K W et al v. Armstrong et al, No. 1:2012cv00022 - Document 337 (D. Idaho 2017)

Court Description: MEMORANDUM DECISION AND ORDER denying 310 Motion to Dismiss. IT IS FURTHER ORDERED, that this case be ADMINISTRATIVELY CLOSED without prejudice to the right of either party to reopen the case for any reason. IT IS FURTHER ORDERED, that the parties shall notify the Court when the Olmstead issues are either ready for trial or are to be dismissed. The Court will not set any trial date until that point, if necessary. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO K.W., by his next friend D.W., et al., Case No. 1:12-cv-22-BLW (lead case) Plaintiffs, MEMORANDUM DECISION AND ORDER v. RICHARD ARMSTRONG, in his official capacity as Director of the Idaho Department of Health and Welfare; PAUL LEARY, in his official capacity as Medicaid Administrator of the Idaho Department of Health and Welfare; and the IDAHO DEPARTMENT OF HEALTH AND WELFARE, a department of the State of Idaho, Defendants. TOBY SCHULTZ, et al. Plaintiffs, Case No. 3:12-CV-58-BLW v. RICHARD ARMSTRONG, et al., Defendants. MEMORANDUM DECISION AND ORDER - 1 INTRODUCTION Before the Court is a motion to dismiss filed by the Idaho Department of Health and Welfare (IDHW). The motion is fully briefed and at issue. For the reasons explained below, the Court will deny the motion. LITIGATION BACKGROUND Plaintiffs are developmentally disabled adults who qualify for benefits under Medicaid. They are eligible for long-term institutional care but choose to live instead in their own homes or in community settings. When their Medicaid payments were reduced, they brought this action against IDHW, alleging, among other things, that the IDHW’s budgeting methodology – referred to as the budget tool – improperly reduces assistance for some recipients, that the notice that IDHW uses to inform participants of reductions in their assistance was insufficient, and that the process for appealing budget reductions was unfair. The Court certified a class of disabled adults to challenge the budget tool, notice form, and hearing procedures used by the IDHW. In addition to these class claims that challenge the system-wide processes of IDHW, there are individual claims brought by 16 named plaintiffs alleging that reductions to their budgets puts them at risk for being institutionalized. These individual claims are referred to as the Olmstead claims, after the Supreme Court decision requiring those in the position of plaintiffs to show that “the challenged state action creates a serious risk of institutionalization.” See Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 607 (1999). MEMORANDUM DECISION AND ORDER - 2 The parties then reached a settlement of the class claims. The IDHW agreed to develop a new budget tool, and to keep plaintiffs’ benefits at their prior high level until the new budgets could be approved and implemented. The settlement gave the IDHW two years to develop and test the new budget tool. The Court approved the class action settlement, and set a trial date for the Olmstead claims. The IDHW now seeks to dismiss the Olmstead claims on the ground that they are moot because the plaintiffs have been awarded the relief they sought in this lawsuit – that is, the new budget tool, revised notice forms, and modified hearing procedures. In the alternative, the IDHW argues, the Court should proceed to trial on the Olmstead claims immediately. The plaintiffs have not, however, obtained all the relief they sued for. The class settlement relies on funding from the State Legislature and approval by the Centers for Medicare and Medicaid Services for the required programmatic changes. Even if the funding and approvals are forthcoming and the new budget tool is implemented, it may reduce budgets, putting some participants in danger of institutionalization, thereby potentially violating Olmstead. In other words, the plaintiffs have only a proposal at this point, not a final product. The Court cannot find, therefore, that plaintiffs’ Olmstead claims are moot. While the Olmstead claims remain alive, they are not ready for trial until the new budget tool is approved and used to determine new individual budgets for the plaintiffs. Only then will the parties know whether the new budgets are reduced to the point where plaintiffs are in MEMORANDUM DECISION AND ORDER - 3 danger of being institutionalized. That time is more than a year away, and so this case will sit for an extended period before the parties will know whether they must proceed to trial on the Olmstead claims or whether those claims will be truly moot. These circumstances call for the case to be administratively terminated, without prejudice to the right of any party to reopen the case for any reason. Once the budget tool has been implemented, and applied to the plaintiffs, the parties can reopen the case to determine whether the Olmstead claims need to be dismissed or tried. ORDER In accordance with the Memorandum Decision set forth above, NOW THEREFORE IT IS HEREBY ORDERED, that the motion to dismiss (docket no. 310) is DENIED. IT IS FURTHER ORDERED, that this case be ADMINISTRATIVELY CLOSED without prejudice to the right of either party to reopen the case for any reason. IT IS FURTHER ORDERED, that the parties shall notify the Court when the Olmstead issues are either ready for trial or are to be dismissed. The Court will not set any trial date until that point, if necessary. MEMORANDUM DECISION AND ORDER - 4 DATED: September 22, 2017 _________________________ B. Lynn Winmill Chief Judge United States District Court MEMORANDUM DECISION AND ORDER - 5