Source: https://www.clearinghouse.net/detail.php?id=11590&amp;search=source%7Cgeneral%3BattyOrg%7C99%3Borderby%7CfilingYear%3B
Timestamp: 2019-04-24 09:50:00+00:00

Document:
On May 4, 2000, a group of individuals with developmental disabilities (each through a parent as next friend), together with several interested advocacy organizations and service providers, filed this suit in the United States District Court for the Northern District of California against the state of California. The plaintiffs, represented by the Disability Rights Education & Defense Fund, sought class certification, as well as injunctive and declaratory relief under: (1) Title XIX of the Social Security Act (the Medicaid Act), 42 U.S.C. § 1396 et seq.; (2) Title II of the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12131-12134; and, (3) Section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a) together with its regulations. Enforcement of the Medicaid Act claims was premised on 42 U.S.C. § 1983. Chiefly, the plaintiffs sought injunctive relief requiring the state to provide wages and benefits for community-based service providers at substantially the same rates as those paid to state institutions. They alleged that the lower wages paid community-based facilities violated the Americans with Disabilities Act by causing some individuals with disabilities to unnecessarily become or remain institutionalized.
Some background on the Medicaid Act is helpful. Through the Medicaid Act, the federal government provides funds to participating states to help them provide health care services to qualifying low-income or otherwise needful individuals. States that accept these funds must ensure that their state Medicaid program complies with certain requirements, as laid out in 42 U.S.C. § 1396a(a)(1)-(65). In 1981, Congress enacted the Home and Community Based Services ("HCBS") waiver program. This program provides Medicaid reimbursement to states for the provision of community based services to individuals who would otherwise require institutional care. To qualify for a waiver, the state must show that the cost of care for that individual through the waiver program will be less than or equal to the cost of care in an institution. See 42 U.S.C. § 1396n(c). See generally Olmstead v. L.C., 527 U.S. 581, 600-03 (1999) (tracing the origins and discussing the application of HCBS).
The plaintiffs claimed that because California pays community based service providers participating in the HCBS waiver program lower wages than it pays employees in state institutions, the State was violating the provision of the Medicaid Act that requires state plans 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[.]" 42 U.S.C. § 1396a(a)(30)(A). Plaintiffs further claimed that the lower wage rate in community based programs has caused some persons with developmental disabilities to remain institutionalized unnecessarily. Plaintiffs argued that this constituted discrimination against them in violation of the ADA and § 504 of the Rehabilitation Act. To remedy this, the plaintiffs sought injunctive relief requiring state officials to increase wages and benefits for community based services to match those provided to employees of in-state institutions. Thus, the plaintiffs advanced three causes of action, namely: (1) the § 30(A) claim (42 U.S.C. § 1396a(a)(30)(A)); (2) the ADA claim; and, (3) the § 504 claim.
After initially denying the plaintiffs' motion for class certification, the District Court (Judge Claudia Wilken) granted the plaintiffs' renewed motion for class certification on August 2, 2001. See Docket at 17, 19. During this time the parties also had several discovery disputes. These revolved around the plaintiffs' requests for production of documents to the defendants regarding budgetary and fiscal information related to community service providers. This culminated in a motion to compel, which the District Court (Magistrate Judge Joseph C. Spero) granted in part and denied in part on November 19, 2001. Sanchez v. Johnson, 2001 U.S. Dist. LEXIS 25233 (N.D. Cal. Nov. 19, 2001).
On August 10, 2001, the defendants moved for judgment on the pleadings with respect to the § 30(A) claim, on the ground that § 30(A) does not provide a private right of action enforceable under 42 U.S.C. § 1983. On September 24, 2001, Judge Wilken denied the defendants' motion for partial judgment on the pleadings. In response, the defendants moved the court for certification to take an interlocutory appeal to the Ninth Circuit. On February 28, 2002, Judge Wilken also denied this motion. Both the court's September 24, 2001, and February 28, 2002, orders and opinions involved the court holding, inter alia, that the plaintiffs were entitled to enforce rights granted to them under § 30(A) of the Medicaid Act by means of 42 U.S.C. § 1983.
"First, the court held that 'even if unjustified institutionalization is occurring, [the plaintiffs] have failed to show that an increase in wages and benefits for community based direct care workers would remedy the alleged violation.' Second, the court held that the relief proposed by [the plaintiffs] is not a 'reasonable modification' of California's current policies and practices because the $1.4 billion of extra expenditure they request would represent a forty percent increase in the State's budget for developmentally disabled services. Third, the court held that California already has in place an acceptable plan for deinstitutionalization, the disruption of which would involve a fundamental alteration of the State's current policies and practices in contravention of the Supreme Court's instructions in Olmstead."
However, Judge Wilkin's denied the plaintiffs' motion for summary judgment as to the § 30(A) claim and allowed the case to go forward exclusively on this issue. The parties engaged in discovery over the course of the following year.
On August 6, 2003, the defendants filed a motion for reconsideration of the district court's denial of their 2001 motion for judgment on the pleadings as to the § 30(A) claim. The defendants claimed that the Supreme Court's subsequent decision in Gonzaga University v. Doe, 536 U.S. 273 (2002), undermined the authorities relied on by the court when it denied judgment on the pleadings, and that reconsideration was thus warranted. Gonzaga University clarified the standard for evaluating whether a statute creates a private right of action.
On January 5, 2004, Judge Wilkin granted the defendants' motion for reconsideration, reversing her earlier decision and granting the defendants judgment on the pleadings as to the § 30(A) claim. Sanchez, 301 F. Supp. 2d at 1064-65. Judge Wilkin held that there was no indication that Congress intended to create a private right of action with § 30(A), and that, accordingly, none of the plaintiffs could bring suit under 42 U.S.C. § 1983. In holding so, Judge Wilkin noted that there had been "no post-Gonzaga case in which a court, considering the guidelines articulated in Gonzaga, has found that § 30(A) gives Medicaid recipients a private right enforceable under § 1983." Since the § 30(A) claim was the sole remaining claim, this decision terminated the case in its entirety.
The plaintiffs appealed the district court's decisions with respect to both their § 30(A) claim as well as their ADA and § 504 claims. The plaintiffs argued § 30(A) does indeed create a private right that is enforceable under § 1983, and that the district court misinterpreted the import of Gonzaga in rejecting their claim. Regarding the ADA and § 504 claims the plaintiffs argued that in granting summary judgment to the defendants, the court had improperly resolved four factual disputes, namely: (1) that the plaintiffs had failed to demonstrate entitlement to class-wide relief because of a failure to show more than "isolated" and "sporadic" instances of developmentally disabled individuals who were ready for community based services but were still institutionalized; (2) that the plaintiffs failed to demonstrate a causal link between low wages and benefits for direct care workers in community service programs for the developmentally disabled and the low rate of deinstitutionalization; (3) that California has a "comprehensive plan" for deinstitutionalization which met the requirements of showing reasonable progress; and (4) that the cost of the relief sought by Plaintiffs constituted a "fundamental alteration" of California's Developmental Disabilities Program.
On August 2, 2005, a three-member panel of the United States Court of Appeals for the Ninth Circuit (Judge Diarmuid F. O'Scannlain writing for the court) unanimously rejected the plaintiffs' claims and affirmed the district court decisions. The Ninth Circuit held that that Congress "did not unambiguously create an individually enforceable right in § 30(A) that would be remediable under § 1983 either by recipients or providers of Medicaid services." Sanchez, 416 F.3d at 1067. The court further explained that the relief requested by the plaintiffs under their ADA and § 504 claims "would require the 'fundamental alteration' of a comprehensive, working plan for deinstitutionalization in contravention of Olmstead."
Plaintiff Description A class of disabled individuals and community care providers.

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