Source: http://fl.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180720_0000131.CDC.htm/qx
Timestamp: 2019-04-22 20:32:33+00:00

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Richard S. Love, Senior Assistant Attorney General, Office of the Attorney General for the District of Columbia, argued the cause for appellants. With him on the briefs were Karl A. Racine, Attorney General, Todd S. Kim, Solicitor General at the time the briefs were filed, and Loren L. AliKhan, Deputy Solicitor General at the time the briefs were filed.
Kathleen L. Millian argued the cause for plaintiffs-appellees. With her on the briefs were Martha Jane Perkins, Zenia Sanchez Fuentes, and Lynn E. Cunningham.
Jonathan H. Levy, Allen Snyder, and Daniel Bruner were on the brief for amici curiae Legal Aid Society of the District of Columbia, et al. in support of appellees.
Before: Henderson and Millett, Circuit Judges, and Ginsburg, Senior Circuit Judge.
This case involves an injunction garbed in the clothing of a consent decree modification. While district courts generally have discretion under Federal Rule of Civil Procedure 60(b)(5) to adjust the terms of an existing consent decree in light of changed circumstances, the issuance of a new injunction must meet the strict preconditions for such exceptional relief set out in Federal Rule of Civil Procedure 65. Because the district court's order in this case provided brand new relief based on brand new facts alleging violations of a new law without the requisite findings for an injunction, it crossed the line from permissibly modifying into impermissibly enjoining. For that reason, we reverse the district court's order, vacate the new injunctive relief, and remand for proceedings consistent with this opinion.
By way of background, under long-established practice, federal courts may enter, as final judicial orders, consent decrees that reflect the agreement of the parties to forward- going injunctive relief, as long as the consent decree arises from and resolves a dispute "within the court's subject-matter jurisdiction[.]" Frew v. Hawkins, 540 U.S. 431, 437 (2004). Once a consent decree has been entered, Federal Rule of Civil Procedure 60(b) empowers the court to modify its terms to the same extent as any other final judgment. See United States v. Western Elec. Co., 46 F.3d 1198, 1205 (D.C. Cir. 1995) (citing System Fed'n No. 91 v. Wright, 364 U.S. 642, 651 (1961)); see also Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 233-234 (1995) ("Rule 60(b) * * * merely reflects and confirms the courts' own inherent and discretionary power, firmly established in English practice long before the foundation of our Republic, to set aside a judgment whose enforcement would work inequity.") (internal quotations and citations omitted).
As relevant here, Rule 60(b) permits modification or relief from a judgment when: (i) it "has been satisfied, released or discharged;" (ii) "it is based on an earlier judgment that has been reversed or vacated;" (iii) "applying it prospectively is no longer equitable," Fed.R.Civ.P. 60(b)(5); or (iv) there is "any other reason that justifies relief," Fed.R.Civ.P. 60(b)(6).
When a party seeks relief under Rule 60(b), that party bears the threshold burden of proving that a "significant change" in legal or factual circumstances "warrants revision of the decree." Rufo v. Inmates of Suffolk Cty. Jail, 502 U.S. 367, 383 (1992). For a change in the law to be significant, it must "make legal what the decree was designed to prevent," or otherwise effect a material change in the governing legal regime. Id. at 388. A change in the facts qualifies as significant if it makes compliance with the decree "substantially more onerous," "unworkable because of unforeseen obstacles," or "detrimental to the public interest." Id. at 384.
Title XIX of the Social Security Act, 42 U.S.C. § 1396, et seq.-commonly known as Medicaid-is a federal subsidy program that underwrites participating States' provision of medical services to "families with dependent children and [to] aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services." Armstrong v. Exceptional Child Ctr., Inc., 135 S.Ct. 1378, 1382 (2015) (quoting 42 U.S.C. § 1396-1). Participating States receive federal funds that are subject to congressionally mandated controls and directives. See id.
With exceptions not relevant here, both federal and local law have long required the District of Columbia to make Medicaid eligibility determinations within 45 days of an application for benefits, 42 C.F.R. § 435.912(c)(3); D.C. Code § 4-205.26, and to provide Medicaid recipients timely notice of any proposed termination, discontinuation, or suspension of eligibility, see, e.g., 42 C.F.R. §§ 435.919(a), 431.200 (1993). As a general rule, the District must annually "recertify"-that is, renew-the eligibility of its Medicaid recipients to maintain their benefits. Compare 42 C.F.R. § 435.916 (2016) (prescribing "renewal" of Medicaid eligibility), with Salazar v. District of Columbia, 954 F.Supp. 278, 292-294 (D.D.C. 1996) ("Liability Order") (referring to the legacy eligibility redetermination process as "recertification").
Historically, the District conducted the application and recertification processes by paper and mail. That system required beneficiaries to take the affirmative step of mailing in the required paperwork to continue their benefit eligibility. See Liability Order, 954 F.Supp. at 282-283, 292.
In 2010, the Patient Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 et seq. ("Affordable Care Act"), wrought several changes in the District's eligibility and recertification processes. Under the Affordable Care Act, the majority of Medicaid applicants and recipients have their eligibility determined by the amount of modified adjusted gross income that they report on their federal income taxes. The Act thus uses household tax information to assess income, household composition, and family size. See 42 C.F.R. §§ 435.901-435.911, 435.916.
For such tax-based eligibility determinations, the District had to replace its old paper recertification system with a new passive renewal model. The passive renewal program first attempts to automatically renew eligibility based on available electronic federal and local tax records. See 42 C.F.R. § 435.916(a). If the data necessary for passive renewal are unavailable, then the District must ask the Medicaid recipient to provide the missing information before renewing Medicaid eligibility. Id. § 435.916(a)(3).
The District began to implement its passive renewal system in late 2012 by building a new, automated eligibility system called the DC Access System. When the DC Access System is fully realized, the District plans to retire its legacy application and recertification system. However, the transition from the old system to the new DC Access System has been halting, due to "technology challenges, contracting issues, and funding." J.A. 827. The plodding transition between systems proved problematic for many individuals' Medicaid application and renewal process. J.A. 1298.

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