Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-35296/USCOURTS-ca9-14-35296-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

K. W., by his next friend D.W.; C.

M.; C. L.; A. L., through her

guardian E.B.; K. S., through his

next friend S.S.; M. S., through his

guardian V.S.; N. R., through her

next friend G.R.; T. F., through her

guardian R.F.; T. M., through his

guardian T.W.; B. B., through his

next friend D.B.; R. P., through her

guardian T.P.; M. S., through her

guardian D.S.; E. L.; TOBY

SCHULTZ, by and through his legal

guardian Jana Schultz on behalf of

himself and all others similarly

situated; BREANNA MULLIC, by and

through her legal guardian Brenda

Passmore; CALEB HALL, by and

through his next friend Melanie Hall,

Plaintiffs-Appellees,

v.

RICHARD ARMSTRONG, in his official

capacity as Director of the Idaho

Department of Health and Welfare;

LISA HETTINGER, in her official

capacity as Medicaid Administrator

of the Idaho Department of Health

and Welfare; IDAHO DEPARTMENT

No. 14-35296

D.C. Nos.

1:12-cv-00022-

BLW

3:12-cv-00058-

BLW

OPINION

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2 K.W. V. ARMSTRONG

OF HEALTH AND WELFARE, a

department of the State of Idaho,

Defendants-Appellants.

Appeal from the United States District Court

for the District of Idaho

B. Lynn Winmill, Chief District Judge, Presiding

Argued and Submitted

November 18, 2014—Portland, Oregon

Filed June 5, 2015

Before: Richard R. Clifton, Milan D. Smith, Jr.,

and Andrew D. Hurwitz, Circuit Judges

Opinion by Judge Milan D. Smith, Jr.;

Partial Concurrence and Partial Dissent by Judge Clifton

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K.W. V. ARMSTRONG 3

SUMMARY*

Medicaid Act

The panel affirmed the district court’s order expanding a

preliminary injunction forbidding the Idaho Department of

Health and Welfare from decreasing the individual budgets of

participants in and applicants to Idaho’s Developmental

Disabilities Waiver program without adequate notice.

The DD Waiver program supplants traditional Medicaid

plan services for Idaho beneficiaries with home-based support

services. The plaintiffs allege that the budget-decrease

notices that the Department sent violated both the Due

Process Clause and the fair hearing requirements of the

Medicaid Act.

The panel held that the dispute was ripe for resolution

because the plaintiffs alleged that they suffered a deprivation

of services without adequate notice when their budgets were

decreased, and thus felt the effects of the Department’s

actions in a concrete way.

The panel affirmed the district court’s order expanding

the preliminary injunction to cover a subsequently-certified

plaintiffs’ class. The panel held that the district court did not

abuse its discretion in finding that the plaintiffs were likely to

succeed on the merits of their claims under the Due Process

Clause and the Medicaid Act. The panel rejected the

Department’s argument that the preliminary injunction

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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4 K.W. V. ARMSTRONG

violated the Eleventh Amendment by awarding retrospective

relief against the state.

The panel held that it lacked pendent jurisdiction to

review the district court’s order denying the Department’s

motion to approve a proposed revised budget notice to the

class because this order was not inextricably intertwined with

whether the district court abused its discretion in expanding

the preliminary injunction.

Concurring in part and dissenting in part, Judge Clifton

wrote that the panel had pendent jurisdiction over the district

court’s denial of the Department’s motion to approve a

proposed revised notice because if the revised notice were

adequate, then the plaintiffs would not have established an

ongoing violation, and there would have been no good reason

to extend the preliminary injunction.

COUNSEL

Cynthia Yee-Wallace (argued), Clay R. Smith, and W. Scott

Danzig, Deputy Attorneys General, Office of the Attorney

General, Boise, Idaho, for Defendants-Appellants.

Richard Alan Eppink (argued), American Civil Liberties

Union of Idaho Foundation, Boise, Idaho; James Piotrowski,

Herzfeld & Piotrowski, LLP, Boise, Idaho, for PlaintiffsAppellees.

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K.W. V. ARMSTRONG 5

OPINION

M. SMITH, Circuit Judge:

Richard Armstrong, in his official capacity as Director of

the Idaho Department of Health and Welfare, Lisa Hettinger,

in her official capacity as Medicaid Administrator of the

Idaho Department of Health and Welfare, and the Idaho

Department of Health and Welfare (collectively,

Department), appeal from the district court’s order expanding

a preliminary injunction forbidding the Department from

decreasing the individual budgets of a class of participants in

and applicants to Idaho’s Developmental Disabilities Waiver

program (DD Waiver program) without adequate notice. The

Department also seeks review of the district court’s order

denying its motion to approve a proposed Budget Notice to

the class.

On appeal, the Department argues that the Plaintiffs’

claims are not ripe because calculating a lower individual

budget does not trigger the fair hearing provisions of the

Medicaid Act, 42 U.S.C. § 1396a(a)(3); 42 C.F.R. § 431.206,

or deprive a participant of property under the Due Process

Clause, U.S. Const. amend. XIV, § 1. The Department also

argues that the Plaintiffs failed to show that they were likely

to succeed on the merits of their claims and that the

injunction violated the Eleventh Amendment.

We affirm the district court’s extension of the preliminary

injunction to the class and hold that we lack pendent

jurisdiction to review the order regarding the proposed notice.

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6 K.W. V. ARMSTRONG

FACTUAL AND PROCEDURAL BACKGROUND

I. Factual Background

The Medicaid Act allows states to apply for a waiver to

provide home- and community-based services to

developmentally disabled Medicaid beneficiaries to help

them avoid institutionalization. See 42 U.S.C. § 1396n; 42

C.F.R. § 440.180. The federal government has approved

Idaho’s DD Waiver program, which supplants traditional

Medicaid plan services for Idaho beneficiaries with homebased support services, including residential habitation

services, chore services, supported employment, non-medical

transportation, specialized medical equipment, home

delivered meals, and skilled nursing. Idaho Admin. Code. r.

16.03.10.700. As of July 2013, there were 3,288 participants

in the DD Waiver program.

The Department assigns each DD Waiver program

participant an individualized budget. The budget is set

“according to an individualized measurement of the

participant’s functional abilities, behavioral limitations, and

medical needs, related to the participant’s disability.” Id. r.

16.03.10.514. Participants select the services they wish to

receive by crafting an annual “plan of service” based on their

individualized budgets. Id. r. 16.03.10.513.

The Plaintiffs represent a class of participants in and

applicants to the DD Waiver program. They allege that the

Department failed to give adequate notice when their

individualized budgets were decreased. The Plaintiffs

contend that the notices the Department sent violated both the

Due Process Clause and the fair hearing requirements of the

Medicaid Act.

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K.W. V. ARMSTRONG 7

A. Eligibility and Annual Reevaluation

To be eligible for DD Waiver program services, an adult

Medicaid participant must have a developmental disability

impairing mental or physical function or independence. See

id. rr. 16.03.10.500, .501, .700. Those interested in receiving

DD Waiver services must submit an application, and current

participants are reassessed annually to determine whether

they remain eligible. During the annual reevaluations, the

Department administers several assessments to determine a

participant’s eligibility and level of need.

B. Budget Calculation and Notice

If the Department determines that an individual is eligible

for services, it must calculate the participant’s individualized

budget. See id. rr. 16.03.10.513., .514. To do so, the

Department enters information gathered during the

participant’s assessments into an Adult Budget Calculation

Tool (Budget Tool). The Budget Tool is a statistical model

designed to predict a participant’s needs based on the

participant’s characteristics. Once the Department has

calculated a participant’s budget for the upcoming plan year,

it sends a Budget Notice to the participant confirming

eligibility and specifying the budget amount. The Budget

Notices the Department sent in 2011 (2011 Budget Notices)

are the subject of this dispute.

C. The Service Plan

If the participant does not appeal the calculated budget,

the participant works with a plan developer or support broker

to submit a service plan to the Department. The service plan

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8 K.W. V. ARMSTRONG

lists the type and frequency of services and outlines their cost

relative to the participant’s calculated budget.

After the participant submits a service plan, the

Department determines whether it meets the needs of the

participant, safeguards the participant’s health and safety, and

is within the calculated budget. If the plan is inadequate or

over-budget, the Department may refer the plan back to the

developer for adjustment. If the plan still does not meet the

participant’s needs or is not within budget, the Department

may either authorize some of the services or deny all of the

services in the plan.

In such cases, the Department notifies the participant

about which services, if any, were approved. The participant

may then request an administrative appeal within 28 days. If

a participant requests an appeal, a hearing officer is appointed

and a hearing is held. The hearing officer may not approve

eligibility, modify the budget, or approve denied services. 

Rather, the hearing officer may only uphold the Department’s

decision or remand to the Department to update assessment

documents, recalculate a participant’s budget, or reexamine

a service denial. If the participant or the Department

disagrees with the hearing officer’s decision, either may seek

a Director’s Review. The Director’s decision may be

appealed to the district court.

The approved and finalized cost of services in the service

plan becomes the participant’s authorized budget. A

participant may change his service plan with the

Department’s approval, but may not spend more than his

calculated budget.

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K.W. V. ARMSTRONG 9

D. 2011 Changes to the Budget Tool

The Department periodically evaluates and adjusts its

Budget Tool. In July 2011, the Department made several

changes to the Budget Tool in a purported effort to capture a

participant’s “living situation.” Although the record does not

disclose exactly how the 2011 changes accounted for “living

situation,” it makes clear that a number of the changes were

dramatic.

First, the weights assigned to the variables–the inputs

from the various assessments used to calculate the

budget–changed. Second, some previous variables were

dropped entirely. For example, before July 2011, “needing

assistance with mobility” was a weighted variable used to

calculate budgets; it no longer is.1

Additionally, the constant coefficient used in the Budget

Tool changed. The constant coefficient before July 2011 was

$54,965.65. After “living situation” became a weighted

variable, the constant coefficient decreased to $24,476.75.

E. Notice of Decreases in Class Members’ Calculated

Budgets

Numerous class members’ individualized budgets

decreased in the Fall of 2011. The Department notified

participants of these cuts by sending Budget Notices. The

2011 Budget Notices did not explain why the budgets had

been cut, but instead simply stated: “Using information from

the Individual Needs Inventory and a complete case file

1 According to the Department, the weighed variables have not changed

since July of 2011.

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10 K.W. V. ARMSTRONG

review conducted by the Regional Independent Assessor,

your individual budget is calculated to be $________.”

II. Prior Proceedings

On January 18, 2012, twelve plaintiffs filed this action in

the United States District Court for the District of Idaho

seeking declaratory and injunctive relief, claiming, among

other things, that the 2011 Budget Notice failed to provide

meaningful notice of the reasons for the reductions in their

budgets. On January 19, 2012, the Plaintiffs moved for a

temporary restraining order requiring the Department to

restore the Plaintiffs’ Medicaid services to prior levels and

barring the Department from reducing these services without

providing adequate notice and a fair hearing. The district

court entered a temporary restraining order on these terms on

February 3, 2012, and the parties stipulated to entry of a

second, supplemental temporary restraining order on

February 9, 2012.

Pursuant to another stipulation, the district court entered

a preliminary injunction on March 12, 2012, providing that:

The defendants shall restore and continue the

plaintiffs’ Medicaid services under the Idaho

Developmental Disabilities waiver as

provided in the Individual Support Plans in

place for each plaintiff prior to July 1, 2011,

and before the last “ANNUAL ICF/ID

LEVEL OF CARE AND DD ELIGIBILITY

APPROVAL NOTICE” and budget

assignment notice sent to them, and are

prohibited from reducing or terminating

Medicaid services under the Idaho

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K.W. V. ARMSTRONG 11

Developmental Disabilities waiver to the

plaintiffs based on their most recent assigned

budget limits unless and until the defendants

first provide adequate advance notice,

approved by this Court, and the opportunity

for a fair hearing prior to the reduction or

termination of services.

(emphasis added).

On March 23, 2012, the Department moved for approval

of a proposed Budget Notice (2012 Proposed Notice)

informing the Plaintiffs of their individual budget amounts. 

The 2012 Proposed Notice informed participants that they

were eligible for the DD Waiver program, explained in

general terms how budgets are calculated, and set forth the

specific budget amount for each individual. The proposed

notice included an attachment with a copy of the budget

calculation and Inventory of Needs for the participant.

On August 2, 2012, the district court denied the

Department’s motion to approve the 2012 Proposed Notice. 

See K.W. v. Armstrong, No. 1-12-00022, 2012 WL 3201172,

at *1 (D. Idaho Aug. 2, 2012). The court found the proposed

notice inadequate, both under the applicable Medicaid

regulations and the Due Process Clause, because it failed to

explain why participants’ individual budgets had changed. 

Id. at *6.

On May 17, 2013, the Plaintiffs filed a motion for class

certification, and a motion to extend the stipulated

preliminary injunction to cover the class. The proposed class

consisted of “all persons who are participants in or applicants

to the Adult Developmental Disability Services program . . .

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12 K.W. V. ARMSTRONG

administered by the Idaho Department of Health and Welfare

as part of the Idaho Medicaid program, and who undergo the

annual eligibility determination or reevaluation process.”

Before the district court ruled on the Plaintiffs’ motions,

the Department filed a motion for approval of a new proposed

Budget Notice (2013 Proposed Notice).

On March 25, 2014, the district court issued a

memorandum decision and order rejecting the 2013 Proposed

Notice. See K.W. v. Armstrong, 298 F.R.D. 479 (D. Idaho

Mar. 25, 2014), as clarified (Apr. 21, 2014). The order also

certified the proposed class and extended the preliminary

injunction to cover the class. Id. at 494.

The Department filed a timely notice of appeal on April

10, 2014. The Department challenges the extension of the

preliminary injunction to cover the class and seeks review of

the denial of its motion to approve the 2013 Proposed Notice.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to review the modification of the

preliminary injunction under 28 U.S.C. § 1292(a)(1). 

Whether we have jurisdiction to review the order denying the

motion to approve the 2013 Proposed Notice depends on

whether we can exercise pendent appellate jurisdiction over

this issue in conjunction with our review of the modification

of the preliminary injunction. See Meredith v. Oregon, 321

F.3d 807, 811–16, as amended by 326 F.3d 1030 (9th Cir.

2003).

“We review the district court’s legal conclusions de novo,

the factual findings underlying its decision for clear error, and

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K.W. V. ARMSTRONG 13

the injunction’s scope for abuse of discretion.” Armstrong v.

Brown, 768 F.3d 975, 979 (9th Cir. 2014) (citing Scott v.

Pasadena Unified Sch. Dist., 306 F.3d 646, 653 (9th Cir.

2002)).

DISCUSSION

I. Ripeness

The Department first argues that this dispute is not ripe

for resolution because the mere preparation of a budget does

not entitle a participant to notice under either the Due Process

Clause or the Medicaid Act. The Department contends that

the Plaintiffs will not suffer a deprivation of property under

the Fourteenth Amendment until services are actually denied.

A determination that this dispute is not yet fit for judicial

resolution would divest us and the district court of

jurisdiction. As the Supreme Court has observed,

[r]ipeness is a justiciability doctrine designed

“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.”

Nat’l Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S.

803, 807–08 (2003) (quoting Abbott Labs. v. Gardner, 387

U.S. 136, 148–49 (1967)).

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14 K.W. V. ARMSTRONG

We reject the Department’s ripeness argument. Whatever

the final determination of budget amounts, the Plaintiffs

allege that they suffered a deprivation of services without

adequate notice when their budgets were decreased. 

Therefore, the Plaintiffs allege that they have already felt the

“effects” of the Department’s actions “in a concrete way.” 

See id.; see also Alaska Airlines, Inc. v. City of Long Beach,

951 F.2d 977, 987 (9th Cir. 1991) (noting that “[w]here . . .

the threat of action is very real,” challenges to legislative

enactments that lack procedural protections may be ripe even

if no deprivation has occurred yet). Postponing adjudication

of this dispute would not bring greater clarity to whether the

Department’s 2011 Budget Notices were adequate. This

dispute is ripe for adjudication.

II. Whether Preliminary Injunctive ReliefWas Available

“A plaintiff seeking a preliminary injunction must

establish (1) likely success on the merits; (2) likely

irreparable harm in the absence of preliminary relief; (3) that

the balance of equities tips in the plaintiff’s favor; and (4) that

an injunction is in the public interest.” Pimentel v. Dreyfus,

670 F.3d 1096, 1105 (9th Cir. 2012) (per curiam) (citing

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20

(2008)). “We review the district court’s decision to grant or

deny a preliminary injunction for abuse of discretion. Our

review is limited and deferential.” Sw. Voter Registration

Educ. Project v. Shelley, 344 F.3d 914, 918 (9th Cir. 2003)

(en banc) (per curiam) (citation omitted).

The Department contends that the district court abused its

discretion in finding that the Plaintiffs were likely to succeed

on the merits of their claims under the Due Process Clause

and the Medicaid Act. Because the notice requirements of

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K.W. V. ARMSTRONG 15

the Medicaid Act are not identical to the requirements of the

Due Process Clause,2 we address the Plaintiffs’ statutory and

constitutional claims separately.

A. Likelihood of Success on the Plaintiffs’ Claim

under the Medicaid Act Fair Hearing Provisions

To assess whether the district court abused its discretion

in holding that the Plaintiffs were likely to prevail on their

claim under the Medicaid Act, we must first “determine de

novo whether the [district court] identified the correct legal

rule to apply to the relief requested.” United States v.

Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009). We find that

it did.

The fair hearing requirements of the Medicaid Act are

defined both by statute and by regulation. The Medicaid Act

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

provide for granting an opportunity for a fair hearing before

the State agency to any individual whose claim for medical

assistance under the plan is denied.” 42 U.S.C.

§ 1396a(a)(3). Medicaid regulations in turn require state

agencies to provide notice to participants of their right to a

hearing under some circumstances. See 42 C.F.R. § 431.206. 

The regulations provide that an agency must “inform every

applicant or beneficiary in writing . . . [o]f his right to a

hearing . . . [a]t the time of any action affecting his or her

2 The notice requirements of the Medicaid Act are triggered by an

“action,” see 42 C.F.R. § 431.206(c)(2), a term defined by regulation, see

id. § 431.201. By contrast, the protections of the Due Process Clause are

triggered by deprivations of constitutionally protected liberty or property

interests. See Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 569

(1972).

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16 K.W. V. ARMSTRONG

claim.” Id. § 431.206(b)–(c)(2). The notice must contain,

among other information, “[t]he reasons for the intended

action.” Id. § 431.210(b). The regulations define an “action”

as a “termination, suspension, or reduction of Medicaid

eligibility or covered services,” or other specified adverse

determinations. Id. § 431.201.

The district court applied the correct standard to the

Plaintiffs’ claim when it inquired whether the Department’s

calculation of new budgets was an “action” under the

Medicaid regulations. See id. § 431.206(c)(2). As the district

court recognized, this question turns on whether calculating

a lower budget amounts to a “reduction of . . . covered

services.” See id. § 431.201. The court concluded that

calculating a lower budget is an “action” because “the

practical effect is a reduction in the amount of services the

participant receives.”

Under the second step of our abuse of discretion test, we

must assess whether the district court’s conclusion on this

point was “(1) ‘illogical,’ (2) ‘implausible,’ or (3) without

‘support in inferences that may be drawn from the facts in the

record.’” Hinkson, 585 F.3d at 1262 (quoting Anderson v.

City of Bessemer City, 470 U.S. 564, 577 (1985)). We find

that it was not.

The district court reasonably found that participants’

services are capped by their individual budgets under Idaho

law. Idaho Code § 56-255(3)(e)(ii) provides that “[t]he

department shall allow budget modifications only when

needed to obtain or maintain employment or when health and

safety issues are identified and meet the criteria as defined in

department rule.” And, Idaho Administrative Code rule

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K.W. V. ARMSTRONG 17

16.03.10.513 provides that a participant’s “plan of service is

based on the individualized participant budget.”

There was ample evidence in the record that, absent an

appeal, the cost of a participant’s service plan could not

exceed the calculated budget. Service plans must be

reviewed by a care manager, who may authorize the plan only

if it is within the calculated budget. If the plan exceeds the

calculated budget, the care manager must either authorize

only services within the budget or deny the plan altogether. 

It does not appear that a participant may craft a service plan

that exceeds the calculated budget specified in the initial

Budget Notice without appealing either his budget

determination or the decision of a care manager to reject his

service plan. It was therefore reasonable for the district court

to conclude that, as a practical matter, calculating a lower

budget decreases a participant’s Medicaid services, thereby

triggering the notice requirements of the Medicaid

regulations.

The district court also did not abuse its discretion in

holding that the Plaintiffs were likely to show that the 2011

Budget Notices did not comply with the notice requirements

of the Medicaid regulations. “A notice required under [42

C.F.R.] § 431.206(c)(2), (c)(3), or (c)(4) . . . must contain . . .

[t]he reasons for the [State’s] intended action.” 42 C.F.R.

§ 431.210(b). The 2011 Budget Notices did not specify why

individual budgets had decreased.3

3 We assume, without deciding, that there is a private right of action

under section 1983 to enforce the fair hearing requirements of the

Medicaid Act. Compare Gonzaga Univ. v. Doe, 536 U.S. 273, 280 (2002)

(“[U]nless Congress ‘speak[s] with a clear voice,’ and manifests an

‘unambiguous’ intent to confer individual rights, federal funding

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18 K.W. V. ARMSTRONG

B. Likelihood of Success on the Plaintiffs’ Due

Process Claim

We also conclude that the district court did not abuse its

discretion in holding that the Plaintiffs were likely to prevail

on their claim that theywere denied adequate notice under the

Due Process Clause.

“The requirements of procedural due process apply only

to the deprivation of interests encompassed by the Fourteenth

Amendment’s protection of liberty and property.” Bd. of

Regents of State Colls. v. Roth, 408 U.S. 564, 569 (1972). 

Therefore, “[t]he first inquiry in every due process challenge

is whether the plaintiff has been deprived of a protected

interest in ‘property’ or ‘liberty.’” Am. Mfrs. Mut. Ins. Co. v.

Sullivan, 526 U.S. 40, 59 (1999). It is well settled that a

person can have a property interest in continuing to receive

government benefits. See, e.g., Goldberg v. Kelly, 397 U.S.

254, 261–63 (1970); Rosas v. McMahon, 945 F.2d 1469,

1474 (9th Cir. 1991) (explaining that Goldberg applies to a

reduction of benefits). To have a property interest in a

benefit, a person must “have a legitimate claim of entitlement

provisions provide no basis for private enforcement by § 1983.” (second

alteration in original) (quoting Pennhurst State Sch. & Hosp. v.

Halderman, 451 U.S. 1, 17, 28 & n.21 (1981)), with Watson v. Weeks, 436

F.3d 1152, 1159–62 & n.8 (9th Cir. 2006) (analogizing 42 U.S.C.

§ 1396a(a)(10) to section 1396a(a)(3), the Medicaid fair hearing provision,

and concluding that the former creates a right enforceable by section

1983), and Gean v. Hattaway, 330 F.3d 758, 772–73 (6th Cir. 2003)

(holding that section 1396a(a)(3) creates a right enforceable by section

1983). The Department has not argued otherwise. See Cal. Alliance of

Child &Family Servs. v. Allenby, 589 F.3d 1017, 1020 n.5 (9th Cir. 2009)

(explaining that whether a private right of action exists is not a

jurisdictional issue and may be deemed waived if not raised).

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K.W. V. ARMSTRONG 19

to it,” not just “an abstract need or desire for it.” Roth, 408

U.S. at 577.

The district court held that because calculating lower

budgets had the practical effect of reducing the Plaintiffs’

waiver services, the Plaintiffs were entitled to adequate notice

under the Due Process Clause. We reach the same

conclusion, but for different reasons. The district court

conflated the Medicaid Act’s standards governing fair

hearings with the standards governing constitutional Due

Process claims. While the Medicaid Act’s fair hearing

requirements are triggered by “actions,” including reductions

in benefits, the requirements of procedural due process are

triggered by deprivations of property. Compare 42 C.F.R.

§§ 431.201, 431.206(c)(2), with Am. Mfrs. Mut. Ins. Co., 526

U.S. at 59. However, because the Plaintiffs had a “legitimate

claim of entitlement” to waiver services as capped by the

calculated budgets, we hold that the district court did not

abuse its discretion in holding that the Plaintiffs were likely

to prevail on their due process claim. See Erickson v. U.S. ex

rel. Dep’t of Health & Human Servs., 67 F.3d 858, 861–62

(9th Cir. 1995) (noting that the district court’s order granting

an injunction to redress an alleged Due Process violation “did

not address whether [medical provider] plaintiffs possessed

a liberty or property interest in continued participation in

Medicare,” and proceeding to consider the issue de novo).

As we stated in Orloff v. Cleland, “[e]ntitlements are

created by ‘rules or understandings’ from independent

sources, such as statutes, regulations, and ordinances.” 708

F.2d 372, 377 (9th Cir. 1983) (quoting Roth, 408 U.S. at

577)). Idaho regulations provide that “the Department sets an

individualized budget for each participant according to an

individualized measurement of the participant’s functional

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20 K.W. V. ARMSTRONG

abilities, behavioral limitations, and medical needs, related to

the participant’s disability.” Idaho Admin. Code r.

16.03.10.514(01). The regulations further provide that the

participant’s “plan of service is based on the individualized

participant budget.” Id. r. 16.03.10.513. And, the Idaho

statute authorizing “[s]ervices for persons with

developmental disabilities” provides that “[t]he department

shall allow budget modifications only when needed to obtain

or maintain employment or when health and safety issues are

identified.” Idaho Code § 56-255(3)(e)(ii). The Idaho

regulations specifically enumerate the services covered under

the DD Waiver program. See Idaho Admin. Code r.

16.03.10.703. Thus, participants in the DD Waiver program

are entitled to a service plan featuring covered services with

a total value equal to or less than a participant’s individual

calculated budget. Because participants have a legitimate

claim of entitlement to this benefit under Idaho law, they

have a property interest in continuing to receive it. See Roth,

408 U.S. 564.

The Department argues that even if the Plaintiffs had a

property interest in their benefits, that interest was narrowly

circumscribed. The Department contends that participants

have no basis for expecting that their budgets will continue

beyond the current year because Idaho’s regulations require

that a participant’s individual budget be reevaluated each

year.

We reject this argument. The Department would have us

define the substance of the Plaintiffs’ entitlement by the

Department’s procedures for evaluating and modifying the

participants’ level of services. But these procedures are

precisely what the Plaintiffs challenge. If a state grants a

property interest, its procedures for terminating or modifying

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K.W. V. ARMSTRONG 21

that interest do not narrow the interest’s scope. See

Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541

(1985). As the Supreme Court has observed,

“[p]roperty” cannot be defined by the

procedures provided for its deprivation any

more than can life or liberty. The right to due

process “is conferred, not by legislative grace,

but by constitutional guarantee. While the

legislature may elect not to confer a property

interest . . . , it may not constitutionally

authorize the deprivation of such an interest,

once conferred, without appropriate

procedural safeguards.”

Id. (quoting Arnett v. Kennedy, 416 U.S. 134, 167 (1974)

(Powell, J., concurring in part and concurring in result in

part)). “Were the rule otherwise, the [Due Process] Clause

would be reduced to a mere tautology.” Id. Because the

yearly reapplication process is merely a procedure for

evaluating eligibility, it does not define the substance of the

Plaintiffs’ property interest in their benefits.

Having found that the Plaintiffs have a property interest

in their benefits, we must now examine whether providing a

lower calculated budget to participants deprives them of this

property interest. We find that it likely does. If a

participant’s new calculated budget is lower than his current

budget, the participant has lost the right to craft a service plan

that is equal in value to his current service plan.

The Department contends that merely calculating a lower

budget for the upcoming year does not deprive a participant

of property because the participant continues to receive the

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services to which he is entitled under the current plan for

some time after the budget notices are circulated. According

to the Department, any reduction in services cannot occur

until after a participant’s new service plan has been

developed, discussed, and approved. But there is ample

evidence in the record that participants’ calculated budgets

effectively capped the value of services participants could

receive. Therefore, once a lower budget is calculated, a

participant has already effectively been deprived of the right

to receive the same level of services in the coming year.

The Department also argues that merely calculating a

lower annual budget does not deprive a participant of

property because the budget may be increased through

appeal. But just because a party deprived of property may

recover it by exercising procedural rights does not mean that

no deprivation occurs. A primary purpose of providing

adequate notice to participants is to enable them to prepare a

defense for a hearing. See Barnes v. Healy, 980 F.2d 572,

579 (9th Cir. 1992). It would be illogical if the availability of

a hearing deprived the Plaintiffs of their right to receive the

notice they need to challenge benefits reductions at that

hearing.

The district court did not abuse its discretion in holding

that the 2011 Budget Notices were inadequate under the Due

Process Clause. “Due process requires notice that gives an

agency’s reason for its action in sufficient detail that the

affected party can prepare a responsive defense.” Id. (citing

Goldberg, 397 U.S. at 267-68). The 2011 Budget Notices

were inadequate because they did not specify why

participants’ budgets had decreased.

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K.W. V. ARMSTRONG 23

C. Likelihood of Irreparable Injury

The district court determined that the Plaintiffs

established a likelihood of irreparable injury. The

Department argues for the first time on appeal that the

Plaintiffs failed to show that the proposed class was likely to

suffer irreparable harm. The Department waived this

argument by failing to raise it before the district court. See

Int’l Union of Bricklayers & Allied Craftsman Local Union

No. 20, AFL-CIO v. Martin Jaska, Inc., 752 F.2d 1401, 1404

(9th Cir. 1985).4

III. The Eleventh Amendment

The Department argues that the injunction violates the

Eleventh Amendment byawarding retrospective relief against

the state. We disagree.

The Eleventh Amendment shields unconsenting states

from suits in federal court. See Seminole Tribe of Fla. v.

Florida, 517 U.S. 44, 54 (1996). “To ensure the enforcement

of federal law, however, the Eleventh Amendment permits

suits for prospective injunctive relief against state officials

acting in violation of federal law,” Frew ex rel. Frew v.

Hawkins, 540 U.S. 431, 437 (2004) (citing Ex parte Young,

209 U.S. 123 (1908)), and courts may also order “measures

ancillary to appropriate prospective relief,” id. (citing Green

v. Mansour, 474 U.S. 64, 71–73 (1985)). But “[f]ederal

4 On appeal, the Department does not contest the district court’s

determination that “the balance of equities tips in the plaintiff[s’] favor”

and that the “injunction is in the public interest.” Pimentel v. Dreyfus, 670

F.3d 1096, 1105 (9th Cir. 2012) (citing Winter v. Natural Res. Def.

Council, Inc., 555 U.S. 7, 20 (2008)).

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courts may not award retrospective relief, for instance, money

damages or its equivalent, if the State invokes its immunity.” 

Id. (citing Edelman v. Jordan, 415 U.S. 651, 668 (1974)). 

Equitable relief is impermissible if it will likely require

payment of state funds and “is measured in terms of a

monetary loss resulting from a past breach of a legal duty on

the part of the defendant state officials.” Edelman, 415 U.S.

at 668.

The classwide injunction grants only prospective relief

allowed under the Eleventh Amendment, by restoring class

members to the individualized budgets they had prior to the

Department’s defective 2011 Budget Notice. The injunction

does not compensate class members for any loss of services

that occurred prior to the date it was entered. Thus, the relief

granted is not measured in terms of a past monetary loss. See

id. We therefore join a number of our sister circuits in

rejecting Eleventh Amendment challenges directed at orders

reinstating social assistance benefits prospectively. See, e.g.,

Turner v. Ledbetter, 906 F.2d 606, 609–10 (11th Cir. 1990);

Coalition for Basic Human Needs v. King, 654 F.2d 838, 842

(1st Cir. 1981) (“[W]e see no Eleventh Amendment

impediment to an order which enjoins the state defendants to

resume payment of AFDC benefits prospectively.”); Kimble

v. Solomon, 599 F.2d 599, 605 (4th Cir. 1979) (holding that

reinstating Medicaid benefits prospectively does not violate

the Eleventh Amendment).

IV. Pendent Jurisdiction to Review Denial of Motion

to Approve Notice

We now turn to the Department’s argument that the

district court abused its discretion by failing to approve the

2013 Proposed Notice. We must first determine whether we

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K.W. V. ARMSTRONG 25

have jurisdiction to review this issue. The order denying the

motion to approve is not final under 28 U.S.C. § 1291, see

Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996)

(“[A] decision is . . . final and appealable under § 1291 only

if it ends the litigation on the merits and leaves nothing for

the court to do but execute the judgment.” (internal quotation

marks omitted)); does not fit within the collateral order

exception to the final judgment rule, see Mohawk Indus., Inc.

v. Carpenter, 558 U.S. 100, 106–09 (2009); and is not an

appealable interlocutory order, see 28 U.S.C. § 1292. The

Department urges that we exercise pendent appellate

jurisdiction to review the non-appealable order rejecting the

2013 Proposed Notice in conjunction with the appealable

order expanding the injunction. We conclude that we may

not.

“Pendent appellate jurisdiction refers to the exercise of

jurisdiction over issues that ordinarily may not be reviewed

on interlocutory appeal, but may be reviewed on interlocutory

appeal if raised in conjunction with other issues properly

before the court.” Cunningham v. Gates, 229 F.3d 1271,

1284 (9th Cir. 2000). “[T]he Supreme Court [has] declined to

settle definitively ‘whether or when it may be proper for a

court of appeals, with jurisdiction over one ruling, to review,

conjunctively, related rulings that are not themselves

appealable.’” Meredith, 321 F.3d at 812 (quoting Swint v.

Chambers Cnty. Comm’n, 514 U.S. 35, 50–51 (1995)). We

have consistently acknowledged that we must “exercise

restraint in reviewing on interlocutory appeal otherwise nonappealable orders,” id., lest litigants use collateral orders as

“multi-issue . . . appeal tickets,” id. (quoting Swint, 514 U.S.

at 49–50); see also Poulos v. Caesars World, Inc., 379 F.3d

654, 670 (9th Cir. 2004) (noting that “we took pains to cabin

our holding [in Meredith] to the unique facts” of the case). 

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We may exercise pendent jurisdiction over an otherwise nonappealable issue only in two “narrow” circumstances: (1) if

it is “‘inextricably intertwined’ with” or (2) “‘necessary to

ensure meaningful review of’” the order properly before us

on interlocutory appeal. See Meredith, 321 F.3d at 813

(quoting Swint, 514 U.S. at 51).

The adequacy of the 2013 Proposed Notice is not

“inextricably intertwined” with whether the district court

abused its discretion in expanding the preliminary injunction. 

To justify the exercise of pendent jurisdiction, “the legal

theories on which the issues advance must either (a) be so

intertwined that we must decide the pendent issue in order to

review the claims properly raised on interlocutory appeal . . . ,

or (b) resolution of the issue properly raised on interlocutory

appeal necessarily resolvesthe pendent issue.” Cunningham,

229 F.3d at 1285 (emphases added). “We have consistently

interpreted ‘inextricably intertwined’ very narrowly,” id. at

1284, and “[o]ur cases make clear that if the properly

appealable order can be resolved without necessarily

resolving the pendent order, then the latter is not ‘inextricably

intertwined’ with the former,” Hilton v. Hallmark Cards, 599

F.3d 894, 902 (9th Cir. 2009) (citing Batzel v. Smith, 333

F.3d 1018, 1023 (9th Cir. 2003)), as amended (Mar. 23,

2010).

It is not necessary for us to decide whether the 2013

Proposed Notice was adequate in order to resolve whether the

district court abused its discretion in expanding the

preliminary injunction. The 2013 Proposed Notice had not

been circulated to the class when the preliminary injunction

was expanded. Whether the Plaintiffs were likely to succeed

on the merits–the sole Winter factor the Department has

properly contested on appeal–depended on the notice they

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K.W. V. ARMSTRONG 27

had already received, not the notice the Department might

provide in the future. Even if the district court had approved

the 2013 Proposed Notice, it still would have been

appropriate to expand the preliminary injunction to protect

the status quo until that notice was circulated. Therefore, the

adequacy of the 2013 Proposed Notice was not inextricably

intertwined withwhetherthe preliminaryinjunction should be

expanded.

Nor is it necessary to review the adequacy of the 2013

Proposed Notice to “ensure meaningful review” of the order

expanding the preliminary injunction. We construe the

related “necessary to ensure meaningful review” prong

narrowly. See Poulos, 379 F.3d at 669 (stating that the

second prong is “restrictive” and “requires that the pendent

decision have much more than a tangential relationship to the

decision properly before us on interlocutory appeal”). 

Pursuant to our narrow construction of “ensure meaningful

review,” we may exercise pendent jurisdiction to consider

issues that “call[] into question the district court’s ‘authority

to rule on a party’s motion for a preliminary injunction.’” 

Hendricks v. Bank of Am. N.A., 408 F.3d 1127, 1135 (9th Cir.

2005) (emphasis omitted) (quoting Meredith, 321 F.3d at

816). But “we have declined to exercise pendent jurisdiction

over rulings . . . that were ‘not a logical predicate to the’

issues properly raised on appeal and did not ‘implicate the

very power of the district court to issue the rulings on

appeal.’” Id. (quoting Wong v. United States, 373 F.3d 952,

960–61 (9th Cir. 2004)).

The district court’s ruling on the 2013 Proposed Notice

did not affect its authority to expand the preliminary

injunction. Even if the Department was willing to circulate

a notice the district court found adequate, a preliminary

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injunction still would have been necessary to protect the

status quo until that notice was circulated. Therefore, ruling

on the proposed notice was not a “logical predicate” to ruling

on the preliminary injunction. See Wong, 373 F.3d at

960–61. We accordingly decline to exercise jurisdiction to

review the district court’s order denying the motion to

approve the 2013 Proposed Notice. If the Department

believes that the district court erred in denying approval of

that notice, it may seek a final judgment from the district

court in this litigation and appeal that order under § 1291. 

But the Department cannot have it both ways–continue to

litigate this case in the district court and simultaneously seek

appellate review of an interlocutory order about the 2013

Proposed Notice. If, as the Department contends, the

adequacy of the 2013 Proposed Notice is the only real issue

in this case, agreeing to a final judgment will allow prompt

appellate review of that issue independent of our

determination today that the district court did not abuse its

discretion in expanding the prior preliminary injunction to

protect class members from losing benefits “unless and until

the defendants . . . provide adequate advance notice . . . and

the opportunity for a fair hearing.”

CONCLUSION

We affirm the order expanding the preliminary injunction

to cover the class for the reasons stated above.

AFFIRMED.

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K.W. V. ARMSTRONG 29

CLIFTON, Circuit Judge, concurring in part and dissenting

in part:

I fully concur in Parts I–III of the majority opinion. I

regret, however, that Imust dissent from Part IV, in which the

majority concludes that we lack pendant jurisdiction over the

district court’s denial of the Department’s motion to approve

a proposed revised notice to program participants. It is clear

to me that we do have jurisdiction and should address that

issue on the merits.

I agree that we would not have jurisdiction over an appeal

from the denial that motion if it were standing by itself,

unless, of course, it was brought as an interlocutory appeal

under 28 U.S.C. § 1292(b). But it is not standing by itself. It

comes to us because it is directly connected to the appeal by

the Department of the district court’s expansion of the

preliminary injunction, over which the majority opinion

acknowledges our jurisdiction.

The district court recognized the connection between the

two motions. It dealt with both in the same memorandum

decision and order. It expressly noted in that order that

before it could deal with the motion to extend the preliminary

injunction, it was “require[d]” to address the Department’s

motion to approve the revised notice:

Plaintiffs move to extend the preliminary

injunction entered on behalf of the named

plaintiffs to the entire class. Before reaching

the merits of that motion, the Court must

consider two arguments IDHW raises in

opposition. . . . Second, IDHW claims that the

motion to extend is moot because IDHW’s

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30 K.W. V. ARMSTRONG

latest proposed Notice satisfies the Medicaid

regulations and due process. Resolution of the

latter argument requires the Court to decide

IDHW’s motion to approve their proposed

budget notice.

Similarly, the district court explicitly noted that it was the

denial of the Department’s motion to approve the revised

notice that opened the door to granting the motion to extend

the preliminary injunction:

For these reasons, the Court holds that

IDHW’s notice does not comport with due

process, and will deny IDHW’s motion to

approve the Notice. Furthermore, because the

notice is not sufficient, Plaintiffs have

established an ongoing violation for the

purposes of the preliminary injunction.

The logic is clear. If the revised notice were adequate –

if it was held to comport with due process – then Plaintiffs

would not have “established an ongoing violation,” and there

would be no good reason to extend the preliminary

injunction. The district court understood and said as much.

The majority opinion offers only one explanation for its

different approach. It observes that the proposed notice had

not yet been circulated at the time that the motions came

before the district court and the preliminary injunction was

issued. That is hardly surprising, because no interest would

have been served by the Department sending out a revised

notice that was inadequate. Doing so would have been

wasteful and likely confusing to the recipients.

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K.W. V. ARMSTRONG 31

Nonetheless, the majority opinion, at 27, infers that

“[e]ven if the district court had approved the 2013 Proposed

Notice, it still would have been appropriate to expand the

preliminary injunction to protect the status quo until that

notice was circulated.”

But the district court never said that. Notably, its

discussion of the motions, as quoted above, contradicts the

majority opinion’s assertion that the preliminary injunction

would in fact have been extended if the revised notice had

been deemed sufficient. It is both logical and clear from the

words used by the district court that if it had concluded that

the revised notice was sufficient, it would not have extended

the preliminary injunction as it did.

The extension of the preliminary injunction was not a

simple thing. The “order” portion of the preliminary

injunction as extended by the district court takes up six pages

of the court’s order. If the district court had concluded that

the revised order were sufficient, it would have put the

preliminary injunction on hold until the Department had

accomplished what it promised to do – distribute the revised

notice to the participants – and then dissolved it. The

majority opinion’s premise to the contrary is both illogical

and contrary to what the district court actually said.

Instead, the district court extended the preliminary

injunction and refused to modify or dissolve it, as sought by

the Department. We are allowed to review the denial of the

Department’s request that the injunction be modified,

conditioned upon the new notice, or dissolved, after the new

notice had been distributed. The statute could not be clearer:

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Interlocutory orders of the district courts of

the United States . . . granting, continuing,

modifying, refusing or dissolving injunctions,

or refusing to dissolve or modify injunctions,

except where a direct review may be had in

the Supreme Court;

28 U.S.C. § 1292(a)(1) (emphasis added).

Similarly, as the majority opinion acknowledges, we may

exercise pendant appellate jurisdiction if the denial of the

Department’s revised notice motion if it is “inextricably

intertwined with” or “necessary to ensure meaningful review

of” the order extending (and refusing to modify or dissolve)

the preliminary injunction. Meredith v. Oregon, 321 F.3d

807, 813 (9th Cir. 2003) (citing Swint v. Chambers Cnty.

Comm’n, 514 U.S. 35, 51 (1995)). For the reasons already

discussed, the denial of the revised notice motion fits both

descriptions.

The approach of the majority opinion exalts form over

substance and does so in a way that, in the future, could cause

harm. The Department could, for example, jump the barrier

imposed by the majority opinion by sending a revised notice

out without waiting for any approval by the district court,

then moving to dissolve or modify the injunction. There is no

doubt that a denial of that motion would be immediately

appealable. What sense is there in motivating the Department

– or any party in a similar position in the future – to proceed

without consulting with the district court, with other possibly

ill effects, simply to permit an immediate appeal it should be

entitled to bring?

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K.W. V. ARMSTRONG 33

It is not hard to see how that barrier could thwart

appropriate appellate review in the future, especially if a

district court could avoid immediate review simply by ruling

separately on related motions and declining to acknowledge

the connections. The district court here made no effort to do

that. To the contrary, and to its credit, it explicitly recognized

that the motion to approve the revised notice needed to be

dealt with before the motion to extend the injunction, because

the second rested upon the resolution of the first. We should

not put blinders on by disregarding what was obvious to the

district court. And, to mix metaphors, it does not make sense

to tie our own hands as the majority opinion has done here.

The majority opinion says that the Department should just

agree to final judgment on the case and appeal under 28

U.S.C. § 1291. I fail to see why the Department should be

forced to give up whatever other issues might be addressed by

the district court before a final judgment is entered. The

statute does not require that – preliminary injunctions are

immediately appealable. Nor would that alternative route

always be available to parties in the future. There could well

be issues outstanding in a case that would need to be resolved

before a final judgment could be entered, unless the party

simply abandoned its claims or confessed judgment on

whatever might remain. That would hardly be a realistic

alternative in those circumstances, and it should not be the

price to obtain review of a decision that undergirds the

district court’s order regarding a preliminary injunction.

The district court recognized that the revised motion order

needed to be taken up and resolved before the court could

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34 K.W. V. ARMSTRONG

address the preliminary injunction motion. We should do the

same.

I respectfully dissent, in part.

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