United States District Court, S.D. Indiana, Indianapolis Division
Karla Steimel, on her own behalf and on behalf of a class of those similarly situated, Plaintiffs
Debra Minott, in her official capacity as Secretary of the Indiana Family and Social Services Administration, et al. Defendants.
JANE MAGNIUS STINSON, Judge.
For a number of years, the Indiana Family and Social Services Administration ("FSSA") had a policy in place that allowed developmentally disabled individuals to receive Medicaid waiver services through a waiver program for which they were ineligible. To remedy this problem, the FSSA changed its policy and began transitioning the inappropriately placed individuals to another waiver program designed to serve their needs. This transition allegedly caused many developmentally disabled individuals to face a reduction in services. This suit challenges the FSSA's policy change.
Plaintiff Karla Steimel brings this action on behalf of herself and a class of those similarly situated (collectively, "Plaintiffs") against Defendants Debra Minott, Secretary of the Indiana Family and Social Services Administration ("FSSA"); Nicole Norvell, Director of the Division of Disability and Rehabilitative Services of the FSSA; and Faith Laird, Director of the Division of Aging of the FSSA (collectively, "the State"), alleging violations of the Americans with Disabilities Act of 1990 ("ADA") and the Rehabilitation Act of 1973. [Filing No. 1.] Presently pending before the Court are Plaintiffs' Motion to Certify Class, [Filing No. 3], and a Motion for Permissive Intervention and to Join in Pending Motion for Class Certification filed by Intervenor Plaintiffs Thomas Maertz, Colton Cole, Cody Cole, and Timothy Keister, [Filing No. 88]. The Court held a hearing on these motions during which counsel for each side presented argument. [ See Filing No. 108.] For the reasons that follow, the Court DENIES the Motion to Certify Class, [Filing No. 3], and GRANTS the Motion for Permissive Intervention and to Join in Pending Motion for Class Certification, [Filing No. 88].
I. Standard of Review
In deciding whether to certify a class, the Court may not blithely accept as true even the most well-pleaded allegations of the complaint, but must instead "make whatever factual and legal inquiries are necessary under Rule 23" to resolve contested issues. Szabo v. Bridgeport Macks., Inc., 249 F.3d 672, 676 (7th Cir. 2001); see Parko v. Shell Oil Co., 739 F.3d 1083, 1085 (7th Cir. 2014). Specifically, the Court must find that the putative class satisfies the four prerequisites set forth in Federal Rule of Civil Procedure 23(a). If the putative class does satisfy these prerequisites, the Court must additionally find that it satisfies the requirements set forth in Federal Rule of Civil Procedure 23(b), which vary depending upon which of three different types of classes is proposed.
Before addressing the Rule 23 factors, however, the Court must examine whether the proposed class members are sufficiently definite. To do so, "[t]he plaintiff must... show... that the class is indeed identifiable as a class." Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006). When "there is no way to know or readily ascertain who is a member of the class, " the class "lacks the definiteness required for class certification." Jamie S. v. Milwaukee Public Schools, 668 F.3d 481, 495 (7th Cir. 2012). If the class as defined is sufficiently definite, the Court turns next the Rule 23(a) factors.
It is the plaintiff's burden to prove that an identifiable class exists that qualifies for certification under Rule 23(a). Oshana, 472 F.3d at 513. The four prerequisites under Rule 23(a) are: "(1) [that] the class is so numerous that joinder of all members is impracticable; (2) [that] there are questions of law or fact common to the class; (3) [that] the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) [that] the representative parties will fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a). Class certification is not appropriate unless the named plaintiff establishes all four prerequisites. Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012).
In addition to meeting the prerequisites of Rule 23(a), the proposed class must satisfy one of the conditions of Rule 23(b). Messner, 669 F.3d at 811; Oshana, 472 F.3d at 513. Under Rule 23(b), a class action that satisfies Rule 23(a) may be sustained if one of the following is true: "(1) prosecuting separate actions by or against individual class members would create a risk of: (A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests; (2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or (3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed.R.Civ.P. 23(b)(1-3).
This case involves Medicaid waiver programs funded jointly by the federal government and the state of Indiana. These programs allow states such as Indiana to waive certain federal Medicaid requirements. See generally 42 U.S.C. § 1396n. A subset of these programs-home-and-community-based waiver programs-"permit a State to furnish an array of home and community-based services that assist Medicaid beneficiaries to live in the community and avoid institutionalization." [Filing No. 58-5, at ECF p. 8.] The FSSA submits waivers for approval to the United States Department of Health and Human Services ("DHHS"). [Filing No. 58-2, at ECF p. 4.] Relevant to this litigation are three such waiver programs currently administered by the FSSA: the Aged and Disabled Waiver ("A & D Waiver"), the Community Integration and Habilitation Medicaid Waiver ("CIH Waiver") and the Family Supports Medicaid Waiver ("FS Waiver"). [Filing No. 58-2, at ECF p. 4; Filing No. 58-4, at ECF p. 4.] The FSSA's Division of Aging administers the A&D Waiver, while the FSSA's Bureau of Developmental Disabilities Services ("BDDS") administers the CIH Waiver and the FS Waiver. [Filing No. 58-2, at ECF p. 4; Filing No. 58-4, at ECF p. 4.] An individual may only be enrolled in (and thus receive services from) one waiver program at a time. [Filing No. 58-2, at ECF p. 4.]
Individuals enrolled in any of the waiver programs receive a case manager. [Filing No. 58-2, at ECF p. 6; Filing No. 58-4, at ECF p. 6.] To determine both the type and amounts of services an enrollee will receive through the waiver program, the case manager, the enrollee, and the enrollee's guardian evaluate the enrollee's particular circumstances to identify the enrollee's specific needs. [Filing No. 58-2, at ECF p. 6; Filing No. 58-4, at ECF p. 6.] The enrollee then submits her plan to the appropriate administrating agency-either the Division of Aging or BDDS-which can either approve or deny the request for services. [Filing No. 58-2, at ECF p. 6; Filing No. 58-4, at ECF p. 6.] An enrollee must have her requested services approved annually by the appropriate agency. [Filing No. 58-2, at ECF p. 6; Filing No. 58-4, at ECF p. 6.]
A basic understanding of each waiver is necessary to understand the events underlying this suit. The A&D Waiver "provides an alternative to nursing facility admission for adults and persons of all ages with a disability, " specifically by providing services "for people who would require care in a nursing facility if waiver or other supports were not available." [Filing No. 58-5, at ECF p. 12.] When an individual's A&D Waiver plan is approved by the Division of Aging, she is provided a list of the A&D Waiver services approved and her waiver budget for that year. [Filing No. 58-2, at ECF p. 7.] The approved services are reimbursed at rates set by the Division of Aging. [Filing No. 58-2, at ECF p. 6.] Although A&D Waiver enrollees receive a specific budget amount each year, they need not use services such that they spend the entire allocated budget. [Filing No. 95-1, at ECF p. 2.] The A&D Waiver has a limited number of individuals that it can serve, but it is not currently at capacity. [Filing No. 58-2, at ECF p. 5.]
Both the FS Waiver and CIH Waiver provide "waiver services to participants... in a range of community settings as an alternative to care in an intermediate care facility" to persons "with a developmental disability, intellectual disability... or autism." [Filing No. 58-7, at ECF p. 8; Filing No. 58-8, at ECF p. 8.] While the A&D Waiver is limited to those who require nursing-facility level of care, the FS Waiver and the CIH Waiver serve individuals who require a different level of care: "intermediate care facility for individuals with intellectual disabilities" ("ICF/IID"). [Filing No. 58-7, at ECF p. 7; Filing No. 58-8, at ECF p. 7.] Like the A&D Waiver, the FS Waiver and the CIH Waiver are reimbursed at set rates, [Filing No. 58-9, at ECF p. 9-10], albeit not the same rates as services under the A&D Waiver, [Filing No. 58-9, at ECF p. 2-4], and an enrollee has a services budget approved at least on an annual basis, [Filing No. 58-4, at ECF p. 6-7]. The FS Waiver currently caps enrollee's budgets at $16, 250 per year. [Filing No. 58-4, at ECF p. 18.] The CIH Waiver, however, has a much higher budget cap, [Filing No. 30-1, at ECF p. 2], given that it is a needs-based waiver and "individuals must meet emergency placement criteria to access [it]." [Filing No. 58-9, at ECF p. 77.] The amount of services available under each of the three waivers is impacted by the statutory requirements that each waiver be cost-neutral compared to the cost of serving these enrollees through a traditional Medicaid institutional placement. See 42 U.S.C. § 1396n(c)(2)(D) (requiring that under each "waiver the average per capita expenditure estimated by the State in any fiscal year for medical assistance provided with respect to such individuals does not exceed 100 percent of the average per capita expenditure that the State reasonably estimates would have been made in that fiscal year for expenditures under the State plan for such individuals if the waiver had not been granted").
From 2006 to 2011, FSSA policy permitted individuals with developmental disabilities to be placed on the A&D Waiver even if they did not meet nursing-facility level of care. [Filing No. 58-9, at ECF p. 27-32 (2006 A&D Waiver Policy Statement).! This decision contradicted the express terms of the A&D Waiver approved by DHHS, which limited the A&D Waiver to individuals requiring nursing-facility level of care. [Filing No. 58-5, at ECF p. 11.] In October 2011, the Division of Aging instituted a new policy that is the subject of this litigation ("2011 Policy Change"). [Filing No. 58-9, at ECF p. 32.] The 2011 Policy Change rescinded the FSSA's prior policy of allowing individuals with a developmental disability to enroll in the A&D Waiver even if they did not require nursing-facility level of care. [Filing No. 58-9, at ECF p. 32.] Because some individuals on the A&D Waiver did not meet that level of care, the Division of Aging needed to transition enrollees to another waiver for which they were eligible. [Filing No. 58-2, at ECF p. 12.] Specifically, the Division of Aging sought to transition those no longer eligible for the A&D Waiver to either of the two waiver programs administered by BDDS: the FS Waiver or the CIH Waiver. [Filing No. 58-2, at ECF p. 12.]
Individuals on the A&D Waiver that were no longer eligible were not instantly transitioned off the A&D Waiver. Instead, they remained-and many still remain-on the A&D Waiver until they were "targeted" for transition to the FS Waiver. [Filing No. 58-2, at ECF p. 12-13.] As stated by the FSSA, "[s]ome individuals currently served through the A&D Waiver no longer meet Nursing Facility level of care but do continue to require assistance with activities of daily living due to a reported developmental disability. These individuals have been notified by their case manager that they no longer meet [Nursing Facility] level of care and may continue to receive services through the A&D Waiver as they wait to be targeted for the [FS Waiver]." [Filing No. 58-9, at ECF p. 76.] Although technically an individual could transition from the A&D Waiver to either the FS Waiver or the CIH Waiver, the FSSA required individuals who must be transitioned off the A&D Waiver to go through an evaluation for placement on the FS Waiver. [Filing No. 58-2, at ECF p. 13.] If the evaluation revealed that the individual's level of care rendered her eligible for the FS Waiver, she would be targeted for that waiver once a slot became available. [Filing No. 58-4, at ECF p. 11.] The FSSA acknowledges that it would be the "rare" occasion that an individual requiring nursing-facility level of care would not also meet the level of care required to be eligible for the FS Waiver and CIH Waiver. [Filing No. 58-2, at ECF p. 15.] Unlike the FS Waiver, individuals transitioned off the A&D Waiver due to the 2011 Policy Change are not targeted for placement on the CIH Waiver. [Filing No. 58-4, at ECF p. 12.] Instead, an individual seeking placement on the CIH Waiver must file a "request for review, " during which BDDS determines whether the individual meets the needs-based criteria required for enrollment on the CIH Waiver. [Filing No. 58-4, at ECF p. 12.]
The Court begins briefly with the pending Motion for Permissive Intervention and to Join in Pending Motion for Class Certification. [Filing No. 88.] Thomas Maertz, Colton Cole, Cody Cole, and Timothy Keister seek to intervene in this action as plaintiffs and seek to join in the pending Motion to Certify. [ See Filing No. 88, at ECF p. 1-2.] They seek to do so not only to vindicate their own rights, but also to serve as class representatives. [Filing No. 88, at ECF p. 1.] The State criticizes but does not opposite the motion, and the Court therefore grants it as unopposed.
The Court turns next to Plaintiffs' Motion to Certify. Plaintiffs seek to certify the following class:
Any and all persons, current and future, terminated from the A&D Waiver as a result of the 2011 Policy Change who require more services each year than are available through the FS Waiver and who are not enrolled in the CIH Waiver.
[ See Filing No. 74, at ECF p. 24 (setting forth the proposed class definition); Filing No. 105, at ECF p. 14 (suggesting a modification to the class definition set forth in the supplemental opening brief).] First, the Court addresses whether this putative class is sufficiently ascertainable. Next, the Court discusses the Rule 23(a) prerequisites to class certification. Finally, the Court analyzes whether the putative class meets Rule 23(b)(2). In the end, the Court concludes that the class is not sufficiently ascertainable, does not meet the four Rule 23(a) requirements, and is not certifiable under Rule 23(b)(2). For each of these reasons, the Court declines to certify the putative class.
A. Ascertainability and Indefiniteness
The ascertainability or definiteness (two terms used interchangeably) of a class is not a prerequisite for class certification enumerated in the Federal Rules, but the Seventh Circuit has made clear that it is nonetheless a requirement for class certification. See Jamie S., 668 F.3d at 495 (declining to certify a putative class because, among other reasons, the class was "fatally indefinite"). To meet this requirement, "[t]he plaintiff must... show... that the class is indeed identifiable as a class." Oshana, 472 F.3d at 513. When "there is no way to know or readily ascertain who is a member of the class, " the class "lacks the definiteness required for class certification." Jamie S., 668 F.3d at 495; see Adashunas v. Negley, 626 F.2d 600, 604 (7th Cir. 1980) (holding that "the proposed class of plaintiffs is so highly diverse and so difficult to identify that it is not adequately defined or nearly ascertainable" to warrant certification).
The parties vigorously dispute whether the class is sufficiently definite. The State points to several difficulties with the class definition that preclude its members' identification. [Filing No. 97, at ECF p. 18-27.] First, the State argues that the individuals who meet the class definition must be identified by reviewing the file of each individual enrolled in the A&D Waiver- approximately 14, 000 files. [Filing No. 97, at ECF p. 20-21 (citing Filing No. 95-1, at ECF p. 1).] This file review is required, says the State, because those terminated from the A&D Waiver due to the 2011 Policy Change are necessarily those individuals on the A&D Waiver that have a developmental disability, thus each file must be examined to check for such a diagnosis. [Filing No. 97, at ECF p. 20-21.] The State maintains that this process is more cumbersome than merely checking an electronic database to see if a developmental disability is listed. Each enrollee's electronic file contains a maximum of three diagnoses. If a developmental disability is not of the diagnoses maintained electronically an examination of each enrollee's full file would have to be conducted to determine the first requirement of class membership. [Filing No. 97, at ECF p. 20-21.] Second, the State focuses specifically on the portion of the class definition that putative class members are those "who require more services each year than are available through the FS Waiver." [ See Filing No. 97, at ECF p. 21-25.] According to the State, determining whether an individual requires more services than offered through the FS Waiver-which is capped at $16, 250 per year in services, [Filing No. 58-4, at ECF p. 18]-"is extremely complicated, individualized, fluctuating, and subjective, " for three reasons: (1) an individual's last A&D Waiver budget is an inadequate proxy for services that an individual will require on the FS Waiver; (2) services available on the A&D Waiver and not the same as those available on the FS Waiver; and (3) budgeted dollars on the FS Waiver are not equivalent to budgeted dollars on the A&D Waiver because of differing approved rates, [Filing No. 97, at ECF p. 21-22].
Plaintiffs respond with several arguments. First, Plaintiffs contend that the State overlooks that Plaintiffs seek certification pursuant to Rule 23(b)(2) rather than Rule 23(b)(3), and that "ascertainability arguments are entitled to little weight where certification is sought under Rule 23(b)(2)." [Filing No. 105, at ECF p. 3.] Second, Plaintiffs argue that any difficulty that exists in identifying class members stems from the State's own failure to track those affected by the 2011 Policy Change, and thus these difficulties should not preclude certification. [Filing No. 105, at ECF p. 7-8.] Third, Plaintiffs maintain that "the key [inquiry] is simply whether a person's membership in the class may be ascertained by reference to objective criteria, " and that all of the criteria in the proposed class definition are indeed objective. [Filing No. 105, at ECF p. 9.] Finally, Plaintiffs argue that if determining what services an individual "requires" precludes class certification, "vindication of class-wide harms [would be] virtually impossible ...