K.W. v. Armstrong, No. 14-35296 (9th Cir. 2015)
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The Department appealed 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 court rejected the Department's ripeness argument and concluded that the dispute is ripe for adjudication where plaintiffs alleged that they have already felt the effects of the Department's actions in a concrete way; the district court reasonably found that participants’ services are capped by their individual budgets under Idaho law; the district court also did not abuse its discretion in holding that plaintiffs were likely to show that the 2011 Budget Notices did not comply with the notice requirements
of the Medicaid regulations; the district court did not abuse its discretion in holding that plaintiffs were likely to prevail on their claim that they were denied adequate notice under the Due Process Clause; the Department waived its argument that plaintiffs failed to show that the proposed class was likely to suffer irreparable harm; the court joined a number of its sister circuits in rejecting Eleventh Amendment challenges directed at orders reinstating social assistance benefits prospectively; and the court declined to exercise jurisdiction to
review the district court’s order denying the motion to approve the 2013 Proposed Notice. Accordingly, the court affirmed the district court's judgment.
Court Description: 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 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.
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