.) Many of the persons with disabilities who are unable to live independently reside with their families. Many adults with disabilities continue to live with their aging parents until the death or illness of the caregivers makes that impossible.
(6) The total number of persons with disabilities is increasing due to medical advances that save the lives of medically fragile infants and persons injured in accidents. Also, as life expectancy increases generally, persons who already have disabilities are living longer and the number of persons with disabilities associated with the aging process is increasing along with the absolute number of elderly persons.
(7) Historically, most persons with disabilities were placed in nursing homes and other large custodial institutions if their families were not able to provide suitable care. Most of this institutional care is and has been funded through the federal Medicaid program. This reliance on institutions to provide residential care has changed over time.
Case 2:04-cv-00193-LA Filed 02/25/04 Page 7 of 20 Document 1-2

In 1981, Federal law was changed to permit States to utilize Medicaid funding to pay for community care.
(8) In Wisconsin, Medicaid funding channeled through the Community Options Program (COP), Community Integration Program (CIP), Brain Injury Waiver (BIW) and Family Care is used to pay for most community care for persons with disabilities including both residential and day program services. The policies of these programs contain a preference for smaller community residences and for community services selected by the individual and/or the legal guardian.
(9) Persons with disabilities may receive care provided in their own home by outside caregivers. They may also receive care in adult family homes (AFHs), which are certified or licensed facilities for one to four persons, and community-based residential facilities (CBRFs), which are licensed facilities for five or more persons. AFHs and CBRFs are either licensed or certified pursuant Wisconsin statutes and regulations promulgated by the Wisconsin Department of Health and Family Services.
(10) Many persons with disabilities who receive residential services also attend day programs. These are programs that provide educational services, assistance with and training in activities of daily living and recreational activities. Day programs frequently include opportunities for participants to engage in community activities ranging from shopping to attending sports events other recreational activities. A day program may also include a vocational component.
(11) Individuals with disabilities and/or their guardians choose particular day programs and places to live for a variety of reasons. The reasons include the availability of specific disability services, appearance and layout, personal preferences regarding staff and other participants or residents, access to public or specialized transportation, proximity to churches, proximity to stores, proximity to recreational facilities, accessibility to work opportunities or vocational services, neighborhood characteristics, and closeness to friends and relatives.
Milwaukee County Services for Persons with Disabilities (12) Wis. Stat., §§46.215, 51.42 and 51.437 require each county in Wisconsin
to provide specified services to persons with disabilities.
(13) Wis. Stat., §51.61 require counties, as well as other persons and entities
providing services to persons with disabilities, to observe certain rights that are
guaranteed to persons with mental illness, developmental disabilities, alcoholism or
drug dependency.
Case 2:04-cv-00193-LA Filed 02/25/04 Page 8 of 20 Document 1-2

(14) Wis. Stat., §§55.06 and 55.07 require counties to follow certain procedures and observe certain rights that are applicable to persons who meet the criteria for protective placement.
(15) Services for persons with disabilities under the age of 60 in Milwaukee County are provided throug h the Milwaukee County Department of Human Services Disability Services Division (DSD). It was formerly known as the Adult Services Division.
(16) Under DSD's policies and procedures, Milwaukee County residents with disabilities under the age of 60, or their guardians if appropriate, are permitted to select and approve specific day programs and residential settings.
(17) Under DSD's policies and procedures, Milwaukee County residents with disabilities under the age of 60 have not been removed from day and /or residential programs over their own objections or over the objection of their guardians.
(18) Under DSD's policies and procedures, day and residential providers are permitted to request rate increases from DSD for serving Milwaukee County residents with disabilities under the age of 60.
(19) Under DSD's policies and procedures, day and residential providers have received cost of living rate increases for serving Milwaukee County residents with disabilities under the age of 60.
(20) Services for persons with disabilities in Milwaukee County who are 60 years of age and older are provided through the Milwaukee County Department on Aging (DOA).
Case 2:04-cv-00193-LA Filed 02/25/04 Page 9 of 20 Document 1-2

(21) Milwaukee County DOA voluntarily requested to participate in Family Care pursuant to Wis. Stat., §46.283. It was under no obligation to do so.
(22) Under DOA's policies and procedures, Milwaukee County residents with disabilities 60 years of age and older, or their guardians if appropriate, are not permitted to select and approve specific day programs and residential settings.
(23) Under DOA's policies and procedures, Milwaukee County residents with disabilities 60 years of age and older have been threatened with removal from day and/or residential programs over their own objections or over the objection of their guardians.
(24) Under DOA's policies and procedures, day and residential providers are not permitted to request rate increases from DOA for serving Milwaukee County residents disabilities 60 years of age and older.
(25) Under DOA's policies and procedures, day and residential providers have not received cost of living rate increases for serving Milwaukee County residents with disabilities 60 years of age and older since the County's involvement in Family Care.
(26) The failure to provide reasonable cost of living rate increases has and will cause day and residential providers to either cut the level of services or refuse to serve Milwaukee County residents with disabilities and this will cause substantial numbers of these residents to deteriorate and be admitted to institutions such as nursing homes.
Gerald N. (27) Gerald N. has a developmental disability and a physical disability.
Case 2:04-cv-00193-LA Filed 02/25/04 Page 10 of 20 Document 1-2

(28) Gerald N. resided in his family's home until his mother became too ill to care for him in November of 1998. Milwaukee County then placed him temporarily in a CBRF operated by Homes for Independent Living located in Menomonee Falls.
(29) Shortly before his mother's death in January of 1999, Milwaukee County placed the subject at Whitnall House, a CBRF operated by HIL in Hales Corners. He also began to receive day program services at Paragon Industries which is associated with HIL.
(30) Gerald N.'s guardian approved of his admission to Whitnall House and the Paragon day program.
(31) It is the guardian's continued desire that Gerald N. remain at Whitnall House and Paragon.
(32) Milwaukee County filed Watts reports with the Milwaukee County Probate Court on October 8, 1999, November 6, 2000, December 12, 2001 and October 14, 2002 stating that the subject's placement at Whitna ll House was appropriate to his needs and recommending that his placement there continue.
(33) Gerald N. now receives and has received funding for his disability services from Family Care through Milwaukee County DOA.
(34) HIL attempted over the course of several year to negotiate with DOA to obtain a higher daily rate to cover the increased cost of providing services to Gerald N. and other clients. (A letter from Lincoln Burr, HIL dated October 22, 2003 to Dennis Ryan and a letter from Lincoln Burr dated December 11, 2003 to Meg Gleeson are attached to this complaint and incorporated here.)
Case 2:04-cv-00193-LA Filed 02/25/04 Page 11 of 20 Document 1-2

(35) Milwaukee County DOA refused to approve a cost of living rate increase for Gerald N.
(36) HIL has given notice that it will terminate its contract with DOA effective April 1, 2004 due to the failure to grant any cost of living rate increases.
(37) HIL will continue to contract with DSD to serve Milwaukee County residents with disabilities under the age of 60.
(38) HIL has notified DOA that it would prefer to continue serving Gerald N. and that the funding dispute with DOA is the only reason for the contract termination.
(39) DOA intends to move Gerald N. to a different CBRF and day program over the guardian's objection.
(40) It would be very traumatic and harmful to Gerald N. to be forcibly removed from his home.
(41) Due to the severity of Gerald N.'s disabilities, it is likely that moving him would worsen his condition and lead to placement in a nursing home or similar institution.
Joan B. (42) Joan B. has a developmental disability. (43) Joan B. resided in the community with her family until 1955. She was then placed in the Milwaukee County Mental Health Complex until 1968 when she was transferred to the Central Wisconsin Center for the Developmentally Disabled, another large institution.
Case 2:04-cv-00193-LA Filed 02/25/04 Page 12 of 20 Document 1-2

(44) Joan B. was transferred from Central Center in 1995 to a succession of community based residential facilities (CBRFs) in Milwaukee County. She moved to Vienna House in 1996 and Arbor House in 2000. Both houses are operated by HIL. She also attends the Paragon day program. Each of the transfers to a CBRF and to the Paragon program was with her guardian's approval.
(45) It is the guardian's continued desire that Joan B. remain at Arbor House and Paragon.
(46) Milwaukee County filed Watts reports with the Milwaukee County Probate Court on January 10, 1997, January 6, 1998, October 12, 1998, October 8, 1999, November 6, 2000, December 12, 2001, October 19, 2002 and July 23, 2003 stating that Joan B.'s placement at Vienna House and Arbor House was appropriate to her needs and recommending that her placement there continue.
(47) Joan B. now receives and has received funding for his disability services from Family Care through Milwaukee County DOA.
(48) HIL attempted over the course of several year to negotiate with DOA to obtain a higher daily rate to cover the increased cost of providing services to Joan B. and other clients. (A letter from Lincoln Burr, HIL dated October 22, 2003 to Dennis Ryan and a letter from Lincoln Burr dated December 11, 2003 to Meg Gleeson are attached to this complaint and incorporated here.)
(49) Milwaukee County DOA refused to approve a cost of living rate increase for Joan B.
Case 2:04-cv-00193-LA Filed 02/25/04 Page 13 of 20 Document 1-2

(50) HIL has given notice that it will terminate its contract with DOA effective April 1, 2004 due to the failure to grant any cost of living rate increases.
(51) HIL will continue to contract with DSD to serve Milwaukee County residents with disabilities under the age of 60.
(52) HIL has notified DOA that it would prefer to continue serving Joan B. and that the funding dispute is the only reason for the contract termination.
(53) DOA intends to move Joan B. to a different CBRF and day program over the guardian's objection.
(54) It would be very traumatic and harmful to Joan B. to be forcibly removed from her home.
(55) Due to the severity of Joan B.'s disabilities, it is likely that moving her would worsen her condition and lead to placement in a nursing home or similar institution.
Case 2:04-cv-00193-LA Filed 02/25/04 Page 14 of 20 Document 1-2

Putative Class Members (56) Gerald N. and Joan B. bring this action on their own behalf and also seek to represent a class of Milwaukee County residents who now qualify or who will in the future qualify for services through the Family Care program. (57) The number of persons with disabilities who are now or will in the future be affected by Family Care policies and procedures is very large and it would impractical to bring them all before the Court. (58) Each year additional persons with disabilities are born in Milwaukee County, and each year additional persons without disabilities residing in Milwaukee County become disabled through accidents, injuries, disease and/or the progression of the aging process. It would impossible to identify or bring these unidentified future members of the putative class befo re the Court. (59) Milwaukee County has acted or refused to act on grounds generally applicable to the putative class, thereby making appropriate preliminary and final injunctive relief and/or declaratory relief with respect to the class as a whole. (60) The requirements of Wis. Stat., §803.08 are met in that the question before the Court is one of a common or general interest of many persons, the affected parties are very numerous and it is impractical to bring them all before the Court.
LEGAL CLAIMS Count One: Wis. Stat., §51.61 - Wisconsin Patients Rights (61) The previous allegation are incorporated here as if fully set forth.
Case 2:04-cv-00193-LA Filed 02/25/04 Page 15 of 20 Document 1-2

(62) Gerald N., Joan B. and the putative class members are "patients" covered by the Wisconsin Patients Rights law pursuant to Wis. Stat., §§51.61(1) and/or 55.07.
(63) Milwaukee County DOA's acts, omissions, policies and procedures as set out above violate the rights of Gerald N., Joan B. and the putative class members to the least restrictive conditions necessary to achieve the purposes of admission, commitment or placement pursuant to Wis. Stat., §51.61(1)(e).
(64) Milwaukee County DOA's acts, omissions, policies and procedures as set out above violate the rights of Gerald N., Joan B. and the putative class members to prompt and adequate treatment, rehabilitation and educational services appropriate to their condition pursuant to Wis. Stat., §51.61(1)(e).
(65) Gerald N., Joan B. and the putative class members are entitled to declaratory and injunctive relief pursuant to Wis. Stat., §51.61(7).
Count Two: 41 U.S.C. §1983 and the Equal Protection Clause of the United States Constitution.
(66) The previous allegation are incorporated here as if fully set forth. (67) The actions of Milwaukee County and its agents and employees with regard to Gerald N., Joan B. and the putative class members were and are under color of state law. (68) By virtue of its undertaking to provide care to Gerald N., Joan B. and the putative class members, Milwaukee County has established a special relationship with them. (69) Persons with disabilities under the age of 60 who are eligible to receive services from Milwaukee County are situated similarly to persons with disabilities who
Case 2:04-cv-00193-LA Filed 02/25/04 Page 16 of 20 Document 1-2

are 60 years of age and older who are eligible to receive services from Milwaukee County.
(70) Milwaukee County DOA's acts, omissions, policies and procedures as set out above discriminate against Milwaukee County residents with disabilities 60 years of age and older in comparison to residents under the age of 60 without any rational basis in violation of the Equal Protection Clause of the United States Constitution.
(71) Gerald N., Joan B. and the putative class members are entitled to declaratory and injunctive relief pursuant to 42 U.S.C. §1983.
Count Three: Equal Protection under Art. I, §1 of the Wisconsin Constitution. (72) The previous allegation are incorporated here as if fully set forth. (73) Milwaukee County DOA's acts, omissions, policies and procedures as set out above discriminate against Milwaukee County residents with disabilities 60 years of age and older in comparison to residents under the age of 60 without any rational basis in violation of Art. I, §1 of the Wisconsin Constitution. (74) Gerald N., Joan B. and the putative class members are entitled to declaratory and injunctive relief.
Count Four: Americans with Disabilities Act (75) The previous allegation are incorporated here as if fully set forth. (76) Gerald N., Joan B. and the putative class members are “qualified individuals with a disability” pursuant to 42 U.S.C. §12131(2). (77) Milwaukee County DOA's acts, omissions, policies and procedures as set out above have violated and will continue to violate the rights of Gerald N., Joan B. and
Case 2:04-cv-00193-LA Filed 02/25/04 Page 17 of 20 Document 1-2

the putative class members under 42 U.S.C. §§12132 and 12203, and 28 C.F.R. §35.130 because: (a) they are preempted by the ADA; (b) they deny persons with disabilities the right to integrated community services; (c) they deny meaningful access to disability services programs or services; (d) they afford opportunities that are not equal to those provided to others; (e) they provide 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; (e) they deny a reasonable modification; and (f) they retaliate against eligible individuals who lawfully assert their rights under the ADA.
(78) Gerald N., Joan B. and the putative class members are entitled to declaratory and injuncti ve relief pursuant to 42 U.S.C. §12132.
Count Five: §504 of the Rehabilitation Act. (79) The previous allegation are incorporated here as if fully set forth. (80) Milwaukee County receives and has received federal financial support at all relevant times. (81) Gerald N., Joan B. and the putative class members are disabled pursuant to 29 U.S.C. §705(9). (82) Milwaukee County DOA's acts, omissions, policies and procedures as set out above have violated and will continue to violate the rights of Gerald N., Joan B. and the putative class members under 29 U.S.C. §794 because: (a) they are preempted by §504 of the Rehabilitation Act; (b) they deny persons with disabilities the right to integrated community services; (c) they utilize methods of administration tha t have the
Case 2:04-cv-00193-LA Filed 02/25/04 Page 18 of 20 Document 1-2

effect of subjecting individuals with disabilities to discrimination; (d) they have the
purpose or effect of defeating or substantially impairing accomplishment of the
objectives of the recipient's program with respect to handicapped persons; and (e) they
deny a reasonable accommodation.
(83) Gerald N., Joan B. and the putative class members are entitled to
declaratory and injunctive relief pursuant to 29 U.S.C. 794a.
CONCLUSION
WHEREFORE, plaintiffs request judgment against defendant Milwaukee County
as follows:
(A) A declaratory judgment holding that Gerald N.'s placement at Whitnall House and Joan B.'s placement at Arbor House are the least restrictive placements appropriate to their needs and are necessary to provide them with prompt and adequate treatment, rehabilitation and educational services pursuant to Wis.Stats., §§51.61(1)(e) & (f), and 55.06(9)(a).
(B) A declaratory judgment holding that DOA's discriminatory treatment of Milwaukee County residents with disabilities 60 years of age and older violates Wis.Stats., §§51.61(1)(e) & (f), the Equal Protection Clause of the United States Constitution, Article I, §1 of the Wisconsin Constitution, the Americans with Disabilities Act and §504 of the Rehabilitation Act.
(C) Preliminary and permanent injunctive relief prohibiting Milwaukee County from any future application or enforcement of policies and procedures that discriminate against Milwaukee County residents with disabilities who are 60 years of age and older.
(D) Payment of the reasonable actual attorney fees including litigation expenses and costs pursuant to Wis.Stat., §51.61(7), 29 U.S.C. §794a, 42 U.S.C. §1988, 42 U.S.C. §2000d-7 and 42 U.S.C. §12205.
Date: January 28, 2003
SCHOTT, BUBLITZ & ENGEL, s.c. Attorneys for Gerald N. and Joan B.
Case 2:04-cv-00193-LA Filed 02/25/04 Page 19 of 20 Document 1-2

/s/ Robert Theine Pledl _____________________________________ Robert Theine Pledl State Bar No. 1007710 Post Office Address: SCHOTT, BUBLITZ & ENGEL, s.c. 16655 West Bluemound Road, Suite 330 Brookfield, WI 53005 TEL 262-827-8916 FAX 262-827-1701
Case 2:04-cv-00193-LA Filed 02/25/04 Page 20 of 20 Document 1-2

 
 Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

2006 WL 290510 United States District Court,
E.D. Wisconsin.
Gerald NELSON, Joan Bzdawka, Sandra Ehrlichman, Marilyn Berdikoff, Lenore Czarnecki,
and John Gorton, Plaintiffs, v.
MILWAUKEE COUNTY, Wisconsin Department of Health and Family Services, and Helene Nelson,
in her official capacity as Secretary of DHFS Defendants.
No. 04 C 0193. | Feb. 7, 2006.
Attorneys and Law Firms
Robert Theine Pledl, Pledl Law Office, Milwaukee, WI, for Plaintiffs.
John F. Jorgensen, Mary Ellen Poulos, Milwaukee County Corporation Counsel, Milwaukee, WI, Mary E. Burke, Maureen McGlynn Flanagan, Wisconsin Department of Justice Office of the Attorney General, Madison, WI, for Defendants.
Opinion
DECISION AND ORDER
ADELMAN, J.
*1 Plaintiffs, who are elderly and afflicted with disabilities, bring this putative class action under the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq., and the Rehabilitation Act (“RA”), 29 U.S.C. § 701 et seq., alleging that defendants Wisconsin Department of Health and Family Services (“DHFS”) and its Secretary, Helene Nelson, (collectively “state defendants”) and Milwaukee County are discriminating against them by inadequately compensating service providers participating in the Family Care program. Plaintiffs also allege that defendants are violating 42 U.S.C. § 1396a(a)(30)(A) relating to payments to Medicaid service providers. Plaintiffs seek damages for defendants’ past conduct as well as declaratory and injunctive relief. Defendants answered plaintiffs fourth amended complaint, and now move to dismiss challenging plaintiffs’ standing and the sufficiency of their complaint.

I. BACKGROUND
The Medicaid program provides health care services to low income individuals. The federal government provides most of the funding for the program, and the states administer it. The federal government imposes requirements on participating states, but the states may seek waivers of certain of them. See 42 C.F.R. § 430.25(b) (stating that “[w]aivers are intended to provide the flexibility needed to try new or different approaches to the efficient and cost-effective delivery of health care services, or to adapt their programs to the special needs of particular areas or groups of recipients”).
Family Care is a Medicaid waiver program1 that provides comprehensive community-based services, including adult day care, home delivered meals, supportive home care, health care and daily-living skills training to elderly and disabled persons with long-term care needs. In most counties in which it operates, Family Care is available to any low income adult with a disability, but in Milwaukee County it is available only to low income adults with disabilities over the age of sixty. Family Care offers a resource center, which provides information about services available to participants, and a CMO, which assesses enrollees’ needs for services and contracts with providers to deliver such services.

1

Family Care involves two waivers. First, a community

based services waiver permits Wisconsin to use

Medicaid funds to pay for services to persons with

disabilities in community, rather than institutional,

settings. See § 1396n(c). Second, a managed care

waiver permits Wisconsin to limit the services provided

by the Family Care program to persons who enroll in a

care management organization (“CMO”) and to limit

enrollees’ choice of providers. § 1396n(b).

The Milwaukee County Department of Aging (“MCDA”) is the CMO in Milwaukee County, and pursuant to a contract with defendant DHFS, it arranges for the provision of Family Care services to enrollees in exchange for capitated payments.2 Plaintiffs Nelson, Bzdawka, Ehrlichman and Berdikoff reside in adult family homes3 or community-based residential facilities4 operated by Homes for Independent Living (“HIL”) and also attend day programs operated by HIL. Plaintiffs Czarnecki and Gorton reside in community based residential facilities operated by Senior Residential Care
1

Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

of America (“SRCA”). Family Care pays for the services provided by HIL and SRCA.

2

A capitated payment is a payment “of a fixed sum per

period for each patient under the care of a selected

provider, regardless of the actual costs incurred by the

provider in treating the patient.” Andrew Ruskin,

Capitation: The Legal Implications of Using Capitation

to Affect Physician Decision-Making Processes, 13 J.

Contemp. Health L. & Policy 391, 391 (Spring 1997).

Medicaid providers are usually paid on a

fee-for-service rather than a capitated basis.

3

An adult family home is a place where three or four

adults who are not related to the operator reside and

receive care, treatment or services that are above the

level of room and board and that may include up to

seven hours per week of nursing care per resident. See

http://

dhfs.wisconsi

n.gov/rl_DSL/AdultFamilyHome/AFHintro.htm (last

updated Dec. 12, 2004); see also Wis. Admin. Code §

HFS 88.02(5) (defining adult family home).

4

A community based residential facility is a place where

five or more unrelated people live together in a

community setting. Services provided include room and

board, supervision, support services and may include

up to three hours of nursing care per week. See http://

dhfs.wisconsin.gov/rl_DSL/CBRF/CBRFintro.htm (last

updated Dec. 12, 2004); see also Wis. Admin. Code §

HFS 83.03 (defining a community based residential

facility).

Plaintiffs allege that MCDA pays HIL and SRCA less than other counties pay for comparable services and less than Milwaukee County pays for comparable services for persons not enrolled in Family Care. HIL and SRCA have unsuccessfully sought increased compensation from MCDA. In 2004, HIL notified MCDA of its intention to withdraw from Family Care because of its dissatisfaction with the compensation, and as a result, MCDA notified plaintiffs Nelson, Bzdawka, Ehrlichman and Berdoff that they would have to move. These plaintiffs then commenced the present action and obtained MCDA’s agreement not to move them pending resolution of the case. SRCA states that if compensation is not increased, it too will withdraw from Family Care, in which event plaintiffs Czarnecki and Gordon would also have to be moved.
*2 I will state additional facts in the course of the decision.

II. DISCUSSION

A. Overview of ADA and RA and Plaintiffs’ Claims 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. The RA contains similar language but applies only to entities receiving federal funding. Pursuant to the ADA and RA, the Attorney General has issued regulations including 28 C.F.R. § 35.130(b)(1), which requires public entities to administer their programs so as to ensure full access by persons with disabilities,5 28 C.F.R. §§ 35.130(d) (ADA), 42.503(d) & 41.51(d)(RA), which require public entities to “administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals,” and 28 C.F.R. § 35.130(b)(7), which requires public entities to make “reasonable modifications in policies, practices, or procedures when the modifications are necessary to avoid discrimination on the basis of a disability unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service program or activity.”

5

Section 35.130(b)(1) states in relevant part that “[a]

public entity ... may not, ... on the basis of disability (i)

Deny a qualified individual with a disability the

opportunity to participate in or benefit from the aid,

benefit or service; (ii) Afford a qualified individual

with a disability an opportunity to participate in or

benefit from the aid, benefit or service that is not equal

to that afforded others; (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 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 person that discriminates on the basis

of disability in providing any aid, benefit, or service to

beneficiaries of the public entity’s program; ... and (vii)

Otherwise limit a qualified individual with a disability

in the enjoyment of any right, privilege, advantage or

opportunity enjoyed by others receiving the aid,

2

Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

benefit, or service. Regulations implementing the RA are substantially equivalent to the above regulations. See 28 C.F.R. § 41.51, 28 C.F.R. § 42.503, 45 C.F.R. § 84.4(b)(4).
Plaintiffs may prove discrimination by showing (1) intentional discrimination, (2) disparate impact, or (3) failure to make a reasonable accommodation. First Step, Inc. v. City of New London, 247 F.Supp.2d 135, 150 (D.Conn.2003). “Disparate treatment ... is the most easily understood type of discrimination ... [S]ome people [are treated] less favorably than others because of their race, color, religion, sex, or [other protected characteristic].” Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 33 n. 15 (1977). A claim for disparate impact arises when a facially neutral rule or practice adversely affects members of a protected group, such as the disabled, more than others regardless of whether such adverse impact was actually intended. Id. A reasonable accommodation claim arises when a public entity fails to “make reasonable modifications” that “are necessary to avoid discrimination on the basis of disability.” 28 C.F.R. § 35.130(b)(7). A reasonable accommodation claim recognizes that, in some cases, the ADA creates an affirmative duty “to provide special preferred treatment, or reasonable accommodation.” Dunlap v. Ass’n of Bay Area Gov’ts, 996 F.Supp. 962, 965 (N.D.Cal.1998).
Plaintiffs assert nine claims. In counts one and five, they allege that defendants are violating the ADA and RA by paying Family Care providers less than other providers of comparable services. In counts two and six, plaintiffs allege that defendants are violating the ADA and RA requirements that public entities administer programs so as to ensure full access to persons with disabilities. In counts three and seven, plaintiffs allege that defendants are violating the ADA and RA by compensating Family Care providers so inadequately as to force plaintiffs to be placed in non-integrated settings. In counts four and eight, plaintiffs allege the defendants are violating the ADA and RA by failing to reasonably modify the compensation paid to Family Care providers. In count nine, plaintiffs allege that by inadequately compensating Family Care providers, defendants are violating the “equal access” provision of § 1396a(a)(30)(A).
*3 I turn now to defendants’ motions.
B. Standing In order to invoke federal jurisdiction, a plaintiff must have standing to sue.6 To survive a motion to dismiss based on an asserted absence of standing, a plaintiff must

allege: (1) injury in fact, meaning an invasion of a legally protected interest that is concrete and particularized, actual or imminent, and not conjectural or hypothetical; (2) a causal connection between the injury and the conduct complained of, such that the injury is fairly traceable to the defendant’s actions; and (3) that a favorable decision is likely to redress the injury. Tobin for Governor v. Ill. State Bd. of Elections, 268 F.3d 517, 527 (7th Cir.2001). A court must analyze standing separately with respect to each type of relief sought. Discovery House v. Consol. City of Indianapolis, 319 F.3d 277, 280 (7th Cir.2003). On a motion to dismiss for lack of standing, a court may consider affidavits relating to standing. Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975).

6

The standing requirement has both constitutional and

prudential components. In the present case, only the

constitutional components are at issue.

The injury in fact requirement is an “ ‘undemanding” ’ one. Family & Children’s Ctr., Inc. v. Sch. City of Mishawaka, 13 F.3d 1052, 1058 (7th Cir.1994) (quoting N. Shore Gas Co. v. EPA, 930 F.2d 1239, 1242 (7th Cir.1991)). Plaintiffs need only allege a stake in the outcome that goes beyond “intellectual or academic curiosity.” S.E. Lake View Neighbors v. Dep’t of Housing & Urban Dev., 685 F.2d 1027, 1033 (7th Cir.1982). Provided that a litigant can establish the existence of a distinct and palpable injury, even a minor injury can satisfy the requirement. See ACLU v. City of St. Charles, 794 F.2d 265, 268 (7th Cir.1986) (holding that the fact that plaintiffs had to alter their normal route of travel to avoid viewing a cross displayed on public property satisfied the standing requirement).
Defendants first argue that plaintiffs lack standing to obtain damages for past conduct7 because they fail to allege that they suffered an actual injury. I agree. Plaintiffs allege that defendants’ past conduct violated the ADA, the RA and § 1396(a)(30)(A), but they do not allege that such conduct injured them in any concrete way. Plaintiffs do not allege, for example, that defendants’ operation of Family Care required them to move or resulted in their receiving deficient care. Plaintiffs appear to concede this, stating only that there is “a substantial likelihood that they will be harmed.” (Pls.’ Br. at 22 (emphasis added)). Thus, I will dismiss plaintiffs’ claims insofar as they relate to defendants’ past conduct.

7

Plaintiffs also seek a declaratory judgment that

defendants violated the ADA, the RA and §

3

Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

1396a(a)(3)(A). However, declaratory relief is unavailable as a means of adjudicating past conduct. James Wm. Moore, Moore’s Federal Practice § 57.04 (3d ed.2005).

Defendants also argue that plaintiffs lack standing to obtain prospective relief because they do not adequately allege injury in fact, causation or redressability.8 I address defendants’ arguments separately as to each element.

8

Contrary to plaintiffs’ assertion, I may determine

plaintiffs’ individual standing before addressing the

issues of class certification and class standing. See

Payton v. County of Kane, 308 F.3d 673, 680 (7th

Cir.2002); see also Linda S. Mullenix,

Multi-Jurisdictional and Cross-Border Class Actions:

Symposium Issue: Standing and Other Dispositive

Motions After Amchem and Ortiz: The Problem of

‘Logically Antecedent’ Inquiries, 2004 Mich. St. L.Rev.

703, 727 (2004).

To satisfy the injury in fact requirement based on a threat of future harm, plaintiffs must allege that they face a real and immediate threat of injury. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 190, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000); see also City of Los Angeles v. Lyons, 461 U.S. 95, 101-02, 107 n. 8, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983) (stating that injury must be “certainly impending” and not merely speculative).9 Plaintiffs allege that by inadequately compensating Family Care service providers, defendants threaten them with injury because HIL and SRCA will withdraw from Family Care, which will cause plaintiffs to be moved and possibly suffer trauma and deterioration. Thus, plaintiffs plead a threat of injury that is real and immediate. HIL has previously indicated that in the absence of increased compensation it will withdraw from Family Care, and executives from HIL and SRCA present affidavits to this effect. Such withdrawal would require that plaintiffs be moved. Moreover, the possibility that plaintiffs would suffer “transfer trauma”-the adverse effect on the physical and mental health of elderly or chronically ill individuals who are forced to move-is real. See, e.g., Jennifer L. Williamson, The Siren Song of the Elderly: Florida’s Nursing Homes & the Dark Side of Chapter 400, 25 Am. J.L. & Med. 423, 435 (1999) (citing Kira Anne Larson, Note, Nursing Homes: Standards of Care, Sources of Liability, Defenses to Suit, & Reform, 37 Drake L.Rev. 699, 701 n. 13 (1987-88)); see also Terri D. Keville, Studies of Transfer Trauma in Nursing Home Patients: How the Legal System Has Failed to See the Whole Picture, 3 Health Matrix: J. of Law-Medicine 421, 440-52 (Summer 1993) (discussing judicial treatment of transfer

trauma); (see also Aff. of Gerald Kallas ¶ 11).10

9

Whether plaintiffs allege an injury sufficiently

imminent to support standing might also be analyzed as

a question of ripeness. Smith v. Wis. Dep’t of Agric.,

Trade & Consumer Prot., 23 F.3d 1134, 1141 (7th

Cir.1999) (stating that with respect to future injuries,

the ripeness and standing doctrines are interchangeable

because the court could tell plaintiffs that they have

suffered no injury and have no standing, or the court

could tell plaintiffs that they have suffered no injury yet

and so their claim is not ripe).

10

Defendants also argue that plaintiffs fail to allege injury

in fact because they do not allege that they have a

legally protected interest in remaining in their homes.

However, plaintiffs allege that they have a legally

protected interest in not being discriminated against by

reason of a disability (ADA and RA) and in having

access to services to the same extent as the general

population (§ 1196a(a)(30)(A), and that defendants are

violating such interests by inadequately compensating

Milwaukee County Family Care service providers.

Plaintiffs allege that the harm they will suffer as the

result of the violation of such interests is that they will

be forced to move. Moreover, for plaintiffs to have

standing, it is not necessary that they allege that the law

affirmatively protects them against such harm. See

Judicial Watch, Inc. v. U.S. Senate, 432 F.3d 359, No.

04-5422, 2005 U.S.App. LEXIS 28456 at *14 (D.C.Cir.

Dec. 23, 2005). Plaintiffs only need to assert that the

harm is “judicially cognizable,” meaning that it satisfies

the requirements that the injury be concrete and

particularized, and actual or imminent. Id.

*4 To satisfy the causation requirement of standing, plaintiffs must allege that their injuries are traceable to the challenged action of defendants. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). It is sufficient for plaintiffs to allege that defendants’ actions necessarily caused a third party to injure them. Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). Plaintiffs allege that defendants’ unlawful conduct will cause HIL and SRCA to withdraw from Family Care, which will in turn cause harm to them. Thus, plaintiffs adequately plead causation. The state defendants argue that as to them the alleged causation is too attenuated. However, plaintiffs allege that the state defendants determine the amount of compensation paid to Family Care providers, which is the cause of their injuries. Thus, plaintiffs satisfy the causation requirement as to the state defendants.
The final element of standing, redressability, “examines the causal connection between the alleged injury and the
4

Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

judicial relief requested.” Allen v. Wright, 468 U.S. 737, 750-51, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). To survive a motion to dismiss raising redressability, a plaintiff need only allege “that there is a substantial likelihood that the relief requested will redress the injury claimed.” Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 75 n. 20, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978) (internal quotations omitted). Plaintiffs ask me to order defendants to increase payments to Family Care providers and allege that such relief will cause HIL and SRCA to remain in the program and result in their not having to be moved. Thus, plaintiffs adequately allege redressability. See Laidlaw, 528 U.S. at 815-16 (stating that “[i]t can scarcely be doubted that, for a plaintiff who is injured or who faces the threat of future injury due to illegal conduct ongoing at the time of suit, a sanction that effectively abates that conduct and prevents its recurrence provides a form of redress”).
Thus, for the reasons stated, I conclude that plaintiffs have standing to sue for prospective relief.
C. Failure to State a Claim
1. Standard Rule 12(b)(6) motions filed after an answer are construed as motions for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c). See Warzon v. Drew, 60 F.3d 1234, 1237 (7th Cir.1995). However, like a Rule 12(b)(6) motion, a court may grant a motion under Rule 12(c) only if the plaintiffs can prove no set of facts that would entitle them to relief. N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 453 (7th Cir.1998) (citing Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir.1997)). The essence of the motion is not that the plaintiffs have pleaded insufficient facts; it is that, even assuming all of their facts are accurate, they have no legal claim. Payton v. Rush-Presbyterian-St. Luke’s Med. Ctr., 184 F.3d 623, 627 (7th Cir.1999). In considering the motion, the court must assume that all facts alleged in the complaint are true, and construe those facts and all reasonable inferences flowing from them in the light most favorable to the plaintiff. Bethlehem Steel Corp. v. Bush, 918 F.2d 1323, 1326 (7th Cir.1990).
2. Claims Against Defendant Nelson *5 Defendant Nelson argues that I should dismiss all of plaintiffs’ discrimination claims against her because plaintiffs do not allege facts supporting such claims and, alternatively, that I should dismiss plaintiffs’ ADA claims against her because she is not a “public entity” within

Title II of the ADA. Plaintiffs sue Nelson in her official capacity. A suit against a state official in her official capacity is a suit against the state. Kentucky v. Graham, 473 U.S. 159, 165-66, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1984); see also Henrietta D. v. Bloomberg, 331 F.3d 261, 288 (2d Cir.2003) (explaining that the ADA permits suits against an individual sued in her official capacity because the suit is in effect against the “public entity,” the state agency). Thus, Nelson’s arguments in support of dismissing plaintiffs’ claims are the same as DHFS’s, and I will address them when I discuss DHFS’s arguments.11

11

The state defendants also argue that to the extent

plaintiffs seek damages for past conduct, their claims

are barred by sovereign immunity. I need not address

this argument as I have already indicated that such

claims will be dismissed. The state defendants do not

raise sovereign immunity arguments with respect to

plaintiffs’ claims seeking prospective relief.

3. Count One and Five Claims In counts one and five, plaintiffs allege that defendants are discriminating against them in violation of the ADA and RA by paying Family Care providers less than they pay providers of services to three other groups of persons with disabilities: (1) persons in Milwaukee County who are under sixty; (2) persons in non-Family Care counties; and (3) persons in Milwaukee County whose disabilities are less serious than their’s. Defendants argue first that these claims fail because plaintiffs do not allege that they are being denied services. However, to survive defendants’ motion, plaintiffs need not allege that they are being denied services outright. The ADA and RA are broad statutes that protect persons with disabilities from discrimination by public entities by reason of such disability. See Bledsoe v. Palm Beach County Soil & Water Conservation Dist., 133 F.3d 816, 822 (11th Cir.1998); Innovative Health Sys., Inc. v. City of White Plains, 117 F.3d 37, 44-45 (2d Cir.1997); see also Downs v. Mass. Bay Transp. Auth., 13 F.Supp.2d 130, 135 (D.Mass.1998) (noting that “[t]he [defendant] focuses exclusively on the access to the ‘services, programs, or activities’ of public entities guaranteed by the first prong of this section, and disregards the general prohibition on discrimination provided by the second prong” of § 12132). Thus, plaintiffs’ allegations that defendants are discriminating against them by providing lesser funding for their services than to other persons with disabilities are sufficient to withstand defendants’ motion to dismiss.12
5

Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

12

Defendants also argue that plaintiffs only allege that

they were discriminated against in relation to other

disabled persons and thus fail to state a claim under the

ADA and the RA because neither the ADA nor the RA

establish an obligation to meet a disabled persons’

needs vis-a-vis the needs of other disabled persons. I

disagree. See Olmstead v. L.C. ex rel. Zimring, 527

U.S. 581, 598-603, 119 S.Ct. 2176, 144 L.Ed.2d 540

(1999) (explaining that the ADA prohibits not only

disparate treatment that favors non-disabled persons

over disabled persons, but also prohibits disparate

treatment among the disabled).

Defendants also argue that plaintiffs’ count one and five claims fail because plaintiffs do not allege discrimination by reason of disability. The ADA requires that discrimination be by reason of disability, and the RA requires that discrimination be solely by reason of disability. Washington v. Ind. High Sch. Athletic Ass’n, 181 F.3d 840, 845 n. 6 (7th Cir.1999). To the extent that plaintiffs allege that defendants are treating them worse than persons with disabilities who are under sixty or who live in non-Family Care counties, they allege discrimination on the basis of age and county of residence rather than disability. (See Pls.’ Supp. Br. at 8) (explaining that “[i]f plaintiffs happened to be a few years younger or if they lived in a different Wisconsin county, they would be able to choose their homes without the constraints that result from the government actions at issue in this litigation”). Thus, to the extent that plaintiffs allege differential treatment based on age or geography, their claims must be dismissed. However, to the extent that plaintiffs allege that defendants are treating them worse than persons with less severe disabilities, they may proceed as such claims allege differential treatment by reason of disability. See Jackson v. Fort Stanton Hosp. & Training Sch., 757 F.Supp. 1243, 1299 (D.N.M.1990) (stating that “[t]he severity of plaintiffs’ [disability] is itself a [disability]” which is protected by the ADA and the RA); see also Messier v. Southbury Training Sch., No. 3:94-CV-1706, 1999 U.S. Dist. LEXIS 1479, at *33 (D.Conn. Jan. 5, 1999) (listing cases in which courts have held that the ADA and the RA prohibit discrimination based on the severity of a disability).
*6 Defendants next argue that plaintiffs fail to plead facts sufficient to support their allegation of discrimination by reason of severity of disability. However, to survive a motion to dismiss, plaintiffs need not plead facts but must only provide “fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); see also Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) (holding that Rule 8(a) is

satisfied so long as plaintiff gives the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests); Thomas v. Washington, 362 F.3d 969, 970-71 (7th Cir.2004) (stating that it is not necessary to plead facts to state a claim for relief). Thus, defendants’ challenge on this ground must be rejected.
Accordingly, as outlined above, I will grant in part and deny in part defendants’ motions to dismiss plaintiffs’ count one and five claims.

4. Count Two and Six Claims The ADA and RA and their implementing regulations require public entities to administer programs so as to enable persons with disabilities to fully participate in and benefit from them and prohibit public entities from affording some persons with disabilities less opportunity to participate in and benefit from programs than others. 28 C.F.R. § 35.130(b)(3)(e). In counts two and six, plaintiffs allege that defendants so inadequately compensate Family Care providers as to deny plaintiffs effective access to services in violation of the above provisions. Defendants argue that plaintiffs’ claims are deficient for failing to identify a comparison group against which to measure the benefits of the Family Care program. However, if I construe plaintiffs’ claim as one of failure to accommodate, plaintiffs are not required to compare themselves to another group. Henrietta D., 331 F.3d at 274. Further, if I construe plaintiffs’ claim as one involving intentional discrimination or disparate impact and take all inferences in the light most favorable to them, plaintiffs allege the existence of a comparison group consisting of persons with disabilities less severe than their own. Thus, I decline to dismiss plaintiffs’ count two and six claims on this ground.
Defendants also argue that plaintiffs fail to plead sufficient facts to support their allegations. However, as previously indicated, plaintiffs are not obliged to plead facts. Thomas, 362 F.2d at 970-71.13

13

Defendants also argue in passing that plaintiffs’ count

six claims should be dismissed because, although

presented as a discrimination claim, plaintiffs are

actually challenging a decision concerning the medical

treatment they are receiving and the RA precludes such

a claim. See Grzan v. Charter Hosp., 104 F.3d 116,

120-21 (7th Cir.1997). However, construing the claim

in the light most favorable to plaintiffs, plaintiffs are

not challenging decisions concerning their treatment

but rather alleging discriminatory funding.

6

Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

Therefore, plaintiffs’ count two and six claims survive defendants’ motions to dismiss.
5. Count Three and Seven Claims The ADA requires public entities to administer programs “in the most integrated setting appropriate to the needs of qualified individuals with disabilities,” 28 C.F.R. § 35.130(d) (2004), which is one “that enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible,” 28 C.F.R. pt. 35, app. A at 543 (2004). The RA contains a “materially identical” integration requirement. Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906, 911-12 (7th Cir.2003) (citing 28 C.R.F. § 41.51(d), which states that “recipients [of federal funding] shall administer programs and activities in the most integrated settings appropriate to the needs of qualified handicapped persons”). Thus, the “unjustified institutional isolation” of persons with disabilities is an actionable form of discrimination-even in the absence of proof that such persons are being treated differently than similarly situated persons without disabilities. Olmstead, 527 U.S. at 597; see also Radaszewski ex rel. Radaszewski v. Maram, 383 F.3d 599, 608 (7th Cir.2004); Bruggeman, 324 F.3d at 911 (holding that disabled persons are entitled to care in the least restrictive environment possible).
*7 Plaintiffs allege that defendants’ actions “substantially increase the probability that Milwaukee County residents with disabilities who are sixty and over will be placed in more restrictive, less integrated settings despite their preference for less restrictive, more integrated settings” (Fourth Am. Compl. ¶ ¶ 153, 171), and thus violate the ADA and RA. Defendants argue that plaintiffs fail to allege facts that support this allegation. However, as indicated, plaintiffs are not required to plead facts but need only provide defendants with fair notice of their claim. Swierkiewicz, 534 U.S. at 512. Plaintiffs’ allegations satisfy this requirement.
Defendants also argue that plaintiffs’ count seven claim fails because plaintiffs allege discrimination based on age rather than disability. However, as discussed above, to state a failure to integrate claim, plaintiffs need not allege differential treatment.
Thus, plaintiffs’ count three and seven claims survive defendants’ motions.

modify their policies “when the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program, or activity.” 28 C.F.R. § 35.130(b)(7); see also Wis. Cmty. Serv. v. City of Milwaukee, 309 F.Supp.2d 1096, 1104 (E.D.Wis.2004). In their count four and eight claims, plaintiffs allege that defendants are obliged to reasonably modify their policies so as to make individualized determinations of the services needed by plaintiffs. Defendants ask me to dismiss these claims, arguing that plaintiffs’ proposed modifications would essentially require Family Care to compensate providers on a fee for service basis and thus would fundamentally alter the program. However, the determination of whether plaintiffs’ requested alterations would fundamentally alter Family Care requires a more fact intensive inquiry than is appropriate on a motion to dismiss. See Crowder v. Kitagawa, 81 F.3d 1480, 1485-86 (9th Cir.1996) (stating that “the determination of what constitutes reasonable modifications is highly fact-specific requiring case-by-case inquiry”); Wong v. Regents of Univ. of Cal., 192 F.3d 807, 818 (9th Cir.1999) (explaining that the question of what constitutes a reasonable accommodation “requires a fact-specific, individualized analysis of the disabled individual’s circumstances and the accommodations” requested).14

14

Defendants also argue that I should dismiss plaintiffs’

other ADA and RA claims because the discrimination

alleged cannot be reasonably accommodated. However,

I cannot make such a determination on a motion to

dismiss.

Defendants also argue that plaintiffs fail to allege facts sufficient to support their count four and eight claims. However, as discussed, plaintiffs are not required to plead facts. Swierkiewicz, 534 U.S. at 512.
Finally, defendants argue that I should dismiss plaintiffs’ RA accommodation claim because plaintiffs do not allege discrimination solely on the basis of disability but also on the basis of age. However, to prevail on an accommodation claim, plaintiffs need not show differential treatment of any sort. Henrietta D., 331 F.3d at 276-77.
*8 Thus, I will deny defendants’ motions to dismiss plaintiffs’ count four and eight claims.

6. Count Four and Eight Claims The ADA and RA require public entities to reasonably

7. Claim Based on Medicaid Statute Plaintiffs also bring a § 1983 claim alleging that
7

Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

defendants are violating the “equal access” provision of § 1396a(a)(30)(A), which requires a state Medicaid plan to
provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary ... to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.
Plaintiffs allege that the capitated rates set by the state defendants and paid to Milwaukee County are inadequate to enlist enough providers so that care and services are available to participants in Family Care to the extent that they are available to the general population. Defendants first argue that § 1396a(a)(30)(A) does not create a private right of action enforceable under § 1983.
A plaintiff may bring a § 1983 action against a person acting under color of state law to vindicate the deprivation of “any rights, privileges, or immunities secured by the Constitution and laws.” 42 U.S.C. § 1983. The phrase “and laws” permits persons to sue for the violation of rights secured to them by federal statutes. Maine v. Thiboutot, 448 U.S. 1, 4-8, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980). However, § 1983 does not “provide an avenue for relief every time a state actor violates a federal law.” City of Rancho Palos Verdes v. Abrams, 544 U.S. 113, 125 S.Ct. 1453, 1458, 161 L.Ed.2d 316 (2005). Instead, “it is rights, not the broader or vaguer ‘benefits’ or ‘interests’ that may be enforced under the authority of that section.” Gonzaga Univ. v. Doe, 536 U.S. 273, 283, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002). Thus, to survive defendants’ motions to dismiss, plaintiffs must establish that § 1396(a)(30)(A) “creates an individually enforceable right in the class of beneficiaries to which [they] belong.” City of Rancho Palos Verdes, 125 S.Ct. at 1458. If plaintiffs establish that the statute creates a presumptively enforceable right, defendants must demonstrate that Congress has “specifically foreclosed a remedy under § 1983” either expressly “or impliedly, by creating a comprehensive enforcement scheme that is incompatible with individual enforcement under § 1983.” Blessing v. Freestone, 520 U.S. 329, 341, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997).
For a statute to create a presumptively enforceable right, three factors must be present: (1) Congress must have

intended that the statute benefit plaintiff; (2) the right must not be so “vague and amorphous” that its enforcement would strain judicial competence; and (3) the statute must unambiguously impose a binding obligation on the states. Id. at 340-41. With respect to the first factor, in creating Medicaid, Congress intended to benefit recipients of services provided by the program. However, in the case of a spending statute such as Medicaid, see Bruggeman, 324 F.3d at 911, Congress must “speak with a clear voice” and manifest its “unambiguous intent to confer individual rights before federal funding provisions will be read to provide a basis for private enforcement.” Gonzaga Univ., 536 U.S. at 1268 (citing Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 28 n. 21, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1982)).
*9 Title 42 U.S.C. § 1320a-2 provides that “an action may be brought to enforce another provision of this chapter,” i.e., the equal access provision, and that “such provision is not deemed unenforceable because of its inclusion in a section of this chapter requiring a State plan or specifying the required contents of a State plan.” Thus, “ § 1396a(a)(30)(A) will not be deemed unenforceable [by recipients] simply because it only elaborates on what a state plan must include.” Memisovski ex rel. Memisovski v. Maram, No. 92 C 1982, 2004 WL 1878332, at *6 (N.D.Ill. Aug.23, 2004). Furthermore, the equal access provision is “couched in mandatory language,” e.g., the State “must” have a plan that affords equal access. “[W]hen combined with the absence of an administrative mechanism to enforce that language, [the mandatory language] connotes an intent to permit private enforcement of the provision.” Clark v. Richman, 339 F.Supp.2d 631, 639 (M.D.Pa.2004) (citing Memisovski, 2004 WL 1878332, at *7). Moreover, in Wilder v. Virginia Hospital Association, 496 U.S. 498, 502, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990), the Supreme Court concluded that a nearly identical provision in the Medicaid Act, 42 U.S.C. § 1396a(a)(13)(A) (1982 ed. Supp. V),15 created private rights enforceable through § 1983, and the Court has indicated that Wilder is still good law. Gonzaga Univ., 536 U.S. at 280. Thus, “[i]f a private right of action was allowed in Wilder, there is no principled basis to say that a private right of action [under § 1396a(a)(30)(A) ] is unlawful.” Memisovski, 2004 WL 1878332, at *8.

15

Section 1396a(a)(13)(A) (1982 ed. Supp. V) provides

that “[a] State plan for medical assistance must ...

provide ... for payment ... of the hospital services ... for

the mentally retarded provided under the plan through

the use of rates ... which the State finds and makes

assurances satisfactory to the Secretary, are reasonable

and adequate to meet the costs which must be incurred

by efficiently and economically operated facilities in

8

Nelson v. Milwaukee County, Not Reported in F.Supp.2d (2006)

order to provide care and services in conformity with applicable State and Federal law ... and to assure that individuals eligible for medical assistance have reasonable access ... to inpatient services of adequate quality.”
With respect to the second Blessing factor, the right at issue is not too vague and amorphous for judicial enforcement. Courts already have interpreted and enforced both the quality of care and equal access provisions of the Medicaid statute. See, e.g., Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d 908, 930-31 (5th Cir.2000) (concluding that the “equal access mandate of section 30(A) is sufficiently definite to enforce”); Orthopaedic Hosp. v. Belshe, 103 F.3d 1491, 1496 (9th Cir.1997) (interpreting and enforcing the quality and access provisions of § 1396a(a)(30)(A)).
The third Blessing requirement, that the statute unambiguously impose a binding obligation on the states, is also satisfied. “Although Medicaid is an optional program, once a state elects to participate, the contents of the state plan specified in § 1396a(a) are required, not optional.” Clayworth v. Bonta, 295 F.Supp.2d 1110, 1124 (E.D.Cal.2003). Thus, § 1396a(a)(30)(A) imposes a binding obligation on any state that participates in the Medicaid program.
Finally, nothing indicates that Congress “specifically foreclosed a remedy under § 1983.” Blessing, 520 U.S. at 341. Thus, I conclude that § 1396a(a)(30)(A) provides a private right of action for recipients of services under Medicaid.
Defendants also argue that even if plaintiffs have a private right of action, they have failed to state sufficient facts to support their claim. However, as previously indicated,

plaintiffs need not plead facts but must only put defendants on notice of their claim and the grounds upon which it rests. See Thomas, 362 F.3d at 970-71; see also Kirksey v. R.J. Reynolds Tobacco Co., 168 F.3d 1039, 1041 (7th Cir.1999) (stating “[t]he courts keep reminding plaintiffs that they don’t have to file long complaints, don’t have to plead facts, don’t have to plead legal theories”). Although the allegations in plaintiffs’ Medicaid claim contain few facts, they are sufficient to inform defendants of the nature of their claim and the grounds upon which it rests to state a claim for relief.16

16

Defendants also argue that “it is highly unlikely that

plaintiffs can rely on § 1396a(a)(30)(A) alone as the

basis to state a claim challenging the adequacy of the

Family Care capitated rates.” (State Defs.’ Br. in

Support of M. to Dismiss at 41.) Defendants seem to be

contending that plaintiffs should also have asserted

claims under §§ 1396n(b)-(c). However, defendants cite

no authority in support of this contention. In any case,

as indicated, plaintiffs are not required to plead legal

theories. Kirksey, 168 F.3d at 1041.

III. CONCLUSION
*10 For the foregoing reasons, defendants’ motions to dismiss are GRANTED IN PART and DENIED IN PART. Defendants’ motions with respect to claims seeking damages for past conduct are GRANTED, and defendants’ motions with respect to claims one and five are GRANTED to the extent previously indicated. Defendants’ motions with respect to plaintiffs’ other claims are DENIED.
	  

9

 
 Case 2:04-cv-00193-LA Document 94 Filed 02/23/2006 Page 1 of 7

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

GERALD NELSON, by his legal guardian and next friend, JANE PRENTICE; JOAN BZDAWKA, by her legal guardian and next friend, RICHARD MILLER; SANDRA EHRLICHMAN, by her legal guardian and next friend, NANCY STEEVES; MARILYN BERDIKOFF, by her legal guardian and next friend, LOIS DEGNER; LENORE CZARNECKI, by her agent and next friend, CAROLYN CETNAROWSKI; and JOHN GORTON, by his agent and next friend, DEBORAK BRUNK, each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs,

v.

Case No. 04-C-0193

MILWAUKEE COUNTY; WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES; and HELENE NELSON, in her official capacity as Secretary of DHFS,

Defendants.

STATE DEFENDANTS’ BRIEF IN SUPPORT OF MOTION FOR CERTIFICATION OF INTERLOCUTORY ORDER PURSUANT TO 28 U.S.C. § 1292(B)

Defendants Wisconsin Department of Health and Family Services and Helene Nelson (collectively “the State defendants”), by their attorneys Maureen McGlynn Flanagan and Mary E. Burke, Assistant Attorneys General, and Peggy A. Lautenschlager, Attorney General, submit this brief in support of their motion for certification of the Court’s interlocutory Order filed February 7, 2006, for appeal pursuant to 28 U.S.C. § 1292(b).

Case 2:04-cv-00193-LA Document 94 Filed 02/23/2006 Page 2 of 7
STATEMENT OF THE CASE Plaintiffs are all aged sixty or over and are either developmentally-disabled or suffer from the disabilities of aging. In their Fourth Amended Complaint, they allege nine separate claims on behalf of themselves and a putative class based on the Americans with Disabilites Act (“ADA”), 42 U.S.C. § 12101 et seq., the Rehabilitation Act, 29 U.S.C. § 701 et seq., and on 42 U.S.C. § 1396a(a)(30)(A), the “equal access” provision of the Medical Assistance (“Medicaid”) Act, Title XIX of the Social Security Act. They allege that the defendants, including the Wisconsin Department of Health and Family Services (“DHFS”), DHFS Secretary Helene Nelson and Milwaukee County, are discriminating against themselves on the basis of their disabilities and violating § 1396a(a)(30)(A) of the Medicaid Act by refusing to increase the rates paid to their providers of residential, community-based services. After answering the Fourth Amended Complaint, both the State and the County defendants moved to dismiss, challenging the plaintiffs’ standing to attack the capitated rates paid by DHFS to Milwaukee County and the rates the County pays their providers, as well as the sufficiency of all nine claims of the latest amended complaint. On February 7, 2006, the Court issued an interlocutory Decision and Order partially granting some of defendants’ motions, agreeing that plaintiffs have alleged no past injuries to themselves and, therefore, lack standing to pursue retroactive monetary and declaratory relief. The Court also limited plaintiffs’ discrimination claims to forms of discrimination based on the ADA or Rehabilitation Act, eliminating allegations of age discrimination or discrimination based on county of residency. In all other respects, however, the Court denied the motions to dismiss, concluding that plaintiffs have standing to seek prospective relief based on the alleged inadequacy of the capitated rates paid by DHFS to Milwaukee County and, in turn, the rates Milwaukee County is
- 2 -

Case 2:04-cv-00193-LA Document 94 Filed 02/23/2006 Page 3 of 7
willing to pay plaintiffs’ providers. In addition, the Court concluded that all nine claims survive,
either entirely or in part, the defendants’ motions for judgment on the pleadings,
F.R.C.P. 12(b)(6) and 12(c). In particular, the Court concluded that § 1396a(a)(30)(A) of the
Medicaid Act creates a private right of action enforceable under the Civil Rights Act, 42 U.S.C. §
1983 (see Order at 18-21).
The State defendants now move the Court to amend the February 7 Order to include a
statement certifying the interlocutory order for appeal pursuant to 28 U.S.C. § 1292(b). As
further argued below, the Order presents two controlling questions of law—plaintiffs’ standing
to seek prospective relief and whether § 1396a(a)(30)(A) creates a private right of action for
Medicaid recipients—as to which there are substantial grounds for difference of opinion.
Moreover, an immediate appeal from the Order is likely to advance materially the ultimate
termination of this litigation.
ARGUMENT CERTIFICATION IS APPROPRIATE BECAUSE THE FEBRUARY 7, 2006, ORDER FULFILLS THE CRITERIA FOR AN IMMEDIATE APPEAL REQUIRED BY 28 U.S.C. § 1292(B). The State defendants request the certification from this Court necessary to seek
immediate review by the court of appeals of the interlocutory Order of February 7, 2006.
Pursuant to 28 U.S.C. § 1292(b),
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is a substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, That application for an appeal hereunder shall not stay proceedings in
- 3 -

Case 2:04-cv-00193-LA Document 94 Filed 02/23/2006 Page 4 of 7
the district court unless the district judge or the Court of Appeals or a judge thereof shall so order. 28 U.S.C. § 1292(b). In order for the State defendants to petition for permission to appeal, this Court must certify that: (1) the order presents a controlling question of law, (2) there is a substantial ground for a difference of opinion on the question, and (3) an immediate appeal and resolution of the question promises to materially speed up the litigation. See Ahrenholz v. Board of Trustees of Univ. of Ill., 219 F.3d 674, 675 (7th Cir. 2000). All criteria must be satisfied before a district court may certify its order. See id. at 676. “A controlling question of law must encompass at the very least every Order which, if erroneous, would be reversible error on final appeal.” Katz v. Carte Blanche Corporation, 496 F.2d 747, 755 (3rd Cir. 1974). The term is clearly not so limited, however, and has long been construed to mean that the question must be “serious to the conduct of the litigation, either practically or legally.” Id., quoted in Johnson v. Burken, 930 F.2d 1202, 1206 (7th Cir. 1991). “A question of law may be deemed ‘controlling’ if its resolution is quite likely to affect the further course of the litigation, even if not certain to do so.” Sokaogon Gaming Enterp. v. Tushie-Montgomery Assoc., 86 F.3d 656, 659 (7th Cir. 1996) (citation omitted). The State defendants respectfully submit that the February 7 Order plainly presents two controlling questions of law: first, whether plaintiffs’ claims of future injury based on the claimed inadequacy of the rates paid their long-term residential care providers are sufficiently ripe to confer standing; and secondly, whether plaintiffs have a private right of action to challenge the adequacy of the rates being paid to their providers based on 42 U.S.C. §§ 1983 and 1396a(a)(30)(A). By even the strictest standard, these two questions are “controlling” because,
- 4 -

Case 2:04-cv-00193-LA Document 94 Filed 02/23/2006 Page 5 of 7
if this Court has decided them wrongly, the decision on either one would constitute reversible error. Katz, 496 F.2d at 755. Clearly, whether the plaintiffs have standing to pursue their prospective claims and have a private right of action to attack the rates paid their providers under the Medicaid Act are critical, both legally and practically, to the conduct of this litigation. Cf. Sokaogon Gaming Enterprise Corp., 86 F.3d at 659.
Secondly, there is substantial ground for difference of opinion on both the question of plaintiffs’ standing and on whether they have a private right of action based on § 1396a(a)(30)(A). On the issue of standing, this Court concluded that the prospect that plaintiffs might have to move from one community-based residential setting to another, combined with the possibility that, at some future time, they might suffer “trauma and deterioration” constitute “a threat of injury that is real and immediate” (Order at 8). Neither the plaintiffs nor the Court has cited any case with similar facts that supports the Court’s conclusion. The State defendants respectfully suggest that there is “substantial ground” for a difference of opinion on this point, given the requirements of settled precedent for establishing standing and ripeness. Cf. Tobin for Governor v. Illinois State Bd. of Elect., 268 F.3d 517, 527-28 (7th Cir. 2001) (the “injury in fact” requirement requires plaintiffs to establish he or she is “immediately in danger of sustaining some direct injury”; speculation is insufficient).
That there is substantial ground for difference of opinion on the question whether Medicaid recipients have a private right of action based on the § 1396a(a)(30)(A) is beyond debate. Although this Court relied primarily on the unreported decision of the Northern District of Illinois in Memisovski ex rel. Memisovski v. Maram, 2004 WL 1878332 (N.D. Ill. 2004), the Seventh Circuit has never directly ruled on this point. See Methodist Hospitals, Inc. v Sullivan, 91 F.3d 1026, 1029 (7th Cir. 1996) (holding that providers of medical care have a private right of
- 5 -

Case 2:04-cv-00193-LA Document 94 Filed 02/23/2006 Page 6 of 7
action based on § 1396a(a)(30)(A)). Methodist Hospitals is overdue for re-examination in light of Gonzaga University v. Doe, 536 U.S. 273, 279-86 (2002), however, and a growing number of cases decided since Gonzaga have now specifically held that § (a)(30)(A) does not confer a private right of action on either recipients or providers or both. See Westside Mothers v. Olszewski., 368 F. Supp. 2d 740, 774 (E.D. Mich. 2005) (re-examining prior decisions recognizing private right in light of Gonzaga; finding no right of action for recipients); Oklahoma Chap. of Amer. Aca., Pediat. v. Fogarty., 366 F. Supp. 2d 1050, 1102-04 (N.D. Okla. 2005) (analyzing cases; holding that recipients but not providers have right of action under (a)(30)(A)); In re. NYAHSA Litigation, 318 F. Supp. 2d 30, 39-40 (N.D.N.Y. 2004) (recipients are intended beneficiaries; no private right of action for providers); Bio-Medical Applications of NC, Inc. v Electronic Data Systems Corp., __ F. Supp. 2d __, 2006 WL 270139 (E.D.N.C. 2006) (providers have no private right of action under (a)(30)(A)); Long Term Care Pharmacy Alliance v. Ferguson, 362 F.3d 50, 56-59 (1st Cir. 2004) (re-examines prior precedent; held: providers do not have private right of action, but rationale may affect recipients as well); Sanchez v. Johnson, 416 F.3d 1051, 1062 (9th Cir. 2005) (holding that neither recipients nor providers have private right of action under (a)(30)(A)).
Finally, an immediate appeal on the questions of standing and whether plaintiffs’ have a private right of action under § 1396a(a)(30)(A) promises materially to speed up the ultimate termination of this litigation. Reversal of the Court’s determination on the standing question would conclude the case entirely, while resolution of whether plaintiffs have a private right of action under § 1396a(a)(30)(A) could substantially limit the scope of discovery, dispositive motions and trial of the case. Because the primary purpose of an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) is that of materially advancing the ultimate termination of the litigation, see
- 6 -

Case 2:04-cv-00193-LA Document 94 Filed 02/23/2006 Page 7 of 7

Fisons Limited v. United States, 458 F.2d 1241, 1245 (7th Cir. 1972), the certification sought by the State defendants motion is particularly appropriate in this case.

CONCLUSION For the reasons discussed above, the State defendants respectfully request certification

from this Court pursuant to 28 U.S.C. § 1292(b) to seek review by the court of appeals of the

interlocutory Order of February 7, 2006.

Dated this 23rd day of February, 2006.

Wisconsin Department of Justice Post Office Box 7857 Madison, Wisconsin 53707-7857 Fax: (608) 267-2223 Telephone: (608) 266-1780 (Flanagan) Email: flanaganmm@doj.state.wi.us Telephone: (608) 266-0323 (Burke) Email: burkeme@doj.state.wi.us

PEGGY A. LAUTENSCHLAGER Attorney General
s/Maureen McGlynn Flanagan MAUREEN MCGLYNN FLANAGAN Assistant Attorney General State Bar #1013639
s/Mary E. Burke MARY E. BURKE Assistant Attorney General State Bar #1015694
Attorneys for Defendants Wisconsin Department of Health and Family Services and Helene Nelson

flanaganmm\nelson\pleadings\brief re m certify interlocutory order-1292(b).doc

- 7 -

 
 Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 1 of 12

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________
GERALD NELSON1, et al.,

Plaintiffs,

vs.

Case

No. 04-C-0193

MILWAUKEE COUNTY, et al.,

Defendants. ______________________________________________________________________________

BRIEF IN SUPPORT OF PLAINTIFFS' RENEWED MOTION FOR CLASS CERTIFICATION
______________________________________________________________________________

INTRODUCTION

Plaintiffs had previously filed a m otion for class certification, however, the parties and

the Court elected to h old it in ab eyance pending the resolution of defense m otions on the

pleadings. On February 7, 2006, t he Court issued a decision resolving the State' s motion to

dismiss and the County's motion for judgment on the pleadings. Most of the claims were allowed

to proceed, but the Court did so me pruning. Plaintiffs are now fu rther simplifying the case by

agreeing to dismiss the Medicaid claim. (A stipul ation to that ef fect is being f iled with th e

Court.) The legal issues have been clarified a nd it is time to address the question of class

certification. Plaintiffs submit that there are substantial common questi ons of law and fact

concerning funding for group hom e services in Milw aukee County and that this case m eets all

other criteria for certification under Rule 23, Federal Rules of Civil Procedure.

1 Gerald Nelson passed away on February 6, 2006 at St. Luke's Hospital. He was there for about a month and never recovered from gall bladder surgery. His status as a plaintiff is being addressed by a separate submission. The Court may decide to remove Mr. Nelson's name from the caption and "promote" Ms. Bzdawka. Or the Court can simply leave Mr. Nelson listed as the lead plaintiff. See Henrietta D. v. Gulliani, 1996 WL 633382 (E.D.N.Y. 1996) (lead plaintiff died but remained on the caption).

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 2 of 12
STANDARD FOR GRANTING CLASS CERTIFICATION "[O]f necessity" the c lass certification process is "not accom panied by the traditional rules and procedures applicable to civil trials." Eisen v. Carlisle & Jacquelin, 477 U.S. 156, 178 (1974). In general, courts do not have "any aut hority to conduct a prelim inary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action." Eisen, 417 U.S. at 178. The criteria for class certification are as follows: One or more members of a class m ay sue or be sued as rep resentative parties on behalf of all only if (1) the clas s is so num erous that joind er of all m embers is impracticable, (2) there are question s of law or fact comm on to the class , (3) the claims or d efenses of the rep resentative parties are typical of the claim s or defenses of the class, an d (4) the rep resentative parties will f airly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a). There is also an implied requirement that the class be identifiable. Clarke v. Ford Motor Co., 220 F.R.D. 568, 576 (E.D. Wis. 2004). If all of these criteria are satisfied, the court must then determine whether the class fits into one of the categories in Rule 23(b). Id. at 579.
ARGUMENT I. The proposed class is sufficiently definite and identifiable.
Plaintiffs seek certification of the following class: All Milwaukee County residents with disa bilities who are now or w ill in the future be: (1) eligible for the Family Care program, and (2) appropriate, based on reasonable professional judgment, for residen tial services in adult f amily homes and community-based residential facilities. "An identifiable class exists if its members can be ascertained by reference to objective criteria." Gomez v. Illinois. State. Bd. of Educ., 117 F.R.D. 394, 397 (N.D. Ill. 1987); Clarke, 220 F.R.D. at 576. Plaintiff classes are often defined in reference to eligib ility for specified governm ent programs. Collins v. Hamilton, 349 F.3d 371, 372 n. 1 (7th Cir. 2003).
2

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 3 of 12
The eligibility element in the proposed defi nition here is objective and clearly m eets the requirement that the c lass be identifiable. The other element in the d efinition is appropriateness for services provided in either AFHs or CBRFs based on reasona ble professional judgment. The scope of these services is defined generally by State statutes. Wis. Stat. §50.01(1)(a)1 & (1)(b) (AFH); Wis. Stat. §50.01(1g) (CBRF). The State regulations contain more specific provisions regarding service provision in bo th types of residential facilities. Ch. HFS 82 and 88, W is. Adm Code (AFH); Ch. HFS 83, W is. Adm. Code (CBRF). The regulati ons thus provide a fram ework for determining the type of indivi duals who are appropriate to live there. That, in turn, defines the class.
The proposed definition ties class mem bership to evaluations and determinations that are already being made on an ongoing basis by Family Care staff. Basing class membership on these familiar criteria results in an objective, definite and identifiable class definition. II. The class is so numerous that joinder of all members is impractical.
The numerosity requirement of Rul e 23(a) is satisfied where joinder of the ind ividual members will be difficult or impractical; it need not be im possible. Clarke I, 220 F.R.D. at 578, citing Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993). A reas onable estimate of class size is sufficient. Leist v. Shawano County, 91 F.R.D. 64, 67 (E.D. W is. 1981). A potential class size of forty or more is generally sufficient to support certification. Clarke I, supra.; Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995).
Joinder may also be impractical for reasons other that sheer numbers. "Inclusion of future class members makes joinder impractical regardless of the num ber of persons already injured." Elliott v. Chicago Housing Authority, 2000 WL 263730, *7 ((N.D. Ill. 2000) (citations omitted). This is common in public benefit cases where "the membership of the class is regularly shifting
3

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 4 of 12
as new applicants are granted benefits . . . and ot hers leave the rolls." Raymond v. Rowland, 200 F.R.D. 173, 179 (D. Conn. 2004). Characteristics of the class m embers may also be relevant. Disability is a factor. Mississippi Protection and Advocacy v. Cotten , 929 F.2d 1054, 1057 (5th Cir. 1991) ("no patient of the Center is likely to be capable of re presenting himself in this or any other court."). Financial st atus is another factor. M.A.C. v. Betit , 284 F.Supp. 2d 1298, 1303 (D.Utah 2003) (Medicaid clients "by definition lack the financial resources [to file] on their own.").
The class consists of more than 1,000 individuals. It is undisputed that approxim ately 1,080 current class m embers reside in AFHs and CBRFs funded through the F amily Care program. [Factual stipulation in connection with plaintiffs' motion for class certification: ¶1 - 100 AFH clients and 980 CBRF clients].2 Moreover, the entire Family Care program currently serves about 5,800 Milwaukee County residents. [Factual stipulation: ¶2]. Many of the approxim ately 4,700 Family Care members who are not currently in an AFH/CBRF are part of the class because they are now appropriate for AFH/CBRFs eve n though they are living so mewhere else. In addition, many will b e appropriate in the f uture. Some will no longer b e able to liv e independently as their needs increas e. Others are now receiving m ore intensive services such as in nursing homes, but they will be able to live in an AFH/CBRF in the future as their condition improves or as comm unity care providers adopt new care methods and technologies. This is an example of the shiftin g membership concept common i n public benefit cases. Raymond v. Rowland, 200 F.R.D. at 179.
Yet more class members will be both eligible and appropriate at some point in the future. The Milwaukee County Disability Services Division now has approximately 350 clients in AFHs and 400 in CBRFs. [Factual stipulation: ¶3]. They are under 60 and are funded through the
2 Plaintiffs are using approximate totals. Obviously, these numbers can be computed exactly, but only some time after they have been reported, inputted into a data base and t hen verified. Given the size of the numbers here, an approximation of current totals should be sufficient.
4

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 5 of 12

Medicaid waiver programs rather than Family Care. Id. They now live in AFH/CBRFs and it is

reasonable to assume that most will be appropriate for this level of care when they reach age 60.

Finally, there are unk nown future class m embers. Some are future resid ents of

Milwaukee County. Som e are living in the C ounty but have not yet becom e disabled, while

others have disabilities and live in the County, but have not yet become eligible for Family Care

because they are over the financial asset lim it. All of these are future m embers of the proposed

class who cannot possibly be ascertained at this time.

The proposed class satisfies the first Rule 23( a) element based on shee r numbers. It also

satisfies other indicia of i mpracticality because it contains future m embers and is com posed of

individuals who are unlikely to bring their own actions due to their disabilities and their financial

situation. Joinder of all class members is clearly impractical.

III. There are questions of law and fact common to the class.

The second Rule 23(a) element is the existence of common questions of law and fact. The

test is satisfied by the presence of a single common legal or factual issue. Clarke I, 220 F.R.D. at

578-9. Class actions may be based on a common le gal issue affecting persons with disabilities

even though the precise services delivered to e ach class member will vary based on individual

needs. M.A.C. v. Bettit, 284 F.Supp.2d at 1303 (Medicaid-funded services);

Bradley v.

Harrelson, 151 F.R.D. 422, 426 (M.D. Ala. 1993) (prison mental health care); Armstead v.

Pingree, 629 F.Supp. 273, 278 (MD. Fla. 1986) (treat ment conditions in state psychiatric

hospitals); Association for Reta rded Citizens of North Dak ota v. Olson , 561 F.Supp. 473, 475

(D.N.D. 1983) (lack of community treatment and conditions in state facilities); Johnson v. Brelje,

482 F.Supp. 121, 125 (N.D. Ill. 1979) (pass and releas e procedures at state facility). The next

sections discuss the specific legal and factual issues that are suitable for class treatment.

5

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 6 of 12
A. Plaintiffs' ADA and §504 claims raise common issues of law and fact. The Court has ruled that the plaintiffs ha ve stated a claim of discrim ination under the ADA and §504 in comparison to other Milwauk ee County residents with lesser disabilities. Nelson, *5 & n. 12. The Court perm itted the plaintiffs' claims to go forward under the effective program access and participation provisions in 28 C.F.R. §35.130. Nelson, *6, citing Henrietta D. v. Bloomberg , 331 F.3d 261, 274 (2d Cir. 2003), cert. denied, 541 U.S. 936 (2004). It also allowed the plaintiffs' claims under the inte gration regulations: 28 C.F.R. §35.130(d) and 28 C.F.R. §41.51(d). Nelson, *6, citing Bruggeman v. Blagojevich , 324 F.3d at 911; Olmstead v. L.C., 527 U.S. 581, 597 (1999); Radaszewski v. Maram , 383 F.3d 599, 608 (7th Cir. 2004). Finally, the Court held that plaintiffs st ated a claim under the reasonable accomm odation provisions. Nelson, *7 (citations omitted). These claim s are clearly suitable for class treatment. As the District Court in Henrietta D. put it, "the unifying legal an d factual question is whether defendants violated their legal obligation to provide plaintiffs with meaningful access, a s required by the ADA a nd the Rehabilitation Act, to public assistance benefits and services." 1996 WL 633382, *13 (E.D.N.Y. 1996). Add in the other legal claims and that is our case. The complaint alleges wide-spread financial problems going beyond the named plaintiffs. [4th Amd. Cmplt. ¶57 - 64]. For example: The failure to provide reasonable rates a nd cost of living rate increases has and will cause numerous operators of adult f amily homes, community-based residential facilities and day programs3 for persons in AFHs and CBRFs to either cut the level of services they provid e or refuse to se rve Milwaukee County residents with disabilitie s with the r esult that they will be f orced to m ove from
3 A brief explanation of the role of day programs is in order. Day programming can be part of the "individual service plan" for specific clients. §HFS 83.32(2)(a) and §HFS 83.33(2)(c). These clients leave the AFH/CBRF on a regular schedule during the week in o rder to attend work or activ ity programs. Not all AFH/ CBRF residents attend day programs. For those who do, it represents another potential loss: "Clients develop attachments to the other clients and to particular staff members in their CBRF and at their day program." [Burr I Aff. ¶12]. Clients will lose contact with their friends if a change in residence makes continued attendance at their day program impossible for geographic or other reasons. Plaintiffs believe there is also a problem with day program rates. [Burr II Aff. ¶15].
6

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 7 of 12
their homes and to lose their day services. This will cause substantial numbers of these residents to be admitted to institutions such as nursing homes. [4th Amd. Cmplt. ¶64]. Moreover: All members of the proposed class are si milarly affected by the failure of DHFS and Secretary Nelson to provide an adequa te capitated rate to Milwaukee County Family Care and the failure of Milw aukee County to provide adequate paym ents to AFHs, and CBRFs and day programs for persons in AFHs and CBRFs. [Id. at ¶129]. The sufficiency of the Family Care rates and the effect of those rates on the members of the class are common issues of fact and they rela te to the co mmon issues of law that the Court has already identified. The proposed class satisfied Rule 23(a)(2). B. The defendants have asserted cl ass-based defenses to the ADA and
Rehabilitation Act claims. The defendants have asserted a fundam ental alteration defense to plaintiffs' ADA and §504 claims. [Dkt. #50: Stipulation regarding issues in dispute: defenses G & H]. This defense must be resolved in the aggregate rather than on an individual basis. Olmstead, 527 U.S. at 6034. In applying the fundamental alteration defense, "[a] court must therefore take care to consider the cost of a plaintiff's care not in isolation, but in the context of the care [the State] must provide to all indiv iduals with d isabilities comparable to those of the plain tiff." Radszewski v. Maram , 383 F.3d at 614. In other words, the needs of other individuals who require AFH/CBRF care must be part of the reasonable modification analysis. Since the comparable individuals are also members of the propo sed class, this class-based defense presents additional comm on issues of law and fact that support the motion for certification. IV. The claims of the named plaintiffs are typical of the class. The third element is whether the claim s of the proposed class repres entatives are typical of the claim s of the class as a whole. Rule 23(a)(3 ). The requir ements of commonality an d
7

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 8 of 12
typicality in Rule 23 "te nd to merge." General Telephone Co. of Southwest v. Falcon , 457 U.S. 147, 157 n. 13 (1982). It is not a de manding requirement because it looks at th e essential characteristics of the claims rather than whether they are identical in all respects. Clarke, supra.
There are five pairs of nam ed plaintiffs c onsisting of a Fam ily Care m ember and their guardian or agent under a power of attorney. (The allegations regarding a sixth pair, Gerald Nelson and his guardian, Jane Pren tice, are being dismissed from the case due to his death.) The complaint alleges that they are all facing exactly the sam e funding issues and threats of losing their current AFH/CBRFs as the res t of the clas s. The claims of the name d plaintiffs are typical under Rule 23(a)(3). V. The representatives will fairly and adequately protect the interests of the class.
The fourth element is whether the named plaintiffs will be able to ad equately represent the class. Fed. R. Civ. P. 23(a)(4). The class representatives m ay not have interests that conflict with or are antagonistic to those of the class. East Tex. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977); Clarke, 220 F.R.D. at 579. However, it is not necessary that their interests be identical. Id. citing Edmondson v. Simon, 86 F.R.D. 375, 381 (N.D.Ill. 1980). This conflict analysis is conducted at the outset of the case when it is no t known exactly which clas s members will re ceive a specific benefit or suf fer a spec ific detriment. Uhl v. Thoroughbred Technology and Telecommunications, Inc, 309 F.3d 978, 986 (7th Cir. 2002).
The individual plaintiffs are in AFHs and CBRFs that are in financial difficulty because of the Fam ily Care rate problem s that are the heart of this cas e. They all feel strongly about getting to the bottom of the funding issue and rem aining in their current homes rather than face the trauma of moving and probable deterior ation. [4th Amd. Cmplt. ¶89-90, 99-100, 108-9, 118119, 126-7]. Two of the guardians submitted affidavits that show how strongly th ey feel about
8

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 9 of 12

this. [Dkt. #12-Steeves Aff. ¶17- 19]; [Dkt. #10-Miller Aff. ¶17]. Th is is not an abstract dispute

for the plaintiffs. They have every reason to litigate the case vigorously on behalf of the class.

VI. Plaintiffs' counsel will fairly and adequately represent the interests of the class.

The qualifications of class counsel had been treated as an element of the named plaintiffs'

adequacy as class representatives. Fed. R. Civ. P. 23(a)(4); Clarke, supra. As a mended in 2003,

Rule 23(g) continues the historic al requirement that counsel "fairly and adequately represent the

interests of the class." Rule 23(g)(1)(B). It also contains additional provisions:

In appointing class counsel, the court

(i)

must consider

•the work counsel has done in iden tifying or investig ating potential

claims in the action,

•counsel's experience in handling class actions, other complex litigation,

and claims of the type asserted in the action,

•counsel's knowledge of the applicable law, and

•the resources counsel will commit to representing the class;

(ii) may consider any other m atter pertinent to counsel' s ability to fairly

and adequately represent the interests of the class;

(iii) may direct potential class co unsel to pro vide information on an y

subject pertinent to the appointm ent and to propose term s for attorneys

fees and nontaxable costs; and

(iv) may make further orders in connection with the appointment.

Rule 23(g)(1)(C). The following sections will discuss the se factors separately in regard to Atty.

Pledl and the National Health Law Program , Inc. All of the elements going to the adequacy of

counsels' representation have been satisfied.

A. Atty. Robert Theine Pledl

Atty. Pledl has obtained and reviewed t housands of pages of docum ents, and has

consulted with numerous clients, potential clients, potential witnesses and experts to identify and

investigate potential claim s in the case. Consis tent with the trend to wards later certification

motions, counsel's efforts have significantly st reamlined both the class motion and the ultim ate

presentation of the m erits. See Rule 23, A dvisory Committee Notes to the 2003 Am endments.

9

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 10 of 12
("discovery in aid of the certifi cation decision also includes information required to identif y the nature of the issues that actually will be presented at trial.") Several experts have been evaluating documents and they have prepared reports and affidavits going to the merits of the case. Motions on the pleadings have been fully briefed and de cided. The work alread y performed on this case demonstrates Atty. Pledl's commitment.
A curriculum vitae was attached to the Seco nd Pledl Affidavit. [Dkt. 53]. He has previously served as plaintiffs' counsel in thre e certified class actions. Atty. Pledl also has an extensive background in other litigation involving disability and civil rights issues. B. National Health Law Program, Inc.
Atty. Sarah Jane Somers and Atty. M. Jane Perkins of the National Health Law Program have filed a notice of appearance and will be serving as co-counsel fo r the plain tiffs and the putative class. They have both filed Declarations setting out their background and qualifications in support of the class certification motion. The National Health Law Program is a non-profit law firm specializing in health issues affecting low-income people and individuals with disabilities.
Atty. Somers is a staf f attorney in the Program's Chapel Hill office. She has previou sly served as counsel in several class actions including Dubois v. Medows, No. 4:03-cv-00107-SPM (N.D. Fla.); Ball v. Biedess , No. 4:00-cv-00067-EHC (D.Ar iz.) and Dunajski v. Keegan , No. 3:99-cv-00353 (D.Ariz.). She has also written a number of manuals and articles on Medicaid and various health law topics. She is admitted to practice in the First, Third, Sixth and Ninth Circuit Courts of Appeal and several district courts. Sh e is in the process of applying for adm ission in the Eastern District.
Atty. Perkins is the Program's Legal Director and is also located in the Chapel Hill office. She has very extensive experience in class actio n litigation involving Medi caid, civil rights and
10

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 11 of 12
children's health. She h as also written extens ively on Medicaid and health care poverty law topics. She is adm itted to prac tice before the United States Supreme Court, the T hird, Fourth, Sixth, Eighth, Ninth, T enth and Di strict of Colum bia Courts of Appeals and various district courts. She is in the process of applying for admission in the Eastern District. VII. The proposed class action is maintainable under RULE 23(b)(2).
Once all of Rule 23(a) criteria have been m et, the next s tep is to de termine whether the class meets one of the subsections in Rule 23(b). Clarke, 220 F.R.D. at 579. Rule 23(b)(2) applies to situations where the defendants "acted or refused to act on grounds equally applicable to the class " and plain tiffs seeks declarato ry and injunctive relief. Ca ses alleging systemic problems in government program s are genera lly appropriate for certification under R ule 23(b)(2). Raymond v. Rowland, 220 F.R.D. at 181. This is just such a case. Any declaratory o r injunctive relief will b enefit the c lass as who le. Clarke, supra. The putativ e class action is maintainable under Rule 23(b)(2).
CONCLUSION Plaintiffs have requested certification of a class based on the following definition: All Milwaukee County residents with disa bilities who are now or w ill in the future be: (1) eligible for the Family Care program, and (2) appropriate, based on reasonable professional judgment, for residen tial services in adult f amily homes and community-based residential facilities. The proposed class m eets all of the requirem ents of Rule 23. A class action will be the m ost efficient means of resolving the issues in the case. The nam ed plaintiffs are suitable representatives and the undersigned have the necessary experience to serve as class counsel. It is respectfully requested that the Court certify this class.
11

Case 2:04-cv-00193-LA Document 102 Filed 03/01/2006 Page 12 of 12

Date: March 1, 2006

Respectf

ully submitted,

ATTORNEYS FOR THE PLAINTIFFS

s/ Robert Theine Pledl

_______________________________________

W

isconsin State Bar No. 1007710

1110

N. Old World Third Street, Suite 670

Milwaukee,

Wisconsin 53203

414-225-8999

s/ Sarah Jane Somers

_______________________________________

NATIONAL

HEALTH LAW PROGRAM, INC.

North

Carolina State Bar No. 33165

211 N. Columbia St.

Chapel

Hill, NC 27514

(919)

968-6771

s/

M. Jane Perkins

______________________________________

NATIONAL

HEALTH LAW PROGRAM, INC.

North

Carolina State Bar No. 9993

211 N. Columbia St.

Chapel

Hill, NC 27514

(919)

968-6771

12

 
 Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 1 of 9

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ________________________________________________________________________

GERALD NELSON, et al.,

Plaintiffs,

v.

Case

No. 04-C-0193

MILWAUKEE COUNTY, et al.,

Defendants.

______________________________________________________________________________

PLAINTIFFS' BRIEF IN OPPOSITION TO MOTION FOR CERTIFICATION OF INTERLOCUTORY ORDER AND MOTION FOR STAY PENDING APPEAL
______________________________________________________________________________

INTRODUCTION The State Defendants (“Defendants”) have file d a motion to certify this Court' s February 7, 2006 order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). They argue that the issues of whether Plaintiffs’ claims are sufficiently ripe to confer standing and whether there is a private right of action under 42 U.S.C. § 1396a (a)(30)(A) meet the criteria for imm ediate interlocutory appeal. On March 1, 2006 the parties filed a stipulation agreeing to dismissal of the Medicaid claim. The rem aining issue, stan ding, does not justify interlocutory review. Accordingly, this Court should deny the Defendan ts’ motion to certify that issue for appeal. Moreover, Defendants’ motion for stay pending appeal should be denied in any case because the potential for harm to Plaintiffs and others is too significant to delay progress of this litigation.

Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 2 of 9
ARGUMENT I. The Motion for Certification sh ould be denied because the iss ue of w hether
Plaintiffs' claims are sufficiently ripe to confer standing does not meet the prerequisites for a discretionary appeal. To justify certification of an issue for permissive interlocutory appeal, a defendant must show that “exceptional circumstances justify a departure from the policy of postponing appellate review until after the en try of a final judgm ent.” Shepherd Investments International, Ltd. v. Verizon Communications, Inc., No. 03-C-0703, 2005 WL 1475323, *1 (E.D. Wis. June 22, 2005) quoting Fisons Ltd. v. United States , 458 F.2d 1241, 1248 (7th Cir. 1972); see also Herdrich v. Pegram, 154 F.3d 362, 368 (7th Cir. 1998) (stating that “[c]ertificat es of appealability are generally disfavored . . .”). Specifically, defenda nts must show that: (1) there is a question of law; (2) it is controllin g; (3) the issue is contestable in that there is substantial ground for difference of opinion; and (4) its resoluti on will promise to speed up the litig ation. Ahrenholz v. Board of Trustees of U niv. of Ill., 219 F.3d 674, 675 (7th Cir. 2000); Shepherd Investments International, Ltd., supra. “Unless all these criteria are satisfied, the district court m ay not and should not certify its order . . . for an immediate appeal under section 1292(b).” Ahrenholz, 219 F.3d at 675 (emphasis original). The question of whether Plaintiffs’ claims are sufficiently ripe to confer standing does not meet all of these factors. A. The standing issue is not a proper question of law for certification. As the Seventh Circuit has emphasized, “a question of law, as used in section 1292(b) has reference to . . . the m eaning of a s tatutory or constitutional provision, regulation, o r common law doctrine . . .” Ahrenholz at 676; see also Boim v. Quranic Literacy Inst., 291 F.3d 1000, 1007 (7th Cir. 2002). It should be “free f rom a factual context” and “something the court of appeals could decide quickly and cleanly w ithout having to study the record.” Ahrenholz at 677. See
2

Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 3 of 9
also, e.g., Boim, 291 F.3d at 1007 (certifying questions of interpretation of fe deral statutes, specifically: (1) whether funding an international terrorist organi zation is an act of terrorism under 18 U.S.C. § 2331; (2) wheth er 18 U.S.C. § 2333 inco rporates the definitions of terrorism found in other statutes; and (3 ) whether a civil cause of ac tion for aiding and abetting international terrorism lies under these statutes.); U.S. EEOC v. Sidley, A ustin, Brown & Wood, 406 F. Supp. 2d 991, 993 (N.D. Ill. 2005) (certif ying the “purely legal” question of whether the EEOC may pursue claims on behalf of individuals who failed to file charges under the ADEA).
In this case, a determ ination of whether Pl aintiffs have standing involves m ore than a clean interpretation of the m eaning of a statutory, constitutiona l or regulatory provision or common-law doctrine. The questio n is enm eshed in the f actual context. This Court based its determination that Plaintiffs have standing on its evaluation of a num ber of factual allegations, including allegations that family care service providers would withdraw from the program unless reimbursement rates were increased, Plaintiffs w ould suffer traum a as a result, th at the State Defendants control the rates of reimbursem ent and that an increase in the rates would mean that providers would not leave the program. Nelson v. Milwaukee County, 2006 WL 290510, *3 (E.D. Wis. 2006). Thus, if the Court of Appeals were to evaluate this Court’ s determination it would be required to engage in a detailed analysis of the many factual allegations rather than a “quick and clean” analysis of a strictly legal question. See JAMES WM. MOORE, MOORE’S FEDERAL PRACTICE § 101.81 (3d Ed. 2005) (noting that the determination of ripeness is frequently difficult because it “necessarily includes a num ber of complex issues to be resolved [including] whether sufficient facts are established or whether the matter is too abstract [or] whether harm is likely to occur . . .”). Defendants have failed to meet their burden of establishing this factor.
3

Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 4 of 9
B. This issue is not contestable for the purposes of a permissive appeal. "An interlocutory review should not be allowed m erely to pr ovide a review of difficult rulings in hard cases." Boese v. Paramount Pictures Corp. , 952 F. Supp. 550, 560 (N.D. Ill. 1996) (citations om itted). To satisfy the requ irement that an issue be contestable, “it is no t enough that there be a differenc e of opinion, there m ust be a substantial ground for such difference.” Shepherd Investments, at *2. Far fr om meeting that standard, Defendants have not identified any opinion or other au thority that actually conflicts with this Court’s decision. The only case that Defendants cite, Tobin for Governor v. Illinois State Bd. of Elec., 268 F.3d 517 (7th Cir. 2001), presents no conflict. The Tobin court found that the plaintiffs’ claim s that their constitutional rights had been violated in con nection with an electio n were m oot because th e election had already taken place. Id. at 528. It also found that they lacked standing to com plain of the sam e injury occurring in the future because at least four unlikely contingencies had to occur for the injury to be replicated.1 In the instant cas e, Plaintiffs have alleged - and presented evidence - that their injury is imm inent because their service providers will withdraw if the rates are not increased. In contrast to Tobin, plaintiffs have shown that this single contingency is highly likely to occur. Defendant argues that neither the Court nor Pl aintiffs cited any cases with sim ilar facts supporting the Court’s conclusion that standing exists. Brief, at 5. This is inaccurate. As just one example, Bennett v. Spear, 520 U.S. 154 (1997), cited in the Court’s opinion, fully supports its conclusion. 2006 WL 290510 at *4. The Bennett plaintiffs alleged that a d irective from the defendant U.S. Fish and W ildlife Service would cause the Bureau of Reclamation, a non-party,
1 The same candidates would have to decide to run fo r office, more than 25,000 signatures in support of those candidates would have to be collected, those signatures would need to be determined sufficient by a hearing officer, and the elections board would have to reverse the hearing officer and issue a written opinion with identical objections. Tobin, at 528.
4

Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 5 of 9
to take ac tions that would inju re the plain tiffs. Sim ilarly, Plaintiffs in this cas e allege that Defendants’ actions will cause providers, non-parties, to take actions that will injure Plaintiffs. The Supreme Court in Bennett held unanimously that the plai ntiffs had standing, noting that a defendant’s actions need not be the last step in a chain of causation to be fairly trac eable to the injury. Id. at 169. The same principle applies in this case.
Even if Defendants had shown a lack of pr ecedent, it would be imm aterial. A showing that there are substantial grounds for difference of opinion cannot be satisfied merely by showing lack of judicial precedent; rather , "the m oving party m ust still s how that there is a substantial likelihood that the district court ruling will be reversed on ap peal." Boese v. Paramount Pictures Corp., 952 F.Supp. at 560-1; Hollinger v. In re Bridgestone/Firestone, 212 F. Supp. 2d 903, 909 (S.D. Ind. 2002) (holding that movant must show "substant ial conflicting p ositions").2 Moreover, any lack of identical cases is simply indicative of the individualized nature of ripeness decisions, which are:
. . . often sui generis. Most litigation has idios yncratic features and the various integers that enter into the ripen ess equation play out quite differently from case to case, thus influencing the bottom line. Ernst & Young v. Depositors Economic Protection Corp. , 45 F.3d 530, 536 (1st Cir. 1995); see also MOORE’S FEDERAL PRACTICE § 101.81. Thus, a rule requiring that the non-moving party or court cite a case bas ed on identical facts reaching the same conclusion before denying a request
2 A district court will be affirm ed on any additional ground that is supported by the record and has not been waived. Crane v. In diana High School Athletic Assn., 975 F.2d 1315, 1319 (7th Cir. 1992). The Court found no need to reach Plaintiffs' supplemental arguments about the essential nature of group home living for people with disabilities, Oconomowoc Residential Pro grams, Inc. v. City of M ilwaukee, 300 F.3d 775, 787 (7th Cir. 2002), or the significant interest in continuing existing relationships with staff and other residents under the S upreme Court's association cases, Roberts v. United States Jaycees, 468 U.S. 609, 620 (1984); Bd. of Dir. of Rotary Internationa l v. Rotary Club of Duarte, 481 U.S. 537, 545 (1987). These arguments would, however, provide yet another basis for affir ming the Court's decision on standing.
5

Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 6 of 9
for interlocutory appeal would result in nearly all ripeness de terminations being appealable, which would run counter to the caution of Ahrenholz and the intent of §1292(b). Defendant s have not met their burden with regard to this criterion.
C. Granting an appeal on this issue is highly unlikely to expedite the litigation. The Seventh Circuit denies m ost §1292(b) requests, thus, Defendants must dem onstrate something extraordinary to justify the obvious delays that result from simply making the motion. Ahrenholz, 219 F.3d at 675. The law “does not contem plate that an imm ediate appeal [be allowed] solely on the ground that [it] m ay advance the proceedings in the district court.” Id. at 676 (citation omitted); see also Genentech, Inc. v. Novo Nordisk A/S , 907 F.Supp. 97, 100 (S.D.N.Y. 1995) (certification "m ust materially advance" the lit igation) (citations omitted). “Special care must be taken to avoid the risk that a § 1292 appeal m ay actually impede, rather than expedite the conclusion of the entire case.” Fisons, 458 F.2d at 1248. This case d oes not inv olve a dispu te over h istorical events. Rather, the operation of the Family Care program is ongoing and im pacts the Plaintiffs in a very personal way. Milwaukee County received a large increase in the capitate d rate for calendar year 2005 com pared to 2004. www.dhfs.state.wi.us/LTCare/StateFedReqs/CaptitatedRates.htm. County staff announced at provider meetings in early 2005 that a new reside ntial rate structure was being developed. [Dkt . 53-SRCA Memo, at 6-7 & 13-14]. T hen it was learned that those additional funds would first be used to repay previous shortfalls instead of allocating at least som e portion to residential providers immediately. [Dkt. 79- Cook Aff. ¶4 9 & Ex. I]. There was still hope for increased residential rates, but it now a ppears that the funding situation has gotten even worse and that residential providers will not be receiving any increases at all.
6

Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 7 of 9
Milwaukee County expected an additional $3.7 million annual increase for 2006 and had already committed it to another class of providers rather than to residential services. Family Care faces $1.8 m illion shortfall, Milwaukee Journal Sentinel, January 22, 2006. Unfortunately, however, the County did not recei ve any annual capitated rate increase for 2006 and providers are "hurting." Id. This lates t failure to increase rates is likely to push more providers over the edge. Thus, the likelihood that th e Plaintiffs and othe r AFH/CBRF residents w ill be forced to move is greater now than at any other tim e since this case was f iled. That, in turn, threa tens the interim agreement that resolved the original prelim inary injunction motion. [Dkt. 20-Transcript of Agreement].
The issues in this case cannot be put on a shelf during an interlocutory appeal. Administrative efficiency will be best served by deciding the pending class motion and resolving the entire case as soon as practical, rather th an focusing on a single issu e. Certification under §1292(b) will not expedite the litigation.
D. Whether this issue is controlling is immaterial. The standing issue m ay be controlling, however , satisfaction of that factor alone cannot justify granting interlocutory appeal. Shepherd Investments, supra. Otherwise interlocutory appeals would be granted routinely rather than as extraordinary relief. II. The proceedings should not be stayed pending the reso lution of the request for an interlocutory appeal. The State D efendants have also m oved for a st ay of further proceed ings in this matte r pending the interlocutory appeal. A stay pending application for an interlocutory appeal requires a separate determination and order. 28 U.S.C. § 1292(b). "Congress could have required but did not require the granting of perm ission for interlocutory appeal to be accompanied always by a stay of the lower court proceed ings." Reed v. Rhodes, 549 F.2d 1050, 1052 (6th Cir. 1976). It
7

Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 8 of 9
should be denied if "poten tial harm to plaintiffs . . . outweighs any bene fit that may be gained by awaiting the Court o f Appeals' decision." Powell v. National Football League , 711 F.Supp. 959, 961 (D. Minn. 1989). The district court in Powell certified issues for an interlocutory appeal but denied the stay and ruled on ad ditional motions including class certification. Id. at 967. Because a §1292(b) appeal m ay prolong litig ation, “a stay of proceedings in the dis trict court pending an appeal . . . will seldom if ever be granted.” Fisons, 458 F.2d at 1248, n. 16.
In Reed, a school desegregation class action, the district court had certified the case for interlocutory appeal and stayed all further proceedings. The Sixth Circuit, however, dissolved the stay because the v alue of the c onstitutional interests at stake ou tweighed the potential administrative inconvenience to the dis trict court if its efforts in form ulating a rem edy were undone by a reversal on the m erits. 549 F.2d at 1052, citing Swann v. Charlotte-Mecklenburg Board of Education, 399 U.S. 926 (1970). Like the Reed and Swann cases, the potential harm in delaying further proceedings here far outweighs any administrative burden. As discussed above, the plight of the individual Plain tiffs is gettin g worse alo ng with the magnitude of the rate dispute. The issues are system ic so it is appropriate to proceed with the class m otion. Accordingly, regardless of this Court’s ruling on the certifica tion question, it should deny the stay motion.
CONCLUSION For the foregoing reasons, Plaintiffs respectfully request that this Court deny the motion to certify issues for interlocutory appeal and the motion for a stay.
8

Case 2:04-cv-00193-LA Document 103 Filed 03/16/2006 Page 9 of 9

Date: March 16, 2006

Respectf

ully submitted,

ATTORNEYS FOR THE PLAINTIFFS

s/ Robert Theine Pledl

_______________________________________

W

isconsin State Bar No. 1007710

1110

N. Old World Third Street, Suite 670

Milwaukee,

Wisconsin 53203

414-225-8999

s/ Sarah Jane Somers

_______________________________________

NATIONAL

HEALTH LAW PROGRAM, INC.

North

Carolina State Bar No. 33165

211 N. Columbia St.

Chapel

Hill, NC 27514

(919)

968-6771

s/

M. Jane Perkins

______________________________________

NATIONAL

HEALTH LAW PROGRAM, INC.

North

Carolina State Bar No. 9993

211 N. Columbia St.

Chapel

Hill, NC 27514

(919)

968-6308

9

 
 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, SANDRA EHRLICHMAN, and MARILYN BERDIKOFF,
Plaintiffs,
v.
MILWAUKEE COUNTY, WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES and KEVIN HAYDEN,
Defendants.

Case No. 04-C-193

ORDER

On March 27, 2007, this court conducted a telephone status. The plaintiffs appeared by Attorneys Robert Pledl and Sarah Somers, defendant Milwaukee County appeared by Attorney John Jorgensen, and defendants Wisconsin Department of Health and Family Services and Kevin Hayden appeared by Attorneys Mary Burke, David Dudley and Neil Gebhardt.
NOW, THEREFORE, IT IS HEREBY ORDERED that the parties shall notify the court in writing no later than April 26, 2007 as to whether or not the parties have settled the issue of attorneys fees.
IT IS FURTHER ORDERED that, based on a discussion with and the approval of United States District Judge Lynn Adelman, all dates set forth in the court’s scheduling order of December 4, 2006, be and hereby are stayed pending further order of Judge Adelman.
Case 2:04-cv-00193-LA Filed 03/27/07 Page 1 of 2 Document 152

Dated at Milwaukee, Wisconsin, this 27th day of March, 2007.
BY THE COURT:
s/Patricia J. Gorence PATRICIA J. GORENCE United States Magistrate Judge

P:\Transfer\PJG\Bzdawka Order 04 C 193.wpd

-2-

Case 2:04-cv-00193-LA Filed 03/27/07 Page 2 of 2 Document 152

 
 Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 1 of 15

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

GERALD NELSON, by his legal guardian and next friend, JANE PRENTICE; JOAN BZDAWKA, by her legal guardian and next friend, RICHARD MILLER; SANDRA EHRLICHMAN, by her legal guardian and next friend, NANCY STEEVES; MARILYN BERDIKOFF, by her legal guardian and next friend, LOIS DEGNER; LENORE CZARNECKI, by her agent and next friend, CAROLYN CETNAROWSKI; and JOHN GORTON, by his agent and next friend, DEBORAK BRUNK, each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs,

v.

Case No. 04-C-0193

MILWAUKEE COUNTY; WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES; and HELENE NELSON, in her official capacity as Secretary of DHFS,

Defendants.

STATE DEFENDANTS’ REPLY BRIEF IN SUPPORT OF MOTION FOR CERTIFICATION OF INTERLOCUTORY ORDER PURSUANT TO 28 U.S.C. § 1292(B)

Defendants Wisconsin Department of Health and Family Services and Helene Nelson (collectively “the State defendants”), by their attorneys Maureen McGlynn Flanagan and Mary E. Burke, Assistant Attorneys General, and Peggy A. Lautenschlager, Attorney General, submit this reply brief in support of their motion for certification of the Court’s interlocutory Order filed February 7, 2006, for appeal pursuant to 28 U.S.C. § 1292(b) and their motion for stay of further litigation of this case pending resolution of the interlocutory appeal by the court of appeals.

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 2 of 15
ARGUMENT I. CERTIFICATION IS APPROPRIATE BECAUSE THE FEBRUARY 7,
2006, ORDER FULFILLS THE CRITERIA FOR AN IMMEDIATE APPEAL REQUIRED BY 28 U.S.C. § 1292(B). Four statutory criteria guide the Court’s decision whether to amend its February 7, 2006, Order to include a statement certifying that interlocutory Order for appeal pursuant to 28 U.S.C. § 1292(b). There must be a question of law. The question of law must be controlling. The controlling question of law must be contestable. And, resolution of that contestable, controlling question of law must promise to speed up the litigation. Ahrenholz v. Board of Tr. of the Univ. of Illinois, 219 F.3d 674, 675 (7th Cir. 2000). The State defendants’ request to certify the February 7, 2006, order for appeal pursuant to 28 U.S.C. § 1292(b) satisfies all those criteria, as discussed below and in the Defendants’ brief-in-chief (“Defendants’ brief”) [Docket 94].1
A. A question of law is presented. Although plaintiffs do not dispute that a question of law is involved, they argue that it “is not a proper question of law for certification” (Plaintiff’s Brief in Opposition to Motion for Certification of Interlocutory Order and Motion for Stay Pending Appeal (“Plaintiffs’ brief”) at 2) [Docket 103 at 2]. Plaintiffs’ argument depends on characterization of the standing issue presented as “enmeshed in the factual context” (Plaintiff’s brief at 3) [Docket 103 at 3]. That characterization is not correct, at this stage of the present litigation. It also fails to recognize the “pure” legal nature of the standing issue involved in the State defendants’ certification request.
1 A fifth, non-statutory requirement also applies; a petition for 28 U.S.C. § 1292(b) certification must be filed in the district court within a reasonable time after the order sought to be appealed. Plaintiffs’ brief [Docket 103] does not challenge the timeliness of the State defendants’ motion for § 1292(b) certification. The State defendants therefore do not address the non-statutory fifth requirement further in this reply brief.
- 2 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 3 of 15
Plaintiffs correctly note Seventh Circuit case law characterizing a question of law, for purposes of 28 U.S.C. § 1292(b) as “a question of the meaning of a statutory or constitutional provision, regulation, or common law doctrine rather than . . . whether the party opposing summary judgment had raised a genuine issue of material fact.” Ahrenholz, 219 F.3d at 676. Cf. Plaintiff’s brief at 2 [Docket 103 at 2]. As the Seventh Circuit has explained:
We think [the framers of § 1292(b)] used “question of law” in much the same way a lay person might, as referring to a “pure” question of law rather than merely to an issue that might be free from a factual contest. The idea was that if a case turned on a pure question of law, something the court of appeals could decide quickly and cleanly without having to study the record, the court should be enabled to do so without having to wait till the end of the case. Ahrenholz, 219 F.3d at 676-77. Cf. Plaintiffs’ brief at 2 [Docket 103 at 2]. The State defendants request this Court’s 28 U.S.C. § 1292(b) certification of a “pure” question of law: the meaning of the common law doctrine of standing in the factual circumstances of this case. That the question of law is framed by specific facts does not somehow cause the question to become “enmeshed in the factual context.” The standing issue is quite discretely framed: whether elderly persons with disabilities who currently reside in particular community living situations have standing to challenge a public funding mechanism that they prospectively claim threatens that they might have to move from those particular community living situations. In other words, does standing exist in this specific factual context? Resolution of that pure issue of law requires no further resort to the record. Consequently, the question of law cleanly presented in this case is very different from the types of legal questions Ahrenholz identifies as not eligible for 28 U.S.C. § 1292(b) certification—for example, reviewing the entire record of summary judgment proceedings to determine whether a question of material fact had been raised by the various filings of the parties. Cf. Ahrenholz, 219 F.3d at 676.
- 3 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 4 of 15
Similarly, the discrete legal parameters of the standing issue presented in this case are easily distinguished from a fact-intensive personal jurisdiction issue that would require reviewing the record to determine a party’s contacts with the jurisdiction, determining whether those contacts count toward personal jurisdiction, assessing how much weight to give each of the contacts, and deciding whether the contacts cumulatively support exercise of personal jurisdiction. Cf. Shepherd Investments Int’l, Ltd. v. Verizon Communications, Inc., 2005 WL 1475323, *2 (E. D. Wis. 2005).
In fact, the Eighth Circuit recently considered very similar standing issues on interlocutory appeal in Bill M. v. Nebraska Dep’t of Health and Human Svcs. Finance and Support, 408 F.3d 1096 (8th Cir.), reh’g denied (2005). Seven persons with developmental disabilities had sued Nebraska and various state officials, alleging violations of the Americans with Disabilities Act (“ADA”), the Rehabilitation Act (“RA”), and various other state and federal laws. The plaintiffs alleged that they had been denied home and community-based Medicaidfunded services. Among other things, the plaintiffs further alleged that Nebraska’s failure to fund those services left the plaintiffs at imminent risk of unnecessary institutionalization. The district court denied the defendants’ motion to dismiss on sovereign immunity grounds, and the defendants took an interlocutory appeal on that issue. Bill M., 408 F.3d at 1098.
Once on appeal, however, the Eighth Circuit sua sponte raised the issue of standing, explaining that “it is elementary that standing relates to the justiciability of a case and cannot be waived by the parties.” Bill M., 408 F.3d at 1098 n.1. That the Eighth Circuit sua sponte found it necessary to raise and address standing, even though that was not the issue on which the defendants’ interlocutory appeal had been taken, forcefully demonstrates the appropriateness— indeed, necessity—of allowing interlocutory appeal on standing issues.
- 4 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 5 of 15
Furthermore, of special relevance to the standing issue presented in the instant case, the Eighth Circuit found that the “mere risk that Plaintiffs might be institutionalized due to the lack of adequate funding does not constitute an actual or imminent harm sufficient to satisfy the first element of standing.” Bill M., 408 F.3d at 1099. Certainly the factual framework of the standing issues presented in Bill M. was no more complicated than that of the standing issue presented in the present case. Bill M. therefore teaches that not only is this type of standing issue a question of law appropriate for consideration on interlocutory appeal, it is the type of threshold issue that should be considered on interlocutory appeal.
B. The question of law is controlling. Plaintiffs summarily dismiss the significance of this factor, arguing that it alone cannot justify granting interlocutory appeal but not addressing it on the merits. In fact, they characterize this factor as “immaterial” to resolution of the State defendants’ certification request. Plaintiffs’ brief at 7 [Docket 103 at 7]. Because the question of standing is so central to justiciability of this case, however, the controlling nature of the issue not only is material and must be considered—it also weighs heavily in favor of certifying the February 7, 2006, Order for interlocutory appeal. “[I]f resolution of the issue being challenged on appeal will terminate the action in the district court, it is clearly controlling. Controlling questions of law that fall within this category of dispositive issues include . . . questions as to . . . standing to maintain the action.” 19 James Wm. Moore et al., Moore’s Federal Practice § 203.31[2], at 203-87 – 203-90 & n.9 (3d ed. 2005), citing Schact v. Brown, 711 F.2d 1343, 1344 (7th Cir. 1983) (interlocutory appeal certified; controlling question of law as to whether plaintiff may sue for the type of injury alleged).
- 5 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 6 of 15
Other courts are solidly in accord on this issue. See, e.g., Klapper v. Commonwealth Realty Trust, 662 F. Supp. 2345, 236 (D. Del. 1987) (standing is a controlling question of law; if plaintiffs have no standing, the litigation will terminate and such questions are particularly well suited for an interlocutory appeal); APCC Services, Inc. v. AT&T Corp., 287 F. Supp. 2d 101, 105 (D.D.C. 2003) (controlling question of law is one that would require reversal if decided incorrectly or that could materially affect the course of litigation with resulting savings of the court’s or the parties’ resources), citing United States ex rel. Wisconsin. v. Dean, 729 F.2d 1100, 1103 (7th Cir. 1984) (subject matter jurisdiction involves a controlling question of law); Forest Guardians v. Bureau of Land Mgt., 188 F.R.D. 389, 396 (D.N.M. 1999) (standing is a controlling question of law). That standing presents a controlling issue of law is further demonstrated by comparison with issues of law that are collateral, rather than controlling. See, e.g., Stout v. Illinois Farmers Ins. Co., 882 F. Supp. 776, 778 (S.D. Ind. 1994) (controlling issue of law is a threshold issue seriously impacting the way that the court conducts the litigation, such as whether or not the plaintiff has a cause of action; discovery issue concerning documents to which litigant will have access in building his or her case is not a controlling issue of law).
Furthermore, the impact that the interlocutory appeal will have on other cases also supports a conclusion that a question of law is controlling. APCC Services, 287 F. Supp. 2d at 105, citing Brown v. Bullock, 294 F.2d, 415, 417 (2d Cir. 1961) (leave to appeal granted in part because determination was likely to have precedential value for large number of other suits). This Court’s February 7, 2006, Order cited no other case finding standing to exist in circumstances closely related to the present case. Cf. Order at 6-10 [Docket 86 at 6-10]. Plaintiffs now have acquired institutional co-counsel with a national practice. See Notice of Appearance and Declarations of Attorneys Sarah Jane Somers and M. Jane Perkins of the
- 6 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 7 of 15
National Health Law Program, Inc. [Docket 97-99]. Resolution of the standing issue presented in this case undoubtedly will affect the filing and resolution of similar lawsuits in other jurisdictions.
For all these reasons, the issue of plaintiffs’ standing to sue presents a controlling question of law weighing in favor of the State defendants’ certification request.
C. The controlling question of law is contestable. Plaintiffs argue that the standing issue presented by the State defendants’ 28 U.S.C. § 1292(b) certification request is not contestable (Plaintiffs’ brief at 4-5) [Docket 103 at 4-5]. Their argument is premised on selective interpretation of the cases cited in support and failure to acknowledge applicable Eastern District of Wisconsin and Seventh Circuit precedent. In the Seventh Circuit, the “controlling question of law” requirement is interpreted with flexibility. Johnson v. Burken, 930 F.2d 1202, 1205-06 (7th Cir. 1991). A question of law may be deemed controlling if its resolution quite likely would affect the further course of the litigation. Sokaogon Gaming Enter. Corp. v. Tushie-Montgomery Assocs., Inc., 86 F.3d 656, 659 (7th Cir. 1996). First, plaintiffs complain that the State defendants have not identified any opinion or other authority that conflicts with the February 7 Order—including the case cited in the State defendants’ brief in chief, Tobin for Governor v. Illinois State Bd. of Elec., 268 F.3d 517 (7th Cir. 2001). Cf. Plaintiffs’ brief at 4 [Docket 103 at 4]. However, the legal principle for which the State defendants rely on Tobin—that speculation is insufficient to establish the standing requirement of injury-in-fact—clearly conflicts with the February 7 Order, which cites no contrary case law on that point of law. See Defendants’ brief at 5 [Docket 94 at 5]; cf. February 7, 2006, Order at 8-9 [Docket 86 at 8-9].
- 7 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 8 of 15
Second, plaintiffs assert that a case cited in the February 7 Order on a different standing requirement—causation—supports the Court’s conclusion that standing exists. Cf. Plaintiffs’ brief at 4-5, citing Bennett v. Spear, 520 U.S. 154 (1997) [Docket 103 at 4-5]. Bennett involved an entirely different aspect of standing from the present case: whether those petitioners had a sufficient interest in an environmental regulatory matter to obtain standing. See Bennett, 520 U.S. at 161-66. Insufficiency of speculation to establish injury-in-fact simply was not involved in Bennett. Moreover, Bennett comes nowhere near addressing the theory underlying Plaintiffs’ entire brief, that the interest of plaintiffs that is protected under the ADA and RA is the interest in not moving, rather than the interest in residing in the most integrated setting and otherwise in receiving services in a non-discriminatory manner. Throughout the plaintiffs'argument it is clear that they premise their standing argument on the threat of having to move in and of itself. No issue anything like that appears anywhere in Bennett.
Third, plaintiffs claim that lack of precedent is immaterial to the contestability of a controlling issue of law (Plaintiffs’ brief at 5-6) [Docket 103 at 5-6]. That is incorrect. Finding the existence of a substantial difference of opinion is warranted when there is no authority in the present jurisdiction, but there exists a unanimous decision from an appellate court in another circuit on the same issue. APCC Services, 297 F. Supp. 2d at 108. Given the Eighth Circuit’s recent Bill M. decision, discussed above, that is precisely the situation that exists in this case with respect to the standing issue presented in this case. There is no Seventh Circuit precedent directly on point in similar factual circumstances, but there is a unanimous Eighth Circuit decision almost on all fours with the facts of the present case. See also Boim v. Quranic Literacy Inst. and Holy Land Found. for Relief and Dev., 291 F.3d 1000, 1007-08 (7th Cir. 2002)
- 8 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 9 of 15
(application of statues to facts alleged presents question of law of first impression that is certainly contestable).
Finally, plaintiffs argue that a party seeking 28 U.S.C. § 1292(b) certification must show a substantial likelihood of reversal on appeal (Plaintiffs’ brief at 5-6) [Docket 103 at 5-6]. The State defendants submit that lack of authority supporting the February 7 order on the aspect of standing at issue in this case, as well as the Bill M. decision, sufficiently establish substantial likelihood of reversal on appeal. Moreover, the cases cited by plaintiffs in support of this argument do not involve issues of standing. Boese v. Paramount Pictures Corp., 952 F. Supp. 550 (N.D. Ill. 1996) involves a post-summary judgment request for 28 U.S.C. § 1292(b) certification on whether statements attributed to those defendants were defamatory per se and cast those plaintiffs in a bad light. See Boese, 952 F. Supp. at 553, 560-61. In re Bridgestone/Firestone, Inc., Tires Products Liability Litigation, 212 F. Supp. 2d 903 (S.D. Ind. 2002) involved various choice of forum and choice of law issues. See Bridgestone/Firestone, 212 F. Supp. 2d at 905-06. Cf. Plaintiffs’ brief at 5 [Docket 103 at 5].
Furthermore, Bridgestone/Firestone expressly noted that the standard in that Indiana district court for existence of a contestable issue differed from that of the Eastern District of Wisconsin. The Bridgestone/Firestone court quoted Stong v. Bucyrus-Erie Co., 476 F. Supp. 224, 225 (E.D. Wis. 1979), for the proposition that the contestable issue criteria is satisfied when “‘a reasonable appellate judge could vote for reversal of the challenged order.’” Bridgestone/Firestone, 212 F. Supp. 2d at 909. The Bridgestone/Firestone court then went on to apply a more stringent standard akin to that advocated by the plaintiffs in this case. Id. at 909-10. Stong is the law in this district—not Bridgestone/Firestone. Given the lack of controlling
- 9 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 10 of 15
Seventh Circuit authority and the inconsistent Bill M. decision, a reasonable appellate judge certainly could vote for reversal of the Court’s February 7 order on standing.
D. Resolution of the standing issue in an interlocutory appeal promises to speed up the litigation.
Plaintiffs’ argument that certifying the standing issue pursuant to 28 U.S.C. § 1292(b) “is highly unlikely to expedite the litigation” ignores both the purpose of § 1292(b) interlocutory appeals and the threshold nature of the standing question now at issue in this case. Cf. Plaintiffs’ brief at 6.
As explained in the Defendants’ brief at 6-7 [Docket at 6-7], reversal of the Court’s February 7 Order on standing would conclude this case entirely and the primary purpose of a § 1292(b) interlocutory appeal is to materially advance ultimate termination of the litigation. See Fisons Ltd. v. United States, 458 F.2d 1241, 1245 (7th Cir. 1972). Instead of addressing the centrality of plaintiffs’ standing to justiciability of the entire remaining case or the purpose of § 1292(b) interlocutory appeals, plaintiffs make an emotional appeal based on alleged facts not of record and sheer speculation (Plaintiffs’ brief at 6-7) [Docket 103 at 6-7].
That is not the legal test, however. Immediate review would materially advance the ultimate termination of this litigation if the Seventh Circuit reversed this Court’s ruling on standing, which would dispose of the case and no further proceedings would be necessary. Stong, 476 F. Supp. at 225. Appeal now would conserve judicial resources and spare the parties from needless expense if it should turn out that this Court’s rulings are reversed. In the event that plaintiffs ultimately are found to lack standing, it would be far better for all concerned— including plaintiffs—to have these matters resolved now as opposed to some time in the distant future. APCC Services, 297 F. Supp. 2d at 109. See also Wieboldt Stores, Inc. v. Schottenstein
- 10 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 11 of 15
Stores Corporation, 1989 WL 51068, *2 (N.D. Ill. May 5, 1989) (interlocutory appeal would materially advance the termination of the litigation if it “might preclude wasteful and timeconsuming discovery as well as a lengthy and complex trial”); Katz v. Carte Blanche Corp., 496 F.2d 747, 753 (3d Cir. 1974) (“Section 1292(b) was the result of dissatisfaction with the prolongation of litigation and with harm to litigants uncorrectable on appeal from a final judgment.”); Klapper v. Commonwealth Realty Trust, 662 F. Supp. 2345, 236 (D. Del. 1987) (if plaintiffs have no standing, the litigation will be terminated and that satisfies the test that an immediate appeal may materially advance the ultimate termination of the litigation).
In this case, plaintiffs propose to mount a complicated class action lawsuit involving massive, expensive discovery activities including retention of expert witnesses and preparation of actuarial analyses. The State defendants do not have unlimited litigation resources, or unlimited resources, period. Eventual reversal on appeal of the standing rulings set forth in this Court’s February 7 Order would needlessly waste scarce state resources that would have to be committed to discovery and other immediate litigation activities if interlocutory appeal is not permitted for review of the plaintiffs’ very questionable standing to pursue the prospective relief they seek in this lawsuit.
II. STAY OF PROCEEDINGS IN THIS COURT IS NECESSARY TO ACHIEVE THE PURPOSES OF THE INTERLOCUTORY APPEAL, ESPECIALLY SINCE PLAINTIFFS OFFER NO PROOF OF ANY ACTUAL OR EVEN IMMINENT HARM.
Because resolution of the standing issue in the State defendants’ favor will terminate this litigation, they have asked this Court to stay litigation of this case pending resolution of their interlocutory appeal by the court of appeals. Motion for Stay Pending Appeal [Docket 95]. Opposing that stay, plaintiffs have identified only general principles of law and advanced the
- 11 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 12 of 15
totally unsupported allegation that “the plight of the individual Plaintiffs is getting worse along with the magnitude of the rate dispute” (Plaintiffs’ brief at 8) [Docket 8]. The problem with plaintiffs’ position on whether a stay should be granted is the same problem that undermines their whole standing argument—they have not shown any proof of actual or imminent harm either to themselves or any potential class member on account of the Family Care operations they challenge, and their attempts to conjure up prospective harm are totally speculative. There simply is no evidence that the “plight” of any plaintiff or prospective plaintiff is “getting worse.” Cf. Plaintiffs’ brief at 8 [Docket 103 at 8]. What was submitted to the Court in support of the State defendants’ motion to dismiss and is part of the record is the CMO contract requiring Milwaukee County to provide services in the most integrated setting, even if the plaintiffs’ providers were to follow thorough on their threats to discharge plaintiffs. The harm against which applicable laws protect plaintiffs is against discrimination based on disability, not against potentially having to move or provide service providers.
Nevertheless, the plaintiffs ask this Court to deny the stay requested by the State defendants with the consequential effect that burdensome and expensive class certification and discovery activities proceed forward. It is the State defendants, not the plaintiffs, who will bear the burden of these activities in disruption of the regular program activities of state personnel and diversion of scarce resources from program administration. The whole point of the State defendants’ request for § 1292(b) certification is that the burden of this litigation should not be imposed on the State defendants until the issue of plaintiffs’ highly questionable standing is resolved. Granting § 1292(b) certification but denying a stay would have the practical effect of actually increasing the State defendants’ litigation burdens by requiring them to go forward with class certification, discovery and other activities in this Court while at the same time litigating a
- 12 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 13 of 15
potentially dispositive appeal in the Seventh Circuit. Substantially more is at stake for the State defendants than “[a]dministrative efficiency” if litigation in this Court is not stayed pending interlocutory appeal of plaintiffs’ standing. Cf. Plaintiffs’ brief at 7 [Docket 103 at 7].
The burdensomeness of requiring the State defendants to proceed with litigation in this Court during the pendency of an interlocutory appeal easily distinguishes this case from the authorities upon which plaintiffs cursorily rely. In Reed v. Rhodes, 549 F.2d 1050, 1051 (6th Cir. 1976), denying a stay pending interlocutory appeal simply required those defendants to cooperate with development of a remedial plan addressing racially segregated conditions in the Cleveland Schools. As the Sixth Circuit explained, “The restraints placed upon defendants by the district court’s order are neither severe nor costly. The order does not compel defendants to perform any particular act, except to participate in the formulation of a remedial plan.” Id. That is a very different situation from the present case, where denying the State defendants’ request for a stay will require participate in intensive, expensive litigation activities. Cf. Plaintiffs’ brief at 7-8 [Docket 103 at 7-8].
Even worse, in Powell v. National Football League, 711 F. Supp. 959, 961 (D. Minn. 1989), a stay was denied for reasons that are totally unexplained other than a cursory statement that the “potential harm to plaintiffs in further delaying resolution of its antitrust claims outweighs any benefit that may be gained by awaiting the Court of Appeals’ decision.” Id. at 962. In that case, however, a number of previous district court decisions already had resolved many controlling issues. Id. at 961. Unlike the present case, Powell did not involve threshold and potentially dispositive issues like whether the plaintiffs had any standing at all to pursue the lawsuit. Cf. Plaintiffs’ brief at 7-8 [Docket 103 at 7-8].
- 13 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 14 of 15
What the plaintiffs have offered in support of their dire assertions that their plight is getting worse appears to be one newspaper article and bald speculation about the consequences of one procedural development reported in that article. Cf. Plaintiffs’ brief at 7-8 [Docket 103 at 7-8]. Quite clearly, the Court has not been provided with “the rest of the story.” Given the lack of any actual evidence of the imminent harms alleged by the plaintiffs, in order to avoid undermining the very purpose for which the State defendants are pursuing an interlocutory appeal this Court should stay further proceedings in the case at least until it is determined whether the interlocutory appeal will proceed in the Seventh Circuit and, after that, until plaintiffs demonstrate that their claims of alleged harm are something more than doomsday warnings based on pure speculation.
Finally, plaintiffs do not address the well-established criteria for stay pending appeal. A party seeking a stay pending appeal must show a likelihood of success on the merits, that irreparable harm will occur if a stay is not granted, that the potential harm to the movant outweighs the harm to the opposing party if a stay is not granted, and that granting the stay would serve the public interest. Sofinet v. Immigration and Naturalization Serv., 188 F.3d 703 (7th Cir. 1999). These factors are not prerequisites, but rather interrelated considerations that must be balanced together. Michigan Coal. of Radioactive Material Users, inc. v, Griepentrog, 945 F.2d 150, 153 (6th Cir. 1991), rev’d on other grounds, 954 F.2d 1174 (6th Cir. 1992). The State defendants have demonstrated a strong likelihood of success on the merits, for the reasons explained in Section I.C. above. Potential harm to the State defendants if a stay is not granted is closely intertwined with the public interest. As explained above in this Section II, the State defendants should not be forced to expend their finite resources litigating complicated legal issues until plaintiffs’ questionable standing to pursue those issues is resolved. Plaintiffs have
- 14 -

Case 2:04-cv-00193-LA Document 105 Filed 03/30/2006 Page 15 of 15

offered no evidence of any real harm if stay is granted, only speculation based on a questionable

legal theory strenuously disputed by the State defendants. Balancing these interrelated

considerations together under the current circumstances of this case heavily weighs in favor of

staying district court litigation pending interlocutory appeal of plaintiffs’ standing in this lawsuit.

CONCLUSION

For the reasons discussed above, the State defendants respectfully renew their request for

certification from this Court pursuant to 28 U.S.C. § 1292(b) to seek review by the court of

appeals of the interlocutory Order of February 7, 2006. The State defendants also respectfully

renew request their request for stay of further litigation of this case pending resolution of the

interlocutory appeal by the court of appeals.

Dated this 30th day of March, 2006.

Wisconsin Department of Justice Post Office Box 7857 Madison, Wisconsin 53707-7857 Fax: (608) 267-2223 Telephone: (608) 266-1780 (Flanagan) Email: flanaganmm@doj.state.wi.us Telephone: (608) 266-0323 (Burke) Email: burkeme@doj.state.wi.us

PEGGY A. LAUTENSCHLAGER Attorney General s/Maureen McGlynn Flanagan MAUREEN MCGLYNN FLANAGAN Assistant Attorney General State Bar #1013639 s/Mary E. Burke MARY E. BURKE Assistant Attorney General State Bar #1015694 Attorneys for Defendants Wisconsin Department of Health and Family Services and Helene Nelson
- 15 -

 
 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ________________________________________________________________________

GERALD N., and JOAN B. each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs,

v.

Case

No. 04-C-0193

MILWAUKEE COUNTY,

Defendant. _____________________________________________________________________

BRIEF IN SUPPORT OF MOTION FOR PRELIMINARY INJUNCTION, AN EXPEDITED SCHEDULING CONFERENCE AND FOR PERMISSION TO FILE FIRST AMENDED COMPLAINT
_____________________________________________________________________
INTRODUCTION

This case has grown out ofa dispute over appropriate funding for disability services

in Milwaukee County. Unlike any other Wisconsin county, there are two distinct systems for

funding disability services. The essence of plai ntiffs' claim is that the "under 60" group

receives more favorable funding treatment in comparison to the "60 and over" group who

are served by the Family Care program. Another issue arose when a particular residential

provider complained to the County about the level of funding, threatened to terminate and

then did terminate its contract for serving persons who are 60 and over. The County has

taken the position that it can move the affected individuals over their guardians' objections

and, if the guardians refuse,to seek their replacementwith guardians who will approve the

moves. This threat to employ different procedures against guardians of persons 60 and

over and the clients themselves is another way in which the Family Care group is treated

less favorably than similar persons under the age of 60. This violates the Americans with Disabilities Act, the Rehabilitation Act, the Equal Protection guarantees in both the United States and Wisconsin Constitutions, and various Wisconsin statutes.
The current named plaintiffs, Gerald Nelson and Joan Bzdawka, were the first to be threatened with moving to another facility over their guardians' objections based on the funding dispute involving their residential pr ovider, Homes for Independent Living. Two other clients of HIL are now in that situation as well. They are Sandra Ehrlichman and Marilyn Berdikoff. The Milwaukee County Department on Aging has given notice that Ms. Bzdawka and Ms. Ehrlichman will be moved on or after April 16, 2004. The guardians of the others have been told that Mr. Nelson and Ms. Berdikoff will also be moved but they have not been given notice of a specific date or place.
Nelson and Bzdawka filed a motion for preliminary injunction in order to keep them in their current residential and day program placements pending further proceedings. They are not seeking a broad declaration concerning the utlimate legal issues in the case at this point. They are only seeking to preserve thestatus quo. Unfortunately, Sandra Erhrlichman and Marilyn Berdikoff are not yet parties in ht e case and a class hasnot yet been certified. They cannot request the same temporary relief unless they are first allowed to join the case as plaintiffs. That is the reason for the additional motion for permi ssion to file a first amended complaint. The "first amended" language isintentional. This case is very complex and it is likely that there will be additional legalclaims once discovery has clarified several factual issues. It is possible that additional defendants will be added. Plaintiffs are not in a position to amend the complaint in regard to additional claims and parties at this time. Once the Court has resolved the request for tempor ary relief, it would be appropriate to set
2

deadlines for discovery, substantive amendments to the complaint, a class certification motion and dispositive motions.
HIL has always been willing to sign a new annualcontract to continue serving clients 60 and over if the rates are increased. It has also told DOA or MCDA (apparently the Department prefers this acronym to "DOA" inits own correspondence.) that it will continue to serve the named plaintiffs and others affe cted by the funding issue under the existing rate structure. HIL actually had an agreement with MCDA to do this and then the notices regarding Joan Bzdawka and SandraEhrlichman went out anyway. This situation presents all of the factors calling for a temporary order to prevent immi nent harm and the Court should enter a preliminary injunction to preserve the status quo.
PROCEDURAL BACKGROUND Gerald Nelson and Joan Bzdawka's guardians first attempted to stop the Department on Aging's plans to move them by filing petitions in Milwaukee County Probate Court under Wisconsin Chapter 55. The Bzdawkapetition was filed on November 14, 2003 and the Nelson petition was filed on November 17, 2003. Both petitions also sought the same declaratory and injunctive relief that isbeing pursued here, but the County moved to dismiss on the grounds that a Chapter 55 review procedure was not the proper forum for these issues. Rather than litigate an issue of procedure, Nelson and Bzdawka filed the current action on January 28, 2004 in Milw aukee County Circuit Court. (Case No. 04CV000862). Plaintiffs' counsel and the County' s counsel agreed that the substantive issues could all be resolved in the civil actionand stipulated to the dismissal of the Probate
3

Court petitions. They were dismissed by Judge Kitty Brennan on February 17. [Pledl-A]. 1 The County filed its notice of removal on February 25 and answered the complaint on March 8. After receiving notices that threat ened to move several HIL clients on April 5, plaintiffs filed a preliminary injunction mo tion on March 31. That deadline was extended. Additional notices were then sent to the guardians for Joan Bzdawka and Sandra Ehrlichman announcing that they would be movedon or after April 16. The Department on Aging still intends to move Gerald Nelson and Marilyn Berdikoff but no definite date has been set for these moves.
STATEMENT OF FACTS DISABILITY SERVICES - PROGRAMS AND FUNDING There are no real disputes about the provision of disability services in Wisconsin and funding for those services. (The County admitted paragraphs 5, 8, 9, 10, 12 - 16 and 20 of the original complaint.) Every Wisconsin county is required to provide specified disability services. Wis.Stat., §46.215, 51.42 an 51.437. Pe rsons receiving those services have various rights under the Wisconsin Patients Rights Statute including the right to the least restrictive environment and appropriate treatment. Wis.Stat., §51.61(1)(e) & (f). Wisconsin's long-term placement statute, Chapter 55, contains various substantive and procedural protections for individuals who meet the criteria for protective placement. The petitions filed in Probate Court on behalf of Nelson and Bzdawka were based on their special status
1 All references to affidavits will include the name of the affiant and paragraph number, for example: [Burr: ¶6]. All references to exhibits will include ht e name of the affidavit to whichthey are attached along with a page number if appropriate, for example: [Burr-A] or [Burr-A:3]. References to deposition transcripts will contain name and page number, for example: [Lyday:12-13]. There is one other point regarding deposition transcripts. The partei s have initially received rough drafts and are waiting for finished transcripts so they are not being filed with the Court at this time.
4

under Chapter 55 as well as theother statutory provisions that apply to all individuals who

receive disability services.

Since 1981, there has been a move towards serving more persons with disabilities in

the community. The funding vehicle for this tar nsition has been a series of programs based

on agreements that each state signs with the Federal government waiving certain Medicaid

regulations in order to redirect funds that had been going to institut ional care. They are

commonly known as "waiver" programs. In Wisconsin, the specific programs are the

Community Integration Program (CIP), Community Options Program (COP) and Brain

Injury Waiver (BIW). The waiver progr ams had been the primary means of funding

community services for persons with disabilities in Wisconsin before Family Care.

Geri Lyday, Administrator of the Milwaukee County Disability Services Division was

deposed on April 6, 2004. DSD was formerly know n as the Adult Services Division. Ms.

Lyday gave the following estimatesof the number of individuals receiving services from the

two units within DSD that provide long-term services for persons with developmental and

physical disabilities:

Developmental Disabilities

Physical Disabilities

CIP-1a program

250

COP program

750

CIP-1b program 3,500

CIP

program

295

BIW

program

50

[Lyday: 13-15]. There are other smaller funding sources used by DSD but this is sufficient

to show the approximate number of clients under 60 being se rved in waiver programs.

Plaintiffs counsel had previously made a request that DSD provide the number of clients

who would turn 60 during each calendar year from 2004 to 2010. Ms. Lyday responded in a 5

letter dated March 3, 2004 with the following data:

Year DD Clients PD Clients Total

2004 2005 2006 2007 2008 2009 2010

44

104

148

52

135

187

59

134

193

62

160

222

61

139

200

90

116

206

72

119

191

Obviously, all of the roughly 5,000 clients cu rrently being by served by DSD in these

programs will eventually turn 60 if they live long enough.

Ms. Lyday was asked about the funding process for clients in the waiver programs.

She explained the assessment process and how the plans were then reviewed and

approved by the State. [Lyday: 26-28]. It is possible to supplement CIP plans with COP

funds if additional funding is required. [26]. She did not believe that the assessors "have

been approving things that people don't need" or "approving unnecessary services." [26-

28]. She was asked about the role of the guardian and the following exchange ensued:

Q. And do you understand that to be a legal requirement from the state,

that guardians of people who have guardians actually have to sign the

person into a residential facility or a day program or an employment

program

or whatever?

MS. POULOS: Object to the question. It's asking for a conclusion beyond her knowledge. You can answer if you know.

BY MR. PLEDL:

Q. If you know, you can answer.

A. I know that it is a requirement of the waivers. So individuals participating in the waiver in order to receive funding, the guardian must sign off on the plan. [Lyday: 37-38].
This is consistent with Mr. Burr's affidavit. He said that in his experience, the only way in

6

which admissions to CBRFs have occurred orcan occur is with guardian involvement and approval. [Burr: ¶16].There are also specific provisions in the regulations pertaining to both types of group homes regarding guardian approval for the admission to occur. Wis. Adm. Code, HFS §83.16(1) (CBRF admissions); and HFS §88.06(2)(b) (Adult Family Home admissions.) These various regulations concerning guardian approval are also consistent with the basic authority of theguardian, who "may have custodyof the person, may receive all notices on behalf of the person and may act in all proceedings as an advocate of the person." Wis. Stat., §880.38(1).
Mr. Burr's affidavit contains a detailed listing of the daily rates received from Milwaukee County DSD for persons under 60 who are funded through the waiver programs. [Burr: ¶¶26 29]. Ms. Lyday was notable to say whether the DSD rates in the affidavit were accurate or not and agreed that her staff would verify them. [Lyday: 47-49]. She said that DSD did give rate increases to individual provdi ers although it did not give out increases on an ongoing basis. [42]. She recalled a rate increase given to some providers in 2002, but would have to ask her staff for information c oncerning any other rate increases. [43-45]. She said that DSD does not have a policy agai nst rate increases for providers based on increased costs. [44].
FAMILY CARE The Wisconsin Legislature authorized the establishment of pilot programs around the State that would provide similar care but using a funding system different from the waiver programs. Wis. Stat., §§46.2805 - 46. 2895. Marjorie (Meg) Gleeson, Assistant Director for Long-Term Support for the Milwaukee County Department on Aging was deposed on April 7 and 8. She described the basic principle of Family Care. The current
7

monthly rate is $1,810.61 for clients receiv ing the most common le vel of service and

$674.49 for clients who have fewer needs based on an evaluation. [Gleeson:14-17].

Milwaukee County currently has about 5200 persons in Family Care and about 160 of those

are at the lower rate. [20 ]. The State pays the appropriate monthly amount times the

number of members and then Milwaukee County pays for specified services out of these

funds. [20-21]. About 26% of ht e Family Care members live in CBRFs, Adult Family Homes

or Residential Care Apartment Complexes and ht ese residential services are paid out of the

monthly capitated amount. [22]. The $1810.61 is an average amount and this means that

there are clients receiving services that cost less as well as clients receiving services that

cost more. [28].

Ms. Gleeson said that HIL was their highestcost provider, but Family Care had not

taken any steps to terminate their contract piror to the time HIL ddi so. [Gleeson I: 41]. She

said that HIL had "always request[ed] a rateincrease on an annual basis." [Gleeson II; 19].

Other providers did so as well, [20], however,no Family Care provider has ever been given

a rate increase based on cost increases. [22]. Ms. Gleeson was not aware of anything in

the Family Care legislation orregulations that would prohibitgiving rate increases to CBRF

providers. [22]. She did not know whether the provider grievance process could address a

rate dispute like this. [40-41]. Here is the next exchange:

Q. And is there anything else that HIL could've done other than what they

did to attempt to secure a higher rate from Family Care and continue

serving

these people?

A. Not that I'm aware of, no. [Gleeson II: 41] When asked about what recourse the Departm ent on Aging would have if the guardians

wanted their wards to stay in the HIL homeswhere they now live and refused to sign them

8

into other CBRFs, Ms. Gleeson said she be lieved that DOA coul d seek to change the
guardians. [54].
Mr. Burr's affidavit says that he notifiedthe Department on Aging that HIL was wililng
to continue serving the affected clients while the litgation was pending. [Burr: ¶36]. The
Department on Aging accepted this offer. Bu rr-D is a letter from Diane Baumbach, DOA
Contract Specialist, to Mr. Burr dated March 10, 2004. Ms. Gleeson said that she approved
this letter. [Gleeson II: 42-43]. It said:
You offered to keep Gerald N. and Joan B. in their current residences past the contract termination date of April 1, 2004 at the existing service rates. MCDA-CMO accepts your offer c ontingent upon the execution of the enclosed Memorandum of Understanding effective April 1, 2004.
[Burr-D]. HIL executed and returned the Memorandum of Understanding as required, but
according to Ms. Gleeson: "We did not si gn the MOU. [Gleeson II: 42]. There was no
explanation beyond "seeking further advice about the MOU." [Id.] DOA made no other
efforts to resolve the impasse and did not considerwaiving its rate policies in this instance.
Mr. Burr's affidavit lists the different rates being paid by various funding sources for
the five HIL homes located in Milwaukee County and summarizes those rates as follows:
The average daily CBRF rate for a ll 18 Milwaukee County DSD clients is $174.82 and including the 4 clients from oht er counties results in an average daily rate for all clients other than those funded by Milwaukee County DOA of $180.53. The average daily rate for the 5 DOA clients is $161.80.
[Burr: ¶27]. There is also a 21% differ ence between what DSD and DOA pay for the
Paragon day program rate. [¶29]. Despite the losses that these rates represent, HIL is
willing to continue serving all of the affected clienst at the existing rates.The last line of Mr.
Burr's affidavit says "we continue to believe that it is in our clients' best interests not to
move them until the legal issues have been resolved. [Burr: ¶37]. 9

THE PLAINTIFFS Gerald Nelson, Joan Bzdawka, Marilyn Berdikoff and Sandra Ehrlichman are all facing an involuntary move that will take themout of the homes and dayprograms to which they are accustomed. They will lose friends and face unfamiliar surroundings. Mr. Burr related the concerns of HIL staff about the other Joan and the negative effects of the move. [Burr: ¶34]. He believes that moving the ot hers presents a substant ial risk that they will deteriorate and even require a more restrictive placement. [Id.]. Mr. Miller is concerned that moving Joan Bzdawka will be harmful to her. [Miller: ¶17]. Sandra Ehrlichman's guardian (her sister) is especially concerned because of behavior problems that Sandra has had since her father's death. [Steeves: ¶10]. A special team from Southern Wisconsin Center was brought in for a consultatoi n. [Id.]. Ms. Steeves believes that a move would be harmful and is concerned that she will deteriorate and be placed back in an institution. [Steeves: ¶18-19]. Plaintiffs also hope to present testimony orwritten reports from Dr. Marta Muller, an HIL staff psychiatrist, as to any effects that the proposed moves will have on the affected residents. (Her evaluations are not yet complete and counsel does not yet have any written reports to share with the County's counsel.)
10

ARGUMENT I. PLAINTIFFS SHOULD BE PERMITTEDTO AMEND THEIR COMPLAINT TO ADD
TWO ADDITIONAL INDIVIDUALS WHO AREFACING THE SAME TREATMENT BY MILWAUKEE COUNTY. Leave to amend a complaint should be "freely given" unless there has been undue delay or prejudice to the defendant. Rule 15(a), Federal Rules of Civil Procedure;Foman v. Davis, 371 U.S. 178, 182 (1962). The decision is left to the court's discretion. Tavarez v. O'Malley, 826 F. 2d 671, 678 (7th Cir. 1987). This caseis at a very early stage. The Court has not yet scheduled or conducted a schedu ling conference. The amendment does not make any substantive changes to the complaint beyond adding parties and a jurisdictional statement. The County will not beprejudiced. The two new plaintiffs are already members of the putative class. They could file a separate action but it would be related to this case and that would just create the need to consolidate. The interests of justice and judicial economy call for permitting the amendment.
II. PLAINTIFFS ARE ENTITLED TO THE ENTRY OF A PRELIMINARY INJUNCTION TO PREVENT MILWAUKEE COUNTY FROM MOVING THEM TO A DIFFERENT RESIDENTIAL FACILITY AND DAY PROGRAM WITHOUT THEIR GUARDIANS' CONSENT. A. Introduction - standards for granting a preliminary injunction. A party must meet two threshold requiremenst to obtain a preliminary injunction: (1)
“some likelihood” of succeeding on the merits, and (2) lack of adequate remedy at law such that movant will suffer irreparable harm if preliminary relief is denied. Washington v. Indiana High School Athletic Association, Inc., 181 F.3d 840, 845 (7th Cir. 1999); Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1 992). Once the movant meets these two threshold requirements, theCourt then proceeds to balance the harms to
11

the parties, and any effect on the public interest. Washington, 181 F.3d at 845; Roth v.
Lutheran General Hospital, 57 F.3d 1446, 1453 (7th Cir. 1995).
The plight of the plaintiffs here presents ht e classic case in which a court must grant
preliminary relief if its final judgment is to have any force or effect. The essence of their
claim is that County disability service clients who are 60 and over have an inferior funding
system, are subject to having the decisions of their guardians discounted and must then
move from their homes and day programs in situations where similar persons under 60
would not be affected. This is discrimination under the American with Disabilities Act and
§504 of the Rehabilitation Act .2 There is ample evidence that any move will be harmful and
disruptive. Once that disr uption and the associated trauma have occurred, any ruling in
plaintiffs' favor will be completely ineffectual. There will be no similar harm to the County if it
is restrained from moving the plaintiffs and this is always a powerful argument for
maintaining the status quo.
B. Plaintiffs have standing to challenge the Milwaukee County Department on Aging's policies and procedures.
The plaintiffs are challenging a set of policies and procedures that affect 60 and over
clients as a group. The County may try refram e the case as being just about HIL or may
argue that HIL and the Department on Aging would probably be unable to agree on a rate
increase even if the Department's policy of never granting rate increases to anyone were
2 Plaintiffs have also asserted substantive claims under Wisconsin Chapters 51 and 55 and the United States and Wisconsin Constitutions. Given that complete relief can be granted at this juncture based on the Federal statutory claims, plaintiffs have chosen notto argue these claims in connection with their preliminary injunction motion. However, the state-law and §1983 claims are not being abandoned. Plaintiffs do intend to assert and argue these claims after further discovery and factual development. Also, some discussion of Chapters 55 and 880 is necessary and was included in the statement of facts to describe the role of the guardian under Wisconsin law and the handling of placement issues by the circuit court as a backdrop for the plaintiffs' discrimination claims.
12

changed. This would misplace the proper focus of the standing inquiry:

When the government erects abarrier that makes it more difficult for member of one class to obtain a benefit than it is for members another group, a member of the former group seeking tochallenge the barrier need not allege that he would have obtained the benefit but for the barrier to establish standing.

Northeastern Florida Chapter of the Associated General Contractors of America v. City of

Jacksonville, 508 U.S. 656, 666 (1993). The Seventh Circuit has said:

[S]tanding does not require a perfectly clear title to the claim sued upon. United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66, 75, 78-79 (2d Cir.2002); United States v. Rodriguez-Aguirre , 264 F.3d 1195, 1204 (10th Cir.2001). This is a corollary of the probabilistic character of the requirement of standing, upon which we have commented in other cases, such as Diaz v. Duckworth, 143 F.3d 345, 347 (7th Cir.1998), and Price v. Pierce, 823 F.2d 1114, 1118 (7th Cir.1987); see also Hohn v. United States, 262 F.3d 811, 818 (8th Cir.2001). "A r easonable probability that a plaintiff will get an apartment that he wants sooner if he wins his suit is a sufficiently tangible expected benefit of suit to conef r standing under the liberal prni ciples that prevail nowadays," as we said in Price...

Morlan v. Universal Guaranty Life Insurance Company, 298 F. 3d 609, 620 (7th Cir.2002).

This liberal standing rule was also discussed in a case involving a veterans hiring

preference: "Each class member is better off when the preference is being enforced than

when it isn't. They may not get the jobb, ut they are guaranteedthe preference." Veterans

Legal Defense Fund v. Schwartz , 330 F.3d 937, n.2 (7th Cir.2003); see

Uhl v.

Thoroughbred Technology and Telecommunications, Inc., 300 F.3d 978, 986 (7th Cir.2002)

(one named plaintiff may represent both "cable side" and "non-cable" subgroups in case

concerning fiber optic cables buried on railroad rights-of-way since membership in either

group will not be determined until the line is surveyed).

There is sufficient evidence to show that HIL will continue to serve the named

plaintiffs and other HIL residents who will turn 60if DOA's policy is changed. It is the finality 13

of the "no increase" policy and not any specificpotential rate increase that has brought HIL and DOA to this point. HIL is not satisfied with the rate increases it has received from the Disability Services Division for persons under 60, but there have been some rateni creases and there is the possibility of future incr eases. Rational providers may well decide to continue a contractual relationship with a fundni g source under these circumstances as HIL has done with DOA up to this point and continuesto do with DSD. Concern for their clients will also encourage many providers to cont inue even when financial conditions are not perfect. The bottom line is that DOA's "no in crease" policy and the policy of overriding guardian decisions are having a negative effect on the persons being served by HIL right now and this will continue in the future. (A dditional HIL clients now served by DSD will reach their 60th birthday and encounter the samediscriminatory policy along with clients of other providers.) These plainti ffs as well as the putative class itself have standing to challenge both policies.
C. Plaintiffs have show n a likelihood of success on the merits on their claims under the Americans w ith Disabilities Act and §504 of the Rehabilitation Act.
The first threshold requirement, likelihood of success on the merits “generally weighs most heavily in a court’s determination.” Davids v. Coyhis, 857 F. Supp. 641, 646 (E.D. Wis. 1994). The standard is much lower than certainty or s ubstantial probability; it is enough that the Plaintiff’s chancesare “better than negligible.” National People’s Action v. Village of Wilmette, 914 F.2d 1008, 1010 (7th Cir. 1990),cert. denied, 499 U.S. 921 (1991). The level of proof is not the same as that r equired at a trial on the merits. “[A]necdotal accounts” are sufficient. Abbott Laboratories, 971 F.2d at 15; see Vaughan Mfg. Co. v. Brikam Int’l. Inc., 814 F.2d 346, 349 (7th Cir. 1987).
14

It is clear that DOA's policies and practicesdisfavor persons 60 and over in several ways. First, the lower rates for identical services and the "no increase" policy affect basic access to residential care and day programming andthe right of individuals to stay in their homes. Second, DOA's policy of overriding guar dian decisions violates basic rights of guardians and wards. Third, the lower DOA rate s substantially increase the likelihood of moving, disruption and admission to an institution. Since persons under 60 are not affected in the same, the differential treatment is clear. The only question is whether this particular form of differential treatment is discrimination under the ADA and the Rehabilitation Act.
The Americans with Disabilities Act is a comprehensive "national mandate for the elimination of discrimination against individuals with disabilities." 42 U.S.C. §12101(b)(1). The "Rehabilitation Act is materially identical to and the model for the ADA." Crawford v. Indiana Department of Corrections , 115 F.3d 481, 483 (7th Cir. 1997) (other citations omitted). "[Title II of the ADA] essentially simply extends the antidiscrimination prohibition embodied in §504 to all actions of state and local governments." H.R.Rep. No. 485(II), 101st Cong., 2d Sess. 84 (1990), reprinted in 1990 U.S.C.C.A.N. 267, 303, 367.
A violation of Title II may be established by hsowing: (1) that the affected clients of a disability service provider are "qualified individuasl with a disability."; (2) that the clients "are being excluded from participation in or denied t he benefits of some service, program or activity by reason of their disability"; by (3) a public entity.Wisconsin Community Service v. City of Milwaukee, Case No. 01-C-0575 (E.D. Wis. March 18, 2004), slip op. at 13, ("WCS II") citing see First Step, Inc. v. City of New London , 247 F.Supp. 2d 135, 149 (D.Conn. 2003); Innovative Health Systems, Inc. v. City of White Plains , 931 F. Supp. 222, 238 (S.D.N.Y. 1996). The County is a public entity and has admitted that the named plaintiffs
15

and the putative class members are qualifiedindividuals pursuant to 42 U.S.C. §12131(2)
and 29 U.S.C. §705(9). (Complai nt ¶¶76 & 81; Answer ¶¶76 & 81). The only issue is
whether the County's actions constitute discrimination.
(1) The Americans with Disabilities Act and the Rehabilitation Act prohibit actual and potential institutional segregation of persons with disabilities.
"[B]oth [the Rehabilitation Act] and the Americans with Disabilities Act entitle
disabled persons (as the plaintiffs undoubtedly are) to care in the least restrictive possible
environment." Bruggeman v. Blagojevich, 324 F.3d 906, 911 (7th Cir. 2003). This is based
on the United States Supreme Court's landmark ruling in Olmstead v. L.C., 527 U.S. 581,
600 (1999). Institutionalization is a form of discrimination even if the plaintiffs can identify no
comparison class. 527 U.S. at 598. Institutional placemen t "perpetuates unwarranted
assumptions that persons so isolated are incapable or unworthy of participating in
community life." 527 U.S. at 600. It also "severely diminishes the everyday life activities of
individuals, including family relations, soci al contacts, work options, economic
independence, educational advancement and cultural enrichment." 527 U.S. at 601.
The Olmstead concept is not limited to persons in institutions trying to get out. The
Tenth Circuit has applied it to a publicly-funded perscription drug benefit where the plaintiffs
merely alleged that it increased t he likelihood of nursing home placement. Fisher v.
Oklahoma Health Care Authority, 335 F.3d 1175, 1182 (10th Cir. 2003). It said:
The integration regulation simply states that public entitie s are to provide ''services, programs and activities in the most integrated setting appropriate" for a qualified person with disabilit ies. 28 C.F.R. §35.130(d). Those protections would be meaningless if pl aintiffs were required to segregate themselves by entering an institution before they could challenge an allegedly discriminatory law or poli cy that threatens to force them into segregated isolation. Second, while it is true that the plaintiffs in Olmstead were
16

institutionalized at the time theybrought their claim, nothing in theOlmstead decision supports a conclusion that inst itutionalization is a prerequisite to enforcement of the ADA;s integration requirements.
335 F.3d at 1181. Plaintiffs do face an increased risk of deterioration and institutionalization
due to the impending moves. This is more than enough to satisfy the minimal burden that
plaintiffs carry at the preliminary injunction stage.
Returning to Bruggeman once again, there is another way in which the integration
principle is implicated. The Seventh Circuit did not simply say that there was a right to get
or stay out of an institution:
There may be an element of paradox in ht e idea that a residential institution, such as an ICF/DD . . . or . . . Community Integrated Living Arrangement . . . provides a less restrictive alternativ e than living at home, especially when some of the plaintiffs are seeking nonresidential services, enabling them to continue to live at home, though this may be their second choice. The paradox is dispelled by recognizing t hat parents, by reason of age or incapacity, may not be capable of taki ng good care of their adult disabled children, in which event the home env ironment may, realistically, be more restrictive of the child's opportunity to develop than an institutional alternative.
324 F.3d at 911-912. This discussion is an exce llent rejoinder to the County's apparent
theory that it can move people wherever it wants as long as the types of facilities are
roughly equivalent. First, as already noted, any move increases the risk of real
institutionalization. Second, and more to t he point that Judge Posner was making, the
concept of least restrictive environment can include many nuances depending on what
services or placement will fac ilitate the "opportunity to develop". Social contacts were
specifically identified by the Olmstead court as worthy of protection under the ADA's
integration regulations. 527 U.S. at 601. Moving someone from familiar surroundings and
established relationships to another placement that may appear similar on paper is in fact
more restrictive and would violate the integration requirements of the ADA and §504. 17

(2) The Department on Aging's rate policy also violates the equal opportunity and enjoyment provisions of the ADA and §504.

The Department of Justice's ADA r egulations go well beyond any conventional

theory of discrimination that requires the comparison of a suspect class to another group.

They include the following prohibitions as forms of actionable discrimination:

A public entity, in providing any aid, benef it or service, may not directly or through contractual, licensing, or ot her arrangements, on the basis of disability --

(i) Deny a qualified individual wit h a disability the opportunity to participate in or benefit from the aid, benefit or service;

(ii) Afford a qualified individual with a disability an opportunity to participate in or benefit fromthe aid, benefit or service that is not equal to that afforded others;

(iii) Provide a qualified individual with a disability with an aid, benefit or service that is not as e ffective in affording equal opportunity to obtain the same result, to gain the same benefi t, 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 than is provided to others unless such action is necessary to providequalified individuals with disabilities with aids, benefits or services that are as effective as those provided to others;

.

.

.

(vii) Otherwise limit a qualified individual with a disability in the enjoyment of any right, privilege, advantage, oropportunity enjoyed by others receiving the aid, benefit, or service.

28 C.F.R. §35.130(b)(1). The question is how toevaluate and measure the diminishment of

the opportunity, right, privilege, advantage, etc.

The scope of these provisions wasexamined by the Second Circuit inHenrietta D. v.

Bloomberg, 331 F.3d 261 (2d Cir. 2003), cert denied, --- U.S. --- (March 22, 2004). The

defendants argued that there was no discrimination against the plaintiffs with AIDS who 18

were challenging the shoddy delivery of va rious social services because everyone was receiving the same bad services. 331 F.3d at 277. As the Court described the issue:
Put another way, we must determine wheht er the "concept ofdiscrimination" embraced by the ADA demandsthat plaintiffs identify a "comparison class" of "similarly situated individuals given preferential treatment." Olmstead v. L.C., 527 U.S. 581, 598, 119 S.Ct. 2176, 144 L.Ed. 2d 540 (1999) (plurality op.). We follow our fellow circuits and the suggestions of theOlmstead plurality in concluding that it does not. 331 F.3d at 273. It quoted extensively fromBultmeyer v. Fort Wayne Community Schools, 100 F.3d 1281, 1283 (7th Cir. 1996), which held thatdisparate impact need not be shown in a reasonable accommodation case. Therefore, even in the absence of any comparison class, plaintiffs will prevail under 28 C.F.R. §35.130(b)(1) (i), (ii), (iii), (iv) & (vii). However, the plaintiffs here have identified a comparison class, persons with disabilities under the age of 60. The differential rate treatment and procedural issues involved guardai ns are classic discrimination between two distinct groups within the largerclass of all persons with disabilities. This is also actionable under the same regulations. Olmstead, 527 U.S. at 598; Henrietta D., 331 F.3d at 273. 28 C.F.R. §35.130(b)(1)(vii) is particularly on target.
(3) The Department on Aging has refused to grant or even consider a reasonable accommodation to its rate policy.
Under the ADA and Rehabilitation Act, pub lic entities are required to provide “reasonable modifications or accommodations in their rules, policies and practices when necessary to avoid discrimination.” 42 U.S.C. § 12131(2);WCS II, slip op at 15;Innovative Health Systems, 931 F.Supp. at 239. The whole accommodation process is based on the concept that a rule or poli cy of general application is an obstacle to something that the
19

claimant wants. If that were not the case, t he claimant would actua lly be entitled to the benefit that he or she seeks.By definition, granting an accommodation means stretching a rule of general application to benefit persons with disabilities.Bay Area Addiction Research v. City of Antioch, 179 F.3d 725, 732 (9th Cir. 1999), citni g The Americans with Disabilities Act: Title II Technical Assistance Manual §11-3.6100, illus. 1 (1993).
The test that has developed in housing cases under the FHA and ADA is whether the accommodation is (1) reasonable and (2) necessary (3) to afford a handicapped person equal opportunity. WCS II, slip op. at 15; Oconomowoc Residential Programs v. City of Milwaukee, 300 F.3d 775, 773 (7th Cir. 2002). The decisional process uses theMcDonnell Douglas burden-shifting analysis whereby the plaintiff has a minimal initial burden that then shifts to the defense which must show unreasonableness or undue hardship. ORP v. Milwaukee, 300 F.3d at 784; see St. Mary's Honor Center v. Hicks , 509 U.S. 502, 515 (1993) ("what is required to establish the McDonnell Douglas prima facie case is infinitely less than what a directed verdict demands."). Similarly, the Court in Henrietta D. said the plaintiff's initial burden is "not a heavy one." 331 F.3d at 280, quoting Borkowski v. Valley Cent. Sch. Dist., 63 F.3d 131, 138 (2nd Cir. 1995). And as this Court recently held, the equal opportunity element makes little sense outside of the housing realm.WCS II, slip op. at 15-16. Therefore, plaintiffs need only show some likelihood of success on the issues of reasonableness and necessity.
DOA's policy (or practice or whatever) ofnever granting a provider rate increase and maintaining lower rates than DSD is exactly the kind of rule of general application that is subject to the accommodation requirement. Persons living in CBRFs operated by providers who give more intensive and higher cost se rvices are particularly in need of this
20

accommodation, however, if DOA rates are signfiicantly below DSD rates anywhere in the

system there will be contract terminations and moves to the detriment of the clients. Some

process of targeted rate increases, even if not system-wide, could ameliorate the worst

situations. Simply standing on the rate policy as DOA is doing is a blanket denial of a

reasonable accommodation which is actionable in its own right. Wisconsin Correctional

Service v. City of Milwaukee, 173 F.Supp.2d 842, 853 (E.D. Wis. 2001) ("WCS I"), citing cf.

PGA Tour, Inc. v. Martin, 532 U.S. 661 (2001).

Plaintiffs are not suggesting that the C ourt can or should engage in the entire

balancing test at this point. First there should be discovery on rates, client moves and the

evaluation methodology that drives the placement process. It is sufficient for the purpose of

the initial preliminary injunction that plaintiffs have a reasonable likelihood of prevailing on the accommodation claim regarding the rate issue and that is certainly the case.3

C. Plaintiffs do not have an adequate remedy at law and will suffer

irreparable

harm.

Plaintiffs must ordinarily show that a lack of an adequate remedy at law will lead to

irreparable harm if preliminary relief is denied. Abbott Laboratories, 971 F.2d at 11. “The

question is whether the Plainti ff will be made whole if he prevails on the merits and is

awarded damages.” Miller v. LeSea Broadcasting, Inc., 896 F. Supp. 889, 894 (E.D. Wis. 1995), quoting Roland Machinery Co. v. Dresser Industries, Inc.,749 F.2d 380, 386 (7th Cir.

1984). It is enough that the movant show a po ssibility of irreparable injury. An actual

likelihood is not required. FSLIC v. Sahni, 868 F.2d 1096, 1097 (9th Cir. 1989). Violations of

3 Plaintiffs are not suggesting that there is a potential accommodation that will fix the differential treatment of guardians by DOA. That policy is pure discrimination. It is to be hoped that granting accommodations to the rate policy will eliminate the funding disputes that lead to conflict with guardians of persons 60 and over.
21

the ADA and §504 are within a special category of cases where proof on liability, without any proof of irreparable harm, is sufficient to grant an injunction. See Wisconsin v. Stockbridge-Munsee Community, 67 F.Supp.2d 990, 995 (E.D. Wis. 1999) (statutory injunction denied under Indian Gaming Act); see also Baxter v. City of Belleville , 720 F.Supp. 720, 734 (S.D. Ill. 1989) (statutory injunction issued under FHA). A more recent case, brought under the ADA and FHA, held that t he reference to injunctive relief in the FHA was sufficient to invoke the exception. United States v. Edward Rose & Sons , 246 F.Supp.2d 744, 754 (E.D. Mich. 2003). The resultshould be the same under the ADA given the comparable availability of injunctive relief and the "national mandate" language in 42 U.S.C. §12101(b)(1).
Clearly damages are inadequate to compensate the plaintiffs here so they can show irreparable harm in any event. Their loss offriends, familiar surroundings and established programs that are working well cannot be compensated by money. The harm will be immediate as soon as they are moved. Also, since they must be below a certain income and asset level to be eligible for Family Care, receiving a sum of money would be problematic in and of itself. All of these fact ors satisfy this element of the preliminary injunction equation.
D. Milwaukee County will not suffer any harm from the granting of a preliminary injunction.
After the threshold factors are met, the first of the two balancing considerations is the potential harm to the party opposing the motion. Abbott Laboratories, 971 F.2d at 1112. The process used is a “sliding scale,” thatis, the greater the likelihood that Plaintiff will succeed on the merits, the less of a showing plani tiff must make on the remaining factors.
22

Diginet, Inc. v. Western Union ATS, Inc.,958 F.2d 1388, 1393 (7th Cir. 1992);Storck USA, L.P. v. Farley Candy Co., 14 F.3d 311, 314, (7th Cir. 1994). Further, it “is an acceptable equitable principle that a court does not have to balance the equities in a case where the defendant’s conduct has been willful.” Wisconsin v. Stockbridge-Munsee Community, 67 F.Supp.2d at 1020, citing EPA v. Environmental Waste Control, 917 F.2d 327 (7th Cir. 1990), cert. denied, 499 U.S. 975 (1991).
Given the willful nature of its conduct, the County does not have any basis for objecting to the entry of an injunction on this ground, but it will not suffer harm at any rate. HIL has been and remains willing to serve the affe cted individuals at the existing rate. It thought there was such an agreem ent until the County reversed itself. With an interim agreement, the County will be no worse off than if this entire dispute had never happened. This factor does not prevent and actually calls for the entry of a preliminary injunction.
23

E. The public interest calls for the entry of a preliminary injunction. The second balancing consideration is what effect the prelim inary injunction will have on the public interest. Abbott Laboratories, 971 F.2d at 11-12. Once again, the process used is a “sliding scale,” that is, thegreater the likelihood thatPlaintiff will succeed on the merits, the less of a showing Plaintiff must make on the remaining factors. Diginit, Inc. v. Western Union ATS, Inc.,958 F.2d 1388, 1393 (7th Cir. 1992). The courts recognize that the public interest may be harmed eit her by granting or denying a preliminary injunction. Ping v. National Educ. Ass’ n, 870 F.2d 1369, 1371-72 (7th Cir. 1989). However, even probable harm to the public inte rest does not prevent the granting of a preliminary injunction in appropriate cases. Abbott Laboratories, 971 F.2d at 12, n. 3. Effective care and treatment in the least re strictive setting for persons with disabilities is one of the preeminent public policies of the State of Wisconsin. Wis. Stat., §§51.001 and 55.001. The issues in this case are of vitailmportance to the citizens of Milwaukee County, including those with and without dis abilities. Issuing a prelimi nary injunction so that the parties and the Court can deal with the merits in a deliberate and rational way is clearly in the public interest. III. AN EXPEDITED DISCOVERY AND BRIEFING SCHEDULE IS NECESSARY IN ORDER TO RESOLVE THE QUESTION OF CLASS CERTIFICATION AND THE ULTIMATE MERITS OF THE CASE. Plaintiffs are also requesting that the Court conduct an expedited scheduling conference in this case. Federal courts have wide discretion to schedule the proceedings before them. The court may initiate a schedu ling conference or one of the parties may make such a request by motion.DiDomenico v. New York Life Insurance Co,. 837 F.Supp. 1203, 1206 (M.D. Fla. 1993). There is also specific authority for an expedited hearing in
24

declaratory judgment cases. "The court ma y order a speedy heari ng of an action for a declaratory judgment and may advance it on thecalendar." Rule 57, Federal Rules of Civil Procedure; Temp-Resisto Corp. v. Glatt, 18 F.R.D. 148, 152 (D.N.J. 1955). The Rules also provide for expedited consideration of a motionfor preliminary injunction, and provides for the trial on the merits "to be advanced and conoslidated with the hearing on the appilcation [for preliminary injunction]." Rule 65, Federal Rules of Civil Procedure. As one court held:
Exigencies of time have been consistentlyrecognized as a sufficient basis for accelerating the procedural calendar of cases in which injunctive relief, as opposed to declaratory relief is sought. See, e.g., Studebaker Corp. v. Gittlin, 360 F.2d 692 (2d Cir. 1966). See also 5 Wright & Miller, Federal Practice and Procedure §1346 (1969). Drinan v. Nixon, 364 F.Supp. 853 (D.Mass. 1973). The urgency for the plaintiffs and the putative class that they seek to represent is obvious. More and more persons under 60 w ho receive Milwaukee County disability services will reach their 60th birthday every month and the financial issues which have already become acute for one provider will ripple throughout the system. The level of disruption for both the client s and the County will snowball if this matter does not move forward with the assistance of an expedited scheduling order.
CONCLUSION The conditions for amending the complain t to add two plaintiffs have been met. Plaintiffs have met each of the criteria for granting a prelim inary injunction in order to preserve the status quo. It is also appr opriate to conduct an expedited scheduling conference.
Dated: April 9, 2004 25

Respectfully

submitted,

Attorney

ROBERT

THEINE PLEDL for the Plaintiffs

s/

Robert Theine Pledl

_________________________________

State

Bar No. 1007710

1110

N. Old World Third Street, Suite 670

Milwaukee,

Wisconsin 53203

TEL

414-225-8999

FAX

414-224-0811

26

 
 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________

GERALD N., et al.,

Plaintiffs,

v.

Case No. 04-C-1093

MILWAUKEE COUNTY, Defendant.
______________________________________________________________________________ DEFENDANT MILWAUKEE COUNTY’S BRIEF IN OPPOSITION TO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
______________________________________________________________________________ The plaintiffs are disabled individuals over the age of 60 who are clients of the Family
Care program, see, Wis. Stat. ss. 46.2805-2895, administered by the Milwaukee County Department on Aging. Family Care is a pilotprogram which the State of Wisconsin has implemented in five counties and, for eligible disabled persons enrolled in the program, it essentially replaces a variety of Medicaid waiver programs as a mechanism to fund the care and services necessary to maintain those persons in community placements.
The owner of the CBRF where the plaintiffs are placed requested an increase in the monthly payment he receives from Family Care to serve the plaintiffs. When that request was denied, he served notice that he would evict the plaintiffs, and the Family Care program proceeded to locate alternative community placement for than and to plan for their transition to those placements. The plaintiffs, by their guardians, have sued, claiming that the refusal of the Family Care program to increase payments to the CBRF owner and the fact that he receives higher payment for some under-60 residents whose care is financed by the traditional Medicaid waiver programs constitute violations of various federal statutory and constitutional rights.

The Family Care program has advised the plaintiffs and their guardians that the program
intends to move them to their new residences in the near future, and the plaintiffs now seek a
preliminaryinjunction to prevent those moves.
I. To obtain preliminary injunctive relief, plaintiffs must prove each element of a five-part test.
The standard applicable to a motion for a preliminary injunction is well settled:
The Court of Appeals for this circuit has held that a party seeking preliminary injunctive relief must show that (1) no adequate remedy at law exists; (2) the moving party will suffer irreparable harm absent injunctive relief; (3) the irreparable harm suffered in the absence of injunctive relief outweighs the irreparable harm the defendant will suffer if the injunction is granted; (4) the moving party has a reasonable likelihood of success on the merits; and (5) the injunction will not harm the public interest.United States v. Rural Electric Convenience Co-Op. Co., 922 F.2d 429, 432 (7th Cir. 1991); Somerset House, Inc. v. Turnock, 900 F.2d 1012, 1014 (7th Cir. 1990); Baja Contractors, Inc. v. City of Chicago, 830 F.2d 667, 675 (7th Cir. 1987), cert. denied, 485 U.S. 993, 99 L. Ed. 2d 511, 108 S. Ct. 1301 (1988). In order to prevail, the plaintiff must satisfy each element of this five-part test. Somerset, 900 F.2d at 1015 (citing Roland Machinery Co. v. Dresser Industries, Inc., 749 F.2d 380, 386-87 (7th Cir. 1984)). Davids v. Coyhis, 857 F.Supp. 641, 646 (E.D. Wis. 1994).
In practice, the “reasonably likelihood of success on the merits” standard presents a fairly
modest threshold, and the amount of “irreparable harm” required to obtain relief is, to some
extent, a function of the countervailing harm which will be suffered by the defendant if the
injunction is granted. However, those factors do not convert the plaintiffs’ motion into the
functional equivalent of an “order to show cause”, requiring the defendant to prove that the
plaintiffsare not entitled to an injunction. The burden remains on the plaintiffs to establish each
and every element of the test.
II. Plaintiffs cannot establish that they have no adequate remedy at law.
The essence of the complaint is this case is that the guardians of the named plaintiffs do
not want their wards moved from the CBRF’s in which they now reside to different CBRF’s
where (the evidence will show) they will receive care and services equivalent to the care and 2

services which they now receive. The proposed moves were precipitated by the stated intention of the owner of the CBRF’s where the plaintiffs now live to evict the plaintiffs because the Family Care program denied his request for more money. For reasons discussed in the succeeding sections of this memorandum, this scenario does not implicate the federal statutory rights of the plaintiffs. However, the court does need not reach that issue because there are adequate state law procedures which will permit the plaintiffs to interpose their objcetions if the proposed moves do not result in the least restrictive placements commensurate with their needs of if they operate to deprive the plaintiffs of necessary care, treatment or support items.
As clients of the Family Care program, the plaintiffshave a specific statutory right to object, and to obtain a hearing on their objection, if Family Care benefits are denied or terminated or if the “plan of care” (which describes the array of services the program proposes to provide) is “unacceptable because the plan of care requires the enrollee to live in a place that is unacceptable to the enrollee or the plan of care provides care, treatment or support items that are insufficientto meet the enrollee’s needs, are unnecessarily restrictive or are unwantedby the enrollee,” Wis. Stat. s. 46.287(2)(a)1.f. Moreover, as persons subject to orders for guardianship and protective placement under Wis. Stat. chs. 880 and 55, the plaintiffs are entitled to an annual review by the probate court, State ex rel. Watts v. Combined Community Services, 122 Wis. 2d 65, 362 N.W.2d 104 (1985). This procedure provides an opportunity for periodic judicial review of the adequacy and appropriateness of the plaintiffs’ placements.
III. The plaintiffs have no reasonable likelihood of success on the merits. The plaintiffs have chosen to rely on their claims under the Americans With Disabilities Act (ADA), 42 U.S.C. s. 12132 et seq., and the Rehabilitation Act, 29 U.S.C. s. 794(a), in support of their motion for preliminary injunctive relief.
3

The viability of the of those claims depends upon the proposition that the ADA and the Rehabilitation Act, and in particular the “integration principle” articulated in the implementing regulations, 28 CFR s. 35.130(d) and 28 CFR s. 41.51(d), empower the federal courts to micromanage programs for the disabled. They do not. “The purpose of the regulation is not to constitute the federal courts the supervisors of the care and treatment of disabled persons. It is to prevent the isolation or segregation of the disabled.” Bruggeman v. Blagojevich, 324 F.3d 906, 911 (7th Cir. 2003).
The evidence in this case will not support a finding that the policies of the Family Care program threaten to isolate or segregate the plaintiffs or any other disabled person. The Family Care program has served notice that it intends to move the plaintiffs from the CBRF’s where they currently live to other CBRF’s, where they will have the same plans of care and will receive the same array of treatment, services and support they are receiving now. There is no plan or intention to institutionalize or re-institutionalize the plaintiffs or anyone else, and there is no basis for a finding that a move from one CBRF to another will result in confinement in a more restrictive institution.
The plaintiffs’ brief quotes dicta from the Bruggeman decision in which the Court of Appeals admits the theoretical possibility that if an aging parent of an adult disabled child is unable adequately to care for that disabled child, placement in the parent’s home may “realistically” be more restrictive that an appropriate institutional placement. In that hypothetical circumstance, which is not presented in this case, the disabled adult child’s entitlement to the least restrictive environment consistent with his needs might be implicated. However, that aside by the Court of Appeals is insufficient to support the plaintiffs’ claim that a move from one CBRF to another functionally identical CBRF can be characterized as a“more restrictive”
4

placement (and therefore a violation of the Rehabilitation Act and the ADA as explicated in Olmstead v. L.C., 527 U.S. 581 (1999)) merely because it would place a disabled person in a temporarily unfamiliar environment. There is no authority which holds that the right to the “least restrictive” environment is that broad.
This is not, as plaintiffs suggest, a “reasonable accommodation” case. A “reasonable accommodation” is one that gives an otherwise qualified plaintiff with disabilitie“smeaningful access” to a program or service. Alexander v. Choate, 496 U.S. 287, 301 (1985). That concept cannot reasonably by applied to the operation of the Family Care program as it affects the plaintiffs in this case because the benefits of the Family Care program are available only to the disabled, and the plaintiffs are currently receiving those benefits. The plaintiffs are arguing that they are entitled to a “reasonable accommodation” which would permit them to remain in the same CBRF forever, irrespective of cost or any other factor. Milwaukee County does not offer any program or service to the non-disabled, or to anyone else, which guarantees perpetual placement in the same residential facility.
Moreover, even if the notion of “reasonable accommodation” were applicable in this case, Milwaukee County cannot be compelled to make that accommodation. Under the ADA, a public entity is not required to make an accommodation which“would fundamentally alter the nature of the service, program, or activity,” 28 CFR s. 35.130(b)(7). Similarly, under the Rehabilitation Act, a requested accommodation is not required if it “creates a fundamental alteration in the nature of the program” or creates “undue financial or administrative burdens”.
The essential and defining feature of the Family Care program is that it is a managed care program. The Department on Aging, in its capacity as the “care maintenance organization” administering the program, receives a capitated (per enrollee-per month) payment from the State of Wisconsin, and it is required to meet the identified needs of all eligible persons through the
5

judicious purchase of residential and support services and the like with that limited source of funds. The plaintiffs are asking the court to permit a particular provider of residential services (in this case, a provider who is already the most expensive CBRF provider in the program) to, in effect, extort higher rates from Milwaukee County by threatening to evict Family Care clients if those higher rates are not paid. If the court empowers providers to engage in such conduct by forbidding the Family Care program to provide alternative appropriate residential and support services on the theory there is a federal right under the ADA and Rehabilitation Act to remainin the same CBRF forever (which is, for the reasons discussed above, a dubious proposition), the program’s ability to manage care and control costs would be eliminated. That would certainly “fundamentallyalter” the nature of the program and would create “undue financial or administrative burdens” within the meaning of the applicable regulations.
IV. “Irreparable harm”. The plaintiffs have offered no authority which relieves them of the requirement to prove “irreparable harm” as a condition precedent to obtaining preliminary injunctive relief in a case under the ADA or the Rehabilitation Act. Whether they meet that burden will, of course, depend upon the evidence adduced at the hearing. However, if “irreparable harm” means anything, it must mean more than mere inconvenience or the temporary disruption of settled routine. The court should not assume that moving one of the plaintiffs from one CBRF to another will result in trauma so profound, permanent and debilitating as to constitute “irreparable” harm unless that harm is established by compelling, relevant expert testimony. The evidence will establish that, in the case of a Family Care client who faced the same situation as the plaintiffs and who has already been relocated to a new CBRF, there has been no
6

irreparable harm. On the contrary, the client appears to be receiving more attentive care in the new facility
V. Harm to defendant Milwaukee County. To claim, as the plaintiffs do, that granting temporary injunctive relief to them will do no harm to Milwaukee County is to ignore the true nature and objective of this case. This is not a case about the integration mandate of the ADA and the Rehabilitation Act. The plaintiffs are already deinstitutionalized and will remain so. The plaintiffs are tatempting to package an attack on the managed care aspect of the Family Care program as an ADA case. Milwaukee County respectfully urges the court to decline the plaintiffs’ invitation to litigate the fiscal and policy judgments of the State of Wisconsin and Milwaukee County which are inherent in the formulation and implementation of that program. Courts have recognized that even cases which involve genuine ADA issues raise “complex medical, social and fiscal issues not easily addressed by litigatio”n and implicate “both fiscal and policy choices that are difficult to make”, Williams v. Wasserman, 164 F. Supp. 2d 591, 595 and 637 (D. Md. 2001). A state ’s obligation to comply with the integration mandate of the ADA and the Rehabilitation Act is limited tothe resources available in the state’s mental health budget, and, in allocating that budget among numerous disabled individuals who need care and services, the state “is entitled to wide discretion in adopting is own systems of cost analysis”, Olmstead, 527 U.S. at 615. The State of Wisconsin and Milwaukee County have chosen to allocate the limited resources available for community-based residential services, care and treatment of disabled persons over the age of 60 by means of a managed care system known as Family Care. That choice is well within the ambit of the discretion permitted to state and local authorities under Olmstead and subsequent cases. The fact that the program may, in some cases, provide a lower
7

rate to a particular CBRF provider than he receives for disabled persons under 60 years of age whose care is financed under the traditional Medicaid waiver programs does not violate the ADA or the Rehabilitation Act, and it does not warrant judicial intervention in the administration of that program.
CONCLUSION For the foregoing reasons, Milwaukee County respectfully submits that that the plaintiffs have not met the standards necessary to demonstrate that they are entitled to the extraordinary remedy of preliminary injunctive relief. Accordingyl, Milwaukee County urges the court do deny the plaintiffs’ motion for a preliminary injunction. Dated at Milwaukee, Wisconsin this 13th day of April, 2004.
OFFICE OF CORPORATION COUNSEL /s/ John Jorgensen
By:___________________________________ John Jorgensen Principal Assistant Corporation Counsel State Bar No. 01017484 Attorneys for Defendant
P.O. Address: Milwaukee County Courthouse 901 North 9th Street, #303 Milwaukee, WI 53233 Telephone: (414) 278-4295 Fax: (414) 223-1249
8

 
 Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 1 of 26

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, by her legal guardian and next friend, RICHARD MILLER; SANDRA EHRLICHMAN, by her legal guardian and next friend, NANCY STEEVES; MARILYN BERDIKOFF, by her legal guardian and next friend, LOIS DEGNER; LENORE CZARNECKI, by her agent and next friend, CAROLYN CETNAROWSKI; and JOHN GORTON, by his agent and next friend, DEBORAK BRUNK, each on their own behalf and on behalf of a class of persons similarly situated,
Plaintiffs,
v.
MILWAUKEE COUNTY; WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES; and HELENE NELSON, in her official capacity as Secretary of DHFS,
Defendants.

Case No. 04-C-0193

STATE DEFENDANTS’ RESPONSE BRIEF OPPOSING RENEWED MOTION FOR CLASS CERTIFICATION

Plaintiffs have filed a Renewed Motion for Class Certification pursuant to
Fed. R. Civ. P. 23 for an order certifying the following plaintiffs’ class:
All Milwaukee County residents with disabilities who now are or will in the future be: (1) eligible for the Family Care program, and (2) appropriate, based on reasonable professional judgment, for residential services in adult family homes [“AFHs”] and community-based residential facilities [“CBRFs”].
Record (“R”) 101 at 1.

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 2 of 26
Defendants Wisconsin Department of Health and Family Services (“DHFS”) and Helene Nelson (collectively “the State defendants”) submit this response brief, together with the Affidavits of Charles Jones (“Jones Aff.”), James Hennen (“Hennen Aff.”) and that of the State defendants undersigned counsel, opposing plaintiffs’ motion.
ISSUES PRESENTED 1. Have the named plaintiffs established the implied and express requirements for certification of the proposed class pursuant to Fed. R. Civ. P. 23(a)? This issue requires the resolution of the following sub-issues:
a. Must the request for class certification be denied because the putative class is neither suffering nor threatened with the same injury plaintiffs allegedly face?
b. Is there in fact an identifiable class? c. Have plaintiffs met their burden of establishing the required elements of Rule 23(a), particularly numerosity and that they are capable of adequately representing the class they seek to represent? 2. Have the named plaintiffs established that they satisfy the elements of Rule 23(b)(2) required for class certification?
STATEMENT OF THE CASE AND OF THE FACTS On February 7, 2006, this Court filed its Decision and Order granting in part and denying in part the defendants’ motions to dismiss the Fourth Amended Complaint (R. 86). As a result of the Court’s Decision and Order and plaintiffs’ subsequent voluntary dismissal pursuant to a stipulation of the parties of a claim based on the Medical Assistance statute, 42 U.S.C. Title XIX, §§ 1396, et seq., this case now consists of four paired claims for declaratory and injunctive relief
- 2 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 3 of 26
based on the Americans With Disabilities Act (“ADA”), 42 U.S.C. § 12101, et seq., and § 504 of the Rehabilitation Act, 29 U.S.C. § 794.
There are now three remaining named plaintiffs who are representatives of the named class, Joan Bzdawka, Sandra Ehrlichman and Marilyn Berdikoff, who appear by their guardians and next friends. Each of these three named plaintiffs is a developmentally disabled person aged 60 or over who is a recipient of Family Care, a managed care Medical Assistance (“MA”) waiver program. These plaintiffs each reside in an AFH or CBRF and attend related day programs operated by Homes for Independent Living (“HIL”), a Family Care provider (see R. 51, Fourth Amended Complaint (“Am. Comp.”), ¶¶ 80, 82, 91, 93, 101 and 102; see also Hennen Aff., ¶ 4). Two other plaintiffs listed as parties in the caption are no longer proper class representatives, according to information discovered by the State defendants in preparing this brief. Plaintiff Lenore Czarnecki has died (Hennen Aff., ¶ 6). In addition, plaintiff John Gorton now resides in a nursing home because his health has deteriorated and his medical needs require treatment in a skilled nursing facility (id.). Czarnecki was, and Gorton is, a frail elderly individual and each formerly resided in CBRFs operated by Senior Residential Care of America, Inc. (“SRCA”), another Family Care provider.
Family Care is currently operated by DHFS as a pilot program in five counties, including Milwaukee County, the only county Family Care program involved in this lawsuit (see Exhibit 2004, filed with the State defendants’ Motion to Dismiss (R. 71)). Under Family Care, elderly persons with long-term care needs and adults who have physical or developmental disabilities may receive comprehensive community-based services (see gen. Exhibit 2001, filed with the State defendants’ Motions to Dismiss (R. 71) and available on the DHFS website at http://dhfs.wisconsin.gov/LTCare/Genera/l/Index.htm). In Milwaukee County, Family Care is
- 3 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 4 of 26
available only for elderly individuals (60 years of age and older), including those with physical disabilities and those with developmental disabilities (see Exhibit 2003-D(1), filed with the State defendants’ Motion to Dismiss (R. 71)).1
As limited by the Court’s February 7 Decision and Order, the Fourth Amended Complaint focuses on the Family Care capitated rates paid by the State defendants to the Milwaukee County Care Management Organization (“CMO”) and the negotiated rates paid by the Milwaukee County CMO to providers of AFH and CBRF residential and day services during the years 2004 and 2005 (see Fourth Amended Complaint at 13-14 (R. 51:2:13-14)).2 Claims for retroactive relief and alleging discrimination on the basis of age and county of residence in the distribution of long term care benefits have been dismissed, leaving only multiple claims that the defendants discriminated against the named plaintiffs and the class they seek to represent on the basis of their disabilities in violation of the ADA and Rehabilitation Act.
Under the Family Care Program, DHFS pays each participating county’s CMO a monthly capitated rate for each individual who enrolls in the program. In exchange for that payment, the CMO is contractually obligated to provide each Medicaid-eligible participant all Medicaidcovered long term care services listed in the participant’s individualized service plan (“ISP”).
1A more detailed description of the Family Care program is included in the State Defendants’ Brief-in-Chief in support of its Motions to Dismiss the Fourth Amended Complaint (R. 71:3-8).
2The Court dismissed all of plaintiffs’ claims for retroactive relief, thus eliminating all claims during the period from CY 2000 through 2003 (R. 86:7-8, 22). The original complaint was filed in January 2004 (R. 1:2:1) and the Fourth Amended Complaint includes a claim expressly challenging the adequacy of the 2005 rates paid by DHFS to the Milwaukee County CMO (R. 51:2:13-14).
- 4 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 5 of 26
See Jones Aff., ¶ 3. The Milwaukee County CMO is the Milwaukee County Department on Aging.
The distinctive feature of the Family Care program, which distinguishes it from prior programs to fund long term care for disabled persons, is that it is intended to serve all eligible individuals on a managed care model. The CMO must use the capitated rates received for each member to purchase the most cost-effective care and treatment in order to meet the treatment needs of all eligible individuals. The CMO negotiates the rates it pays to individual providers. The contracts between the CMO and providers renew automatically from year to year, but are subject to mutual renegotiation by mutual consent of the parties. See Hennen Aff., ¶ 3.
Additional facts will be discussed as necessary during the course of the argument below.
ARGUMENT I. THE NAMED PLAINTIFFS HAVE FAILED TO ESTABLISH THE
IMPLIED AND EXPRESS REQUIREMENTS FOR CERTIFICATION OF THE PROPOSED CLASS PURSUANT TO RULE 23(A). A. Plaintiffs have the burden of establishing each of the required
elements necessary to support their motion for class certification under Rule 23. Federal R. Civ. P. 23 requires a two-step analysis to determine whether class certification is appropriate. See Rosario v. Livaditis, 963 F.2d 1013, 1017 (7th. Cir. 1992). First, Rule 23(a) contains four express requirements, each of which is a prerequisite to class certification. Clay v. American Tobacco Co., 188 F.R.D. 483, 489 (S.D. Ill. 1999). The failure to meet any one of them precludes certification as a class. Id. The four requirements are: (1) that the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately
- 5 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 6 of 26
protect the interests of the class. Fed. R. Civ. P. 23(a). It is the moving party’s burden to establish that each of the prerequisites of Rule 23 is satisfied. General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 161 (1982).
In addition—and antecedent to—the express requirements of Rule 23(a) are two implicit requirements: “that the plaintiffs and the class they seek to represent have standing;” and that the proposed class be identifiable, or that the proposed class definition be precise, objective and presently ascertainable. In re Copper Antitrust Litigation, 196 F.R.D. 348, 353 (W.D. Wis. 2000) (quoting and citing treatises).
If the threshold requirements of Rule 23(a) are met, plaintiffs must satisfy at least one of the three subdivisions of Rule 23(b). In re Copper, 196 F.R.D. at 353. In this case, plaintiffs rely on Rule 23(b)(2) which requires a showing that “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.” Id.
Once the successive requirements for class certification are met, the decision whether or not to certify the class is vested in the discretion of the district court. Cf. Alliance to End Repression v. Rochford, 565 F.2d 975, 977 (7th Cir. 1977).
B. Class certification must be denied because the requested class is not limited to persons who have standing to maintain this action on their own behalf.
Decisions on class certification should not be conditioned upon the merits of a case. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974). Nonetheless, “[t]he determination
- 6 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 7 of 26
whether to certify a class usually should be predicated on more information than the complaint itself affords.” In re Copper, 196 F.R.D. at 353 (internal quotation omitted). Thus,
[i]n evaluating a motion for class certification, it is sometimes necessary to probe behind the pleadings to determine whether the interests of absent parties are fairly encompassed within the named [plaintiffs’] claims. . . . Indeed, to protect absent class members and defendants, this Court has an affirmative obligation to resolv[e] factual and legal disputes that strongly influence the wisdom of class treatment. . . . Thus, instead of assuming that whatever the plaintiffs allege is true, as it would in testing the legal sufficiency of a complaint under Rule 12(b)(6), the Court may look[ ] beneath the surface of [the] complaint to conduct the inquiries in [Rule 23] and exercise the discretion it confers. Abram v. United Parcel Service of America, Inc., 200 F.R.D. 424, 427 (E.D. Wis. 2001) (internal quotation marks and citations omitted; italics in original). Before addressing the specific requirements of Rule 23 (a), two implied prerequisites to class certification must be addressed. See Clay, 188 F.R.D. at 490; Rochford, 565 F.2d at 977. “Implicit in Rule 23 is the requirement that the plaintiffs and the class they seek to represent have standing.” In re Copper, 196 F.R.D. at 353. “This is a ‘threshold requirement for the maintenance of a federal class action and must be considered in addition to the requirements of Rule 23.’” Id., quoting Rozema v. The Marshfield Clinic, 174 F.R.D. 425, 432 (W.D. Wis. 1997), and 7B Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure, § 1785.1 (2d ed. 1986), at 139. “The definition of a class should not be so broad so as to include individuals who are without standing to maintain the action on their own behalf.” Clay, 188 F.R.D. at 490. “To have standing to sue as a class representative, the plaintiff ‘must be part of the class and ‘possess the same interest and suffer the same injury’ as the class members.’” Harriston v. Chicago Tribune Co., 992 F.2d 697, 703 (7th Cir. 1993), quoting East Texas Motor Freight System Inc. v.
- 7 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 8 of 26
Rodriguez, 431 U.S. 395, 403 (1977) and Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 216 (1974).
Plaintiffs’ brief in support of their renewed motion for class certification (“Brief”) advances conclusory arguments that ignore the question of class standing generally and fail to recognize the impact of this Court’s February 7, 2006, order recognizing the named plaintiffs’ limited standing and construing their numerous ADA and Rehabilitation Act claims in such a way that they survived, at least in part, the defendants’ motions to dismiss. Mere eligibility for Family Care benefits alone is not sufficient to justify class standing, as plaintiffs seem to argue; in addition, plaintiffs and the class they seek to represent must “suffer the same injury.” Schlesinger, 418 U.S. at 216; Rodriguez, 431 U.S. at 403; Falcon, 457 U.S. at 156. Apart from the conclusory allegations of the Fourth Amended Complaint, which the Court must look behind to evaluate properly the request for class certification, the record, including the affidavits submitted in opposition to the request for class certification and attached discovery documents from plaintiffs themselves, demonstrates plainly that the broad class plaintiffs seek to represent is simply not “suffer[ing] the same injury” the plaintiffs claim to suffer.
Plaintiffs themselves claim no present injury whatever, as this Court has recognized. Each is a Family Care recipient who claims no injury from their present residential placement or any of the other Family Care services they have continuously received for the past several years. They concede that their current placements are fully integrated and the least restrictive possible given their acute physical and developmental limitations. They have suffered no barriers to initial eligibility nor do they allege any difficulty in securing appropriate long term care services in the first place.
- 8 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 9 of 26
Instead, their eight variously stated claims under the ADA and Rehabilitation Act all boil down to semantic variations on a single theme. They claim that the capitated rates paid by DHFS to the Milwaukee CMO during calendar years (“CY”) 2004 and 2005 and, in turn, the rates the Milwaukee CMO contracted to pay their residential providers during the same period, were so low that the providers will be forced to terminate their participation in Family Care, thereby forcing plaintiffs personally to move involuntarily to a different residential placement, accompanied, as this Court has found, by real and immediate “trauma and deterioration” (R. 86:8) and “forced . . . move[s] to an institutional setting” (R. 106:3).3
Indeed, plaintiffs themselves have fully acknowledged that their numerous claims of discrimination on the basis of disability focus exclusively on the prospect of an involuntary forced move from their present, appropriate placements caused entirely by DHFS’ allegedly inadequate capitated rates during CY 2004 and 2005 and the contracted rates paid by the Milwaukee CMO to their providers during the same period. In fact, they have directly said this in responses to interrogatories provided to the State defendants during discovery. In their Amended Response to State Defendants’ First Set of Interrogatories served June 7, 2005, plaintiffs stated:
It is the position of the plaintiffs that deficiencies in any services provided to Milwaukee County Family Care recipients . . . are the result of the state
3In context, the Court’s description can only be construed as indicating that plaintiffs face a real and immediate danger of being forced involuntarily into a more restrictive, less integrated institutional setting such as a nursing home (see R. 106:3, contrasting plaintiffs’ prospective injuries with the facts in Bill M. ex rel. William M. v. Nebraska Dept. H.H.S., 408 F.3d 1096, 1098 (8th Cir. 2005)). Although the Fourth Amended Complaint does not contain these assertions, the Court’s interpretation of plaintiffs’ claims based on affidavits submitted by plaintiffs’ experts effectively amends the Fourth Amended Complaint to include them.
- 9 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 10 of 26
defendants’ failure to set an adequate capitated rate for calendar years 2000 through 2005. See Exhibit E, at 2, attached to the Affidavit of the undersigned (emphasis supplied). Accordingly, in order for a class to be certified in this matter, the class would have to share the same claimed prospective injury as that accepted by the Court as imminently threatening the plaintiffs in this case—i.e., the real and immediate threat that other Family Care members will be involuntarily moved from their present AFH and CBRF residential placements causing immediate “trauma and deterioration” (R 86:8) and “forced . . . move[s] to an institutional setting” (R 106:3) as a result of inadequate capitated and contract rates paid during CY 2004 and 2005. Settled Supreme Court precedent cited above plainly requires that putative class members must “suffer the same injury” as the named plaintiffs before class standing can be recognized. See also Keele v. Wexler, 149 F.3d 589, 592 (7th Cir. 1998), quoting Schlesinger, 418 U.S. at 216; Baby Neal For and By Kanter v. Casey, 43 F.3d 48, 56 (3d Cir. 1994). The class plaintiffs seek to represent includes all Milwaukee County residents with disabilities who will “now or will in the future” be: (1) eligible for Family Care, and (2) an appropriate candidate for residential services in AFHs and CBRFs (R. 101:1). Quite plainly, the requested class consists primarily if not almost entirely of persons who are not remotely threatened with the same injury plaintiffs claim to face. Because the proposed class improperly includes those who lack standing to bring this action on their own behalf, class certification should be denied. See Rodriguez, 431 U.S. at 403; Schlesinger, 418 U.S. at 216; Keele, 149 F.3d at 592.
- 10 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 11 of 26
C. The requested class is not sufficiently definite because it fails to identify those individuals actually harmed by the defendants’ allegedly wrongful conduct.
The other implicit condition contained in Rule 23(a) is that an “identifiable” class must exist. Gomez v. Illinois State Bd. of Educ., 117 F.R.D. 394, 397 (N.D. Ill. 1987). The proposed class definition “must be precise, objective and presently ascertainable.” In re Copper, 196 F.R.D. at 353 (citations omitted; internal quotation omitted). An identifiable class exists if its members can be ascertained by reference to “objective criteria.” Gomez, 117 F.R.D. at 397. “A class description is insufficient, however, if membership is contingent on the prospective member’s state of mind.” Id. (citing cases). There are two primary purposes of properly identifying the proposed class. First, a properly identified class alerts the parties and the court to the burdens that such a process might entail; and second, proper identification of the class insures that those individuals actually harmed by a defendant’s wrongful conduct will be recipients of the relief eventually provided. Simer v. Rios, 661 F.2d 655, 670 (7th Cir. 1981).
Plaintiffs argue that their class definition is appropriate because it identifies objectively who should be included in the class. See Brief at 2-3. The class definition offered by plaintiffs serves neither of the purposes the identification of a proper class is supposed to serve. Including persons based on current or future Family Care eligibility and on the individual’s appropriateness for a community-based placement does precisely nothing to inform anyone what the case is supposed to be about, nor does it in any way “insure[] that those actually harmed by defendants’ wrongful conduct will be the recipients of the relief eventually provided.” Simer, 661 F.2d at 670.4
4The fact that the primary beneficiaries of the relief plaintiffs seek would be the providers and not the class of Family Care eligibles or recipients at all is discussed in Section I.D.3., below.
- 11 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 12 of 26
D. Plaintiffs have failed to meet their burden of establishing the required express elements of Rule 23(a), and in particular, have failed to establish numerosity and that they will adequately represent the interests of the putative class. 1. Viewed from the perspective of the number of persons plaintiffs might have standing to represent, plaintiffs have failed to establish the required numerosity.
Plaintiffs argue superficially that, given the number of current and prospective Family Care participants generally and the number of Milwaukee Family Care participants currently residing in AFHs and CBRFs in particular, there are literally thousands of members in the class they seek to represent. Brief at 3-4. And yes, superficially at least, plaintiffs make a plausible argument. Once again, however, they ignore the question of class standing and the more fundamental question of how many people plaintiffs might actually have standing to represent. Looking behind the speculative assertions of the complaint and the equally speculative predictions of harm contained in the affidavits of plaintiffs’ experts, the fact is, plaintiffs have failed to demonstrate that there are more than a handful of Family Care participants similarly situated with themselves.
Plaintiffs correctly observe that a potential class size of forty or more is generally sufficient to support certification. See Brief at 3, citing Clarke v. Ford Motor Co., 220 F.R.D. 568, 578 (E.D. Wis. 2004). The parties have filed a Factual Stipulation in Connection with Plaintiffs’ Motion for Class Certification (“Factual Stipulation”) (R. 100). In addition, submitted with this brief are two affidavits which provide direct evidence, based on personal knowledge and review of available records, concerning just how many persons in the class plaintiffs seek to represent appear to have claims similar to those of the plaintiffs. See Jones Aff. and Hennen Aff., filed herewith. The Factual Stipulation establishes that the Milwaukee CMO is currently serving approximately 5,800 persons enrolled in Family Care, with
- 12 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 13 of 26
approximately 19% of that total (1080) currently residing in 74 AFHs and 123 CBRFs (R. 100:1; Hennen Aff., ¶ 12).
The affidavits provide further information directly rebutting plaintiffs’ dire predictions about providers terminating their contracts with Family Care based on inadequate rates during CY 2004 and 2005 and resulting involuntary transfers of Family Care participants to other facilities as a result of such contract terminations. According to James Hennen, the current Milwaukee CMO contract administrator, during the period from January 1, 2004, to the present, only one provider, HIL, has given the CMO the required prior written notice of intent to terminate its contract (Hennen Aff., ¶ 4). HIL is the provider of residential services for the remaining three named class representative plaintiffs in this lawsuit as well as two additional Family Care participants who are not parties to this litigation (id., ¶ 4).
In addition, the Milwaukee CMO is aware of only one Family care residential provider that has notified the CMO verbally that it planned to terminate residential services to two Family Care members living in a group home provided under a contract with the CMO (Hennen Aff., ¶ 5). In that case, which occurred just recently in February 2006, the provider collaborated with Family Care staff to transition these two persons to more integrated residential placements with services continuing to be provided by the same agency (id.).
In the case of SRCA, which until recently provided residential services to two of the named plaintiffs, Lenore Czarnecki and John Gorton, although SRCA has repeatedly threatened to give written notice of its intent to terminate its Family Care contracts, it has never in fact done so (id., ¶ 6). Moreover, although SCRA serves a substantial number of Family Care clients (70 by current count), those persons have not joined this litigation. (id., ¶ 7).
- 13 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 14 of 26
Thus, evidence submitted by the State and county defendants documents that there have been three Milwaukee County Family Care residential providers who have either taken steps to terminate a small number of Family Care placements or, like SCRA have threatened but never actually done so. In addition, the Affidavit of Gerald Kallas filed by plaintiffs (R. 78) contains the assertion, speculative on its face, that a facility called Bayside Terrace was forced to close “sometime in 2004” allegedly because of the inadequacy of Family Care rates and that “[a]pproximately 100 residents had to be moved to other CBRFs and into nursing homes” (id., at 15).
As the Hennen affidavit plainly demonstrates, however, the actual facts are quite different from Kallas’ account (see Hennen Aff., ¶¶ 17-18). According to Hennen, documents contained in the Milwaukee CMO files revealed that the Bayside facility consisted of two CBRFs, one licensed for 52 beds and the other for 65 beds. An entity called the Laureate Group purchased the Bayside facility in June 2003 from a previous owner who had a Family Care contract with the Milwaukee CMO. Although Laureate purchased with the intent to operate as a private pay facility, it agreed to continue to provide care through the remaining months of 2003 to the 23 Family Care participants living at Bayside at the time of the purchase (Hennen Aff., ¶ 18).
In December 2003, Laureate gave formal notice that it was terminating its Family Care contract consistent with communications at the time it purchased the facility six months earlier. All 23 Family Care participants were transitioned to other facilities appropriate to their assessed needs (id.). At the present time, the 15 remaining Family Care participants from that group reside primarily in other CBRFs (a total of 11 persons), one is currently in a hospice facility, one lives in a residential care apartment, and two moved out of the county and no longer are enrolled in Family Care. None of the former Bayside Family Care residents is currently in a nursing
- 14 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 15 of 26
home. The ages of the former Bayside Family Care residents who died between June 2003 and the present ranged between 78 and 102 years old (id.).
In addition to the fact that there is no objective evidence to support plaintiffs’ claims that large numbers of Family Care members receiving AFH and CBRF residential services have been or will imminently be transferred to different residential placements as a result of provider dissatisfaction with the CY 2004 and 2005 rates, there is literally no evidence, apart from the examples of the named plaintiffs themselves, that Family Care residents have been subject to or potentially subject to involuntary5 transfers as a result of provider dissatisfaction with Family Care rates.
Family Care participants are provided by the CMO with a grievance procedure and an appeal process to address a participant’s dissatisfaction with a placement plan. They may also file a request for a fair hearing with the state Division of Hearings and Appeals (“DHA”) to challenge a residential placement that is unacceptable to the participant (Jones Aff., ¶ 6). During the period from January 2004 to the present, DHFS personnel have been able to identify only three instances in which CMO participants have filed CMO grievances or grievance appeals or fair hearing requests with DHA challenging a change of residential placement by the Milwaukee CMO (id., ¶ 7).
One of those complaints concerned a claim that the room and board rate, a cost which is paid by the Family Care recipient and not the CMO, was excessive (id., ¶¶ 5, 7). In the second case, the participant’s daughter wanted her mother moved to a nursing home. The CMO
5Obviously, if a person transfers voluntarily to a different facility, there would be no ADA or Rehabilitation Act claim, regardless of the level of care, integration or restrictiveness of the placement.
- 15 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 16 of 26
disagreed, since the nursing home would not have been the most integrated setting appropriate to the mother’s needs. The result was that the participant remained in her existing residence, a CBRF (id.). In the third case, the participant wanted to remain in a particular CBRF close to her daughter, but the CMO disapproved because the participant could not afford the room and board rate charged by the facility. In this third case, the CMO offered the participant an alternative CBRF placement in at least as integrated a setting as the former CBRF (id.).
None of the Family Care participants filing grievances, appeals or fair hearing requests complaining of placement decisions during the period from January 2004 to the present complained of being moved involuntarily from an existing placement. Thus, records of the grievance, appeal or hearing mechanisms available to all Family Care participants for airing complaints about placement decisions directly contradict plaintiffs’ claims that Family Care participants are being forced out of their AFH or CBRF placements because providers of AFH and CBRF residential or day services are so dissatisfied with the 2004-05 actuarial or provider rates that they are refusing to provide Family Care community-based residential services.
Finally, plaintiffs themselves have admitted, in response to recent discovery interrogatories, that they cannot identify and are not aware of any Family Care participants who have been forced to move from an AFH or CBRF into another AFH or CBRF, or into a nursing home, skilled nursing facility or other institution “because that person’s first AFH or CBRF provider has either cut the level of services provided or refused to serve Milwaukee County residents with disabilities as a result of the capitated rates paid by DHFS for persons enrolled in the Milwaukee County Family Care program.” See Exhibit D, at 2, Plaintiffs’ Response to State Defendants Third Set of Interrogatories and Second Requests to Produce Documents, served May 15, 2006, attached to Affidavit of the undersigned.
- 16 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 17 of 26
Plaintiffs have now had more than two years since filing this case to identify other persons being imminently threatened with the same injury as they claim in this action. Their recent discovery response concedes that they are unable to identify or locate a single other person who shares their claimed injury. The affidavits of Hennen and Jones directly contradict the speculative assertions of plaintiffs’ experts and of plaintiffs’ pleadings predicting that numerous Family Care residents will be forced out of their homes and otherwise suffer dire consequences because of the claimed inadequacy of the Family Care rates. In short, plaintiffs have utterly failed to establish that the number of persons suffering the same or comparable injuries to those they fear for themselves warrants class certification.
2. Plaintiffs’ claims are not typical of the class they seek to represent.
“‘A plaintiff’s claim is typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members and his or her claims are based on the same legal theory.’” De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983). Three factors persuaded the court in De La Fuente that the plaintiffs had satisfied the typicality requirement: (1) the allegedly unlawful practices “remained essentially unchanged throughout the years in question;” (2) “[a]ll members of the class were subject to the same allegedly unlawful practices;” and (3) these unlawful practices equally affected all members of the class. Id. at 232. “The typicality inquiry is intended to assess whether the action can be efficiently maintained as a class and whether the named plaintiffs have incentives that align with those of absent class members so as to assure that the absentees’ interests will be fairly represented.” Baby Neal, 43 F.3d at 57.
- 17 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 18 of 26
Given the breadth of plaintiffs’ putative class, it is apparent that the relatively idiosyncratic claims of the plaintiffs—all residents of long term care facilities who claim imminent injury personal to themselves based on the allegedly insufficient amount of money paid to their providers for the cost of their care—are hardly “typical” in any ordinary sense.
On the face of it, all three factors identified in the De La Fuente case, above, strongly suggest that plaintiffs’ multiple challenges to the capitated rates paid by DHFS to the Milwaukee CMO and the contract rates paid by the CMO to plaintiffs’ providers lack the typicality required for certification of a class under Rule 23(a)(3). See De La Fuente, 713 F.2d at 232. First, DHFS’ capitated rates, which are the primary target of plaintiffs’ claims and which are revised and federally approved each successive year, have risen substantially during the course of the six-years Family Care has been in existence (see Jones Aff., ¶ 10). Secondly, as already pointed out, only about one fifth of the putative class currently resides in CBRFs or AFHs, meaning that approximately 80% of the class is not even arguably subject to the “unlawful practices” about which plaintiffs complain. Similarly, these “unlawful practices,” i.e., the rates paid to providers of long term community-based residential services in the Milwaukee County CMO, cannot be said to affect equally “all members” of the putative class. Cf. De La Fuente, 713 F.2d at 232.
3. There are strong reasons to doubt that plaintiffs adequately represent the interests of the class they seek to represent.
The “adequacy of representation” requirement of Rule 23(a)(4) has two parts: the adequacy of the named plaintiffs’ counsel and the adequacy of representation by the named plaintiffs in protecting the separate and distinct interest of the class members. Clay, 188 F.R.D. at 493 (citing cases). The State defendants do not question that plaintiffs’ current counsel are
- 18 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 19 of 26
“qualified, experienced, and generally able to conduct the proposed litigation.” Cf. Rozema, 174 F.R.D. at 439.
In order for plaintiffs themselves to be fair and adequate class representatives, they (1) “must have sufficient interest in the outcome to ensure vigorous advocacy;” and (2) “must not have antagonistic or conflicting interests with other members of the proposed class.” Id.; Rosario, 963 F.2d at 1018. Furthermore, for purposes of determining the adequacy of representation, the stature and personal characteristics of the representatives may be examined. See Massengill v. Board of Ed., Antioch Community High, 88 F.R.D. 181, 185 (N.D. Ill. 1980), citing Amos v. Board of Directors of City of Milwaukee, 408 F. Supp. 765 (E.D. Wis. 1976). Plaintiffs, “as fiduciaries of the class,” are required to “meet the high level of responsibility imposed on every class representative.” Massengill, 88 F.R.D. at 185. “Adequate representation is the foundation of all representative actions, and embodies the due process requirement that each litigant is entitled to his day in court.” Gomez, 117 F.R.D. at 400 (internal citation omitted).
The three remaining named plaintiffs are developmentally disabled persons who have been adjudged incompetent to represent their own interests. There is no reason to question the dedication of plaintiffs’ guardians to protecting zealously the best interests of their respective wards, and the State defendants do not do so. It is quite another level of dedication, however, to demonstrate commitment to protecting the interests of the entire class of Family Care participants that plaintiffs seek to represent. Notwithstanding plaintiffs’ conclusory arguments on this point, see Brief at 8-9, there are several factors that strongly suggest that plaintiffs’ representatives are not prepared or equipped to do so in this case.
Plaintiffs’ brief argues that plaintiffs “all feel strongly about getting to the bottom of the funding issue and remaining in their current homes rather than face the trauma of moving and
- 19 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 20 of 26
probable deterioration,” pointing to the affidavits submitted by the guardians of plaintiffs Bzdawka and Ehrlichman as evidence of “how strongly they feel about this.” Id. Again, there is no reason to doubt that the strength of the guardians’ concerns about their wards, as expressed in the cited affidavits (see R:10 and 12). With all due respect, however, there is no evidence that the guardians’ dedication extends to protecting the interests of the entire class of Family Care participants they seek to represent. Rather, the respective affidavits speak solely to protecting the personal interests of the individual plaintiffs and the guardians’ concern that their wards’ lives not be disrupted by having to move from one facility to another (id.).
Recently, in fact, plaintiffs were asked to respond to a discovery request for information about the extent to which the plaintiffs’ guardians had visited other facilities or otherwise considered alternative facilities that might be suitable placements for the individual plaintiffs. See Plaintiffs’ Response to State Defendants’ Third Set of Interrogatories at 3, attached to the affidavit of counsel as Exhibit D. Plaintiffs responded flatly that the “guardians or agents of the individual plaintiffs did not visit any alternate AFHs or CBRFs or otherwise consider any alternate AFHs or CBRFs for their respective wards. . . . based on the belief that remaining [in their present placements] is necessary to provide the individual Plaintiffs with necessary services and prevent deterioration.” Id. Again, there is no reason to question the guardians’ concern for their wards, but the fact that they will not even visit alternative facilities where other members of the class they claim to represent are living hardly bespeaks any interest, much less advocacy on behalf of, the interests of the class as a whole.
Furthermore, it is impossible to ignore the fact that this entire lawsuit is strong testimony to the plaintiffs’ alignment—not with the class they seek to represent—but with the individual financial interests of their respective providers. In fact, at the moment, all of the named class
- 20 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 21 of 26
representative plaintiffs are residents of facilities owned by HIL, the only Family Care provider of community-based residential services that has given written notice of its intent to terminate its Family Care contract during the period covered by this litigation, CY 2004-05. The providers, whose own financial interest in this litigation is obvious, and not the plaintiffs or their guardians, have been and continue to be the most vocal force behind this litigation. Lincoln Burr and Dr. Gerald Kallas, two of the experts on whose testimony plaintiffs rely, have each submitted voluminous affidavits decrying the Family Care capitated rates and the contract rates paid to providers by the Milwaukee CMO (R:78, 79). Burr and Kallas are the CEOs of HIL and SRCA, respectively.6 HIL and SRCA, of course, are the two facilities in which the original plaintiffs have resided.
Indeed, it is the financial interests of these few providers in securing higher Family Care rates, both across-the-board from the State defendants and on an individual basis from Milwaukee County, that are the focus of the primary relief requested in this lawsuit, that of increased Family Care rates. A cynical person might suggest that this lawsuit has been and continues to be driven by the financial interests of two providers who have not hesitated to use highly vulnerable individuals in their care as the stalking horses for this litigation. Although these two providers appear to be dissatisfied with the rates they receive from the Milwaukee CMO, the CMO continues to receive almost daily contacts from other providers interested in joining the Family Care network; has developed contracts with new providers to serve
6State defendants’ counsel have repeatedly requested that plaintiffs provide them with information required by Fed. R. Civ. P. 26(a)(2)(B) concerning the compensation arrangements between plaintiffs and their experts. See letters dated October 6 and November 16, 2004, and April 27, 2005, contained in Exhibits A-C, attached to the affidavit of the undersigned. To date, plaintiffs have never provided this information.
- 21 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 22 of 26
Family Care members at rates lower than those charged by comparable HIL facilities; and has
expanded its contracts with five existing Family Care providers who wished to expand their
Family Care participation (Hennen Aff., ¶ 8).
Not only does the close alignment of the named plaintiffs with their providers suggest a
conflict of interest between the plaintiffs and the class of Family Care participants they seek to
represent, but the form of financial relief sought—increased rates for providers of long term
residential services—necessarily conflicts with the interests of the class of Family Care
participants as a whole. The Jones Affidavit explains:
Under the terms of the federal approvals that permit DHFS to operate Family Care, DHFS is required to make capitated payments to CMOs at a level no higher than that which the independent actuary finds is actuarially sound, and DHFS is not permitted to supplement those payments. Therefore, if the Milwaukee County CMO were directed by court order to raise its payment rates to certain residential providers, the share of the total capitated payments available for services for participants who do not reside in facilities operated by those certain providers, as well as for participants who do not reside in a residential care facility, would decrease.
Jones Aff., ¶ 12.
The Hennen affidavit further explains the direct effect on the Milwaukee CMO of an
order requiring that particular residential providers be paid higher rates:
In order to fulfill its mandate to serve all eligible individuals with funding derived from a fixed capitated rate and to provide the maximum level of services to all Family Care members, the CMO contracts with service providers are based at least in part on an assessment of comparative cost-effectiveness. The CMO must provide for the needs of all Family Care members, only 19% of whom currently require services in an AFH or a CBRF. A requirement that the CMO contract with every available residential provider and pay the rates that each provider demands based on the provider’s claimed costs, irrespective of a reasonable assessment of comparative cost effectiveness of the provider’s services to Family Care members, would divert limited available funds from providing necessary services to other Family Care members.
Hennen Aff., ¶ 13.
- 22 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 23 of 26
In short, to the extent the primary relief sought would benefit particular Family Care providers or a limited class of Family Care providers, plaintiffs are pursuing relief that may fairly be characterized as antagonistic to the interests of the class they seek to represent as a whole. There is nothing inherently questionable about seeking such relief on plaintiffs’ own behalf. However, doing so under the guise of protecting the interests of the class as a whole is strong evidence that plaintiffs are pursuing interests that are antagonistic to the class they seek to represent. See Rosario, 963 F.2d at 1018.
This record simply fails to support plaintiffs’ claims that they are equipped to represent adequately the class of Family Care participants as a whole.
II. INJUNCTIVE RELIEF WITH RESPECT TO THE CLASS AS A WHOLE IS NOT APPROPRIATE.
Plaintiffs seek to proceed as a class under Fed. R. Civ. P. 23(b)(2) which declares that class certification under that section is appropriate when “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.” Two basic requirements must be satisfied under Fed. R. Civ. P. 23(b)(2): (1) the party opposing the class must have acted in a consistent manner toward members of the class so that its actions may be viewed as part of a pattern of activity; and (2) final injunctive or corresponding relief must be appropriate. Edmondson v. Simon, 86 F.R.D. 375, 382-83 (N.D. Ill. 1980) (citations omitted).
To be certified under Fed. R. Civ. P. 23(b)(2), the interests of the class members must be “cohesive and homogeneous.” Lemon v. Intern. Union Operating Eng’rs, Loc. 139, 216 F.3d 577, 580 (7th Cir. 2000). Although the rule itself is silent regarding whether Fed. R. Civ. P. 23(b)(2) certification is permissible when the plaintiffs request individualized
- 23 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 24 of 26
relief (most commonly, monetary damages), the prevailing rule in the Seventh Circuit is that Fed. R. Civ. P. 23(b)(2) will not support certification of a case that demands relief that requires judicial inquiry into the particularized merits of each individual’s claim. Id. at 580-81. Id. For these reasons, “‘Rule 23(b)(2) may not be invoked in a case requiring significant individual liability or defense issues which would require separate hearings for each class member in order to establish the defendants’ liability.’” Clay, 188 F.R.D. at 495, quoting Arch v. American Tobacco Co., Inc., 175 F.R.D. 469, 482 (E.D. Pa. 1997).
Apart from the concerns, addressed above, that the interests of the class members are not “cohesive and homogeneous,” at least with respect to the relief sought in this litigation, the State defendants advance two objections to whether final injunctive or corresponding relief is appropriate in this case. Cf. Edmonson, 86 F.R.D. at 382-83.
First, plaintiffs’ emphasis on the funding and rates for Family Care obscures the fact that it is the rights of the individual Family Care recipients that are at issue in this case. Those interests in living in the least restrictive most integrated setting are necessarily protected on an individual case-by-case basis. The Milwaukee County CMO has a placement team which continuously monitors vacancies in AFHs and CBRFs for Family Care members who may be in need of such placements, and numerous vacancies currently exist. The Milwaukee County CMO will not move a Family Care member unless there is a placement available in an appropriate facility which will satisfy the member’s plan of care and provide care and treatment in the most integrated setting commensurate with the member’s needs, with due consideration for continuity of care and the member’s social relationships (Hennen Aff., ¶¶ 9-10). Indeed, the Family Care program includes a grievance, appeal and hearing process that is specifically designed to protect
- 24 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 25 of 26
those interests, so that a broad injunction requiring that the defendants refrain from violating the ADA or Rehabilitation Act is, as a practical matter, redundant in this context.
Moreover, the U.S. Supreme Court has long held that a federal court “cannot issue a general injunction against all possible breaches of the law” and, as a result, has a duty to avoid “a sweeping injunction to obey the law.” Swift & Co. v. United States, 196 U.S. 375, 396 and 401 (1905). A court order requiring a defendant to obey a law that the defendant already has a general duty to obey is no more than a redundancy unless it is directed at some specific threat of a future illegality. See United States v. Turner, 601 F. Supp. 757, 769 (E.D. Wis. 1985). “Such ‘obey the law’ injunctions cannot be sustained.” Payne v. Travenol Laboratories, Inc., 565 F.2d 895, 898 (5th Cir. 1978); see also Hughey v. JMS Development Corp., 78 F.3d 1523, 1531 (11th Cir. 1996) (“appellate courts will not countenance injunctions that merely require someone to ‘obey the law.’”). The injunctive and declaratory relief sought by plaintiffs in the present case with respect to the purported class as a whole is clearly inappropriate under this standard.
- 25 -

Case 2:04-cv-00193-LA Document 114 Filed 05/26/2006 Page 26 of 26

CONCLUSION For the reasons discussed above, the State defendants respectfully submit that plaintiffs’

Renewed Motion for Class Certification must be denied.

Dated this 26th day of May, 2006.

Wisconsin Department of Justice Post Office Box 7857 Madison, Wisconsin 53707-7857 Fax: (608) 267-2223 Telephone: (608) 266-1780 (Flanagan) Email: flanaganmm@doj.state.wi.us Telephone: (608) 266-0323 (Burke) Email: burkeme@doj.state.wi.us

PEGGY A. LAUTENSCHLAGER Attorney General
s/Maureen McGlynn Flanagan MAUREEN MCGLYNN FLANAGAN Assistant Attorney General State Bar #1013639
s/Mary E. Burke MARY E. BURKE Assistant Attorney General State Bar #1015694
Attorneys for Defendants Wisconsin Department of Health and Family Services and Helene Nelson

flanaganmm\nelson\pleadings\brief - dhfs resp re class cert 052606.doc

- 26 -

 
 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

GERALD NELSON, by his legal guardian and next friend, JANE PRENTICE; JOAN BZDAWKA, by her legal guardian and next friend, RICHARD MILLER; SANDRA EHRLICHMAN, by her legal guardian and next friend, NANCY STEEVES; MARILYN BERDIKOFF, by her legal guardian and next friend, LOIS DEGNER; LENORE CZARNECKI, by her agent and next friend, CAROLYN CETNAROWSKI; and JOHN GORTON, by his agent and next friend, DEBORAK BRUNK, each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs,

v.

Case No. 04-C-0193

MILWAUKEE COUNTY; WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES; and HELENE NELSON, in her official capacity as Secretary of DHFS,

Defendants.

STATE DEFENDANTS’ BRIEF IN SUPPORT OF MOTIONS TO DISMISS FOURTH AMENDED COMPLAINT

STATEMENT OF THE CASE This is an action for declaratory, injunctive and retroactive monetary relief based on the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101, et seq., and § 504 of the Rehabilitation Act, 29 U.S.C. § 794; together with a statutory civil rights claim, 42 U.S.C. § 1983, based on the federal Medical Assistance (“MA” or “Medicaid”) statute, § 1396a(a)(30)(A). Plaintiffs claim that their rights under the ADA, Rehabilitation Act and Medicaid statute, § 1396a(a)(30)(a) (“(a)(30)(A)”), are being violated by the manner in which the

Case 2:04-cv-00193-LA Filed 06/15/05 Page 1 of 46 Document 71

State of Wisconsin and Milwaukee County administer Family Care, a statutory Wisconsin MA waiver program designed to serve physically and developmentally disabled persons and the elderly. Family Care is now operating in a limited number of Wisconsin counties, including Milwaukee County, and is designed to provide long-term community-based managed care to covered individuals who choose to enroll in the county “care management organization” (“CMO”). Plaintiffs, six individual recipients of Family Care in Milwaukee County and their guardians or authorized representatives, currently assert nine counts on behalf of themselves and a putative class. The primary focus of plaintiffs’ claims is the allegedly inadequate per member-per month (or “capitated”) rates paid by the State to the Milwaukee CMO and Milwaukee County’s attempts to limit the contracted rates it pays to providers of certain residential and day program services to the plaintiffs and the class they seek to represent.
The defendants include Milwaukee County, which administers the Milwaukee County CMO; the Wisconsin Department of Health and Family Services (“DHFS”), which administers the Wisconsin Medical Assistance program, including Family Care; and Helene Nelson, the DHFS Secretary, sued in her official capacity (collectively, the “State defendants”). After filing answers incorporating grounds for dismissal as defenses, both the County and the State defendants have formally moved to dismiss the Fourth Amended Complaint. This brief is submitted in support of the State Defendants’ Motions to Dismiss.
QUESTIONS PRESENTED 1. Must certain counts be dismissed for lack of jurisdiction because the plaintiffs lack standing or because particular claims are not ripe for adjudication?
- 2 Case 2:04-cv-00193-LA Filed 06/15/05 Page 2 of 46 Document 71

2. Must plaintiffs’ claim for retroactive declaratory and monetary relief against the State defendants be dismissed because, with the exception of the Rehabilitation Act, such relief is barred based on sovereign immunity and the Eleventh Amendment to the U.S. Constitution?
3. Must the complaint be dismissed because the nine assorted counts fail to state claims on which relief can be granted, F.R.C.P. 12(b)(6) and 12(c)?
STATEMENT OF FACTS Family Care is a managed care MA waiver program currently operated by DHFS as a pilot program through which elderly persons with long-term care needs and adults who have physical or developmental disabilities may receive comprehensive community-based services.1 Services available under Family Care include both some of the services that would otherwise be provided under Wisconsin’s regular State Medicaid Plan, as well as services that would otherwise be available only under a Home and Community-Based Services (HCBS) Waiver obtained from the federal government under § 1915(c) of the Social Security Act, 42 U.S.C. § 1396n(c).2
1General descriptive information regarding Family Care is available on the DHFS website at http://dhfs.wisconsin.gov/LTCare/Generalinfo/Index.htm (Exhibit 2001*). *As more fully described later in this brief, the State defendants request that the Court take judicial notice of basic documentary materials related to the Family Care waiver that are posted on the DHFS website. Hard copies of the documents have been marked as exhibits and are being mailed to the Court and other counsel simultaneously with the filing of this brief. An index to these exhibits is attached to this brief as well.
2For a complete listing of long-term care services provided through Family Care, see the Health and Community Supports Contract for 2005 (“the CMO Contract”) at pp. 15-16, available on the DHFS website at: http://dhfs.wisconsin.gov/LTCare/StateFedReqs/CY05HCSContract.pdf (Exhibit 2002).
- 3 Case 2:04-cv-00193-LA Filed 06/15/05 Page 3 of 46 Document 71

Family Care is authorized by federal Medicaid authorities pursuant to two types of waivers,3 and an approved prepaid health plan that authorizes DHFS to contract for State Plan long-term care services on a prepaid basis.4 The waivers permit Wisconsin to deliver services in a manner that is exempt from some otherwise-applicable federal Medicaid requirements. One type of waiver, the HCBS or “1915(c)” waiver, permits Wisconsin to use federal Medicaid funds for HCBS services instead of only institutional care for people who would qualify for Medicaid in a nursing home. See 42 USC §1396n(c). The other type of waiver, the managed care or “1915(b)” waiver, permits Wisconsin to limit the services in the Family Care benefit to people who enroll in a CMO. This waiver also limits participants’ freedom of choice of provider. See 42 USC §1396n(b) (“Waivers to promote cost-effectiveness and efficiency”).
Family Care is currently being operated on a pilot basis in several counties.5 In Milwaukee County, Family Care is available only for elderly individuals (60 years of age and older), including those with physical disabilities and those with developmental disabilities. In other counties in which Family Care is operating, it is available for elderly individuals and adults
3The waiver applications and terms and conditions of approval are available on the DHFS website at: http://dhfs.wisconsin.gov/LTCare/Waiver/Index.htm (see Exhibit 2003, which includes some of the primary materials marked as Ex. 2003-A through 2003-D(3)).
4The federal government approves DHFS’ contracts with CMOs as Prepaid Health Plans. See n.2, CMO contract, p. 121, ¶ (18), (Ex. 2002). See also June 1, 2001, waiver approval letter from Center for Medicaid and State Operations, ¶ 1, available on the DHFS website at http://dhfs.wisconsin.gov/LTCare/Waiver/HCFAApprovalLetter-1915b.pdf (Ex. 2003-D(1)).
5See “Wisconsin Family Care Counties,” a map posted on the DHFS website at: http://dhfs.wisconsin.gov/LTCare/Generalinfo/FCMap.htm (Ex. 2004).
- 4 Case 2:04-cv-00193-LA Filed 06/15/05 Page 4 of 46 Document 71

of any age with physical or developmental disabilities.6 (In Milwaukee County, physically or developmentally disabled persons under the age of 60 continue to receive community-based long term care services via pre-existing HCBS waivers, including the Community Options Program (“COP”) waiver, Community Integration Program (“CIP”) and Brain Injury (“BI”) waivers. See Am. Comp. ¶ 32.)
Organizationally, Family Care consists of two components in each county in which the program is fully implemented: an aging and disability resource center (“resource center”) and a CMO. See Wis.Stat. §§ 46.283 and 46.284.7
The resource center provides information to elderly people and people with disabilities about resources available to them in their local communities, Wis. Stat. § 46.283(4)(e). An individual who wants to receive long-term care services through the Family Care program is screened for eligibility by the resource center and the county Economic Support unit. Wis. Stat. § 46.283(4)(f) and (g). If the individual is eligible and is considering enrollment, the person is contacted by an independent “enrollment consultant” who determines whether the person is making an informed decision to enroll in the CMO. The CMO has no part in the eligibility or enrollment decision.
The CMO manages and delivers the Family Care benefit. Wis. Stat. § 46.284. After a participant enrolls, the CMO assesses the participant’s needs for health care and long-term care

6See June 1, 2001, waiver approval letter from Center for Medicaid and State Operations,

par.

1,

available

on

the

DHFS

website

at:

http://dhfs.wisconsin.gov/LTCare/Waiver/HCFAApprovalLetter-1915b.pdf (Ex. 2003-D(1)).

7See also “Family Care Program Operations Information” posted on the DHFS website at: http://dhfs.wisconsin.gov/LTCare/ProgramOps/Index.htm (Ex. 2005).

- 5 Case 2:04-cv-00193-LA Filed 06/15/05 Page 5 of 46 Document 71

services, Wis. Stat. § 46.284(4)(b).8 The CMO delivers those services in the Family Care benefit
package that are identified as necessary to meet the individual’s long-term care needs through the CMO’s network of providers, Wis. Stat. § 46.284(4)(d).9 A contract between DHFS and the
CMO requires that the CMO, in exchange for the capitated payments, manage and provide a
combination of HCBS waiver services and long-term care Medicaid State Plan services. In Milwaukee County, the CMO is the Milwaukee County Department on Aging (“MCDA”).10
A CMO enrollee has a right to a contested case hearing to challenge certain actions or
inactions on the part of the CMO. These include failure to provide timely services included in the
enrollee’s care plan, reduction of such services, or a care plan that requires the enrollee to live in a place unacceptable to the enrollee.11
Several important features of Family Care distinguish it from the Medicaid State Plan and
the HCBS Waivers: • Family Care pays on a capitated12 rather than a fee-for-service basis. Under both the State Plan and traditional HCBS Waivers, providers are usually paid on a “fee-for-service”
8See also n.2, CMO contract at pp. 30 et seq., (Ex. 2002). 9See n.2, CMO Contract at p. 15 et seq., (Ex. 2002) 10See “Resource Center and CMO Contacts,” posted on the DHFS website at: http://dhfs.wisconsin.gov/LTCare/Generalinfo/Where.htm (Ex. 2006). 11See CMO contract at 54-55, (Ex. 2002). 12“Capitation refers to the prospective payment of a fixed sum per period for each patient under the care of a selected provider, regardless of the actual costs incurred by the provider in treating the patient.” Andrew Ruskin, “Capitation: The Legal Implications of Using Capitation to Affect Physician Decision-Making Processes,” 13 J. Contemp. Health L. & Policy 391 (Spring 1997). See also Gary R. Ilminen, Consumer Guide to Long-Term Care (Madison, WI 1999) at 49 (capitation is “[t]he practice in managed care of paying a fixed amount to a provider or entity to cover the cost of providing care to members of a health plan for a set period of time”).
- 6 Case 2:04-cv-00193-LA Filed 06/15/05 Page 6 of 46 Document 71

basis: the provider renders a service to a Medicaid recipient, submits a claim to Medicaid, and is paid at a pre-established rate for the service. In contrast, under Family Care, the CMO agrees by contract with the State Medicaid Program to provide the services from the Family Care benefit package that most cost-effectively meet each participant’s assessed long-term care needs, in exchange for a capitated, per member-per month payment from the State Medicaid Program. Wis. Stat. §§ 46.28(4)(d) and (5). • Under applicable federal regulations, DHFS is required to set these capitated payment rates at a level that is “actuarially sound,” subject to annual review and approval by the Centers for Medicare and Medicaid Services (“CMS”), see 42 CFR §§ 438.1(a)(1) and 438.6(c)(2). The capitated rates paid to the CMOs by DHFS have increased at an average of more than 8 percent each year, ranging from $1,466.64 in CY 2000 to $2,055.01 in CY 2005 in Milwaukee County for enrollees at the comprehensive level.13 The rates are developed by an actuarial firm under contract with DHFS.14 • Family Care is a Medicaid entitlement program. Unlike other HCBS waiver programs (COP, CIP and BI), an individual who is eligible for Medicaid and is functionally eligible for Family Care may not be placed on a waiting list to await either participation in the program or receipt of any part of the services for which the individual has an assessed need. Wis. Stat. § 46.286(3)(a). A Family Care CMO is required to provide all services

13See “Family Care CMO Capitation Rates,” 2000-2005, posted on the DHFS website at: http://dhfs.wisconsin.gov/LTCare/StateFedReqs/CapitationRates.htm (Ex. 2007).

14See Actuary Report, “Family Care Capitated Rates, CY 2005” (November 22, 2004),

posted

on

the

DHFS

website

at:

http://dhfs.wisconsin.gov/LTCare/StateFedReqs/RateReport2005.pdf (Ex. 2008).

- 7 Case 2:04-cv-00193-LA Filed 06/15/05 Page 7 of 46 Document 71

necessary to cost-effectively meet the participant’s assessed needs, in exchange for the monthly capitated payment for that individual.15 • DHFS, as the state Medicaid agency, does not make direct payments to the providers who render Family Care services. Instead, DHFS pays the respective CMO the capitated rate based on the total number of Family Care enrollees the CMO serves per month. The Family Care CMO pays its providers, and is responsible for setting payment rates at a level that will attract a sufficient number of qualified providers to provide services to all entitled persons who seek enrollment in the CMO.16 The plaintiffs include six individual Milwaukee County Family Care recipients and their respective guardians or authorized representatives. All of the plaintiff recipients are aged 60 or over and each is disabled as a result of a developmental disability or because of disabilities associated with aging. Plaintiffs Nelson, Bzdawka, Ehrlichman and Berdikoff are legally incompetent (Am. Comp. ¶¶ 5-10). Plaintiffs Czarnecki and Gorton both have significant disabilities that affect their ability to make decisions (id.). The Amended Complaint alleges that providers servicing MA recipients in conventional HCBS waiver programs (COP, CIP and BI waivers) have been given more favorable rates and have been granted increases in their rates more readily than Milwaukee County Family Care providers (Am. Comp. ¶¶ 56-57). Plaintiffs also allege that the ability of Family Care recipients to select specific day programs and residential placements is more limited than that of participants in the COP, CIP and BI waiver programs (Am. Comp. ¶ 52).
15 See n.2, CMO contract at pp. 15 et seq., (Ex. 2002). 16See n.2, CMO contract at pp. 60-61, (Ex. 2002).
- 8 Case 2:04-cv-00193-LA Filed 06/15/05 Page 8 of 46 Document 71

In 2004, Dr. Kallas, an executive officer of Senior Residential Care of America, Inc., which owns the facilities where plaintiffs Czarnecki and Gorton currently reside, allegedly conducted a mail survey of Wisconsin Family Care providers around the state (Am. Comp. ¶ 59). The Amended Complaint alleges that 80% of the respondents stated they were being paid below “their cost of care as determined by an audit,” while 8.5% of the respondents indicated they were being paid the equivalent of their cost of care and 5.7% said they were being paid more than their cost of care (id.).
Plaintiffs allege that the capitated rates for Family Care set by DHFS for the years 2000 through 2004 were “insufficient to provide appropriate services to persons with disabilities in Milwaukee County and were a substantial factor in causing the Milwaukee County Family Care program to operate at a deficit” during the same period (Am. Comp. ¶ 60). Plaintiffs also allege that the capitated rates were a substantial factor in causing numerous adult family homes (“AFHs”), community-based residential facilities (“CBRFs”) and day programs for AFH and CBRS residents “to operate at a loss and either cease operation or be at a substantial risk of ceasing operation” (id.).
According to plaintiffs, Milwaukee County’s residential rates for 2005 “will lead to significant numbers of residential providers either leaving the Family Care program or declaring bankruptcy” (Am. Comp. ¶ 61). Plaintiffs further allege that the capitated rate set by DHFS for the 2005 calendar year is insufficient to provide appropriate services to persons with disabilities in Milwaukee County and, at the same time, eliminate Milwaukee County’s Family Care deficit and provide reimbursement to AFHs, CBRFs and day programs sufficient to support their continued operation (Am. Comp. ¶ 63). Plaintiffs predict that the failure to provide reasonable rates and cost of living increases will cause numerous providers either to cut the level of services
- 9 Case 2:04-cv-00193-LA Filed 06/15/05 Page 9 of 46 Document 71

they provide or refuse to serve disabled Milwaukee County residents, forcing them to move from their homes, lose their day services and cause substantial numbers to be admitted to institutions such as nursing homes (Am. Comp. ¶ 64).
Plaintiffs Nelson, Bzdawka, Ehrlichman and Berdikoff are developmentally disabled persons (Am Comp. ¶¶ 65, 80, 91, 101). Each resides at either an adult family home or a CBRF operated by Homes for Independent Living (“HIL”) and all four attend a day program operated by HIL as well (Am. Comp. ¶¶ 67, 82, 93 and 102). Plaintiffs Czarnecki and Gorton each reside in CBRFs operated by a different provider, Senior Residential Care of America (Am. Comp. ¶¶ 111, 121). Plaintiffs Nelson and Bzdawka are both under the supervision of the Milwaukee County Probate Court and in each case, their placements have been determined to be appropriate to their needs (Am. Comp. ¶¶ 70, 84). In the case of Berdikoff, Ehrlichman, Czarnecki and Gorton, their agents or family members all approve of their placements and prefer that each individual continue in his or her current placement (Am. Comp. ¶¶ 94, 104, 113 and 123).
HIL, the residential and day services provider for Nelson, Bzdawka, Berdikoff and Ehrlichman, has been negotiating with the Milwaukee County CMO for several years in an unsuccessful attempt to obtain a higher contract rate for the provision of services to all four plaintiffs as well as other Family Care clients (Am. Comp. ¶¶ 73, 90, 97 and 106). The rates that the CMO has been willing to approve for HIL placements are lower than rates paid by the Milwaukee County Disability Services Division (“MCDSD”) for conventional HCBS waiver services and by other counties for serving persons with similar needs, but the CMO has refused to approve a “cost of living increase” for Family Care services to the plaintiffs or for other clients (Am. Comp. ¶¶ 72-74, 86-87, 96-97 and 105-06). HIL brought the situation to a head by notifying the Milwaukee CMO that it would terminate its Family Care contract and that the
- 10 Case 2:04-cv-00193-LA Filed 06/15/05 Page 10 of 46 Document 71

funding dispute was the only reason for the contract termination (Am. Comp. ¶¶ 75-76). Although the CMO reacted to the contract termination notice by seeking to move Nelson, Bzdawka, Ehrlichman and Berdikoff to different group homes or CBRFs and different day programs over their guardians’ objections, HIL and the CMO have agreed that all four will stay in their present placements pending resolution of this case or further order of the Court (id. ¶¶ 77, 88, 98 and 107).
In the cases of plaintiffs Czarnecki and Gorton, their provider, Senior Residential Care, has also attempted without success to obtain a rate increase from the Milwaukee CMO for the provision of services to Family Care clients (id. ¶ 114). The Family Care rate authorized for Senior Residential Care’s CBRF’s in Milwaukee County is substantially less than the COP waiver program rate authorized by Waukesha County for identical services at a Waukesha County Senior Residential Care facility (id. ¶ 115). Senior Residential Care has issued public statements that it is losing money under its current Family Care rates (id. ¶¶ 116, 124). According to the Amended Complaint, it is probable that in the “foreseeable future” Senior Residential Care will refuse to accept Family Care clients or will be forced to close its residential facities (id. ¶¶ 117, 125).
In the case of each of the plaintiffs, the complaint alleges, it would be “very traumatic and harmful” to each of them to be removed from their current placements (id. ¶¶ 81, 89, 99, 108, 118 and 126). In each case, the complaint further alleges, because of the severity of the disabilities of each one, it is likely that moving him or her “would worsen his [or her] condition and lead to placement in a nursing home or similar situation” (id. ¶¶ 82, 90, 100, 109, 119 and 127).
- 11 Case 2:04-cv-00193-LA Filed 06/15/05 Page 11 of 46 Document 71

ARGUMENT I. ALL NINE COUNTS MUST BE DISMISSED BECAUSE PLAINTIFFS
LACK STANDING OR BECAUSE THEY ARE NOT RIPE FOR ADJUDICATION.
A. Standing and ripeness implicate the essential constitutional requirement that a “case or controversy” must exist between the parties.
Under article III of the United States Constitution, federal courts only have jurisdiction over “cases and controversies.” Smith v. Wisconsin Dept. of Agriculture, 23 F.3d 1134, 1141 (7th Cir. 1994). “Standing to sue or defend is an aspect of the case-or-controversy requirement.” Arizonans for Official English v. Arizona, 520 U.S. 43, 64 (1997) (citations omitted). In order to qualify as a person with standing to litigate, a person must show, first and foremost, “‘an invasion of a legally protected interest’ which is ‘concrete and particularized’ and ‘“actual or imminent, not ‘conjectural’ or ‘hypothetical.’” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal citations omitted); see also Raines v. Byrd, 521 U.S. 811, 818, (1997). Plaintiffs have the burden of proving the existence of standing. Cf. Valley Forge, Etc. v. Americans United, Etc., 454 U.S. 464, 473 (1982).
To have standing, a party must show: (1) a direct and palpable injury; (2) that the injury can be fairly traced to the challenged action of the defendant; and (3) that the injury is likely to be redressed if the relief sought is granted. See Valley Forge, Etc., 454 U.S. at 472; Oak Ridge Care Center v. Racine County, Wis., 896 F. Supp 867, 871 (E.D. Wis. 1995). These three components comprise “the core” of Article III’s case or controversy requirement. See Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 103-04 (1998).
A plaintiff must have a personal stake in the outcome, which requires both a “distinct and palpable injury” to the plaintiff and a “fairly traceable” causal connection between the claimed
- 12 Case 2:04-cv-00193-LA Filed 06/15/05 Page 12 of 46 Document 71

injury and the challenged conduct. See Banks v. Secretary of Indiana Family & Soc. Serv., 790 F. Supp. 1427, 1434 (N.D. Ind. 1992); cf. U.S. ex rel. Hall v. Tribal Development Corp., 49 F.3d 1208 (7th Cir. 1995).
A plaintiff has standing to sue—that is, he can invoke the jurisdiction of the court—if he is tangibly, materially, injured by the conduct of the defendant that he claims is unlawful and if the relief he seeks would redress the injury in whole or in part and thus confer a material benefit upon him. Bruggeman v. Blagojevich, 324 F.3d 906, 909 (7th Cir. 2003). In other words, each plaintiff must demonstrate “an individuated harm impacting specifically upon him [or her] and of a tangible, concrete nature.” L. Tribe, American Constitutional Law, § 3-16 at 114 (2d ed. 1988). In order to establish standing for purposes of declaratory or injunctive relief, the injury need not already have occurred. A state agency that has “‘plainly indicated’ an intent to enforce an act that would affect the rights” presented a present and concrete controversy within the meaning both of the Declaratory Judgment Act and Article III of the Constitution. California v. LaRue, 409 U.S. 109, 112 n.3 (1972) (quoting from Public Utilities Comm’n of California v. United States, 355 U.S. 534, 539 (1958)). Also see Warth v. Seldin, 422 U.S. 490, 499 (1975) (a federal court’s jurisdiction can be invoked only when the plaintiff himself has suffered “some threatened or actual injury,” quoting from Linda R.S. v. Richard D., 410 U.S. 614, 617 (1973) (emphasis added). Where, as here, the challenged conduct is only threatened, “[t]he plaintiff must show that ‘he has sustained or is immediately in danger of sustaining some direct injury’ as the result of the challenged official conduct and the injury or threat of injury must be both ‘real and immediate,’ not ‘conjectural’ or hypothetical.’“ United States ex rel. LeBlanc v. Raytheon Co., 729 F. Supp. 170, 172 (D. Mass. 1990), aff’d, 913 F.2d 17 (1st Cir. 1990) (quoting Los Angeles v. Lyons, 461 U.S. 95, 101-02 (1983)). In Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995), the Court held that construction contractors could sue to challenge affirmative action requirements on future jobs they
- 13 Case 2:04-cv-00193-LA Filed 06/15/05 Page 13 of 46 Document 71

had not yet bid upon. The Court said the test is whether the injury is concrete and particularized and actual or imminent, not conjectural or hypothetical. Id. at 211. Adarand was not required to demonstrate that it had been, or would be, the low bidder. Id. The injury to Adarand from a discriminatory classification lay in being prevented from competing on an equal footing. The imminence test was met because the agency was likely to let contracts involving guardrail work containing the disqualifying clause at least once per year; the plaintiff was very likely to bid on each such contract; and the plaintiff often had to compete for such contracts against small disadvantaged businesses. Id. at 212.
For a declaratory judgment to issue, however, “there must be a dispute which ‘calls, not for an advisory opinion upon a hypothetical basis, but for an adjudication of present right upon established facts.’” Ashcroft v. Mattis, 431 U.S. 171, 172 (1977), quoting Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 242 (1937). Even when the jurisdictional prerequisites for standing are satisfied, the district court has wide discretion in deciding whether declaratory relief is appropriate. See Nationwide Ins. v. Zavalis, 52 F.3d 689, 692 (7th Cir. 1995).
The doctrine of ripeness is based on both constitutional and prudential grounds. Koehring Co. v. Adams, 605 F.2d 280, 282 (7th Cir. 1979). Under Article III, federal courts may only adjudicate “cases or controversies” and may not render advisory opinions. Wisconsin’s Environmental Decade, Inc. v. State Bar of Wisconsin, 747 F.2d 407, 410 (7th Cir. 1984), cert. denied, 471 U.S. 1100 (1985). Ripeness is a jurisdictional prerequisite. Smith, 23 F.3d at 1142. Cases are unripe when the parties point only to hypothetical, speculative, or illusory disputes as opposed to actual, concrete conflicts. In this regard, ripeness is closely related to its justiciability cousins, the doctrines of finality and standing.
- 14 Case 2:04-cv-00193-LA Filed 06/15/05 Page 14 of 46 Document 71

In Abbott Laboratories v. Gardner, 387 U.S. 136 (1967), the Court explained that the
rationale of ripeness
is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.
Id. at 148. The Court elaborated a two-part standard for evaluating the ripeness of claims. A court
must first weigh the fitness of the issues for judicial decision. It must then evaluate the hardship to
the parties of withholding court consideration. Id. at 149. As stated in United Public Workers of
America v. Mitchell, 330 U.S. 75, 89-90 (1947):
The power of courts, and ultimately of this Court to pass upon the constitutionality of acts of Congress arises only when the interests of litigants require the use of this judicial authority for their protection against actual interference.
For example, in the Smith v. Wisconsin Department of Agriculture case, the court held that a
suit by dairy farmers claiming that procedures for suspension of milk permits violated due process
was not ripe, and the district court lacked subject matter jurisdiction, where the farmer was under
no present threat of suspension even though he would be subject to regulatory inspections. Id.,
23 F.3d at 1142.
B. Plaintiffs lack standing to seek retroactive declaratory or monetary relief for actions of either the State defendants or Milwaukee County for the period prior to the filing of this lawsuit because they fail to allege any direct or tangible injury to themselves that this court can redress for that period of time.
The Fourth Amended Complaint sets forth nine counts against both the State defendants
and Milwaukee County. The first eight counts are paired counts under the ADA and
Rehabilitation Act so that each ADA claim (Counts 1-4) is accompanied by a twin Rehabilitation
Act claim (Counts 5-8) which are essentially identical to each other in substance, but are based - 15 -
Case 2:04-cv-00193-LA Filed 06/15/05 Page 15 of 46 Document 71

on the respective statutes. In general, these eight counts seek declaratory and injunctive relief because “Family Care policies, procedures and rates related to funding” for Adult Family Homes, Community-Based Residential Facilities and day programs “have in the past and continue to” discriminate against the plaintiffs in various alleged ways based on their disabilities (cf. Am. Comp. ¶¶ 143, 148, 153, 156, 162, 166, 171, and 174) (emphasis supplied).
Count 9 alleges a private right of action under the Civil Rights Act, 42 U.S.C. § 1983, based on what are often called the “quality of service” and “equal access provisions” of the Medicaid statute, 42 U.S.C. § 1396a(a)(30)(A), and is a direct challenge to the adequacy of the capitated rates set by DHFS and paid to the Milwaukee County CMO for the years 2000 through 2004 (Am. Comp. ¶ 183) and during year 2005 as well (Am. Comp. ¶ 184). The complaint seeks a declaratory judgment to the effect that the defendants have violated and continue to violate the ADA, the Rehabilitation Act and (a)(30)(a), and prospective injunctive relief related to the funding for Family Care (Am. Comp. at 34). In addition, the complaint demands retroactive monetary relief requiring that “future rates set by the State defendants include an amount sufficient to alleviate the shortfall in Milwaukee County’s Family Care program caused by inadequate capitated rates from 2000 through the present” (id., ¶¶ (F) and (G)).
The problem with every one of these claims based on past actions of the State defendants and Milwaukee County is that plaintiffs fail to allege any “direct and palpable injury” to themselves during the period from 2000 to the present that is “likely to be redressed by a favorable decision.” See Valley Forge, Etc., 454 U.S. at 472.
The complaint contains no allegations that the plaintiffs have not been entirely satisfied with the residential and day program placements each has had during the period each has been enrolled in the Family Care program from the time of their enrollment to the present time (see
- 16 Case 2:04-cv-00193-LA Filed 06/15/05 Page 16 of 46 Document 71

gen. Am. Comp. ¶¶ 65-127). Accordingly, none of the plaintiffs claims any past violation of the integration, least restrictive setting and reasonable accommodation requirements of the ADA and Rehabilitation Act, nor any violation of (a)(30)(a), with regard to themselves personally.
The complaint does allege that, when HIL, the residential and day services provider for plaintiffs Nelson, Bzdawka, Berdikoff and Ehrlichman served notice on the Milwaukee CMO that HIL intended to terminate its contract, the CMO reacted by planning to move the plaintiffs to different facilities (Am.Comp. ¶¶ 77, 88, 98 and 107). But a simple “move,” a mere change in placement alone, whether the change is threatened or actual, is not an injury that “is likely to be redressed by a favorable decision” under the statutes plaintiffs seek to invoke. See Valley Forge, Etc., 454 U.S. at 472.
Under the ADA and Rehabilitation Act, the court has jurisdiction to insure that plaintiffs are placed in the most integrated setting appropriate to their needs and that they be reasonably accommodated. See gen. Olmstead v. L.C. by Zimring, 527 U.S. 581, 590-02, 607 (1999). Under (a)(30(A), which plaintiffs also seek to invoke, the MA statute requires that the state MA plan provide methods and procedures “as may be necessary . . . to assure that payments are consistent with efficiency, economy and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent such care and services are available to the general population in the geographic area.” Furthermore, the Court is empowered to remedy past violations of plaintiffs’ rights under these statutes. None of these statutes, however, protects plaintiffs against simply being moved to a different residential placement, nor do they confer on this court the authority to remedy individual placement decisions absent a cognizable injury to plaintiffs. See Valley Forge, Etc., 454 U.S. at 472.
- 17 Case 2:04-cv-00193-LA Filed 06/15/05 Page 17 of 46 Document 71

In essence, applying the standing analysis set forth above, plaintiffs lack standing to pursue claims for retroactive declaratory or monetary relief for the period from year 2000 to the present because none of them alleges any past or current injury—neither past disability discrimination nor past deprivation of MA services—that this Court is empowered to remedy. Accordingly, plaintiffs lack standing to litigate any of their claims to the extent they seek relief for any period prior to the filing of this litigation. Cf. Id.; Bruggeman, 324 F.3d at 909. Applying Bruggeman, the plaintiffs cannot invoke the jurisdiction of the court because they have not been “tangibly, materially, injured” by the past conduct of either set of defendants and because the relief they seek would not “redress the injury . . . and thus confer a material benefit” upon them. Id.
C. Plaintiffs’ speculative predictions of future disastrous consequences to providers and, in turn, to themselves are insufficient to establish ripeness necessary to litigate either their ADA and Rehabilitation Act discrimination claims or their Medicaid claim.
While plaintiffs certainly attempt to assert claims of past injury to their rights under the ADA, Rehabilitation Act and (a)(30)(A), the primary focus of their latest amended complaint continues to be allegations that the cumulative effect of the State defendants’ and Milwaukee County’s alleged violations of the statutes will result in future injuries to themselves that this Court should remedy through injunctive or declaratory relief.
Plaintiffs allege that the capitated rates for Family Care paid by DHFS to Milwaukee County have caused the Milwaukee County CMO to operate at a deficit and that the capitated rates were a substantial factor in causing “numerous” AFHs, CBRFs and day programs to operate at a loss and either cease operation already or to be at a substantial risk of ceasing operation in the future (Am. Comp. ¶ 60). They further allege that the rates paid by the Milwaukee County
- 18 Case 2:04-cv-00193-LA Filed 06/15/05 Page 18 of 46 Document 71

CMO to providers “will lead to significant numbers of residential providers either leaving the Family Care program or declaring bankruptcy” (Am. Comp. ¶ 61). They predict that the County CMO’s failure to provide reasonable rates and cost of living increases “will cause” numerous providers of residential services either to cut services or refuse to serve disabled Milwaukee County residents, “forc[ing them] to move from their homes and to lose their day services” and, in turn, “cause substantial numbers of these residents to be admitted to institutions such as nursing homes” (Am. Comp. ¶ 64).
As to the plaintiffs personally, HIL, the residential and day program provider for plaintiffs Nelson, Bzdawka, Ehrlichman and Berdikoff, has sought to terminate its Family Care contract, thus forcing the Milwaukee County CMO to initiate the process of seeking different placements for those plaintiffs (Am. Comp. ¶¶ 75-77, 88, 98 and 107). As to plaintiffs Czarnecki and Gorton, their residential service provider, Senior Residential Care, has issued public statements that it is losing money because of its current Family Care contract rates and that it will not be able to sustain these losses much longer (Am. Comp. 116, 124). As a result, plaintiffs allege that Senior Residential Care will refuse to accept Family Care clients or will be forced to close its residential facilities “in the foreseeable future” (Am. Comp. ¶¶ 117, 125), presumably requiring plaintiffs Czarnecki and Gorton to move to a different facility if they wish to remain enrolled in Family Care. Plaintiffs allege that these forced future moves, if they occur, will be very traumatic and harmful to each and will, in turn, likely cause their individual disabilities to worsen, thus leading to their individual “placement in a nursing home or similar situation” (Am. Comp. ¶¶ 82, 90, 100, 109, 119 and 127).
Clearly, although plaintiffs allege threatened harm, they do not claim to have sustained, nor are they “‘immediately in danger of sustaining some direct injury.’” Cf. U.S. ex rel. LeBlanc,
- 19 Case 2:04-cv-00193-LA Filed 06/15/05 Page 19 of 46 Document 71

729 F. Supp. at 172. Plaintiffs’ claims of threatened future injury are entirely “conjectural or hypothetical”; they are neither direct nor “real and immediate” id., rendering claims based on such injuries unripe for adjudication. In one sense at least, “ripeness is about when [plaintiffs] can sue”; a matter of whether they can sue “yet” rather than whether they can ever sue. See Smith, 23 F.3d at 1141 (emphasis in original). Regardless of whether plaintiffs can sue at all, the State defendants respectfully suggest that they clearly cannot sue “yet” to redress claims that they may, some day, be forced to move and that, as a result of such a move, they will eventually end up in residential placements that violate rights protected by the ADA, the Rehabilitation Act or (a)(30)(A). Id.
The threatened future injuries, if they occur at all, are not direct violations of plaintiffs’ statutory rights nor direct injuries to themselves. The claimed threats of future injury are based on allegations that the rates paid to residential providers in the future will result in sufficient numbers of providers refusing to provide Family Care services so that, as a result, plaintiffs allege, they will be forced to relocate to different residential placements and, ultimately, to nursing homes. Moreover, these threats of future indirect injury are significantly dependent on the assumption that the Milwaukee County CMO will violate its obligations under both the CMO contract and the statutes themselves to assure that plaintiffs are placed consistently with their needs and protected rights. Yet plaintiffs have not alleged any facts to support a claim that the Milwaukee County CMO is currently placing Family Care enrollees without due regard for their needs and protected rights and there is no basis whatever for a presumption that it will do so in the future. Furthermore, each has available an immediate administrative remedy in the form of a grievance and fair hearing process, should they be dissatisfied with any potential future change of placement. See n.2, CMO Contract at 54-55 (Ex. 2002).
- 20 Case 2:04-cv-00193-LA Filed 06/15/05 Page 20 of 46 Document 71

The danger of any potential future injury to plaintiffs is remote indeed. In short, because plaintiffs’ claims of threatened future injury are entirely hypothetical and speculative, they are not ripe for adjudication and must be dismissed as a result. See Smith, 23 F.3d at 1141-1142.
D. Plaintiffs lack standing to challenge the capitated rates DHFS pays to the Milwaukee County CMO under the terms of the Family Care contract.
As indicated above at 4, Family Care is authorized by federal Medicaid authorities pursuant to two types of waivers and an approved prepaid health plan authorizing DHFS to contract for State Plan long-term care services on a prepaid basis. See nn. 3 and 4 (Exhibits 2003 and 2004). The managed care aspect of Family Care permits DHFS to limit services in the Family Care benefit to those persons who enroll in a CMO. See gen. 42 U.S.C. § 1296n(b) and Wis. Stat. §§ 46.281, 46.284 and 46.286. The CMO manages and delivers the Family Care benefit. Wis. Stat. § 46.284. DHFS provides funding on a capitated basis for the provision of services under Family Care. Wis. Stat. § 46.284(5). In exchange for the capitated payments, the CMO is required by the terms of the CMO contract to manage and provide all services necessary to meet a participant’s assessed needs in a cost-effective manner. See n.2, above, CMO contract at 1, 15 (Exhibit 2002).
Although all nine of plaintiffs’ current counts focus on funding for AFHs, CBRFs and day programs, Counts 4, 8 and 9 focus directly and exclusively on the adequacy of “the fixed capitation rate” paid by DHFS to the Milwaukee County CMO and on the “methods used to determine provider rates” employed by Milwaukee County (Am. Comp. ¶¶ 156, 174, 183 and 184). Indeed, via their Amended Response to State Defendants’ First Interrogatories, plaintiffs have recently confirmed their claim that “deficiencies in any services provided to Milwaukee Family Care recipients, including assessment and evaluation methods, are the result
- 21 Case 2:04-cv-00193-LA Filed 06/15/05 Page 21 of 46 Document 71

of the state defendants’ failure to set an adequate capitated rate for calendar years 2000 through 2005.” See Exhibit 2009 at 2, attached to State Defendants’ Motions to Dismiss. It appears, therefore, that should the court reject the standing and ripeness arguments set forth in Secs. I.B and I.C, above, the justiciability of this entire case turns on whether plaintiffs’ have standing to attack the capitated rates DHFS pays the Milwaukee County CMO, as they plainly seek to do.
In addition to the general objections to plaintiffs’ standing argued above, the State defendants specifically submit that plaintiffs lack standing to attack the capitated rates paid by DHFS to the Milwaukee County CMO under the CMO contract. In return for accepting the capitated rates—and regardless of their claimed adequacy or inadequacy in plaintiffs’ eyes—the CMO has obligated itself under the contract to provide Family Care enrollees, including the plaintiffs, with the full range of Family Care services the individual enrollee needs under his or her plan of care. See n.2, CMO Contract at pp. 15 et seq. (Ex. 2002). The CMO contracts with service providers who, in turn, provide the Family Care services needed by individual enrollees.
The State defendants neither negotiate nor contract with the providers, nor do they provide the services to which plaintiffs are entitled under Family Care. Although plaintiffs complain that the capitated rates are inadequate, they are not parties to the CMO contracts. The Milwaukee County CMO, which is a party to the CMO contract, is obligated to manage and provide for the Family Care services plaintiffs need in return for the capitated rates set by the State defendants.
The Fourth Amended Complaint simply fails to allege facts showing how the capitated rates directly injure the plaintiffs, since Family Care recipients or beneficiaries are entitled to Family Care services regardless of the level or adequacy of the capitated rates. See Wis. Stat. §§ 46.284(4)(d) and (5). With regard to the capitated rates, therefore, plaintiffs have failed to
- 22 Case 2:04-cv-00193-LA Filed 06/15/05 Page 22 of 46 Document 71

demonstrate the second essential component of standing or justiciability: they have failed to allege how any injury to themselves “can be fairly traced to” the capitated rates set by DHFS. See Valley Forge, Etc., 454 U.S. at 472.
II. PLAINTIFFS’ CLAIMS FOR RETROACTIVE DECLARATORY AND MONETARY RELIEF BASED ON § 1983 AND THE MEDICAID STATUTE, AND TITLE II OF THE ADA MUST BE DISMISSED BECAUSE SUCH RELIEF AGAINST THE STATE DEFENDANTS IS BARRED BY SOVEREIGN IMMUNITY AND THE ELEVENTH AMENDMENT.
The Complaint includes a demand for retroactive monetary relief of a decidedly unusual sort, requesting that the State defendants reimburse Milwaukee County for allegedly inadequate capitated payments sufficient to “alleviate the shortfall” allegedly caused by the State defendants’ “inadequate capitated rates from the year 2000 to the present” (Am. Comp. at 34, Conclusion F). Apart from the obvious question of plaintiff Family Care recipients’ standing to advance such a claim,17 addressed above, the State defendants contend that the Court lacks jurisdiction to entertain such a claim because, except for counts based on § 504 of the Rehabilitation Act, sovereign immunity and the Eleventh Amendment bar such retroactive monetary relief against them.
The Constitution recognizes a state’s sovereign immunity from suit. See College Savings Bank v. Florida Prepaid Postsecondary, 527 U.S. 666, 684 (1999). The Eleventh Amendment to the Constitution provides, “The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by
17On its face, at least, the demand for relief is framed simply as an attempt to recoup from the State defendants money for the county treasury.
- 23 Case 2:04-cv-00193-LA Filed 06/15/05 Page 23 of 46 Document 71

Citizens of another State, or by Citizens or Subjects of any Foreign State.” This Amendment is convenient shorthand but something of a misnomer, for the sovereign immunity of the States neither derives from, nor is limited by, the terms of the Eleventh Amendment. . . . [T]he States’ immunity from suit is a fundamental aspect of the sovereignty which the States enjoyed before the ratification of the Constitution, and which they retain today (either literally or by virtue of the admission into the Union upon an equal footing with the other States) except as altered by the plan of the Convention or certain constitutional Amendments.
Alden v. Maine, 527 U.S. 706, 713 (1999). The Eleventh Amendment “does not define the scope of the States’ sovereign immunity; it is but one particular exemplification of that immunity.” Federal Maritime Commission v. S.C. State Ports Authority, 535 U.S. 743, 753 (2002).
It is jurisdictional “in the sense that it is a limitation on the federal court’s judicial power, and therefore can be raised at any stage of the proceedings.” Calderon v. Ashmus, 523 U.S. 740, 745 n.2 (1998). See Kimel v. Florida Board of Regents, 528 U.S. 62, 73 (2000) (it “does not provide for federal jurisdiction over suits against non-consenting States”). “This withdrawal of jurisdiction effectively confers an immunity from suit.” Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, 506 U.S. 139, 144 (1993).
There are “only two circumstances in which an individual may sue a State. First, Congress may authorize such a suit in the exercise of its power to enforce the Fourteenth Amendment. . . . Second, a State may waive its sovereign immunity by consenting to suit.” College Savings Bank, 527 U.S. at 670.
Sovereign immunity bars federal court “suits against the States and their agencies . . . regardless of the relief sought.” Puerto Rico Aqueduct & Sewer Auth., 506 U.S. at 146. See Seminole Tribe of Florida v. Florida, 517 U.S. 44, 72 (1996) (the relief sought “is irrelevant to the question whether the suit is barred”); Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 100-01 (1984) (this jurisdictional bar applies “regardless of the nature of the relief
- 24 Case 2:04-cv-00193-LA Filed 06/15/05 Page 24 of 46 Document 71

sought”). Accordingly, sovereign immunity bars an action for money damages against a state agency, Edelman v. Jordan, 415 U.S. 651, 666-67 (1974); injunctive relief, Seminole Tribe of Florida, 517 U.S. at 58, and Alabama v. Pugh, 438 U.S. 781 (1978); and declaratory relief. Benning v. Board of Regents of Regency Universities, 928 F.2d 775, 778 (7th Cir. 1991).
The rule against retrospective monetary relief cannot be circumvented by labeling it equitable restitution: it is a retrospective claim against the treasury. Edelma, 415 U.S. at 663, 665-68. The bar applies “if the relief is tantamount to an award of damages for a past violation of federal law, even though styled as something else.” Papasan v. Allain, 478 U.S. 265, 278 (1986). “Relief that in essence serves to compensate a party injured in the past by an action of a state official in his official capacity that was illegal under federal law is barred when the state official is the named defendant.” Papasan, 478 U.S. at 278 (footnote omitted).
To be distinguished are actions for prospective declaratory and injunctive relief against state officials. Sovereign immunity does not “preclude actions against state officials sued in their official capacity for prospective injunctive or declaratory relief.” Thiokol Corp. v. Department of Treasury, 987 F.2d 376, 381 (6th Cir. 1993) (citing Ex Parte Young, 209 U.S. 123 (1908). Also see Benning, 928 F.2d at 778 (sovereign immunity precludes declaratory relief against the state because Ex Parte Young’s “authority-stripping fiction” is limited to actions against public officials).
“Congress can abrogate state sovereign immunity only when it legislates to enforce the Fourteenth Amendment.” College Savings Bank, 527 U.S. at 671 (emphasis added). “Seminole Tribe makes clear that Congress may not abrogate state sovereign immunity pursuant to its Article I powers.” Florida Prepaid Postsecondary v. College Savings, 527 U.S. 627, 636 (1999). See Seminole Tribe of Florida, 517 U.S. at 72 (“Even when the Constitution vests in Congress
- 25 Case 2:04-cv-00193-LA Filed 06/15/05 Page 25 of 46 Document 71

complete lawmaking authority over a particular area, the Eleventh Amendment prevents congressional authorization of suits by private parties against unconsenting States”).
Whether the abrogation arises from an act of Congress or a state waiver, the language purporting to do so must be expressed with unmistakable clarity. Welch v. State Dept. of Highways and Public Transp., 483 U.S. 468, 474 (1987); Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 239-40 (1985). 42 U.S.C. § 1983 is not such a waiver. See Will v. Michigan Dept. of State Police, 491 U.S. 58 (1989). In this case, based on Edelman, Will and many other cases, it is clear that plaintiffs cannot seek retroactive monetary relief against the State defendants based on their § 1983Medicaid claim. Id.18
The Supreme Court recently held that Title II of the ADA, under which plaintiffs sue the defendants here, constitutes a valid exercise of Congress’ enforcement power under the Fourteenth Amendment. Tennessee v. Lane, 124 S. Ct. 1978, 1993 (2004). However, Lane expressly refrained from addressing Eleventh Amendment immunity as a defense to Title II ADA claims outside “the class of cases implicating the fundamental right of access to the courts.” Id.
Following Lane, therefore, whether retroactive monetary relief is available in suits against states under Title II of the ADA outside the context of access to the courts remains an open question which the Court pointedly did not address, even though the plaintiff had asked for damages as well as equitable relief. Id., at 1983. Furthermore, the majority opinion emphasized that the primary ADA remedy of “reasonable modifications”—a form of prospective injunctive relief—is “a
18In Atascadero, the court held that Congress did not abrogate the State’s Eleventh Amendment immunity in adopting the Rehabilitation Act. See id., 473 at 247. However, Congress subsequently enacted 42 U.S.C. § 2000d-7 in response to Atascadero and the Supreme Court subsequently recognized § 2000d-7 as a valid and unambiguous waiver of states’ Eleventh Amendment immunity. See Lane v. Pena, 518 U.S. 187, 200 (1996).
- 26 Case 2:04-cv-00193-LA Filed 06/15/05 Page 26 of 46 Document 71

reasonable prophylactic measure, reasonably targeted to a legitimate end.” Id., at 1994. The State defendants respectfully submit that, given the Court’s rationale and limited holding in Lane, that retroactive monetary relief is not available as a remedy in a suit against the State based on Title II of the ADA. See also Walker v. Snyder, 213 F.3d 344, 346-47 (7th Cir. 2000).
III. THE COMPLAINT MUST BE DISMISSED BECAUSE THE NINE ASSORTED COUNTS FAIL TO STATE CLAIMS ON WHICH RELIEF CAN BE GRANTED. A. A complaint must allege facts sufficient to support the elements of the claim: factual and legal conclusions are not sufficient.
In considering a motion to dismiss under F.R.C.P. 12(b)(6), the court must accept as true all well-pleaded factual allegations in the complaint, drawing all reasonable inferences in favor of the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 72 (1984); Yeksigian v. Nappi, 900 F.2d 101, 102 (7th Cir. 1990). Cf. F.R.C.P. 12(c); City of Waukesha v. Viacom International, Inc., 362 F. Supp.2d 1025, 1028 (E.D.Wis. 2005) (same standard applies under Rule 12(c)). The court may dismiss a complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6) only if “‘it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitled him to relief.’“ Strauss v. City of Chicago, 760 F.2d 765, 767 (7th Cir. 1985) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Although all reasonable inferences are to be drawn in favor of the plaintiff, the complaint must set forth factual allegations sufficient to establish the elements that are crucial to recovery under plaintiff’s claim. Sutliff, Inc. v. Donovan Cos., 727 F.2d 648, 654 (7th Cir. 1984). Legal conclusions without factual support are not sufficient. Benson v. Cady, 761 F.2d 335, 338 (7th Cir. 1985).
Moreover, even the liberal notice pleading standards have their limits. If there is no “reasonable prospect” that the plaintiff can make out a valid claim from the facts narrated in the
- 27 Case 2:04-cv-00193-LA Filed 06/15/05 Page 27 of 46 Document 71

complaint, the court should grant the motion to dismiss. Sutliff, Inc., 727 F.2d at 654; see also Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1430 (7th Cir. 1993) (plaintiff may not “fumble around searching for a meritorious claim within the elastic boundaries of a barebones complaint”); Matter of Wade, 969 F.2d 241, 249 (7th Cir. 1992) (inferences plaintiffs asked court to draw from alleged facts were not reasonable), cert. denied, 510 U.S. 870 (1993); 5C Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure, § 1368 at 248 (2004) (inferences drawn in favor of non-moving party must be reasonable and “cannot be indulged in when they are . . . inconsistent with matters that fall within the judicial notice doctrine”). The court “need not accept as true allegations that contradict facts which may be judicially noticed.” Westlands Water District v. U.S. Department of the Interior, 850 F. Supp. 1388, 1399 (E.D. Cal. 1994).
Plaintiffs have a responsibility to include allegations of fact sufficient to establish the crucial elements of their claims. Forest County Potawatomi Community v. Doyle, 828 F. Supp. 1401, 1405 (W.D.Wis. 1993), aff’d, 45 F.3d 1079 (7th Cir. 1995). If they file complaints that assert legal conclusions without making adequate factual allegations to support those conclusions, their complaints may be dismissed on Rule12 grounds. Panaras v. Liquid Carbonic Industries Corp., 74 F.3d 786, 792 (7th Cir. 1996); Strauss, 760 F.2d at 767-68. A complaint must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable theory. Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984), cert. denied, 470 U.S. 1054 (1985).
Since a court can take judicial notice of a document at any stage of the proceedings under Fed. R. Evid. Rule 201(f), it can do so on a motion to dismiss without converting it to a motion for summary judgment. See Menominee Indian Tribe of Wisconsin v. Thompson, 161 F.3d 449, 455-56
- 28 Case 2:04-cv-00193-LA Filed 06/15/05 Page 28 of 46 Document 71

(7th Cir. 1998), cert. denied, 526 U.S. 1066 (1999); MGIC Indem. Corp. v. Weisman, 803 F.2d 500,
504 (9th Cir. 1986). Under Fed. R. Evid. Rule 201(b), documents judicially noticed must be
“capable of accurate and ready determination by resort to sources whose accuracy cannot
reasonably be questioned.” Public records and other documents filed in public offices are judicially
noticeable. Mass. v. Westcott, 431 U.S. 322, 323 n. 2 (1977); Green v. Warden, U.S. Penitentiary,
699 F.2d 364, 369 (7th Cir.), cert. denied, 461 U.S. 960 (1983); Reiner v. Washington Plate Glass
Co., Inc., 711 F.2d 414, 416 (D.C. Cir. 1983). A court may also refer to contention interrogatories
in deciding a motion to dismiss. See Sperling v. Hoffmann-LaRoche, Inc., 924 F. Supp. 1396,
1401-2 (D.N.J. 1996) (treating contention interrogatories as though included within the complaint itself).19
B. Counts 1-8 must be dismissed because the complaint fails to state claims based on the ADA or the Rehabilitation Act. 1. Summary of the showings necessary to state claims for which relief may be granted under Title II of the ADA and § 504 of the Rehab Act.
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. Under Title II of the ADA, a “qualified individual with a disability” is someone who,
with or without reasonable modifications, meets the essential eligibility requirements to receive
public services or participate in a public program. 42 U.S.C. § 12131(2). The ADA defines
19Based on the Fed. R. Evid. Rule 201(b) and (d) and the precedent cited in the text, the State defendants request that the court take judicial notice of the Family Care waiver documents posted on the DHFS website and cited, with electronic links, at nn 1-16 above. A listing of the documents to which this request for judicial notice is directed, with exhibit numbers, is attached to this brief. See n.1, above. A copy of Plaintiff’s Amended Response to State Defendants’ First Set of Interrogatories is attached to the State defendants Motions to Dismiss as Exhibit 2009.
- 29 -
Case 2:04-cv-00193-LA Filed 06/15/05 Page 29 of 46 Document 71

“disability” as a “physical or mental impairment that substantially limits one or more of the major life activities of the individual.” 42 U.S.C. § 12012(2)(A). A “public entity” includes any special purpose district or other instrumentality of the state or local government. 42 U.S.C. § 12131(1).
To establish a violation of Title II of the ADA, a plaintiff must show that (1) he or she is a qualified individual with a disability; (2) he or she is being excluded from participation in or denied the benefits of some service, program or activity by reason of his or her disability, or subjected to discrimination by reason of his or her disability; and (3) that the entity providing the service, program or activity is a public entity. Wisconsin Cmty Serv. v. City of Milwaukee, 309 F. Supp. 2d 1096, 1103 (E.D. Wis. 2004).
The Rehab Act provides that “[n]o otherwise qualified individual with a disability in the United States, as defined in [29 U.S.C. § 706(8)], 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). See also Branham v. Snow, 392 F.3d 896, 904 (7th Cir. 2004), reh’g denied (2005) (Rehab Act prohibits discrimination based solely on a person’s disability). The Rehab Act defines “disability” similarly to definition of the same term in the ADA. 29 U.S.C. § 794(a). “Otherwise qualified” means, for purposes of the Rehab Act, that if an individual were not disabled, he or she would have qualified for the program or treatment allegedly denied because of the individual’s disability. Grzan v. Charter Hosp. of Northwest Indiana, 104 F.3d 116, 120 & n.4 (7th Cir. 1997).
To survive a motion to dismiss a Rehab Act claim, the plaintiff’s prima facie case must show that (1) he or she is an “individual with a disability” under the Act, (2) he or she is
- 30 Case 2:04-cv-00193-LA Filed 06/15/05 Page 30 of 46 Document 71

“otherwise qualified” for the benefit sought, (3) he or she was excluded from participation, denied benefits, or discriminated against solely by reason of his or her disability, and (4) the program or activity in question receives federal financial assistance. Grzan, 104 F.3d at 119 & n.4; Wisconsin Cmty Serv., 309 F. Supp. 2d at 1103; Branham, 392 F.3d at 902.
Relevant provisions of the ADA and the Rehab Act are similar. Wisconsin Cmty. Serv., 309 F. Supp. 2d at 1103. Title II of the ADA was modeled on § 504 of the Rehab Act, and elements of claims under the two provisions are nearly identical. Washington v. Indiana High Sch. Athletic Assoc., 181 F.3d 840, 845 n.6 (7th Cir. 1999). Standards and precedent applicable to one act also are applicable to the other. Washington, 181 F.3d at 845 n.6; Wisconsin Cmty. Serv., 309 F. Supp. 2d at 1103.
One key difference is that while the Rehab Act requires exclusion solely by reason of disability, the ADA requires only that exclusion be by reason of the disability. Washington, 181 F.3d at 845 n.6. Section 504 of the Rehab Act therefore prohibits discrimination against a person with a disability only if the individual’s disability is unrelated to and improper to consideration of the services in question. When medical treatment is the issue, typically the disability itself creates or contributes to the need for services. The term “otherwise qualified” consequently cannot be applied in the context of medical treatment decisions without distorting its plain meaning. Similarly, denial of treatment “solely by reason of disability” also does not fit allegations of discriminatory medical treatment. Section 504 prohibits discrimination between persons with disabilities and persons without disabilities; it does not create absolute substantive rights to treatment, and is ill suited for bringing claims of discriminatory medical treatment in which the plaintiff compares his or her treatment (medical or non-medical) to the treatment afforded other persons with disabilities. Grzan, 104 F.3d at 120-22.
- 31 Case 2:04-cv-00193-LA Filed 06/15/05 Page 31 of 46 Document 71

2. Failures to state claims for which relief may be granted common to Counts One-Eight of the Amended Complaint.
Counts One through Eight against Secretary Nelson must be dismissed outright. The Amended Complaint fails to allege any involvement or conduct whatsoever by Secretary Nelson in developing and implementing policies, procedures and rates relating to funding for AFHs, CBRFs and day programs for persons in AFHs and CBRFs (collectively, “services”). The Amended Complaint further fails to allege any involvement or conduct whatsoever amounting to intentional discrimination by Secretary Nelson in the manners alleged in the Amended Complaint or in any other manner. Instead, the Amended Complaint alleges only that Secretary Nelson is responsible for the overall operation of DHFS and has the powers and duties of the head of a state agency specified in Wis. Stat. § 15.04(1) (Am. Comp. ¶ 13). That single conclusory allegation amounts to neither a direct factual allegation nor an inferential factual allegation linking Secretary Nelson to development and implementation of policies, procedures and rates relating to funding for the services. Cf. Car Carriers, 745 F.2d at 1106. Furthermore, as to Counts One, Three, Five and Seven alleging ADA violations, Secretary Nelson is an individual and not a “public entity” for purposes of the ADA. Cf. 42 U.S.C. § 12131(1). For all these reasons, Counts One-Eight fail to state claims against Secretary Nelson for which relief can be granted and must be dismissed.
Similarly, Counts One through Eight all allege that reasonable modifications or reasonable accommodations can be made to the Family Care program to serve plaintiffs in the manner they advocate (Am. Comp.¶¶ 142, 147, 151, 155, 161, 165, 170, 173). Counts One through Eight all fail to state claims under either the ADA or the Rehab Act in which a reasonable accommodation or modification is possible, however.
- 32 Case 2:04-cv-00193-LA Filed 06/15/05 Page 32 of 46 Document 71

Regulations implementing the ADA require a public entity to make reasonable modifications in policies, practices or procedures, “‘when the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program or activity.’” 28 C.F.R. § 35.130(b)(7), quoted in Wisconsin Cmty. Serv., 309 F. Supp. 2d at 1104. The Rehab Act requires reasonable accommodation unless it creates undue financial or administrative burdens, or requires a fundamental alteration in the nature of the program. Wisconsin Cmty. Serv., 309 F. Supp. 2d at 1104. The Seventh Circuit has framed the fundamental alteration inquiry as “to ask whether waiver of the rule in the particular case at hand would be so at odds with the purposes behind the rule that it would be a fundamental and unreasonable change.” Washington, 181 F.3d at 850.
Plaintiffs already are participating in the Family Care program. Plaintiffs’ proposed reasonable accommodation or modification consists of essentially requiring fee-for-service payments to providers serving Family Care members in the same way that fee-for-service payments are made to providers serving participants in the other waiver programs. To require alteration of Family Care from a capitated rate to a fee-for-service system would eviscerate the entire purpose for the program and change it so fundamentally that it would no longer exist as a managed care capitated rate system. Because that change so clearly would constitute a fundamental alteration of the entire Family Care program, no reasonable accommodation or modification is possible. Counts One-Eight therefore fail to state claims for which relief can be granted.
Finally, Counts Five-Eight fail to state claims for which relief may be granted because the Amended Complaint fails to allege that the plaintiffs were discriminated against solely on the
- 33 Case 2:04-cv-00193-LA Filed 06/15/05 Page 33 of 46 Document 71

basis of their disabilities as required by the Rehab Act. The specific variations of discrimination alleged in Count Five distinguish between classes of persons with disabilities on the basis of (1) age, (2) county of residence, and (3) degree of disability (Am. Comp. ¶ 143). The specific variations of discrimination alleged in Counts Seven and Eight distinguish among classes of persons with disabilities on the basis of age—whether they are sixty years of age or older. None of these are distinctions between persons with disabilities and persons without disabilities. Rather than alleging that the plaintiffs were discriminated against solely on the basis of their disability, Count Six instead attacks the treatment decisions made by and for Family Care enrollees. The Rehab Act does not create substantive rights to treatment, however, and cannot be applied in the context of comparative treatment decisions. The plaintiffs therefore fail to allege that they are persons with disabilities otherwise qualified for the benefits allegedly denied them. Grzan, 104 F.3d at 120-22. Counts Five-Eight consequently all fail to state claims for which relief can be granted under the Rehab Act.
3. Counts One and Five fail to state claims for which relief can be granted.
Counts One (ADA) and Five (Rehab Act) allege that Milwaukee County residents with disabilities aged 60 and older whose services are funded by Family Care receive substantially inferior treatment regarding payment for services compared to (1) Milwaukee County residents under age 60 whose services are funded by the COP, CIP and BI programs; (2) residents of nonFamily Care counties with disabilities of any age whose services are funded by the COP, CIP and BI programs; and (3) Milwaukee County residents with less significant disabilities served by Family Care (Am. Comp. ¶ 138-43, 157-62.)
- 34 Case 2:04-cv-00193-LA Filed 06/15/05 Page 34 of 46 Document 71

Neither the ADA nor the Rehab Act establish any obligation to meet a disabled persons’ particular needs vis-à-vis the needs of other disabled persons. Doe v. Pfrommer, 148 F.3d 73, 83 (2nd Cir. 1998). Plaintiffs’ alleged distinction from the other groups alleged in Counts One and Five therefore affords no cognizable grounds for relief under the ADA or the Rehab Act.
There is no allegation anywhere in the Amended Complaint of any facts demonstrating or implying intentional discrimination by the State defendants against the plaintiffs on grounds of the plaintiffs’ disabilities or any other grounds. Counts consequently fail to state any intentional discrimination claim for which relief can be granted.
Also, as to both Counts One and Five, none of the plaintiffs are being excluded from or denied the benefits of some service, program or activity by reason of their disabilities. It is participation in services, programs and activities that the ADA and Rehab Act protect—not access to any specific funding stream to pay for those services, programs and activities, and not any universal, objective funding level for those services, programs and activities. All of the plaintiffs are receiving residential and other services through the Family Care program in which they are enrolled, by reason of their disabilities (Am. Comp. ¶¶ 71, 85, 95, 103, 112, 122).
Certain providers of services to the plaintiffs might want to be paid more money for providing those services, but that does not amount to any kind of discrimination against the plaintiffs who indisputably have been and continue to receive services through their participation in the Family Care program. Family Care is not about writing blank checks to service providers; it is about providing effective, coordinated, appropriate services to Family Care members in an efficient and cost-effective manner. Appropriate coordination and delivery of services to Family Care enrollees is guaranteed and protected by the state’s contract with the CMO, as explained in sections I.C. and I.D. above, not by the level of the capitated rate paid to the CMO. Because the
- 35 Case 2:04-cv-00193-LA Filed 06/15/05 Page 35 of 46 Document 71

providers’ complaints about the rates they are paid by the CMO do not amount to discrimination against the plaintiffs who have been and continue to receive services and other benefits of participating in the Family Care program, Counts One and Five fail to state claims for which relief can be granted under the ADA or the Rehab Act.
4. Counts Two and Six fail to state claims for which relief may be granted.
Count Two (ADA) and Count Six (Rehab Act) allege that the State defendants Family Care policies, procedures and rates prevent persons with disabilities from obtaining the same result, gaining the same benefit, or reaching the same level of achievement in the most integrated setting appropriate to their needs. Count Two further alleges that those polices, procedures and rates have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the Family Care and Medicaid programs (Am. Comp. ¶¶ 144-48, 163-66).
Counts Two and Six fail to state claims for which relief can be granted because they make no sense. They allege that Family Care policies, procedures and rates relating to funding for services prevent persons with disabilities from obtaining the same result, gaining the same benefit or reaching the same level of achievement in the most integrated setting appropriate to their needs—without identifying any comparison group against which to gauge attainment of the same result, the same benefit and the same level of achievement. There can be no discrimination against persons with disabilities absent another group of persons without disabilities treated differently.
Nor are plaintiffs’ conclusory allegations about deprivation of the same results, benefits and achievements in the most integrated setting supported by evidentiary facts in the Amended Complaint. None of the plaintiffs has claimed that he or she is not placed in the most integrated
- 36 Case 2:04-cv-00193-LA Filed 06/15/05 Page 36 of 46 Document 71

setting, and any possibility that a plaintiff’s residential placement might change in the future is not equivalent to alleging deprivation of most integrated setting—all as explained above in Sections I.C. and I.D. And, even if the plaintiffs had alleged sufficient supporting facts, neither the ADA nor the Rehab Act establish any obligation to meet a disabled persons’ particular needs vis-à-vis the needs of other disabled persons. Doe, 148 F.3d at 83.
Relatedly, the State defendants’ role concerning direct care and decisions regarding the most integrated settings for individual Family Care enrollees is non-existent as a matter of law. Under the Family Care contract, it is the county CMO—not the State defendants—that is legally responsible for direct care service provision and decisions regarding the most integrated settings for individual Family Care enrollees (see n.2 above, Exhibit 2002, pages 15-20, 26-42).
For these reasons, Counts Two and Six fail to state claims for which relief can be granted under Title II of the ADA and § 504 of the Rehab Act.
5. Counts Three and Seven fail to state claims for which relief can be granted.
Counts Three (ADA) and Seven (Rehab Act) allege that Family Care policies, procedures and rates relating to funding for services as developed and implemented by DHFS and Secretary Nelson violate integration requirements of the ADA and the Rehab Act because they substantially increase the probability that Milwaukee County residents with disabilities aged 60 or older will be placed in more restrictive, less integrated settings despite their preference for less restrictive, more integrated settings (Am. Comp. ¶¶ 149-53, 169-70).
Plaintiffs’ conclusory claims are totally speculative and unsupported by evidentiary facts concerning any of the named plaintiffs. As explained in Sections I.C. and I.D. above, plaintiffs have not alleged any facts to support a claim that the CMO has in the past or is currently placing
- 37 Case 2:04-cv-00193-LA Filed 06/15/05 Page 37 of 46 Document 71

Family Care enrollees without due regard for their needs and protected rights, and there is no basis whatever for a presumption that it will do so in the future. No claim for which relief can be granted is stated.
6. Counts Four and Eight fail to state claims for which relief can be granted.
Count Four (ADA) and Count Eight (Rehab Act) allege that the fixed capitation rate and the methods used to determine provider rates fail to provide an individualized determination of services needed to place and maintain Milwaukee County residents aged 60 or older with disabilities in appropriate and integrated residential services of their choice (Am. Comp. ¶¶ 154—56, 172-74).
The essence of these claims seems to be that the State defendants’ policies, procedures and rates related to Family Care funding will not result in plaintiffs’ future placement in (1) appropriate and integrated residential services (2) of their unrestricted choice. As to point (1), please see Arguments I.C. and I.D. above. As to point (2), there is no basis in law for plaintiffs to claim injury based on a purported unilateral right to choose their own residential settings. Section 1396n(c)(2)(C) of the Medicaid statute requires that all similarly situated waiver participants be “informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to provision of inpatient hospital services, nursing facility services or services in an intermediate care facility for the mentally retarded.” As a matter of law neither Family Care nor other waiver recipients have a protected, unlimited right to choose residential facilities. The plaintiffs therefore fail to allege any actionable discrimination.
Also, the Amended Complaint sets forth only generalized and conclusory allegations regarding failure to provide individualized determination of services needed for placement of
- 38 Case 2:04-cv-00193-LA Filed 06/15/05 Page 38 of 46 Document 71

Family Care members. These speculative claims are not supported by facts relating to
individualized determination of service needs for any of the plaintiffs in this lawsuit, as further
explained in Section I.C. above.
Furthermore, the State defendants’ responsibility for providing Milwaukee County with
actuarially sound capitation rates does not include either setting provider rates or making an
individualized determination of services needed by participants, both of which are the
responsibility of the Milwaukee County CMO pursuant to the CMO contract (Exhibit 2,
page 15). Plaintiffs’ complaints about allegedly inadequate provider rates or individual service
determinations therefore fail to state any claim for relief against the State defendants.
C. Count 9 fails to state a claim based on 42 U.S.C. § 1396(a)(30)(A).
Count 9 attempts to set forth a claim based on the Medicaid statute, 42 U.S.C.
§ 1396a(a)(30)(A), which provides:
[A state plan for Medical Assistance must] provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan . . . as may be necessary to safeguard against unnecessary utilization of care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.
Id. (emphasis supplied). In Count 9, plaintiffs refer to the italicized language of the statute as the “adequate rate and equal access” provisions20 of (a)(30)(A) (see Am. Comp. ¶ 182). In the two
20There seems to be no common shorthand for describing the provisions of (a)(30)(A) to which plaintiffs refer although, for the sake of brevity, the cases most commonly refer to these provisions together as simply to the “equal access” provisions. See, e.g., Clark v. Richman, 339 F. Supp.2d 631, 638 (M.D. Pa. 2004). When broken into two concepts, the first is often referred to as the “quality of care” provision. See Pennsylvania Pharmacists Assn. v. Houstuon,
- 39 -
Case 2:04-cv-00193-LA Filed 06/15/05 Page 39 of 46 Document 71

succeeding paragraphs, plaintiffs set forth conclusory allegations that the capitated rates set by the State defendants and paid to Milwaukee County for the years 2000 through 2005 have been inadequate to assure that payments to Family Care AFH and CBRF providers and to providers of day services to residents of such facilities are adequate and sufficient, tracking the italicized language of the statute almost word for word (id. ¶¶ 183-184).
Count 9, together with the rest of the amended complaint, fails to state a claim for relief based on the quality of care and equal access provision of (a)(30)(A) for several reasons. First, for purposes of retroactive monetary relief, neither DHFS nor Secretary Nelson in her official capacity are “persons” who are subject to suit under 42 U.S.C. § 1983. See Arizonans for Official English, 520 U.S. at 69-70 n. 24; Will, 491 U.S. at 71.
Secondly, there is significant room for debate as to whether the provisions of (a)(30)(A) are sufficient to create a statutory right in favor of either recipients or providers which is enforceable under § 1983, based on the requirements articulated by the Supreme Count most recently in Gonzaga University v. Doe, 536 U.S. 273, 279-286 (2002); see also Blessing v. Freestone, 520 U.S. 329, 340-343 (1997). Cases following Gonzaga acknowledge that pre-Blessing cases recognizing that MA recipients or providers have a private right of action under § 1983 are open for re-examination. See Westside Mothers, et al. v. Olszewski, et al., 2005 WL 1027987 *4-*15, __ F. Supp.2d __ (E.D.Mich. 2005) (re-examining prior decisions recognizing private right in light of Gonzaga; finding no right of action for recipients); Sanchez v. Johnson, 301 F. Supp.2d 1060, 1063 (N.D. Cal. 2004) (on reconsideration following Gonzaga, holding that recipients did not have private right of action); OKAAP, et al. v. Fogarty, et al.,
283 F.3d 531, 538-44 (3rd Cir. 2002)(en banc). This argument will refer to the “quality of care” and “equal access” provisions.
- 40 Case 2:04-cv-00193-LA Filed 06/15/05 Page 40 of 46 Document 71

366 F. Supp.2d 1050, 1102-04 (N.D. Ok. 2005) (analyzing cases; holding that recipients but not providers have right of action under (a)(30)(A)); cf. Long Term Care Pharmacy Alliance v. Ferguson, 362 F.3d 50, 56-58 (2004) (re-examines prior precedent; held: providers do not have private right of action, but rationale may affect recipients as well); In re. NYAHSA Litigation, 318 F. Supp.2d 30, 39-40 (N.D.N.Y. 2004) (recipients are intended beneficiaries; no private right of action for providers).
The question of whether recipients have a private right of action under (a)(30)(A) and § 1983 is noted to the court here, however, primarily for purposes of preserving the issue for review. Because the State defendants presume that this court will consider itself bound by Seventh Circuit precedent pre-dating Blessing, which expressly recognized a private right of action for providers based on (a)(30)(A),21 they will not challenge in this Court plaintiffs’ claim that plaintiffs have a private right of action based on the equal access provisions of (a)(30)(A).
Assuming, arguendo, that MA recipients have a private right of action under (a)(30)(A) however, it is highly unlikely that plaintiffs can rely on (a)(30)(A) alone as the basis to state a claim challenging the adequacy of the Family Care capitated rates, as plaintiffs seek to do in Count 9. Cf. Clayworth v. Bonta, 295 F. Supp. 1110, 1124-1126 (E.D. Cal. 2003) (despite finding private right of action benefiting recipients under (a)(30)(A), the court concluded that neither MA recipients nor providers had private right of action to challenge capitated rates under the managed care waiver provisions of 42 U.S.C. § 1396n(b) and the applicable federal
21See Methodist Hospitals v. Sullivan, 91 F.3d 1026, 1029 (7th Cir. 1996) (held: providers have a private right of action to enforce “equal access” provision of (a)(30)(A)); see also American Society of Consultant Pharmacists, et al. v. Garner, 180 F. Supp.2d 953, 969, 977 (N.D. Ill. 2001) (post-Blessing; following Methodist Hospitals; suggesting that providers’ right of action is derivative of patients’ rights to quality of services).
- 41 Case 2:04-cv-00193-LA Filed 06/15/05 Page 41 of 46 Document 71

regulation, 42 C.F.R. § 438.(6)(c)).22 After all, the components of Family Care are approved as a managed care program under the waiver provisions of § 1396n(b), “waivers to promote cost-effectiveness and efficiency,” and as a prepaid health plan as well as a HCBS waiver under § 1396n(c). See nn. 3 and 4, above and citations therein, including the CMO Contract (Ex. 2002) at 121, ¶ 18 and Ex. 2003-D(1). Plainly, applying fundamental principles of statutory construction, the Court must strive to interpret all of the requirements of the federal statutes and interpretative rules that apply to Family Care, including (a)(30)(A), in harmony with one another.
Most importantly for present purposes, the Family Care capitated rates, on which plaintiffs focus their primary attack, must comply with the “actuarial soundness” requirements of 42 C.F.R. § 438.6, which imposes various requirements on contracts for managed care and pre-paid health plans. See 42 C.F.R. § 438.6(a). Among the central requirements of that rule applicable to Family Care are the requirements of § 438.6(c) that the payments by DHFS to CMO providers, including the Milwaukee County CMO, must comply with the detailed standards for “actuarially sound capitation rates” as defined in subsec. 438.6(C)(1)(i) and set forth in succeeding provisions of that rule, including subsecs. 438.6(c)(2) and (3). Subsec. (c)(2)(i) provides unequivocally that “[a]ll payments under risk contracts and all risk-sharing mechanisms in contracts must be actuarially sound,” while subsec. (3) contains the specific requirements that the “actuarially sound” DHFS rates must meet.
22Because plaintiffs assert a private right of action based solely on (a)(30)(A) and ignore the managed care waiver requirements of 42 U.S.C. § 1396n(b) as well as the actuarial soundness requirements of the federal regulations governing capitated rates, the State defendants will address plaintiffs’ claim in the context of arguing that they do not state a claim for relief concerning the capitated rates under (a)(30)(A). Clayworth, however, is clear well-reasoned precedent addressing why the waiver provisions of § 1396n(b) are relevant and why MA recipients do not have enforceable rights to attack managed care capitated rates based on § 1396n(b). See Clayworth, 295 F. Supp.2d at 1124-26.
- 42 Case 2:04-cv-00193-LA Filed 06/15/05 Page 42 of 46 Document 71

Because the detailed requirements for actuarial soundness of 42 C.F.R. § 438.6 govern the capitated rates DHFS pays CMO providers, the State defendants submit that, at a minimum, in order to state a claim under (a)(30)(A) directly attacking the capitated rates of a managed care waiver, as plaintiffs seek to do, the complaint must set forth facts alleging that the rates are not “actuarially sound.” Yet Count 9 of the Fourth Amended Complaint—indeed, the complaint as a whole—completely ignores the applicable, detailed requirements of § 438.6(c) and does not allege, even in conclusory fashion, that the DHFS capitated rates are not actuarially sound.
Furthermore, if one construes the actuarial soundness requirements in conjunction with the “quality of care” language of (a)(30)(A), on which plaintiffs rely, plaintiffs must adequately allege that the capitated rates “are [in]consistent with efficiency, economy, and quality of care” as well as “[in]sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area” see id. Count 9 should be dismissed for failure to state a claim for that reason alone.
In any event, assuming one can ignore the federal standards the DHFS capitated rates must meet for purposes stating a claim that the rates are inadequate under (a)(30)(A), the utterly conclusory allegations of the complaint fail to set forth facts that are even minimally sufficient to state a claim under that statute.
With regard to the requirement that the payments be consistent with “quality of care,” plaintiffs do not allege any deficiencies in the quality of the care they are currently receiving. The bald assertions to the effect that Family Care rates may at some point in the future allegedly become inadequate to assure quality of care is nothing more than conclusory speculation, insufficient to support an inference that, in fact, this will come to pass.
- 43 Case 2:04-cv-00193-LA Filed 06/15/05 Page 43 of 46 Document 71

In an apparent attempt to support a claim under the final “equal access” requirement of (a)(30)(A), plaintiffs do allege that some providers have threatened to stop providing Family Care services and, in the case of HIL, one of the providers serving the plaintiffs, the provider actually did serve the Milwaukee County CMO with notice that it intended to terminate its Family Care contract. But the termination of a single provider contract is a far cry from—and not remotely the equivalent of—alleging facts sufficient to demonstrate that so many providers will terminate their services (and will not be replaced with other willing providers) that plaintiffs and their putative class will not have access to community-based residential long term care services “at least to the extent that such care and services are available to the general population in the geographic area,” as the statute requires. While ¶¶ 183 and 184 of the Amended Complaint repeat the statutory language in conclusory fashion, there are simply no facts anywhere in the complaint to support the conclusory allegations.
As the Seventh Circuit indicated in Methodist Hospitals, Inc., any rights enforceable under (a)(30)(A) are substantive rather than procedural; the statute “requires each state to produce a result, not to employ any particular methodology for getting there.” Id. at 1030. Count 9 of the Fourth Amended Complaint does not adequately allege that the results required of Family Care—that the payments be consistent with quality of care and sufficient to insure access to Family Care services by recipients to the extent that such care and services are available to the general population in the geographic area—will not be delivered. In short, Count 9 fails to state a claim actionable under (a)(30)(A).
CONCLUSION For the reasons discussed above, the Fourth Amended Complaint must be dismissed for lack of jurisdiction because plaintiffs lack standing or because the claims are not ripe for
- 44 Case 2:04-cv-00193-LA Filed 06/15/05 Page 44 of 46 Document 71

adjudication. In the alternative, the complaint must be dismissed because it fails to state claims

for relief under the ADA, the Rehabilitation Act or the Medicaid statute, 42 U.S.C

§ 1396(a)(30)(A) enforceable under § 1983. In addition, claims for retroactive declaratory and

monetary relief against the State defendants, other than claims based on the Rehabilitation Act

§ 504, are barred by sovereign immunity and the Eleventh Amendment.

Dated this 15th day of June, 2005.

Respectfully submitted,

PEGGY A. LAUTENSCHLAGER Attorney General

s/Maureen McGlynn Flanagan MAUREEN MCGLYNN FLANAGAN Assistant Attorney General State Bar #1013639

MARY E. BURKE Assistant Attorney General State Bar #1015694

On Brief:

NEIL GEBHART Assistant Legal Counsel, DHFS State Bar # 1010133

Attorneys for Defendants Wisconsin Department of Health and Family Services and Helene Nelson
Wisconsin Department of Justice Post Office Box 7857 Madison, Wisconsin 53707-7857 Fax: (608) 267-2223 Telephone: (608) 266-1780 (Flanagan) Email: flanaganmm@doj.state.wi.us Telephone: (608) 266-0323 (Burke) Email: burkeme@doj.state.wi.us
flanaganmm\nelson\pleadings\brief-motions to dismiss 4th am comp061005.doc
- 45 -
Case 2:04-cv-00193-LA Filed 06/15/05 Page 45 of 46 Document 71

- 46 Case 2:04-cv-00193-LA Filed 06/15/05 Page 46 of 46 Document 71

 
 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________

GERALD N., et al.,

Plaintiffs,

v.

Case No. 04-C-1093

MILWAUKEE COUNTY, et al., Defendants.
______________________________________________________________________________
BRIEF IN SUPPORT OF MILWAUKEE COUNTY’S MOTION FOR JUDGMENT ON THE PLEADINGS
______________________________________________________________________________ This action was commenced on January 28, 2004. It is now before the court on the
plaintiffs’Fourth Amended Complaint. Although the Fourth Amended Complaint is an improvement (at least from the defendants’perspective) over the Third Amended Complaint (41 pages, 234 paragraphs, 10 named plaintiffs), it still runs to 34 pages and 184 paragraphs and it sets out nine separate legal counts1.
The defendants are filing motions at this stage of the proceedings to challenge the legal sufficiency of the plaintiffs’claims. Because of the number and complexity of those claims, and the interplay between the actual dimensions of the plaintiffs’substantive claims and their standing to raise them2, it may be more useful to the court to address the allegations in the Fourth

1 This is not quite as bad as it seems. The plaintiffs set out parallel claims under Title II of the Americans with Disabilities Act, 42 USC s. 12132, and s. 504 of the Rehabilitation Act, 29 U.S. C s. 794. Those claims will not require separate analysis, Radaszewski v. Maram, 383 F.3d 599, 607 (7th Cir. 2004) (“In view of the similarities between the relevant provisions of the ADA and the Rehabilitation Act and their implementing regulations, courts construe and apply them in a consistent manner . . . see also Bruggeman, supra, 324 F.3d at 912 (noting that the statutory and regulatory provisions concerning integrated care are ‘materially identical’.)”). 2 Bruggman v. Blagojevich, 324 F.3d 906, 909 (7th Cir. 2003) (“Not that standing and the merits are always or in this case [which raised ADA, Rehabilitation Act and Medicaid claims] clearly distinct.”)
Case 2:04-cv-00193-LA Filed 06/15/05 Page 1 of 14 Document 69

Amended Complaint as they become relevant to the discussion rather than attempt to summarize them in a statement of facts.
I. Motion for Judgment on the Pleadings At this stage of the proceedings, after multiple rounds of pleadings have been exchanged, a motion to challenge the legal sufficiency of the plaintiffs’claims is properly styled a motion for judgment on the pleadings under Rule 12(c), F.R.C.P. The standard applied to a Rule 12(c) motion is the same as the standard for a motion to dismiss under rule 12(b). A moving defendant will succeed only if it is clear that the factual allegations of the complaint will not support the plaintiff’s claim for relief. The court must view those factual allegations in the light most favorable to the plaintiff. However, the court is “not obliged to ignore any facts set forth in the complaint that undermine the plaintiff’s claim or to assign any weight to unsupported conclusions of law”, R.J.R. Serv., Inc. v. Aetna Cas. & Sur. Co., 895 F.2d 279, 281 (7th Cir. 1989). II. Standing. To create a “case or controversy” sufficient to invoke the jurisdiction of the federal court under Article III of the Constitution, a party must show that he or she has suffered an “injury in fact” that is “concrete,” distinct and palpable,” and “actual or imminent,” as opposed to “conjectural” of “hypothetical”. McConnell v. Federal Election Commission, 540 U.S. 93, 225 (2003). In addition, the party must show that his or her injury is “fairly traceable” to the defendant’s conduct and that there is a “substantial likelihood” that the requested relief will redress the harm. Id. Without such a showing, a federal court is without jurisdiction to entertain the party’s arguments on the merits. United States ex rel. Stevens, 529 U.S. 765, 778 (2000).
2 Case 2:04-cv-00193-LA Filed 06/15/05 Page 2 of 14 Document 69

III. ADA and Rehabilitation Act claims. Each of the plaintiffs is a disabled person who resides in a community based residential facility (CBRF) and receives additional services, all paid for by the Family Care program administered by the Milwaukee County Department on Aging (MCDA). But for their various disabling conditions, they would be ineligible for the funding and services they receive through Family Care. It is therefore unsurprising that their attempts to articulate viable claims under the ADA and the Rehabilitation Act against the Family Care program present conceptual difficulties. In Washington v. Indiana H.S. Athletic Assn., Inc.,181 F.3d 840, 847 (7th Cir. 1999), the Seventh Circuit Court of Appeals adopted a plain language standard which is helpful in analyzing the claims in this case: “In our view, the Sixth Circuit outlined correctly . . . the various methods of proof in s. 504 Rehabilitation Act or Title II ADA claims: discrimination under both acts may be established by evidence that (1) the defendant intentionally acted on the basis of the disability, (2) the defendant refused to provide a reasonable modification, or (3) the defendant’s rule disproportionately impacts disabled people.” A. The defendants have not intentionally discriminated against the plaintiffs because of their disabilities. This method of establishing a claim under the ADA or the Rehabilitation Act (essentially, “adverse treatment”) is clearly absent from the plaintiffs’Fourth Amended Complaint. The plaintiffs have not alleged that the features of the Family Care program of which they complain are the result of any purposeful animus against them or against persons with disabilities generally, nor have they identified any “comparison class” of non-disabled persons singled out for preferable treatment.
3 Case 2:04-cv-00193-LA Filed 06/15/05 Page 3 of 14 Document 69

B. The features of the Family Care program of which the plaintiffs complain do not disproportionately affect disabled persons. The allegations of the Fourth Amended Complaint are not sufficient to establish a claim under the ADA or the Rehabilitation Act under a theory of disparate impact. Any discussion of disparate impact logically requires the designation of a “comparison class” whose treatment under the rule or program under attack can be compared with the treatment received by the plaintiffs. When disabled plaintiffs assert claims under the ADA and the Rehabilitation Act, one might expect the comparison class to be persons who are not similarly disabled. However, there are no allegations in the complaint about any non-disabled persons. The plaintiffs’disparate impact theory must therefore be of a non-traditional sort for ADA and Rehabilitation Claims, and in fact it is. Because the plaintiffs are eligible disabled persons over the age of 60, their communitybased residential care and services are paid for by the Family Care program. Under that program (the basics of which are described with reasonable accuracy in the Fourth Amended Complaint), the MCDA (in its role as the Family Care CMO) receives a capitated monthly rate from the State for each beneficiary of the program. From that funding, MCDA pays for the care and treatment of each beneficiary, as determined by that beneficiary’s individual needs and care plan. Eligible persons with similar disabilities under the age of 60 who reside in the community are served by the MCDHS Disabilities Services Division under the “traditional” Medical Assistance waiver programs (COP, CIP, etc., as described in the Fourth Amended Complaint). One consequence of the introduction of the Family Care as a program operated on an HMO model and administered separately from the Medical Assistance waiver programs is that the Family Care program pays some CBRF operators and other service providers a lower rate for persons over the age of 60
4 Case 2:04-cv-00193-LA Filed 06/15/05 Page 4 of 14 Document 69

than those operators receive for similarly disabled persons under the age of 60 whose care is funded under the Medical Assistance waiver programs.
This, then, is the gravamen of the Fourth Amended Complaint: Family Care pays some CBRF operators and ancillary treatment providers at lower rates than those same providers would receive for the same beneficiaries if they were under 60 years old and, therefore, beneficiaries of the Medical Assistance waiver programs rather than Family Care.
The disparity upon which the plaintiffs rely (that is, between disabled persons over 60 whose care is paid by the defendants under Family Care and disabled persons under 60 whose care is paid for by the defendants under the traditional Medical Assistance waiver programs) will not support their claims under the ADA and the Rehabilitation Act.
The plaintiffs attempt to make more of this claimed disparity than the factual allegations of their complaint will bear. They allege that Family Care beneficiaries receive “substantially inferior treatment in regard to payment for services”, (Paragraphs 143(A), (B) and (C) and 162(A), (B) and (C), Fourth Amended Complaint). But there is no factual allegation which will support an inference that the difference, even with respect to payment, is “substantial”. More importantly, there is nothing in the factual allegations of the complaint from which the court can infer that the lower payments affect the quality of the treatment and services received by Family Care beneficiaries so substantially that the rights of the plaintiffs under the ADA and the Rehabilitation Act are implicated.
None of the named plaintiffs alleges that his or her own care or services have been substantially reduced. They allege only that they may face the prospect of moving to different community-based providers because their current providers are dissatisfied with their profits under the rates which Family Care pays them. The plaintiffs do not allege that the care they
5 Case 2:04-cv-00193-LA Filed 06/15/05 Page 5 of 14 Document 69

would receive if that occurs will be “substantially inferior” to the care they currently receive, and there is no reason for the court to infer that it would be. Nor does any named plaintiff allege that he or she is receiving care or treatment which is substantially inferior to what he or she received when under age 60 as a beneficiary of a Medical Assistance waiver program. The complaint does not describe the case of a single Family Care beneficiary who has suffered any injury cognizable under the ADA or the Rehabilitation Act due to the “disparate treatment” alleged in Paragraphs 143 and 162.
In short, the claims of disparate treatment in Paragraphs 143 and 162 are mere unsupported conclusions and therefore insufficient to state a claim under conventional Rule 12(c) analysis. Moreover, even if they did state a claim, the Fourth Amended Complaint does not identify any Family Care beneficiary who has the standing to raise it.
C. The integration mandate. The Fourth Amended Complaint charges that the defendants administer Family Care in a fashion which violates the mandate, derived from both the ADA and the Rehabilitation Act and their respect implementing regulations, that disabled persons be served in the “most integrated” (that is, typically, the least institutional) setting appropriate to their needs. The case law is clear that “unjustified institutional isolation” of disabled individuals receiving care under the auspices of the state is actionable as a violation of the integration mandate of Title II of the ADA, Olmstead v. L.C., 527 U.S. 581 (1999), Radaszewski v. Maram, 383 F.3d 599 (7th Cir. 2004). However, none of the named plaintiffs is in “institutional isolation”, justified or otherwise. They are all in community placements, thanks to Family Care funding, and none has the standing to assert a claim under the integration mandate.
6 Case 2:04-cv-00193-LA Filed 06/15/05 Page 6 of 14 Document 69

The allegations of Fourth Amended Complaint which describe the named plaintiffs (Par. 65-Par. 127) do not show any concrete “injury in fact” to the those plaintiffs, and certainly no injury which implicates their rights under the integration mandates of the ADA and the Rehabilitation Act. Viewing those allegations in the light most favorable to the plaintiffs, they establish no more than conjectural or hypothetical injury.
Four of the six named plaintiffs reside in CBRF’s run by the same business entity, Homes for Independent Living (HIL). HIL demanded higher rates from MCDA. When MCDA declined, HIL gave notice that it would cease doing business with MCDA, which forced MCDA to make other arrangements for the plaintiffs. At length, due to interim stipulations, HIL agreed to keep those plaintiffs at the existing rates and it was not necessary to move them. The other named plaintiffs are placed in a CBRF which, according the operator, is insufficiently profitable at the rates paid by the Family Care Program. Therefore, if the program does not increase those rates, those plaintiffs may have to move because that operator will stop doing business with the Family Care program. The action has been pending for a year and a half, and that has not yet happened.
The worst thing that could happen to the plaintiffs, even in the absence of the stipulation in this action, would be a move to a different CBRF, perhaps with different ancillary service providers. Significantly, it is not even alleged that MCDA plans to move any of the plaintiffs to a “less integrated” nursing home or other institutional placement (in which event, the plaintiffs might have an arguable claim under the integration mandates of the ADA and the Rehabilitation Act).
The plaintiffs allege that any move would be so stressful as to result in a nursing home or similar institutional placement, but such conclusory allegations are “hypothetical” and
7 Case 2:04-cv-00193-LA Filed 06/15/05 Page 7 of 14 Document 69

“conjectural” and therefore inadequate to confer standing. Indeed, the allegations of the complaint itself tend to refute that proposition. Plaintiff Bzdawka has been transferred to “a succession of group homes in Milwaukee County”, and then she was transferred from one HIL facility to another (Fourth Amended Complaint, Par. 82). Plaintiff Nelson was also transferred from one HIL CBRF to another HIL CBRF (Fourth Amended Complaint, Pars. 66-67). Plaintiff Gorton (one of the two plaintiffs not in HIL facility) was in “several assisted living facilities” before moving to his current placement. In none of those cases did the moves result in nursing home or other institutional placements. The only inference which flows logically from the allegations of the complaint is that, for a variety of reasons, disabled persons move from one facility or treatment provider to another (which, in fact, they do), and that those moves are not typically so traumatic as to cause placement in less integrated institutional settings.
The substantive right which the plaintiffs are really asserting is a right to remain indefinitely, at state and county expense, in a particular CBRF with a particular array of additional service providers, irrespective of cost or any other factor. No such right exists under the ADA or the Rehabilitation Act. The law will not support federal court intervention to regulate the administration of a program for the disabled at that level of specificity. “The purpose of the [integration mandate] regulation is not to constitute the federal courts the supervisors of the care and treatment of disabled persons. It is to prevent the isolation or segregation of the disabled.” Bruggeman v. Blagojevich, 324 F.3d 906, 911 (7th Cir. 2003).
D. Reasonable accommodation requirement. This is not, as plaintiffs suggest, a “reasonable accommodation” case. A “reasonable accommodation” is one that gives an otherwise qualified plaintiff with disabilities “meaningful access” to a program or service. Alexander v. Choate, 496 U.S. 287, 301 (1985). That concept
8 Case 2:04-cv-00193-LA Filed 06/15/05 Page 8 of 14 Document 69

cannot reasonably by applied to the operation of the Family Care program as it affects the plaintiffs in this case because the benefits of the Family Care program, insofar as they pertain to the plaintiffs, are available only to the disabled, and the plaintiffs are currently receiving those benefits. The plaintiffs are arguing that they are entitled to a “reasonable accommodation” which would permit them to remain in the same CBRF forever, irrespective of cost or any other factor. Milwaukee County does not offer any program or service to the non-disabled, or to anyone, which guarantees perpetual placement in the same residential facility.
Moreover, even if the notion of “reasonable accommodation” were applicable in this case, the defendants cannot be compelled to make that accommodation. Under the ADA, a public entity is not required to make an accommodation which “would fundamentally alter the nature of the service, program, or activity,” 28 CFR s. 35.130(b)(7). Similarly, under the Rehabilitation Act, a requested accommodation is not required if it “creates a fundamental alteration in the nature of the program” or creates “undue financial or administrative burdens”.
The essential and defining feature of the Family Care program is that it is a managed care program. MCDA, in its capacity as the “care maintenance organization” administering the program, receives a capitated (per enrollee-per month) payment from the State of Wisconsin, and it is required to meet the identified needs of all eligible persons through the judicious purchase of residential and support services and the like with that limited source of funds. What the plaintiffs characterize as a “reasonable accommodation” would permit particular providers of residential services to, in effect, extort higher rates from Milwaukee County by threatening to evict Family Care clients if those higher rates are not paid. If the court empowers providers to engage in such conduct by forbidding the Family Care program to offer alternative appropriate residential and support services on the theory there is a federal right under the ADA and
9 Case 2:04-cv-00193-LA Filed 06/15/05 Page 9 of 14 Document 69

Rehabilitation Act to remain in the same CBRF forever (which is, for the reasons discussed above, a very doubtful proposition), the program’s ability to manage care and control costs would be eliminated. That would certainly “fundamentally alter” the nature of the program and would create “undue financial or administrative burdens” within the meaning of the applicable regulations.
The Supreme Court has explicitly recognized that in reasonable accommodation cases (as in all cases of this kind), there is only so much money to go around. Accordingly, the Court refused to adopt an interpretation of the reasonable modifications regulation which “would leave the State virtually defenseless once it is shown that the plaintiff is qualified for the service or program she seeks,” Olmstead, 527 U.S. 581 at p. 603. Rather, the Court stated that, “[s]ensibly construed, the fundamental-alteration component of the reasonable-modifications regulation would allow the State to show that, in the allocation of available resources, immediate relief for the plaintiffs would be inequitable, given the responsibility the State has undertaken for the care and treatment of a large and diverse population” of persons with disabitilites”, id.
The goal of the Family Care program is to allocate the available resources as efficiently as possible in order to fund community placements for all eligible disabled persons for whom such placements are appropriate, as an alternative to leaving people in institutions on waiting lists (which, if properly administered, would be perfectly legal under the ADA and the Rehabilitation Act, Bruggeman v. Blagojevich, 324 F.3d 906, 913 (7th Cir. 2003)). To require the Family Care program to pay whatever rates a particular CBRF or other provider which is serving a particular enrollee or group of enrollees may demand would permit those enrollees and providers to absorb an inequitable share of the available resources. In fact, it could delay or
10 Case 2:04-cv-00193-LA Filed 06/15/05 Page 10 of 14 Document 69

eliminate the possibility of more integrated community placements for other eligible individuals, and thus frustrate the larger purpose or the ADA and the Rehabilitation Act.
IV. Medicaid Act claims. The Fourth Amended Complaint includes a claim under 42 U.S.C. s. 1396a(a)(30)(A), a section of that portion of the federal Medicaid Act which prescribes the components of the medical assistance plan which a state must have in order to participate in the Medicaid program. The plaintiffs allege that provider payments under the Family Care program are not “sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographical area,” within the meaning of that provision of the Act. The complaint alleges that the plaintiffs have a private cause of action under s. (30)(A), enforceable under 42 U.S.C. s. 1983. (Par. 182, Fourth Amended Complaint). This is an unsupported legal conclusion which the court should not consider in assessing the viability of the claim. R.J.R. Serv., Inc. v. Aetna Cas. & Sur. Co., 895 F.2d 279, 281 (7th Cir. 1989). Although there is authority from other circuits allowing such a cause of action for Medicaid beneficiaries, see, e.g., Evergreen Presbyterian Ministries Inc., v. Hood, 235 F.3d 908 (5th Cir. 2000), the Seventh Circuit Court of Appeals has not recognized such a cause of action3. Even if such authority would be found, it is not clear what the relevant “general population” or “geographical area” would be in this action.
3 Nor is there any reason to suppose the Seventh Circuit is in a hurry to create such a cause of action. The court has shown a salutary reluctance to turn Medicaid state plan requirements into causes of action, see, Bruggeman v. Blagojevich, 324 F.3d 906, 911 (7th Cir. 2003), wherein the court refused to find a private cause of action in the “best interests” provision of 42 U.S.C. s. 1396a(a)(19), citing “the Supreme Court’s hostility, most recently and emphatically expressed in Gonzaga University v.Doe, 536 U.S. 273 . . . to implying such rights in spending statutes.”
11 Case 2:04-cv-00193-LA Filed 06/15/05 Page 11 of 14 Document 69

The Seventh Circuit Court of Appeals has recognized a cause of action under s. (30)(A) in favor of Medicaid providers, Methodist Hospitals, Inc. v. Sullivan, 91 F.3d 1026, 1029 (7th Circuit). However, the plaintiff providers in that case, although they had the theoretical basis for a claim, were unsuccessful because they were unable to establish a violation of s. (30)(A). Based upon the allegations in the Fourth Amended Complaint, the plaintiffs in this action would fail for the same reasons, even if they could assert a cognizable cause of action.
In Methodist Hospitals, the Seventh Circuit Court of Appeals held that a state does not violate s. (30)(A) if it “behave[s] like other buyers of goods and services in the market place” in setting Medicaid reimbursement rates. A state can experiment with reimbursement methods and rates to test what the market will bear. If an experiment fails and sufficient providers are not forthcoming, s. (30)(A) may require the state to raise the rates, but the experiment itself does not subject the state to a private cause of action, id., 91 F.3d 1026 at 1030.
Based upon the allegations in the Fourth Amended Complaint, the impact of Family Care rates on the availability of CBRF’s and ancillary service providers for program beneficiaries has not been sufficiently adverse to support a claim under s. (30)(A). In dismissing the claims of the plaintiff providers in Methodist Hospitals, the court noted that the plaintiffs themselves had not withdrawn from the market as a result of the challenged reimbursement system. “Indeed, they have not offered to show that any provider withdrew, anywhere in the state.” The plaintiff providers offered only “dire predictions”, which did not come to pass, id., 91 F.3d 1026 at 1030. The allegations of the Fourth Amended Complaint are very similarly deficient. The providers serving the named plaintiffs complain and threaten, but during the year and a half that this action has been pending neither has stopped serving Family Care beneficiaries. Indeed, like the unsuccessful provider plaintiffs in Methodist Hospitals, the plaintiffs in this action have alleged
12 Case 2:04-cv-00193-LA Filed 06/15/05 Page 12 of 14 Document 69

only “dire predictions”. As alleged in paragraphs 50 and 130 of the Fourth Amended Complaint, Family Care has been operating since 2000 and serves nearly 5,700 enrollees, but the plaintiffs have not offered to show that any provider has withdrawn from the program or that there has been any contraction in the relevant market for services which would suggest a violation of s. (30)(A).
CONCLUSION For the foregoing reasons (together with the reasons which are cogently and persuasively argued in the brief of the State of Wisconsin defendants), Milwaukee County respectfully urges the court to dismiss the Fourth Amended Complaint under Rule 12(c), on the grounds that the named plaintiffs do not state claims upon which relief can be granted because the claims as stated are not cognizable or, with regard to those sections of the complaint which may describe viable private causes of action, the plaintiffs lack the standing to raise them. Dated at Milwaukee, Wisconsin this 15th day of June, 2005.
OFFICE OF CORPORATION COUNSEL By:___________________________________
John Jorgensen Principal Assistant Corporation Counsel State Bar No. 01017484 Attorneys for Defendant Milwaukee County P.O. Address: Milwaukee County Courthouse 901 North 9th Street, #303 Milwaukee, WI 53233 Telephone: (414) 278-4302 Fax: (414) 223-1249
13 Case 2:04-cv-00193-LA Filed 06/15/05 Page 13 of 14 Document 69

14 Case 2:04-cv-00193-LA Filed 06/15/05 Page 14 of 14 Document 69

 
 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________

GERALD NELSON, et al.,

Plaintiffs,

vs.

Case No. 04-C-0193

MILWAUKEE COUNTY, et al.,

Defendants. ______________________________________________________________________________

PLAINTIFFS' BRIEF IN OPPOSITION TO STATE DEFENDANTS' MOTION TO DISMISS AND IN OPPOSITION TO MILWAUKEE COUNTY'S MOTION FOR JUDGMENT ON THE PLEADINGS ______________________________________________________________________________

INTRODUCTION

The State and County defendants have each filed motions to dismiss plaintiffs' fourth

amended complaint. The motions assert that plaintiffs have failed to state legal claims upon

which relief can be granted and also that the plaintiffs lack standing to make these claims. The

motions to dismiss based on legal sufficiency were anticipated and plaintiffs actually welcome

the opportunity to clarify these dispositive issues before going forward with the process of class

certification and further discovery. That was the whole purpose of the stipulation that resolved

the pending motion to file the fourth amended complaint. It was hoped that clarifying the issues

would in turn simplify the class certification decision. In addition, the State seeks to dismiss one

aspect of the case based on Eleventh Amendment immunity. This was also anticipated.

Unfortunately, the defendants' other assertion that the case should be dismissed for lack

of standing creates some unanticipated procedural issues. Standing in class actions is determined

with reference to the class as a whole rather than simply looking at the potential impact on the

Case 2:04-cv-00193-LA Filed 07/22/05 Page 1 of 29 Document 77

named plaintiffs. Pursuant to the stipulation, plaintiffs' class motion has been denied with leave to refile after these pending motions are decided. This creates an endless procedural loop. Rather than return immediately to the class motion, plaintiffs have a suggestion for resolving this awkward situation. First, the Court should consider whether the allegations in the fourth amended complaint support standing based only on the claims of the individual plaintiffs. If so, the plaintiffs will prevail on standing without further analysis. If not, the second step would be to determine whether the class allegations in the complaint support standing based on the claims of the putative class. Once again, if this step is satisfied, the plaintiffs simply prevail on standing. If not, the only proper course is to deny the defense standing motions at this time with leave to refile after plaintiffs' request for class certification is decided.
The procedure governing the other aspects of the defense motions is much more straightforward. The Court can conduct its customary inquiry into whether the claims are legally sufficient and whether plaintiffs can prove any set of facts in support of the allegations of the complaint. Plaintiffs are filing three affidavits and a number of exhibits at this time. The purpose of these affidavits and plaintiffs' previous submissions is not to convert the pending motions into motions for summary judgment, but rather to show that plaintiffs will be able to prove facts in support of their fourth amended complaint.
Plaintiffs will first review the legal basis under each of the three applicable statutes since this will simplify the later discussion of standing and the State's Eleventh Amendment defense. The plaintiffs have alleged legally sufficient claims under the Americans with Disabilities Act, §504 of the Rehabilitation Act and 42 U.S.C. §1396(a)(30)(a), and will be able to prove a set of facts in support of these claims. The plaintiffs have standing to bring these claims and the Eleventh Amendment does not present any obstacles to the relief that they are seeking.
2
Case 2:04-cv-00193-LA Filed 07/22/05 Page 2 of 29 Document 77

STATEMENT OF ISSUES I. Plaintiffs have stated claims upon which relief can be granted under the Americans with
Disabilities Act and §504 of the Rehabilitation Act................................................................11 A. Intentional discrimination and disparate impact under the ADA and §504.......................13 B. Effective access to public services under the ADA and §504...........................................15 C. The right to integrated services under the ADA and §504................................................16 D. Reasonable accommodation under the ADA and §504.....................................................17 II. Plaintiffs have stated claims upon which relief can be granted under 42 U.S.C. §1396(a)(30)(A) of the federal Medicaid statute.....................................................................18 III. The individual plaintiffs, as well as the members of the putative class, have standing to bring the legal claims set out in the fourth amended complaint........................................................20 A. Group home residents have a legitimate interest in continuing to live in a particular home
of their choice....................................................................................................................22 B. The individual plaintiffs have standing..............................................................................23 C. The putative class members have standing........................................................................24 D. If the issue cannot be resolved in plaintiffs' favor at this stage of the proceedings, the
portions of the defense motions relating to standing should be denied with leave to refile after the class certification question is resolved................................................................25 IV. Plaintiffs' claims for injunctive relief which may result in an order directing the State defendants to increase future capitated rates payable to Milwaukee County are not barred by the Eleventh Amendment.........................................................................................................25 A. There is no State immunity for claims under §504............................................................26 B. Ex Parte Young permits an action for injunctive relief against the State defendants under the ADA, §504 and 42 U.S.C. §1396(a)(30)(a).................................................................26 C. Plaintiffs are not pursuing any claims under the ADA or 42 U.S.C. §1396(a)(30)(a) other than those that come within the Ex Parte Young doctrine.................................................28
3
Case 2:04-cv-00193-LA Filed 07/22/05 Page 3 of 29 Document 77

PROCEDURAL BACKGROUND The original complaint was filed in State Court on January 28, 2004 and was removed on February 25, 2004. [Dkt 1]. The only parties were Plaintiffs Nelson and Bzdawka and Defendant Milwaukee County. Id. Two additional plaintiffs living in homes operated by the same provider were added in the first amended complaint on April 13, 2004. [Dkt 18]. Milwaukee County then raised the issue of the State's participation as a necessary party and that led to the second amended complaint on April 30, 2004. [Dkt 23]. A third amended complaint added additional plaintiffs. [Dkt. 37]. Two of them, Lenore Czarnecki and John Gorton, are served by another residential provider, but the issues are similar. Other plaintiffs added at that time who receive different types of Family Care services were subsequently dismissed as part of a stipulation in order to limit the issues in the case. [Dkt. 50]. Counsel attempted to reach a stipulation defining the legal issues further in order to avoid a further amendment, but were not successful. This led to a motion to amend in order to permit the filing of a fourth amended complaint. [Dkt. 51]. A class certification motion was also filed at this time. [Dkt. 54]. Counsel were then able to reach a stipulation permitting the amendment and suggesting a roadmap for further proceedings. [Dkt. 58]. Defense counsel insisted that dispositive motions be heard first and that the class certification issue be deferred and that is what the stipulation provided. [Dkt. 67]. The State and County defendants have now filed their motions to dismiss. [Dkt. 68 & 70].
STATEMENT OF FACTS The factual history provided by the State defendants is a reasonably complete summary of the factual allegations and issues in the case. This is intended to supplement the State's version rather than to replace it. Plaintiffs are filing three affidavits along with this brief. There is a supplemental affidavit from Lincoln Burr, executive director of Homes for Independent Living.
4
Case 2:04-cv-00193-LA Filed 07/22/05 Page 4 of 29 Document 77

[Burr-II]. Plaintiffs Nelson, Bzdawka, Ehrlichman and Berdikoff live in HIL homes. There is an affidavit from Dr. Gerald Kallas, president of Senior Residential Care of America. [Kallas]. Plaintiffs Czarnecki and Gorton live in SRCA homes. There is also an affidavit from Thomas Cook, an expert on disability services and disability funding programs. [Cook]. The following will also reference portions of previous affidavits and other submissions.
Funding Developments at the State and County Level The State increased Milwaukee County's Family Care comprehensive rate from $1,810.61 for calendar year 2004 to $2,055.01 for calendar year 2005. www.dhfs.state.wi.us/ LTCare/StateFedReqs/CapitationRates.htm. This is the second highest rate increase in the history of Family Care. [Cook: ¶36]. However, most of the other Family Care counties still receive higher rates in comparison to Milwaukee. For example, the comprehensive rates for 2005 are: Fond du Lac County - $2,120.74, La Crosse County - $1,828.82, Portage County - $2,320.75 and Richland County - $2,140.30. The "intermediate" rates which covers many fewer individuals, those who have lesser services needs, are the same for all counties and are as follows: 2001 $628.79, 2002 - $640.00, 2003 - $657.40, 2004 - $674.49, 2005 - $691.35. (All of this data is from the above- referenced web page.) In the wake of the rate increase, residential providers in Milwaukee County anxiously awaited word on how the Milwaukee County Department on Aging (MCDA) would allocate the funds locally. Much of what we know about this comes from MCDA informational meetings for providers that were held on February 15 and March, 2005. Staff from Senior Residential Care of America (SRCA) attended the meeting and reported what was said. The memo, dated March 16, 2005 was previously filed as attachment A to the second Pledl affidavit. [Dkt. 53]. It will be
5
Case 2:04-cv-00193-LA Filed 07/22/05 Page 5 of 29 Document 77

referenced as the "SRCA memo" or as Pledl II-Ex. A. The following quotations from the memo
are pertinent to the issue of provider payments:
•Family Care is currently trying to no longer require Family Care providers to complete a financial audit each year. This is based on the idea that, since a company's financial standing will no longer determine the payments received to care for a resident, financial audits "are an unnecessary expense." [page 7]
•Regarding [MCDA staff's] views on how businesses are expected to coexist with an "entitlement program" like Family Care, [she] stated: "I have found that businesses need to go bankrupt at least two times before they learn how to run a CBRF properly." [page 8] (emphasis in memo)
•Some meeting attendees stated that potential residents were now moving into Milwaukee County and signing over their money and assets to their family members so that they can qualify to receive Family Care funding. [MCDA staff] stated that she (and almost everyone else in Family Care) knows that this practice is rampant (even though she admits that it is "illegal"). She further admitted that Family Care "is doing nothing at this time to try to stop this illegal practice." [Id.]
• . . . [MCDA staff] stated that all newly constructed facilities have operating costs that are too high and will not be able to afford accepting Family Care residents. [Id.]
•Although new facilities may offer nicer environments and amenities, "this does not equal a benefit to the FC residents," Therefore, facilities with higher costs may not be able to offer FC housing." [Id. at 13]
• . . . if the facilities don't receive enough compensation from FC, then we "should get more private pay residents" to help cover our operating costs. [Id. at 14]
• . . . because there is no private pay industry to offer DD care services, programs that offer care services for DD's receive greater financial support than care programs for seniors. [Id.]
MCDA staff at these meetings also explained that a new "functional" method would be
used to set provider rates beginning in April of 2005. [Id. at 7]. Plaintiffs' counsel recently
inquired about why the new functional rate method had not been implemented. Atty. Jorgensen
responded by letter dated July 18, 2005:
Meanwhile, Family Care has been directed to refrain from granting across-theboard rate increases unless and until the County Board approves such increases. We assume that such approval will depend on, among other things, a satisfactory
6
Case 2:04-cv-00193-LA Filed 07/22/05 Page 6 of 29 Document 77

arrangement to establish risk reserves and to repay Family Care deficits which have been covered by tax levy revenues. [Cook-Ex. I].
The Effect of Funding Developments on Residential Providers Dr. Kallas is the CEO of Senior Residential Care which is the residential provider for two of the plaintiffs. His affidavit summarizes the unsuccessful efforts to obtain a Family Care rate increase at SRCA's Milwaukee County CBRFs by working with MCDA, [Kallas:¶¶16-19, 2335], other providers, [¶¶20-21], and the State Legislature. [¶26 & Ex. D]. SRCA's Milwaukee County Family Care rate has been $2,700 per month since 2001. [¶17]. Waukesha County is not in Family Care and SRCA's facility there has operated with a monthly Medicaid waiver rate of $3,500 per month for identical services. [¶15]. Dr. Kallas reported that in a survey of other residential providers, 80% of the respondents said they were being paid below their cost of care. [¶20-21]. He has spoken with bankers who expressed a reluctance to finance residential facilities in the County because of the perception that Family Care is unstable and underfunded. [¶43]. As Dr. Kallas said on December 10, 2004: "SRCA will be forced to consider leaving the Family Care Program at some point duing 2005 if we do not receive a significant rate increase. [¶44]. Lincoln Burr is Executive Director of Homes for Independent Living which is the provider for four of the plaintiffs. His previous affidavit detailed the early stages of HIL's problems with MCDA over rate issues. [Dkt. 56]. His second affidavit describes the circumstances of HIL's entry into Milwaukee County: HIL developed these homes beginning in the mid-90's. HIL and Paragon were encouraged by the State to enter the County in order to serve individuals with more severe disabilities that were being transferred from the State Centers for the Developmentally Disabled and other institutions into community placements. The State and County had experienced difficulty in placing these individuals with existing programs in the County because they had significant behavioral and/or medical issues. HIL negotiated generally higher rates for these individuals
7
Case 2:04-cv-00193-LA Filed 07/22/05 Page 7 of 29 Document 77

compared to existing residential providers in the County based on the need to arrange more intensive staffing patterns and utilize more highly trained staff. [Burr II: ¶7]. The second affidavit goes on to describe the current funding situation. HIL and its associated day program, Paragon, have historically received cost of living increases from the Milwaukee County Disabilities Services Division, which serves clients under age 60, and from other Wisconsin counties. [Burr I: ¶19]; [Burr II: ¶¶9-10]. The total annual shortfall for the six Milwaukee Family Care clients in HIL homes is now $18,899.70 when compared to the Milwaukee DSD average rate and $52,187.70 when compared to the average rate paid by other counties. [Burr II: ¶4]. Milwaukee DSD has worked with HIL on a procedure to bill for MA personal care services that will increase the DSD effective rate to about the same level as the other counties. [Burr II: ¶9 & 11]. It has now been five years without a rate increase from MCDA for either HIL or Paragon as additional DSD clients continue to age into Family Care. [Burr II: ¶¶8, 13, 14 & 15]. Mr. Burr says that HIL and Paragon have been able to remain in operation in Milwaukee County despite the MCDA rate problems because of their operations in other counties. [Burr II: ¶20]. "However, we will be forced to reconsider our continued subsidy of MCDA in the near future. We cannot subsidize Family Care clients. Unless we receive significant rate increases, we will be forced to terminate our contract with MCDA." Id. Thomas Cook is an expert in the field of disability services and funding systems with personal experience in Milwaukee County. [Cook: ¶¶2-11 and Ex. A]. It is his conclusion that the share of Milwaukee Family Care dollars going to residential providers in 2004 was too low and that the situation got even worse in 2005. [Cook: ¶43-45]1. CBRFs are legitimately one of
1 There is a variance between the 2005 capitated rate of $1,975.88 reported by the County in an email, [Cook - Ex. H], and the $2,055.01 rate listed on the DHFS website. Plaintiffs do not have an explanation for this. Using the higher figure would make the percentage allocated to providers even lower.
8
Case 2:04-cv-00193-LA Filed 07/22/05 Page 8 of 29 Document 77

the most costly services in any system and it appears they are not receiving adequate payments from Family Care. [¶47]. Part of the basis for this conclusion came from the affidavits of Dr. Kallas and Mr. Burr. He noted that both SRCA and HIL are receiving higher rates for similar services from other counties and, in the case of HIL, higher rates from another part of the same county, DSD. [¶24-25]. In general, large providers are able to cover losses in a particular segment of their operations for a time, but for various reasons they must then either reduce or eliminate the segment that is losing money. [¶26]. Mr. Cook said:
The rate problems with MCDA would cause any large provider to consider reducing or eliminating the number of Family Care clients. It is reasonable to predict that SRCA and HIL will leave Milwaukee County Family Care if rates do not improve. Other large providers in Milwaukee County are probably considering this option. [¶27]. Due to inflation, five years without a rate increase "actually represents a substantial decrease in effective provider income." [¶29]. Mr. Cook noted that the plight of smaller residential providers is somewhat different. They usually cannot move to another county or pursue higher-rate clients from other counties in their Milwaukee homes and so they will simply cease operations if rates are not adequate. [Cook: ¶28]. In order to determine whether the rate structure was having any effect on providers, plaintiffs arranged for a Milwaukee accounting firm to gather data from audited financial statements filed by Milwaukee County residential providers. [¶30]. The data was then evaluated by John Villegas-Grubbs, an expert on disability funding systems from Arizona. Id.2 His conclusion is that small providers in Milwaukee County are in serious financial condition and that many no longer have "going concern" status. [Cook: ¶31]. Larger providers are in better financial condition according to their audited financial statements, a fact that Mr. Cook attributes
2 Gathering the data from the County was a lengthy process. Then Mr. Villegas-Grubbs had to perform his evaluation which was then subjected to a peer review process. Mr. Cook has reviewed a draft report and spoke to Mr. Villegas-Grubbs. Plaintiffs will submit the actual documents once they are received.
9
Case 2:04-cv-00193-LA Filed 07/22/05 Page 9 of 29 Document 77

to their ability to subsidize their Milwaukee County operations from other sources. [¶¶31-32]. Mr. Cook was very critical of MCDA for planning to dispense with the audit requirement. [¶48]. "Small providers in the County are in a financial crisis. The County should continue to collect this data in order to monitor the adequacy of the residential provider rates." Id.
He also disagreed with the implication by MCDA staff that CBRF business failures were the provider's fault. [¶47]. Based on a variety of factors, "[b]ankruptcies among Milwaukee County providers are more likely to be caused by low rates rather than the business abilities of the provider." Id. Mr. Cook recognized that Milwaukee County has some legitimate reasons for wanting to use the money from the 2005 rate increase to establish a risk reserve and reimburse the tax payers. [¶49]. He then said: "However, regardless of the County's rationale, the likelihood of wide-spread business failures and larger providers leaving Family Care make it imperative that at least some of the increased State funding should go to the residential providers immediately." Id.
The Effect of Funding Developments on the Clients of Residential Providers Significant planning and effort goes into selecting the right residential setting for a particular person with a disability. [Burr I: ¶10]. Once they are in their new home, '[c]lients develop attachments to other clients and to particular staff members in the CBRF and at their day program. The whole purpose is to develop a sense of living and working together as a family and this actually does occur." [¶12]; see [Kallas: ¶10]; and see [Cook: ¶52]. According to Mr. Cook's affidavit, this is one of the main reasons that transfers are so traumatic: (52) Transfers between community-based programs put clients at risk for a number of reasons. Such transitions are not just transfers between facilities as would be the case if someone moves from a hospital bed to a nursing facility. They involve the loss of the person's home with all that implies. Clients lose relationships with other residents and staff who know them well. In moving, they lose their place in a "family", a neighborhood and a community.
10
Case 2:04-cv-00193-LA Filed 07/22/05 Page 10 of 29 Document 77

(53) It is almost a certainty that some of the Plaintiffs will need to be institutionalized if this matter is not resolved to the satisfaction of the providers and discharge and contract termination procedures go forward. The more severe heir disabilities or intense their support needs, the higher the risk is for adverse placement outcomes for the Plaintiffs.
Transfers between community placements generally have a higher failure rate than other
transfers. [Cook: ¶51]. Mr. Cook concluded that being transferred to other residential settings
will expose all of the individual plaintiffs "to an imminent threat of institutionalization". [¶65].
Mr. Burr made a similar statement with respect to HIL's clients. [Burr II: ¶23].
ARGUMENT
I. Plaintiffs have stated claims upon which relief can be granted under the Americans with Disabilities Act and §504 of the Rehabilitation Act.
Invoking "the sweep of congressional authority, including the power to enforce the fourteenth amendment and to regulate commerce," the ADA is designed "to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." §§12101(b)(1), (b)(4).
Tennessee v. Lane, 541 U.S. 509, 516 (2004). Congress had passed §504 of the Rehabilitation
Act in 1973 without an extensive statement of intent and purpose. However, two years after
passage of the ADA, Congress revisited §504 and added virtually identical findings about the
persistent problems causing disability discrimination in America. Pub.L. No. 102-569, §106,
106 Stat. 4346 (1992) (codified in 29 U.S.C. §701). Those findings include the following:
(5) individuals with disabilities continually encounter various forms of discrimination in such critical areas as employment, housing, public accommodations, education, transportation, communication, recreation, institutionalization, health services, voting, and public services; and
(6) the goals of the Nation properly include the goal of providing individuals with disabilities with the tools necessary to --
(A) make informed choices and decisions; and
11
Case 2:04-cv-00193-LA Filed 07/22/05 Page 11 of 29 Document 77

(B) achieve equality of opportunity, full inclusion and integration in society, employment, independent living, and economic and social selfsufficiency, for such individuals. 29 U.S.C. §701(a). Plaintiffs' claims under the ADA and §504 will be discussed together because the methods of proving discrimination are imported from one to other. Wisconsin Correctional Service v. City of Milwaukee, 173 F.Supp. 2d 842, 849 (E.D. Wis. 2001). The only significant difference is that §504 is limited to public entities that receive Federal financial support while Title II of the ADA applies to all public entities without regard to funding source. Id. Both Milwaukee County and DHFS receive Federal funds. Numerous cases brought under the ADA and §504 involve various aspects of the Medicaid program. In one such case the defendants argued that in approving the waiver application, the U.S. Department of Health and Human Services had somehow insulated the State from liability under the ADA and §504. The court disagreed, holding: The HCFA waivers upon which the State relies neither could have exempted QUEST from the ADA and the RA, nor purported to do so. Section 1315 authorizes the DHHS to waive various provisions of the Medicaid statute, but it does not mention the ADA or the RA. See also 28 C.F.R. §35.190(b)(3) (charging the DHHS with implementing Title II compliance procedures for programs relating to the provision of health care and social services. Lovell v. Chandler, 303 F.3d 1039, 1056 (9th Cir. 2002), cert. denied, 537 U.S. 1105 (2003). Defendants in cases under the ADA and §504 may assert a fundamental alteration defense based on legitimate governmental interests, however, this can rarely be determined on a Rule 12(b)(6) motion. Michelle P. v. Holsinger, 356 F.Supp.2d 763, 770-1 (E.D. Ken. 2005). Provided that plaintiffs are seeking adjustments to an existing program rather than the creation of an entirely new program, "whether the relief requested would result in a fundamental alteration "is a matter that can be resolved only by a careful examination of the facts and circumstances'."
12
Case 2:04-cv-00193-LA Filed 07/22/05 Page 12 of 29 Document 77

Id., quoting Martin v. Taft, 222 F.Supp.2d 940, 975 (S.D. Ohio 2002); see Radaszewski v.
Maram, 383 F.3d 599, 614 (7th Cir. 2004) ("This is not an assessment that can be made on the
pleadings.")
As the following sections will discuss, plaintiffs' complaint states legally sufficient claims under the ADA and §504 and their factual submissions3 demonstrate that they will be able
to prove facts in support of those claims.
A. Intentional discrimination and disparate impact under the ADA and §504.
The ADA prohibits classic discrimination involving differential treatment of persons with
disabilities in comparison to persons without disabilities, Bay Area Addiction Research v. City of
Antioch, 179 F.3d 725, 735 (9th Cir. 1999), and policies that have a disparate impact on persons
with disabilities, Regional Economic Action Program, Inc. v. City of Middleton, 294 F.3d 35, 48
(2d Cir. 2002). Facially discriminatory government policies, without more, are sufficient to
establish intentional discrimination. Lovell v. Chandler, 303 F.3d at 1057. When a government
entity (a State in that instance), "facially discriminates against the disabled, it is chargeable with
notice that federal rights are implicated by such discrimination." Id. Any claim that
discriminatory animus is required is simply wrong. Also, it is not necessary that plaintiffs show
discrimination in comparison to the general population. Unlike other previous civil rights
statutes, the ADA and §504 also prohibit differential treatment within groups of individuals who
3 The pending motions do not seek summary judgment, and so it is important to define the role of the affidavits and exhibits that plaintiffs have filed. Submissions of this type are made "not for evidentiary, but rather for illustrative purposes -- that is, not to establish the truth of their contents, but to show that there might be a set of facts consistent with [the] allegations in the complaint." Thomas v. Guardsmark, Inc., 381 F.3d 701, 704 (7th Cir. 2004). Plaintiffs believe the factual matters in the submissions are significant evidence, however, this is immaterial in the context of the pending motions. Dismissal "is proper only if there is no state of facts consistent with the complaint that would entitle the plaintiffs to relief. In submitting the [allegedly objectionable document], the plaintiffs were merely indicating that, yes, there may well be facts they could prove that would show they had a claim." Hart v. Sheahan, 396 F.3d 887, 895 (7th Cir. 2005) (citations omitted).
13
Case 2:04-cv-00193-LA Filed 07/22/05 Page 13 of 29 Document 77

all have disabilities. Olmstead v. L.C., 527 U.S. 581, 598 (1999); Henrietta D. v. Bloomberg, 331
F.3d 261, 275-6 (2nd Cir. 2003), cert. denied, 541 U.S. 936 (2004). This also applies to cases
that seek systemic modifications in Medicaid-funded programs. Makin v. Hawaii, 114 F.Supp.2d
1017, 1033 (D. Hawaii 1999).
The plaintiffs have alleged in Counts One and Five that:
Family Care policies, procedures and rates relating to funding for AFHs, CBRFs and day programs for persons in AFHs and CBRFs as developed and implemented by DHFS, Secretary Nelson and Milwaukee County have in the past and continue to intentionally discriminate and have a disparate impact under the ADA [and §504] because:
(A) Milwaukee County residents with disabilities who are 60 years of age and older receive substantially inferior treatment in regard to payment for services in adult family homes (AFH), community-based residential facilities (CBRF) and day programs for persons in AFHs and CBRFs in comparison to Milwaukee County residents with disabilities who under the age of 60 whose services are funded by the Community Options Program (COP), Community Integration Program (CIP) and (Brain Injury Waiver (BIW) programs instead of Family Care.
(B) Milwaukee County residents with disabilities who are 60 years of age and older receive substantially inferior treatment in regard to payment for services in AFHs, CBRFs and day programs for persons in AFHs and CBRFs in comparison to persons with disabilities of any age who are residents of other counties that are not participating in Family Care and whose services in non-Family Care counties are funded by the COP, CIP and BIW programs.
(C) Milwaukee County residents with more significant disabilities who are served by Family Care receive substantially inferior treatment in regard to payment for services in AFHs, CBRFs and day programs for persons in AFHs and CBRFs in comparison to persons with less significant disabilities that are served by Milwaukee County Family Care.
[4th Amd. Cmplt., ¶¶143 & 162]. Each of these three subparts supplies a clear legal basis for a
finding of discrimination.
14
Case 2:04-cv-00193-LA Filed 07/22/05 Page 14 of 29 Document 77

The plaintiffs, who are 60-and-over MCDA Family Care clients have alleged that they are treated differently in comparison to under-60 clients of Milwaukee County. They have alleged a significant funding disparity between the two groups that will ultimately cause the loss of their homes for the plaintiffs and many members of the putative class. [4th Amd. Cmplt. ¶¶3336, 58-64]. The same portions of the complaint allege that Milwaukee Family Care clients are being treated differently than other similar individuals in other counties with similar effect. Id. Finally, the plaintiffs allege that as persons with more significant disabilities, they are being treated differently in comparison to individuals with lesser disabilities in Family Care. Id. Each of these represents classic differential treatment that is actionable as intentional discrimination or disparate treatment under the ADA and §504.
B. Effective access to public services under the ADA and §504. The ADA and §504 also require public entities to administer their programs in certain ways to ensure full access by persons with disabilities. 28 C.F.R. §35.130(b). Once again, discrimination in relation to a comparison group is not required in order to prevail. "A plaintiff can prevail either by showing 'discrimination' or by showing 'deni[al, of] the benefits' of public services." 42 U.S.C. §12132, Henrietta D., 331 F.3d at 276. "[T]he statute itself does not literally require a showing of 'discrimination'." Id. The actionable conduct must, however, be by reason of the plaintiffs' disabilities, Id. at 279, but that is not an obstacle here. Counts two and six allege:
(148) Family Care policies, procedures and rates relating to funding for AFHs, CBRFs and day programs for persons in AFHs and CBRFs as developed and implemented by DHFS, Secretary Nelson and Milwaukee County have in the past violated and continue to violate the ADA because they aid or perpetuate discrimination against persons with disabilities and prevent them from obtaining the same result, gaining the same benefit or reaching the same level of achievement in the most integrated setting appropriate to their needs and have the
15
Case 2:04-cv-00193-LA Filed 07/22/05 Page 15 of 29 Document 77

purpose or effect of defeating or substantially impairing accomplishment of the objectives of the Family Care and Medicaid programs. [4th Amd. Cmplt., ¶¶148 & 166]. The same allegations referenced above would also support a finding that the plaintiffs are being denied effective access to public services. C. The integration requirements of the ADA and §504. Plaintiffs are discussing their claims in the order that they appear in the complaint, but in many ways this is the most compelling. It is not necessary to show discrimination in comparison to another group under Olmstead, so even if the persons with disabilities in either Milwaukee County or the State of Wisconsin were also in Family Care, the plaintiffs could still pursue their claims that various systemic changes are necessary to prevent their unnecessary institutionalization. The integration claim is based on the following regulation: A public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities. 28 CFR §35.130(d) (1998). Another part of the DOJ Regulations defines "most integrated setting" as "a setting that enables individuals with disabilities to interact with non-disabled persons to the fullest extent possible." 28 CFR pt. 35, App. A, p. 450 (1998). §504 also contains an integration requirement which is "materially identical" to the corresponding ADA provision. Bruggeman, 324 F.3d at 911-2. The United States Supreme Court held that States must provide "community-based treatment" in lieu of institutional confinement to persons who choose that option. Olmstead, 527 U.S. at 607. However, the integration clause is not limited to individuals in institutions that are trying to get out. It also applies to claims brought by individuals living in the community to increase the funding levels for certain services or to modify the provisions of disability funding
16
Case 2:04-cv-00193-LA Filed 07/22/05 Page 16 of 29 Document 77

programs where there is a risk of future institutionalization. Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175, 1181-1182 (10th Cir. 2003).
Counts three and seven allege: Family Care policies, procedures and rates relating to funding for AFHs,
CBRFs and day programs for persons in AFHs and CBRFs as developed and implemented by DHFS, Secretary Nelson and Milwaukee County have in the past violated and continue to violate the integration requirements of the ADA because they substantially increase the probability that Milwaukee County residents with disabilities who are 60 and over will be placed in more restrictive, less integrated settings despite their preference for less restrictive, more integrated settings. [4th Amd. Cmplt., ¶¶153 & 171]. There are specific allegations for each plaintiff that they are likely to be institutionalized due to forced moves from their residential providers. [¶¶78-79]. The complaint also lays out the specifics of the funding dispute and how the rate issue is causing the providers to terminate their contracts with Family Care. [¶¶56-64, 72-77]. This is similar to the chain of causation leading to institutionalization submitted in Fisher. 335 F.3d at 1184-1185. Plaintiffs have stated a claim under the integration requirements of the ADA and §504. D. Reasonable accommodation under the ADA and §504. This issue requires only a brief discussion. Plaintiffs are not requesting an individualized plaintiff by plaintiff modification of Family Care that is different for each person as in some reasonable accommodation situations. They seek an overall modification of Family Care policies and changes in overall funding like in Olmstead. That means the fundamental alteration defense is balanced against the needs of the entire client population rather than just a few applicants. 527 U.S. at 605-606. This issue is subsumed in the above discussions of discrimination, access and integration. Based on the timing of the decision in Wisconsin Community Service v. City of Milwaukee, --- F.3d ---, 2005WL1523215 (7th Cir. June 29,2005), plaintiffs do not know whether the defense will be arguing in their reply briefs that it has some bearing on this case. It
17
Case 2:04-cv-00193-LA Filed 07/22/05 Page 17 of 29 Document 77

does not. The present case involves allegations of widespread discrimination that would meet the majority's standard in WCS. Also, the plaintiffs in WCS have requested en banc review and the Seventh Circuit has requested that the City file a response to the petition. II. Plaintiffs have stated a claim upon which relief can be granted under 42 U.S.C.
§1396(a)(30)(A) of the federal Medicaid statute. Plaintiffs have also brought a claim under 42 U.S.C.§1983 alleging a violation of 42 U.S.C. §1396a(a)(30)(A). The State recognizes that this phase of the case must go forward based on controlling Seventh Circuit precedent. Methodist Hospitals, Inc. v. Sullivan, 91 F.3d 1026 (7th Cir. 1996). The County does not agree so the issue does require some discussion. The federal Medicaid statute provides: A State plan for medical assistance must . . . provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan . . . as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area; . . . 42 U.S.C. §1396a(a)(30)(A). Participation in the Medicaid program is voluntary, but once a state decides to do so, it must abide by all applicable federal requirements and standards Wilder v. Va. Hosp. Ass'n, 496 U.S. 498, 502 (1980). A claim may be brought under 42 U.S.C. §1983 to remedy a violation of a Federal statute provided that the statute unambiguously confers an individual right. Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002). Prior to Gonzaga, the Seventh Circuit had held that "providers of medical care have a private right of action, derived through §1983, to enforce §1396(a)(30)." Methodist Hospitals, 91 F.3d at 1029. Some courts had taken another approach, finding a right of action under (30)(A) only as to Medicaid beneficiaries. Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d
18
Case 2:04-cv-00193-LA Filed 07/22/05 Page 18 of 29 Document 77

908, 927 (5th Cir. 2000); Ark. Med. Soc'y, Inc. v. Reynolds, 6 F.3d 519, 526 (8th Cir. 1993). Obviously, the plaintiffs here are beneficiaries, not providers, and they would be allowed to proceed even under the more restrictive approach.
Various cases since Gonzaga have found a private right of action to enforce 42 U.S.C. §1396a(a)(30)(A). In Memisovski v. Maram, 2004WL1878332 (N.D. Ill. 2004), District Judge Lefkow conducted an exhaustive review of the case law and concluded that recipients had a private right of action to enforce §1396a(30)(A) and other Medicaid provisions. Ball v. Biedness, 2004 WL2566262 (D. Ariz. 2004), found a private right of action under (30)(A) on behalf of recipients to challenge funding shortages in a community care program. Clayworth v. Bonta, 295 F.Supp.2d 1110, 1124 (E.D. Cal. 2003), also found a private right of action under (30)(A) specifically for recipients, but not providers, to challenge a 5% reduction in rates paid in the California Medi-Cal program. (However, Sanchez v. Johnson, 301 F.Supp.2d 1060, 1064 (N.D. Cal. 2004), held that (30)(A) does not create a private cause of action.)
Sabree v. Richman, 367 F.3d 180, 193-194 (3rd Cir. 2004), another case containing an exhaustive review of the case law after Gonzaga, found a private right of action under several other Medicaid provisions other than (30)(A). Michelle P. v. Holsinger also involved different Medicaid provisions and allowed the case proceed on those claims as well as under the ADA and §504. 356 F.Supp.2d at 760-770.
Most of the factual allegations in the complaint, most of the affidavits and most of the other documents submitted by the plaintiffs and the defendants concern the rate issue and its effect on residential providers in Milwaukee County. There is no need to catalogue them in detail here. The complaint is clearly sufficient. The affidavits and other documents set out a clear
19
Case 2:04-cv-00193-LA Filed 07/22/05 Page 19 of 29 Document 77

pattern of Family Care rate problems that are affecting providers and especially the retention of providers which is one of the specific elements of 42 U.S.C. §1396a(a)(30)(A). III. The individual plaintiffs, as well as the members of the putative class, have standing
to bring the legal claims set out in the fourth amended complaint. “[F]ederal courts have a ‘virtually unflagging obligation’ to exercise the jurisdiction conferred on them by Congress.” Sverdrup Corp. v. Edwardsville Community Unit School Dist. No. 7, 125 F.3d 546, 549 (7th Cir. 1997) quoting Colorado River Water Conservation District v, United States, 424 U.S. 800, 817 (1976). Standing is absent only where it is impossible for a court to grant "any effectual relief whatever." Church of Scientology v. United States, 506 U.S. 9, 12 (1992). To satisfy the case or controversy requirement of Article III, “a plaintiff must allege: (1) an 'injury in fact' (2) fairly traceable to the Defendants’ conduct (3) that a favorable federal court decision likely would redress or remedy.” Oak Ridge Care Center, Inc. v. Racine County, 896 F.Supp. 867, 871 (E.D. Wis. 1995), citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Congress frequently expands standing in connection with civil rights statutes, see Trafficante v. Metropolitan Life Insurance Co., 409 U.S. 205, 212 (1972) (expanded standing under Fair Housing Act), and has clearly done so in the ADA. Oak Ridge Care Center, 896 F.Supp. at 872. The outer limits of standing are represented by the "tester" situation. That is where an individual does not even have any intent to avail him or herself of the item or activity in question, but pretends to seek it in order to determine whether an act of discrimination will occur. The United States Supreme Court had held in Havens Realty Corp. v. Coleman, 455 U.S. 363, 374 (1982), that the Fair Housing Act supported "tester" standing. According to Havens, the FHA statute "creat[ed] legal rights, the invasion of which creates standing." Id. at 373. It is
20
Case 2:04-cv-00193-LA Filed 07/22/05 Page 20 of 29 Document 77

enough for the tester to suffer this technical injury. The Tenth Circuit held that this analysis also applies to the ADA:
Thus, the totality of Title II's plain language, the plain language of its enforcement provision, and the statutory scheme's anti-discrimination purpose lead this court to conclude that Congress intended Title II to confer standing to the full limits of Article III. Cf. Havens Realty, 455 U.S. at 372-74, 102 S.Ct. 1114. Tandy v. City of Witchita, 380 F.3d 1277, 1287 (10th Cir. 2004). The court held that the standing requirements of §504 were equally expansive. Id. The Second Circuit had earlier reached the same result in Innovative Health Systems, Inc. v. City of White Plains, 117 F.3d 37, 47 (2d Cir. 1997). It held that use of the broad language, "any person alleging discrimination", in 42 U.S.C. §12133 essentially dispensed with any requirement of standing beyond alleging an ADA violation. Id. As for the claims under 42 U.S.C. §1396(a)(30)(A), the Seventh Circuit has held that the standing requirements under general Medicaid law, the ADA and §504 were similarly expansive. Bruggeman v. Blagojevich, 324 F.3d 906, 910 (7th Cir. 2003) Actions for declaratory judgment involve the lowest standing threshold. “[I]n some instances a declaratory judgment is proper even though there are future contingencies that will determine whether a controversy ever actually becomes real.” 10B Wright, Miller & Kane, Federal Practice and Procedure, §2757, at 476 (3d ed. 1998). Judicial relief may be ordered before any harm occurs precisely “to avoid the dispute escalating into additional wrongful conduct.” Dow Jones & Co., Inc. v. Harrods, Ltd., 237 F.Supp. 2d 394, 405 (S.D.N.Y. 2002). A declaratory judgment may completely resolve a dispute or may be a “prelude” to other relief. Bontkowski v. Smith, 305 F.2d 757, 761 (7th Cir. 2002). “[B]y seeking just the declaration the plaintiff avoids the burden of formulating and justifying a precise injunctive remedy.” Id.
21
Case 2:04-cv-00193-LA Filed 07/22/05 Page 21 of 29 Document 77

An injury "in the probabilistic sense" is all that is required to have standing to seek
declaratory or injunctive relief. Cook, Inc. v. Boston Scientific Corp., 333 F.3d 737, 744 (7th Cir.
2003). The Seventh Circuit has said:
[S]tanding does not require a perfectly clear title to the claim sued upon. United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66, 75, 78-79 (2d Cir.2002); United States v. Rodriguez-Aguirre, 264 F.3d 1195, 1204 (10th Cir.2001). This is a corollary of the probabilistic character of the requirement of standing, upon which we have commented in other cases, such as Diaz v. Duckworth, 143 F.3d 345, 347 (7th Cir.1998), and Price v. Pierce, 823 F.2d 1114, 1118 (7th Cir.1987); see also Hohn v. United States, 262 F.3d 811, 818 (8th Cir.2001). “A reasonable probability that a plaintiff will get an apartment that he wants sooner if he wins his suit is a sufficiently tangible expected benefit of suit to confer standing under the liberal principles that prevail nowadays,” as we said in Price; . . . Morlan v. Universal Guar. Life Ins. Co., 298 F. 3d 609, 620 (7th Cir.2002). As the following
sections will discuss, both the allegations in plaintiffs' complaint and their factual submissions
demonstrate a substantial likelihood that they will be harmed by the alleged violations of federal
law that they have identified in the Family Care program.
A. Group home residents have a legitimate interest in continuing to live in a particular home of their choice
At the heart of the standing issue is a fundamental disagreement between the plaintiffs
and defendants about whether group home residents have an interest in remaining in a particular
home. MCDA considers Family Care clients to be like interchangeable pegs that can be moved
around a board. However, the complaint alleges that group home residents have important
associations with others in the home and at their day programs that will be lost if they are shifted
to another CBRF. [4th Amd. Cmplt. ¶¶21-22]. It also alleges that each of the plaintiffs will be
individually harmed. See [4th Amd. Cmplt. ¶¶78-79]. Each of the three affidavits addresses these
points. [Cook: ¶¶50-53]; [Burr-II: ¶¶21-23]; [Kallas: ¶¶10-13].
22
Case 2:04-cv-00193-LA Filed 07/22/05 Page 22 of 29 Document 77

The defense point of view is just that, a point of view. Plaintiffs have sufficiently alleged an interest in remaining in their homes that supplies standing in this case.4
B. The individual plaintiffs have standing.
A Medicaid provider, ". . . has standing, along with the patients themselves, to challenge
in federal court laws that forbid it to sell its services to potential customers or limit the prices it
can charge." Bethesda Lutheran Homes v. Leann, 122 F.3d 443, 444 (7th Cir. 1997) (citations
omitted) (emphasis supplied). Medicaid recipients were held to have had standing to challenge
various aspects of an Illinois Medicaid plan under 42 U.S.C. §1983, the ADA and §504 even
though the requested relief might not benefit actually benefit them:
They seek merely a plan, which might not lead to an increase in the ICF/DD capacity in their immediate area. Even if it did, they might not benefit. . . . The potential benefit to them from the relief that they seek thus is speculative.
But not so speculative as to negate standing, which is a matter of probabilities rather than certainties. North Shore Gas Co. v. EPA, 930 F.2d 1239, 1242 (7th Cir. 1991). The suit seeks to remove a logjam that is preventing the creation of facilities desired by the plaintiffs, and if the likelihood of success is conjectural so is the argument for failure based on the possibility that any new facilities will be overwhelmed by other applicants.
Bruggeman, 324 F.3d at 910. This is a good description of the situation in virtually every
Medicaid or Olmstead type case. The plaintiffs in Fisher avoided summary judgment on their
integration claim based on evidence of a "high risk of premature entry into a nursing home." 335
F.3d at 1184.
4 There is another issue lurking here. The defendants have gone out of their way to paint an attractive picture of Family Care and all of its components. Their argument seems to be that Family Care will take care of any problems caused by a transfer and residents have an appeal procedure to protect them. Plaintiffs are skeptical based on information such as that contained in the SRCA memo. However, the important legal issue is that there is no exhaustion requirement under the Title II and §504 so the plaintiffs are free to bring these claims regardless of the availability of an internal hearing or some other procedure. Dertz v. City of Chicago, 912 F.Supp. 319, 324 (N.D. Ill. 1995).
23
Case 2:04-cv-00193-LA Filed 07/22/05 Page 23 of 29 Document 77

We have a wealth of information about the probabilities in this case based on the overall funding problems in the Milwaukee County system. There are separate paragraphs in the complaint alleging the harm to each plaintiff. [4th Amd. Cmplt. ¶¶78-79, 89-90, 99-100, 108109, 118-119, 126-127). We also have expert affidavit testimony that the individual plaintiffs are likely to suffer harm including institutionalization. [Cook: ¶25]. This was found to be sufficient in Fisher, 335 F.3d at 1181-1182, and it is more than enough to supply individual standing here.
C. The putative class members have standing. Class actions frequently are aimed at a policy that limits access to a particular benefit, even where not all members could receive (or would even want) the desired object. For example, in a case involving a veterans hiring preference policy, the court noted that there were only a few potential jobs compared to the size of the class, but: "[e]ach class member is better off when the preference is being enforced than when it isn’t. They may not get the job, but they are guaranteed the preference." Veterans Legal Defense Fund v. Schwartz, 330 F.3d 937, 939 n.2 (7th Cir. 2003); see Uhl v. Thoroughbred Technology and Telecommunications, Inc., 309 F.3d 978, 986 (7th Cir. 2002) (each class member had 50% chance of suffering the harm). In the same vein: When the government erects a barrier that makes it more difficult for members of one class to obtain a benefit than it is for members of another group, a member of the former group seeking to challenge the barrier need not allege that he would have obtained the benefit but for the barrier in order to establish standing. The "injury in fact" in an equal protection case of this variety is denial of equal treatment resulting from the imposition of the barrier, not the ultimate inability to obtain the benefit. Northeastern Florida Chapter of the Associated General Contractors of America v. City of Jacksonville, 508 U.S. 656, 666 (1993). The plaintiffs have alleged all of the elements of a class action. [4th Amd. Cmplt. ¶¶129137]. If necessary, the Court can look to these in order to determine standing using a larger
24
Case 2:04-cv-00193-LA Filed 07/22/05 Page 24 of 29 Document 77

potential pool of individuals that are likely to suffer harm. Based on the allegations of the complaint and the affidavits, large numbers of persons with disabilities in Milwaukee County are now facing and will in the future face the same loss of established residences as the individual plaintiffs due to the rate policies in Family Care.
D. If the issue cannot be resolved in plaintiffs' favor at this stage of the proceedings, the portion of the defense motions relating to standing should be denied with leave to refile after class certification is resolved.
Plaintiffs contend that the standing question can be decided in their favor based entirely on the allegations in the complaint and that this final step is unnecessary. However, if the Court reaches this stage, it should deny the State's motion in regard to standing and take up the class certification issue. Deciding whether a case may be maintained as a class action is "the first order of business." Hart v. Michael Sheahan, 396 F.3d at 894 (citations omitted). Class certification must be resolved prior to any issues of standing. Payton v. County of Kane, 308 F.3d 673, 681 (7th Cir. 2002). Plaintiffs had agreed with the defense that it would be more efficient to hold the class certification issue in abeyance until the issues concerning the legal sufficiency of the fourth amended complaint were decided. Obviously, this will not work if the answer to the standing question depends on the existence of a certified class. In that event, the standing question should be deferred until after plaintiffs renew their motion and the class certification issue is resolved. II. Plaintiffs' claims for injunctive relief which may result in an order directing the
State defendants to increase future capitated rates payable to Milwaukee County are not barred by the Eleventh Amendment. There are three exceptions to the Eleventh Amendment bar against suits naming states or state agencies as defendants: (a) where the state has consented to suit in federal court. Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 238 (1985); Marie O. v. Edgar, 131 F.3d 610, 615 (7th Cir. 1997); (b) where a party sues a state official for prospective injunctive or
25
Case 2:04-cv-00193-LA Filed 07/22/05 Page 25 of 29 Document 77

declaratory relief from an ongoing violation of federal law, Ex Parte Young, 209 U.S. 123, 15960 (1908); and (c) where Congress has properly abrogated state immunity, Seminole Tribe of Florida v. Florida, 517 U.S. 44, 55-6 (1996).
A. There is no State immunity for claims under §504. Voluntary participation in a funding program authorized by Congress waives state immunity. Seminole Tribe, 517 U.S. at 65. The Seventh Circuit has held that §504's funding mechanism does create a valid waiver of Eleventh Amendment immunity and that it may be enforced in federal court against state agencies. Stanley v. Litscher, 213 F.3d 340, 344 (7th Cir. 2000). The State acknowledges this. (State Brf., at 23). A plaintiff may seek compensatory damages directly from a State agency under §504. Even if the demand that future Family Care rates must account for past shortfalls in Milwaukee County should present problems under the plaintiffs' other legal theories, it may proceed under the Rehabilitation Act. B. Ex Parte Young permits an action for injunctive relief against the State
defendants under all three federal statutes. A suit for injunctive relief against State officials is one of the specific exceptions to Eleventh Amendment immunity. Ex Parte Young, 209 U.S. at 159-60. The Ex Parte Young doctrine comes into play at the pleading stage and does not include any analysis of the merits. Verizon Maryland, Inc. v. Public Service Comm. of Maryland, 535 U.S. 635, 646 (2001), citing, Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 281 (1997). A court need only conduct a “straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly described as prospective.” Coeur d’Alene, 521 U.S. at 296; Ameritech Corp. v. McCann, 297 F.3d 582, 587 (7th Cir. 2002). The actual role of the state official is not crucial. Suits of this type "generally represent only another way of pleading an action against an entity of which an officer is an agent." Kentucky v. Graham, 473 U.S. 159, 165 (1985).
26
Case 2:04-cv-00193-LA Filed 07/22/05 Page 26 of 29 Document 77

Ex Parte Young applies not only to violations of constitutional law, but also to suits alleging violations of federal statutory law, Verizon, 535 U.S. at 648 (Telecommunications Act), and more specifically to cases brought under the ADA and §504. Bruggeman, 324 F.3d at 912.
The distinction between prospective relief and past damages is not as clear as "night and day." Edelman v. Jordan, 415 U.S. 651, 667 (1974). A State may be ordered to conform its conduct to federal law without trespassing on "the "Eleventh Amendment even though accompanied by a substantial effect on the state treasury." Papasan v. Allain, 478 U.S. 265, 278 (1986). The Ninth Circuit found no Eleventh Amendment obstacle in a case by Medicaid recipients claiming that tobacco settlement proceeds were being miss-allocated by the State. Cardenas v. Anzai, 311 F.3d 929, 938 (9th Cir. 2002). It held that "[t]he fact that the plaintiffs' claims depend in part upon past conduct by the state . . . is not dispositive." Id.
As discussed elsewhere, the complaint alleges violations of the ADA, §504 and the Medicaid statute that are clearly ongoing and expected to continue into the foreseeable future. The relief sought is not "damages" since plaintiffs are seeking no financial payments to themselves. The case does involve financial payments going forward and plaintiffs have included in their prayer for relief "that future rates set by the State defendants include an amount sufficient to alleviate the shortfall in Milwaukee County's Family Care program caused by inadequate capitated rates from 2000 through the present." [4th Amd. Cmplt., Conclusion ¶¶F &G]. If plaintiffs prevail, this Court will be entering an order directing the State to cease any violations of federal law and conduct itself accordingly. This would include how it expends funds in the future and any proper consideration of rates for Milwaukee County disability providers would have to include the effect of past-underfunding in order to have any validity. This does not convert plaintiffs' claims for prospective relief into a damages claim.
27
Case 2:04-cv-00193-LA Filed 07/22/05 Page 27 of 29 Document 77

The court's decree in Ball v. Biedess provides an excellent example of the type of order the plaintiffs are seeking here. The principal provision says:
It is further ordered that the AHCCCS program must offer a rate of pay to health care workers so as to deliver adequately those services for which each individual qualifies; that is, to attract enough health care workers to deliver all of the services for which an individual qualifies. 2004 WL2566262. The defendants still retain substantial authority about how to effectuate the order. The Arizona district court also allowed the parties to submit proposals for an effective date for the relief order which is an excellent idea in any systemic litigation. Assuming the entry of some similar relief in this case, there will be no immunity problem. More importantly at this stage as required by Verizon, the relief requested in the complaint does not implicate the Eleventh Amendment C. Plaintiffs are not pursuing any ADA or Medicaid claims other than those
coming under the Ex Parte Young doctrine. Plaintiffs believe that Congress did validly abrogated State immunity in Title II under the standard in Tennessee v. Lane. Abrogation under the Medicaid statute is a more difficult question. However, neither of these issues will be here because the State defendants would be able to take an immediate appeal from a ruling in the plaintiffs' favor. This would create an unfortunate delay. The providers who serve the clients in this case are concerned about their welfare and they are staying with the Family Care program as long as possible. This will not continue. Plaintiffs can obtain the relief they seek under the ADA and 42 U.S.C. §1396a(a)(30)(A) by way of the Ex Parte Young doctrine. They may seek any potential relief under §504 unencumbered by the Eleventh Amendment.
28
Case 2:04-cv-00193-LA Filed 07/22/05 Page 28 of 29 Document 77

CONCLUSION The defendants have a huge burden here. They must show that the claims are legally insubstantial or that plaintiffs cannot prove any set of facts in support of those claims. The defense has simply failed to carry that burden. All of plaintiffs' legal claims in the fourth amended complaint should be permitted to go forward. The Court should also hold that the Eleventh Amendment is not an impediment to plaintiffs claims under the ADA, §504 and 42 U.S.C. §1396a(a)(30)(A). The Court should also deny the defendants' motions to dismiss for lack of standing. Date: July 22, 2005
Respectfully submitted, ROBERT THEINE PLEDL Attorney for the Plaintiffs /s/ _Robert Theine Pledl____________________ State Bar No. 1007710 1110 N. Old World Third Street, Suite 670 Milwaukee, Wisconsin 53203 TEL 414-225-8999 FAX 414-224-0811 EMAIL pledl@sbcglobal.net
29
Case 2:04-cv-00193-LA Filed 07/22/05 Page 29 of 29 Document 77

 
 Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 1 of 15

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

GERALD NELSON, by his legal guardian and next friend, JANE PRENTICE; JOAN BZDAWKA, by her legal guardian and next friend, RICHARD MILLER; SANDRA EHRLICHMAN, by her legal guardian and next friend, NANCY STEEVES; MARILYN BERDIKOFF, by her legal guardian and next friend, LOIS DEGNER; LENORE CZARNECKI, by her agent and next friend, CAROLYN CETNAROWSKI; and JOHN GORTON, by his agent and next friend, DEBORAK BRUNK, each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs,

v.

Case No. 04-C-0193

MILWAUKEE COUNTY; WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES; and HELENE NELSON, in her official capacity as Secretary of DHFS,

Defendants.

STATE DEFENDANTS’ REPLY BRIEF IN SUPPORT OF MOTIONS TO DISMISS FOURTH AMENDED COMPLAINT

The Wisconsin Department of Health and Family Services (“DHFS”) and DHFS Secretary Helene Nelson (collectively, “the State defendants”), by their undersigned counsel, submit the following limited comments in reply to the arguments contained in plaintiffs’ brief opposing the State defendants motions to dismiss the Fourth Amended Complaint and Milwaukee County’s motion for judgment on the pleadings. For the most part, the State defendants rely on the arguments and authorities set forth in their brief-in-chief, much of which is ignored and not disputed by plaintiffs’ brief in opposition.

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 2 of 15
ISSUES ARGUED IN REPLY 1. Must the affidavits of plaintiffs’ experts be stricken because their purpose is clearly evidentiary and not, as plaintiffs assert, merely illustrative? 2. Must the Fourth Amended Complaint be dismissed for lack of jurisdiction because plaintiffs lack standing or because their claims of possible future injury are not ripe for adjudication? 3. Have plaintiffs failed to rebut defendants’ arguments demonstrating the inadequacy of plaintiffs’ various claims for relief under the ADA, Rehab Act § 504 and the Medicaid statute privately enforceable under 42 U.S.C. § 1983?
ARGUMENT I. THE AFFIDAVITS OF PLAINTIFFS’ EXPERTS MUST BE STRICKEN
BECAUSE THEIR PURPOSE IS CLEARLY EVIDENTIARY RATHER THAN ILLUSTRATIVE, SO THAT IT IS IMPROPER FOR THE COURT TO CONSIDER THEM FOR PURPOSES OF DECIDING MOTIONS TO DISMISS AND FOR JUDGMENT ON THE PLEADINGS, RULES 12(B)(6) AND (C). The State defendants have submitted motions to dismiss based on F.R.C.P. 12(b)(6) and 12(c) and Milwaukee County seeks judgment on the pleadings pursuant to Rule 12(c). Although the State defendants have submitted documents which can be judicially noticed and considered in the context of deciding legal motions concerning the sufficiency of the complaint without converting the legal motions into motions for summary judgment, see brief-in-chief at 28-29, all of the defendants have carefully limited their submissions to materials the Court can properly consider in deciding legal motions concerning the sufficiency of the complaint. Plaintiffs concede that the State defendants’ brief-in-chief contains a reasonably complete summary of the factual allegations of the Fourth Amended Complaint. See Brief at 4. However, plaintiffs have also filed with their brief in opposition voluminous attached materials which they
- 2 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 3 of 15
discuss freely throughout their brief, even going so far as to refer to a work-in-progress by another expert that is not even submitted or properly identified (see brief at 9, n.2). See also Affidavit of Gerald J. Kallas, M.D. (with attachments), Affidavit of Thomas Cook (with attachments), and Second Affidavit of Lincoln Burr. These affidavits and nearly all of the evidentiary material attached, unlike the government documents referenced in the State defendants’ motions to dismiss, are not properly subject to judicial notice because they are not “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. Rule 201(b); see brief-in-chief at 28-29 (citing cases).
Plaintiffs seek to justify their submission and substantial reliance on these materials on the pretense that the materials are not submitted for “evidentiary” purposes, i.e. to supplement the factual allegations of the complaint relating to standing and the nature of plaintiffs’ claims, but are simply submitted for “illustrative” purposes, i.e., to show that “there might be” a set of facts consistent with the allegations in the complaint. See Brief at 4-5, 13 n.3, citing Thomas v. Guardsmark, Inc., 381 F.3d 701, 704 (7th Cir. 2004); and Hart v. Sheahan, 396 F.3d 887, 895 (7th Cir. 2005). Despite plaintiffs’ attempts to label these materials otherwise, they appear to be evidentiary in nature and are certainly used for evidentiary purposes to support plaintiffs’ claims of standing and regarding the sufficiency of the numerous claims. Plaintiffs refer to facts and opinions stated in these affidavits as if they were set forth in the complaint and as if they must be accepted as true for purposes of the pending motions, rather than for “illustrative” purposes at all.
- 3 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 4 of 15
The State defendants respectfully submit that these affidavits and attached documentation should be stricken or ignored by the court in deciding the pending motions.1
II. THE FOURTH AMENDED COMPLAINT MUST BE DISMISSED BECAUSE THE INDIVIDUAL PLAINTIFFS LACK STANDING AND THEIR CLAIMS OF POSSIBLE FUTURE INJURY ARE NOT RIPE FOR ADJUDICATION. A. Plaintiffs misstate the law by arguing that individual plaintiffs need not have standing so long as unnamed members of the putative class do.
Tacitly recognizing the weakness of their individual claims of actual or threatened injury and, therefore, standing, plaintiffs repeatedly suggest that whether or not they have individual standing does not matter because “[s]tanding in class actions is determined with reference to the class as a whole rather than simply looking at the potential impact on the named plaintiffs,” brief at 1-2. See also id. at 24-25 (arguing that if plaintiffs lack standing, the court should hold the question of standing in abeyance until after a class is certified). This argument is flatly, demonstrably and unequivocally wrong and it is no accident plaintiffs cite no authority to support it. Indeed, the very cases plaintiffs cite contradict the argument. For example, in Payton v. County of Kane, 308 F.3d 673, 682 (7th Cir. 2002), a case which turned on the propriety of certifying a defendant rather than a plaintiff class, the court had no doubt that the named
1Because this reply brief will focus primarily on the legal issues relating to standing and the adequacy of plaintiffs’ numerous claims, and because plaintiffs concede that the State defendants have accurately summarized the factual contents of the amended complaint that must be taken as true for purposes of the motions, the Kallas, Cook and Burr affidavits and attachments are not discussed in detail in this brief. For the most part, however, the affidavits appear to repeat at length facts, opinions, conjecture and hypotheses that are already outlined in the complaint. To the extent the affidavits go beyond the complaint, the State defendants strongly object to their consideration for purposes of deciding the pending motions.
- 4 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 5 of 15
plaintiffs themselves had individual standing. See Id., 308 F.3d at 677. There, the court
pointedly emphasized:
This is not a case where the named plaintiff is trying to piggy-back on the injuries of the unnamed class members. That, of course, would be impermissible, in light of the fact that “a named plaintiff cannot acquire standing to sue by bringing his action on behalf of others who suffered injury which would have afforded them standing had they been named plaintiffs; it bears repeating that a person cannot predicate standing on injury which he does not share. Standing cannot be acquired through the back door of a class action.”
Id., 308 F.3d at 682 (emphasis supplied), quoting Allee v. Medrano, 416 U.S. 802, 828-29 (1974)
(Burger, C.J., dissenting). See also Simon v. Eastern Ky. Welfare Rights Organization,
426 U.S. 26, 40 n.20 (1976), quoting Warth v. Seldin, 422 U.S. 490 (1975): “That a suit may be
a class action . . . adds nothing to the question of standing, for even named plaintiffs who
represent a class ‘must allege and show that they personally have been injured, not that injury has
been suffered by other, unidentified members of the class to which they belong and which they
purport to represent.’”
If none of the named plaintiffs have standing, this case must be dismissed: “[I]f none of
the named plaintiffs purporting to represent a class establishes the requisite of a case or
controversy with the defendants, none may seek relief on behalf of himself or any other member
of the class.” O’Shea v. Littleton, 414 U.S. 488, 494 (1974); see also Bailey v. Patterson,
369 U.S.31, 32 (1962) (plaintiffs cannot represent a class of whom they are not a part).
B. Because plaintiffs do not dispute their lack of standing to seek retroactive relief, it will likely be unnecessary for the Court to reach the question whether their claims for retroactive declaratory and monetary relief against the State defendants are barred by the Eleventh Amendment and sovereign immunity.
Both the State defendants brief-in-chief at 23-27 and plaintiffs’ response brief at 25-28
argue the scope of this Court’s jurisdiction and authority to award plaintiffs the retroactive
- 5 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 6 of 15
declaratory and monetary relief they seek against the State defendants in view of the Eleventh Amendment and the State’s sovereign immunity. However, the plaintiffs have failed to respond to—and appear implicitly to concede—the State defendants’ argument that plaintiffs lack standing to seek retroactive declaratory or monetary relief against any of the defendants for the period prior to filing of this lawsuit because they have not alleged any direct or tangible injury to themselves for that period of time. See brief-in-chief at 15-18; cf. plaintiffs’ brief at 22 (asserting “a substantial likelihood they will be harmed by the alleged violations of federal law that they have identified in the Family Care program”) (emphasis added).
Based on other cases plaintiffs have cited, this implicit concession of partial lack of standing is well advised. See Tandy v. City of Wichita, 380 F.3d 1277, 1283-84, 1289-90 (10th Cir. 2004) (recognizing that the “injury in fact” requirement of constitutional standing is satisfied differently depending on whether the plaintiff seeks prospective or retrospective relief). Accord: Discovery House. v. Consol City of Indianapolis, 319 F.3d 277, 280 (7th Cir. 2003) (quoting prior Supreme Court precedent that “‘a plaintiff must demonstrate standing separately for each form of relief sought’”).
The Tandy decision first recites the familiar three requirements for establishing Article III standing:
To establish Article III standing, a plaintiff must show that: (1) she has suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by the relief requested. Id., 380 F.3d at 1283 (footnote and citations omitted). With regard to retrospective relief, a plaintiff “satisfies the ‘injury in fact’ requirement if she suffered a past injury that is concrete and particularized.” Tandy, 380 F.3d at 1284. As
- 6 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 7 of 15
discussed in the State defendants’ brief-in-chief at 17, and plaintiffs do not dispute, none of the plaintiffs claims any past violation of the integration, least restrictive setting and reasonable accommodation requirements of the Americans with Disabilities Act (“ADA”) and Rehabilitation Act, nor any violation of 42 U.S.C. § 1396a(a)(30)(A) (“(a)(30)(A)”), with regard to themselves personally. Because plaintiffs claim no past injury whatever to themselves, it necessarily follows that they lack standing to seek retrospective declaratory or monetary relief. See Tandy, 380 F.3d at 1283-84.
C. Plaintiffs lack standing based on threats to their current residential placements and their claims of threatened future injury are not ripe for adjudication.
The State defendants refer the Court to the arguments contained in their brief-in-chief at 21. Plaintiffs do not challenge the State defendants’ argument that they lack standing to challenge the capitated rates DHFS pays to the Milwaukee County Care Management Organization (“CMO”) under the terms of the Family Care contract, see id. at 21-23. However, they do make an unconvincing attempt to argue current and future standing based on threats to their current residential placements and their claims that, if they are required to change their community placements at all, they are “likely to suffer harm including institutionalization,” brief at 24.
First, plaintiffs assert that they have a “legitimate interest in continuing to live in a particular home of their choice,” brief at 22. Whether they have a legitimate, subjective, heartfelt, sincere interest in continuing to stay in their current residential placements, however, simply begs the real question relevant to the question of standing: whether this interest is one protected by the laws plaintiffs seek to invoke, and therefore, one that is likely to be redressed by
- 7 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 8 of 15
a favorable decision according them relief authorized by those statutes. Cf. Valley Forge, Etc. v. Americans United, Etc., 454 U.S. 464, 472 (1982); Tandy, 380 F.3d at 1283.
As pointed out previously, a court has jurisdiction under the ADA and Rehabilitation Act to insure that plaintiffs remain in the most integrated setting appropriate to their needs and that they be reasonably accommodated. Plaintiffs have failed to cite any authority for the proposition that this Court has the authority under the ADA, the Rehabilitation Act or the Medical Assistance (“MA”) statutes to require that plaintiffs remain in a particular or specific community placement, if, as plaintiffs’ residential providers threaten here, those providers no longer participate in the Family Care program. Indeed, the State defendants have not located any precedent supporting this proposition either. Therefore, plaintiffs cannot establish standing based on the mere likelihood that they will need to move to a different community placement if their providers make good on their threats to terminate their Family Care contracts, because such a move is not a legally cognizable injury that this court can likely redress.
In order to seek prospective relief, [T]he plaintiff must be suffering a continuing injury or be under a real and immediate threat of being injured in the future. . . . The threatened injury must be “certainly impending” and not merely speculative. A claimed injury that is contingent upon speculation or conjecture is beyond the bounds of a federal court’s jurisdiction. Tandy, 380 F.3d at 1283-84 (citations omitted). Another case cited by plaintiffs clearly illustrates the difference between a case in which a threat of future injury is real and immediate—and thus sufficient to demonstrate standing—and this case, where the threats of future injury in the form of plaintiffs’ having to move to a nursing home are merely speculative and conjectural. See Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (10th Cir. 2003). In Fisher, the plaintiffs were participants in a community-based
- 8 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 9 of 15
Medicaid program in which the Oklahoma Health Care Authority had previously provided unlimited, medically-necessary prescription benefits for participants in the community-based program and had provided such prescription benefits for institutionalized MA recipients as well.
In order to deal with a funding crisis, the Health Care Authority decided to terminate the unlimited, medically-necessary prescription benefits for the community-based recipients, limiting them to five prescriptions per month, regardless of medical necessity. Id., 335 F.3d at 1177-78. The plaintiffs were community-based recipients with very high monthly prescription costs and, typical of Medicaid-eligible persons, very low income. Id., 335 F.3d at 1179-80. Because the prescriptions were medically necessary, Fisher and the other plaintiffs faced a real and immediate threat of institutionalization in order to continue to obtain the medications their health required. While the defendants in Fisher denied discrimination and disputed the merits of the plaintiffs’ ADA and Rehabilitation Act claims, including whether they would really be forced into nursing homes, there was simply no grounds to challenge plaintiffs’ standing because the claims of future injury were sufficiently real, probable and immediate.
In contrast, here plaintiffs are threatened with nothing more than a move to a different community placement. Furthermore, the Milwaukee Family Care contract effectively binds the CMO to provide appropriate services to plaintiffs in the most integrated, least restrictive setting in exchange for the monthly capitated rate of those individuals. See CMO Contract at 15, 19, 151, 164, Addendum X.4.19 (Exhibit 2002; see brief-in-chief at 3 n.2 for full citation to the Contract). Plaintiffs to not allege that the CMO is violating this important obligation under the contract nor is there any basis to presume that the CMO will do so in the future. There are no facts (as opposed to opinions, fears and speculation) in the complaint to support an inference that a change in community placement, in itself, will violate plaintiffs’ rights to remain in an
- 9 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 10 of 15
integrated setting. Rather, plaintiffs actual claim is that such a move may lead to one or more other changes in placement and that, ultimately, sometime in the future, they will end up in nursing homes, notwithstanding their desire to remain in the community.
These threats of future harm, unlike those presented in Fisher, are simply too speculative and conjectural to support standing to litigate plaintiffs’ claims. While the likelihood of future harm for purposes of establishing standing is “a matter of probabilities rather than certainties,” Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906, 910 (7th Cir. 2003), plaintiffs here have established nothing more than the possibility, not the probability, of future harm. In short, plaintiffs’ claims based on threatened future injury are simply not ripe for adjudication and must be dismissed for lack of standing.
III. PLAINTIFFS FAIL TO STATE CLAIMS FOR RELIEF UNDER THE ADA, THE REHABILITATION ACT OR THE MEDICAID STATUTE, 42 U.S.C. § 1396a(a)(30)(A). A. Plaintiffs’ ADA and Rehabilitation Act arguments must be rejected because applicable law does not obligate states to meet all individualized preferences and desires of a state Medicaid beneficiary.
Plaintiffs’ intentional discrimination and disparate impact arguments (brief at 13-15) fundamentally misconstrue ADA and Rehabilitation Act requirements. The ADA and Rehabilitation Act do not require states to provide either a particular standard of care or a particular level of benefits to persons with disabilities. They do not guarantee that each recipient of state medical benefits will receive care precisely tailored to his or her individual preferences. Instead, they require only that a state not discriminate in the services it has chosen to provide. Radaszewski v. Maram, 383 F.3d 599, 608-09 (7th Cir. 2004), citing Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 603 n.14 (1999).
- 10 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 11 of 15
The states “retain ‘substantial discretion to choose the proper mix of amount, scope and duration limitations on coverage.’” Vaughn v. Sullivan, 83 F.3d 907, 912 (7th Cir. 1996), quoting Alexander v. Choate, 469 U.S. 287, 303 (1985). The benefit provided through Medicaid is a particular package of health care services, with the general aim of assuring that individuals will receive necessary medical services. Alexander, 469 U.S. at 302.
The ADA and Rehabilitation Act do not require that decisions affecting allocation of program resources, including decisions relating to funding of those resources, be made in a way that meets the preference of each individual program beneficiary. For example, closure of a specialized facility did not run afoul of the ADA and Rehabilitation Act when most services provided at that facility were to be provided at a new location one mile away. Cercpac v. Health & Hospitals Corp., 147 F.3d 165, 168 (2nd Cir. 1998). Contrast that with a cost-saving measure impermissibly eliminating the only county hospital focused on the needs of disabled individuals, providing services disproportionately required by the disabled and available nowhere else in the county. Rodde v. Bonta, 357 F.3d 988, 996-97 (9th Cir. 2004). Even plaintiffs conjure up nothing so drastic.
The forgoing authorities further rebut plaintiffs’ confusing claims about “effective access to health care services” (brief at 15-16). See also brief-in-chief at 36-37.
As for plaintiffs’ arguments about integration requirements of the ADA and Rehabilitation Act (brief at 16-17), plaintiffs already benefit from community placements serving them in the most integrated setting appropriate to their needs. The CMO, by contract, must continue to provide all services necessary to cost-effectively meet the plaintiffs’ assessed needs. See’ brief-in-chief at 7-8, 38-39. As explained at pages 9-10 above, the present plaintiffs’ circumstances are easily distinguished from those of the Fisher plaintiffs.
- 11 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 12 of 15
Plaintiffs fail to identify a single authority indicating that integration requirements of the ADA and Rehabilitation Act entitle them to demand specific providers, regardless of the parameters of the state benefit package they receive. That, however, is the bottom line of both their integration requirement claims and their reasonable accommodation claims (brief at 17-18). Controlling case law proves otherwise. Radaszewski, 383 F.3d at 608-09; Olmstead, 527 U.S. at 603 n.14; Vaughn, 83 F.3d at 912; Alexander, 469 U.S. at 303. See also brief-in-chief at 38-39.
Moreover, because the present plaintiffs fail to make out a prima facie case of discrimination, the issue of reasonable accommodation is not properly before the Court. When properly considered in response to a prima facie case of discrimination, reasonable accommodations can be ordered to alleviate barriers hindering equal opportunity to accessing services and benefits already provided—but not to create special substantive rights, such as tailoring benefits to recipients’ personal preferences. Cf. Wisconsin Cmty. Services, Inc. v. City of Milwaukee, 413 F.3d 642, 646 (7th Cir. 2005).
Similiarly, the defense of fundamental alteration is not implicated unless plaintiffs prove entitlement to some reasonable accommodation. The present plaintiffs have not, so, again, this issue is not properly before the Court. In any event, no legal rule prohibits resolution of fundamental alteration issues by judgment on the pleadings. Cf. plaintiffs’ brief at 12-13.
When a fundamental alteration defense requires resolving issues of material fact, consideration beyond judgment on the pleadings could be warranted. McGary v. City of Portland, 386 F.3d 1259, 1207 (9th Cir. 2004); Crowder v. Kitagawa, 81 F.3d 1480, 1485 (9th Cir. 1996). Plaintiffs cite only cases where material facts concerning costs of benefit expansion had to be determined and weighed against material facts concerning affected access to benefits (brief at 12-13). Cf. Michelle P. v. Holsinger, 356 F. Supp. 2d 763, 764, 770
- 12 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 13 of 15
(E.D. Ken. 2005) (plaintiffs wait-listed for community based services apparently sought expansion of state’s Home and Community Based Services waiver program in order to receive services); Radaszewski, 383 F.3d at 614 (whether funding specific, expensive placement for one individual would fundamentally alter care provided by Illinois to others with similar needs).
No such issue of material fact remains in the present case. Plaintiffs freely admit what they want: “[Plaintiffs] seek an overall modification of Family Care policies and changes in overall funding” (brief at 17; emphasis added). The policy and funding changes plaintiffs want would transform Family Care from a capitated-rate system to a demand-driven fee-for-service system (brief-in-chief at 33). It is hard to imagine a more fundamental alteration of the policy and funding choices Alexander and Olmstead entitle defendants to make.
B. Although plaintiffs insist, despite recent precedent, that they have a private right of action under (a)(30)(A), they fail to address or dispute the affirmative requirements for stating a claim under (a)(30)(A) and related statutes and rules governing the sufficiency of the capitated Family Care rates that is the focus of Claim 9.
The only argument plaintiffs develop with regard to the adequacy of their Medicaid claim based on (a)(30)(A) is that they have a private right of action to challenge the Family Care capitated rates based on § 1983 (see brief at 18-20). While defendants believe that the Seventh Circuit decision in Methodist Hospitals v. Sullivan, 91 F.3d 1026 (7th Cir. 1996), recognizing a
- 13 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 14 of 15
private right of action for providers must be reexamined in light of Gonzaga University v. Doe, 536 U.S. 273 (2002), it is up to the Seventh Circuit, not this Court, to do so.2
Plaintiffs fail to analyze the facts alleged in the complaint in light of the language of (a)(30)(A) or, in the context of a challenge to capitated rates, the closely related requirements of the managed care waiver provisions of 42 U.S.C. § 1396n(b) and the applicable federal regulation, 42 C.F.R. § 438.6. See also Clayworth v. Bonta, 295 F.Supp.2d 1110 (E.D. Cal. 2003), discussed in State defendants’ brief-in-chief at 41-42 n.22. Instead, plaintiffs make a completely conclusory argument, unsupported by analysis or citation of precedent, that “the complaint is clearly sufficient,” presumably to state a claim challenging the sufficiency of the capitated rates under (a)(30)(A). Brief at 19-20. Therefore, while the State defendants strongly urge that Claim 9 fails to state a claim based on (a)(30)(A), they rely on the discussion of this issue contained in their brief-in-chief at 39-44 which plaintiffs do not challenge.
CONCLUSION For the reasons discussed above and in their brief-in-chief, the State defendants submit that the Fourth Amended Complaint must be dismissed for lack of jurisdiction based on lack of standing and ripeness; that claims for retroactive declaratory and monetary relief against them are
2The State defendants do, however, call to the Court’s attention the recent decision of the Ninth Circuit in Sanchez v. Johnson, __ F.3d __, 2005 WL 1804195 (9th Cir.), decided August 2, 2005, affirming the decision of the district court of the same name, 301 F.Supp. 1060 (N.D. Cal. 2004). The Tenth Circuit decision in Sanchez contains a thorough analysis of the language of (a)(30)(A) in light of Gonzaga, and holds that the statute does not create individual rights enforceable under § 1983 by either Medicaid recipients or providers of Medicaid services. Sanchez, 2005 WL 1804195 *8. The court also points out that, since Gonzaga, no federal court of appeals has concluded that (a)(30)(A) provides either Medicaid recipients or providers with a statutory right enforceable under § 1983. Sanchez, 2005 WL 1804194 *4.
- 14 -

Case 2:04-cv-00193-LA Document 81-1 Filed 08/05/2005 Page 15 of 15

barred by sovereign immunity and the Eleventh Amendment; and that the various claims in the

complaint must be dismissed because they fail to state claims on which relief can be granted.

Dated this 5th day of August, 2005.

Wisconsin Department of Justice Post Office Box 7857 Madison, Wisconsin 53707-7857 Fax: (608) 267-2223 Telephone: (608) 266-1780 (Flanagan) Email: flanaganmm@doj.state.wi.us Telephone: (608) 266-0323 (Burke) Email: burkeme@doj.state.wi.us

Respectfully submitted,
PEGGY A. LAUTENSCHLAGER Attorney General
s/Maureen McGlynn Flanagan MAUREEN MCGLYNN FLANAGAN Assistant Attorney General State Bar #1013639
s/Mary E. Burke MARY E. BURKE Assistant Attorney General State Bar #1015694
Attorneys for Defendants Wisconsin Department of Health and Family Services and Helene Nelson

flanaganmm\nelson\pleadings\brief-reply re mdismiss 4th am comp 08 05 05.doc

- 15 -

 
 Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 1 of 10

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________

GERALD N., et al.,

Plaintiffs,

v.

Case No. 04-C-1093

MILWAUKEE COUNTY, et al., Defendants.
______________________________________________________________________________ REPLY BRIEF IN SUPPORT OF MILWAUKEE COUNTY’S MOTION FOR JUDGMENT ON THE PLEADINGS
______________________________________________________________________________ The defendants’ legal arguments in support of the proposition that the plaintiffs’ claims
should be dismissed have been thoroughly presented in the briefs already filed, and no purpose would be served by recapitulating them in a reply brief. Some aspects of the plaintiff’s submissions in opposition to the defendants’ motions do, however, call for a brief rejoinder.
I. The plaintiffs’ quasi-evidentiary submissions. The plaintiffs have filed affidavits along with their responsive brief. They disclaim any intention to convert the pending motions into summary judgment motions, maintaining that this material is provided for “illustrative” rather the “evidentiary” purposes. Presumably, these submissions are intended to lend plausibility to the unsupported conclusory allegations of the complaint, and to persuade the court that the defendants’ alleged conduct could cause injury in fact to the plaintiffs that is actual and imminent, rather than merely conjectural orhypothetical, so as to meet the minimum requirements for standing.

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 2 of 10
The plaintiffs’ illustrative submissions are not a sufficient substitute for factual allegations in the actual pleadings. For the reasons explained in the defendant’s previous briefs, those allegations show no more than conjectural or hypothetical injuries to the plaintiffs. The illustrative submissions do, however, serve to illuminate the motives behind this lawsuit and to identify the real parties in interest. Certain high-cost residential providers want (or, if they are to be believed, need) to make more money from Family Care clients. Affiant Kallas threatened County Executive Walker with a federal class action lawsuit charging“discriminatorypractices” and “reckless disregard” against providers, Exhibit I, Kallas Aff. Such a lawsuit, irrespective of its merits, would at least have been straightforward and less disingenuous than the present action. However, those providers took a different course. Affiant Burr precipitated a crisis with a view to manufacturing grounds for a lawsuit by threatening to evict Family Care clients after Family Care did not meet his demands for rate increases. Milwaukee County suggests that the court consider the business interests of these affiantsas Family Care providers in assessing the value of their affidavits as illustrative support for the claims of the plaintiffs.
II. Intentional discrimination under the ADA and s. 504 of the Rehabilitation Act. The plaintiffs argue that they have adequately pled claims of intentional discrimination and disparate treatment, actionable under by the ADA and s. 504 of the Rehabilitation Act, by alleging (1) that Milwaukee County pays lower rates to some CBRF’s and other providers of residential services for disabled Family Care clients who are over the age of 60 than the County pays for disabled persons under the age of 60 who are served under the auspices of the Medicaid waiver programs, (2) that Milwaukee County pays lower rates to some CBRF’s and other providers of residential services for disabled Family Care clients than other counties pay, and (3) that Family Care clients with“more significant disabilities” received inferior treatment in regard

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 3 of 10
to payment for residential services in comparison to FamilyCare clients with “less significant disabilities”, Plaintiffs’ Brief in Opposition, pp. 14-15.
Regardless of the viability of the claim that the Milwaukee County Family Care program pays lower rates than other counties pay for residential services for the disabled, it cannot reasonably be held to state a cause of action against Milwaukee County. Milwaukee County cannot be liable for a disparity in treatment between two classes, only one of which is treated by Milwaukee County.
With regard to the contention that Family Care rates unlawfully discriminates against Family Care clients with “more significant disabilities” in paying for residential services, that contention is purely an unsupported conclusion. There are no factual allegations in the Fourth Amended Complaint describing any differences in the level of disability among the named plaintiffsor between the named plaintiffs and anyone else. Moreover, in the absence of any allegation as to whether any of the named plaintiffs is more or less“significantly disabled” than any other persons whose residential care is funded by Milwaukee County, it is difficult to imagine how any of the plaintiffs have the standing to pursue a claim based on this alleged disparity, even assuming that it is both actual and actionable.
The case then devolves to a claim that the plaintiffs have a right under the ADA and the Rehabilitation Act to force a program such as Family Care to pay whatever certain residential providers demand so as to guarantee their perpetual placements in residential facilities operated by those providers. The plaintiffs have not cited any case which supports such an extraordinary claim.
The plaintiffs citeOlmstead v. L.C., 527 U.S. 581 (1999), and Henrietta D. v. Bloomberg, 331 F.3d 261 (2nd Cir. 2003), for the proposition that courts recognize discrimination

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 4 of 10
claims under the ADA and the Rehabilitation Act based upon differential treatment within groups of individuals who all have disabilities. That proposition does find support in the Olmstead decision, 527 U.S. 581, 598, fn. 10. (in which the plurality opinion controverts the assertion of the dissenters that the Supreme Court had not previously interpreted “discrimination” to encompass disparate treatment among members of the same protected class). However, the Olmstead plaintiffs did not achieve their limited success solely on the basis of their assertion of disparate treatment. It was essential that the disparate treatment plainly operated to implicate an interest protected by the ADA. This is what the Supreme Court actually held: “Specifically,we confront the question whether the proscription of discrimination [in the ADA] may require placement of persons with mental disabilities in community settings rather than in institutions. The answer, we hold, is a qualified yes. . . . Unjustified isolation, we hold, is properly regarded as discrimination based on disability”. 527 U.S. 581, 587 and 597. Thanks to the Family Care program, none of the plaintiffs is isolated in an instituiton. They are all in community settings. Nothing more than idle speculation supports the assertion that any of them faces the prospect of institutionalization as a consequence of alleged disparate treatment by the defendants. It is not alleged that, in the face of Affiant Burr’s threat to evict four of the plaintiffs from his CBRF’s, they would have been placed in institutions. On the contrary, suitable alternative CBRF placements were available. The histories of the plaintiffs, as recited in the Fourth Amended Complaint, show multiple moves between community placements, none of which resulted in nursing home or other institutional placements.
III. Effective access to public services under the ADA and s. 504 of the Rehabilitation Act. The plain tiffs cite Henrietta D. v. Bloomberg, 331 F.3d 261 (2nd Cir. 2003), for the principle that a plaintiff can prevail by showing either discrimination or the denial of benefits or

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 5 of 10
public services by reason of the plaintiff’s disabilities. However,Henrietta D. is inapposite to this case.
The plaintiffs inHenrietta D. suffered from disabilities resulting from HIV-AIDS and related diseases. They were the intended beneficiaries of a program designed to assist them in obtaining various welfare benefits and public services to which they were entitled but which, by reason of the debilitating conditions peculiar to their disease, they were often physically unable to avail themselves of. Those plaintiffs were able to show that this program was so incompetently administered and ineffectual that they could not, by reason of their disabilities, obtain the benefits and services to which they were entitled and which other persons were able to access.
In this case, the plaintiffs are all enjoying the benefits of the Fma ily Care program. There is nothing in the allegations of the Fourth Amended Complaint to suggest that there is any welfare benefit or public service to which they are entitled that they are not receiving. The plaintiffspoint to the Par. 148 of the Fourth Amended Complaint, in which it is alleged that discriminationon the part of the defendants “prevent[s] [plaintiffs] from obtaining the same result, gaining the same benefit or reaching the same level of achievement in the most integrated setting appropriate to their needs and have the purpose of effect of defeating or substantially impairing accomplishment of the objectives of the Family Care and Medicaid program”s. Those allegations are pure legal conclusions which find no support in the factual alegations of the complaint. So far as those factual allegations disclose, all the plaintiffs are in community settings (presumably, the most integrated settings appropriate to their needs) and receiving such other benefits as may flow from their eligibiltiy for Family Care and Medicaid. Again, all that can be discerned from the allegations of the Fourth Amended Complaint with regard to impact of

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 6 of 10
defendants’ alleged disparate treatment of the plaintiffs is that it might result in a move from one community placement to another because Affiants Kallas and Burr demand higher CBRF rates than Family Care is able to pay. That is a far cry from the desperate situation of the indigent AIDS victims in Henrietta D. who, due to their disabilities, were unable obtani food stamps and other basic public assistance benefits to which they were entitled.
IV. The integration requirement of the ADA and s. 504 of the Rehabilitation Act. It bears repeating that “[t]he purpose of the [integration mandate] regulation is not to constitute the federal courts the supervisors of the care and treatment of disabled persons. It is to prevent the isolation or segregation of the disabled.” Bruggeman v. Blagojevich, 324 F.3d 906, 911 (7th Cir. 2003). None of the plaintiffs is isolated or segregated. They are all in community placements and there is nothing in the Fourth Amended Complaint, apart from sheer speculation, to suggest that they will not remain in community placements so long as such placements are commensurate with their individual needs. The situation of the plaintiffs in this case differs significantly from that of the plaintiffs in Fisher v. Oklahoma Health Care Authority, 335 F.3d 1175 (10th Cir. 2003). In that case, the plaintiffs, who were supported in community placements as beneficiaries of Medicaid waiver programs comparable to the defendants’ COP programs, challenged a policy of the state Medicaid program which severely limited prescription drug coverage for beneficiaries of the community based services program while providing more comprehensive coverage for nursing home residents. The plaintiffs were able to make a factual showing that this policy placed them at imminent risk of avoidable nursing home placement sufficient to create a genuine issue of fatc as to whether the policy violated the integration mandate.

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 7 of 10
V. Reasonable accommodation. The plaintiffs have thoughtfully directed the cour’ts (and this writer’s) attention to the recent decision of the Seventh Circuit Court of Appeals inWisconsin Communtiy Service v. City of Milwaukee, ___ F.3d. ___, 2005 WL 1523215 (7th Cir., June 29, 2005). That decision indicates that, in a case under Title II of the ADA and the Rehabilitation Act, a demand for “reasonable accommodation” does not give rise to a freestanding claim but rather comes into play only if and when a plaintiff can establish a case of actionable discrimination under some other theory, such as intentional discrimination or disparate impact. Milwaukee County agrees with the plaintiffs that the ultimate resolution of that issue is not critical to the disposition of the pending motions in this case. Milwaukee County respectfully submits that the plaintiffs have not made out a case of actionable discrimination under the ADA and the Rehabilitation Act, but that, even if they had, the court could not order the accommodation they demand because it is not reasonable. It would fundamentally alter the nature of the Family Care program and would impose undue financial and administrative budr ens on the defendants. The plaintiffs in this action, functioning as straw men for a couple of hig-hcost residential care providers, are attempting to hold the Family Care program hostage until the demands of those providers for higher rates are satisfied. As the defendants have argued at length in the briefs previously filed, if those providers are permitted to succeed, the financial burden on the program is self evident, as is the fact that the nature of the program would be altered beyond recognition. VI. Medicaid Act claims. The arguments for and against the recognition of a private cause of action for Medicaid beneficiariesunder 42 U.S.C. s. 1396a(a)(30)(a) have been thoroughly discussed in the briefs

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 8 of 10
already filed. However, even if the court decides that such a private right exists, the plaintiffs’ submissions do not establish that the defendants have violated it.
The court should require more than hand-wringing and threats to sustain a claim under s. (30)(a). All that plaintiffs have alelged is dire predictions of the loss of residential providers because Family Care rates are too low, now supported by illustrative submissions which consist largely of self-serving affidavits from CBRF operators who complain, unsurprisingly, that they are not making enough money caring for Family Care beneficiaries. But those same submissions also include the uncontroverted representation that very few residential or other care providers have actually left the Family Care provider network for any reason,Kallas Aff., Exhibit H. At this advanced stage of the game, after the case has been pending for many months and plaintiffs’ counsel has had years prior to the commencement of the action to collect plaintiffs and information, plaintiffs have not offered toidentify a single provider which has gone out of business or stopped serving Family Care clients, or to identify a single Family Care beneficiary who was forced into institutional care or otherwise adversely affected because Family Care had failed to enlist a sufficient number of CBRF’s and other residential care providers. They have not offered to make even a minimal showing sufficient to establish a viable claim under s. (30)(a).
VII. Standing and the “putative class”. No attempt will be made here to improve upon the exposition of the jurisprudence of standing which the State of Wisconsin defendants have presented. At the risk of some redundancy, however, defendant Milwaukee County urges the court to consider, under the rubric of standing and also of common sense, the distance between what the plaintiffs can factually and fairly allege about their own situations and the rather more

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 9 of 10
expansive conclusory allegations which, they maintain, constitute viable causes of action. The plaintiffs are six individuals who might have to make the transition from the care provided at the CBRF’s where they now reside to the care provided at different CBRF’s (all of which has been and will be paid for by the defendants so long as they remain eligible for Family aCre) because two CBRF operators demand higher rates for their care than the Family Care program can pay. The allegations in the Fourth Amended Complaint disclose that they have made such transitions in the past. There is nothing in the pleadings from which the court can reasonably infer that any of the named plaintiffs has been deprived of any right protected by the ADA or the Rehabilitation Act as the result of discriminatory“disparate treatment” by the defendants, that any of them has been denied, byreason of disability, any benefit or service to which he or she is entitled, or that any of them is or is likely to be in“unjustified institutional isolation” in violation of the integration mandate. There is likewise nothing in the pleadings from which the court can reasonably infer that any of the plaintiffs has been harmed in any way by a failure of the defendants to enlist sufficient care providers as required by 42 U.S.C. s. 1396(a)(30)( A).
Nor should the plaintiffs be permitted to“borrow” standing to assert those claims from some imaginary putative class plaintiffs. As mentioned above, plaintiff’scounsel has had a long time to troll for plaintiffs, yet he is unable to identify and plead the cause of even one real plaintiffwho can allege that the defendants’ discriminationon the basis of disability has caused his or her unjustified institutional placement, has denied him or her any right or benefit to which he or she is entitled, or has deprived him or her of any right or caused him or her anyinjury which would give rise to a cognizable claim under the ADA, the Rehabilitation Act, or the Medicaid Act. He should not be permitted to continue to this action.

Case 2:04-cv-00193-LA Document 80 Filed 08/05/2005 Page 10 of 10
CONCLUSION
For the foregoing reasons, together with those set forth in the previously filed briefs and
in the reply brief of the State of Wisconsin defendants, Milwaukee County respectfully urges the
court to dismiss the Fourth Amended Complaint under Rule 12(c), on the grounds that the named
plaintiffsdo not state claims upon which relief can be granted because the claims as stated are
not cognizable or, with regard to those sections of the complaint which may describe viable
private causes of action, the plaintiffs lack the standing to raise them. Dated at Milwaukee, Wisconsin this 5th day of August, 2005.
OFFICE OF CORPORATION COUNSEL
By:___/s/ John Jorgensen__________ John Jorgensen Principal Assistant Corporation Counsel State Bar No. 01017484 Attorneys for Defendant Milwaukee County
P.O. Address: Milwaukee County Courthouse 901 North 9th Street, #303 Milwaukee, WI 53233 Telephone: (414) 278-4302 Fax: (414) 223-1249

 
 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, et al., Plaintiffs,
v. MILWAUKEE COUNTY, et al.,
Defendants.

Case No. 04-C-0193

JOINT MOTION FOR PRELIMINARY AND FINAL APPROVAL OF THE SETTLEMENT AGREEMENT, AND FOR AN ORDER DIRECTING DISTRIBUTION OF NOTICE OF PROPOSED SETTLEMENT AGREEMENT
AND SCHEDULING FAIRNESS HEARING

The parties have reached a Settlement Agreement, attached hereto as Exhibit A, and jointly move the Court for approval pursuant to Fed. R. Civ. P. 23(e). The parties submit herewith their Joint Memorandum in Support of the Joint Motion for Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing. By September 25, 2007, in further support of this Joint Motion, the parties also will submit their individual substantive memoranda in support of approval of the Settlement Agreement.
Pursuant to Fed. R. Civ. P. Rule 23(e) and Armstrong v. Board of Sch. Directors, 616 F.2d 305, 314 (7th Cir. 1980), overruled on other gds. by Felzen v. Andreas, 134 F.3d 873, 875 (7th Cir. 1998), the parties also jointly move the Court to enter an immediate order finding that the proposed Settlement Agreement is within the range of possible approval and that there is good reason to notify the class members of the
1
Case 2:04-cv-00193-LA Filed 08/14/07 Page 1 of 32 Document 161

proposed Settlement Agreement; approvmg the contents of the Notice of Proposed Settlement Agreement (the "Notice"), attached hereto as Exhibit B; approving the Proposed Plan for Distribution ofNotice of Proposed Settlement Agreement (the "Plan"), attached hereto as Exhibit C; directing distribution of the Notice as set forth in the Plan; and scheduling a fairness hearing on October 19, 2007, at 1:30 p.m., to determine whether the proposed settlement is fair, reasonable, and adequate. FOR PLAINTIFFS:

Date: 8/13/2007
Pledl Law Office 1110 North Old World Third Street, Suite 670 Milwaukee, WI 53203 Fax: (414) 224-0811 Telephone: (414) 225-8999 Email: pledl@sbcglobal.net

s/Robert Theine Pledl ROBERT THEINE PLEDL State Bar #1 007710

Date: 8113/2007

s/Sarah Jane Somers SARAH JANE SOMERS North Carolina State Bar #33165

Date: 8/13/2007
National Health Law Program, Inc. 211 North Columbia Street Chapel Hill, NC 27514 Fax: (919) 968-8855 Telephone: (919) 968-6771 Email: somers@healthlaw.org Email: perkins@healthlaw.org

s/Martha Jane Perkins MARTHAJANEPEruuNS North Carolina State Bar #9993
Attorneys for Plaintiffs

2 Case 2:04-cv-00193-LA Filed 08/14/07 Page 2 of 32 Document 161

FOR COUNTY DEFENDANTS:
Date: 8114/2007
Milwaukee County Courthouse 901 North 9th Street, #303 Milwaukee, WI 53233 Fax: (414) 223-1249 Telephone: (414) 278-4302 Email: jjorgensen@milwcnty.com

s/John Jorgensen JOHN JORGENSEN Principal Assistant Corporation Counsel State Bar #1017484
Attorney for Defendant Milwaukee County

3 Case 2:04-cv-00193-LA Filed 08/14/07 Page 3 of 32 Document 161

FOR STATE DEFENDANTS:
Date: 8/ 14/2007
Date: 811 4/2007
Date: 8/14/2007
Wisconsin Department of Justice Post Office Box 7857 Madison, WI 53707-7857 Fax: (608) 267-2223 Telephone: (608) 266-1780 (Flanagan) Email: flanaganmm@doj .state.wi.us Telephone: (608) 266-0323 (Burke) Email: burkeme@doj .state.wi.us Telephone: (608) 266-3076 (Dudley) Email: dudleydd@doj .state.wi.us

s/Maureen McGlynn Flanagan MAUREEN MCGLYNN FLANAGAN Assistant Attorney General State Bar #1013639
s/Mary E. Burke MARY E. BURKE Assistant Attorney General State Bar #1015694
s/David Dudley DAVID DUDLEY Assistant Attorney General State Bar #1062812
Attorneys for Defendants Wisconsin Department of Health and Family Services and Kevin Hayden

4
Case 2:04-cv-00193-LA Filed 08/14/07 Page 4 of 32 Document 161

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA. SANDRA ERLICHMAN AND MARILYN BERDIKOFF,

CLASS ACTION

Plaintiffs,

V.

MILWAUKEE COUNTY, WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES, AND KEVIN HAYDEN, Secretary for Wisconsin Department of Health and Family Services,

CIVIL ACTION NO. 04-C-0193

Defendants.

SETTLEMENT AGREEMENT

WHEREAS, Plaintiffs initiated this lawsuit by complaint filed January 28, 2004, in Milwaukee County Circuit Court Case No. 04-CV-0862 seeking declaratory and injunctive relief against Milwaukee County (the "County Defendants"); and
WHEREAS , the County Defendants removed Milwaukee County Circuit Court Case No. 04-CV-0862 to federal court by notice of removal filed February 25, 2004; and
WHEREAS, Plaintiffs joined the Wisconsin Department of Health and Family Services ("DHFS") and the predecessor of Wisconsin Department of Health and Family Services Secretary Kevin Hayden (collectively, the "State Defendants" and, together with the County Defendants, "Defendants") to this lawsuit by amended complaint filed April 13, 2004; and
WHEREAS, Plaintiffs subsequently sought and obtained permission to file their second amended complaint (filed April 30, 2004), third amended complaint (filed August 19, 2004), and fourth amended complaint (filed March 30, 2005); and
WHEREAS, the Court, in a Decision and Order filed February 7, 2006, has partially granted and partially denied the Defendants' motions to dismiss and, in an Order filed April 5, 2006, has denied the State Defendants ' motion to certify the Court's February 7, 2006, ruling to include certification to pursue an interlocutory appeal; and

EXHIBIT A Case 2:04-cv-00193-LA Filed 08/14/07 Page 5 of 32 Document 161

WHEREAS, as a result of the Court's prior rulings and amendments to the pleadings by the parties. this now is an action for prospective declaratory and injunctive relief under the Americans with Disabilities Act ("ADA"). 42 U.S.C. § 12101 et seq., and the Rehabilitation Act, 29 U.S.C. § 701 et seq., based on claims of discrimination on the basis of disability in the delivery of Family Care services; and
WHEREAS, Family Care is a federally-approved Wisconsin Medical Assistance ("MA") dual waiver program designed to deliver home and community-based services, rather than only nursing home care, to elderly and disabled persons who qualify for nursing home care via a managed care waiver, see 42 U.S.C. § 1396n(b) and (c); and
WHEREAS, the Court on October 13, 2006, certified a plaintiff class consisting of disabled Milwaukee County residents who are now, or will in the future, be eligible to reside in a Family Care-funded community-based residential facility ("CBRF')or adult family home ("AFH"); and
WHEREAS, all parties now want to resolve this controversy on mutually satisfactory terms by compromising disputed claims and terminating this protracted litigation;
NOW THEREFORE, in consideration of the undertakings set forth herein and intending to be legally bound thereby, it is stipulated and agreed to by the Plaintiffs, the County Defendants and the State Defendants, represented by their undersigned counsel, that all of Plaintiffs' claims for relief which were or could have been asserted in this action shall be fully resolved on the following terms as set forth in this Settlement Agreement.
I. COMMITMENTS OF THE COUNTY DEFENDANTS.
A. The Milwaukee County Department on Aging ("MCDA") Care Management Organization ("CMO") will provide continuing education and training to care managers regarding when notices of intended adverse action must be sent pursuant to Wis. Admin. Code § HFS I0.52(3) and the 2007 Health and Community Supports Contract, at 53-55, by incorporating this information into the annual continuing education provided to care management staff. This information will be incorporated into the annual continuing education materials provided to care management staff no later than 120 days following Court approval of this Settlement Agreement.
B. The MCDA CMO will make reasonable efforts to support enactment of that part of Governor Doyle's proposed 2007-09 budget that would provide funding for an independent advocacy program for Family Care participants.
C. The MCDA CMO will expand its CBRF provider audit review process to include actual salary and wages, staff turnover rates, occupancy, and further details regarding
-2-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 6 of 32 Document 161

cost and wage structures. beginning with the calendar year 2007 year-end audit reviews that will occur in 2008 and also including the calendar year 2008 year-end audit reviews that will occur in 2009.

D . No later than December I. 2007, the MCDA CMO will refine its CBRF provider contracts to require providers to submit additional information to support the expanded audit review described in Section I.C.

E. The MCDA CMO will conduct a bi-annual (every other year) review of audited financial statements and contracts provided by multifacility, corporate providers of 3-4 bed AFH services, including actual salary and wages, staff tumover rates, occupancy, and further details regarding cost and wage structures, for the calendar
· year 2008 year-end audit reviews that will occur in 2009.

F. No later than December I, 2007, the MCDA CMO will refine its provider contracts with multifacility, corporate providers of 3-4 bed AFH services to require those providers to submit additional information to support the audit review described in Section I.E.

G. The MCDA CMO will con sider as a relevant factor data from provider surveys released on March 26, 2007, in connection with quality performance and provider rate setting for 2008 rates. The MCDA CMO will retain its current discreti on to establish the rate-setting methodology and negotiate provider rates, subject to the superintending authority of DHFS .

H. The MCDA CMO will complete provider network adequacy reviews twice a year, beginning with one such review in calendar year 2007. The CMO will retain its current right to terminate contracts with providers whose costs are not competitive.

l.

In connection with provider rate-setting for calendar years 2008 and 2009, MCDA will

provide contracted providers for CBRF, AFH and day services the factors taken into

account in developing the rates offered those providers.

·

J. In connection with provider rate settingforcalendaryears 2008 and 2009, MCDA will post on its website a summary of the factors taken into account in developing the rates offered subcontracted CBRF, AFH and day services providers.

K. The MCDA CMO will initiate a formal process of soliciting input from CBRF, AFH and day services providers that will be considered to the extent it is relevant in future rate setting, in connection with provider rate setting for calendar years 2008 and 2009.

L. The MCDA CMO will, at least once annually in calendar years 2007,2008 and 2009,
in vite all Milwaukee County municipalities to provide input to address the issue of affordable CBRF, AFH and other housing for Milwaukee County Family Care

-3-

Case 2:04-cv-00193-LA Filed 08/14/07 Page 7 of 32 Document 161

participants: identify impediments; and encourage the development of such housing throughout Milwaukee County.
M. As part of its semi-annual review of provider network adequacy, as described in Section I.H. above, the MCDA CMO will conduct needs assessments of future Family Care participants and where they are living in Milwaukee County.
N. The MCDA CMO will disseminate the results of its provider network adequacy reviews at least once annually in calendar years 2007, 2008 and 2009 to the development and/or land use planning departments of all Milwaukee County municipalities.
0. No later than 120 days following Court approval of this Settlement Agreement, the MCDA CMO will collaborate with the MCDA Resource Center to make available to all nursing homes located in Milwaukee County materials explaining the alternate residential options available through the Family Care program and providing contact information for the Milwaukee County Aging Resource Center for persons who wish to discuss other options available' to them.
II. COMMITMENTS OF THE STATE DEFENDANTS.
A. No later than 60 days following expiration of the 30 day review and comment period described in Section II.B., DHFS will issue a contract interpretation memo reiterating that: (I) a Family Care participant, pursuant to Wis. Stat.§ 46.287(2)(b), may contest the choice of residential or day services provider proposed by the CMO by pursuing Family Care grievance procedures or a fair hearing; and (2) that the standard to be applied in resolving any such disputes is whether the proposed plan would provide care, treatment or supports that are insufficient to meet the participant's needs or outcomes, or are provided in a setting that is unnecessarily restrictive or less integrated than is appropriate to the participant's needs. The contract interpretation memo will state the importance of following the notice procedures required by Wis. Admin . Code § HFS 10.52(3) and the 2007 Health and Community Supports Contract, at 53-55.
B. No later than 120 days following Court approval of this Settlement Agreement, DHFS will provide a draft of the contract interpretation memo discussed in Section II. A., to Plaintiffs' counsel, the County Defendants' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin for review and comment before finalization. DHFS will accept written comments on the draft contract interpretation memo for a period of 30 days beginning on the date the draft contract interpretation memo is transmitted to the entities specified in this paragraph. The State Defendants will retain sole discretion to determine final content of the contract interpretation memo, and to provide drafts to any other person or organization for review and comment before finalization .
-4-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 8 of 32 Document 161

C. Within 15 business days of issuance as described in Sections II.A. and 8 ., DHFS will post the final contract interpretation memo on its Family Care website .
D. No later than 60 days following expiration of the 30 day review and comment period described in Section II.E., DHFS will develop additional informational materials explaining the Resource Allocation Decision ("RAD") method used in the Family Care program to help participants identify personal outcomes after which a participant's care management team then works with the participant and/or the participant's authorized representatives to find the most cost-effective way of achieving those personal outcomes via a service plan that is both reasonable and effective. The RAD instructional materials will include an explanation that Family Care participants who enter CBRFs and AFHs are not and should not be automatically disqualified from participating in day programming services outside their residences, and that it is appropriate to use the RAD to determine whether the outcomes of individual Family Care participants who reside in CBRFs and AFHs can not be met without access to outside day programming services.
E. No later than 120 days following Court approval of this Settlement Agreement, DHFS will provide a draft of the RAD informational materials discussed in Section II.D., to Plaintiffs' counsel, the County Defendants' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin for review and comment before finalization. DHFS will accept written comments on the draft RAD informational materials for a period of 30 days beginning on the date the draft RAD informational materials are transmitted to the entities specified in this paragraph. The State Defendants will retain sole discretion to determine final content of the RAD informational materials, and to provide drafts to any other person or organization for review and comment before finalization.
F. Within 15 days of issuance as described in Sections II.D. and E., DHFS will post the final RAD informational materials discussed on its Family Care website.
G. At the same time as the final RAD informational materials are posted on DHFS' Family Care website as described in Section II.F., DHFS also will provide the final RAD informational materials discussed in Sections II.D. and II.E. to Family Care grievance bodies (CMO Grievance and Appeal Hearing Boards or Committees, DHFS' contracted MetaStar review team, and DHFS' internal contract monitoring team) and Division of Hearings and Appeals administrative law judges assigned to conduct Family Care hearings.
H. If the MCDA CMO's 2008 annual certification application to DHFS includes submission of any revised form notices required by Wis. Admin. Code § HFS I 0.52(3)(b)7. and 8., DHFS will , before certifying the MCDA CMO for 2008, provide copies of any such revised form notices to Plaintiffs ' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin for
-5-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 9 of 32 Document 161

review and comment. DHFS will allow Plaintiffs' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin a minimum time period of ten business days to submit comments on any revised form notices provided to them for review. The State Defendants will retain sole discretion to determine whether or not to certify the MCDA CMO for 2008, and to determine whether to require the MCDA CMO to make ·any changes in the MCDA CMO' s revised form notices.

I.

If the independent advocacy program to be funded pursuant to Governor Doyle's

2007-09 budget proposal is established, DHFS will include in any contract or other

document governing the independent advocacy program a requirement for

semi-annual reporting by the entity operating the independent advocacy program of

statistical information regarding referrals received by the independent advocacy

program.

J.

If the independent advocacy program to be funded pursuant to Governor Doyle's

2007-09 budget proposal is established, DHFS will post statistical reports received

within two years from the date the Court approves this Settlement Agreement from the

independent advocacy program as described in Section II.I. on DHFS' Family Care

website within fifteen business days of receipt by DHFS of those reports.

K. No later than 120 days following Court approval of this Settlement Agreement, DHFS will amend its contract with it.<> External Quality Review Organization, currently MetaStar, to require semi-annual statistical reporting regarding referrals to the state's appeals and grievances program, both at DHFS and at the Division of Hearings and Appeals; referral outcomes; requests for fair hearings; and fair hearings conducted beginning with the January- June 2008 reporting period.

L. Within 30 days of receipt, for a period of two years beginning on the date the Court
approves this Settlement Agreement, DHFS will post the statistical reports described in Section IlK. on the DHFS Family Care website.

M. The State Defendants will continue to support creation of the independent advocacy program for Family Care participants for which Governor Doyle included funding in his proposed 2007-09 budget and will issue a request for proposals and take other necessary steps to implement the program promptly upon passage by the Legislature, if that funding is included in the 2007-09 budget as enacted.

N. DHFS will work with the MCDA CMO to enhance openness of the MCDNprovider rate-setting process for rate years 2008 and 2009 by exploring alternate rate-setting methods for CBRF and AFH providers.

0. No later than 90 days following Court approval of this Settlement Agreement, DHFS will provide information to CBRF and AFH members of the MCDA CMO's provider

-6-

Case 2:04-cv-00193-LA Filed 08/14/07 Page 10 of 32 Document 161

network about locations on DHFS' Family Care web site of the webcast describing the capitated rate setting process and the Family Care actuarial rate reports describing rate development methodology.

P.

No later than 60 days following expiration of the review and comment period

described in Section II.Q., DHFS will issue a contract interpretation memo reiterating

the importance of appropriate and adequate pre-transfer planning so as to identify and

minimize potential effects on a Family Care participant transferring from one

residential setting to another.

Q. No later than 120 days following Court approval of this Settlement Agreement, DHFS
will provide a draft of the contract interpretation memo discussed in Section II.P., to Plaintiffs' counsel, the County Defendants' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin for review and comment before finalization. DHFS will accept written comment<; on the draft contract interpretation memo for 30 days commencing with the date the draft contract interpretation memo is transmitted to the entities specified in this paragraph. The State Defendants will retain sole discretion to determine final content of the contract interpretation memo, and to provide drafts to any other person or organization for review and comment before finalization.

R. Within 15 days of issuance as described in Sections II.P. and Q., DHFS will post the final contract interpretation memo discussed in Sections II.P. and II.Q. on its Family Care website.

S.

DHFS will provide technical assistance to MCDA and its existing Placement Team in

identifying and implementing additional practices to enhance planning for safe and

effective residential moves for Family Care participants, and in assessing every move

before it occurs to identify potential harmful effects on the participant and to develop

strategies for minimizing those effects. DHFS will provide this technical assistance to

MCDA and its existing Placement Team by preparing technical assistance materials

and convening, no later than July I, 2008, a meeting of DHFS and MCDA staff to

discuss these materials and how MCDA is incorporating or might incorporate

strategies identified in its practices.

T. DHFS will assign DHFS developmental disabilities staff to conduct a one-time review of Milwaukee County Watts review 1 procedures and pursue a~y corrective action, to be determined by DHFS, as determined appropriate by DHFS in its sole discretion and enforceable only by DHFS in its sole discretion. The one-time review will commence no later than July 1, 2008.

U. Within 30 days of completion of the final report for the review described in Section II.T., DHFS will provide plaintiffs' counsel with a copy of the final report.
1Stale ex rei. Warts 1'. Combined Comm. s\'CS., 122 Wis. 2d 65 , 362 N.W.2d I04 ( 1985 ).
-7-

Case 2:04-cv-00193-LA Filed 08/14/07 Page 11 of 32 Document 161

V. Within 30 days of finalization of any corrective action plan described in Section ll.T, DHFS will provide plaintiffs' counsel with copies of any final corrective action plan.
W. Within 30 days of receipt, DHFS will provide plaintiffs' counsel with copies of any compliance reports submitted by Milwaukee County for a period of two years following finalization of any corrective action plan implemented as a result of the one-time review of Milwaukee County Watts procedures discussed in Section ll.T.
X. No later than 120 days following Court approval of this Settlement Agreement, DHFS will amend the DHFS/MCDA Family Care contract to include language that MCDA will provide services in the most integrated level of residential setting consistent with the desired outcomes, preferences and identified needs of a participant, and that is cost-effective when compared to alternative services that could meet the same needs and achieve similar outcomes.
Y. No later than 120 days following Court approval of this Settlement Agreement, DHFS will direct its External Quality Review Organization in writing to include in the care plan review process consideration of whether a Family Care participant would be more appropriately placed in a less restrictive/more integrated residence, and of whether the individual would prefer to move to a less restrictive/more integrated facility.
III. ENFORCEMENT.
A. If Plaintiffs determine, based upon their good faith review of available evidence, that either the County Defendants or the State Defendants are out of compliance with any provision of this Agreement, Plaintiffs will notify all Defendants in writing accompanied by supporting documentation.
B. The parties shall engage in a good faith negotiation to reach agreement within 30 days of the receipt by the Defendants of any documentation of alleged noncompliance and any necessary corrective actions, including a time period for implementation of such corrective actions, and shall make all reasonable efforts to reach agreement. This 30 day time period can be extended for any period of time by mutual agreement of all parties, or in the absence of agreement, can be extended once for one 30 day period by each party.
C. If no agreement on the issue of noncompliance or necessary corrective action is reached within the timeframe established in Section III.B., the plaintiffs may file a remedial motion with the Court within 30 days after expiration of the timeframe established in Section III.B.
-8-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 12 of 32 Document 161

D. The Court shall retain ultimate jurisdiction to enforce this Agreement until the tem1ination date specified in Sectioh IV.D.
E. All of the provisions of this Agreement are separately and independently enforceable, except where the Agreement provides that an element or provision is not enforceable.
IV. MISCELLANEOUS.
A. The parties agree that Family Care participants who enter CBRFs and AFHs are not and should not automatically be disqualified from participating in day programming services outside their residences. The parties further agree that it is appropriate to use the RAD to determine whether the outcomes of Family Care participants who reside in CBRFs and AFHs can not be met without access to outside day programming services.
B. Time shall be computed under sections 990.001(4) and 801.15(1 )(a) of the Wisconsin Statutes .
C. Forthwith upon the Court's approval of the Settlement Agreement, Milwaukee County will cause to be transmitted to plaintiffs' attorneys the sum of Sixty-five Thousand Dollars ($65,000.00) and the State of Wisconsin will cause to be transmitted to plaintiffs' attorneys the additional sum of Sixty-five Thousand Dollars ($65,000.00) in full and final settlement of any and all claims plaintiffs may have for attorneys' fees and costs, including any costs incurred by plaintiffs for the services of expert witnesses, arising from this litigation through the date of the Court's order approving the Settlement Agreement following hearing pursuant to Fed. R. Civ. P. 23(e)( I )C).
D. Except for provisions of this Settlement Agreement for which some other compliance date or time period is specified, the provisions of this Settlement Agreement will terminate and cease to be enforceable on the date two years after the date of the Court's order approving the Settlement Agreement following hearing pursuant to Fed. R. Civ. P. 23(e)(l)(C).
E. This Agreement is a full, final and complete compromise and settlement of claims, actual, doubtful or disputed, as to questions of liability, damage and remedy for the claims raised in this case or that could have been raised in this case, and is not to be construed as an admission of liability by the County Defendants, the State Defendants, their respective agents, their respective officers or their respective employees.
-9-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 13 of 32 Document 161

FOR PLAINTIFFS:
~ Date: 3 ~ 2C07
Pledl Law Office
1110 North Old World Third Street, Suite 670 Milwaukee, WI 53203 Telephone: (414) 225-8999

~~ ROBERT THEINE PLEDL State Bar #1007710

Date:~. G1 .1...cx::n

SARAH JANE SOMERS North Carolina State Bar #33165

National Health Law Program, Inc.
211 North Columbia Street Chapel Hill, NC 27514 Telephone: (919) 968-6771

Attorneys for Plaintiffs

-10-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 14 of 32 Document 161

FOR COUNTY DEFENDANTS:
Date: _ _%..:...../1_/_()...:_7_ __
Milwaukee County Courthouse 901 North 9th Street, #303 Milwaukee, WI 53233 Fax: (414) 223-1249 Telephone: (414) 278-4302 Email: jjorgensen@ rnilwcnty .corn

Principal Assistant Corporation Counsel State Bar#1017484 Attorney for Defendant Milwaukee County

-11-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 15 of 32 Document 161

FOR STATE DEFENDANTS :

J.B. VAN HOLLEN Attorney General
~.J~~} MAREEN MCGLYNFLWAGAN {__ Assistant Attorney General State Bar#1013639
MARY .BURKE Assistant Attorney General State Bar #1015694

Wisconsin Department of Justice Post Office Box 7857 Madison, WI 53707-7857 Fax: (608) 267-2223 Telephone: (608) 266-1780 (Flanagan) Email: flanaganmm@doj.state.wi.us Telephone: (608) 266-0323 (Burke) Email: burkeme@doj.state.wi.us Telephone: (608) 266-3076 (Dudley) Email: dudleydd@doj .state.wi.us

Assistant Attorney State Bar #1062812
Attorneys for Defendants Wisconsin Department of Health and Family Services and Kevin Hayden

-12-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 16 of 32 Document 161

SO ORDERED:
THE HONORABLE LYNN ADELMAN United States District Judge

DATE

-13-
Case 2:04-cv-00193-LA Filed 08/14/07 Page 17 of 32 Document 161

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, et al., Plaintiffs,
v. MILWAUKEE COUNTY, et al.,
Defendants.

Case No. 04-C-0193

NOTICE OF PROPOSED SETTLEMENT AGREEMENT

PLEASE READ THIS NOTICE CAREFULLY IF YOU ARE:
• A MILWAUKEE COUNTY FAMILY CARE PARTICIPANT WHO LIVES IN AN ADULT FAMILY HOME (ALSO CALLED AN "AFH") OR A COMMUNITY
BASED RESIDENTIAL FACILITY (ALSO CALLED A "CBRF")
• A PERSON IN MILWAUKEE COUNTY WITH DISABILITIES WHO IN THE FUTURE MAY BE ELIGIBLE FOR FAMILY CARE AND TO LIVE IN AN AFH OR CBRF WITH FAMILY CARE FUNDING
• A FAMILY MEMBER, GUARDIAN, OR POWER OF ATTORNEY FOR ANY PERSON DESCRIBED ABOVE
THE MATTERS EXPLAINED IN TIDS NOTICE WILL NOT IMMEDIATELY INCREASE OR REDUCE BENEFITS RECEIVED BY ANY FAMILY CARE PARTICIPANT.
ALL FAMILY CARE PARTICIPANTS WILL CONTINUE TO RECEIVE NEEDED AND APPROPRIATE SERVICES FOR WHICH THEY ARE ELIGIBLE.
SEE SECTION ill, BELOW, FOR INSTRUCTIONS ABOUT WHOM YOU CAN CONTACT FOR MORE INFORMATION ABOUT THE MATTERS EXPLAINED IN TIDS NOTICE.

I.

WHAT THIS NOTICE IS ABOUT.

This notice is about a lawsuit concerning certain rights of Milwaukee County residents with disabilities who are now or may in the future participate in the Family Care program. Family Care is a program providing home and community-based support services to persons with disabilities. In Milwaukee County, Family Care is administered by the Milwaukee County Department on Aging (also called "MCDA") through its Care Management Organization (also called the "CMO"). The state Department of Health and Family Services (also called "DHFS") provides funding for Family Care and oversees operation of Family Care by MCDA and the CMO.

This lawsuit was filed in 2004. Judge Lynn S. Adelman, from the United States District Court for the Eastern District of Milwaukee, is presiding over the lawsuit.

EXHIBIT B Case 2:04-cv-00193-LA Filed 08/14/07 Page 18 of 32 Document 161

Judge Adelman certified the lawsuit as a "class action." This means that the lawsuit involves the rights of all persons in the "class" identified by Judge Adelman, even if those persons are not participating directly in the lawsuit. The persons in the class are called the "class members" or the "plaintiffs." The class identified by Judge Adelman is:

Disabled Milwaukee County residents who are now, or will in the future, be eligible to reside in a Family Care funded community-based residential facility ("CBRF") or adult family home ("AFH").

In the lawsuit, the plaintiffs claimed that their legal rights were violated because Milwaukee County and DHFS were not providing enough funding for Family Care members who lived or wished to live in a CBRF or a AFH.

The other side of the lawsuit, called the "defendants," consists of Milwaukee County, DHFS, and DHFS Secretary Kevin Hayden. The defendants deny that the plaintiffs' legal rights were violated as claimed in the lawsuit.

The lawyers for the class members and the defendants have negotiated a Settlement Agreement. This means that the lawsuit will end without a trial or a decision by Judge Adelman about the claims made by the plaintiffs, if the settlement is approved. Instead, the lawyers for the class members and the defendants have agreed about certain actions that MCDA, the CMO, and DHFS will take to ensure that Family Care in Milwaukee County meets applicable requirements. Some information about the Settlement Agreement is provided in Section V, below. Information about how you can obtain a copy of the Settlement Agreement or further information about the Settlement Agreement is provided in Section III, below.

The lawyers have asked Judge Adelman to approve the Settlement Agreement. Further information about this process is provided in Section II, below. Judge Adelman has approved the contents of this notice and its dissemination to class members and other interested persons.

D.

JUDGE ADELMAN WILL HOLD A HEARING ABOUT THE PROPOSED SETTLEMENT

AGREEMENT, AND YOU MAY ATTEND THE HEARING, SPEAK AT THE HEARING, OR SUBMIT

WRITTEN COMMENTS TO THE JUDGE BEFORE THE HEARING.

Judge Adelman has scheduled a hearing to consider whether to approve the Settlement Agreement. This hearing is scheduled as follows:

DATE: TIME: PLACE:

Friday, October 19, 2007 1:30 p.m. United States District Court for the Eastern District of Wisconsin 517 East Wisconsin Avenue, Courtroom 390 Milwaukee, Wisconsin 53202

PLEASE NOTE: TillS LAWSUIT, THE SETTLEMENT AGREEMENT, AND THE OCTOBER 19 HEARING DO NOT CONCERN ANY INDIVIDUAL CLASS MEMBER'S CASE THAT IS PENDING IN COURT, OR IN AN ADMINISTRATIVE PROCEEDING. THIS LAWSUIT, THE SETTLEMENT AGREEMENT, AND THE OCTOBER 19 HEARING CONCERN ONLY THE OPERATION OF THE FAMILY CARE PROGRAM IN MILWAUKEE COUNTY AS A WHOLE.

Before the hearing, class members (or other persons on their behalf) may submit written comments regarding the Settlement Agreement for Judge Adelman to consider. Instructions on how to submit written comments appear in Section IV, below.

Class members and other persons are welcome to attend the hearing. You do not have to make a reservation in order to attend the hearing.

2 Case 2:04-cv-00193-LA Filed 08/14/07 Page 19 of 32 Document 161

Judge Adelman, in his discretion, may permit some class members (or other persons on their behalf) to speak during the hearing about the Settlement Agreement. Instructions on how to ask Judge Adelman for permission to speak at the hearing appear below in Section IV.
III. HOW TO OBTAIN A COPY OF THE SETTLEMENT AGREEMENT OR MORE INFORMATION ABOUT THE CASE.
Class members (or other persons on their behalf) may obtain a copy of the Settlement Agreement from DHFS's internet site, at http://www.dhfs.state. wi.us!LTCare. A paper copy of the Settlement Agreement may be obtained, at no charge, by contacting Attorney Robert Pledl of the Pledl Law Office. Attorney Pledl is one of the lawyers for the class members. His telephone number is (414) 225-8999.
· Class members (or other persons on their behalf) who have questions about the Settlement Agreement or would like more information about the lawsuit also may contact Attorney Pledl at (414) 225-8999.
You may also review the materials that the parties have filed with the Court by going to the Office of the Clerk of Court at the United States District Court for the Eastern District of Wisconsin in Milwaukee, which is in the United States Courthouse at 517 East Wisconsin Avenue, Room 362, Milwaukee, Wisconsin. To review materials in the public record in this case, refer to Case No. 04-C-0193. Persons with accounts on the Court's PACER system may access many case filings electronically, subject to the standard applicable fees, at http://www.wied.uscourts.govlpacer_infmmation.htm .
IV. HOW TO SUBMIT COMMENTS TO JUDGE ADELMAN OR REQUEST PERMISSION TO SPEAK AT THE OCTOBER 19 HEARING.
Any class member (or other persons on his or her behalf) who wishes to submit written comments that support or object to the Settlement Agreement, must send or deliver a letter to the Clerk of Court at the following address :
Clerk of Court United States District Court Eastern District of Wisconsin 517 East Wisconsin Avenue, Room 362
Milwaukee, WI 53202
All letters must be received by the Clerk of Court no later than 4:30 p.m., Tuesday, September 25, 2007. All letters must be signed, and must include the name, address, and telephone number of the person submitting the letter. All letters should indicate that they are being submitted in Case No. 04-C-0193 . The Clerk of Court will forward all letters received to Judge Adelman. Copies of all letters also should be sent by the writer to both Attorney Pledl and Attorney Maureen McGlynn Flanagan at the addresses provided at the end of this Section IV.
Any class member (or other persons on their behalf) who wishes to speak at the October 19 hearing must request permission from Judge Adelman by submitting a letter to the Clerk of Court. These letters also must be received by the Clerk of Court no later than 4:30p.m., Tuesday, September 25, 2007. All letters must be signed, and must include the name, address, and telephone number of the person submitting the letter. All letters should indicate that they are being submitted in Case No. 04-C-0 193. The Clerk of Court will forward all letters received to Judge Adelman. Copies of all letters also should be sent by the writer to both Attorney Pledl and Attorney Maureen McGlynn Flanagan at the addresses provided at the end of this Section IV.
Judge Adelman will decide who can speak at the hearing. Please be assured that Judge Adelman will consider all letters whether or not permission is granted to speak, and whether or not the letter writer attends the October 19 hearing.
3 Case 2:04-cv-00193-LA Filed 08/14/07 Page 20 of 32 Document 161

The addresses at which copies of all letters shouid be sent to Attorney Pled! and Attorney Flanagan are:

Robert Theine Pled! Pled! Law Office Ill 0 North Old World Third Street, #670 Milwaukee, WI 53203

Maureen McGlynn Flanagan Wisconsin Department of Justice Post Office Box 7857 Madison, WI 53707-7857

V.

INFORMATION ABOUT THE SETTLEMENT AGREEMENT.

If Judge Adelman approves the Settlement Agreement, then MCDA, the CMO, and DHFS will commit to take certain actions over a two-year period to help insure that Family Care in Milwaukee County meets applicable requirements.

The most important parts of the Settlement Agreement are summarized below. For further details, such as applicable deadlines, please review the Settlement Agreement online or by requesting a paper copy from Attorney Pledl as discussed in Section III above.

(A)

Commitment~· of the Milwaukee County Department on Aging and the CMO

1.

The CMO will provide annual training to care managers about when notices of intended adverse

action must be sent to Family Care participants. This information also will be incorporated into

related training materials.

2.

The CMO will make reasonable efforts to support the enactment of Governor Doyle's budget

proposal to provide funding for an independent advocacy program for Family Care participants.

3.

The CMO will expand its annual audit review process for CBRF providers to include actual salary

and wages, staff turnover rates, occupancy, and further details regarding cost and wage structures.

4.

The CMO will review audited fmancial statements and contracts for multifacility, corporate

providers of 3-4 bed AFHs, including actual salary and wages, staff turnover rates, occupancy, and

further details regarding cost and wage structures.

5.

In connection with CBRF and AFH provider 2008 rate setting, the CMO will consider data from

provider surveys released in March 2007. The CMO will retain its discretion to establish the

rate-setting methodology and negotiate provider rates, subject to supervisory review by DHFS.

6.

The CMO will complete provider network adequacy reviews twice a year, beginning with one

review in calendar year 2007. These reviews will include needs assessments of future Family Care

participants and where they are living in Milwaukee County. The results of these reviews will be

provided to the development and/or land use planning departments of all Milwaukee County cities,

towns, and villages. The CMO will retain its current right to terminate contracts with providers

whose costs are not competitive.

7.

In connection with provider rate-setting for calendar years 2008 and 2009, MCDA will provide

CBRF, AFH, and day services providers the factors taken into account in developing the rates

offered those providers. MCDA will post a summary of these factors on its website.

8.

The CMO will start a formal process of soliciting input from CBRF, AFH, and day services

providers that will be considered to the extent that it is relevant in future rate setting.

9.

At least once annually in calendar years 2007, 2008, and 2009, the CMO will invite all Milwaukee

County municipalities to provide input on affordable CBRF, AFH, and other housing for

4
Case 2:04-cv-00193-LA Filed 08/14/07 Page 21 of 32 Document 161

Milwaukee County Family Care participants, and will encourage the development of such housing throughout Milwaukee County.

10. The CMO will work with the MCDA Resource Center to provide all nursing homes located in Milwaukee County with informational materials about the alternate residential options available through the Family Care program, and will provide contact information for persons who wish to discuss other options available to them.

(B) Commitments of the Wisconsin Department of Health and Family Services

1.

DHFS will issue written guidance reiterating that a Family Care participant may contest the choice

of the residential or day services provider proposed by the CMO, through the Family Care

grievance procedures or a fair hearing. The written guidance will note that the standard in

resolving these disputes is whether the proposed plan would provide care, treatment, or supports

that are insufficient to meet the participant's needs or outcomes, or are provided in a setting that is

unnecessarily restrictive or less integrated than is appropriate to the participant's needs. It will

state the importance of following the notice procedures required by the Wisconsin Administrative

Code and the Family Care contract. DHFS will provide a draft of its written guidance to the

plaintiffs' lawyers and certain public interest law firms, and will accept comments from them

before fmalizing the written guidance. When complete, the written guidance will be posted on the

DHFS website.

2.

DHFS will develop additional informational materials explaining the Resource Allocation

Decision ("RAD") method used in the Family Care program to help participants identify personal

outcomes, after which a participant's care management team then works with the participant and/or

the participant's authorized representatives to find the most cost-effective way of achieving those

personal outcomes via a service plan that is both reasonable and effective. The materials will

include an explanation that Family Care participants who enter CBRFs and AFHs are not and

should not be automatically disqualified from participating in day programming services outside

their residences, and that it is appropriate to use the RAD to determine whether the outcomes of

individual Family Care participants who reside in CBRFs and AFHs can not be met without access

to outside day programming services. DHFS will provide a draft of its informational materials to

the plaintiffs' lawyers and certain public interest law firms, and will accept comments from them

before fmalizing the informational materials. When complete, the informational materials will be

posted on the DHFS website. The informational materials also will be provided to administrative

law judges and other persons who review Family care grievances.

3.

If the CMO's 2008 annual certification application to DHFS includes submission of any revised

form notices, DHFS will provide copies of any revised form notices to the plaintiffs' lawyers and

certain public interest law firms, and will accept comments from them regarding the revised form

notices. DHFS will retain sole discretion to determine whether or not to certify the CMO for 2008,

and to determine whether to require the CMO to make any changes in the CMO's revised form

notices.

4.

If the Family Care independent advocacy program included in Governor Doyle's 2007-09 budget

proposal is established, DHFS will require the independent advocacy program to provide

semi-annual statistical reports about referrals received by the independent advocacy program.

These reports will be posted on the DHFS website.

5.

DHFS and Secretary Hayden will continue to support Governor Doyle 's budget proposal to create

and fund an independent advocacy program for Family Care participants. If funding is included in

the 2007-09 budget passed by the legislature, DHFS will take steps to implement the program

promptly.

5
Case 2:04-cv-00193-LA Filed 08/14/07 Page 22 of 32 Document 161

6.

DHFS will work with the CMO to enhance openness of the provider rate-setting process for rate

years 2008 and 2009 by exploring alternate rate-setting methods for CBRF and AFH providers.

7.

DHFS will issue written guidance reiterating the importance of appropriate and adequate

pre-transfer planning so as to identify and minimize potential effects on a Family Care participant

transferring from one residential setting to another. DHFS will provide a draft of its written

guidance to the plaintiffs' lawyers and certain public interest law firms, and will accept comments

from them before finalizing the written guidance. When complete, the written guidance will be

posted on the DHFS website.

8.

DHFS will assist MCDA and its existing Placement Team in implementing additional practices to

enhance planning for safe and effective residential moves for Family Care participants, assess

moves before they occur to identify potential harmful effects on participants, and develop

strategies for minimizing those effects.

9.

DHFS will conduct a one-time review of Milwaukee County Watts review procedures and pursue

any corrective action as determined appropriate by DHFS. A copy of the fmal report, any

corrective action plan, and corrective action compliance reports will be provided to plaintiffs'

counsel.

10.

DHFS will direct its external quality review organization to include in the care plan review process

consideration of whether a particular Family Care participant would be more appropriately placed

in a less restrictive/more integrated residence, and of whether the individual would prefer to move

to a less restrictive/more integrated facility.

(C) Agreement Regarding Day Programming: The plaintiffs and defendants agree that Family Care participants who enter CBRFs and AFHs are not and should not automatically be disqualified from participating in day programming services outside their residences. They further agree that it is appropriate to use the RAD to determine whether the outcomes of Family Care participants who reside in CBRFs and AFHs cannot be met without access to outside day programming services.

(D) Enforcement: If the parties disagree about whether the defendants are complying with the Settlement Agreement, the parties must first try to resolve the disagreement through negotiation with each other. If negotiations do not succeed, then the plaintiffs' lawyers may ask the Court to resolve the disagreement.

(E)

Attorney Fees: If successful, the kinds of claims that are involved in this lawsuit would entitle the

plaintiffs to reasonable attorney fees and costs. The parties have negotiated, separately from the remainder of the

settlement agreement, a compromise of the claim for attorneys' fees and costs submitted by the plaintiffs ' lawyers.

Under the Settlement Agreement, plaintiffs' lawyers, who include lawyers from the Pledl Law Office, of Milwaukee,

Wisconsin, and the not-for-profit organization National Health Law Program, Inc. of Chapel Hill, North Carolina,

would receive a total of One Hundred and Thirty Thousand Dollars ($130,000.00) as compensation and to reimburse

their expenses incurred during this 3 l/2-year-old lawsuit.

6 Case 2:04-cv-00193-LA Filed 08/14/07 Page 23 of 32 Document 161

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, et al., Plaintiffs,
v.
MILWAUKEE COUNTY, et al., Defendants.

Case No. 04-C-0 193

PROPOSED PLAN FOR DISTRIBUTION OF NOTICE OF PROPOSED SETTLEMENT AGREEMENT

1. No later than September 11, 2007, the defendants shall cause a copy of the

Notice of Proposed Settlement Agreement (the "Notice") to be sent by First Class

U.S. Mail to each person included, as of a date certain, in the database maintained by the

Milwaukee County Department on Aging ("MCDA") listing Milwaukee County Family

Care members, legal guardians for those Family Care members, and persons holding

activated powers of attorney for those Family Care members.

2.

MCDA shall cause a copy of the Notice to be provided to each person who

enrolls in Milwaukee County Family Care, and/or the legal guardians or persons holding

activated powers of attorney for those enrollees, between the date certain used to

determine recipients ofthe mailing described in~ 1 and October 16, 2007.

3. No later than September 11 , 2007, the Wisconsin Department of Health

and Family Services will post electronic copies of the Settlement Agreement and the

Notice on its website at http://www.dhfs.state.wi.us/LTCare.

EXHIBIT C Case 2:04-cv-00193-LA Filed 08/14/07 Page 24 of 32 Document 161

4. Upon request, counsel for the plaintiffs shall provide paper copies of the
Settlement Agreement to class members or other persons requesting paper copies.
Counsel for the plaintiffs will record the names of persons to whom paper copies are
provided.
5. No later than September 11, 2007, counsel for the plaintiffs shall cause a
copy of the Notice to be provided to the Executive Directors of the following
organizations:
• AIDS Resource Center Milwaukee, WI
• Alliance for the Mentally Ill, Greater Milwaukee Milwaukee, WI
• Alzheimer Association West Allis, WI
• American Diabetes Association of Wisconsin Wauwatosa, WI
• ARC Milwaukee Milwaukee, WI
• Arthritis Foundation-Wisconsin Milwaukee, WI
• Asian American Community Center Milwaukee, WI
• Autism Society of Southeastern Wisconsin Franklin, WI
• Bethesda Community Senior Citizens Center Milwaukee, WI
• Brain Injury Association of Wisconsin Wauwatosa, WI
• Brown Deer Senior Citizens Center Milwaukee, WI
2 Case 2:04-cv-00193-LA Filed 08/14/07 Page 25 of 32 Document 161

• Catholic Charities of the Archdiocese of Milwaukee Milwaukee, WI
• Community Care for the Elderly Milwaukee, WI
• Disability Rights Wisconsin Milwaukee, WI
• Eisenhower Center Milwaukee, WI
• Gay Lesbian Bi-Sexual Transgender Community Center Milwaukee, WI
• Goodwill Industries Milwaukee, WI
• Grand Avenue Club Milwaukee, WI
• Guest House ofMilwaukee Milwaukee, WI
• Health Care for the Homeless Milwaukee, WI
• Huntington's Disease Society of America Wauwatosa, WI
• Independence First Milwaukee, WI
• Indian Council of the Elderly Milwaukee, WI
• Interfaith Older Adult Programs Milwaukee, WI
• Islamic Family & Social Services Milwaukee, WI
• Jewish Family Services Milwaukee, WI
3
Case 2:04-cv-00193-LA Filed 08/14/07 Page 26 of 32 Document 161

• Kindcare South Milwaukee, WI
• Legal Action of Wisconsin/Senior Law Milwaukee, WI
• Legal Aid Society of Milwaukee Milwaukee, WI
• Mental Health Association in Milwaukee County Milwaukee, WI
• Milwaukee Area Agency on Aging Milwaukee, WI
• Milwaukee Center for Independence Milwaukee, WI
• National Spinal Cord Injury Association Milwaukee, WI
• Ranch Community Services Menomonee Falls, WI
• SET Ministry Milwaukee, WI
• United Cerebral Palsy of Southeastern Wisconsin Milwaukee, WI
• United Seniors of Wisconsin Milwaukee, WI
• Wisconsin Regional Library for the Blind & Physically Handicapped Milwaukee, WI
• First Choice Outreach Services Milwaukee, WI
• Open Door Services Milwaukee, WI
• Supportive Community Service West Allis, WI
4 Case 2:04-cv-00193-LA Filed 08/14/07 Page 27 of 32 Document 161

• Board on Aging and Long Term Care Madison, WI
• Wisconsin Council on Developmental Disabilities Madison, WI
• Governor's Committee for People with Disabilities Madison, Wisconsin
• Wisconsin Council on Mental Health Madison, WI
• Wisconsin Council on Physical Disabilities Madison, Wisconsin
• Independent Living Council of Wisconsin Madison, WI
• Wisconsin Council on Long Term Care Reform Madison, WI
• Wisconsin Parents Coalition for the Retarded, Inc. Hartford, WI
• People First of Southeastern Wisconsin Milwaukee, WI
• The Arc - Wisconsin Disability Association, Inc. Madison, WI
• Mental Health Association Madison, WI
• Coalition of Wisconsin Aging Groups Madison, WI
• Wisconsin ADAPT Madison, WI
• Southeast Wisconsin ADAPT Brookfield, WI
• NAMI Wisconsin Madison, WI
5
Case 2:04-cv-00193-LA Filed 08/14/07 Page 28 of 32 Document 161

• · Wisconsin United for Mental Health Madison, WI
• Mental Health America of Wisconsin Milwaukee, WI
• Movin' Out, Inc. Madison, WI
• New Horizons Un-Limited, Inc. Milwaukee, WI
• iCare Independent Care Health Plan Milwaukee, WI
• Aging Resource Center of Milwaukee County Milwaukee, WI
• ANEW Wauwatosa, WI
• ANS Home Health West Allis, WI .
• Aurora Family Service Milwaukee, WI
• Barry Health Care Milwaukee, WI
• Bell Therapy Milwaukee, WI
• Carefinders, Inc. Milwaukee, WI
• Care Management Plus Wauwatosa, WI
• Community Care Organization Milwaukee, WI
• Curative Milwaukee, WI
6
Case 2:04-cv-00193-LA Filed 08/14/07 Page 29 of 32 Document 161

• Horizon Home Care and Hospice, Inc. Brown Deer, WI
• Luther Manor Wauwatosa, WI
• Milwaukee County Department on Aging Milwaukee, WI
• Metro Home Health Service Milwaukee, WI
• Milwaukee Christian Center Milwaukee, WI
• Project Access Milwaukee, WI
• Quality Assurance Home Health Milwaukee, WI
• St. Anne's CMU Milwaukee, WI
• St. Anne's Intergenerational Center Milwaukee, WI
• Temps Plus Milwaukee, WI
• Transitional Living Services West Allis, WI
• United Community Center Milwaukee, WI
• Mental Health Association Madison, WI
• OASIS Milwaukee, WI
• Asian American Senior Center Milwaukee, WI
7
Case 2:04-cv-00193-LA Filed 08/14/07 Page 30 of 32 Document 161

• Beulah Brinton Senior Center
Milwaukee, WI
• West Milwaukee Senior Center
Milwaukee, WI
• Chester W. Grobschmidt Senior Center
South Milwaukee, WI
• Indian Council ofthe Elderly
Milwaukee, WI
• Jewish Community Center
Whitefish Bay, WI
• Lakeside Senior Enrichment Program
Milwaukee, WI
• Kelly Senior Center
Cudahy, WI
• McGovern Park Senior Center
Milwaukee, WI
• Milwaukee Christian Center
Milwaukee, WI
• Northwest Senior Center Milwaukee, WI
• Project Focal Point, Inc. Milwaukee, WI
• Clinton and Bernice Rose Senior Center Milwaukee, WI
• United Community Center Milwaukee, WI
• Washington Park Senior Center Milwaukee, WI
• Wauwatosa Senior Center Wauwatosa, WI
8 Case 2:04-cv-00193-LA Filed 08/14/07 Page 31 of 32 Document 161

• West Allis Senior Center West Allis, WI
• Wilson Park Senior Center Milwaukee, WI
• Community Health Ministry of Columbia St. Mary' s c/o Three Holy Women Catholic Church Milwaukee, WI
• Community Health Ministry of Columbia St. Mary' s c/o Old St. Mary's Church Milwaukee, WI
• Community Health Ministry of Columbia St. Mary's c/o Ebenezer C.O.G.I.C. Milwaukee, WI
• Milwaukee Aging Consortium Milwaukee, WI
9 Case 2:04-cv-00193-LA Filed 08/14/07 Page 32 of 32 Document 161

 
 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, et al., Plaintiffs,
v. MILWAUKEE COUNTY, et al.,
Defendants.

Case No. 04-C-0193

ORDER PRELIMINARILY APPROVING THE PROPOSED SETTLEMENT AGREEMENT, DIRECTING DISTRIBUTION OF THE NOTICE OF PROPOSED
SETTLEMENT AGREEMENT, AND SCHEDULING FAIRNESS HEARING

Pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, the Court having reviewed the proposed Settlement Agreement negotiated between the parties (the “Settlement Agreement”), a copy of which is attached to the parties’ Joint Motion for Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing (the “Joint Motion”) as Exhibit A; the Joint Motion; the Joint Memorandum in Support of the Joint Motion for Preliminary and Final Approval of the Settlement Agreement, and for an order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing (the “Joint Memorandum”); the Notice of Proposed Settlement Agreement (the “Notice”) attached to the Joint Motion as Exhibit B; and the Proposed Plan for Distribution of Notice of Proposed Settlement Agreement (the “Plan”) attached to the Joint Motion as Exhibit C, hereby:

1

Case 2:04-cv-00193-LA Filed 08/21/07 Page 1 of 3 Document 165

1. FINDS that the proposed Settlement Agreement is within the range of possible approval, and that there is good reason to notify the class members of the proposed settlement and to proceed with a fairness hearing. Fed. R. Civ. P. 23(e)(1)(B) and (C); Armstrong v. Board of Sch. Directors, 616 F.2d 305, 314 (7th Cir. 1980), overruled on other gds. by Felzen v. Andreas, 134 F.3d 873, 875 (7th Cir. 1998).
2. APPROVES the contents of the Notice. 3. APPROVES the Notice distribution procedures set forth in the Plan. 4. ORDERS that the Notice be distributed as set forth in the Plan. 5. ORDERS that any additional memoranda by counsel for the parties in support of the Joint Motion and proposed Settlement Agreement shall be filed with the Court on or before September 25, 2007, pursuant to electronic case filing procedures for the U.S. District Court for the Eastern District of Wisconsin. 6. ORDERS that the deadline for receipt by the Court of any other written comments and/or objections regarding the proposed Settlement Agreement shall be 4:30 p.m., on September 25, 2007, and that all such written comments and/or objections shall be filed with the Clerk of Court at the Federal Courthouse, Room 362, 517 East Wisconsin Avenue, Milwaukee, WI 53202-4500. 7. ORDERS that any written responses by counsel for the parties to any written comments and/or objections by regarding the proposed Settlement Agreement shall be filed with the Court on or before October 9, 2007, pursuant to electronic case filing procedures for the U.S. District Court for the Eastern District of Wisconsin. 8. ORDERS that the Court shall hold a fairness hearing on October 19, 2007, at 1:30 p.m., in Room 390 of the United States Courthouse, 517 East Wisconsin Avenue, 2
Case 2:04-cv-00193-LA Filed 08/21/07 Page 2 of 3 Document 165

Milwaukee, Wisconsin, to consider whether the proposed Settlement Agreement is fair, reasonable, and adequate.
9. ORDERS that persons wishing to address the Court at the fairness hearing may so inform the Court in writing filed by 4:30 p.m. on September 25, 2007, with the Clerk of Court at the Federal Courthouse, Room 362, 517 East Wisconsin Avenue, Milwaukee, WI 53202-4500.
Dated at Milwaukee, Wisconsin, this 21 day of August, 2007. SO ORDERED: /s THE HONORABLE LYNN S. ADELMAN United States District Judge
a.
3 Case 2:04-cv-00193-LA Filed 08/21/07 Page 3 of 3 Document 165

 
 Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 1 of 10

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________

GERALD NELSON, et al.,

Plaintiffs,

vs.

Case

No. 04-C-0193

MILWAUKEE COUNTY, et al.,

Defendants. ______________________________________________________________________________

PLAINTIFFS' SUPPLEMENTAL BRIEF IN OPPOSITION TO STATE DEFENDANTS' MOTION TO DISMISS AND IN OPPOSITION TO MILWAUKEE COUNTY'S MOTION FOR JUDGMENT ON THE PLEADINGS
______________________________________________________________________________

INTRODUCTION

The State and County de fendants have argued that the plaintiffs lack standing to assert a

right to rem ain in their curren t residential placements. One aspec t of this issue r elates to th e

plaintiffs' claims under the inte gration provisions of the Am ericans with Disabilities Act and

§504 of the Rehabilitation Act. Plaintiffs have a lleged that the State and County policies at issue

expose them to an imm inent threat of institutionalization. See Fisher v. Oklahoma Health Care

Authority, 335 F.3d 1175, 1185 (10th Cir. 2003) (case allo wed to proceed based on showing that

"[s]ome will eventually end up in a nu rsing home."). Plaintiffs' earlier argum ents and

submissions, along with the John Villegas-Grubbs affidavit, are sufficient to address this issue.

The other aspect of the plaintiffs' right to remain in the ir current homes is som ewhat

different. They are claim ing harm even if th e anticipated forced moves do not lead to

institutionalization. In support of this theory, th e plaintiffs have alleged that the choice of a

particular group home is based on a number of factors including the characteristics of the hom e

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 2 of 10
itself as well as its proxim ity to various features in the surrounding community of interest to the particular resident. [4th Am d. Cmplt. ¶¶20-21]. Each of the nam ed plaintiffs selected their current residence for a reason and they wish to remain in their chosen hom e. The plaintiffs have also alleged that "many individuals with disabilities develop attachments to the other clients and to particular staff members." [¶22]. Each of the plaintiffs alleges that it "would be very traumatic and harmful" to be "forcibly removed" from their homes. [¶¶78, 89, 99, 108, 118, 126].
The affidavits show that plaintiffs will be able to introduce eviden ce in support of their claim that lateral moves to other group homes will be harmful. [Miller ¶9: "[Joan Bzdawka] has friendships with other clients and with staff. I would like her to continue residing at Arbor House and attending the Paragon day program ."]; [Burr I ¶¶9-14, 34: "We believe that it would also be traumatic for Gerald, Joan B., Marilyn B., Sandra E. and the HIL resid ents who will be turn ing 60 in the near future if they were forced to leave their homes and day programs."]; [Burr II ¶21: "Any person with a d evelopmental disability is at a greater risk of deterioration whenever their residence or other program changes."]; [Kallas ¶¶7-8, 10-11: "There is also a one-third increase in mortality each time elderly residents are relocated to a new facility. "]; [Cook ¶¶50-51: "The potential for real harm exists when a person wi th extensive support needs transfers to another community-based facility without the history that has been developed by the facility they left."].
The defendants argue that lateral movements between group homes are not actionable: Plaintiffs have failed to c ite any authority fo r the proposition that this Court has the authority under the ADA, the Rehab ilitation Act or the Medical Assistance ("MA") statutes to r equire that plaintiffs remain in a p articular or specific community placement, if, as plaintiffs' residential providers threaten here, tho se providers no longer participate in the Family Care program. (State Brf. at 8). . . . all that can be discerned from the allegations of the Fourth A mended Complaint with regard to impact of defendants' alleged disparate treatment of the plaintiffs is that it m ight result in a m ove from one community placem ent to another . . . (County Brf. at 5-6).
2

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 3 of 10
. . . plaintiffs are threat ened with nothing more than a move to a different community placement. (State Brf. at 9). The defendants are correct that there is no case law directly on point under the ADA, §504 or the MA statutes regarding this issue, however, this does not m ean that plai ntiffs have no legally protected interest in remaining in their current homes. The following will show that they have a legitimate legal right to remain in their homes and have standing to assert that right.
ARGUMENT I. Group home res idents have a legally pro tected interest in con tinuing to live in a
particular home of their choice. The defendants as m oving parties bear the burden of proving that "no legally cognizable claim for relief exists." 5B Wright & Miller, Federal Practice and Procedure, Civil 3d §1357, at 462 (2004). In analyzing a m otion under Rule 12(b)(6), "[t]he district court should be especially reluctant to dismiss on the basis of the pleading when the asserted theory of liability is novel or even 'extreme,' since it is im portant that new legal theories be explored and assayed in the ligh t of actual facts rath er than a p leader's suppositions." Wright & Miller, s upra. at 692 . The sam e principle applies to motions for judgment on the pleadings. 5C Wright & Miller, supra. at 222. In Reed v. Monahan's Landscape Co., 2004 WL 422686, No. 03 C 7 081 (N.D. Ill. March 4, 2004), Judge Zagel found only one case from anot her circuit that peripherally addressed the issue raised by a m otion to dismiss. Rather than decide the issue on that basis, the motion was denied so that it could be appe aled later "on a fully developed factual record." *3. In the sam e vein, the First Circuit reversed a Rule 12(b)(6) dismissal in a novel voting rights case because: As courts get m ore experience dealing w ith these cases and the rules firm up, it may be m ore feasible to dismiss weaker cases o n the p leadings, but in the cas e before us we think that the plaintiffs are entitled to an opportunity to develop evidence before the merits are resolved. Metts v. Murphy, 363 F.3d 8, *11 (1st Cir. 2004) (en banc).
3

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 4 of 10

In order to support a novel clai m, "[t]he plaintiff has to sh ow that while her legal claim

has no basis in existing law, or at least the law' s current pigeonholes, it lies in the natural line of

the law's development and should now be recognized as part of the law."

Kirksey v. R.J.

Reynolds Tobacco Co., 168 F.3d 1039, 1042 (7th Cir. 1999) (em phasis in original). There are no

cases specifically dealing with the right to live in a particular group home and the Court m ust

look elsewhere to determine whether plaintiffs have a legitimate interest that is recognized under

federal law. See J.H. ex rel. Higgins v. Johnson , 346 F.3d 788, 793 (7th Cir. 2003) (state law

may not create causes of action under §1983).

Various cases have noted the unique role th at group homes play in the lives of persons

with disabilities. See Oconomowoc Residential Programs, Inc. v. City of Milwaukee , 300 F.3d

775, 787 (7th Cir. 2002) ("group living arrangem ents can be essential for disabled persons who

cannot live without the services such arrangem ents provide, and not sim ilarly essential for the

non-disabled."); Brandt v. Village of Chebanse , 82 F.3d 172, 174 (7th Ci r. 1996) ("joint living

arrangements are essential"); Erdman v. City of Fort Atkinson , 84 F.3d 960, 963 (7th Cir. 1996)

("[l]iving together in groups of that size is claim ed to be ther apeutic and is also the only way

most of the residen ts can live in a single-family home."); Oconomowoc Residential Programs,

Inc. v. City of Greenfield , 23 F.Supp.2d 941, 958 (E.D. W is. 1998) ("[t]he developm entally

disabled people ORP serves are not able to live independently, so the CBRF is one m ode of

ameliorating their inability to liv e independently by enabling them to live in sm all groups with

nonresidential caretakers."); Smith & Lee Associates, Inc. v. City of Taylor, Michigan , 13 F.3d

920, 931 (6th Cir. 1993) ("the handicapped m ay have little choice but to live in a comm ercial

home if they desire to live in a residential neighbor hood."). The strong feelings that residents

may have a bout their group hom e are illustrated by the plight of Valerie D., a putative class

4

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 5 of 10
member that lives in an HIL hom e. [Burr-II ¶13]. She was one of the individu al plaintiffs in Oconomowoc Residential v. Milwaukee. After a lengthy legal battle to liv e in her current home, her continued residence is now threatened due to funding because she turned 60 in 2004. Id.
There is no question that persons with disabilities have a vital, legall y protected interest in living in a group hom e. The disputed issue is wh ether they have a right to a particular group home. The Erdman case discussed this concept:
In our case, the d istrict court concluded that what the plaintiffs must show is inequality of opportunity to live in the city of Fort At kinson. We express skepticism about that interpretation of a statute [the Fair Housing Act] which refers specifically to inequali ty of opportunity to live in a dwelling . . . But for reasons which we now explain, we need not answer the question as to whether a city's providing handicapped housing somewhere within its borders is sufficient to satisfy the [FHA]. 84 F.3d at 963 (emphasis in original). There is no principled reason to distinguish state and local zoning policies that restrict access to particular dwellings in violation of the FHA from state and local funding policies that restrict access to pa rticular dwellings in violation of the ADA, §504 and the Medicaid s tatutes. This passage supports the plaintiffs' position that there is a federally recognized right to live in a par ticular group hom e as opposed to just a sim ilar type of group home "somewhere." The reasoning in Erdman is persuasive even if it is dicta. The plaintiffs are not seeking to rem ain in their current homes simply because they like the physical attributes or ambiance of a particular structure.1 They have alleged that group hom e residents form attachments within the home and at their day programs and that each of the named plaintiffs will be harm ed by the loss of these va rious relationships. [4th Am d. Cmplt. ¶¶22, 78 , 89, 99, 108, 118, 126]. It is the im pending termination of these significant relationships that implicates additional legal rights that have been recognized in other contexts.
1 Plaintiffs are not conceding that liking a particular group home, standing alone, is an insufficient basis to support a claim. Persons under 60 and residents of other counties can choose to remain in their current group home for any reason whatsoever. The point is that the plaintiffs have also alleged additional factors which certainly state a claim.
5

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 6 of 10
Plaintiffs had elected not to pursue any substantive constitutional claims in this case since they would be subject to rationa l basis review rathe r than the heightened requirements of the federal disability statutes. Oconomowoc Residential v. Greenfield, 23 F.Sup.2d at 953. However, if a particular relationship is entitled to c onstitutional protection, it should receive sim ilar recognition under the federal laws that have declar ed persons with disabili ties to be a protected class entitled to special legal status. Id.; 42 U.S.C. §12101; 29 U. S.C. §701(a); see Tennessee v. Lane, 541 U.S. 509, 516 (2004) (discussing 42 U.S.C. §12101(b)(1) & (b)(4). T his "lies in the natural line of the law's development" pursuant to Kirksey, 168 F.3d at 1042.
The United States Suprem e Court recognized the expansive nature of the concept of "family" in Moore v. City of Eas t Cleveland, 431 U.S. 494 (1977). Overturning a zoning ordinance that prohibited more distant family members from living with each other, the plurality observed that relatives beyond the sc ope of the nuclear fam ily have historically chosen to live together "[e]specially in times of adversity, such as the death of a spouse or economic need." Id. The principal reason that people li ve in group homes is that they require care beyond that which most families can provide. Oconomowoc Residential v. Milwaukee, 300 F.3d at 787 (group home residents "require a living situation where supportive services are available twenty-four hours per day.") Their only opportunity for a semblance of family life is in a group home.
It is not necessary that group home residents be determined to actually constitute a family in order to have a legally protected interest in the continuation of their relationships within the home. The Suprem e Court "has recognized that th e freedom to enter into and carry on certain intimate or private relationships is a funda mental element of liberty pr otected by the Bill of Rights." Bd. of Dir. of Rotary International v. R otary Club of Duarte, 481 U.S. 537, 545 (1987). This is not limited to family relationships. Id.; Marcum v. McWhorter, 308 F.3d 635, 640 (6th
6

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 7 of 10

Cir. 2002). The liberty interest extends to other relationships that "are distinguished by such

attributes as relative smallness, a high degree of selectivity in deci sions to begin or m aintain the

affiliation, and seclusion from others in crucial aspects of the relations hip." Roberts v. United

States Jaycees, 468 U.S. 609, 620 (1984). The relevant fact ors in determ ining whether certain

relationships are entitle d to constitutiona l protection a re "size, purpose, policies, selec tivity,

congeniality, and other characteristics that in a particular case may be pertinent." Id. Neither the

Jaycees nor the Rotary Club could m eet the st andard because they ad mitted virtually anyone

(except women, which was the point of the litigation) and often invited the public to m eetings.

Roberts, 468 U.S. at 621; Bd. of Dir. of Rotary International , 481 U.S. at 546-7. There was a

continuous "flow of prospects" to replenish the membership because of high turnover. Id.

This Court's task is to determ ine "where [ a particular] relationship's objective

characteristics locate it on the spectrum from the most intimate to the most attenuated of personal

relationships." Id., 468 U.S. at 620. The reasons that the Supreme Court gave for denying

protection to the Jaycees and the Rotary are precisely w hy group hom e residents do have a

protected interest.

First, group hom es are sm all. HIL's homes in Milwaukee County serve 4-6 residents.

[Burr-II ¶10]. SRCA's homes each serve 20 residents. [Kallas ¶4].

Second, considering purpose, policies and sel ectivity together, there is a painstaking

admission process, [Burr ¶8-10]; [K allas ¶9], in order to ass emble a group of residents who are

able to live together in a "family" atmosphere. [Kallas ¶11]. The complaint alleges:

(21) A great deal of care g oes into choosing a residential facility or a day

program. Individuals may be referred to a particular provider by a county

caseworker based on the genera l characteristics of the p erson and the facility or

program, but that would only be th

e beginning of the process. Many

individuals/guardians/agents choose a fac ility or program based on its proxim ity

to family, friends, recreational activities, church and a variety of other community

7

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 8 of 10
activities. Provider staff, the guardian/agent and the individual himself or herself also try to d etermine in advance whethe r the client will get along well with both staff and other residents and participants in te rms of personalities an d similar interests. The inability of certain residents to get along with each other is likely to lead to another move. That is the reason that so much attention is paid to choosing compatible residents, participants and staff. Certain individuals also have special or unusual service needs that could require a specialized service provider. All of these factors could affect the choice of a particular facility or program.
. . . (25) Given the com plexity of locating and arranging suitable services, obtaining the approval of th e person and/or guardian /agent, getting through the initial period of adjustment and the de velopment of relationships by the client, there is a general preference among families, guardians, agents, service providers, county agencies and the clients them selves for rem aining in a particular residential setting and day program.
[4th Amd. Cmplt.]. Many components of the adm ission process are actually prescribed by law.
HFS §83.32 (CBRF) and §88.06 (AFH), Wis. Adm. Code.
Third, in regard to "congeni ality", plaintiffs have alleg ed that group hom e residents
develop important attachm ents to staff and other clients. [4th Amd. Cmplt. ¶22]; [Burr ¶12];
[Kallas ¶10]. "The whole purpose is to develop a sense of living together and working together
as a family." [Burr ¶12].
There are other factors as well. These are private homes that are not open to the public so
they clearly meet the s eclusion test. Roberts, 468 U.S. 609 at 620. And, any relationship that
involves sharing a kitchen, living room or bathroom is clearly at the intimate end of the Supreme
Court's spectrum. Bd. of Dir. of Rotary International, 481 U.S. at 546-7
The bottom line is that group hom e residents associate in ways that closely resem ble the
family relationships that have historically b een granted Con stitutional protection. They live in
group homes because they cannot live in conventional fa mily groups because of their need for
disability services. If plaintiffs happened to be a few years younger or if th ey lived in a different
Wisconsin county, they would be able to choose their homes and their housem ates without the
8

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 9 of 10
constraints that result from the governm ent actions at issue in this litigation. Plaintiffs have alleged that it violates the letter and spirit of the federal disability laws to treat the plain tiffs and the putative class d ifferently from these o thers who are similarly situated except for the happenstance that places them in a different funding program. The relationships that group home residents have with each other and with s taff clearly m eet the standard for a pro tected liberty interest and, therefore, also provid e a legitim ate foundation for the relief that plaintiffs seek under the ADA, §504 and the Medicaid statutes. II. Plaintiffs have standin g based on a subs tantial likelihood that they will be fo rced
from their current g roup homes based on the financial conditio n of residential providers in Milwaukee County. Plaintiffs have sought leave to file the expert report of John Villegas-Grubbs to show that they will be able to introduce evidence in support of the allegations that the Family Care funding scheme has a negative impact on Milwaukee County residential providers that will lead to the involuntary relocation of the indi vidual plaintiffs and other Fam ily Care clients. [4th Am d. Cmplt. ¶¶34, 59-64]. The JVG report is in addition to the Cook affidavit. [¶¶27-34, 49]. The defendants object to any consideration of the affidavits and factual m aterials submitted by the plaintiffs. However, the Se venth Circuit is known for its acceptance of additional factual submissions by plaintiffs in response to Rule 12(b)(6) motions. 5B W right & Miller, supra., at 777, citing Smith v. Boyle , 144 F.3d 1060 (7th Cir. 1998) (other citations omitted). The recent case of Lac du Flambeau Band of Lake Superior Chippewa Indians v. Norton, --- F.3d ---, 2005 W L 2100530, *6 (7th Cir. September 1, 2005), reaffirm ed that additional facts may be submitted throughout the proceedings and even on appeal in response to a dismissal motion. It also restated the liberal pr inciples of standing in cases based on probable harm consistent with the discussion in the plaintiffs' original brief. Id. at *6.
9

Case 2:04-cv-00193-LA Document 84 Filed 09/09/2005 Page 10 of 10

The substantial likelihood that the individual plaintiffs, as well as the putative class

members, will suffer imminent harm from the actions of the defendants is more than sufficient to

provide standing to proceed on the claims in the fourth amended complaint.

CONCLUSION

The defense has failed to carry its burden of showing that the plaintiffs' claims are legally

insubstantial or that they ca nnot prove any set of facts in support of those claim s. All of

plaintiffs' legal claims in the fourth amended complaint should be permitted to go forward.

Date: September 9, 2005

Respectf

ully submitted,

Attorney

ROBE

RT THEINE PLEDL for the Plaintiffs

State 1110 Milwaukee, TEL FAX EMAIL

/s/ _Robert Theine Pledl____________________ Bar No. 1007710 N. Old World Third Street, Suite 670 Wisconsin 53203 414-225-8999 414-224-0811 pledl@sbcglobal.net

10

 
 Case 2:04-cv-00193-LA Filed 09/26/2007 Page 1 of 14 Document 183

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________

JOAN BZDAWKA, et al.

Plaintiffs,

v.

Case No. 04-C-0193

MILWAUKEE COUNTY, et al.

Defendants. ______________________________________________________________________________

PLAINTIFFS’ MEMORANDUM IN SUPPORT OF JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT
______________________________________________________________________________

INTRODUCTION

Pursuant to Fed. R. Civ. P. 23(e), this Court must determine whether to give final

approval to the proposed Settlement Agreement. The parties have agreed that this settlement is

fair, adequate and reasonable and that, if given final approval by the Court, it will dispose of all

claims in this action. The rights of all class members were given due regard throughout the

negotiations. There is no evidence of any collusion or other improper behavior between the

negotiating parties. Accordingly, the plaintiffs request that the court give final approval to this

settlement agreement after considering any written objections and comments as well as those

presented at the fairness hearing scheduled for October 19, 2007.

FACTUAL BACKGROUND

Litigation History

This lawsuit was filed on January 28, 2004, in Milwaukee County Circuit Court. (Case

No. 04-CF-0862). The County defendants removed the case to federal court on February 25,

2004. [Eastern District Docket No. 1]. Plaintiffs filed an Amended Complaint against the

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 2 of 14 Document 183
County on April 13, 2004. [Dkt 18]. A Second Amended Complaint adding the State defendants was filed on April 30, 2004. [Dkt 23]. The Third Amended Complaint was filed on August 19, 2004 [Dkt 37]; and the Fourth Amended Complaint was filed on March 30, 2005. [Dkt 51 & ECF court order dated April 25, 2005]. The State and County defendants (“defendants”) filed motions to dismiss the Fourth Amended Complaint on June 15, 2005. [Dkt 68 & 70].
On February 7, 2006, the court entered an order partially granting and partially denying Defendants’ motions to dismiss and, on April 5, 2006, denied Defendants’ motion to certify the denial of the motion to dismiss for interlocutory review. See Decision and Order on Motion to Dismiss [Dkt 86]; Decision and Order Denying Certification for Interlocutory Appeal (Apr. 6, 2006) [Dkt 106]. On October 13, 2006, the court certified a plaintiff class consisting of Milwaukee County residents with disabilities who are now, or will in the future, be eligible to reside in a Family Care-funded community-based residential facility (“CBRF”) or an adult family home (“AFH”). Decision and Order Certifying Class [Dkt 125].
Settlement Process The case was referred to Magistrate Judge Patricia Gorence on December 4, 2006. [Dkt 135]. Judge Gorence held telephone conferences on December 19 [Dkt 139] and December 21 [Dkt 140]. There was a full day of negotiations on February 26. [Dkt 150]. There were follow-up telephone conferences with Judge Gorence on March 27 [Dkt 151] and May 25. [Dkt 155]. Throughout the time period from January to May of 2007, counsel had numerous telephone conferences and exchanged detailed written settlement proposals and responses. There was some delay in getting final approval from the Milwaukee County Board and the parties filed a joint motion for preliminary approval on August 14. [Dkt 160]. The Court granted preliminary approval of the class settlement on August 21. [Dkt 165].
2

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 3 of 14 Document 183

The August 21 order also approved the joint proposal for notice to the known members of

the class. Id. Plaintiffs mailed a copy of the Notice along with a complete copy of the proposed

Settlement Agreement to community agencies on September 11. Affidavit of Mailing [Dkt. 166].

State’s Proposed Findings of Fact

The State has submitted detailed findings of fact and conclusions of law. They contain an

extensive recitation of the discovery, motion and settlement phases of the case. (The plaintiffs

appreciate the State’s substantial efforts in producing the findings and conclusions.) Not

surprisingly, plaintiffs characterize the strength of their own case somewhat differently from the

defendants, and this will be discussed below in the appropriate section. With this modification,

plaintiffs accept the State’s proposed findings of fact and conclusions of law.

The Input and Comment Process

The class Notice instructed the recipients to call Atty. Pledl with any questions. The

number of calls from Family Care members, guardians and family members received each day

are listed by date as follows:

September 13

66

September 14

42

September 17

14

September 18

9

September 19

8

September 20

3

September 21

3

September 24

7

September 25

4

September 26

1

TOTAL

157

Approximately 25 other people who called after hours and on the weekends apparently received

sufficient information about the proposed Settlement from a voicemail greeting that provided

answers to the most frequent questions. These callers did not request a return call. A total of 10

3

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 4 of 14 Document 183
callers (included in the daily totals above) requested a copy of the complete Settlement Agreement which was sent to them by mail.
Most of the callers requested more information about the lawsuit and whether it would have any impact on their current services. Very few of the callers made any comment about the proposed Settlement. Some of the callers had concerns or complaints about the Family Care program that are outside the scope of this lawsuit. Atty. Pledl spoke with each of them about their specific concerns. He referred some to their Family Care case manager with suggestions about how to obtain additional information or clarify their options for different types of care. He referred a few to local no-cost advocacy agencies. The defendants have expressed their interest in getting additional information about any “non-lawsuit” complaints and concerns. Atty. Pledl will provide a summary to DHFS and Milwaukee County after the fairness hearing so that they will be able to utilize this information for quality assurance purposes.
Five calls were received from AFH/CBRF providers in response to the mailed Notice.1 The residential providers each complained about the method by which the Milwaukee County Department on Aging set their rates and said that they were unable to cover their expenses. These callers were supportive of the Settlement. They were especially pleased with the portion of the Settlement that calls for MCDA to collect actual AFH/CBRF cost data and utilize that information in setting provider rates.
A few additional calls were received from human service agencies in Milwaukee County. They had already received a copy of the complete Settlement Agreement. They had various
1 HIL and SRCA are not included in this total. Atty. Pledl has had contact with them throughout the lawsuit to monitor the AFH/CBRF rate issues that affect the name plaintiffs. Counsel has had ongoing contact with the guardians of the name plaintiffs (both current and past) to discuss the same issues. The guardians of the current name plaintiffs who are served by HIL approve of the settlement. No current name plaintiff is served by SRCA.
4

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 5 of 14 Document 183
questions about the settlement and each caller said that the settlement appeared to correct various issues in the Family Care program about which they were concerned.
Written Comments Filed with the Court The Notice invited class members, or others on their behalf, to file written comments with the Court. Four people have done so: Estelle Stewart [Dkt 168], Rinda McClendon [Dkt 169], Jessie Larson [Dkt 170] and Bonnie Van Landingham [Dkt 171]. Ms. Stewart requested to address the Court while the others did not. The specific concerns and how they pertain to the class settlement are discussed in a later section of the brief.
ARGUMENT The Proposed Settlement Agreement was reached through arms-length negotiations, and is fundamentally fair, reasonable and adequate.
In order to approve a settlement agreement in a class action, a court must ascertain that a settlement is fair, reasonable, adequate and the product of arms-length negotiations. Great Neck Capital Appreciation Investment Partnership, L.L.P. v. PricewaterhouseCoopers, L.L.P., 212 F.R.D. 400, 409 (E.D. Wis. 2006). Settlement of class action litigation is favored. Isby v. Bayh, 75 F.3d 1191, 1196 (7th Cir. 1996). Courts in the Seventh Circuit have formulated the same essential class settlement criteria in different ways. Ultimately, district courts are to consider the following factors: (1) the strength of the plaintiffs' case, balanced against the settlement offer; (2) the defendants’ ability to pay; (3) the stage of the proceedings and the amount of discovery that has been completed; (4) the complexity, length and expense of continued litigation; (5) whether there was fraud or collusion in the settlement; (6) the amount of opposition to the settlement from affected parties; and (7) the opinion of competent counsel. EEOC v. Hiram Walker & Sons, Inc., 768 F.2d 884, 889 (7th Cir. 1985); Great Neck Capital Appreciation, 212
5

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 6 of 14 Document 183
F.R.D. at 409; Mangone v. First USA Bank, 206 F.R.D. 222, 224 (S.D. Ill. 2001), citing see Isby, 75 F.2d at 1199; and Hispanics United of DuPage County v. Village of Addison, 988 F.Supp. 1130, 1150 (N.D. Ill. 1997).
There is a presumption in favor of class action settlements. “The district court may not deny approval of a consent decree unless it is unfair, unreasonable or inadequate.” Hiram Walker, supra. All of the above factors weigh heavily in favor of approving this settlement as the following discussion will show.
A. The strength of the plaintiffs’ case, balanced against the settlement offer. This first factor is the most important in the court’s consideration. Isby v. Bayh, 75 F.2d. at 1199; Hiram Walker, 768 F.2d at 889. This determination is a practical one and the court “should refrain from resolving the merits of the controversy or making a precise determination of the parties’ respective legal rights.” Id. (citations omitted). The plaintiffs have already prevailed in a number of motions, including surviving a motion to dismiss and winning certification of the plaintiff class. Plaintiffs do not agree with the negatives characterizations in the State’s proposed findings of fact such as “[m]oreover, some claims are sufficiently vague that they present difficult proof problems for the Plaintiffs.” [State PFOF, Para. 43]. Also, statements like the one concerning the plaintiffs’ failure to supply proof about individuals who were forced into more restrictive setting seems to confuse the procedural posture of the case prior to settlement. [State PFOF, Para. 42]. The evidence of client transfers is in the possession of the County and their contract agencies. Plaintiffs’ counsel chose to pursue settlement instead of the extensive discovery that would be necessary on this issue. Nonetheless, plaintiffs do have some concerns about the legal issues in this case. The law concerning program access and reasonable accommodation in public benefit programs is still developing and this
6

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 7 of 14 Document 183
alone presents a substantial risk. Given the state of the law in this area, it is virtually certain that the losing side would take an appeal. There is never a guaranteed outcome in litigation, and the class plaintiffs have a significant interest in eliminating any risk of loss.
Moving from the legal to the factual aspects of this litigation, plaintiffs do face substantial challenges in proving their case. Counsel and their experts would have to conduct numerous depositions and review a mountain of documents. Unfortunately, it is a growing and changing mountain. Each year, the State revisits the capitation formulas that determine monthly per client payments to Milwaukee County. And each year, County Family Care staff evaluate and revise the provider rate structure after receiving the State rate information. Our experience here shows that it would be nearly impossible to do the necessary discovery and then litigate dispositive motions and/or try the case before another yearly cycle changes the landscape.
Any concerns about whether the plaintiffs would prevail at the end of this litigation are to be balanced against the benefits of the settlement. The proposed Settlement Agreement provides significant benefits to the current and future members of the plaintiff class. Consideration of this factor clearly calls for approval of the proposed Settlement.
B. The defendants’ ability to pay. This criterion involves a series of interlocking questions. On the one hand, both DHFS and Milwaukee County probably have the ability to fund whatever changes in the Family Care program that the Court might order. This means that ability-to-pay is not a constraint like a corporation’s impending bankruptcy or the limits of a liability insurance policy. However, one way for a public entity to pay for any court-ordered program changes is to redirect funds from another part of the same program or from another State or County program that also serves the class members. This could result in a zero sum (or worse) outcome for class
7

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 8 of 14 Document 183
members. Plaintiffs and defendants in many class action cases will not have any dealings with each other after the settlement. Here we have the opposite situation because most class members will remain in the Family Care program for the remainder of their lives. They will benefit if the program is financially healthy. Other things being equal, the class members and the defendants have a similar interest in resolving the case in a cost-effective way.
C. The stage of the proceedings and the amount of discovery already taken. There has already been extensive document discovery by all sides. The State’s Proposed Findings provide a good summary of the documents discovery efforts. [State PFOF, Para. 56 – 59]. In addition, plaintiffs’ counsel and the experts have been able to access a great of additional information from the DHFS website. Plaintiffs’ counsel spoke with numerous Family Care residential and other service providers to obtain information about program and financial issues. In addition, plaintiffs’ accounting expert conducted two on-site reviews of residential provider financial records at the MCDA offices. Thus, counsel’s evaluation of the case was based upon significant information about the facts of the case. See Great Neck Capital, 212 F.R.D. at 410; EEOC v. Hiram Walker, 768 F.2d at 891. D. The complexity, length and expense of continued litigation. This is a very significant factor in this case. The amount of time that the parties have already spent on discovery and litigating legal issues is a fraction of the time that would be spent preparing the case for trial. There would be extensive depositions of State and County administrators, yet more document review and coordination of experts who would review discovery documents and additional sources of information. The time and money saved by both sides are a significant incentive to settle. Great Neck Capital, 212 F.R.D. at 409.
8

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 9 of 14 Document 183
E. The presence of fraud or collusion. The negotiations in this case were extensive and conducted at arm’s length. Plaintiffs’ counsel consulted with advocates for people with disabilities and the elderly in formulating a substantial list of demands. The parties participated in mediation overseen by Magistrate Judge Gorence over the course of several months. Negotiations were intense and motivated by a desire to reach a settlement that would benefit plaintiffs and the entire Family Care program. The parties did agree to an award of attorney’s fees. The negotiations for fees, however, were completely separate from and independent of the negotiations on the merits. Moreover, plaintiffs’ counsel ultimately accepted payment for only about one-half of the hours actually expended on this case in the interest of reaching settlement. This is being paid by the defendants and does not reduce or impact the outcome for the class in any way. There is no evidence of collusion or other improper motive. F. The amount of opposition to the settlement from affected parties. Many Family Care members and others called plaintiffs’ counsel to complain about various aspects of the program.2 However, virtually all of the complaints relate to issues that were not a part of the case or the proposed Settlement and no one actually opposed the settlement. Four individuals filed comments with the Court and they will be discussed in detail.
Estella M. Stewart Ms. Stewart filed her comment on September 24. [Dkt 168]. Atty. Pledl spoke with her by telephone on September 26. Ms. Stewart’s concerns fall into two categories. Ms. Stewart
2 It is unfortunate that there were any complaints at all, but plaintiffs’ counsel do not mean to draw any conclusions here about the type of complaints or the number of complaints in comparison to the total Milwaukee County Family Care membership. Counsel will be providing a summary of the complaints to the defendants so that the information may be used for program evaluation or improvement. Many of the callers were satisfied with the services they receive through Family Care and the purpose of their calls was solely to seek additional information about the legal case.
9

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 10 of 14 Document 183
objects to the requirement that all long-term care services for people over 60 in Milwaukee County must be delivered through the Family Care system. She would prefer to receive those services through Medicaid. This is a fundamental question in Medicaid managed care systems like Family Care. The Medicaid waiver agreement between the State of Wisconsin and the Federal Government that established Family Care requires that all of the previous communitycare waiver programs to be rolled into the new managed care system. People cannot choose to receive long-term care services under the old system. Allowing that would have a huge effect on the viability of the system. Taking this position amounts to opposing the entire Family Care system. Ms. Stewart has asked to address the Court on this issue and her point of view may deserve some exploration. However, plaintiffs’ counsel and their consultants felt very strongly that the best approach was to pursue improvements to the entire Family Care system rather than allowing individuals to dis-enroll and still receive waiver services. That is what was achieved in the proposed Settlement.
Ms. Stewarts’s other concerns involve her interaction with case managers and nurses employed by Family Care contract agencies in Milwaukee County. She has worked with three different agencies over the years and says that she has had problems with each revolving around requests for specific services and a lack of responsiveness by the agencies and their staff. While this case is focused more on AFH/CBRF residential services rather than services provided in the client’s own home like Ms. Stewart’s situation, the proposed Settlement Agreement is intended to address concerns of this type. For example, Section II-D of the Agreement describes changes in the Resource Allocation Decision process. Improving the RAD process and particularly providing additional information about the process to consumers and agencies should alleviate many situations such as those Ms. Stewart’s. Also, she and others in her situation could receive
10

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 11 of 14 Document 183
assistance from the Individual Advocacy Program described in Section I-B and II-M of the Settlement in any disputes with Family Care agencies.
Rinda McClendon Ms. McClendon’s comment was received by the Court on September 24. [Dkt 169]. She is concerned about the financial eligibility reports for her husband that are prepared by Milwaukee County. This appears to be a situation where they have some financial resources and so they are expected to pay a “cost share” each month to cover part of the husband’s care. Concerns about how the cost share is computed and then explained to clients surfaced throughout the litigation. Many of the callers complained about this issue and it comes up at almost any meeting about Family Care. Plaintiffs’ counsel considered raising the cost share issue, but determined that it would have very little impact on the individuals with more significant disabilities who live in AFH’s and CBRF’s. Most have SSI payments as their only income and no savings or other financial assets. Cost-share is not an issue for those who only receive monthly SSI payments. The more general question raised by Ms. McClendon is responsiveness and, once again, the Independent Advocacy Program would be helpful to her. She has not requested to address the Court.
Jessie Larson Ms. Larson’s comment was filed on September 25. [Dkt 170]. She is writing about her mother, Edna Craven, who lives in an “assisted living facility.” This could be an AFH or CBRF. Ms. Larson says that her family was not given proper information about room and board costs and they found (apparently while looking for an appropriate residential facility) that “many of the room and board rates are higher than the average social security benefits.” Id.
11

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 12 of 14 Document 183
A basic principle of the Federal-State waiver programs (including Family Care) is that a person’s own money or Social Security/SSI check must be used to pay for their housing and food in an AFH or CBRF. Federal waiver funding may be used to pay for disability-related services in the residential facility, but not the building itself. Many AFH/CBRF residents receive only SSI payments and many others receive only Social Security. The cost of housing is the major determinant of room and board costs and many residential facilities in Milwaukee County have R&B rates that exceed what most people can afford. This is one dimension of the financial problems facing residential providers. Some have empty beds because their R&B rate is too high to attract residents. Others set their R&B rates lower than their actual real estate cost. Either way, R&B rates have a significant negative effect on the financial condition of residential providers.
Numerous items in the County’s portion of the Settlement Agreement address the financial condition of residential providers. [Section I-C through I-N]. The Milwaukee County Department on Aging will be collecting detailed cost data from AFH and CBRF providers. MCDA will then use that data to set 2008 provider rates, although it retains the discretion to set and negotiate provider rates. [Sec. I-G]. It will also publicize the factors it uses in developing provider rates. [Sec. I-I & J]. All of these provisions will improve the process of setting provider rates by making it more objective and transparent. This should prevent unpleasant surprises for both residential providers and Family Care clients who are shopping for an AFH or CBRF. That would help people like Ms. Craven in the future. Plaintiffs are also hopeful that the financial data along with the future needs assessment will be used by both MCDA and municipalities in the County to plan for the future housing needs of people who require AFH and CBRF services.
Ms. Larson’s letter contains concerns about the responsiveness of agency staff. She also has problems with the way in which MCDA interacts with her in her capacity as power of
12

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 13 of 14 Document 183
attorney. These issues are not within the scope of the lawsuit. However, as with Ms. Stewart and Ms. McClendon’s concerns, the Individual Advocacy Program would be helpful in dealing with these issues. Ms. McClendon did not request to address the Court.
Bonnie Van Landingham Ms. Van Landingham’s comment was filed on September 25. [Dkt 171]. They concern her father, Mitchell. Her letter raises the same issues concerning responsiveness discussed above. The improvements in the Resource Allocation Decision process and the Independent Advocacy Program would both be helpful to her in the future. She did not request to address the Court.
None of these four individuals who filed comments with the Court have objected to the Settlement Agreement. None of the community agencies has filed any object on behalf of the class or any individual class member. 157 Family Care members, guardians and family members called plaintiffs’ counsel with questions or complaints about the Family Care program, but not one single caller objected to the proposed Settlement. This factor obviously calls for approval.
G. The opinion of competent counsel. Plaintiffs’ counsel have significant experience in class action litigation. Order Certifying Class, at 9. [Dkt 125]. In addition to their own review of the legal and factual issues in this case, they solicited extensive input from community agencies that provide advocacy or direct services to people with disabilities in Milwaukee County. They also consulted other experts. Based on all of that information, plaintiffs’ counsel recommend approval of the proposed Settlement.
CONCLUSION The parties believe that this settlement agreement fully disposes of the claims in the Fourth Amended Complaint and that it is fair, adequate and reasonable. The State and County
13

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 14 of 14 Document 183
Defendants have agreed to take numerous actions with regard to the Family Care program,
including sharing information and soliciting input into the establishment of reimbursement rates,
dissemination of information, creating independent advocacy programs, and providing assistance
and support to enhance and improve services. These measures are expected by all of the parties
to improve the Family Care program and benefit the plaintiff class significantly. Accordingly, it
is requested that this Court approve the proposed Settlement Agreement.
Dated: September 26, 2007
Respectfully submitted,
ATTORNEYS FOR THE PLAINTIFFS:
s/Robert Theine Pledl _______________________________________ PLEDL LAW OFFICE 1110 North Old World Thirst Street, Ste. 670 Milwaukee, WI 53203 Tel: (414) 225-8999 Fax: (414) 224-8999
s/ Sarah Jane Somers _______________________________________ NATIONAL HEALTH LAW PROGRAM, INC.
Date North Carolina State Bar No. #33165 211 N. Columbia St. Chapel Hill, NC 27514 Tel: (919) 968-6771 Fax: (919) 968-8855
s/ M. Jane Perkins ________________________________________ NATIONAL HEALTH LAW PROGRAM, INC. North Carolina State Bar No. #33165 211 N. Columbia St. Chapel Hill, NC 27514 Tel: (919) 968-6771 Fax: (919) 968-8855
14

 
 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, et aI., Plaintiffs,
v.
MILWAUKEE COUNTY, et a1., Defendants.

Case No. 04-C-0193

STATE DEFENDANTS' PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW REGARDING THE PROPOSED SETTLEMENT AGREEMENT

Defendants Wisconsin Department of Health and Family Services ("DHFS") and DHFS Secretary Kevin Hayden (together with DHFS, the "State Defendants"), by their attorneys, J.B. Van Hollen, Attorney General, and Maureen McGlynn Flanagan, Mary E. Burke, and David Dudley, Assistant Attorneys General, respectfully submit the following proposed findings of fact and conclusions of law regarding the proposed Settlement Agreement which the parties jointly have requested the Court to approve.
FINDINGS OF FACT Procedural Background
1. This action was originally filed in Milwaukee County Circuit Court in January 2004, sub nom. Gerald N. and Joan B. v. Milwaukee County, Case No. 04-CV-0862. On the motion of Milwaukee County (the "County Defendants"), the action was removed to the U.S. District Court for the Eastern District of Wisconsin pursuant to 28 U.S.c. § 1441, where the case was filed on February 25, 2004 (R. 1). The original complaint sought declaratory and

Case 2:04-cv-00193-LA Filed 09/26/07 Page 1 of 30 Document 173

injunctive relief against Milwaukee County as the sole defendant asserting claims based on Wis. Stat. § 51.61, the Wisconsin Patient Rights law; 41 U.S.c. § 1983 and the Equal Protection Clause of the U.S. Constitution; the Equal Protection Clause of the Wisconsin Constitution; the Americans with Disabilities Act ("ADA"), 42 U.S.c. § 12101, et seq., and § 504 of the Rehabilitation Act ("Rehabilitation Act"), 29 U.S.c. § 794.
2. Following preliminary proceedings and the filing of a First Amended Complaint and the County Defendants' Answer, the plaintiffs ("Plaintiffs") were pennitted to file a Second Amended Complaint on April 30, 2004, adding additional plaintiffs and two additional defendants, the Wisconsin Department of Health and Family Services ("DHFS") and the Secretary of DHFS in her official capacity (together with DHFS, the "State Defendants," and collectively with DHFS and the County Defendants, "Defendants"), so that the case was then captioned Gerald Nelson. Joan Bzdawka. et at. v. Milwaukee County. Wisconsin Department of Health and FamiZv Services and Helene Nelson I in her official capacity as Secreta!Y of DHFS (R. 23). The Second Amended Complaint sought declaratory and injunctive relief based on eight claims alleging violations of the ADA (Counts 1, 2, and 3), the Rehabilitation Act (Counts 4, 5, and 6), civil rights claims under 42 U.S.c. § 1983 and the First and Fourteenth Amendments to the U.S. Constitution (Count 7); and the Wisconsin Patients' Rights statute (Count 8) (R. 23). Both the County Defendants and the State Defendants answered, asserting grounds for dismissal and various defenses, but without filing or briefing separate motions to dismiss (R. 27, 31).
IHelene Nelson has since been succeeded as DHFS Secretary by Kevin Hayden and he, in turn, has been substituted as a party defendant (R. 143, 147).
-2Case 2:04-cv-00193-LA Filed 09/26/07 Page 2 of 30 Document 173

3. In August 2004, the Plaintiffs were pennitted to file a Third Amended Complaint adding additional named plaintiffs and a ninth claim for relief based on § 1983 and 42 U.S.C. § 1396, et seq., the federal Medical Assistance ("MA" or "Medicaid") statute, Title XIX of the Social Security Act (R. 37). The parties concurrently engaged in substantial initial discovery focusing on adequacy of the state and county Family Care rates, policies, and procedures during the years immediately prior to the filing of the original complaint through 2004. Plaintiffs deposed two employees of the County Defendants. Interrogatories promulgated by the State Defendants were answered by the Plaintiffs. Document requests promulgated by the State Defendants were answered by the Plaintiffs; document requests promulgated by the Plaintiffs were answered by the State Defendants and the County Defendants (Affidavit of Mary E. Burke, ~~ 7-10; Affidavit of Patricia Chiazor, ~~ 4-7). The County Defendants also allowed Plaintiffs' experts to access all Family Care Community Based Residential Facility ("CBRF") provider files, including audited financial statements, at the Milwaukee County Department on Aging ("MCDA") office (ef R. 120:2-3). The initial discovery on these subjects was updated and expanded periodically as this lawsuit proceeded (Affidavit of Mary E. Burke, ~~ 7-11; Affidavit of Patricia Chiazor, ~~ 4-6, 8).
4. Following efforts by the parties to reach a stipUlation identifying what matters were in dispute as required by the Amended Scheduling Order of the Court filed January 31, 2005 (see R. 46, 50), the Plaintiffs moved for pennission to file a Fourth Amended Complaint (R. 51). Plaintiffs justified the motion on grounds that transactions and events that had taken place since the filing of the Third Amended Complaint needed to be included in the action, and because the Plaintiffs wished to clarify claims alleged in that complaint in order to avoid the Defendants' objections that certain matters were not fairly within the scope of the litigation (id.).
-3Case 2:04-cv-00193-LA Filed 09/26/07 Page 3 of 30 Document 173

The Defendants subsequently stipulated to the filing of the Fourth Amended Complaint, the addition of other named plaintiffs, and the amendment of the caption, based on the Plaintiffs' assurances that they would seek no further substantive changes to the complaint, and the Defendants' stated intent vigorously to oppose any additional substantive amendments (R. 58). In granting the Plaintiffs' motion for permission to file the Fourth Amended Complaint, the Court also denied without prejudice the Plaintiffs' Motion to Certify a Class (R. 60).
5. Like its immediate predecessor complaint, the Fourth Amended Complaint asserted four pairs of claims seeking declaratory, injunctive, and retroactive monetary relief based, respectively, on the ADA and the Rehabilitation Act; and a statutory civil rights claim, 42 U.S.C. § 1983, based on a provision of the federal Medicaid statute, 42 U.S.C. § 1396a(a)(30)(A) ("(a)(30)(A)") (see R. 51, Att. 1). The named plaintiffs and their guardians or authorized representatives claim that their rights under the ADA, Rehabilitation Act, and (a)(30)(A) are being violated by the manner in which DHFS and Milwaukee County administer Family Care, a statutory Wisconsin MA waiver program designed to serve physically and developmentally disabled persons and the elderly (id.).
6. Family Care is a managed care MA waiver program currently operated by DHFS as a pilot program in a limited number of counties including Milwaukee, through which elderly persons with long-term care needs and adults who have physical or developmental disabilities may receive comprehensive community-based services (see R. 71:3 n.l (citations omitted*2); see also id. at 4, n.5*). Services available under Family Care include both some of the services that would otherwise be provided under Wisconsin's regular State Medicaid Plan, as well as services
2"*,, indicates full citation is available at indicated page of the record.
-4 -
Case 2:04-cv-00193-LA Filed 09/26/07 Page 4 of 30 Document 173

that would otherwise be available only under a Home and Community-Based Services ("HCBS") Waiver obtained from the federal government under § 1915(c) of the Social Security Act, 42 U.S.c. § I396n(c) (id. at 3, n.2*).
7. Family Care is authorized by federal Medicaid authorities pursuant to two types of waivers, and an approved prepaid health plan that authorizes DHFS to contract for State Plan long-term care services on a prepaid basis (R.71 no.3, 4*). The waivers permit Wisconsin to deliver services in a manner that is exempt from some otherwise-applicable federal Medicaid requirements. One type of waiver, the HCBS or "1915(c)" waiver, permits Wisconsin to use federal Medicaid funds for HCBS services instead of only institutional care for people who would qualify for Medicaid in a nursing home. See 42 U.S.c. § 1396n(c). The other type of waiver, the managed care or "1915(b)" waiver, permits Wisconsin to limit the services in the Family Care benefit to people who enroll in a care management organization ("CMO"). This waiver also limits participants' freedom of choice of provider. See 42 U.S.C. § 1396n(b) ("Waivers to promote cost-effectiveness and efficiency"). Family Care is designed to provide long-term community-based managed care to covered individuals who choose to enroll in the county CMO. See Wis. Stat. § 46.284.
8. In Milwaukee County, Family Care is available only for elderly individuals (60 years of age and older) with physical disabilities, as well as those with developmental disabilities. In other counties in which Family Care is operating, it is available for elderly individuals and adults of any age with physical or developmental disabilities (R. 71 :4-5, n.6*). In Milwaukee County, physically or developmentally disabled persons under the age of 60 continue to receive community-based long term care services via pre-existing HCBS waivers,
-5Case 2:04-cv-00193-LA Filed 09/26/07 Page 5 of 30 Document 173

including the Community Options Program ("COP") waiver, Community Integration Program ("CIP") and Brain Injury ("Br') waivers (R.71 :5*).
9. Features of the Family Care program that distinguish it from the state Medicaid plan itself and from the traditional HCBS waiver programs include the following:
a) Wisconsin Medicaid pays Family Care CMOs on a capitated "per member per month" basis rather than a "fee-for-service" basis. Under both the State Plan and traditional HCBS Waivers, providers are usually paid on a fee-for-service basis: the provider renders a service to a Medicaid recipient. submits a claim to Medicaid, and is paid at a pre-established rate for the service. In contrast, under Family Care, the CMO agrees by contract with the State Medicaid Program to provide the services from the Family Care benefit package that meet most cost-effectively each participant's assessed long-term care needs, in exchange for a capitated, per member-per month payment from the State Medicaid Program. Wis. Stat. § 46.28(4)(d) and (5) (see R. 71:6-7, n.12*).
b) Under applicable federal regulations, DHFS is required to set these capitated payment rates at a level that is "actuarially sound," subject to annual review and approval by the Centers for Medicare and Medicaid Services ("CMS"). See 42 C.F.R. §§ 438.1 (a)(l) and 438.6(c)(2). "Actuarially sound" refers to the federal requirement that the capitated rates must be developed and independently certified as appropriate for the populations covered and for the services to be furnished under the contract, and as providing for all reasonable, appropriate, and attainable
-6Case 2:04-cv-00193-LA Filed 09/26/07 Page 6 of 30 Document 173

costs. See 42 C.F.R. § 438.6(c)(l )-(3). The Family Care capitated rates are developed by an actuarial firm under contract with DHFS (R. 71 :7, n.14*). c) Family Care is a Medicaid entitlement program. Unlike other HCBS waiver programs (COP, CIP, and BI), an individual who is eligible for Medicaid, and is functionally eligible for Family Care, may not be placed on a waiting list to await either participation in the program or receipt of any part of the services for which the individual has an assessed need. Wis. Stat. § 46.286(3)(a). A Family Care CMO is required to provide cost-effectively all services necessary to meet the participant's assessed needs, in exchange for the monthly capitated payment for that individual (see R. 71 :3,8 nn.2, 15*). d) Unlike provider reimbursement under the traditional HCBS WaIver programs, DHFS, as the state Medicaid agency, does not make direct payments to the providers who render Family Care services. Instead, DHFS pays the respective CMO the capitated rate based on the total number of Family Care enrollees the CMO serves per month. The Family Care CMO pays its providers, and is responsible for setting payment rates, at a level that will attract a sufficient number of qualified providers to provide services to all entitled persons who seek enrollment in the CMO (R. 71:3,8 nn.2, 16*). 10. The primary focus of Plaintiffs' claims set forth in the Fourth Amended Complaint is the allegedly inadequate capitated rates paid by the State to the MCDA which is the
-7Case 2:04-cv-00193-LA Filed 09/26/07 Page 7 of 30 Document 173

CMO for Milwaukee County (the "MCDA CMO"), and the allegedly inadequate contracted rates that the MCDA CMO pays to providers of certain residential and day program services who serve Plaintiffs and the class they represent. According to the Fourth Amended Complaint, the allegedly inadequate state capitated rates and, in tum, the contracted rates the MCDA CMO pays to providers of services by CBRFs, adult family homes ("AFHs"), and adult daycare programs violate the ADA and Rehabilitation Act by: discriminating against persons with disabilities; providing services and using methods of administration that subject persons with disabilities to discrimination; violating the mandate of those statutes that services be administered in the most integrated setting; and violating the "reasonable modification" requirements of those statutes and related federal regulations; and, in addition, violate (a)(30)(A) of the Medicaid Act as well (R. 51, Att. 1).
11. The County and State Defendants each answered the Fourth Amended Complaint in May 2005, and then, pursuant to a briefing schedule ordered by the Court, filed their respective briefs in support of the State Defendants' Motions to Dismiss and the County Defendants' Motion for Judgment on the Pleadings (R. 60, 63, 64, 68-69, 70-71). The Defendants vigorously argued that some of Plaintiffs' claims should be dismissed because the individual plaintiffs lacked standing or because the claims were not ripe for adjudication, and that all nine claims failed to state claims on which relief could be granted (R. 69, 71). In addition, the State Defendants argued that Plaintiffs' claim for retroactive monetary and declaratory relief against them under either the ADA or (a)(30)(A) must be dismissed on grounds of sovereign immunity and the Eleventh Amendment to the U.S. Constitution (R. 71).
12. On February 7, 2006, the Court issued an interlocutory Decision and Order partially granting some of Defendants' motions, agreeing that Plaintiffs had alleged no past
-8Case 2:04-cv-00193-LA Filed 09/26/07 Page 8 of 30 Document 173

InJunes to themselves, and therefore lacked standing to pursue retroactive monetary and declaratory relief. The Court also limited Plaintiffs' discrimination claims to forms of discrimination based on the ADA or Rehabilitation Act, eliminating allegations of age discrimination or discrimination based on county of residency (see gen., R. 86).
13. The Court denied the Defendants' remaining motions to dismiss or for judgment on the pleadings, concluding that Plaintiffs have standing to seek prospective relief based on the alleged inadequacy of the capitated rates paid by DHFS to the MCDA CMO and, in tum, the rates the MCDA CMO is willing to pay Plaintiffs' providers. In addition, the Court concluded that all eight claims based on the ADA and Rehabilitation Act survived, either entirely or in part, the Defendants' motions for dismissal alleging the failure to state claims that relief could be granted, Fed. R. Civ. P. 12(b)(6) and 12(c). Finally, the Court concluded that § (a)(30)(A) of the Medicaid Act creates a private right of action enforceable under the Civil Rights Act, 42 U.S.c. § 1983 (see gen., R. 86).
14. On February 23, 2006, the State Defendants filed a motion seeking certification of the Court's February 7,2006, Order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b) on two grounds, arguing that the issues of whether Plaintiffs' claims are sufficiently ripe to confer standing, and whether there is a private right of action under (a)(30)(A), met the criteria required for an immediate interlocutory appeal (R. 93).
15. On March 1,2006, the parties filed a stipulation agreeing to dismiss the Medicaid claim based on (a)(30)(A). They also stipulated to dismissal of the lead plaintiff, Gerald Nelson, who had passed away on February 6, 2006, thereby leaving Joan Bzdawka, the other original plaintiff, as lead plaintiff (R. 96).
-9Case 2:04-cv-00193-LA Filed 09/26/07 Page 9 of 30 Document 173

16. On March 1, 2006, Plaintiffs, appearing by additional counsel on behalf of the putative class, filed their Renewed Motion for Class Certification pursuant to Fed. R. Civ. P. 23, seeking an order certifying a class composed of H[a]ll Milwaukee County residents with disabilities who are now or will in the future be: (1) eligible for the Family Care program, and (2) appropriate, based on reasonable professional judgment, for residential services in adult family homes and community-based residential facilities" (R. 101: 1; see also R. 97).
17. On April 6, 2006, the Court denied the State Defendants' motion for certification of an interlocutory appeal on the remaining issue of standing set forth in the motion (R. 106).
18. On May 26, 2006, the State Defendants filed their response brief opposing the renewed motion for class certification, together with supporting affidavits (R. 114-17). In opposing the renewed motion, the State Defendants challenged Plaintiffs' claim that they had successfully established the requirements for certification of the proposed class and argued, in addition, that the declaratory and injunctive relief sought with respect to the putative class as a whole would not be appropriate under governing precedent (see gen., R. 114).
19. On October 13, 2006, the Court issued its Decision and Order concluding that class certification under Fed. R. Civ. P. 23(b)(2) is appropriate, thereby granting Plaintiffs' motion, and certifying a class "consisting of disabled Milwaukee County residents who are now or will in the future be eligible to reside in a Family Care AFH or CBRF" (R. 125: 10).
20. In preparation for the scheduling conference required by Fed~ R. Civ. P. l6(b), the parties reached stipulations concerning the nature of remaining claims, defenses, and relief sought; the scope of anticipated discovery to prepare for trial; and the usefulness of exploring settlement of the litigation through an alternate dispute resolution process (R. 127).
- 1OCase 2:04-cv-00193-LA Filed 09/26/07 Page 10 of 30 Document 173

21. With regard to the remaining claims and defenses, the parties agreed that the plaintiff class alleges, in general, that the capitated rates paid by DHFS to the MCDA CMO for each Family Care enrollee are insufficient and that the rates paid, in turn by the MCDA CMO to AFHs, CBRFs, and day programs for Milwaukee County Family Care enrollees are also insufficient (R. 127:2, ~ 2). With one exception identified in (a) below, the parties agreed that the remaining claims and defenses are fairly summarized as follows:
a) Claims arising from Counts 1 and 5 (as summarized, respectively, by the Defendants and the Plaintiffs): Defendants summarize the claims as follows: ADA and Rehabilitation Act claims of discrimination based on severity of disability, but not age or county of residence. Plaintiffs allege that Family Care recipients with more severe disabilities receive substantially inferior treatment because the Family Care program provides lesser funding for services in AFHs, CBRFs, and related day programs for these individuals, in comparison to those with less significant disabilities, so that the individuals with more severe disabilities will be forced, contrary to their wishes, to move into more restrictive, less integrated settings (R. 127:2, ~ 5(a)*). Plaintiffs summarize the claims as follows: ADA and Rehabilitation Act claims of discrimination based on severity of disability, but not age or county of residence. Plaintiffs allege that Family Care recipients with more severe disabilities receive substantially inferior treatment because the Family Care program provides lesser funding for services in AFHs, CBRFs, and related day programs for these individuals, in comparison to
- 11 Case 2:04-cv-00193-LA Filed 09/26/07 Page 11 of 30 Document 173

those with less significant disabilities. This substantially increases the probability that the individuals with more severe disabilities will be forced contrary to their wishes to move into other AFRs, CBRFs, and day programs and/or more restrictive, less integrated settings (127:3, ~ 5(a)*). b) Claims arising from Counts 2 and 6: Claims under the ADA, Rehabilitation Act, and cited federal rules, alleging discrimination and the failure reasonably to accommodate people with disabilities by virtue of Family Care policies, procedures, and rates relating to funding for AFRs, CBRFs, and related day programs. Plaintiffs allege that the rates set by the defendants "aid or perpetuate discrimination against persons with disabilities and prevent them from obtaining the same result, gaining the same benefit or reaching the same level of achievement in the most integrated setting appropriate to their needs and have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the Family Care and Medicaid programs" (127:3, ~ 5(b)*). c) Claims arising from Counts 3 and 7: ADA and Rehabilitation Act integration claims. Plaintiffs allege that inadequate Family Care "policies, procedures and rates relating to funding for AFRs, CBRFs and [related] day programs" will substantially increase the probability that members of the plaintiff class will be placed into more restrictive, less integrated settings contrary to their wishes (127:3-4, ~ 5(c)*). d) Claims arising from Counts 4 and 8: ADA and Rehabilitation Act reasonable accommodation claims. Plaintiffs allege that defendants are
- 12 Case 2:04-cv-00193-LA Filed 09/26/07 Page 12 of 30 Document 173

required to make reasonable modifications of capitated rates and methods used to determine provider rates, so as to make individualized detennination of the services needed to place and maintain members of the plaintiff class in appropriate and integrated residential settings of their choice (127:4, ~ 5(d)*). 22. The parties further agreed that the Defendants generally denied the validity of each of the claims, and that, in addition to other defenses available under the ADA and Rehabilitation Act, the Defendants had preserved claims that requested modifications of Family Care program procedures, including relief in the form of increases in either the State capitated rates or the Milwaukee County provider rates, would constitute a "fundamental alteration" of the Family Care managed care program. The parties also agreed that Defendants had preserved their claim that injunctive relief would be unjustified as a matter of law because the named plaintiffs and members of the certified class have an adequate remedy at law in the form of the right to a fair hearing concerning any denial, reduction, or termination of Family Care benefits (R. 127:4-5). 23. Concerning the scope of anticipated discovery needed before further dispositive motions or trial, the parties agreed that, in addition to updating responses to prior discovery demands, further discovery efforts should be forward-looking, consistent with the Court's February 7, 2006, order denying retroactive injunctive and declaratory relief. Thus, further discovery and litigation would focus on the setting of the capitated rates and provider rates for calendar years 2006 and 2007. To that end, counsel agreed that subjects on which additional discovery would be needed to prepare for trial include the process by which DHFS calculates the capitated rate paid to the MCDA CMO for each Family Care enrollee; the information upon
- 13 Case 2:04-cv-00193-LA Filed 09/26/07 Page 13 of 30 Document 173

which the capitated rate is calculated; the adequacy and actuarial soundness of the capitated rates; the process by which the CMO calculates the rates paid to AFH, CBRF, and day program providers serving Milwaukee County enrollees in Family Care; the information upon which the provider rates are calculated; the adequacy of the provider rates; the factual bases upon which the Plaintiffs' allegations about inadequacy of the capitated rates and provider rates are based; and expert opinions about all of the foregoing subjects (R. 127:6).
24. Although the parties agreed, and the Court then ordered, that the case be referred to Magistrate Judge Gorence for mediation (R. 125:5, ~ 11; 135), the Plaintiffs and State Defendants completed both the exchange of Rule 26(a)(1) initial disclosures and the updating of prior discovery responses before the formal mediation before Magistrate Judge Gotence began on February 26,2007 (see R. 132; Affidavit of Mary E. Burke, ~~ 7,8,10,11; Affidavit of Patricia
Chiazor, ,r 8).
25. Pursuant to the Order Re: Mediation issued by Judge Gorence (R. 136), the parties developed, exchanged, and had preliminary discussions concerning comprehensive settlement proposals developed both by the Plaintiffs, and jointly by the State and County Defendants. Because the interests of the State Defendants and the County Defendants, both in the litigation itself and in the formula for a potential settlement, are not identical, development of the Defendants' joint settlement proposal required both considerable cooperation and substantial mutual accommodation by the two sets of defendants as well (Affidavit of Mary E. Burke, ~ 12).
26. Key representatives of each of the defendant parties and counsel of record for all parties and the class participated in a day-long mediation conducted by Judge Gorence on February 26, 2007 (R. 150). Tom Hlavacek, an experienced and respected advocate for the interests of the plaintiff class, assisted Plaintiffs' counsel throughout the mediation (R. 150).
- 14 Case 2:04-cv-00193-LA Filed 09/26/07 Page 14 of 30 Document 173

Also participating in the mediation were various client representatives for the State Defendants and the County Defendants (R. 150). Client representatives participating in the mediation session for the State Defendants were DHFS Deputy Secretary Susan Reinardy, DHFS Managed Care Section Chief Monica Deignan, Family Care Program Manager Charles Jones, and Family Care Rate Setting Consultant Tom Lawless (R. 150; Affidavit of Mary E. Burke, ~ 14). Client representatives participating in the mediation session for the County Defendants were MCDA Director Stephanie Sue Stein; MCDA Assistant Director for Long Term Care Maria Ledger (who serves as Director of the MCDA CMO); MCDA CMO Chief Financial Officer Jim Hodson; MCDA Assistant Director for Fiscal Services David Hopkins; and MCDA CMO Contract Manager James Hennen (R. 150; Affidavit of Mary E. Burke, ~ 15). Although the parties made substantial progress in reaching agreement on a number of key issues and all agreed that further negotiations were desirable, they were not able to complete their negotiations concerning the terms of a substantive settlement at the February 26 mediation session (Affidavit of Mary E. Burke, ~ 16). As a result, Judge Gorence ordered that the mediation be continued to a second session scheduled for March 27,2007 (R. 149).
27. Prior to the scheduled March 27, 2007, mediation, the parties finalized language memorializing terms of the substantive settlement agreed to at the February 26 session, and continued to negotiate via e-mail and telephone concerning those tenus on which agreement had not been reached (Affidavit of Mary E. Burke, ~ 17). They were able to reach an agreement concerning all substantive terms of the settlement agreement prior to the March 27 session (R.151).
28. After reporting to Judge Gorence concerning the completion of a substantive agreement, the parties began a separate arms-length negotiation concerning the single remaining
- 15 Case 2:04-cv-00193-LA Filed 09/26/07 Page 15 of 30 Document 173

issue of attorney fees and costs, as ordered by Judge Gorence during a telephone conference conducted in lieu of the March 27 mediation (id.). No discussion or negotiation of attorneys' fees or costs took place until the parties already had reached agreement on the substantive terms of settlement (Affidavit of Mary E. Burke, ,-r 19). Plaintiffs' counsel provided cOW1sel for both sets of Defendants with copies of itemized billing records, and defense counsel carefully reviewed them before responding to the offer for settlement of an award of fees and costs initially requested by Plaintiffs' counsel (Affidavit of Mary E. Burke, ,-r 20). Further offers and counteroffers were exchanged prior to counsel reaching a tentative agreement on the amount of attorney fees and costs (Affidavit of Mary E. Burke, ,-r 20). That agreement was communicated to Judge Gorence during a telephone conference with counsel for all parties on May 25, 2007 (R. 155).
29. Although the State Defendants were able to obtain approval of the tentative settlement within a relatively short time, the process for securing the successive approvals required by the Committee on JUdiciary, Safety and General Services of the Milwaukee COW1ty Board, and by the County Board was not completed until July 26, 2007, when the fuIl County Board formally approved the terms of the settlement (R. 158).
30. The parties promptly reported the approval of the settlement agreement to the Court at a telephone status conference on July 31,2007 (R. 159). As ordered by the Court, the parties filed their Joint Motion for Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing, supporting brief, and proposed order, along with a copy of the Settlement Agreement signed by all counsel, on August 14, 2007 (R. 161-63). Pursuant to Fed. R. Civ. P. 23(e) and Armstrong v. Board o/School Dir., 616 F.2d 305,314 (7th Cir. 1980),
- 16 -
Case 2:04-cv-00193-LA Filed 09/26/07 Page 16 of 30 Document 173

overruled on other gds. by Felzen v. Andreas, 134 F.3d 873, 875 (7th Cir. 1998), the Court found that the tern1S of the proposed Settlement Agreement were within the range of possible approval, and that there was good reason to notify the class members of the proposed settlement and proceed with a fairness hearing (R. 165 :2). The Court therefore issued the Order preliminarily approving the proposed settlement, directing distribution of notice of the proposed settlement, and scheduling the fairness hearing required by Fed. R. Civ. P. 23(e) on August 21, 2007 (R. 165). The Court also approved the contents of the Notice of Proposed Settlement Agreement (the "Notice") (R. 165:2).
The Proposed Settlement Agreement 31. The proposed Settlement Agreement consists of four major sections
(R.161:6-13). 32. The first major section of the proposed Settlement Agreement is entitled
"Commitments of the County Defendants" (R. 161 :6-8). Particular provisions, for which specific timeframes and other details are set forth in the proposed Settlement Agreement, include:
a. The MCDA CMO will provide care managers with continuing training and education regarding when notices of intended adverse action must be sent to Family Care participants pursuant to Wis. Admin. Code § HFS 10.52(3) and the Family Care contract (R. 161:6).
b. The MCDA CMO will make reasonable efforts to support enactment of Governor Doyle's proposed 2007-09 budget proposal that would provide funding for an independent advocacy program for Family Care participants (R. 161 :6).
- 17 Case 2:04-cv-00193-LA Filed 09/26/07 Page 17 of 30 Document 173

c. The MCDA CMO will expand its CBRF provider audit review process to include additional cost and staffing information, and will contractually require CBRF providers to submit additional information for consideration in the audit review process (R.161:6-7).
d. The MCDA CMO will conduct bi-annual audit reviews of muItifacility, corporate providers of 3-4 bed AFH services, and will contractually require those providers to submit audited financial statements, cost, and staffing information for consideration in the audit review process (R. 161 :7).
e. In cOlmection with quality performance and provider rate setting, the MCDA CMO will consider as a relevant factor data from provider surveys released on March 26, 2007. The MCDA CMO will retain its current discretion to establish the ratesetting methodology and negotiate provider rates, subject to the superintending authority ofDHFS (R. 161:7).
f. The MCDA will complete provider network adequacy reviews twice a year, including needs assessments of future Family Care participants (R. 161 :7-8). The MCDA CMO will disseminate the results of its provider network adequacy reviews at least once annually to the development and/or land use planning departments of all Milwaukee County municipalities (R. 161 :8).
g. In connection with provider rate setting, MCDA will: (1) provide contracted CBRF, AFH, and day services providers the factors taken into account in developing the rates offered those providers; (2) post on its website a summary of the factors taken into account in developing the rates offered those providers; and (3) initiate
- 18 Case 2:04-cv-00193-LA Filed 09/26/07 Page 18 of 30 Document 173

a process of soliciting input from CBRF, AFH, and day services providers that will be

considered in rate-setting to the extent it is relevant (R. 161: 7).

h. The MCDA CMO will at least once annually invite all Milwaukee County

municipalities to provide input to address the issue of affordable CBRF, AFH, and other

housing for Milwaukee County Family Care participants (R. 161 :7-8).

1.

The MCDA CMO will collaborate with the MCDA Resource Center to

make materials available to all nursing homes located in Milwaukee County that explain
• the alternate residential options available through the Family Care program and provide

contact information for the Milwaukee County Aging Resource Center (R. 161 :8).

33. The second major section of the proposed Settlement Agreement is entitled

"Commitments of the State Defendants" (R. 161 :8-12). Particular provisions, for which specific

timeframes and other details are set forth in the proposed Settlement Agreement, include:

a. DHFS will issue and post on its website a contract interpretation memo

reiterating that Family Care participants may contest the choice of residential or day care

provider services proposed by the CMO by pursuing Family Care grievance procedures or

a fair hearing; and that the standard to be applied in resolving any such disputes is

whether the proposed plan would provide care, treatment, or supports that are insufficient

to meet a participant's needs or outcomes, or are provided in a setting that is

unnecessarily restrictive or less integrated than is appropriate to the participant's needs

(R. 161:8-9). DHFS will issue and post on its website a contract interpretation memo

reiterating the importance of appropriate and adequate pre-transfer planning for Family

Care participants transferring from one residential setting to another (R. 161: 11).

Similarly, DHFS will issue and post on its website additional informational materials

- 19 Case 2:04-cv-00193-LA Filed 09/26/07 Page 19 of 30 Document 173

explaining the Resource Allocation Decision ("RAD") method used in the Family Care program to help participants identify personal outcomes (R. 161 :9). DHFS will provide drafts of the contract interpretation memos and the RAD informational materials to plaintiffs counsel and certain advocacy organizations, and will accept written comments before finalizing the documents (R. 161:8-9, 11). DHFS will retain sole discretion to determine final content of the memos and the informational materials (R. 161 :8-9, 11). DHFS also will provide the final RAD informational materials to Fanlily Care grievance bodies and Division of Hearings and Appeals administrative law judges assigned to conduct Family Care hearings (R. 161: 10).
b. If the MCDA CMO's 2008 annual certification application to DHFS includes submission of any revised form notices, before certifYing the CMO for 2008 DHFS will provide copies of the revised form notices to plaintiffs' counsel and certain advocacy organizations (R. 161 :9-10). DHFS will accept comments on the revised form notices, but will retain sole discretion to determine whether to certify the MCDA CMO for 2008 and to determine whether to require the MCDA CMO to make any changes in the revised form notices (R. 161: 10).
c. The State Defendants will continue to support creation of the independent advocacy program for Family Care participants for which Governor Doyle included funding in his 2007-09 budget proposal (R. 161: I0). Upon passage by the Legislature and inclusion of funding in the 2007-09 budget, DHFS will promptly issue a request for proposals and take other necessary steps to implement the program (R. 161: 10). If the independent advocacy program is established, DHFS will include in any contract or other document governing that program a requirement for semi-annual reporting of referral
- 20Case 2:04-cv-00193-LA Filed 09/26/07 Page 20 of 30 Document 173

statistics (R. 161:10). The statistical reports will be posted on DHFS' Family Care

website (R. 161: 10).

d. DHFS will contract with its External Quality Review Organization to

require semi-annual statistical reporting regarding referrals to the state's appeals and

grievances program, referral outcomes, requests for fair hearings, and fair hearings

conducted (R. 161: 10). DHFS will post statistical reports received on its Family Care

web site (R. 161: 10).

e. DHFS will work with the MCDA CMO to enhance openness of the

MCDAJprovider rate-setting process by exploring alternate rate setting methods for

CBRF and AFH providers (R. 161:10).

f.

DHFS will provide information to CBRF and AFH members of the

MCDA CMO's provider network about locations on DHFS' web site of information

about the capitated rate setting process and the Family Care actuarial rate reports

describing development methodology (R. 161: 10-11).

g. DHFS will prepare technical assistance materials and convene a meeting

of DHFS and MCDA staff regarding identification and implementation of additional

practices to enhance planning for safe and effective residential moves for Family Care

members, and pre-move assessments (R. 161: 11). h. DHFS will conduct a one-time review of Milwaukee County Watts3

review procedures and pursue any corrective action as determined appropriate by DHFS

3State ex rei. Watts v. Combined Comm. Svcs., 122 Wis. 2d 65, 362 N.W.2d 104 (1985).
- 21 Case 2:04-cv-00193-LA Filed 09/26/07 Page 21 of 30 Document 173

in its sole discretion (R. 161: 11). DHFS will provide copies of the final report, any

corrective action plan, and any compliance reports to plaintiffs' counsel (R. 161: 11-12).

1.

DHFS will amend the DHFS/MCDA Family Care contract to include

language that MCDA will provide services in the most integrated level of residential

setting consistent with the desired outcomes, preferences, and identified needs of a

participant, and that is cost-effective when compared to alternate services that could meet

the same needs and achieve similar outcomes (R. 161: 12).

J.

DHFS will direct its External Quality Review Organization to include in

the care plan review process consideration of whether a Family Care participant would be

more appropriately placed in a less restrictive/more integrated residence and whether the

individual would prefer to move to a less restrictive/more integrated facility (R. 161: 12).

34. The third major section of the proposed Settlement Agreement is entitled

"Enforcement" (R. 161: 12-13). If plaintiffs believe in good faith that either the County

Defendants or the State Defendants are out of compliance with any provision of the Settlement

Agreement, plaintiffs must notify all Defendants and attempt to negotiate an agreement to

address the alleged deficiency (R. 161:12). If the parties are unable to reach an agreement, the

plaintiffs may file a remedial motion with the Court (R. 161: 12).

35. The fourth major section of the proposed Settlement Agreement is entitled

"Miscellaneous" (R. 161:13). The parties agree that Family Care participants who enter CBRFs

and AFHs should not automatically be disqualified from participating in day programming

services outside their residences (R. 161: 13). The parties agree that it is appropriate to use the

RAD to determine whether the outcomes of Family Care participants who reside in CBRFs and

AFHs cannot be met without access to outside day programming services (R. 161: 13). Except

- 22 Case 2:04-cv-00193-LA Filed 09/26/07 Page 22 of 30 Document 173

for provisions of the Settlement Agreement for which some other compliance date or time period is specified, provisions of the Settlement Agreement will terminate and cease to be enforceable two years after the date of the Court's order approving the Settlement Agreement (R. 161:13). Plaintiffs' counsel will receive $130,000.00 in full settlement of their claim for attorneys fees and costs in connection with their representation of the plaintiffs in this lawsuit (R. 161: 13).
Distribution of Notice of Proposed Settlement Agreement 36. The Notice approved by the Court was sent by First Class U.S. Mail on or about
September 11,2007, to each person included as of September 5, 2007, in the MCDA database of all current Milwaukee County Family Care members, legal guardians for those Family Care members, and persons serving as agents under activated powers of attorney for those Family Care members (Affidavit of James Hennen, ~~ 3-7).
37. A copy of the Notice was provided to each person, and/or the legal guardian or person holding activated powers of attorney for each such person, who enrolled in Milwaukee County Family Care between September 6, 2007, and October 16, 2007 (Affidavit of James Hennen, 18, and other submissions of the County Defendants).
38. On September 10, 2007, copies of the Notice and the Proposed Settlement Agreement were posted on the DHFS website at http://wwvv.dhjs.slate.wi.us/LTCare and remained posted through the close of business October 19, 2007 (Affidavit of Hollister Chase, ,~ 4-6).
39. Copies of the Notice and the proposed Settlement Agreement were sent by First Class U.S. Mail on September 11, 2007, to each agency or organization listed in the
- 23 Case 2:04-cv-00193-LA Filed 09/26/07 Page 23 of 30 Document 173

Proposed Plan for Distribution of Notice of Proposed Settlement Agreement previously approved by the Court (R. 166).
40. The Notice was distributed to the persons, agencies, and organizations and in the mamler required in the Court's Order Preliminarily Approving the Proposed Settlement Agreement, Directing Distribution of the Notice of Proposed Settlement Agreement, and Scheduling Fairness Hearing (R. 165).
Application of the Factors Required by Armstrong Strength of the Plaintiffs' Case 41. Although the Court has concluded that Plaintiffs have alleged a sufficient threat of
future injury to support standing in a constitutional sense (R. 86:7-10; 106:2-3), the Court has expressly recognized that none of the named plaintiffs has, as yet, been injured in a legal sense (R. 86:7). This is true whether injury consists of being forced to move involuntarily to another CBRF or AFH, as Plaintiffs insist, or being forced to move involuntarily to a less integrated more restrictive institutional setting, as defendants insist. See FOF 21(a), above.
42. The Defendants all deny that Plaintiffs or their class are being forced to move to different AFHs or CBRFs because of inadequate Family Care rates, and have preserved for possible appeal the legal argument that, even if proven, such forced moves would not constitute actionable claims under the Rehabilitation Act or the ADA. In addition, the Defendants strongly deny that Plaintiffs or their class are being forced into institutional (i.e., more restrictive, less integrated) settings as a result of allegedly inadequate Family Care capitated or provider rates. During discovery so far, Plaintiffs have supplied the Defendants with very little evidence to
- 24Case 2:04-cv-00193-LA Filed 09/26/07 Page 24 of 30 Document 173

support a claim that Family Care emollees are being forced into institutional settings because of inadequate Family Care rates.
43. Although the Court has concluded that all eight of Plaintiffs' four paired ADA and Rehabilitation Act claims survive in limited respects, it is conceptually difficult to distinguish between the four pairs of claims. See FOF 21 (a)-(d), above. Moreover, some claims are sufficiently vague that they present difficult proof problems for the Plaintiffs, who have the burden of proof. For example, to the extent Plaintiffs claim discrimination on the basis of "severity of disability," as described in FOF 21 (a), Plaintiffs have the burden of identifying and proving if and how members of the plaintiff class are treated differently as a result of the degree of individual disability, and, in addition, that the Family Care capitated or provider rates have a causal connection to such differential treatment. The defendants deny that plaintiffs have produced probative evidentiary support for this claim during the discovery conducted so far.
44. The Court has also limited the relief available to prospective injunctive and declaratory relief for the class as a whole (R. 86:22). As a result, the parties have agreed that further discovery and litigation would focus on the setting of the DHFS capitated rates and the County provider rates for calendar years 2006 and 2007 (FOF 23), and they have agreed that discovery would focus on a variety of technical, systemic, and factual questions requiring the gathering of extensive expert testimony concerning the legal adequacy of the rates (id.).
45. Obtaining the evidence Plaintiffs need to prove that the DHFS capitated rates for 2006 and 2007 have a discriminatory effect on the plaintiff class will necessarily require heavy reliance on expert testimony. Such technical expertise is expensive and Plaintiffs have not produced evidentiary support for this claim during the discovery conducted so far. Plaintiffs will almost certainly face difficult proof problems if they are to discharge their burden of proving that
- 25Case 2:04-cv-00193-LA Filed 09/26/07 Page 25 of 30 Document 173

the actuarially-calculated federally-approved state capitated rates are inadequate and are, in fact, causing actionable ham1 to the plaintiffs' class.
46. Plaintiffs' claim that the rates paid by the MCDA CMO to the many individual providers of AFHs and CBRFs serving current Fanlily Care enrollees are inadequate and will force enrollees into institutional settings will both require substantial additional discovery and will present substantial proof problems as well. The Plaintiffs have conducted considerable discovery concerning the rates paid to Milwaukee Family Care providers, and may well have gathered evidence that the rates paid to AFH and CBRF providers are not satisfactory to at least some of those providers. However, the Defendants deny that such evidence alone is sufficient to prove that the provider rates are causing actionable harm to the Plaintiffs and deny that Plaintiffs have produced evidence sufficient to support such a claim during the discovery conducted so far.
47. The primary form of relief sought by the plaintiffs' class against the State Defendants is either an increase in the capitated rates or a change to a different form of reimbursement entirely. Assuming Plaintiffs are able to prove a claim of discrimination under the ADA or Rehabilitation Act warranting such relief, their primary prayer for relief faces an additional significant hurdle based on the State Defendants' affirmative defense that the relief sought will require a fundamental modification of the Fanlily Care managed care program. Plaintiffs' challenge to the County provider rates must overcome the same affirmative defense. The State Defendants in particular have facially strong grounds to support their affirmative defense, based on their claim that court-mandated changes in the capitated rates or a courtordered remedy that the Fanlily Care program institute a different form of reimbursement would require a fundamental modification of Family Care.
- 26Case 2:04-cv-00193-LA Filed 09/26/07 Page 26 of 30 Document 173

Opinion of Counsel for the Parties 48. Plaintiffs have been represented throughout this case, since its initial filing in Milwaukee County Circuit Court, by Robert Theine Pledl (R. 1-1: 1; 1-2:4-5). 49. In March 2006, Sarah J. Somers and M. Jane Perkins of the National Health Law Program, Inc. joined this lawsuit as co-counsel on behalf of Plaintiffs (97). 50. Plaintiffs' counsel unconditionally support the terms of the proposed Settlement Agreement (Plaintiffs' written and oral submissions). 51. Throughout this litigation, the State Defendants have been represented by the Wisconsin Department of Justice. Assistant Attorney General (HAAG") Maureen McGlynn Flanagan has appeared on behalf of the State Defendants since May 2004. AAG Mary E. Burke has appeared on behalf of the State Defendants since March 2005. AAG David Dudley has appeared on behalf of the State Defendants since December 2006. 52. Counsel for the State Defendants unconditionally support the terms of the proposed Settlement Agreement (State Defendants' written and oral submissions). 53. Throughout this litigation, the County Defendants have been represented by the Milwaukee County Corporation Counsel. Principal Assistant Corporation Counsel John Jorgensen has appeared on behalf of the County Defendants since April 2004 (R. 5). 54. Counsel for the County Defendants unconditionally supports the terms of the proposed Settlement Agreement (County Defendants' written and oral submissions). 55. All parties are represented by competent counsel (R. 53-3; R. 98; R. 99; R. 102:9-11; Affidavit of Maureen McGlynn Flanagan, " 1-4; Affidavit of Mary E. Burke,
"r " 1-5; Affidavit of David Dudley, 1-3; County Defendants' written and oral submissions).
- 27 Case 2:04-cv-00193-LA Filed 09/26/07 Page 27 of 30 Document 173

Stage of the Proceedings and the Extent of Discovery See proposed findings of fact 3, 4, 5, 11, 12, 13, 16, 19,20, 21, 22, 23, and 24. 56. During the course of this litigation, the County Defendants produced approximately 2,000 pages of documents in discovery, produced two persons for deposition, and provided plaintiffs with direct access to files maintained at MCDA (Affidavit of Patricia Chiazor, ~~ 4, 7; R. 120:2-3). 57. The Plaintiffs produced approximately 1,000 pages of documents in discovery (Affidavit of Patricia Chiazor, ~ 5). 58. Discovery produced by the State Defendants included over 925 documents consisting of over 7,000 total pages, as well as 6 compact disks containing in the aggregate over 9,500 documents many of which consist of multiple pages and/or include attachments (Affidavit of Patricia Chiazor, ~ 6). 59. The State Defendants promulgated 33 interrogatories to which the Plaintiffs responded (Affidavit of Mary E. Burke, ~ 7).
Absence of Collusion See proposed findings of fact 25, 26, 27, and 28. 60. The substantive and financial terms of the proposed Settlement Agreement result from fair arms-length negotiations among counsel for the parties, and not from any collusion between the parties or their counsel (Affidavit of Mary E. Burke, ~~ 14-20).
Reaction of the Class to Settlement and Extent of Opposition No findings of fact regarding reaction of the class to settlement and the extent of any opposition to the proposed Settlement Agreement are proffered at this time. The deadline for
- 28 Case 2:04-cv-00193-LA Filed 09/26/07 Page 28 of 30 Document 173

submission of any written comments or objections to the proposed Settlement Agreement is September 25, 2007, immediately prior to the date for submissions by the parties pursuant to which these proposed findings of fact and conclusions of law are being filed (R. 165:2, 166, 167). On or before October 9, 2007, the response date established by the Court, the State Defendants will submit additional proposed findings of fact and conclusions of law addressing the reaction of the class to settlement and the extent of opposition to the proposed Settlement Agreement. (R. 165 :2, 166, 167).
CONCLUSIONS OF LAW 1. The contents of the Notice of Proposed Settlement Agreement comport with the requirements of procedural due process in that they were sufficient to apprise class members and others of the terms of the proposed settlement and of the opportunity to be heard in respect to the proposed settlement. 2. The Notice of Proposed Settlement Agreement was widely disseminated throughout the Milwaukee County community and was sufficiently provided to or made available to all interested persons or their legal representatives to comport with the requirements of procedural due process. 3. The interests of the plaintiff class have been adequately represented throughout the course of this litigation and the settlement negotiations. 4. The terms of the proposed Settlement Agreement are, 111 their entirety, fair, reasonable, and adequate.
- 29Case 2:04-cv-00193-LA Filed 09/26/07 Page 29 of 30 Document 173

5. it is unlikely that Plaintiffs would have secured any greater relief than achieved through the Settlement Agreement ifthis case had been fully tried.
Dated at Madison, Wisconsin, this 26th day of September, 2007.
Respectfully submitted,
J.B. VAN HOLLEN Attorney General
~)~~ MA EN MCGLYNN ANAGAN Assistant Attorney General State Bar#1013639
~f2h1
M?ARYEF
Assistant A:ttorney General State Bar #1015694

Wisconsin Department of Justice Post Office Box 7857 Madison, WI 53707-7857 Telephone: (608) 266-1780 (MMF) Telephone: (608) 266-0323 (MEB) Telephone: (608) 266-3076 (DD) Fax: (608) 267-2223
kurlishrklbzdawka\proposed settlement agreement.doc

Assistant Attorney State Bar #1062812
Attorneys for Defendants, Wisconsin Department of Health and Family Services and Kevin Hayden

- 30Case 2:04-cv-00193-LA Filed 09/26/07 Page 30 of 30 Document 173

 
 Case 2:04-cv-00193-LA Filed 09/26/2007 Page 1 of 11 Document 180

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________

JOAN BZDAWKA, et al.,

Plaintiffs,

v.

Case No. 04-C-1093

MILWAUKEE COUNTY, et al.,
Defendants. ______________________________________________________________________________
MEMORANDUM OF MILWAUKEE COUNTY IN SUPPORT OF PROPOSED SETTLEMENT AGREEMENT ______________________________________________________________________________

Under Rule 23(e)(1), F.R.C.P., the court must approve any settlement of a class action. Before approving a settlement, the court must be satisfied that notice of the proposed settlement has been directed to class members in a reasonable manner, and that the proposed settlement is fair, reasonable and adequate. Milwaukee County respectfully submits this memorandum in support of the proposition that the procedural and substantive requirements for approval of the proposed settlement are satisfied. In addition to the arguments presented in this memorandum, Milwaukee County joins in the facts1 and arguments submitted by counsel for the other parties to support approval of the proposed settlement.

1 Defendant Milwaukee County concurs in the proposed findings of fact and conclusions of law which have been drafted and filed on behalf of the State of Wisconsin defendants and joins those defendants in respectfully urging the court to adopt those findings and conclusions as its own.

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 2 of 11 Document 180
I. Notice has been directed to class members in a reasonable manner. The procedure by which notice of the proposed settlement was directed to class members, which process the court has already approved, is described in detail in paragraphs 36 through 40 the State of Wisconsin defendants’ proposed findings of fact and documented in the supporting affidavits referenced therein. In order to comply with Rule 23, and as a matter of constitutional due process, notice of a proposed settlement or compromise of a class action should be directed to class members in the best manner which is practicable under the circumstances, including, in some cases, individual notice to all class members who can be identified through reasonable effort, DeJulius v. New England Health Care Employees Pension, 429 F.3d 935, 943-944 (10th Cir.). The procedure for distribution of the notice in this case certainly meets, and probably exceeds, the minimum standards under Rule 23 and the applicable case law. Individual notice was mailed to all class members who could be identified through reasonable effort: All current Family Care members, which includes all current class members (those currently residing in CBRF’s or adult family homes) and some future class members (current Family Care members who do not currently reside in CBRF’s or adult family homes but who may in the future be appropriate for such residential facilities). In addition, to assure effective notice to class members and future class members who are, to the knowledge of the defendants, under a disability which could affect their ability to understand the notice, individual notice was mailed to the guardians and agents operating under activated powers of attorney for current Family Care members.
2

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 3 of 11 Document 180
Finally, the notice was posted on the DHFS web site, and it was distributed to a wide variety of agencies and community organizations which provide services to and/or advocate on behalf of persons who are or may in the future be members of the plaintiff class.
In short, every reasonable effort was made to afford effective notice of the proposed settlement to the class members and to others in the community, particularly to those who are best positioned to understand the implications of the proposed settlement and to speak on behalf of the class members.
II The proposed settlement is fair, reasonable and adequate. In order to approve the proposed settlement, the court must determine that the settlement is fair, adequate and reasonable. Factors to be considered by the court in making that determination include: (a) the likelihood of success on the merits weighed against the amount and form of the relief offered in the settlement; (b) the risks, expense, and delay of further litigation; (c) the judgment of experienced counsel who have competently evaluated the strength of their proofs; (d) the amount of discovery completed and the character of the evidence uncovered; (e) whether the settlement is fair to the unnamed class members; (f) objections raised by class members; (g) whether the settlement is the product of arm's length negotiations as opposed to collusive bargaining; and (h) whether the settlement is consistent with the public interest. See, Granada Invs., Inc. v. DWG Corp., 962 F.2d 1203, 1205 (6th Cir.1992); Williams v. Vukovich, 720 F.2d 909, 922-23 (6th Cir.1983); Kogan v. AIMCO Fox Chase, L.P., 193 F.R.D. 496, 501-02 (E.D.Mich.2000); Steiner v. Fruehauf Corp., 121 F.R.D. 304, 305-06 (E.D.Mich.1988).
3

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 4 of 11 Document 180
(a) The likelihood of success on the merits weighed against the amount and form of the relief offered in the settlement.
Because this case does not involve monetary damage claims, the court cannot apply this factor in the typical arithmetical fashion, evaluating the settlement as percentage of the plaintiffs’ maximum recovery and comparing the result with the plaintiffs’ statistical odds of success, see, In re Cardizem CD Antitrust Litigation, 218 F.R.D. 508 E.D. Mich. 203). Nevertheless, this factor militates in favor of approval of the proposed settlement in this case.
The proposed findings of fact submitted by the State of Wisconsin defendants include a description of the plaintiffs’ claims as they have evolved through the history of this action. That description is as clear and precise as the nature of those claims will allow. Under the court’s prior decisions, some of the plaintiffs’ claims have survived dismissal motions as abstract legal propositions. Nevertheless, it is fair to state that the plaintiffs would experience difficulty in proving facts sufficient to withstand summary judgment motions or to support those claims at trial.
The crux of the plaintiffs claims against Milwaukee County is that the County is not paying CBRF operators enough to guarantee Family Care members a stable network of providers sufficient to meet their needs and avoid the deleterious consequences of transfer from one provider to another or, even worse, transfer to a “less integrated” residential setting. The plaintiffs identify a few providers who complain, unsurprisingly, that their businesses are insufficiently profitable at the rates they have negotiated with the County. Also, plaintiffs’ experts have offered guarded preliminary opinions, based on a review of financial statements submitted to Milwaukee County, that some smaller
4

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 5 of 11 Document 180
residential providers were experiencing financial distress (see, e.g., R. 120). However, thus far the plaintiffs have been unable to identify any members of plaintiff class for whom the threatened harms postulated in their complaint have actually come to pass. Moreover, the County’s actual experience has been that CBRF operators and other residential providers are not leaving the Family Care program due to inadequate reimbursement rates, and that there is no shortage of new residential providers who want to become part of the program, see, Aff. of James Hennen, submitted in support of State Defendants’ Opposing Motions for Class Certification (R-115). Therefore, there is at least a reasonable basis to doubt that the plaintiffs can prove the essential factual premise for their claims against Milwaukee County. The same may be said for the plaintiffs’ claims against the State of Wisconsin defendants, for the reasons explained in their submissions.
Especially when weighed against the plaintiffs’ likelihood of succeeding on the merits in this action, the commitments of Milwaukee County which are part of the proposed settlement will provide significant benefits to the plaintiff class. They effectively address the plaintiffs’ concerns about the availability of appropriate residential services by addressing the legitimate concerns of the CBRF and adult family home operators who provide those services with respect to the rate-setting process. Milwaukee County has agreed to substantial refinements to the process by which reimbursement rates for Family Care residential providers are set. Those refinements, which require Milwaukee County to solicit and utilize a broader range of information about the providers’ true costs to provide services to Family Care members, will make the ratesetting process more transparent and equitable for the providers while preserving the
5

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 6 of 11 Document 180
ability of Milwaukee County to administer Family Care on a cost-efficient managed care model, which is critical to the survival of the program.
(b) The risks, expense and delay of further litigation. From the perspective of members of the plaintiff class, the primary risk of further litigation is that, for the reasons discussed above as well as the reasons documented in the proposed findings of fact and conclusions of law submitted by the State of Wisconsin defendants, ultimately they will be unable to prove the facts necessary to support their remaining claims. Those claims could be dismissed on summary judgment or at trial, in which case this lawsuit will avail them naught. The proposed settlement avoids that risk by providing immediate and significant improvements in the administration of the Family Care program. Also, continued prosecution of this action through trial (and, in all likelihood, appeal) would cause significant additional cost and delay. Although substantial discovery, primarily in the form of document production and interrogatories, has already occurred, considerable additional time and effort would be required to complete discovery from both fact and expert witnesses, prepare and brief dispositive motions, and prepare for trial. Besides occupying counsel, those activities would consume an enormous amount of the time and attention of administrators and other personnel of both the Wisconsin Department of Health and Family Services and the Milwaukee County Department on Aging for discovery, trial preparation and other litigation-related tasks. The resources of both those agencies are not unlimited. The interests of the plaintiff class will be better served if those resources are devoted to improving the administration of the Family Care
6

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 7 of 11 Document 180
program (including, but not limited to, implementing the terms of the proposed settlement agreement) and providing services to its members, rather than to additional depositions, document discovery and the like.
(c) The judgment of experienced counsel who have competently evaluated the strength of their proofs.
Counsel for the plaintiffs can certainly speak for themselves with regard to this factor. However, defendant Milwaukee County is satisfied that plaintiffs’ local counsel, Mr. Pledl, has extensive experience in litigating the rights of persons with disabilities in actions against state and municipal agencies. The court can reasonably trust his judgment in evaluating the strength of his clients’ case and negotiating a settlement based on that evaluation. In this case, the reliability of that judgment is reinforced by his decision to obtain the assistance of the National Health Law Program, Inc., a national public interest law firm which specializes in services to, among other groups, the elderly and people with disabilities, and the concurrence of that firm in the proposed settlement agreement.
In class actions of a commercial nature arising under anti-trust and consumer protection laws, courts have adverted to the participation of attorneys general as factor in favor of the fairness and adequacy of a settlement, New York v. Reebok Int’l, Ltd., 96 F.3d 44, 48 (2d Cir. 1996). In those cases the attorney general participates on the plaintiffs’ side in a parens patriae capacity rather than, as in this case, representing defendants. Even in this case, however, the participation of the attorney weighs in favor of the conclusion that the proposed settlement is fair, adequate and reasonable. Certainly the attorney general and, for that matter, the Milwaukee County corporation counsel, have considerable experience in defending cases involving both medical assistance and
7

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 8 of 11 Document 180
other entitlement programs and federal disability law. Both those offices have the experience and sophistication required to competently assess the merits of such a case and to reach a reasonable judgment that a stipulated resolution is reasonable and prudent.
(d) The amount of discovery completed and the character of the evidence uncovered.
The amount of discovery completed and the character of the evidence uncovered in this action is sufficient to allow counsel for the parties to make a competent assessment of the strengths and weaknesses of their respective claims and defenses.
Although substantial additional discovery would be necessary to prepare for summary judgment motions and for trial if this case was not settled, the amount of discovery completed to date is not inconsiderable. As noted in the State of Wisconsin defendants’ proposed findings of fact, thousands of pages of documents have been exchanged.
In addition, experts retained by plaintiffs’ counsel availed themselves of the opportunity to review the files maintained by Milwaukee County for each CBRF operator under contract to provide services of Family Care members. Those experts reviewed and analyzed the financial statements submitted by those operators. By that means they were able to assess the viability of plaintiffs’ claims against Milwaukee County to the extent that those claims depended upon the assertion that Milwaukee County’s reimbursement rates for residential providers were so inadequate as to violate the rights of Family Care members under the ADA and the Rehabilitation Act.
(e) Whether the settlement is fair to the unnamed class members;
8

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 9 of 11 Document 180
The relief provided under the proposed settlement agreement will redound equally to the benefit of all current and future Family Care members who are receiving or will receive residential services in a CBRF or adult family home. It does not provide any benefits to the named plaintiffs exclusively. Therefore, fairness to the unnamed class members relative to the named plaintiffs is not an issue.
(f) Objections raised by class members. This factor poses no impediment to approval of the proposed settlement agreement because thus far no cogent objections have been raised. Each Family Care member, and each person operating as an agent of a member under an order for guardianship or an activated power of attorney, received individual mail notice of the proposed settlement agreement. As of the date of this writing, we are aware of only three responses from class members or their agents in response to the notice of proposed settlement (R. 168, 169 and 170). While those responses express some dissatisfaction with various aspects of the administration of the Family Care program, their complaints are not directly related to the substantive provisions of the proposed settlement agreement or to the claims raised on behalf of the plaintiff class in this lawsuit. (g) Whether the settlement is the product of arm’s length negotiations as opposed to collusive bargaining. The process of mediation and negotiation that led to the proposed settlement agreement in this action is described in detail in the proposed findings of fact submitted by the State of Wisconsin Defendants. The nature of the settlement process in this case as described in those proposed findings, particularly the highly structured mediation
9

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 10 of 11 Document 180
procedure which was directed and supervised by Magistrate Judge Gorence, clearly shows genuine arm’s length bargaining and effectively precludes the possibility of collusion.
With specific regard to the role of Milwaukee County as a party defendant in this action, the fact that the proposed settlement was subject to review and approval by the Health and Human Needs Committee of the Milwaukee County Board of Supervisors and by the full Board of Supervisors after the conclusion of the negotiations among counsel parties provides additional assurance that the proposed agreement was the product of genuine negotiation and compromise among the parties.
Finally, as documented in the proposed findings of fact, the parties were careful to separate the negotiation of the substantive terms of the settlement agreement from negotiation of the plaintiffs’ attorney fees, which were not discussed until agreement had been reached on the substantive terms of the agreement.
(h) Whether the settlement is consistent with the public interest. From the perspective of Milwaukee County, and doubtless of the other parties as well, the predominant interest at stake in the settlement of this action is enhancing the ability of the Family Care program to serve all program members in a fashion which meets their various needs and conforms to all applicable laws while preserving the fiscal viability of the program. The proposed settlement agreement is reasonably calculated to serve that interest and that interest only. Therefore, it is manifestly consistent with the public interest.
10

Case 2:04-cv-00193-LA Filed 09/26/2007 Page 11 of 11 Document 180
CONCLUSION For reasons set forth in this memorandum, together with those set forth in the submissions of the other parties, the proposed settlement agreement in this action is fair, adequate and reasonable and it is consistent with the public interest. Milwaukee County respectfully asks the court to approve that settlement agreement.
OFFICE OF CORPORATION COUNSEL By: /s/ John Jorgensen________________
John Jorgensen Principal Assistant Corporation Counsel State Bar No. 01017484 Attorneys for Defendant Milwaukee County P.O. Address: Milwaukee County Courthouse 901 North 9th Street, #303 Milwaukee, WI 53233 Telephone: (414) 278-4302 Fax: (414) 223-1249
11

 
 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, SANDRA EHRLICHMAN, and MARILYN BERDIKOFF,1
Plaintiffs, v.
MILWAUKEE COUNTY, WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES, and HELENE NELSON, in her official capacity as Secretary of DHFS,
Defendants.

Case No. 04-C-193

DECISION AND ORDER I. BACKGROUND
Plaintiffs Joan Bzdawka, Sandra Ehrlichman and Marilyn Berdikoff are elderly disabled residents of Milwaukee County with low incomes who are enrolled in Family Care, a Medicaid waiver program administered by defendants. Plaintiffs live in adult family homes (“AFHs”) or community based residential facilities (CBRFs”) operated by Homes for Independent Living (“HIL”) which, pursuant to a contract with Milwaukee County, provides services to Family Care enrollees. Plaintiffs claim that defendants are violating the Americans with Disabilities Act (“ADA”) and the Rehabilitation Act (“RA”) by inadequately compensating HIL and other providers of services to Family Care enrollees in Milwaukee County, and that defendants’ conduct might force them out of their homes. Plaintiffs allege that in 2004, HIL notified defendants that, because of the inadequate compensation, it intended to withdraw from Family Care, and as a result Milwaukee County notified plaintiffs that it would transfer them

1 I have amended the caption to reflect that some of the original plaintiffs are no longer participating in the case.
Case 2:04-cv-00193-LA Filed 10/13/06 Page 1 of 10 Document 125

to other facilities. Plaintiffs then commenced the present putative class action seeking
declaratory and injunctive relief. Defendants agreed not to move plaintiffs pending resolution
of the case. Defendants moved to dismiss the complaint, and I granted the motion in part and
denied it in part. Plaintiffs now ask me to certify a class consisting of disabled Milwaukee
County residents who are now or will in the future be eligible to reside in a Family Care AFH
or CBRF. The state defendants oppose class certification.2
II. DISCUSSION
In order to obtain class certification, a plaintiff must satisfy several requirements. First,
as in any federal lawsuit, as a threshold issue, a plaintiff in a putative class action must
establish that she, as an individual, has standing to sue.3 Rozema v. Marshfield Clinic, 174
F.R.D. 425, 432 (W.D. Wis. 1997). If the plaintiff establishes individual standing, she may
bring a class action if she can satisfy the criteria in Fed. R. Civ. P. 23. Rule 23(a) has four
prerequisites: (1) numerosity of parties; (2) commonality of legal and factual issues; (3)
typicality of the class representative’s claims; and (4) adequacy of representation. If the
plaintiff satisfies these requirements, she must also meet one of the requirements of Rule
23(b). In addition, although Rule 23 is silent on the matter, it implicitly requires that the
plaintiff establish the existence of a definable class. Rosario v. Livaditis, 963 F.2d 1013, 1017
2The county defendant did not respond to plaintiffs’ motion.
3Since the Supreme Court stated in Ortiz v. Fibreboard Corp., 527 U.S. 815, 831 (1999), that “the class certification issues are . . . logically antecedent to Article III concerns, and themselves pertain to statutory standing, which may properly be treated before Article III standing,” some courts have declined to consider challenges to a plaintiff’s standing before addressing class certification. However, close analysis of Ortiz strongly suggests that its “‘logically antecedent’ language was not intended to create a new rule, but . . . restated preexisting doctrine . . .” Linda S. Mullenix, Standing & Other Dispositive Motions After Amchem and Ortiz: The Problem of “Logically Antecedent” Inquiries, 2004 Mich. St. L. Rev. 703, 730731. Thus, I conclude that “courts should continue to review standing challenges, and other traditional pre-certification dispositive motions, at the same time and in the same fashion as [they] did prior to . . . Ortiz.” Id.
-2Case 2:04-cv-00193-LA Filed 10/13/06 Page 2 of 10 Document 125

(7th Cir. 1992).4 In the present case, defendants argue that plaintiffs fail to satisfy the
standing requirement and the requirements of Rule 23.
A. Standing
The standing requirement has both a constitutional and prudential function. Its
constitutional function ensures that the case or controversy requirement of Article III, section
2 of the Constitution is satisfied. If a plaintiff lacks the necessary interest in the lawsuit to
have standing, there is no case or controversy and the court lacks jurisdiction. Simon v. E.
Ky. Welfare Rights Org., 426 U.S. 26, 37-38 (1976). To satisfy the Article III standing
requirement, a plaintiff must allege: (1) injury in fact, meaning an invasion of a legally
protected interest that is concrete and particularized, actual or imminent, and not conjectural
or hypothetical; (2) a causal connection between the injury and the conduct complained of,
such that the injury is fairly traceable to the defendant’s actions; and (3) that a favorable
decision is likely to redress the injury. Tobin for Governor v. Ill. State Bd. of Elections, 268
F.3d 517, 527 (7th Cir. 2001). The prudential function of the standing requirement enables
a court to exercise some discretion in determining whether a claim is appropriate for judicial
resolution. See Valley Forge Christian Coll. v. Am. United for Separation of Church & State,
454 U.S. 464, 474-75 (1982) (discussing prudential considerations). “When a court refuses
4Although courts have sometimes said that Rule 23 also implicitly requires that a plaintiff establish that she is a member of the class, it is now settled that Rule 23 does not contain any separate membership in the class requirement. Alba Conte and Herbert Newberg, Newberg on Class Actions § 2:10 (4th ed. 2002). “Once standing to raise an issue common to a class has been established by the plaintiff, any supposed test of membership in the class is automatically satisfied, and whether the plaintiff should be permitted to maintain a class action and whether in fact the issues are common to a class depend on the application of Rule 23 criteria.” Id.; see also Arkansas Ed. Ass’n. v. Board of Ed. of Portland, Ark. School Dist., 446 F.2d 763, 766 (8th Cir. 1971) (stating that if a class representative has standing to sue and is a real party in interest under Fed. R. Civ. P. 17(a), it need not meet any further requirement of class membership).
-3Case 2:04-cv-00193-LA Filed 10/13/06 Page 3 of 10 Document 125

to find prudential standing, it, in effect, refuses to infer a cause of action from common or statutory law.” William J. Fletcher, The Structure of Standing, 98 Yale L. J. 221, 252 (1988).
I previously determined that plaintiffs had established standing in the constitutional sense. I concluded that plaintiffs had alleged a real and immediate threat of injury, namely, being transferred out of their homes, that such threat was traceable to defendants’ alleged inadequate compensation of Family Care providers, and that the relief sought (a declaration that such compensation was unlawful and an injunction against its continuation) would redress the claimed injury. Defendants do not ask me to revisit that determination. Rather, they argue that in addition to establishing that plaintiffs have standing as individuals, plaintiffs must establish that members of the putative class have standing and they have not done so.
I disagree with defendants’ contention that class action plaintiffs must establish that unnamed class members have standing. In a class action, the unnamed class members are “passive” in contrast to the named plaintiff, who actively prosecutes the litigation on their behalf. Conte & Newberg, supra, at § 2.7 (citing American Pipe & Const. Co. v. Utah, 414 U.S. 538, 550-51 (1974)). And while standing analysis is concerned with whether the named plaintiff is properly before the court, the represented class members are not only passive but also not before the court. Id.; see also F. & H.R. Farman-Farmaian Consulting Eng’rs Firm v. Harza Eng’g Co., 882 F.2d 281, 284 (7th Cir. 1989) (stating that in a class action the relevant citizenship for diversity purposes is that of the named plaintiff rather than that of the persons on whose behalf he is suing). Moreover, to require a plaintiff to show that every class member’s claim presents an actual controversy would place a formidable, if not insurmountable, threshold burden on the parties and the court. Since by definition the joinder of class members is impracticable, to require proof of the existence of individualized “cases”
-4Case 2:04-cv-00193-LA Filed 10/13/06 Page 4 of 10 Document 125

would in essence be treating the class members as parties. Mary Kay Kane, Standing, Mootness & Federal Rule 23 – Balancing Perspectives, 26 Buffalo L. Rev. 83, 96 (1976-77).
In a class action, the appropriate question with respect to unnamed class members is not whether they have standing to sue but whether the named plaintiff may assert their rights. Although this question implicates the prudential function of the standing requirement, it finds legislative expression in the requirements of Rule 23 and is therefore a Rule 23 question, rather than one of standing.5 Thus, a federal court addressing a request for class certification should not ask whether absent class members have standing but whether, in light of the policies and requirements of Rule 23, it should authorize the plaintiff to represent the class members. Kane, supra, at 97; see also Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 422-23 (6th Cir. 1998) (stating that once the class representative has established individual standing, whether he will be able to represent the putative class depends solely on whether he can satisfy the Rule 23 criteria and that no additional standing requirement exists); Hassine v. Jeffes, 846 F.2d 169, 175 (3rd Cir. 1988) (noting the district court’s erroneous use of the term “standing”); Rozema, 174 F.R.D. at 444 (stating that although a court should not certify a class unless claims of class representative are typical of those of the class, a court should not conduct a separate inquiry into whether individual members of the class have standing); Coleman v. Cannon Oil Co., 141 F.R.D. 516, 522-24 (M.D. Ala. 1992) (rejecting an argument that in determining whether to certify a class a court should inquire whether members of plaintiff class have standing).
Defendants cite several cases in support of their argument that unnamed class members must have standing. However, the cases they cite do not persuade, but rather
5See Ortiz, 527 U.S. at 831 (referring to the application of Rule 23 requirements to class representatives as “statutory standing”).
-5Case 2:04-cv-00193-LA Filed 10/13/06 Page 5 of 10 Document 125

appear to be examples of courts’ “uncritical reliance . . . on standing-related concepts in attempts to articulate the limits of the Rule 23 qualifications.” Conte & Newberg, supra, at § 2.7. Some merely assert without analysis that class members must have standing. Loeb Indus. v. Sumitomo Corp.(In re Copper Antitrust Litig.), 196 F.R.D. 348, 353 (W.D. Wis. 2000); Clay v. American Tobacco Co., 188 F.R.D. 483, 490 (S.D. Ill. 1999). Others discuss the standing of class representatives. Harriston v. Chicago Tribune Co., 992 F.2d 697, 703 (7th Cir. 1993); Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 216 (1974). Yet another is primarily concerned with the requirement that a plaintiff adequately define the class. Adashunas v. Negley, 626 F.2d 600, 604 (7th Cir. 1980). A recent case not cited by defendants states that unnamed class members must have standing but then confusingly applies what appears to be a very relaxed standing requirement. Denney v. Deutsche Bank, AG, 443 F.3d 253, 263-64 (2d Cir. 2006). I find this approach analytically muddled. B. Rule 23
I first discuss defendants’ argument that plaintiffs do not satisfy the implicit requirement of Rule 23 that they define an ascertainable class. A plaintiff’s definition of a proposed class must be precise enough to enable the court to determine whether at any given time a particular individual is or is not a member of the class. See Alliance to End Represssion v. Rockford, 565 F.2d 975, 977 (7th Cir. 1977). A court must be able to resolve the question of an individual’s membership by reference to objective criteria. Elliot v. ITT Corp., 150 F.R.D. 569, 574 (N.D. Ill. 1992). However, when a plaintiff attempts to certify a class under Rule 23(b)(2) for the purpose of seeking injunctive or declaratory relief, a precise class definition is less critical. See Battle v. Commonwealth of Pa., 629 F.2d 269, 271 n.1 (3rd Cir. 1980). The fact that a class includes persons who will become members in the future does not
-6Case 2:04-cv-00193-LA Filed 10/13/06 Page 6 of 10 Document 125

render it impermissibly indefinite. Probe v. State Teacher’s Ret. Sys., 780 F.2d 776, 780 (9th Cir. 1986). Plaintiffs seek certification of a class consisting of disabled Milwaukee County residents who are now or will in the future be eligible to reside in a Family Care AFH or CBRF. This definition is relatively precise and will enable me to determine whether at any given time a particular individual is a member of the class. Thus, plaintiffs’ definition is sufficient.
I turn next to the Rule 23(a) requirements. 1. Numerosity Rule 23(a)(1) requires that potential class members be “so numerous that joinder of all members is impracticable.” To satisfy this requirement, a plaintiff need only show that joinder would be difficult or inconvenient. Robidoux v. Celani, 987 F.2d 931, 935 (2nd Cir. 1993). A plaintiff will generally meet the requirement by showing that the putative class consists of 40 or more. Clarke v. Ford Motor Co., 220 F.R.D. 568, 578 (E.D. Wis. 2004). In the present case, the parties agree that Family Care serves about 5,800 disabled individuals in Milwaukee, about 1,080 of whom reside in an AFH or CBRF. The parties further agree that Family Care will serve additional individuals in the future, some of whom will reside in AFHs or CBRFs. Thus, plaintiffs establish that the proposed class meets the numerosity requirement. 2. Commonality Rule 23(a)(2) requires that there be “questions of law or fact common to the class.” Generally, the presence of a single common legal or factual question is sufficient. Clarke, 220 F.R.D. at 579 (stating that the commonality requirement is not demanding because it may be satisfied by a single common issue). Rule 23(a)(2) generally looks to whether the defendants’ conduct is common to class members, rather than to whether the result of the conduct is uniform among class members. Rosario, 963 F.2d at 1018. In the present case, plaintiffs
-7Case 2:04-cv-00193-LA Filed 10/13/06 Page 7 of 10 Document 125

contend that defendants’ policies concerning the compensation of Family Care providers to Milwaukee County enrollees violates the ADA and RA. This is a question of law that is common to the class. Thus, plaintiffs satisfy the commonality requirement.
3. Typicality Rule 23(a)(3) requires that the claims of the class representative be “typical of the claims . . . of the class.” Typicality does not require a complete identity of claims. Clarke, 220 F.R.D. at 579 (stating that typicality does not require that the named plaintiff be in the same position as every member of the class). Rather, the critical inquiry is whether the class representative’s claims have the same essential characteristics as those of the putative class. Id. If the claims arise from a similar course of conduct and share the same legal theory, factual differences will not defeat typicality. Since the claims only need to share the same essential characteristics and need not be identical, the typicality requirement is not highly demanding. Id. In the present case, plaintiffs’ claims and those of members of the putative class relate to the same conduct by defendants and are based on the same legal theory. Further, as to each aggrieved class member, plaintiffs request the same relief. Defendants argue that plaintiffs do not establish typicality because most members of the putative class do not presently live in an AFB or CBRF. However, this factual difference does not defeat typicality, as these class members are or will be eligible to live in an AFB or CBRF and thus stand to be injured by any violations of the ADA or RA. Defendants also argue that plaintiffs do not establish typicality because HIL is the only provider who has notified defendants of its intent to withdraw from Family Care. However, this factual difference also does not defeat typicality because plaintiffs present evidence indicating that, in the absence of relief, class members may be at risk of being involuntarily transferred in the future.
-8Case 2:04-cv-00193-LA Filed 10/13/06 Page 8 of 10 Document 125

4. Adequacy of Representation Rule 23(a)(4) requires that the named plaintiff adequately represent the proposed class. In determining whether a plaintiff will provide adequate representation, courts consider the adequacy of the class representative and of class counsel. Retired Chicago Police Ass’n v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993). The interest of the representative must not conflict with those of the class and class counsel must be qualified. In the present case, defendants concede that class counsel is qualified but contend that the named plaintiffs will not adequately represent the class because they have been adjudged incompetent and are closely aligned with service providers, and because their suit would have a negative effect on Family Care as a whole. However, defendants present nothing supporting their suggestion that the guardians of the named plaintiffs cannot prosecute the present action for the benefit of the class. And the fact that the suit may benefit Family Care providers does not mean that it will not also benefit class members. Additionally, while plaintiffs’ suit might force defendants to make changes to Family Care affecting participants outside of the class, such changes would necessarily benefit class members. Finally, that plaintiffs sue on behalf of a putative class of disabled individuals, rather than merely as HIL residents seeking additional funding for that provider, suggests a commitment to the class as a whole. I turn next to Rule 23(b). In the present case, plaintiffs proceed under Rule 23(b)(2), which authorizes certification if “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.” To obtain certification under Rule 23(b)(2), the defendant’s conduct need not be directed to or damage every member of the class. See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 58-59 (3rd Cir. 1994). Further, where a plaintiff seeks primarily injunctive relief, the Rule 23(b)(2)
-9Case 2:04-cv-00193-LA Filed 10/13/06 Page 9 of 10 Document 125

requirement is almost automatically satisfied. See Weiss v. York Hospital, 745 F.2d 786, 811 (3rd Cir. 1984). In the present case, defendants’ alleged violations of the ADA and RA would affect the class and declaratory and injunctive relief would be an appropriate remedy. As such, I conclude that class certification under Rule 23(b)(2) is proper.
III. CONCLUSION Thus, I will grant plaintiff’s motion to certify a class consisting of disabled Milwaukee County residents who are now or will in the future be eligible to reside in a Family Care AFH or CBRF. However, I will continue to monitor whether certification is proper, whether the definition of the class is appropriate, and what is required to protect the rights of absentees. See Kuehner v. Heckler, 778 F.2d 152, 163 (3rd Cir. 1985) (indicating that court must monitor its own decisions relating to class action status); see also In re “Agent Orange” Prod. Liab. Litig., 996 F.2d 1425, 1438 (2nd Cir. 1993) (discussing court’s continuing duty to protect interests of absentees). These duties are particularly important where as here the class has been certified under Rule 23(b)(2). See Lemon v. Int’l Union of Operating Eng'rs. Local No. 139, AFL-CIO, 216 F.3d 577, 582 (7th Cir. 2000); Jefferson v. Ingersoll Intern. Inc., 195 F.3d 894, 899 (7th Cir. 1999). Therefore, IT IS ORDERED that plaintiff’s motion for class certification is GRANTED. Dated at Milwaukee, Wisconsin, this 13th day of October, 2006.
s/Lynn Adelman LYNN ADELMAN U.S. District Judge
-10Case 2:04-cv-00193-LA Filed 10/13/06 Page 10 of 10 Document 125

 
 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN

JOAN BZDAWKA, SANDRA ERLICHMAN AND MARILYN BERDIKOFF,

CLASS ACTION

Plaintiffs,

v.

MILWAUKEE COUNTY, WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES, AND KEVIN HAYDEN, Secretary for Wisconsin Department of Health and Family Services,

CIVIL ACTION NO.04-C-0193

Defendants.

SETTLEMENT AGREEMENT

WHEREAS, Plaintiffs initiated this lawsuit by complaint filed January 28, 2004, in Milwaukee County Circuit Court Case No. 04-CV-0862 seeking declaratory and injunctive relief against Milwaukee County (the "County Defendants"); and
WHEREAS, the County Defendants removed Milwaukee County Circuit Court Case No. 04-CV-0862 to federal court by notice of removal filed February 25, 2004; and
WHEREAS, Plaintiffs joined the Wisconsin Department of Health and Family Services ("DHFS") and the predecessor of Wisconsin Department of Health and Family Services Secretary Kevin Hayden (collectively, the "State Defendants" and, together with the County Defendants, "Defendants") to this lawsuit by amended complaint filed April 13, 2004; and
WHEREAS, Plaintiffs subsequently sought and obtained permission to file their second amended complaint (filed April 30, 2004), third amended complaint (filed August 19, 2004), and fourth amended complaint (filed March 30, 2005); and
WHEREAS, the Court, in a Decision and Order filed February 7, 2006, has partially granted and partially denied the Defendants' motions to dismiss and, in an Order filed AprilS, 2006, has denied the State Defendants' motion to certify the Court's February 7, 2006, ruling to include certification to pursue an interlocutory appeal; and

Case 2:04-cv-00193-LA Filed 10/19/07 Page 1 of 13 Document 191

WHEREAS, as a result of the Court's prior rulings and amendments to the pleadings by the parties, this now is an action for prospective declaratory and injunctive relief under the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12101 et seq., and the Rehabilitation Act, 29 U.S.C. § 701 et seq., based on claims of discrimination on the basis of disability in the delivery of Family Care services; and
WHEREAS, Family Care is a federally-approved Wisconsin Medical Assistance ("MA") dual waiver program designed to deliver home and community-based services, rather than only nursing home care, to elderly and disabled persons who qualify for nursing home care via a managed care waiver, see 42 U.S.C. § I396n(b) and (c); and
WHEREAS, the Court on October 13, 2006, certified a plaintiff class consisting of disabled Milwaukee County residents who are now, or will in the future, be eligible to reside in a Family Care-funded community-based residential facility ("CBRF') or adult family home ("AFH"); and
WHEREAS, all parties now want to resolve this controversy on mutually satisfactory terms by compromising disputed claims and terminating this protracted litigation;
NOW THEREFORE, in consideration of the undertakings set forth herein and intending to be legally bound thereby, it is stipulated and agreed to by the Plaintiffs. the County Defendants and the State Defendants, represented by their undersigned counsel, that all of Plaintiffs' claims for relief which were or could have been asserted in this action shall be fully resolved on the following terms as set forth in this Settlement Agreement.
I. COMMITMENTS OF THE COUNTY DEFENDANTS.
A. The Milwaukee County Department on Aging ("MCDA") Care Management Organization ("CMO") will provide continuing education and training to care managers regarding when notices of intended adverse action must be sent pursuant to Wis. Admin. Code § HFS 10.52(3) and the 2007 Health and Community Supports Contract, at 53-55, by incorporating this information into the annual continuing education provided to care management staff. This infonnation will be incorporated into the annual continuing education materials provided to care management staff no later than 120 days following Court approval of this Settlement Agreement.
B. The MCDA CMO will make reasonable efforts to support enactment of that part of Governor Doyle's proposed 2007-09 budget that would provide funding for an independent advocacy program for Family Care participants.
C. The MCDA CMO will expand its CBRF provider audit review process to include actual salary and wages, staff turnover rates, occupancy, and further details regarding
-2-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 2 of 13 Document 191

cost and wage structures, beginning with the calendar year 2007 year-end audit reviews that will occur in 2008 and also including the calendar year 2008 year-end audit reviews that will occur in 2009.

D. No later than December 1, 2007, the MCDA CMO will refine its CBRF provider contracts to require providers to submit additional information to support the expanded audit review described in Section LC.

E. The MCDA CMO will conduct a bi-annual (every other year) review of audited financial statements and contracts provided by multifacility, corporate providers of 3-4 bed AFH services, including actual salary and wages, staff turnover rates, occupancy, and further details regarding cost and wage structures, for the calendar year 2008 year-end audit reviews that will occur in 2009.

F. No later than December 1,2007, the MCDA CMO will refine its provider contracts with multifacility, corporate providers of 3-4 bed AFH services to require those providers to submit additional information to support the audit review described in Section I.E.

G. The MCDA CMO will consider as a relevant factor data from provider surveys released on March 26, 2007, in connection with quality performance and provider rate setting for 2008 rates. The MCDA CMO will retain its current discretion to establish the rate-setting methodology and negotiate provider rates, subject to the superintending authority of DHFS.

H. The MCDA CMO will complete provider network adequacy reviews twice a year, beginning with one such review in calendar year 2007. The CMO will retain its current right to terminate contracts with providers whose costs are not competitive.

I.

In connection with provider rate-setting for calendar years 2008 and 2009, MCDA will

provide contracted providers for CBRF, AFH and day services the factors taken into

account in developing the rates offered those providers.

J.

In connection with provider rate setting for calendar years 2008 and 2009, MCDA will

post on its website a summary of the factors taken into account in developing the rates

offered subcontracted CBRF, AFH and day services providers.

K. The MCDA CMO will initiate a formal process of soliciting input from CBRF, AFH and day services providers that will be considered to the extent it is relevant in future rate setting, in connection with provider rate setting for calendar years 2008 and 2009.

L. The MCDA CMO will, at least once annually in calendar years 2007, 2008 and 2009, invite all Milwaukee County municipalities to provide input to address the issue of affordable CBRF, AFH and other housing for Milwaukee County Family Care

-3-

Case 2:04-cv-00193-LA Filed 10/19/07 Page 3 of 13 Document 191

participants; identify impediments; and encourage the development of such housing throughout Milwaukee County.
M. As part of its semi-annual review of provider network adequacy, as described in Section I.H. above, the MCDA CMO will conduct needs assessments of future Family Care participants and where they are living in Milwaukee County.
N. The MCDA CMO will disseminate the results of its provider network adequacy reviews at least once annually in calendar years 2007, 2008 and 2009 to the development and/or land use planning departments of all Milwaukee County municipalities.
O. No later than 120 days following Court approval of this Settlement Agreement, the MCDA CMO will collaborate with the MCDA Resource Center to make available to all nursing homes located in Milwaukee County materials explaining the alternate residential options available through the Family Care program and providing contact information for the Milwaukee County Aging Resource Center for persons who wish to discuss other options available' to them.
II. COMMITMENTS OF THE STATE DEFENDANTS.
A. No later than 60 days following expiration of the 30 day review and comment period described in Section II.B., DHFS will issue a contract interpretation memo reiterating that: (1) a Family Care participant, pursuant to Wis. Stat. § 46.287(2)(b), may contest the choice of residential or day services provider proposed by the CMO by pursuing Family Care grievance procedures or a fair hearing; and (2) that the standard to be applied in resolving any such disputes is whether the proposed plan wOllld provide care, treatment or supports that are insufficient to meet the participant's needs or outcomes, or are provided in a setting that is unnecessarily restrictive or less integrated than is appropriate to the participant's needs. The contract interpretation memo will state the importance of following the notice procedures required by Wis. Admin. Code § HFS 10.52(3) and the 2007 Health and Community Supports Contract, at 53-55.
B. No later than 120 days following Court approval of this Settlement Agreement, DHFS will provide a draft of the contract interpretation memo discussed in Section II.A., to Plaintiffs' counsel, the County Defendants' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin for review and comment before finalization. DHFS will accept written comments on the draft contract interpretation memo for a period of 30 days beginning on the date the draft contract interpretation memo is transmitted to the entities specified in this paragraph. The State Defendants will retain sole discretion to determine final content of the contract interpretation memo, and to provide drafts to any other person or organization for review and comment before finalization.
-4-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 4 of 13 Document 191

C. Within 15 business days of issuance as described in Sections II.A. and B., DHFS will post the final contract interpretation memo on its Family Care website.
D. No later than 60 days following expiration of the 30 day review and comment period described in Section II.E., DHFS will develop additional informational materials explaining the Resource Allocation Decision ("RAD") method used in the Family Care program to help participants identify personal outcomes after which a participant's care management team then works with the participant and/or the participant's authorized representatives to find the most cost-effective way of achieving those personal outcomes via a service plan that is both reasonable and effective. The RAD instructional materials will include an explanation that Family Care participants who enter CBRFs and AFHs are not and should not be automatically disqualified from participating in day programming services outside their residences, and that it is appropriate to use the RAD to determine whether the outcomes of individual Family Care participants who reside in CBRFs and AFHs can not be met without access to outside day programming services.
E. No later than 120 days following Court approval of this Settlement Agreement, DHFS will provide a draft of the RAD informational materials discussed in Section n.D., to Plaintiffs' counsel, the County Defendants' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin for review and comment before finalization. DHFS will accept written comments on the draft RAD informational materials for a period of 30 days beginning on the date the draft RAD informational materials are transmitted to the entities specified in this paragraph. The State Defendants will retain sole discretion to determine final content of the RAD informational materials, and to provide drafts to any other person or organization for review and comment before finalization.
F. Within 15 days of issuance as described in Sections II.D. and E., DHFS will post the final RAD informational materials discussed on its Family Care website.
G. At the same time as the final RAD informational materials are posted on DHFS' Family Care website as described in Section II.F., DHFS also will provide the final RAD informational materials discussed in Sections II.D. and II.E. to Family Care grievance bodies (CMO Grievance and Appeal Hearing Boards or Committees, DHFS' contracted MetaStar review team, and DHFS' internal contract monitoring team) and Division of Hearings and Appeals administrative law judges assigned to conduct Family Care hearings.
H. If the MCDA CMO's 2008 annual certification application to DHFS includes submission of any revised form notices required by Wis. Admin. Code § HFS I 0.52(3)(b)7. and 8., DHFS will, before certifying the MCDA CMO for 2008, provide copies of any such revised form notices to Plaintiffs' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin for
Case 2:04-cv-00193-LA Filed 10/19/07 Page 5 of 13 Document 191

review and comment. DHFS will allow Plaintiffs' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin a minimum time period of ten business days to submit comments on any revised form notices provided to them for review. The State Defendants will retain sole discretion to determine whether or not to certify the MCDA CMO for 2008, and to determine whether to require the MCDA CMO to make 'any changes in the MCDA CMO's revised form notices.
I. If the independent advocacy program to be funded pursuant to Governor Doyle's 2007-09 budget proposal is established, DHFS will include in any contract or other document governing the independent advocacy program a requirement for semi-annual reporting by the entity operating the independent advocacy program of statistical information regarding referrals received by the independent advocacy program.
J. If the independent advocacy program to be funded pursuant to Governor Doyle's 2007-09 budget proposal is established, DHFS will post statistical reports received within two years from the date the Court approves this Settlement Agreement from the independent advocacy program as described in Section ILL on DHFS' Family Care website within fifteen business days of receipt by DHFS of those reports.
K. No later than 120 days following Court approval of this Settlement Agreement, DHFS will amend its contract with its External Quality Review Organization, currently MetaStar, to require semi-annual statistical reporting regarding referrals to the state's appeals and grievances program, both at DHFS and at the Division of Hearings and Appeals; referral outcomes; requests for fair hearings; and fair hearings conducted beginning with the January - June 2008 reporting period.
L. Within 30 days of receipt, for a period of two years beginning on the date the Court approves this Settlement Agreement, DHFS will post the statistical reports described in Section ILK. on the DHFS Family Care website.
M. The State Defendants will continue to support creation of the independent advocacy program for Family Care participants for which Governor Doyle included funding in his proposed 2007-09 budget and will issue a request for proposals and take other necessary steps to implement the program promptly upon passage by the Legislature, if that funding is included in the 2007-09 budget as enacted.
N. DHFS will work with the MCDA CMO to enhance openness ofthe MCDAJprovider rate-setting process for rate years 2008 and 2009 by exploring alternate rate-setting methods for CBRF and AFH providers.
O. No later than 90 days following Court approval of this Settlement Agreement, DHFS will provide information to CBRF and AFH members of the MCDA CMO' s provider
-6-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 6 of 13 Document 191

network about locations on DHFS' Family Care web site of the webcast describing the capitated rate setting process and the Family Care actuarial rate reports describing rate development methodology.
P. No later than 60 days following expiration of the review and comment period described in Section II.Q., DHFS will issue a contract interpretation memo reiterating the importance of appropriate and adequate pre-transfer planning so as to identify and minimize potential effects on a Family Care participant transferring from one residential setting to another.
Q. No later than 120 days following Court approval of this Settlement Agreement, DHFS will provide a draft of the contract interpretation memo discussed in Section II.P., to Plaintiffs' counsel, the County Defendants' counsel, the Legal Aid Society of Milwaukee, Legal Action of Wisconsin and Disability Rights Wisconsin for review and comment before finalization. DHFS will accept written comments on the draft contract interpretation memo for 30 days commencing with the date the draft contract interpretation memo is transmitted to the entities specified in this paragraph. The State Defendants will retain sole discretion to determine final content of the contract interpretation memo, and to provide drafts to any other person or organization for review and comment before finalization.
R. Within 15 days of issuance as described in Sections II.P. and Q., DHFS will post the final contract interpretation memo discussed in Sections ILP. and II.Q. on its Family Care website.
S. DHFS will provide technical assistance to MCDA and its existing Placement Team in identifying and implementing additional practices to enhance planning for safe and effective residential moves for Family Care participants, and in assessing every move before it occurs to identify potential harmful effects on the participant and to develop strategies for minimizing those effects. DHFS will provide this technical assistance to MCDA and its existing Placement Team by preparing technical assistance materials and convening, no later than July 1, 2008, a meeting of DHFS and MCDA staff to discuss these materials and how MCDA is incorporating or might incorporate strategies identified in its practices.
T. DHFS will assign DHFS developmental disabilities staff to conduct a one-time review of Milwaukee County Watts review! procedures and pursue a~y corrective action, to be determined by DHFS, as determined appropriate by DHFS in its sole discretion and enforceable only by DHFS in its sole discretion. The one-time review will commence no later than July 1, 2008.
U. Within 30 days of completion of the final report for the review described in Section ILT., DHFS will provide plaintiffs' counsel with a copy of the final report.
IStale ex reI. Watts v. Combil1ed Comm. Svcs.• 122 Wis. 2d 65.362 N.W.2d 104 (1985). -7-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 7 of 13 Document 191

V. Within 30 days of finalization of any corrective action plan described in Section II.T, DHFS will provide plaintiffs' counsel with copies of any final corrective action plan.
W. Within 30 days of receipt, DHFS will provide plaintiffs' counsel with copies of any compliance reports submitted by Milwaukee County for a period of two years following finalization of any corrective action plan implemented as a result of the one-time review of Milwaukee County Watts procedures discussed in Section ILT.
X. No later than 120 days following Court approval of this Settlement Agreement, DHFS will amend the DHFS/MCDA Family Care contract to include language that MCDA will provide services in the most integrated level ofresidential setting consistent with the desired outcomes, preferences and identified needs of a participant, and that is cost-effective when compared to alternative services that could meet the same needs and achieve similar outcomes.
Y. No later than 120 days fo]]owing Court approval of this Settlement Agreement, DHFS will direct its External Quality Review Organization in writing to include in the care plan review process consideration of whether a Family Care participant would be more appropriately placed in a less restrictive/more integrated residence, and of whether the individual would prefer to move to a less restrictive/more integrated facility.
III. ENFORCEMENT.
A. If Plaintiffs determine, based upon their good faith review of available evidence, that either the County Defendants or the State Defendants are out of compliance with any provision of this Agreement, Plaintiffs will notify all Defendants in writing accompanied by supporting documentation.
B. The parties shall engage in a good faith negotiation to reach agreement within 30 days of the receipt by the Defendants of any documentation of alleged noncompliance and any necessary corrective actions, including a time period for implementation of such corrective actions, and shall make all reasonable efforts to reach agreement. This 30 day time period can be extended for any period of time by mutual agreement of all parties, or in the absence of agreement, can be extended once for one 30 day period by each party.
C. If no agreement on the issue of noncompliance or necessary corrective action is reached within the timeframe established in Section III.B., the plaintiffs may file a remedial motion with the Court within 30 days after expiration of the timeframe established in Section III.B.
-8-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 8 of 13 Document 191

D. The Court shall retain ultimate jurisdiction to enforce this Agreement until the termination date specified in Section IV.D.
E. All of the provisions of this Agreement are separately and independently enforceable, except where the Agreement provides that an element or provision is not enforceable.
IV. MISCELLANEOUS.
A. The parties agree that Family Care participants who enter CBRFs and AFHs are not and should not automatically be disqualified from participating in day programming services outside their residences. The parties further agree that it is appropriate to use the RAD to detennine whether the outcomes of Family Care participants who reside in CBRFs and AFHs can not be met without access to outside day programming services.
B. Time shall be computed under sections 990.001 (4) and 801.15(1)(a) of the Wisconsin Statutes.
C. Forthwith upon the Court's approval of the Settlement Agreement, Milwaukee County will cause to be transmitted to plaintiffs' attorneys the sum of Sixty-five Thousand Dollars ($65,000.00) and the State of Wisconsin will cause to be transmitted to plaintiffs' attorneys the additional sum of Sixty-five Thousand Dollars ($65,000.00) in full and final settlement of any and all claims plaintiffs may have for attorneys' fees and costs, including any costs incurred by plaintiffs for the services of expert witnesses, arising from this litigation through the date of the Court's order approving the Settlement Agreement following hearing pursuant to Fed. R. Civ. P. 23(e)(1)C).
D. Except for provisions of this Settlement Agreement for which some other compliance date or time period is specified, the provisions of this Settlement Agreement will terminate and cease to be enforceable on the date two years after the date of the Court's order approving the Settlement Agreement following hearing pursuant to Fed. R. Civ. P. 23(e)(1)(C).
E. This Agreement is a full, final and complete compromise and settlement of claims, actual, doubtful or disputed, as to questions of liability, damage and remedy for the claims raised in this case or that could have been raised in this case, and is not to be construed as an admission ofliability by the County Defendants, the State Defendants, their respective agents, their respective officers or their respective employees.
-9-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 9 of 13 Document 191

FOR PLAINTIFFS:

'Jhl.y Date:

:1~ 2«17

Pledl Law Office
1110 North Old World Third Street, Suite 670
Milwaukee, WI 53203
Telephone: (414) 225-8999

ROBERT THEINE PLEDL State Bar #1007710

Date:~, <1,1...(X;;>i

SARAH JANE SOMERS North Carolina State Bar #33165

National Health Law Program, Inc.
211 North Columbia Street Chapel HiU,NC 27514 Telephone: (919) 968-6771

~AJANE PERKINS
North Carolina State Bar #9993
Attorneys for Plaintiffs

-10-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 10 of 13 Document 191

FOR COUNTY DEFENDANTS:
Date: _ _8'.:..-/,_1_(}...:-7_ __
Milwaukee County Courthouse 901 North 9th Street, #303 Milwaukee, WI 53233 Fax: (414) 223-1249 Telephone: (414) 278-4302 Email: jjorgensen@milwcnty.com

Principal Assistant Corporation Counsel State Bar#1017484
Attorney for Defendant Milwaukee County

-11-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 11 of 13 Document 191

FOR STATE DEFENDANTS:

J.B. VAN HOLLEN Attorney General·

Assistant Attorney General State Bar #1013639
MARY .BURKE Assistant Attorney General State Bar #1015694

Wisconsin Department of Justice Post Office Box 7857 Madison, WI 53707-7857 Fax: (608) 267-2223 Telephone: (608) 266-1780 (Flanagan) Email: flanaganmm@doj.state.wi.us Telephone: (608) 266-0323 (Burke) Email: burkeme@doj.state.wi.us Telephone: (608) 266-3076 (Dudley) Email: dudleydd@doj.state.wLus

Assistant Attorney State Bar # 1062812
Attorneys for Defendants Wisconsin Department of Health and Family Services and Kevin Hayden

-12Case 2:04-cv-00193-LA Filed 10/19/07 Page 12 of 13 Document 191

SO ORDERED:
TUHniEtedHOStNatOesRDAiBstrEict~!~~ ADELMAN

:::-:-::(J_J_,_I ~ ~7
DATE

-13-
Case 2:04-cv-00193-LA Filed 10/19/07 Page 13 of 13 Document 191

 
 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________________

GERALD N., et al.,

Plaintiffs,

v.

Case No. 04-C-0193

MILWAUKEE COUNTY, WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES, and HELENE NELSON
Defendants. ______________________________________________________________________________
MILWAUKEE COUNTY’S ANSWER TO THIRD AMENDED COMPLAINT ______________________________________________________________________________

Defendant Milwaukee County, by the Office of the Corporation Counsel, for an answer to the Third Amended Complaint, admits, denies, and shows to the court as follows:
1. Answering paragraph 1, admits that the allegations of that paragraph accurately characterize the plaintiffs claims, but denies that the Family Care program as administered by the defendants operates in violation of the cited statutes and constitutional provisio ns.
2. Answering paragraph 2, admits that the plaintiffs base their claims on the cited statutes, but denies that any act or omission of defendant Milwaukee County operates to deny the plaintiffs any rights under those statutes.
3. Admits. 4. Admits.

5. Answering paragraph 5, admits those allegations pertaining to plaintiff Gerald Nelson’s residence, admits that was adjudicated incompetent and has a guardian, and lacks information sufficient to form a belief as to the truth of the other allegations in this paragraph.
6. Answering paragraph 6, admits those allegations pertaining to plaintiff Joan Bzdawka’s residence, admits that she was adjudicated incompetent and has a guardian, and lacks knowledge or information sufficient to form a belief as to t he truth of the other allegations in this paragraph.
7. Answering paragraph 7, admits those allegations pertaining to plaintiff Sandra Ehrlichman’s residence, admits that she was adjudicated incompetent and has a guardian, and lacks knowledge or informa tion sufficient to form a belief as to the truth of the other allegations in this paragraph.
8. Answering paragraph 8, admits those allegations pertaining to plaintiff Marilyn Berdikoff’s resident, admits that she was adjudicated incompetent and has a g uardian, and lacks knowledge or information sufficient to form a belief as to the truth of the other allegations in this paragraph.
9. Answering paragraph 9, admits, upon information and belief, those allegations pertaining to plaintiff Lenore Czarnicki’s residence, and lacks knowledge or information sufficient to form a belief as to the truth of the other allegations in this paragraph.
10. Answering paragraph 10, admits, upon information and belief, those allegations pertaining to plaintiff John Gorton’s residence, and lacks knowledge or information sufficient to form a belief as to the truth of the other allegations in this paragraph.
11. Answering paragraph 11, admits, upon information and belief those allegations pertaining to plaintiff Classie Marcilis’ residence and that he was adjudicated incompetent and
2

has a guardian, and lacks knowledge or information sufficient to form a belief as to the truth of the other allegations in this paragraph.
12. Answering paragraph 12, admits that Costance Ewig’s address is W4021 Takodah Drive in Fond du Lac Wisconsin, and affirmatively alleges upon information and belief that that Constance Ewig’s stated intention is to remain a resident of Fond du Lac and that she is aggressively resisting any effort to move her back to Milwaukee County. Constance Ewig has not been adjudicated incompetent. Therefore, there is substantial doubt whether she is a resident of Milwaukee County.
13. Admits 14. Admits. 15. Admits. 16. Admits. 17. Admits. 18. Answering paragraph 17, admits that the trend in recent years has been to “de institutionalize” disabled persons as alleged in this paragraph, but lacks knowledge or information sufficient to form a belief as the truth of the other allegations in this paragraph. 19. Admits. 20. Admits. 21. Admits. 22. Admits. 23. Admits. 24. Answering paragraph 24, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph.
3

25. Admits. 26. Admits. 27. Admits. 28. Admits. 29. Admits. 30. Admits. 31.-33. Answering paragraphs 31 through 34, admits that there is a conventional belief that that the “least restrictive environment” will be found in the smallest residential setting which is consistent with an individual’s needs, as alleged in these paragraphs, affirmatively alleges that the least restrictive, most integrated setting for an individual disabled person will be based on several factors besides the size of the individual’s residence, and lacks knowledge or information sufficient to form a belief as whether “most” disabled persons and/or their legal representatives prefer a non- institutional placement. 34. Answering paragraph 34, admits that Wisconsin counties have certain duties with respect to mentally ill and developmentally disabled persons under the cited statutes, and affirmatively alleges that those duties are subject to fiscal and other limitations as set forth in those statutes. 35. Answering paragraph 35, admits that persons receiving services for mental illness and developmental disabilities have certain “patient rights” as specified in Wis. Stat. s. 51.61. 36. Admits. 37. Admits. 38. Admits.
4

39. Answering paragraph 39, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph.
40. Answering paragraph 40, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph.
41. Answering paragraph 41, admits that DSD has allowed rate increases to certain service providers on some occasions, but denies that DSD has a policy or practice of allowing “cost of living” rate increases to service providers and lacks knowledge or information sufficient to form a belief as to truth of the allega tions of this paragraph with respect to the policies or practices of other counties.
42. Admits. 43. Admits. 44. Admits. 45. Admits 46. –53. Answering paragraphs 46 through 53, which relate to the Medicaid waiver (“1915(b) waiver”) pursuant to which the Family Care program has been established, admits that the Family Care program was established and is administered under the terms of such a waiver, but lacks knowledge or information sufficient to form a belief with respect to the specific conte nt (or absence of content) of that waiver as alleged in those paragraphs. 54. Answering paragraph 54, admits that DHFS solicited proposals, by means of an “RFP” process, from designated counties, to establish and administer Family Care programs, and offered contracts to them. 55. Answering paragraph 55, admits that Milwaukee County was under no legal obligation to submit a proposal to DHFS or to enter into a contract to establish and administer a
5

Family Care program, but affirmatively allege that Milwaukee County was motivated to do so by the fact that Family Care offered the prospect of eliminating the waiting lists which had previously existed and which resulted in approximately 2,200 persons not receiving services which might permit them to be supported in less restrictive, community-based placements.
56. Admits. 57. Answering paragraph 57, admits that DSD attempts to reach consensus clients and/or their legal agents with regard to their choices of residential and day program providers, but denies that those choices are unlimited and affirmatively alleges that those choices are generally limited to providers who are within the network of DSD -contracted providers and also may be limited by cost considerations in the case of providers deemed by DSD to be unreasonably expensive. 58. Denies. 59. Admits 60. Denies 61. Denies. 62. Denies 63. Answering paragraph 63, admits that providers have been permitted to request rate increases, and admits that rate increases have been allowed on some occasio ns, but denies that DSD has a policy or practice of allowing rate increases. 64. Admits. 65. Answering paragraph 65, admits that higher Family Care capitated rates would be consistent with the actual costs experienced by the MCDA CMO in serving eligi ble Family Care clients, but denies that the services provided by the MCDA CMO have been inadequate.
6

66. Answering paragraph 66, admits, upon information and belief, that a survey described in this paragraph was conducted, and affirmatively allege, upon information and belief, that the number of responders to the survey was very small and did not constitute a representative sample of the providers who were surveyed.
67. Denies. 68. Admits. 69. Admits. 70. Admits. 71. Admits. 72. Admits. 73. Admits. 74. Admits. 75. Answering paragraph 75, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 76. Answering paragraph 76, admits that HIL has attempted to obtain higher rates, despite the fact that HIL’s rates are already substantially higher than almost every other similar provider. 77. Admits. 78. Admits. 79. Admits. 80. Admits 81. Denies. 82. Denies.
7

83. Admits. 84. Admits. 85. Admits. 86. Admits. 87. Admits. 88. Admits. 89. Answering paragraph 89, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 90. Answering paragraph 90, admits that HIL has attempted to obtain higher rates, despite the fact t hat HIL’s rates are already substantially higher than almost every other similar provider, and admits that MCDA did not approve a cost of living rate increase. 91. Admits. 92. Denies. 93. Denies. 94. Admits. 95. Admits. 96. Admits. 97. Admits. 98. Admits. 99. Answering paragraph 99, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph.
8

100. Answering paragraph 100, admits that HIL has attempted to obtain higher rates, despite the fact that HIL’s rates are already substantially higher than almost every other similar provider, and admits that MCDA did not approve a cost of living rate increase.
101. Admits 102. Denies. 103. Denies. 104. Admits. 105. Admits. 106. Admits. 107. Admits. 108. Answering paragraph 108, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 109. Answering paragraph 109, admits that HIL has attempted to obtain higher rates, despite the fact that HIL’s rates are already substantially higher than almost every other similar provider, and admits that MCDA has not approved a cost of living rate increase. 110. Admits. 111. Denies. 112. Denies. 113. Admits. 113. Admits. 114. Admits. 115. Admits. 116. Admits, upon information and belief.
9

117. Answering paragraph 117, admits that Senior Residential Care requested a rate increase for 2003, and admits that MCDA declined to grant a rate increase.
118. Answering paragraph 118, upon information and belief denies that MCDA reduced rates paid to Senior Residential Care.
119. Answering paragraph 119, admits upon information and belief that the owner of Senior Residential Care has made such statements in at least one public forum, but l acks knowledge or information sufficient to form a belief as to the truth of those statements.
120. Answering paragraph 120, lacks knowledge or information sufficient to form a belief as to the truth of the statements in this paragraph.
121. Denies. 122. Denies. 123. Admits. 124. Admits. 125. Admits. 126. Answering paragraph 126, lacks knowledge or information sufficient to form a belief as to truth of the allegations in this paragraph. 127. Answering paragraph 127, admits upon information a nd belief that the owner of Senior Residential Care has made such statements in at least one public forum, but lacks knowledge or information sufficient to form a belief as to the truth of those statements. 128. Answering paragraph 128, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 129. Denies. 130. Denies.
10

131. Admits. 132. Admits. 133. Answering paragraph 133, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 134. Denies, and affirmatively alleges that the current daily rate paid to Dungarvin is $112.82 135. Answering paragraph 135, admits that the Family Care Program has undertaken or intends to undertake a re assessment of Classie Marcillis to ensure that he has a plan of care which is appropriate to his needs and which maximizes his functioning, but denies that the Family Care program has implemented any reduction in authorized services or funding for Mr. Marcilis and denies that the Family Care program has any intention to move Classie Marcillis to a more restrictive setting for reasons of cost or any other reason. 136. Answering paragraph 133, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 137. Admits, upon information and belief. 138. Denies. 139. Denies. 140. Admits. 141. Admits upon information and belief. 142. Admits. 143. Admits. 144. Answering paragraph 144, admits that Constance Ewig’s CBRF placement has been successful and more satisfactory to her than her previous placements because a CBRF is a more
11

appropriate placement for an individual with her needs, and denies that this satisfaction is necessarily attributable to her placement in Takodah House.
145. Answering paragraph 145, admits that Constance Ewig has express a preference to remain in her current placement.
146. Answering paragraph 146, admits that MCDA stated its intention not to fund CBRF services at Takotah House and to provide Constance Ewig an appropriate community placement in Milwaukee County within the network of CBRF providers under contract with the Family Care Program and which the Family Care Program is reasonably capable of supervising, affirmatively alleges that, in addition to those reasons, MCDA has well founded concerns about the quality of care and the safety of residents in Takodah House, and further affirmatively alleges that Constance Ewig is not subject to guardianship and protective place ment and may therefore reside wherever she chooses.
147. Admits. 148. Answering paragraph 148, admits that the ALJ did nor order MCDA to contract with Lifeline Services and Takodah House but denies that the ALJ upheld “the decision to move [Constance Ewig] to another CBRF” because there was no such decision to review. 149. Denies, and affirmatively alleges that the state court action is proceeding on an expedited schedule and that the order of the ALJ has been stayed pending disposition of the state court action. 150. Denies. 151. Denies. 152. Admits.
12

153. Answering paragraph 153, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph.
154. Answering paragraph 154, admits that Bert Sie gel is multiply disabled and requires substantial support and services to remain in a community placement, which support and services the Family Care program is currently funding or providing, but denies that he requires 24 hour per day “care”.
155. Answering paragraph 155, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph.
156. Admits. 157. Admits. 158. Denies. MCDA did undertake an reevaluation of Bert Siegel’s care plan of care, which yielded a recommendation to reduce authorization for certain services. However, those reductions were not implemented and were ultimately rescinded following Bert Siegel’s subsequent hospitalization. Bert Seigel’s care plan will probably be reevaluated aga in based upon his post- hospitalization condition and needs. Currently Bert Seigel’s sister is paid for 42 hours of supportive home care per week at the rate of $7.30 per hour plus $25 per night (generating total annual caregiver income of approximately $27,264). Additional Family Care services for Bert Seigel include two visits per day, seven days per week, by a home health aid, purchase by Family Care of an electric wheel chair with specialized adaptive seating and purchase by Family Care of a specialized bariatric bed with airflow mattress. 159. Answering paragraph 159, lack knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 160. Denies.
13

161. Denies. 162. Admits. 163. Answering paragraph 163, admits the truth of those allegations which describe Kathleen Johnson’s medical conditions but deny that she “requires around -the-clock assistance” 164. Answering paragraph 164, admits that in February, 2004, Kathleen Johnson was authorized for 38.5 ho urs per week of supportive home care and 28 hours per week of personal care services to be provided by her daughter, but affirmatively alleges that this level of care has not been authorized continuously nor is it necessarily representative of the level of authorized care in Kathleen Johnson’s case. Kathleen Johnson’s case has been subject to ongoing reevaluation and multiple grievances and appeals. 165. Admits 166. Answering paragraph 166, admits that Kathleen Johnson’s plan of care has been reevaluated from time to time but not necessarily as a consequence of the “March 1, 2004 memorandum and guidelines”. Currently, Kathleen Johnson’s daughter is not compensated for supportive home care on the basis of an hourly authorization. Rather, she is being co mpensated at a daily “live- in” rate of $74.55 per day, seven days per week (approximately $27,210 per year). 167. Answering paragraph 167, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 168. Denies 169. Denies. 170. Answering paragraph 170, admits that the plaintiffs seek to represent a class.
14

171. Answering paragraph 171, admits that approximately 5,200 Milwaukee County residents are currently enrolled in Family Care, and lacks knowl edge or information sufficient to form a belief as to how many other Milwaukee County residents, if any, would meet the eligibility standards for Family Care.
172. Admits. 173. Admits. 174. Admits. In approximately 250 to 300 cases, authorized fund ing for family-provided supportive home care has been reduced. 175. Admits. 176. Admits. 177. Answering paragraph 177, admits that the number of persons potentially affected by Family Care procedures is large, but denies that those persons constitute a properly certifiable class. 178. Admits. 179. Admits. 180. Denies. 181. Denies. 182. Answering paragraph 161, incorporates by reference the responses to paragraphs 1 through 181, as hereinabove set forth. 183. Admits. 184. Admits.
185. Admits
15

186. Answering paragraph 186, denies that the plaintiffs are served in a manner which constitutes actionable “discrimination” under the ADA, and therefore denies that additional “reasonable accommodation” is necessary, and affirmatively alleges that the Family Care program cannot be operated so as to accommodate all the stated desires and remedy all the complaints of the plaintiffs without a substantial modification to the nature of the program which would be unduly burdensome.
187. Denies. 188. Answering paragraph 166, incorporates by reference the responses to paragraphs 1 through 187, as hereinabove set forth. 189. Answering paragraph 189, admits that this paragraph contains generally accurate excerpts and/or paraphrases of portions of the regulations cited in this paragraph. 190. Answering paragraph 190, admits that this paragraph contains generally accurate excerpts and/or paraphrases of portions of the regulations cited in this paragraph. 191. Answering paragraph 191, denies that the plaintiffs are served in a manner which constitutes actionable “discrimination” under the ADA, and therefore denies that additional “reasonable accommodation” is necessary, and affirmatively alleges that the Family Care program cannot be operated so as to accommodate all the stated desires and remedy all the complaints of the plaintiffs without a substantial modification to the nature of the program which would be unduly burdensome. 192. Denies. 193. Answering paragraph 193, incorporates by reference t he responses to paragraphs 1 through 192, as hereinabove set forth. 194. Admits.
16

195. Answering paragraph 195, denies that the services being offered to the plaintiffs are not consistent with the most integrated settings reasonably appropriate to their needs, and therefore denies that additional “reasonable accommodation” is necessary, and affirmatively alleges that the Family Care program cannot be operated so as to accommodate all the stated desires and remedy all the complaints of the plaintiffs without a substantial modification to the nature of the program which would be unduly burdensome.
196. Answering paragraph 196, admits that the defendants are subject to the “integration mandate” of the ADA, but affirmatively alleges that defendants’ obligat ions under the integration mandate are limited to those services which can be reasonably accommodated, taking into account the resources available to the defendants and the needs of other disabled individuals.
197. Denies. 198. Answering paragraph 198, incorporates by reference the responses to paragraphs 1 through 197, as hereinabove set forth. 199. Admits. 200. Admits. 201. Admits. 202. Answering paragraph 202, denies that the plaintiffs are served in a manner which constitutes actionable discrimination under the Rehabilitation Act, and therefore denies that additional “reasonable accommodation” is necessary, and affirmatively alleges that the Family Care program cannot be operated so as to accommodate all the stated desires and remedy all the complaints of the plaintiffs without a substantial modification to the nature of the program which would be unduly burdensome. 203. Denies.
17

204. Answering paragraph 204, incorporates by reference the responses to paragraphs 1 through 203, as hereinabove set forth.
205. Admits. 206. Answering paragraph 206, denies that the plaintiffs are served in a manner which constitutes actionable discrimination under the Rehabilitation Act, and therefore denies that additional “reasonable accommodation” is neces sary, and affirmatively alleges that the Family Care program cannot be operated so as to accommodate all the stated desires and remedy all the complaints of the plaintiffs without a substantial modification to the nature of the program which would be unduly burdensome. 207. Denies. 208. Answering paragraph 208, incorporates by reference the responses to paragraphs 1 through 207, as hereinabove set forth. 209. Answering paragraph 209, admits that the defendants are subject to the “integration mandate” of the ADA, but affirmatively alleges that defendants’ obligations under the integration mandate are limited to those services which can be reasonably accommodated, taking into account the resources available to the defendants and the needs of other disabl ed individuals. 210. Answering paragraph 210, denies that the services being offered to the plaintiffs are not consistent with the most integrated settings reasonably appropriate to their needs, and therefore denies that additional “reasonable accommodat ion” is necessary, and affirmatively alleges that the Family Care program cannot be operated so as to accommodate all the stated desires and remedy all the complaints of the plaintiffs without a substantial modification to the nature of the program which would be unduly burdensome. 211. Denies.
18

212. Answering paragraph 212, incorporates by reference the responses to paragraphs 1 through 211, as hereinabove set forth.
213. Admits. 214. Denies. 215. Answering paragraph 215, affirmatively alleges tha t the paragraph consists of legal conclusions which summarize the views of plaintiffs’ counsel with respect to a complex area of constitutional jurisprudence, and therefore defendant Milwaukee County cannot admit or deny the allegations of that paragraph, and denies the apparent implication of those allegations that residents of a community based residential facility have a constitutionally protected interest in the integrity of their relationship with each other or with their caregivers that is any way analogous to the relationships of a biological family, and denies that residents of a community based residential facility enjoy any heightened First Amendment rights which operate to guarantee perpetual funding of a particular desired placement. 216. Answering paragraph 196, affirmatively alleges that the paragraph consists of legal conclusions which summarize the views of plaintiffs’ counsel with respect to a complex area of constitutional jurisprudence, and therefore defendant Milwaukee County cannot admi t or deny the allegations of that paragraph, and denies that the plaintiffs’ status as disabled persons gives rise to any heightened “liberty interest” which supports their claims in this action. 217. Denies. 218. Denies. 219. Denies.
19

220. Answering paragraph 220, incorporates the responses to paragraphs 1 through 219, as hereinabove set forth.
221. Admits 222. Answering paragraph 222, admits that the provision of 42 U.S.C. s. 1396 quoted in this paragraph identifies one of the stated purposes of the federal Title XIX appropriation. 223. Admits. 224. Admits. 225. Answering paragraph 225, lacks knowledge or information sufficient to form a belief as to the truth of the allegations in this paragraph. 226. Denies. 227. Answering paragraph 226, incorporates by reference the responses to paragraphs 1 through 226, as hereinabove set forth. 228. Answering paragraph 228, lacks knowledge or information sufficient to form a belief as to the truth of the allegations of this paragraph. 229. Denies. 230. Denies 231. Answering paragraph 231, lacks knowledge or information sufficient to form a belief as to the truth of the allegations of this paragraph. 232. Denies. 233. Denies. 234. Denies.
20

AFFIRMATIVE DEFENSES 206. Defendant Milwaukee County realleges and incorporates as through fully set forth herein paragraphs 1 through 105 of this Answer. 207. The Third Amended Complaint fails to state a claim upon which relief can be granted. 208. The plaintiffs have failed to comply with the notice an d claim procedures of Wis. Stat. s. 893.80, a condition precedent to invoking the pendant jurisdiction of the Court whan alleging violation of state law of common law. 209. This action is frivolous. WHEREFORE Defendant demands judgment dismissing the Th ird Amended Complaint upon its merits, and costs and reasonably attorney fees according to law. Dated at Milwaukee, Wisconsin this 10th day of September, 2004

P.O. Address: Milwaukee County Courthouse 901 North 9th Street, #303 Milwaukee, WI 53233 Telephone: (414) 278-4302 Fax: (414) 223-1249

OFFICE OF CORPORATION COUNSEL
By: /s/ Mary Ellen Poulos Mary Ellen Poulos Principal Assistant Corporation Counsel State Bar No. 01014190 John Jorgensen Principal Assistant Corporation Counsel State Bar No. 01017484 Attorneys for Defendant Milwaukee County

21

 
 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN ______________________________________________________________________

GERALD NELSON, JOAN BZDAWKA, SANDRA EHRLICHMAN, MARILYN BERDIKOFF, LENORE CZARNECKI, JOHN GORTON, CLASSIE MARCILIS, CONSTANCE EWIG, BERT SIEGEL and KATHLEEN JOHNSON, each on their own behalf and on behalf of a class of persons similarly situated,

Plaintiffs,

v.

Case

No. 04-C-0193

MILWAUKEE COUNTY, WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES, and HELENE NELSON, in her official capacity as Secretary of DHFS,

Defendants

.

______________________________________________________________________

THIRD AMENDED COMPLAINT ______________________________________________________________________

The plaintiffs, by their counsel, Robert Theine Pledl, hereby state the following as

their third amended complaint:

INTRODUCTION

(1) This action is brought on behal f of Milwaukee Co unty residents with

disabilities that are now or will in the future receive services from the Family Care

program which is op erated and/or overseen by Milwauk ee County, the Wisconsin

Department of Health and Family Servic es and DHF S Secretary Helene Nelson. The

plaintiffs allege that various aspects of the Family Care program violate the Americans

with Disabilities Act, §504 of t he Rehabilitation Act, the Unit ed States Constitution, the Medicaid Act and the Wisconsin Patients Bill of Rights.
JURISDICTION AND VENUE (2) This action is brought under the Americans with Disabilities Act, 42 U.S.C. §12101, et seq.; §504 of the Rehabilitation Act, 29 U.S.C. §794; 42 U.S.C. §1983 and 42 U.S.C. §1396a. There are also supplemental state law claims. (3) This Court has jurisdiction of this action pursuant to 29 U.S.C. §794, 42 U.S.C. §12132, 28 U.SC. §1331, 28 U.S.C. §1343 and 28 U.S.C. §1367. (4) Venue in this district is proper pursuant to 28 U.S.C. §1391.
PARTIES (5) Plaintiff Gerald Nelson is a resident of Milwaukee County. His address is 6275 South 106th Street, Hales Co rners, Wisconsin. He is incom petent and has a legal guardian. The guardian has reta ined the undersigned to serve as his counsel. He appears here through his next friend and guardian, Jane Prentice. (6) Plaintiff Joan Bzdawka is a resident of Milwaukee County. Her address is 4570 South 117th Street, Greenfield, Wis consin. She is incom petent and has a legal guardian. The guardian has reta ined the undersigned to serve as her counsel. She appears here through her next friend and guardian, Richard Miller. (7) Plaintiff Sandra Ehrlichman is a resident of Milw aukee County. Her address is 4570 South 117th Street, Greenfield, Wisconsin. She is incompetent and has a legal guardian. The guardian has retained the undersigned to serve as her counsel. She appears here through her next friend and guardian, Nancy Steeves.
2

(8) Plaintiff Marilyn Berdikoff is a resident of Milwaukee Co unty. Her address is 10136 West Vienna Street, Wauwatosa, Wisconsin. She is incompetent and has a legal guardian. The guardian has retained the undersigned to serve as her counsel. She appears here through her next friend and guardian, Lois Degner.
(9) Plaintiff Lenore Czarnecki is a re sident of Milwaukee County. Her address is 3620 Denton, St. Francis, Wisconsin. She has significant mental disabilities that affect her ability to make decisions. Her daughter is her agent under a power of attorney and has retained the undersigned to serve as her counsel. She appears here through her next friend and agent, Carolyn Cetnarowksi.
(10) Plaintiff John Gorton is a resident of Milwaukee County. His address is 7550 South 13th Street, Oak Creek, Wisconsin. He has significant disabilities that affect his ability to make decisions. His niece is his agent under a po wer of attorney and has retained the undersigned to serve as his counsel. He appears here through his next friend and agent, Deborah Brunk.
(11) Plaintiff Classie Marcilis is a resi dent of Milwaukee County. His address is 7810 West Waterford Street, Milwaukee, W isconsin. He is incompetent and has a legal guardian. The guardian has reta ined the undersigned to serve as his counsel. He appears here through his next friend and guardian, Dorothy Reynolds.
(12) Plaintiff Constance Ewig is a re sident of M ilwaukee County. Her address is W5021 Takodah Drive, Fond du Lac, Wisconsin.
(13) Plaintiff Bert Siegel is a resident of Milwaukee Co unty. His address is 5609 West Morgan, Milwaukee, Wisconsin.
3

(14) Plaintiff Kathleen Johnson is a resident of Milwaukee County. Her address is 3534 North 13th Street, Milwaukee, Wisconsin.
(15) Defendant Milwaukee County is a munic ipal corporation with its p rincipal place of business lo cated at 901 North 9th Street, City and C ounty of Milwauk ee, Wisconsin.
(16) Defendant Wisconsin D epartment of Healt h and F amily Services is an administrative agency of the St ate of Wisconsin. Its headquarters is located at 1 West Wilson Street, Madison, Wisconsin.
(17) Defendant Helene Nelson is Secretary of the Wisconsin Depart ment of Health and Family Services and is sued in her official capacity. She is responsible for the overall operation of DHFS. Secretary Nelson's addre ss is 1 West Wilson Street, Madison, Wisconsin.
FACTUAL ALLEGATIONS Services for Persons with Disabilities (18) Historically, most persons with dis abilities were placed in nursing homes and other large custodial institut ions if their families were not able to provide suitab le care. Most of this institutional care is and has been funded through the federal Medicaid program. The reliance on institutions to prov ide residential care has changed over time and many persons with disabilities now reside in the community. (19) Persons with disabilities live in a variety of setti ngs and utilize a variety of services. Many live independently, are em ployed and otherwise p articipate in community life in ways that are indistinguishable from persons without any disabilities.
4

(20) Many persons with di sabilities who req uire assistance receive care provided in their own home by outside caregivers.
(21) Certain persons with disabilities such as developmental disabilities, mental illness, brain injury, Alzheimers, physica l disabilities, etc. are unable to live independently in a s ingle-family home or an apartment. Many of the persons with disabilities who are un able to live independently reside with their families. Many adults with disabilities acquired before birth or early in life c ontinue to live with their aging parents until the death or illness of the caregivers makes that impossible.
(22) Persons with dis abilities may also receive care in various types of residential facilities th at are licensed or cert ified pursuant to Wi sconsin statutes and regulations promulgated by the Wisconsin Department of Health and Family Services.
(23) Many persons with disabilities who receive residential services also attend day programs. These are progr ams that provide educational services, assistance with and training in activ ities of daily liv ing and recreational activ ities. Day programs frequently include opportunities for partici pants to engage in community activities ranging from shopping to attending sports events and other recreational activities. A day program may also include a vocational component.
(24) In Wisconsin and nationally, the trend in disability service delivery is towards greater consumer choic e and mor e consumer-directed services. Persons with disabilities who c an make the ir own de cisions are permitted to choos e their own providers and to make their own decisio ns about treatment and care. Guardians an d agents under a power of attorney make these same decisions on behalf of persons with disabilities who cannot do so because of the extent of their disabilities.
5

(25) Individuals with disabilities and/or their guardi ans or agents choos e particular day programs and plac es to live for a variety of reasons. The reasons include the availability of specific dis ability services, appearance and layout, personal preferences regarding staff an d other participants or residents, access to public or specialized transportation, proximity to chur ches, proximity to st ores, proximity to recreational facilities, accessibility to wo rk opportunities or vocationa l services, neighborhood characteristics, and closeness to friends and relatives.
(26) A great de al of care goes into choosing a residential facility or a da y program. Individuals may be refe rred to a particular provider by a County c aseworker based on the general characterist ics of the person and the faci lity or program, but that would only be the beginning of the process. Many individuals/guardians/agents choose a facility o r program based on it s proximity to family, friends, recreational activities, church and a variety of other community activities. Provi der staff, the guardian/agent and the individual him self or herself also try to determine in advance whether the client will get along well with both staff and other residents and pa rticipants in terms of personalities and similar interests. The inabi lity of certain residents to get along with each other is likely to lead to another move. That is the reason that so much attention is paid to choosing compatible re sidents, participants and sta ff. Certain individuals also have special or unusual service needs that coul d require a specialized service provider. All of these factors could affect the choice of a particular facility or program.
(27) Many Individuals with disabilities develop attachments to the other clients and to particular staff members in a residential facility and/or day program.
6

(28) Many persons with disabilities have difficulty learning and adapting to new situations. This may c ause behavioral prob lems when moving from an institution to a community setting, from a com munity setting to an institution, or from one community setting to another as the indiv idual learns the routine and expec tations of the new setting.
(29) If the services being provided to a person with disabilities are not sufficient to meet their needs, there is an increased probability that the person will have to be moved to another setti ng and an increased probabi lity that they w ill be transferred to a more restrictive facility or institution.
(30) Given the complexity of locating and arranging suitable services, obtaining the approval of the person and/or guardian/ agent, getting through the initial period of adjustment and the development of relationshi ps by the client , there is a general preference among families, gua rdians, agents, service providers, County agencies a nd the clients themselves for remaining in a particular residential setting and day program.
(31) Living in one's own home with s ervices is generally more integrated and less restrictive than living in a facility su ch as an adult family home, community-based residential facility or nursing home, unless an individual has certain needs that cannot be met in their own home.
(32) Smaller residential settings, 3 or 4- person Adult Family Homes (AFHs) for example, are generally more integrated and less restrictive than larger facilities such a s a 20-person community-based residential facili ties (CBRFs), unless an individual has certain needs that cannot be met in the smaller setting.
7

(33) The most restrictive form of re sidential placement is a nursing home or other institution. Most persons with dis abilities and/or their guardians/agents prefer to live in the community and receive the services described above outside of an institution if they are able to do so.
(34) Wis. Stat., §§46.215, 51.42 and 51.437 require each county in Wiscons in to provide specified services to persons with disabilities.
(35) Wis. Stat., §51.61 r equires the State and W isconsin counties, as well a s other persons and e ntities providing services to persons with disab ilities, to observe certain rights that are guar anteed to persons with ment al illness, developmental disabilities, alcoholism or drug dependency.
(36) Wis. Stat., §§55.06 and 55.07 require prescribe certain rights and procedures that are appl icable to persons with disabili ties that are determined by a Wisconsin Circuit Court to meet the criteria for protective placement.
Funding for Disability Services (37) Many persons with disab ilities who require residential facilities, day programming or institut ional care are not financ ially able to pay for the services and depend on public funding sources. (38) One source of fund ing for disability services in Milwaukee Coun ty and in other Wisconsin counties are the Medicaid Waiver programs such as the Community Options Program (COP), Community Integrat ion Program (CIP) and Brain Injury Waiver (BIW). These programs pay for s pecific services in each state pursuant to various laws and regulations and v arious agreements with the United States Depa rtment of Health
8

and Human Services. Waiver programs involv e an approximate 60/40 mix of Federal and non-Federal funds. The precise percentage is adjusted from time to time.
(39) If the service needs of a partic ular person served by one of the Waiver programs increase, the servic e provider will usua lly negotiate a high er rate with the funding source for continuing to serve t he person. Wisconsin counties , including Milwaukee County, have historically granted rate increased in situations of this type.
(40) Even if a particular person's needs do not increa se, the cost of providing residential, day programming and other disab ility services is subject to significa nt inflation. The largest expenses of providing disa bility services are salary and insuranc e costs. The costs of health car e and health insurance have inc reased significantly in recent years and this has caused provider s to seek increases from their funding sources. There have also been huge increases in liability insur ance across the entire residential care industry.
(41) While the increases have usua lly been less than the amounts requested, disability service providers have been ab le to obtain cost of living rate increases under the Waiver programs in all Wisc onsin counties and have been able to obtain increase s from the Disability Services Division of Milwaukee County.
(42) Historically, the Milwaukee County Adult Services Division (now known as Disability Services Divis ion) had provided services to persons with dev elopmental disabilities and p hysical disabilities regardless of age. Over time, the resp onsibility for serving persons with t hese disabilities who were 60 and over was transferred to the Milwaukee County Department of Aging (MCDA) which had already been serving
9

elderly persons without these specific disabilities. Prior to Family Care, MCDA funde d many of these services using Waiver money.
Family Care (43) The Wisconsin Family Care progr am was established by Wis . Stat., §§46.286 - 46.2895 and Wis. Stat., §§46.2805 - 46.2 85 set forth statutory definitions, specify the powers and dutie s of DHFS and the DHFS Se cretary, and govern car e management organizations and resource cent ers. Wis. Stat., § 46.281 sets out the powers and duties of DHFS and the DHFS Secretary relative to Family Care. (44) Wis. Stat., §46.281(1 )(f) required DHFS to "[p] rescribe and implement a per person monthly rate structure for costs of the family care benefit." (45) Wis. Stat., §46.281(1)(c) requir ed DHFS to negotiate a ne w agreement with the United States Departm ent of Health and Human Serv ices (DHHS) to establis h a capitated system. (46) DHFS submitted a proposal to DHHS for a §1915(b) Capitated Waiver program (1915(b) waiver) for Milwaukee County Family Care regarding the waiver that is currently in effect for Milwaukee County. (47) The Milwaukee County 1915(b) waiv er application re quested that DHHS waive the application of 42 U.S.C. §1396a(a)1 regarding "st atewideness", 42 U.S.C. §1396a(a)(10)(b) regarding "co mparability of services", and 42 U.S.C. §1396a(a)23 regarding "freedom of choice". DHHS did subsequently appro ve the waiver of these provisions. (48) The Milwaukee County 1915(b) wa iver application did not request the waiver of any provisions of the Federal Medicaid Act other t han those described in
10

paragraph 47. All of t he other applicable provisions of t he Federal Medicaid Act remain

in full force and effect with regard to the portions of the Family Care program in

Milwaukee County covered by the 1915(b) waiver at present and at all relevant times.

(49) DHFS also submitted a proposal to DHHS for two §1915(b) Capitat ed

Waiver programs regarding the waivers that are currently in effect for Milwaukee County

to serve 60 and ov er persons with dis abilities (1915(c) disability waiver), and for

persons with mental retardation/developmental disabilities (1915(c) MR/DD waiver).

(50) The 1915(c) disability waiver application requested that DHHS waive the

application of 42 U.S.C. §1396a(a)1 r

egarding "statewideness", 42 U.S.C.

§1396a(a)(10)(b) regarding "comparability

of services", and 42 U.S.C.

§1396a(a)10(C)(i)(III) regarding " community deeming rules". DHHS did s ubsequently

approve the waiver of these provisions.

(51) The 1915(c) disability waiver application did no t request the waiver of any

provisions of the Federal Medic aid Act other than those described in paragraph 50. All

of the other applicable provis ions of the F ederal Medicaid Act remain in full force and

effect with regard to the porti ons of the Family Care progr am covered by the 1915(c)

disability waiver at present and at all relevant times.

(52) The 1915(c) MR/DD waiver app lication requested that DHHS waive th e

application of 42 U.S.C. §1396a(a)1 r

egarding "statewideness", 42 U.S.C.

§1396a(a)(10)(b) regarding "comparability

of services", and 42 U.S.C.

§1396a(a)10(C)(i)(III) regarding " community deeming rules". DHHS did s ubsequently

approve the waiver of these provisions.

11

(53) The 1915(c) MR/DD wa iver application did not r equest the waiv er of any provisions of the Federal Medic aid Act other than those described in paragraph 52. All of the other applicable provis ions of the F ederal Medicaid Act remain in full force and effect with regard to the porti ons of the Family Care program covered by the 1915(c) MR/DD waiver at present and at all relevant times.
(54) DHFS offered contracts to vari ous Wisconsin c ounties to begin the operation of Family Care.
(55) Milwaukee County DSD contin ues to utilize the Waiver programs for persons under 60, but Milwaukee County decided to sign a contract with DHFS to place all eligible persons 60 and over into Family Care. It was under no obligation to do so.
(56) In 2000, MCDA began to operate its disability services under the umbrella of Family Care. Under Family Care MCDA receives a specific monthly payment from the State for each eligible pers on enrolled in Family Care . MCDA then contracts with various agencies and service providers who deliver services to a specific person.
(57) Pursuant to Waiver program polic ies and procedures established by DSD and DHFS, Milwaukee County residents with di sabilities under the age of 60, or their guardians or agents if appropr iate, are generally permitted to select and approv e specific day programs and residential settings.
(58) Pursuant to Family Care policie s and procedures establis hed by MCDA and DHFS, the ability of Milwauk ee County residents 60 and over, or their guardians or agents if appropriate, to select and approve specific day programs and residential settings is substantially limited by MCDA's practice of placing indiv iduals based on cost and administrative convenience rather than client choice.
12

(59) Pursuant to Waiver program pol icies and procedures established by DSD

and DHFS, persons with dis abilities are evaluated for potential serv ices using

procedures that focus on the c apacity of the individ ual for independent living. T his

results in many persons with signific ant disabilities who do receive funding for

community services instead of institutional care.

(60) Pursuant to Family Care policie s and procedures establis hed by MCDA

and DHFS, persons with dis abilities are evaluated for potential serv ices using

procedures that focus more narrowly on the medical needs of the individual. The result

is that many fewer persons with significant disabilities receive funding for community

services. The evaluation proces s also has a negative effect on the right to obtain

appropriate placement and services in the least restrictive setting in

Watts review

proceedings and proceedings in general held under Wis. Stat., Chapter 55 for persons

in Family Care.

(61) Pursuant to Family Care policie s and procedures establis hed by MCDA

and DHFS, Family Care does not automatically enroll eligible indi viduals who are in

nursing homes or other institutions, or who are in the process of entering nursing homes

or other institutions.

(62) Pursuant to Family Care policie s and procedures establis hed by MCDA

and DHFS, numerous persons in nursing homes who are eligible for Family Care and

who could reside in the co mmunity if evaluated usi ng appropriate professiona l

standards and judgm ent have not been enrolled in F amily Care and therefore remain

institutionalized.

13

(63) Pursuant to Waiver program polic ies and procedures established by DSD and DHFS, day and residential providers hav e been granted rate increases from DSD for serving Milwaukee County residents with disabilities under the age of 60.
(64) Under Family Care polic ies and procedures established by MCDA and DHFS, day and residential pr oviders have not been granted rate increases from MCDA for serving Milwaukee County residents disabilities 60 years of age and older.
(65) The capitated rate set by DHF S is insufficient to provide appropriate services to persons with disabilities in Milwaukee County.
(66) A mail survey of Family Care pr oviders around the State conducted in January and February of 2004 by Dr. Gerald Kallas of Senior Residential Care of America, Inc. showed that 80% of the respondents said that they were being paid below their cost of care as dete rmined by an audit. Only 8.5% of the respondents said they were being paid equal to their cost of care and 5.7% said they were being paid abov e their cost of care.
(67) The failure to provide reasonable ra tes and cost of living rate increases has and will cause service providers to either cut the level of services or refuse to serve Milwaukee County residents wit h disabilities with the result that they will b e forced to move from their homes and to lose other disa bility services. This will ca use substantial numbers of these residents to be admitted to in stitutions such as nursing homes. Many Milwaukee County residents who are already in nursing homes and other institutions will remain there if service providers are unwilling to serve them under the Family Care rate structure.
14

Gerald Nelson (68) Gerald Nelson has a developmental disability and a physical disability. He is 71 years old. (69) Mr. Nelson resided in his family's home until his mother became too ill to care for him in November of 1998. Milwa ukee County then placed him temporarily in a community-based residential facility (CBRF) operated by Homes for Independent Living located in Menomonee Falls. (70) Shortly before his mo ther's death in January of 1999, Milwauk ee County placed Mr. Nelson at Whitna ll House, another CBRF operated by HIL in Hales Corner s. He also began to r eceive day program se rvices at Paragon Industries which is associated with HIL. (71) Mr. Nelson's guardian approved of his admission to Whitnall House and the Paragon day program. (72) It is the guardian's continued desire that Mr. Nelson remain at Whitnall House and Paragon. (73) Milwaukee County filed Watts reports with the Milwauk ee County Probate Court stating that Mr. Nelson 's placement at Whitnall H ouse was appropr iate to his needs and recommending that his placement there continue. (74) Mr. Nelson receives funding for his disability services from Famil y Care through Milwaukee County Department on Aging (MCDA). (75) The rates that MCDA have approv ed for HIL to serve Mr. Nelson at Whitnall House and Paragon are lo wer than the rates being paid to HIL by Milwauk ee County DSD and by other Wisconsin counties for serving individuals with similar needs.
15

(76) HIL attempted over the course of several years to negotiate with MCDA to obtain a higher daily rate for providing services to Mr. Nelson and other clients.
(77) MCDA has refused to approve a cost of liv ing rate increase for Gerald Nelson or any other MCDA client.
(78) HIL gave notice that it would termi nate its contract wit h MCDA effective April 1, 2004. HIL later signed an agreement to continue serving Mr. Nels on at the existing rates.
(79) HIL will c ontinue to contract with DSD to serve Milwaukee County residents with dis abilities under the age of 60. HIL has notified MCDA t hat it would prefer to continue ser ving Mr. Nelson and all other M CDA clients and that the funding dispute is the only reason for the contract termination.
(80) MCDA intends to move Mr. Nels on to a diff erent CBRF and day program over the guardian's o bjection and has stated t hat it will seek the guardian 's removal if the disagreement continues, however, pursuant to a s tipulation entered in this action , MCDA has agreed that it will not move Mr. Nelson over the guardian's objection pending resolution of the issues in this action or further order of the Court.
(81) It would be very traumatic and harmf ul to Gerald Ne lson to be forcibly removed from his home.
(82) Due to the severity of Gerald Nelson' s disabilities, it is likely that moving him would worsen his condition and lead to placement in a nur sing home or similar institution.
Joan Bzdawka (83) Joan Bzdawka has a developmental disability. She is 68 years old.
16

(84) Ms. Bzdawka resided in the co mmunity with her family until 1955. She

was then placed in the Milwaukee County M ental Health Complex until 1968 when she

was transferred to the Centra l Wisconsin Center for the Developmentally Disabled,

another large institution.

(85) Ms. Bzdawka was transferred from Central Center in 1995 to a succession

of CBRFs in Milwaukee County. She moved to Vienna House in 1996 and Arbor House

in 2000. Both houses are operated by HIL. She als o attends the Paragon day program.

Each of the transfers to a CBRF and to the Paragon program wa s with her guardian's

approval.

(86) It is the guardian's continued desire that Ms. Bzdawka remain at Arbor

House and Paragon.

(87) Milwaukee County filed Watts reports with the Milwauk ee County Probate

Court stating that Ms. Bzdawka' s placement at Vienna House and Arbor House was

appropriate to her needs and recommending that her placement there continue.

(88) Ms. Bzdawka receives funding for her disability services from Family Care.

(89) The rates that MCDA have appr oved for HIL to serve Ms. Bzdawka at

Arbor House and Pa ragon are lo wer than the rates being paid to HIL by Milwaukee

County DSD and by other Wisconsin counties for serving individuals with similar needs.

(90) HIL attempted over the course of several years to obtain a rate increase

from MCDA to obtain a higher daily rate fo r providing services to Ms. Bzdawka and

other clients. MCDA has refused to approve a cost of living rate increase.

(91) MCDA intends to move Ms. Bzdawka to a different CBRF

and da y

program over the guardian's ob jection and has stated that it will seek the guardian's

17

removal if the disagreement continues, however, pursuant to a stipulation entered in this action, MCDA has agreed that it will not move Ms. Bzdawka over the guardian' s objection pending resolution of the issues in this action or further order of the Court.
(92) It would be very traumatic and harmf ul to Ms. Bzdawka to be forcibly removed from her home.
(93) Due to the severity of Ms. Bzdawka's disabilities, it is likely that moving her would worsen her c ondition and lead to pl acement in a nursing home or similar institution.
Sandra Ehrlichman (94) Sandra Ehrlichman has a developmental disability. She is 60 years old. (95) Ms. Ehrlichman resided in the comm unity with her family until 1960. She was then placed in the Southern Wisconsin Center for the Developmentally Disabled. (96) Ms. Ehrlichman was transferred from Southern Wisconsin Center to Arbor House in 2000. She also attends the Par agon day program. The tr ansfer to Arbor House and to the Paragon program was with her guardian's approval. (97) It is the guardian's continued desire that Ms. Ehrlichman remain at Arbor House and Paragon. (98) Ms. Ehrlichman receives fundin g for her disab ility services from Family Care. Prior to her 60th birthday she received Waiver funding through DSD. (99) The rates that MCDA have appr oved for HIL to serve Ms. Erlichman at Arbor House and Pa ragon are lo wer than the rates being paid to HIL by Milwaukee County DSD and by other Wisconsin counties for serving individuals with similar needs.
18

(100) HIL attempted over the course of several years to obtain a rate increase from MCDA to obtain a higher daily rate fo r providing services to Ms. Erlichman and other clients. MCDA has refused to approve a cost of living rate increase.
(101) MCDA intends to move Ms. Er lichman to a different CBRF and da y program over the guardian's ob jection and has stated that it will seek the guardian's removal if the disagreement continues, however, pursuant to a stipulation entered in this action, MCDA has agreed that it will not move Ms. Er lichman over the guardian 's objection pending resolution of the issues in this action or further order of the Court.
(102) It would be very traumatic and harmf ul to Ms. Ehrlichman to be forcibly removed from her home.
(103) Due to the severity of Ms. Ehrlichman' s disabilities, it is likely that moving would worsen her c ondition and lead to pl acement in a nursing home or similar institution.
Marilyn Berdikoff (104) Marilyn Berdikoff has a developmental disability. She is 60 years old. (105) Ms. Berdikoff resides at Vienna House, a CBRF operated by HIL and attends the Paragon day program. The admi ssion to Vienna Hous e and to the Paragon program was with her guardian's approval. (106) Ms. Ehrlichman receives fundin g for her disab ility services from Family Care. Prior to her 60th birthday she received Waiver funding through DSD. (107) It is the guardian's continued desire t hat Ms. Berdikoff remain at Vienna House and Paragon.
19

(108) The rates that MCDA have approv ed for HIL to serve Ms. Berdikoff at

Vienna House and Paragon are lower than the rates being paid to HIL by Milwauke e

County DSD and by other Wisconsin counties for serving individuals with similar needs.

(109) HIL attempted over the course of several years to obtain a rate increase

from MCDA to obtain a higher daily rate for providing services to Ms. Berdikoff and

other clients. MCDA has refused to approve a cost of living rate increase.

(110) MCDA intends to move Ms. Berdikoff to a different CBRF

and da y

program over the guardian's ob jection and has stated that it will seek the guardian's

removal if the disagreement continues, however, pursuant to a stipulation entered in this

action, MCDA has a greed that it will not move Ms. Berdikoff over the guardian 's

objection pending resolution of the issues in this action or further order of the Court.

(111) It would be very traumatic and harmf ul to Ms. Berdiko ff to be forcibly

removed from her home.

(112) Due to the severity of Ms. Berdikoff's disabilities, it is likely that moving her

would worsen her c ondition and lead to pl acement in a nursing home or similar

institution.

Lenore Czarnecki

(113) Lenore Czarnecki has Alzheimers disease, a disability associated with the

aging process. She is 81 years old.

(114) Ms. Czarnecki resided at home with her husband until four years ago. She

was then placed in a CBRF operated by Senior Residential Care of America, Inc.

(115) Ms. Czaernecki receives fundin g for her disab ility services from Family

Care.

20

(116) It is the desire of her family and her agent, Caro lyn Cetnarowski, that Ms. Czarnecki remain at her current residence.
(117) Senior Residential Care of America, Inc. has attempted to obtain a rate increase from MCDA for providing servic es to Family Care c lients, but MCDA has refused to approve a cost of living rate increase.
(118) MCDA has reduced the rates paid to Senior Residential Care under the current contracts in comparison to previous contracts.
(119) Senior Residential Care has issued public statements that it is losing money under current Family Car e rates and will not be able to sustain these loses for much longer.
(120) It is probable that in the forese eable future Senior Residential Care will refuse to accept Family Care clients or will have to close its residential facilities entirely.
(121) It would be very traumatic and harmf ul to Ms. Czarnecki to be forcibly removed from her home.
(122) Due to the severity of Ms. Czarnecki's disability, it is likely that moving her would worsen her c ondition and lead to pl acement in a nursing home or similar institution.
John Gorton (123) John Gorton has physical and mental disabilities. He is 77 years old. (124) Mr. Gorton resided in his ow n home until 1997 when his condition worsened significantly. He was hospitalized and then placed in various nur sing homes. After trying several as sisted living facilities, approximately 2 ½ years ago h e was then placed in a CBRF operated by Senior Residential Care of America, Inc.
21

(125) Mr. Gorton receives funding for his disability services from Family Care. (126) It is the desire of his family and hi s agent, Deborah Brunk, that Mr. Gorton remain at his current residence. (127) Senior Residential Care has issued public statements that it is losing money under current Family Car e rates and will not be able to sustain these loses for much longer. (128) It is probable that in the forese eable future Senior Residential Care will refuse to accept Family Care clients or will have to close its residential facilities entirely. (129) It would be very traumatic and ha rmful to Mr. Gorton to be forcibly removed from his home. (130) Due to the severity of Mr. Gorton's disability, it is likely that moving him would worsen his c ondition and lead to pl acement in a nursing home or similar institution.
Classie Marcilis (131) Classie Marcilis has a developm ental disability and other mental disabilities. He is 60 years old. (132) Mr. Marcilis has lived in his own home with supportive services provided by Dungarvin, a national disability services provider. Services were funded through DSD until his 60th birthday last year. (133) For some time prior to and at t he time of his 60th birthday, Dungarvin wa s paid $135.33 per day to provide supportive se rvices through waiver funding that was arranged by DSD.
22

(134) Since his 60th birthd ay, funding for Mr. Marcilis's services h ave been

funded through Family Care. The daily rate paid to Dungarvin for providing supportive

services was reduced to $111.16 per day.

(135) The Family Care Program has reassessed Mr. Marcilis's daily liv ing skills.

This reassessment is expect ed to further reduce his leve l of funding for supportive

services and make it more like ly that he will have to move to a larger m ore restrictive

setting for reasons of cost.

(136) It is probable that in the foreseeabl e future Dungarvin will refuse to serve

Mr. Marcilis for the rates that MCDA and Famiily Care clients have and will authorize.

(137) It is the desire of his f amily and his guardian, Dorothy Reynolds, that Mr.

Marcilis remain at his current residenc e and that he not be transferred to a more

restrictive and less integrated setting such as a CBRF or nursing home.

(138) It would be very traumatic and harmf ul to Mr. Marcilis to be forcibly

removed from his home.

(139) Due to the severity of Mr. Marcilis's disability, it is likely that movi ng would

worsen his condition and lead to placement in a nursing home or similar institution.

Constance Ewig

(140) Constance Ewig has developmental disabilities. She is 60 years old.

(141) Ms. Ewig resided at home with her

family until her mother's death

approximately 10 years ago. She then res ided in a s eries of apartments with variou s

services and intermittent periods of hospitalization. Several years ago she was placed in

Hearthside Rehabilitation C enter, a large institution fo r persons with development al

disabilities.

23

(142) Until March of 2004, Ms. Ewig wa s eligible for services through the Milwaukee County Disabilities Services Division (DSD). In March of 2004, she reached her 60th birthday and now receiv es funding for her disability se rvices from Family Care through MCDA.
(143) In 2003, Hearthside was in the pr ocess of closing and Ms. Ewig wa s moved to a CBRF. DSD had difficulty locat ing enough community residences for all of the Hearthside residents and she was referr ed to Takodah Hous e, a CBRF in Fond du Lac which is operated by Lifeline Services.
(144) Ms. Ewig has been more successful and more satisfied at Takodah House than at any of her other residences since her mother died.
(145) Constance Ewig likes Takodah House and would like to remain there. She also likes her doctor, psychiatrist, day program and friends in Fond du Lac.
(146) When Ms. Ewig turned 60, Lifeline Se rvices was notified by MCDA that it would not be offered a contract to serve her under Family Care and that she would be moved to a different CBRF that is located within Milwaukee County.
(147) Ms. Ewig filed a petition for administrative review of this decision. (148) Following a hearing on Ms. Ewig's petition, Administrative Law Judge Joseph A. Nowick iss ued a dec ision on July 20, 2004 upholding the decision to move her to another CBRF instead of directing MCDA and the Family Care program to contract with Lifeline Services and Takodah House so t hat she could remain in Fond du Lac County. (149) On August 11, 2004, Ms. Ewig f iled an appeal from the administrative decision pursuant to Wis. Stat., §227.53. Ewig v. Wisconsin Department of Health and
24

Family Services, et al., Case No. 04-CV-007043 (Milwaukee County Circuit Court). On August 12, 2004, her counsel in that cas e, Atty. Patrick Berigan from the Wiscons in Coalition for Advocacy, moved for a stay of the State cour t proceeding pending the outcome of this action. That motion remains pending at this time.
(150) It would be very traumatic and harmful to Ms. Ewig to be forcibly removed from her home.
(151) Due to the severity of Ms. Ewig's disability, it is likely that moving he r would worsen her c ondition and lead to pl acement in a nursing home or similar institution.
Bert Siegel (152) Bert Siegel has phys ical disabilities resulting from multiple sclerosis. He was first diagnosed in 1983 and is now 60 years old. (153) Mr. Siegel was able to live independently until 2000. He was unable to walk following surgery that year and has requi red assistance since that time. His sister began to provide care at that time. She moved here from another State and gave up her job in order to do so. She was paid by wa iver funding through DSD until Mr. Siegel turned 60 years old and became eligible for Family Care. (154) Mr. Siegel is non-ambulatory and has very limited mobility in his uppe r body. He is quite large and mus t use a Hoyer lift for transfers in and out of his bed or wheelchair. He requires assistance to reposition himself and with other activities of daily living. It is necessary for someone to provide this care 24 hours per day. (155) For some time prior to and at t he time of Mr. Siegel' s 60th birthday, his sister was being paid $8.00 per hour for 46 hours per week of supportive home care.
25

(156) Following Mr. Siegel 's admission into Family Car e, his sister was

approved to provide 46 hours per week of supportive home care at a lower rate of $7.30

per hour. She was paid an additional $25 per night flat rate to provide care as needed

during her sleeping hours.

(157) DHFS issued a memorandum dated Ma rch 1, 2004 regarding "Guideline s

for Paying Family Caregivers". The ac tual Guidelines were attached to the

memorandum.

(158) MCDA and its cont ractors conducted a reevaluat ion of Mr. Siegel's care

pursuant to the March 1, 2004 memor

andum and guidelines. Follo wing this

reevaluation, the hour s of suppo rtive home care by his sister that were aut horized for

payment through Family Care were reduced from 46 hours to 32 hour s per week.

Authorization for the $25 per night flat overnight rate was eliminated entirely.

(159) Mr. Siegel's sister will have to find another source of income outside of the

home because of the funding c uts and will be unable to care f or him as she is now

doing.

(160) Due to the severity of Mr. Siegel's di sability, it is likely that the failure to

provide sufficient funding for supportive home care will le ad to his placement in a

nursing home or similar institution.

(161) It would be very traumatic and harmful to Mr. Siegel to be forcibly removed

from his home.

Kathleen Johnson

(162) Kathleem Johnson has disabiliti es resulting from a severe medical

condition which was diagnosed in early 2003. She is 69 years old.

26

(163) Ms. Johnson lived independently in her own home until she was

hospitalized with gastro-intes tinal bleeding. Her condition was so severe that he

physician advised placement in a nursing home. Instead, she returned home and her

daughter has lived with her in order to provi de care. Ms. Johnson is restricted to her

bed. She is unable to walk or transfer without assistance. She is unable to eat anything

by mouth and is tube-fed through a port whic h has been surgically implanted in her

stomach. She requires around-the-clock assistance.

(164) Ms. Johnson's daughter, who was previously employed as a pharmacy

technician, was unable to work because of the extensive care that she was providing to

her mother. Family Care made arrangement s to pay the daught er for 38.5 hours per

week of supportive home care and 28 hours per week of personal care services.

(165) DHFS issued a memo randum dated March 1, 2004 regarding "Guideline s

for Paying Family Caregivers". The ac tual Guidelines were attached to the

memorandum.

(166) MCDA and its contractors conducted a reevaluation of Ms. Johnson's care

pursuant to the March 1, 2004 memor

andum and guidelines. Follo wing this

reevaluation, the hours of s upportive home care by her daughter that were authorized

for payment through Family Care were r educed from 38.5 hours to 2 hours per week.

The hours of personal care services will also be reduced.

(167) Ms. Johnson's daughter will have to find another source of income outside

of the home because of the funding cuts and will be unable to care for her as she is now

doing.

27

(168) Due to the severity of Ms. Johnson's di sability, it is likely that the failure to provide sufficient funding for supportive hom e care will lead to her plac ement in a nursing home or similar institution.
(169) It would be very traumatic and harmful to Ms. Johnson to be forcibly removed from her home.
Class Certification (170) The named plaintiffs bring this ac tion on their own behalf and also seek to represent a class of Milwauk ee County residents who now qualify or who will in the future qualify for services through the Family Care program. (171) Approximately 5,200 Milwaukee County residents ar e currently enrolled in Family Care. There are at least another 10,000 Milwaukee County residents in nursing facilities or living in th e community who wo uld meet the eligib ility standards for Family Care. (172) Approximately 5,000 persons with devel opmental and/or physica l disabilities who are u nder age 60 currently receive services through the Milwauk ee County Disability Services Division. (173) Several hundred of the approximately 5,000 clie nts currently receiving services from DSD receive res idential or other disability services outside of Milwaukee County. (174) Approximately 1,000 individuals with dis abilities receive care from family caregivers and hundr eds of those indiv iduals have had their level of funding reduce d since the March 1, 2004 memorandum and gui delines described above in paragraph s 157 and 165.
28

(175) The number of persons currently receiving developmental d isability (DD)

or physical disability (PD) services from Milwaukee County DSD who will turn 60 during

each calendar year from now until 2010 is as follows:

Year DD Clients PD Clients Total

2004 2005 2006 2007 2008 2009 2010

44

104

148

52

135

187

59

134

193

62

160

222

61

139

200

90

116

206

72

119

191

(176) All of the approxim ately 5,000 clients cur rently receiving DD and PD

services from DSD will eventually turn 60 if they live long enough.

(177) The number of persons with dis abilities who are now or will in the future

be affected by F amily Care polic ies and procedures is v ery large and it would

impractical to bring them all before the Court.

(178) Each year additiona l persons with disabilitie s are born in Milwauk ee

County, and each ye ar additional persons without disabilities residing in Milwauk ee

County become disabled through accident s, injuries, disease and/or the progression of

the aging process.

(179) It would impossible to identify or bring these unidentified future members

of the putative class before the Court.

(180) The requirements of Rule 23 of the Federal Rules of Civil Procedure have

been met in that: (a) it is im possible to identify future members of the class and the

number of persons already se rved by DSD w ho will transfer to Family Care is s o

numerous that joinder of all cl ass members is impractical; (b) there are questions of la w

29

or fact common to the class; (c) the claims of the representative pa rties are typical of the claims of the class; and (d) the repr esentative parties will fairly and adequately protect the interests of the class.
(181) Pursuant to Rule 2 3(b)(2), Milwaukee County, DHFS and Secretary Nelson have acted or refused to act on grounds generally applicab le to t he putative class, thereby making appropriate prelim inary and final injunctive relief and/or corresponding declaratory relief with respect to the class as a whole.
LEGAL CLAIMS Count One: Americans with Disabilities Act
Discrimination on the Basis of Disability (182) The previous allegation are incorporated here as if fully set forth. (183) The individual plaintiffs and t he putative class members are “qualified individuals with a disability” pursuant to 42 U.S.C. §12131(2). (184) MCDA and DHFS are public entities covered by Title II of the ADA. (185) The Americans with Disab ilities Act prohibits the defendants from discriminating against persons with disab ilities. 42 U.S.C. §12131 ; 42 U.S.C. §12132; 28 C.F.R. §35.130 (186) Serving the named plaintiffs and the putative class members in a nondiscriminatory manner can be reasonably accommodated. (187) The above-described acts, omissi ons, policies and procedures of MCDA, DHFS and Secretary Nelson d iscriminate against persons with disab ilities in the following ways: (a) individuals being served by Family Care in Milwa ukee County receive inferior treatment as compared to similar individuals being served by Milwaukee County DSD and in other counties by the Waiv er programs, (b) i ndividuals with more
30

severe disabilities being served by Milwa ukee County Family Care receive inferior

treatment as compar ed to s imilar individuals with less severe d isabilities being served

by Milwaukee County Family Care, and (c) the failure t o provide adequate services and

funding denies Milwaukee County residents wit h disabilities who are 60 years of age

and older their right to receive public ly-funded services in the most integrated and least

restrictive setting appropriate to their needs.

Count Two: Americans with Disabilities Act Prohibition on Provision of Services and Using Methods of Administration
that Subject Persons with Disabilities to Discrimination

(188) The previous allegation are incorporated here as if fully set forth.

(189) Regulations implementing Title II of the ADA 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 --

(i) Deny a qualified individual with a disability the opportunity to participate in or benefit from the aid, benefit or service;

(ii) Afford a qualified individual with a disability an opportunity to participate in or benefit from the aid, benefit or service that is not equal to that afforded others;

(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 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;

.

.

.

(vii) Otherwise limit a qualified individual with a disability in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the aid, benefit, or service. 28 C.F.R. §35.130(b)(1).

31

(190) Another portion of the regulations implementing Title II states: A public entity may not, directly or through contractual or other arrangements, utilize criteria or 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 purpos e or effect of defeating or substantially impairing accomplishment of the objectives of the public entity's program with respect to individuals with disabilities. . ." 28 C.F.R. §35.130(b)(3). (191) Serving the named plaintiffs and the putative class members in a nondiscriminatory manner can be reasonably accommodated. (192) The above-described acts, omissi ons, policies and procedures of MCDA, DHFS and Secretary Nelson d iscriminate against persons with disab ilities in the following ways: (a) individuals being served by Family Care in Milwa ukee County receive inferior treatment as compared to similar individuals being served by Milwaukee County DSD and in other counties by the Waiv er programs, (b) i ndividuals with more severe disabilities being served by Milwa ukee County Family Care receive inferior treatment as compar ed to s imilar individuals with less severe d isabilities being served by Milwaukee County Family Care, and (c) the failure t o provide adequate services and funding denies Milwaukee County residents wit h disabilities who are 60 years of age and older their right to receive public ly-funded services in the most integrated and least restrictive setting appropriate to their needs.
32

Count Three: Americans with Disabilities Act Mandate to Administer Services and Programs in the Most Integrated Setting
(193) The previous allegation are incorporated here as if fully set forth. (194) Regulations implementing Title II of the ADA requires that "a public entity shall administer services, programs, and acti vities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 CFR §35.130(d). (195) Serving the named plaintiffs and the putative class members in more integrated settings can be reasonably accommodated. (196) MCDA, DHFS and Se cretary Nelson are obligated by the ADA to administer programs in a manner that supports the availability of programs and services for persons with disabilities in the most integrated setting. (197) The above-described acts, omissi ons, policies and procedures of MCDA, DHFS and Secretary Nelson d iscriminate against persons with disab ilities in the following ways: (a) individuals being served by Family Care in Milwa ukee County receive inferior treatment as compared to similar individuals being served by Milwaukee County DSD and in other counties by the Waiv er programs, (b) i ndividuals with more severe disabilities being served by Milwa ukee County Family Care receive inferior treatment as compar ed to s imilar individuals with less severe d isabilities being served by Milwaukee County Family Care, and (c) the failure t o provide adequate services and funding denies Milwaukee County residents wit h disabilities who are 60 years of age and older their right to receive public ly-funded services in the most integrated and least restrictive setting appropriate to their needs.
33

Count Four: §504 of the Rehabilitation Act. Discrimination on the Basis of Disability
(198) The previous allegation are incorporated here as if fully set forth. (199) Section 504 of the Rehabilitation Act, 29 U.S.C. §794 states: No otherwise qualified indi vidual with a disability in the United States . . . shall, solely by rea son of he r or his disab ility, be e xcluded from participation in, be denied benefits o f, or be subjected to discrimination under any program or activity receiving Federal financial assistance. (200) Milwaukee County and DHF S now receiv e and hav e received federal financial support at all relevant times. (201) The named plaintiffs and the putative class members are disabled pursuant to 29 U.S.C. §705(9). (202) Serving the named plaintiffs and the putative class members in a nondiscriminatory manner can be reasonably accommodated. (203) The above-described acts, omissi ons, policies and procedures of MCDA, DHFS and Secretary Nelson d iscriminate against persons with disab ilities in the following ways: (a) individuals being served by Family Care in Milwa ukee County receive inferior treatment as compared to similar individuals being served by Milwaukee County DSD and in other counties by the Waiv er programs, (b) i ndividuals with more severe disabilities being served by Milwa ukee County Family Care receive inferior treatment as compar ed to s imilar individuals with less severe d isabilities being served by Milwaukee County Family Care, and (c) the failure t o provide adequate services and funding denies Milwaukee County residents wit h disabilities who are 60 years of age and older their right to receive public ly-funded services in the most integrated and least restrictive setting appropriate to their needs.
34

Count Five: §504 of the Rehabilitation Act. Prohibition on Using Methods of Administration that Subject
Persons with Disabilities to Discrimination
(204) The previous allegation are incorporated here as if fully set forth. (205) Regulations implementing §504 state that "a recipient may not, directly or through contractual or other a rrangements, utilize criteria or methods of administration: (i) that have the effect of subjecting qualified individuals with disabilities to discrimination on the basis of dis ability; [or] (ii) that have the pur pose or ef fect of defeating or substantially impairing accomplishment of the objectives of the recipient's program wit h respect to handicapped persons. . ." 45 C.F.R. §84.4(b)(4). (206) Serving the named plaintiffs and the putative class members in a nondiscriminatory manner can be reasonably accommodated. (207) The above-described acts, omissi ons, policies and procedures of MCDA, DHFS and Secretary Nelson d iscriminate against persons with disab ilities in the following ways: (a) individuals being served by Family Care in Milwa ukee County receive inferior treatment as compared to similar individuals being served by Milwaukee County DSD and in other counties by the Waiv er programs, (b) i ndividuals with more severe disabilities being served by Milwa ukee County Family Care receive inferior treatment as compar ed to s imilar individuals with less severe d isabilities being served by Milwaukee County Family Care, and (c) the failure t o provide adequate services and funding denies Milwaukee County residents wit h disabilities who are 60 years of age and older their right to receive public ly-funded services in the most integrated and least restrictive setting appropriate to their needs.
35

Count Six: §504 of the Rehabilitation Act. Failure to Administer Services and Programs in the Most Integrated Setting (208) The previous allegation are incorporated here as if fully set forth. (209) MCDA, DHFS and Secretar y Nelson are obligated under §504 to administer programs in a manner that supports the availability of programs and services for persons with disabilities in the most integrated setting. (210) Serving the named plaintiffs and the putative class members in more integrated settings can be reasonably accommodated. (211) The above-described acts, omissi ons, policies and procedures of MCDA, DHFS and Secretary Nelson d iscriminate against persons with disab ilities in the following ways: (a) individuals being s erved by Family Care in Milwaukee Co unty receive inferior treatment as compared to similar individuals being served by Milwaukee County DSD and in other counties by the Waiv er programs, (b) i ndividuals with more severe disabilities being served by Milwa ukee County Family Care receive inferior treatment as compar ed to s imilar individuals with less severe d isabilities being served by Milwaukee County Family Care, and (c) the failure t o provide adequate services and funding denies Milwaukee County residents wit h disabilities who are 60 years of age and older their right to receive public ly-funded services in the most integrated and least restrictive setting appropriate to their needs.
36

Count Seven: 42 U.S.C. §1983 and the First and Fourteenth Amendments to the United States Constitution
(212) The previous allegation are incorporated here as if fully set forth. (213) The actions of Milwaukee Count y, DHFS and their officers, agents, servants and employ ees with regard to the named plaintiffs and the putative clas s members were and are under color of state law. (214) Individuals who reside with other persons in order to receive care for their disabilities form and maintain relationships with the other persons in their home that are similar to family relationships. They also form personal relationships and attachments to other persons at day programs and employment programs for persons with disabilities. These are small groups with a high degree of selectivity in the process of forming the relationship that are private and exclude outsiders to the same degree as any family. (215) Small groups that have a high degree of selectivity in forming and maintaining their relationship and that secl ude others from cri tical aspects of the relationship are protected by the Bill of Ri ghts and especially the First Amendment from unjustified interference by the State. (216) Persons with disabilities hav e a substantial liberty int erest in p ersonal autonomy and in being free from unnecessary re strictions on personal liberty under State and Federal law. (217) Persons with disabilities under t he age of 60 who are eligib le to receive services from Milwau kee County are situated si milarly to persons with disa bilities who are 60 years of age and older who are elig ible to receive services from Milwauke e County except for the differential treatment described above.
37

(218) Persons with more si gnificant disabilities who are 60 and over and who are eligible to receive services from Milwa ukee County are situated similarly to persons with less s ignificant disabilities who are 60 and over and wh o are eligible to receive services from Milwaukee County except for the differential treatment described above.
(219) The above-described acts, omissi ons, policies and procedures of MCDA, DHFS and Secretary Nelson d iscriminate against persons with disab ilities in the following ways: (a) individuals being served by Family Care in Milwa ukee County receive inferior treatment as compared to similar individuals being served by Milwaukee County DSD and in other c ounties by the Waiver prog rams, and (b) individuals with more severe disabilities being served by Milwaukee County Family Care receive inferior treatment as compar ed to s imilar individuals with less severe d isabilities being served by Milwaukee County Family Care.
Count Eight: 42 U.S.C. §1983 and the Medicaid Act (220) The previous allegation are incorporated here as if fully set forth. (221) The Medical Assistance (Medicaid) program is authorized under Title XIX of the Social Security Act, 42 U.S.C. §1396 et seq. (222) The purpose of Title XIX is to "enabl[e] each St ate . . . to furnish . . . rehabilitation and other services to help such families and indiv iduals attain or retain capacity for independence and self-care." 42 U.S.C. §1396. (223) The Federal Medicaid Act provides: A State plan for medical assistance must . . . provide such methods and procedures relating to the utiliza tion of, and the payment for, care and services available under the plan . . . as may be nec essary to safeguard against unnecessary utilization of such care and ser vices and to assure that payments are consistent with e fficiency, economy, and quality of care and are sufficient to enlist enough provi ders so that care and services are
38

available under the plan at least to the extent that such care and services are available to the general population in the geographic area; . . . 42 U.S.C. §1396a(a)(30)(A). (224) The State of Wisconsin, DHFS and the Secretary of DHFS have chosen to participate in the Medicaid program. (225) DHFS and the Secretary of DHFS have not sought or obtained a waiver of 42 U.S.C. §1396a(a)(30)(A) in connection wit h the operation of Family Care in Milwaukee County. (226) The above-described acts, omissi ons, policies and procedures of MCDA, DHFS and Secretary Nelson viol ate Title XIX because they are inconsistent with the requirements of "effici ency, economy and quality of care" and further, because the Family Care funding scheme and rate stru cture is not "sufficient to enlist enough providers so that care and services are avai lable under the plan at least to the extent that such care and services are availabl e to the general populati on in the geographic area." 42 U.S.C. §1396a(a)(30)(A).
Count Nine: Wis. Stat., §51.61 - Wisconsin Patients Rights (227) The previous allegation are incorporated here as if fully set forth. (228) The named plaintiffs and the put ative class members are "patients" covered by the Wisconsin Patients Rights la w pursuant to Wis. Stat., §51.61(1) and/or Wis. Stat., §55.07. (229) The specific authority in Wis. Stat., §51.61(7) to bring an action for injunctive relief against "the state or any politic al subdivision thereof" overrides the notice and claim provisions in Wis. Stat., §893.80 and Wis. Stat., §893.82.
39

(230) Milwaukee County's employees, agents and contractors had actu al notice of the facts relevant to this complaint at all relevant times and any failure to give notice has not been prejudicial to Milwaukee County.
(231) The specific authority in W is. Stat., §51.61(7) to bring an action f or either damages or injunctive relief ag ainst "the state or any polit ical subdivision thereof" constitutes a specific waiver of any def enses that DHFS or Se cretary Nelson might otherwise have under the Eleventh Amendment to the United States Constitution.
(232) The acts, omissions , policies and procedures of MCDA, DHFS and Secretary Nelson as set out above violate the rights of the nam ed plaintiffs and the putative class members to the least restri ctive conditions nec essary to achieve the purposes of admission, commitment or placement pursuant to Wis. Stat., §51.61(1)(e).
(233) The acts, omissions , policies and procedures of MCDA, DHFS and Secretary Nelson as set out above violate the rights of the nam ed plaintiffs and the putative class members to prompt and adequate treatment, rehabilit ation and educational services appropriate to their condition pursuant to Wis. Stat., §51.61(1)(f).
(234) The acts, omissions , policies and procedures of MCDA, DHFS and Secretary Nelson as set out above violate the rights of competent individuals and guardians or agents acting on behalf of individual s to make all appropriate decision s and to exercise legal rights pursuant to Wis. Stat., §51.61(1)(a) - (x) & (8).
CONCLUSION WHEREFORE, plaintiffs request judgment as follows: (A) A declaratory judgment, a prelim inary injunction and a permanent
injunction pursuant to the Americans with Disabilities Act, §504 of the Rehabilitation Act and Wis. Stat., §51.61 directed to M ilwaukee County, DHFS and Secretary Nelson prohibiti ng any further discriminatory
40

treatment of Milwaukee County residents with disabili ties 60 years of age and older and ensuring that the named pl aintiffs and the members of the putative class receiv e services appropria te to their condition in t he most integrated and least restrictive setting.

(B) A declaratory judgment, a prelim inary injunction and a permanent injunction pursuant to 42 U.S.C. §1983, the First and Fourteenth Amendments to the Unit ed States Constit ution and the Medic aid Act directed to Milwaukee County and Secretary Nelson prohibiting any further discriminatory treatment of Milwaukee County residents with disabilities 60 years of age and older and ensuring that the named plaintiffs and the members of the putative class receive services appropriate to their condition in the most integrated and least restrictive setting.

(C) Preliminary and permanent injunctive relief pursuant to the ADA, §504, 42 U.S.C. §1983, the Firs t and Fourteenth Amendments to the United States Constitution, the Medicaid Act and Wis. Stat., §51.61 prohibiting Milwaukee County from cutting funding to or moving the named plaintiffs or any other members of the putative class except for legitimate and nondiscriminatory reasons with the approval of the individual or their guardian or agent, as appropriate.

(D) Payment of the reasonab le actual attorney f ees including litigation expenses and costs pursuant to 29 U.S. C. §794a, 42 U.S.C. §1988, 42 U.S.C. §2000d-7, 42 U.S.C. §12205 and Wis. Stat., §51.61(7).

Date: August 19, 2004

ROBERT Attorney

THEINE PLEDL for the Plaintiffs

s/ _______________

Robert Theine Pledl ______________________
State Bar No. 1007710 1110 N. Old World Third St., Suite 670 Milwaukee, Wisconsin 53203 TEL 414-225-8999 FAX 414-224-0811 EMAIL pledl@sbcglobal.net

41

 
 Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 1 of 14
CLOSED, E−FILE, PROTO
United States District Court Eastern District of Wisconsin (Milwaukee) CIVIL DOCKET FOR CASE #: 2:04−cv−00193−LA

Gerald Nelson et al v. Milwaukee County Assigned to: Judge Lynn Adelman Cause: 28:1441 Petition for Removal− Civil Rights Act
Plaintiff

Date Filed: 02/25/2004 Date Terminated: 10/19/2007 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: Federal Question

Gerald Nelson TERMINATED: 10/13/2006

represented by Martha Jane Perkins National Health Law Program Inc 211 N Columbia St Chapel Hill, NC 27514 919−968−6308 Fax: 919−968−8855 Email: somers@healthlaw.org LEAD ATTORNEY ATTORNEY TO BE NOTICED

Robert Theine Pledl Pledl Law Office Riverfront Plaza 1110 N Old World 3rd St − Ste 670 Milwaukee, WI 53203−1100 414−225−8999 Fax: 414−224−0811 Email: pledl@sbcglobal.net LEAD ATTORNEY ATTORNEY TO BE NOTICED

Sarah J Somers National Health Law Program Inc 211 N Columbia St Chapel Hill, NC 27514 919−968−6771 Fax: 919−968−8855 Email: somers@healthlaw.org LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Joan Bzdawka

represented by Martha Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Sarah J Somers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Plaintiff Sandra Ehrlichman

represented by Martha Jane Perkins (See above for address)

Case: 2:04-cv-00193-LA
Plaintiff Marilyn Berdikoff
Plaintiff Lenore Czarnecki TERMINATED: 07/07/2006
Plaintiff John Gorton TERMINATED: 10/13/2006
Plaintiff

As of: 03/13/2011 08:30 PM CDT 2 of 14
LEAD ATTORNEY ATTORNEY TO BE NOTICED
Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Sarah J Somers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Martha Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Sarah J Somers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Martha Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Sarah J Somers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Martha Jane Perkins (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Sarah J Somers (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:04-cv-00193-LA Classie Marcilis TERMINATED: 04/25/2005
Plaintiff Constance Ewig TERMINATED: 04/25/2005
Plaintiff Alberto Resendez TERMINATED: 04/25/2005
Plaintiff Bert Siegel TERMINATED: 04/25/2005
Plaintiff Kathleen Johnson TERMINATED: 04/25/2005

As of: 03/13/2011 08:30 PM CDT 3 of 14
represented by Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Robert Theine Pledl (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

V. Defendant Milwaukee County
Defendant Wisconsin Department of Health and Family Services

represented by John F Jorgensen Milwaukee County Corporation Counsel 901 N 9th St − Rm 303 Milwaukee, WI 53233−1425 414−278−4087 Fax: 414−223−1249 Email: jjorgensen@milwcnty.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Mary Ellen Poulos Milwaukee County Corporation Counsel 901 N 9th St − Rm 303 Milwaukee, WI 53233−1425 414−278−4295 Fax: 414−223−1249 LEAD ATTORNEY
represented by Mary E Burke Wisconsin Department of Justice Office of the Attorney General 17 W Main St PO Box 7857 Madison, WI 53707−7857 608−266−0323 Fax: 608−267−2223 Email: burkeme@doj.state.wi.us LEAD ATTORNEY

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 4 of 14

ATTORNEY TO BE NOTICED

Maureen McGlynn Flanagan Wisconsin Department of Justice Office of the Attorney General 17 W Main St PO Box 7857 Madison, WI 53707−7857 608−266−1780 Fax: 608−267−2223 Email: flanaganmm@doj.state.wi.us LEAD ATTORNEY ATTORNEY TO BE NOTICED

Maura F J Whelan Wisconsin Department of Justice Office of the Attorney General 17 W Main St PO Box 7857 Madison, WI 53707−7857 608−266−3859 Fax: 608−267−2223 Email: whelanmf@doj.state.wi.us TERMINATED: 03/21/2005

Defendant
Helene Nelson TERMINATED: 02/08/2007

represented by Mary E Burke (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Maureen McGlynn Flanagan (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Maura F J Whelan (See above for address) TERMINATED: 03/21/2005

Defendant
Kevin Hayden Secretary for Dept. of Health &Family Services

represented by Mary E Burke (See above for address) ATTORNEY TO BE NOTICED

Date Filed 02/25/2004
03/03/2004 03/09/2004 03/09/2004 03/15/2004

# Docket Text
1 NOTICE OF REMOVAL by Milwaukee County from Milwaukee County Circuit Court, Case Number: 04cv000862 with attached S/C. Consent Forms Distributed for Magistrate Judge Patricia Gorence. E−File Notification Distributed. ( Filing fee $ 150 ) (cms, ) Modified on 3/15/2004 PDF disk received from filer.(cms, ).
2 Docket Annotation; emailed plaintiff's attorney re: the PDF document requirement. (cms, )
3 ANSWER to Complaint by Milwaukee County.(cms, ) (Entered: 03/15/2004)
4 REFUSAL of Consent to Jurisdiction by US Magistrate Judge by Milwaukee County (cms, ) (Entered: 03/15/2004)
Case reassigned to Judge Lynn Adelman. Judge Patricia J Gorence no longer assigned to the case due to non−consent. (cms, )

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 5 of 14

04/01/2004
04/01/2004 04/09/2004 04/09/2004 04/09/2004 04/09/2004 04/09/2004 04/09/2004 04/09/2004 04/13/2004 04/13/2004 04/13/2004 04/13/2004
04/13/2004 04/14/2004
04/21/2004 04/21/2004 04/22/2004 04/23/2004
04/23/2004 04/26/2004
04/30/2004 04/30/2004

5 Minute Entry for proceedings held before Judge Lynn Adelman : Telephone Status Conference held on 4/1/2004 Motion hearing scheduled for 4/13/04 at 1:30. (ers, ) (Entered: 04/02/2004)
Set/Reset Deadlines/Hearings: Motion Hearing set for 4/13/2004 01:30 PM before Judge Lynn Adelman. (ers, ) (Entered: 04/02/2004)
6 MOTION to Amend/Correct Complaint by Gerald N. (Attachments: # 1 Supplement Proposed Complaint)(Pledl, Robert)
7 MOTION for Preliminary Injunction by Gerald N. (Pledl, Robert)
8 BRIEF in Support re 6 MOTION to Amend/Correct Complaint, 7 MOTION for Preliminary Injunction filed by all plaintiffs. (Pledl, Robert)
9 AFFIDAVIT of Lincoln Burr (Attachments: # 1 Exhibit Burr Exhibits A−E)(Pledl, Robert)
10 AFFIDAVIT of Richard Miller (Attachments: # 1 Exhibit Miller A−C)(Pledl, Robert)
11 AFFIDAVIT of Robert Pledl (Attachments: # 1 Exhibit Pledl A)(Pledl, Robert)
12 AFFIDAVIT of Nancy Steeves (Pledl, Robert)
13 MOTION in Limine by Milwaukee County. (Poulos, Mary)
14 AFFIDAVIT of Mary Ellen Poulos (Poulos, Mary)
15 BRIEF in Opposition re 7 MOTION for Preliminary Injunction filed by Milwaukee County. (Poulos, Mary)
17 Minute Entry for proceedings held before Judge Lynn Adelman : Motion Hearing held on 4/13/2004 re 13 DENYING AS MOOT MOTION in Limine filed by Milwaukee County, 6 GRANTING MOTION to Amend/Correct Complaint filed by Gerald N, 7 DENYING AS MOOT MOTION for Preliminary Injunction filed by Gerald N, Motions terminated:. (ers, ) (Entered: 04/15/2004)
18 AMENDED COMPLAINT against Milwaukee County filed by Joan B, Gerald N.(ers, ) (Entered: 04/15/2004)
16 SCHEDULING ORDER: Parties to serve state or state agency no later than 4/27/2004; discovery due 7/13/2004; summary judgment motions filed and served on or before 7/13/2004. See order for further instructions signed by Judge Lynn Adelman on 04/13/04. (cc: all counsel)(Wesolek, Marie)
Party Sandra Ehrlichman rep by Robert Theine Pledl, and Marilyn Berdikoff rep by Robert Theine Pledl added. (ers, )
19 Docket Annotation to Atty Pledl regarding a two part motion that needs to be resubmitted (ers, )
20 TRANSCRIPT of Agreement of the Parties ( Motion hearing ) held on 4/13/04 at 1:17 p.m. before Judge Adelman Court Reporter: Christine Petrie (ers, )
21 INCORRECT DOCUMENT ATTACHED. ATTORNEY WILL REFILE IT CORRECTLY. MOTION to Amend/Correct Scheduling Order by all plaintiffs. (Pledl, Robert) Modified on 4/23/2004 (ers, ).
22 MOTION to Amend/Correct Scheduling Order by all plaintiffs. (Pledl, Robert)
MARGIN ORDER signed by Judge Lynn Adelman on 4/26/04 granting 22 MOTION to Amend/Correct Scheduling Order filed by Gerald Nelson, Joan Bzdawka, Sandra Ehrlichman, Marilyn Berdikoff. (cc: all counsel) (Adelman, Lynn)
23 AMENDED DOCUMENT by all plaintiffs. Second Amended Complaint (Pledl, Robert)
Party Plaintiffs Lenore Czarnecki rep by Robert Theine Pledl, and John Gorton rep by Robert Theine Pledl, and Classie Marcilis rep by Robert Theine Pledl, and

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 6 of 14

04/30/2004 05/03/2004 05/20/2004
05/20/2004 05/24/2004 05/24/2004 05/25/2004 06/02/2004 06/18/2004 07/13/2004 07/16/2004 07/22/2004 07/23/2004
07/23/2004 08/19/2004 09/10/2004 09/17/2004 09/17/2004 09/17/2004

Constance Ewig rep by Robert Theine Pledl, and Alberto Resendez rep by Robert Theine Pledl, and DEfendants Wisconsin Department of Health and Family Services, and Helene Nelson added. (ers, )
Summons Issued Re: Amended Complaint as to Defendants Helene Nelson, Wisconsin Department of Health and Family Services. (ers, )
24 Docket Annotation regarding wrong event used (ers, )
25 7.4 EXPEDITED NON−DISPOSITIVE MOTION for Extension of Time to Answer or otherwise plead to Second Amended Complaint by Helene Nelson, Wisconsin Department of Health and Family Services. (ers, ) PDF Disk Received from Filer on 5/25/2004 (ers, ).
26 PDF Document Requirement form sent to Maura FJ Whelan regarding Expedited Non−Dispositive Motion for Extension of Time to Answer filed on 5/20/04. (ers, )
27 ANSWER to Second Amended Complaint by Milwaukee County.(ers, ) PDF Disk Received from Filer on 6/2/2004 (ers, ).
28 PDF Document Requirement form sent to John Jorgensen regarding Milwaukee County's Answer to Plaintiffs Second Amended Complaint filed on 5/24/04. (ers, )
29 ORDER signed by Judge Lynn Adelman on 05/24/04 granting 25 Motion for Extension of Time . (cc: all counsel) (Wesolek, Marie)
30 Docket Annotation sent to Attorney Jorgensen regarding signature on document # 27 (ers, )
31 ANSWER to Amended Complaint by Helene Nelson, Wisconsin Department of Health and Family Services. (Attachments: # 1 # 2)(Whelan, Maura)
32 MOTION to Amend/Correct Complaint, MOTION for Extension of Time by all plaintiffs. (Pledl, Robert)
33 SCHEDULING ORDER: signed by Judge Lynn Adelman on 07/16/04. Telephone Conference set for 7/22/2004 02:30 PM before Judge Lynn Adelman. (cc: all counsel)(Wesolek, Marie)
34 Minute Entry for proceedings held before Judge Lynn Adelman : Telephone Status Conference held on 7/22/2004. New Scheduling Order established. See Order for dates. (ers, ) (Entered: 07/23/2004)
35 SCHEDULING ORDER: signed by Judge Lynn Adelman on 07/22/04. Plaintiffs Expert Witness List due by 9/20/2004. Defendants Expert Witness List due by 10/29/2004. Motions due by 1/14/2005. Plaintiffs third amended complaint due by 08/19/04. Defendants answer to third amended complaint due by 09/10/04. (cc: all counsel)(Wesolek, Marie) Additional attachment(s) added on 7/23/2004 (bet, ).
36 Docket Annotation −− attached Scheduling Order replaces the document e−filed with docket entry 35 (bet, )
37 AMENDED COMPLAINT Third − add Pltffs Siegel and Johnson against all defendants filed by Marilyn Berdikoff, Joan Bzdawka, Lenore Czarnecki, Sandra Ehrlichman, Constance Ewig, John Gorton, Classie Marcilis.(Pledl, Robert)
38 Defendant's ANSWER to Amended Complaint (Third Amended) by Milwaukee County.(Poulos, Mary)
39 To Plaintiffs' Third Amended Complaint ANSWER to Amended Complaint by Helene Nelson, Wisconsin Department of Health and Family Services.(Flanagan, Maureen)
40 SEE DOCUMENT # 42 CERTIFICATE OF SERVICE by Helene Nelson, Wisconsin Department of Health and Family Services (Flanagan, Maureen) Modified on 9/17/2004 (ers, ).
41 LETTER from Maureen Flanagan (Flanagan, Maureen)

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 7 of 14

09/17/2004 12/29/2004 01/03/2005
01/28/2005
01/31/2005
03/21/2005 03/21/2005 03/21/2005 03/30/2005 03/30/2005 03/30/2005 03/30/2005 03/30/2005 03/30/2005 03/30/2005 04/19/2005 04/19/2005
04/19/2005 04/25/2005 05/11/2005 05/11/2005 05/11/2005
05/17/2005

42 CERTIFICATE OF SERVICE by Helene Nelson, Wisconsin Department of Health and Family Services (Flanagan, Maureen)
43 Letter REQUEST by plntfs' atty to vacate the current scheduling order and hold another scheduling conference (djd)
44 SCHEDULING ORDER: signed by Judge Lynn Adelman on 01/03/05. Telephone Conference set for 1/28/2005 04:00 PM before Judge Lynn Adelman. (cc: all counsel)(Wesolek, Marie)
45 Minute Entry for status conference held before Judge Lynn Adelman on 1/28/2005. Plntf to answer state's discovery request by 2/28/05; Plntf to file motion for class certification by 3/30/05; Parties to complete the issue identification process by 3/30/05. (djd) (Entered: 01/31/2005)
46 AMENDED SCHEDULING ORDER: plaintiffs answer to defendants' discovery requests due 2/28/05; plaintiffs' motion for class certification due 3/30/05 − defendants' response due by 5/31/05; parties stiuplation as to issues in dispute due 3/30/05 signed by Judge Lynn Adelman on 1/28/05. (cc: all counsel)(Wesolek, Marie)
47 LETTER from AAG Mary E. Burke (Burke, Mary)
48 CERTIFICATE OF SERVICE by Wisconsin Department of Health and Family Services, Helene Nelson (Burke, Mary)
49 NOTICE by Wisconsin Department of Health and Family Services, Helene Nelson Of Substitution of Counsel (Burke, Mary)
50 STIPULATION Regarding Issues in Dispute by all plaintiffs (Pledl, Robert)
51 MOTION to Amend/Correct Complaint by all plaintiffs. (Attachments: # 1 Proposed 4th Amended Complaint)(Pledl, Robert)
52 BRIEF in Support re 51 MOTION to Amend/Correct Complaint filed by all plaintiffs. (Pledl, Robert)
53 AFFIDAVIT of Robert Theine Pledl (Attachments: # 1 A−SRCA 3−16−5 Memo# 2 B−CV)(Pledl, Robert)
54 MOTION to Certify Class by all plaintiffs. (Pledl, Robert)
55 BRIEF in Support re 54 MOTION to Certify Class filed by all plaintiffs. (Pledl, Robert)
56 AFFIDAVIT of Lincoln Burr (Pledl, Robert)
57 LETTER from AAG Maureen McGlynn Flanagan (Attachments: # 1)(Flanagan, Maureen)
58 MOTION for Order Regarding Motion for Permission to File Fourth Amended Complaint and Modified Scheduling Order by Wisconsin Department of Health and Family Services, Helene Nelson. (Flanagan, Maureen)
59 LETTER from AAG Maureen McGlynn Flanagan (Flanagan, Maureen)
60 SCHEDULING ORDER: see order for details signed by Judge Lynn Adelman on 4/21/05. (cc: all counsel)(Wesolek, Marie)
61 LETTER from Maureen M Flanagan (Flanagan, Maureen)
62 CERTIFICATE OF SERVICE by Wisconsin Department of Health and Family Services, Helene Nelson (Flanagan, Maureen)
63 RESPONSE Answer of Defendants Wisconsin Department of Health and Family Services and Helene Nelson to Plaintiffs' Fourth Amended Complaint filed by Wisconsin Department of Health and Family Services, Helene Nelson. (Flanagan, Maureen)
64 Milwaukee County ANSWER to Complaint by Milwaukee County. (Attachments: # 1)(Poulos, Mary)

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 8 of 14

05/24/2005
06/10/2005
06/13/2005
06/14/2005
06/15/2005 06/15/2005 06/15/2005
06/15/2005
06/16/2005 06/16/2005 07/08/2005 07/14/2005 07/22/2005 07/22/2005 07/22/2005 07/22/2005 08/05/2005 08/05/2005
09/09/2005 09/09/2005 09/09/2005

65 MOTION to Modify Scheduling Order by Milwaukee County, Wisconsin Department of Health and Family Services, Helene Nelson. (Attachments: # 1 # 2 # 3)(Burke, Mary)
66 MOTION to Amend/Correct Stipulated Motion Regarding Modified Scheduling Order by all parties. (Attachments: # 1 Text of Proposed Order Third Amended Scheduling Order# 2 Cover Letter# 3 Certificate of Service)(Burke, Mary)
67 STIPULATION &THIRD AMENDED SCHEDULING ORDER signed by Judge Lynn Adelman on 6/13/05. Motions to dismiss due 6/15/05; Responses due 7/15/05; Replies due 7/29/05; Plntfs' motion to certify class due 10 days after Court's Order on Motions to Dismiss; Responses to class motion due 45 days after plntfs' motion to certifiy class; Replies on class motion due 15 days after responses to motion for class certification. (cc: all counsel)(djd) (Entered: 06/14/2005)
NOTICE by the Court reminding parties to provide paper copies of all documents electronically filed to chambers pursuant to Judge Adelman's standing order. (Wesolek, Marie)
68 MOTION for Judgment on the Pleadings by Milwaukee County. (Poulos, Mary) PDF disk rec'd from filer 6/16/05. (djd )
69 BRIEF in Support re 68 MOTION for Judgment on the Pleadings filed by Milwaukee County. (Poulos, Mary)
70 MOTION to Dismiss Fourth Amended Complaint by Wisconsin Department of Health and Family Services, Helene Nelson. (Attachments: # 1 # 2 # 3 # 4)(Flanagan, Maureen)
71 BRIEF in Support re 70 MOTION to Dismiss Fourth Amended Complaint filed by Wisconsin Department of Health and Family Services, Helene Nelson. (Attachments: # 1)(Flanagan, Maureen)
72 Docket Annotation − Email sent to Atty Poulos re #68 and #69 (djd )
73 Docket Annotation − Email sent to Atty Flanagan re #70 and #71 (djd )
74 ORDER signed by Judge Lynn Adelman on 7/8/05 granting 66 Motion to Amend/Correct . (cc: all counsel) (Wesolek, Marie)
75 STIPULATION to Extend Briefing Schedule by all plaintiffs (Pledl, Robert)
76 Second AFFIDAVIT of Lincoln Burr (Pledl, Robert)
77 BRIEF in Opposition re 70 MOTION to Dismiss Fourth Amended Complaint, 68 MOTION for Judgment on the Pleadings filed by all plaintiffs. (Pledl, Robert)
78 AFFIDAVIT of Gerald Kallas (with attachments A−J). FILED IN PAPER FORMAT − ORIGINAL IN COURT FILE. (rpz, ) (Entered: 07/25/2005)
79 AFFIDAVIT of Thomas Cook (with attachments A−I). FILED IN PAPER FORMAT − ORIGINAL IN COURT FILE. (rpz, ) (Entered: 07/25/2005)
80 REPLY BRIEF in Support re 68 MOTION for Judgment on the Pleadings filed by Milwaukee County. (Poulos, Mary)
81 REPLY BRIEF in Support re 70 MOTION to Dismiss Fourth Amended Complaint filed by Wisconsin Department of Health and Family Services, Helene Nelson. (Attachments: # 1 Civil Cover Sheet Cover Letter# 2 Civil Cover Sheet Cert of Service)(Flanagan, Maureen)
82 7.4 MOTION to Supplement Brief in Opposition to Pending Defense Motions by all plaintiffs. (Pledl, Robert)
83 Third AFFIDAVIT of Robert Theine Pledl (Pledl, Robert)
84 BRIEF in Opposition re 70 MOTION to Dismiss Fourth Amended Complaint, 68 MOTION for Judgment on the Pleadings −Supplemental filed by all plaintiffs. (Pledl, Robert)

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 9 of 14

09/16/2005
02/07/2006
02/09/2006
02/15/2006 02/16/2006 02/17/2006
02/23/2006 02/23/2006 02/23/2006
02/23/2006
02/23/2006 03/01/2006 03/01/2006 03/01/2006 03/01/2006 03/01/2006 03/01/2006 03/01/2006 03/16/2006
03/30/2006 03/30/2006

85 RESPONSE to Motion re 82 7.4 MOTION to Supplement Brief in Opposition to Pending Defense Motions filed by Wisconsin Department of Health and Family Services, Helene Nelson. (Attachments: # 1 Cover Letter# 2 Certificate of Service)(Burke, Mary)
86 ORDER signed by Judge Lynn Adelman on 2/7/06 granting in part and denying in part 68 Motion for Judgment on the Pleadings, granting in part and denying in part 70 Motion to Dismiss. (cc: all counsel) (Wesolek, Marie)
87 SCHEDULING ORDER: signed by Judge Lynn Adelman on 2/9/06. Telephone Scheduling Conference set for 3/23/2006 10:30 AM before Judge Lynn Adelman. (cc: all counsel)(Wesolek, Marie)
88 STIPULATION for Extension of Class Motion Deadline by all plaintiffs (Pledl, Robert)
89 ORDER cancelling scheduling conference set for 3/23/06 signed by Judge Lynn Adelman on 2/16/06. (cc: all counsel)(Wesolek, Marie)
90 ORDER: plaintiffs' deadline for filing motion to certify class with briefs extended to 3/1/06; defendants' deadline for response is 4/17/06; plaintiffs' deadline for reply brief is 5/1/06 signed by Judge Lynn Adelman on 2/17/06. (cc: all counsel)(Wesolek, Marie)
91 LETTER from Maureen McGlynn Flanagan (Flanagan, Maureen)
92 CERTIFICATE OF SERVICE by Wisconsin Department of Health and Family Services (Flanagan, Maureen)
93 MOTION for Order State Defendants' Motion for Certification of Interlocutory Order Pursuant to 28 U.S.C. sec. 1292(b) by Wisconsin Department of Health and Family Services, Helene Nelson. (Flanagan, Maureen)
94 BRIEF in Support re 93 MOTION for Order State Defendants' Motion for Certification of Interlocutory Order Pursuant to 28 U.S.C. sec. 1292(b) filed by Wisconsin Department of Health and Family Services, Helene Nelson. (Flanagan, Maureen)
95 MOTION to Stay Pending Appeal by Wisconsin Department of Health and Family Services, Helene Nelson. (Attachments: # 1)(Flanagan, Maureen)
96 STIPULATION regarding partial dismissal by all plaintiffs (Pledl, Robert)
97 NOTICE of Appearance by Robert Theine Pledl on behalf of all plaintiffs. Attorney(s) appearing: Sarah Somers &Jane Perkins (Pledl, Robert)
98 DECLARATION of Atty. Sarah Somers (Pledl, Robert)
99 DECLARATION of Atty. Jane Perkins (Pledl, Robert)
100 STIPULATION of facts in connection with motion for class certification by all plaintiffs (Pledl, Robert)
101 Second MOTION to Certify Class by all plaintiffs. (Pledl, Robert)
102 BRIEF in Support re 101 Second MOTION to Certify Class filed by all plaintiffs. (Pledl, Robert)
103 BRIEF in Opposition re 93 MOTION for Order State Defendants' Motion for Certification of Interlocutory Order Pursuant to 28 U.S.C. sec. 1292(b), 95 MOTION to Stay Pending Appeal filed by all plaintiffs. (Pledl, Robert)
104 LETTER from AAG Mary E. Burke (Attachments: # 1 Certificate of Service)(Burke, Mary)
105 REPLY BRIEF in Support re 93 MOTION for Order State Defendants' Motion for Certification of Interlocutory Order Pursuant to 28 U.S.C. sec. 1292(b) filed by Wisconsin Department of Health and Family Services, Helene Nelson. (Burke, Mary)

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 10 of 14

04/06/2006
04/11/2006 04/11/2006
04/12/2006
05/22/2006
05/22/2006
05/22/2006 05/24/2006
05/26/2006 05/26/2006 05/26/2006 05/26/2006 05/26/2006 06/16/2006 06/16/2006 06/16/2006 06/16/2006 07/07/2006 07/07/2006
10/13/2006 10/19/2006
11/21/2006

106 ORDER signed by Judge Lynn Adelman on 4/5/06 denying 93 Motion for Order, denying 95 Motion to Stay . (cc: all counsel) (Wesolek, Marie) Order with corrected date added on 4/6/2006 and e−mailed to counsel (bet)
107 LETTER from DHFS and Helene Nelson (Attachments: # 1)(Burke, Mary)
108 STIPULATION Motion Regarding Amended Order Extending Class Motion Deadlines by Wisconsin Department of Health and Family Services, Helene Nelson (Attachments: # 1)(Burke, Mary)
109 ORDER extending class motion deadlines. Defendants' responses due 5/22/06; plaintiffs' reply due 6/12/06 signed by Judge Lynn Adelman on 4/12/06. (cc: all counsel)(Wesolek, Marie)
110 STIPULATION Amended Stipulation for Extension of Class Motion Deadlines by Wisconsin Department of Health and Family Services, Helene Nelson (Flanagan, Maureen)
111 PROPOSED Second Amended Order Extending Class Motion Deadlines filed by Wisconsin Department of Health and Family Services, Helene Nelson. (Flanagan, Maureen)
112 CERTIFICATE OF SERVICE by Wisconsin Department of Health and Family Services, Helene Nelson (Attachments: # 1)(Flanagan, Maureen)
113 ORDER extending deadline to 5/25/06 for defendants' responses to class motion; to 6/16/06 for plaintiffs' reply brief on class motion signed by Judge Lynn Adelman on 5/24/06. (cc: all counsel)(Wesolek, Marie)
114 BRIEF in Opposition re 101 Second MOTION to Certify Class filed by Wisconsin Department of Health and Family Services, Helene Nelson. (Flanagan, Maureen)
115 AFFIDAVIT of James Hennen (Flanagan, Maureen)
116 AFFIDAVIT of Maureen McGlynn Flanagan (Flanagan, Maureen)
117 AFFIDAVIT of Charles Jones (Flanagan, Maureen)
118 CERTIFICATE OF SERVICE by Wisconsin Department of Health and Family Services, Helene Nelson (Attachments: # 1)(Flanagan, Maureen)
119 REPLY BRIEF in Support re 101 Second MOTION to Certify Class filed by all plaintiffs. (Pledl, Robert)
120 AFFIDAVIT of Jon Neal, CPA (Pledl, Robert)
121 AFFIDAVIT of Andrew Holman, CPA (Pledl, Robert)
122 AFFIDAVIT of Thomas A. Nowak, MSW (Pledl, Robert)
123 STIPULATION regarding dismissal of Lenore Czarnecki by Lenore Czarnecki (Pledl, Robert)
124 ORDER signed by Judge Lynn Adelman on 7/7/06 dismissing all claims by and on behalf of Lenore Czarnecki and Carolyn Cetnarowski with prejudice and without costs or attorneys fees to any party. (cc: all counsel) (Adelman, Lynn) (Entered: 07/11/2006)
125 DECISION AND ORDER signed by Judge Lynn Adelman on 10/13/06 granting 101 plaintiff's motion for class certification. (cc: all counsel) (Adelman, Lynn)
126 SCHEDULING ORDER: signed by Judge Lynn Adelman on 10/18/06. Telephone Scheduling Conference set for 11/30/2006 10:30 AM before Judge Lynn Adelman. (cc: all counsel)(Wesolek, Marie)
127 Proposed Discovery Plan and Preconference Report REPORT of Rule 26(f) Plan by all parties. (Attachments: # 1 Protective Order Regarding Disclosure and Use of Health Records and Other Individually Identifiable Health Information)(Flanagan, Maureen)

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 11 of 14

11/21/2006 11/29/2006 11/30/2006 11/30/2006
12/01/2006 12/01/2006 12/04/2006
12/04/2006 12/05/2006 12/15/2006 12/18/2006 12/19/2006
12/21/2006
12/21/2006 01/04/2007 02/02/2007 02/02/2007 02/02/2007 02/02/2007

128 LETTER from Maureen McGlynn Flanagan filing Proposed Discovery Plan and Preconference Report. (Attachments: # 1 Certificate of Service by Electronic Filing)(Flanagan, Maureen)
129 Docket Annotation − Email sent to Atty Flanagan re Certificate of Service 128 (djd)
130 PROTECTIVE ORDER signed by Judge Lynn Adelman on 11/30/06. (cc: all counsel)(Wesolek, Marie)
131 Minute Entry for telephonic scheduling conference held 11/30/06 before Judge Lynn Adelman: State to submit proposed scheduling order; Case referred to Magistrate Judge Patricia J Gorence for settlement conference. (djd) (Entered: 12/01/2006)
132 PROPOSED Rule 16(b) Scheduling Order filed by all parties. (Attachments: # 1 Cover Letter to proposed Rule 16(b) Scheduling Order)(Burke, Mary)
133 CERTIFICATE OF SERVICE by all parties proposed Rule 16(b) Scheduling Order (Burke, Mary)
134 SCHEDULING ORDER: signed by Judge Lynn Adelman on 12/4/06.Discovery due by 1/4/2007,Plaintiffs Expert Witness List due by 4/16/2007,Defendants Expert Witness List due by 7/16/2007, summary judgment motions due by 11/1/2007. See order for more dates. (cc: all counsel)(Wesolek, Marie)
135 ORDER REFERRING CASE to Magistrate Judge Patricia J Gorence to conduct mediation signed by Judge Lynn Adelman on 12/4/06. (cc: all counsel)(Wesolek, Marie)
136 ORDER signed by Judge Patricia J Gorence on 12/5/06. Mediation Hearing set for 1/5/2007 09:15 AM before Magistrate Judge Patricia J Gorence. (cc: all counsel)(cms) (Entered: 12/06/2006)
137 LETTER from Robert Pledl regarding Mediation Schedule. (Pledl, Robert)
138 NOTICE of Hearing: (cc: all counsel) Telephone Status Conference set for 12/19/2006 03:00 PM before Magistrate Judge Patricia J Gorence. (cms)
139 Minute Entry for proceedings held before Judge Patricia J Gorence : Telephone Conference held on 12/19/2006 Mediation Hearing reset for 2/26/2007 10:00 AM before Magistrate Judge Patricia J Gorence. Court discusses the case and preparation for mediation however another telephone conference was set for 12/20/06 to discuss matters further.(Tape #3:09:24 − 3:34:23) (cms) (Entered: 12/20/2006)
140 Minute Entry for proceedings held before Judge Patricia J Gorence : Telephone Conference held on 12/21/2006; court discusses the mediation. Plaintiff shall provide the names of possible participants in the mediation to the defendants' by 1/3/07. The defendants shall provide a response by 1/10/07. (Tape #2:36:20 − 2:57:01) (cms) Modified on 12/21/2006 to attach correct minute entry (cms).
141 ORDER signed by Judge Patricia J Gorence on 12/21/06. Mediation Hearing set for 2/26/2007 10:00 AM before Magistrate Judge Patricia J Gorence. (cc: all counsel)(cms)
142 LETTER from Atty Pledl re correcting ECF (ECF corrected − Plntfs John Gorton and Gerald Nelson termed) (djd)
143 MOTION to Substitute Party Motion to Substitute Named Defendant by Helene Nelson. (Burke, Mary)
144 PROPOSED Order Substituting Kevin Hayden as Defendant filed by Helene Nelson. (Burke, Mary)
145 CERTIFICATE OF SERVICE by Helene Nelson (Burke, Mary)
146 Docket Annotation − Email sent to Atty Burke re 143 and 144 (djd)

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 12 of 14

02/08/2007 02/15/2007 02/26/2007 02/26/2007 03/27/2007
03/27/2007 04/25/2007 05/24/2007 05/25/2007
06/27/2007 07/16/2007 07/27/2007 07/31/2007
08/01/2007 08/14/2007
08/14/2007
08/14/2007
08/14/2007

147 ORDER signed by Judge Lynn Adelman on 2/7/07 granting 143 Motion to Substitute Party. Kevin Hayden added. Helene Nelson terminated. (cc: all counsel) (Wesolek, Marie)
148 LETTER. (Jorgensen, John)
149 NOTICE of Hearing: (cc: all counsel) Mediation Hearing continued to 3/27/2007 10:00 AM before Magistrate Judge Patricia J Gorence. (cms) (Entered: 02/27/2007)
150 Minute Entry for proceedings held before Judge Patricia J Gorence : Mediation Hearing held on 2/26/2007. Mediation continued to 03/27/07 at 10:00 a.m. (jac, Patricia J Gorence) (Entered: 02/27/2007)
151 Minute Entry for proceedings held before Judge Patricia J Gorence : Telephone Conference held on 3/27/2007; parties have settled the case except for the attorneys fees. They are still trying to work that part out. The parties will notify the court in writing by 4/26/07 as to whether or not they have settled the case. (Tape #10:05:58 − 10:15:20) (cms)
152 ORDER signed by Judge Patricia J Gorence on 3/27/07. (cc: all counsel)(cms)
153 LETTER from Mary E. Burke Attorney's fees settlement discussions. (Burke, Mary)
154 LETTER from Mary E. Burke re: conference call on 5/25/07 at 2:00 p.m.. (Burke, Mary)
155 Minute Entry for proceedings held before Judge Patricia J Gorence : Telephone Conference held on 5/25/2007; the parties agree on the atty's fees and costs. The county needs to get approval from the county board. Parties will notify the court upon completion of that. Parties will also email the Judge the proposed settlement order. (Tape #2:05:10 − 2:15:41) (cms) (Entered: 05/29/2007)
156 LETTER from John Jorgensen. (Jorgensen, John)
157 SCHEDULING ORDER: signed by Judge Lynn Adelman on 7/16/07. Telephonic Status Conference set for 7/31/2007 11:30 AM before Judge Lynn Adelman. (cc: all counsel)(Wesolek, Marie)
158 LETTER from Milwaukee County. (Jorgensen, John)
159 Minute Entry for telephonic status conference held 7/31/07 before Judge Lynn Adelman: Parties to file joint motion for preliminary approval by 8/14/07; Assuming Court grants motion, Fairness Hearing will be set for 10/19/2007 01:30 PM before Judge Lynn Adelman. (djd) (Entered: 08/01/2007)
160 ORDER signed by Judge Patricia J. Gorence on 08/01/07 returning case to Judge Adelman for entry of dismissal order. Case no longer referred to Patricia J Gorence. (cc: all counsel)(jac, Patricia J Gorence)
161 Joint MOTION for Settlement Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing by Kevin Hayden, Wisconsin Department of Health and Family Services. (Burke, Mary)
162 BRIEF in Support filed by Kevin Hayden, Wisconsin Department of Health and Family Services re 161 Joint MOTION for Settlement Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing. (Burke, Mary)
163 PROPOSED Proposed Order Preliminarily Approving the Proposed Settlement Agreement, Directing Distribution of the Notice of Proposed Settlement Agreement, and Scheduling Fairness Hearing filed by Kevin Hayden, Wisconsin Department of Health and Family Services. (Burke, Mary)
164 CERTIFICATE OF SERVICE by Kevin Hayden, Wisconsin Department of Health and Family Services filing Joint Motion and Memorandum for Preliminary and Final Approval of the Settlement Agreement (Burke, Mary)

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 13 of 14

08/21/2007
08/21/2007 09/19/2007 09/21/2007 09/24/2007 09/24/2007
09/24/2007 09/25/2007 09/25/2007 09/26/2007
09/26/2007 09/26/2007 09/26/2007 09/26/2007 09/26/2007 09/26/2007 09/26/2007 09/26/2007
09/26/2007 09/26/2007 09/26/2007
10/02/2007 10/09/2007 10/09/2007

165 ORDER preliminarily approving proposed settlement, directing distribution of notice of proposed settlement and schedule of fairness hearing signed by Judge Lynn Adelman on 8/21/07. See order for dates and deadlines. (cc: all counsel)(Wesolek, Marie)
Set/Reset Hearings: Fairness Hearing set for 10/19/2007 01:30 PM in Courtroom 390 before Judge Lynn Adelman. (djd) (Entered: 08/22/2007)
166 AFFIDAVIT of of Mailing by Robert Theine Pledl. (Pledl, Robert)
167 MOTION to Modify Schedule by all plaintiffs. (Pledl, Robert)
168 Letter REQUEST by Estella Stewart to speak at hearing. (djd)
MARGIN ORDER to doc. #167 approving dates set forth, WITH EXCEPTION OF telephone status conference, signed by Judge Lynn Adelman on 9/24/07. Telephone conference is set for 10/12/07 at 4:00 p.m. The court will initiate the call. (cc: all counsel) (Wesolek, Marie)
169 LETTER from Rinda McClendon. (djd)
170 LETTER from Jessie Larson, POA for Edna Craven. (djd)
171 LETTERS from Bonnie Vanlandingham. (djd) (Entered: 09/26/2007)
172 BRIEF in Support filed by Kevin Hayden, Wisconsin Department of Health and Family Services re 161 Joint MOTION for Settlement Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing State Defendants' Memorandum in Support of Joint Motion for Approval of Settlement Agreement. (Burke, Mary)
173 Proposed Findings of Fact by Kevin Hayden, Wisconsin Department of Health and Family Services (Burke, Mary)
174 AFFIDAVIT of Mary E. Burke. (Burke, Mary)
175 AFFIDAVIT of Hollister Chase. (Burke, Mary)
176 AFFIDAVIT of Patricia Chiazor. (Burke, Mary)
177 AFFIDAVIT of David Dudley. (Burke, Mary)
178 AFFIDAVIT of Maureen McGlynn Flanagan. (Burke, Mary)
179 CERTIFICATE OF SERVICE by Kevin Hayden, Wisconsin Department of Health and Family Services (Burke, Mary)
180 BRIEF in Support filed by Milwaukee County re 161 Joint MOTION for Settlement Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing. (Jorgensen, John)
181 AFFIDAVIT of James Hennen re: notice to class members. (Jorgensen, John)
182 Fourth AFFIDAVIT of Robert Theine Pledl. (Pledl, Robert)
183 BRIEF in Support filed by all plaintiffs re 161 Joint MOTION for Settlement Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing. (Pledl, Robert)
184 LETTER from Patricia Bernethy. (djd) (Entered: 10/03/2007)
185 AFFIDAVIT of Monica Deignan. (Burke, Mary)
186 REPLY BRIEF in Support filed by Kevin Hayden, Milwaukee County, Wisconsin Department of Health and Family Services re 161 Joint MOTION for Settlement Preliminary and Final Approval of the Settlement Agreement, and for an Order Directing Distribution of Notice of Proposed Settlement Agreement and Scheduling Fairness Hearing State Defendants' Supplemental Proposed Findings of Fact and

Case: 2:04-cv-00193-LA As of: 03/13/2011 08:30 PM CDT 14 of 14

10/09/2007 10/09/2007 10/12/2007 10/18/2007
10/19/2007

Supplemental Argument in Support of the Proposed Settlement Agreement. (Burke, Mary)
187 CERTIFICATE OF SERVICE by Kevin Hayden, Milwaukee County, Wisconsin Department of Health and Family Services (Burke, Mary)
188 Fifth AFFIDAVIT of Robert Theine Pledl. (Pledl, Robert)
189 Minute Entry for telephonic status conference held 10/12/07 before Judge Lynn Adelman: Parties and Court agreed on procedure for next week's hearing (djd) (Entered: 10/15/2007)
190 Minute Entry for settlement conference/fairness hearing held 10/18/07 before Judge Lynn Adelman. Court adopted parties' proposed findings of fact &conclusions of law. Court approved class settlement. This case is closed. (Court Reporter Cheryl Stawski) (djd) (Entered: 10/22/2007)
191 SETTLEMENT AGREEMENT signed by Judge Lynn Adelman on 10/19/07. Case Terminated. (cc: all counsel)(djd) (Entered: 10/22/2007)