Cathleen Murray v. Charles Auslander

Cathleen MURRAY, Shelly Wilson, et al., Plaintiffs-Appellees,
v.
Charles AUSLANDER, Acting Administrator of DFCS District 11, State of Florida, Agency for Health
Care Administration, by the highest ranking official, et al., Defendants-Appellants.
No. 00-11955.
United States Court of Appeals,
Eleventh Circuit.
March 13, 2001.
Appeal from the United States District Court for the Southern District of Florida. (No. 98-01066-CV-WDF),
Wilkie D. Ferguson, Jr., Judge.
Before WILSON, KRAVITCH and COX, Circuit Judges.
KRAVITCH, Circuit Judge:
The State of Florida and several Florida officials (collectively the "Defendants") appeal the district
court's order certifying a plaintiff class of developmentally disabled persons who have been denied services
for which they are eligible under Florida's Home and Community Based Waiver Program. Defendants
contend: (1) that every named plaintiff either lacked standing or possessed moot claims at the time of
certification; (2) that the named plaintiffs lack commonality and typicality of claims; (3) that the class
definition is overly broad; and (4) that the plaintiffs' class is subsumed in the certified class of another
lawsuit. After careful consideration, we vacate the class certification order and remand for further
proceedings not inconsistent with this opinion.
I. BACKGROUND
Plaintiffs are developmentally disabled individuals participating in the Medicaid program under
Florida's Home and Community Based Waiver Program ("Waiver Program").1 On May 12, 1998, Plaintiffs
1
Medicaid is a federal-state program "through which the federal government furnishes financial
assistance to the states so that the states may provide necessary medical, rehabilitation, and other services
to low-income persons." Prado-Steiman v. Bush, 221 F.3d 1266, 1268 (11th Cir.2000); see Medicaid
Act, Title XIX of the Social Security Act, 42 U.S.C. § 1396, et seq. Because Florida participates in the
Medicaid program, it is obligated to provide Medicaid services to all of Florida's Medicaid-eligible and
developmentally disabled persons either in an Intermediate Care Facility for the Developmentally
Disabled ("ICF/DD") or through the Waiver Program. See 42 U.S.C. § 1396n. Under the Waiver
Program, the Secretary of Health and Human Services ("Secretary") may "grant a waiver to a state under
which approved costs of home- and community-based services are reimbursed for eligible individuals
who otherwise would require care in an ICF/DD facility, but who instead elect to remain in their homes."
Prado-Steiman, 221 F.3d at 1268; see § 42 U.S.C. 1396n(c). Florida has chosen to participate in the
Waiver Program.
filed a class action lawsuit in federal court, challenging the manner in which Defendants administer the
Waiver Program. Plaintiffs allege violations of Title XIX of the Social Security Act, § 1396n (c)(2)(A); the
Fourteenth Amendment to the United States Constitution; and the Americans with Disabilities Act ("ADA"),
42 U.S.C. § 12101, et seq. Specifically, Plaintiffs contend that, contrary to federal law, Defendants routinely
deny needed Home and Community Based Waiver ("HCBW") services to Medicaid-eligible, developmentally
disabled individuals based on funding concerns rather than medical necessity concerns.2
According to the plaintiffs, Defendants have implemented a policy which "caps" the amount that
Florida will spend on services for a particular individual regardless of changes in that individual's condition
or needs. Plaintiffs assert that the "cap" used by Defendants equals the cost of an individual's HCBW services
as of the day he or she entered the Waiver Program. Consequently, participants of the Waiver Program
allegedly are forced to select between certain needed HCBW services despite their admitted eligibility for
all such services. Plaintiffs seek declaratory and injunctive relief which would require Defendants to provide
all necessary HCBW services for participants of the Waiver Program whom Defendants already have deemed
eligible to receive such services. Plaintiffs also seek compensatory damages under the ADA.
On May 13, 1998, the day after Plaintiffs filed this class action, another group of developmentally
disabled individuals filed a class action in which they also challenged Florida's administration of the Waiver
Program. See Prado-Steiman v. Bush, No. 98-06496 (S.D.Fla. Mar. 30, 1999), vacated by Prado-Steiman
v. Bush, 221 F.3d 1266 (11th Cir.2000). The district court certified the Prado-Steiman class in March 1999,
but this court vacated the certification order and remanded for further proceedings. See Prado-Steiman, 221
F.3d at 1283.
On February 22, 2000, the district court in the instant case certified the following class under
Fed.R.Civ.P. 23(b)(2):
All developmentally disabled individuals participating in the Home and Community-Based Waiver
who are not receiving needed services under the Waiver for which they are qualified and eligible.
Defendants sought an interlocutory appeal of the class certification decision under Rule 23(f) and we granted
permission to appeal.
II. DISCUSSION
A.
2
Federal law allows Medicaid plans to apply a "medical necessity" test to all applicants. See Prado-
Steiman, 221 F.3d at 1268; see also 42 CFR § 440.230(d).
We review orders granting class certification for abuse of discretion. Prado-Steiman, 221 F.3d at
1278. In order to obtain class certification, plaintiffs first must satisfy the prerequisites of numerosity,
commonality, typicality, and adequacy of representation specified in Rule 23(a).3 General Tele. Co. of
Southwest v. Falcon, 457 U.S. 147, 156, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). Here, the district court
found that the named plaintiffs met all four prerequisites. Defendants disagree, arguing that the class lacks
commonality and typicality of claims because none of the named plaintiffs demonstrated that they have
Article III standing and that they possessed claims that were not moot at the time of certification.
Prado-Steiman v. Bush involved a similar challenge to the district court's class certification order.
In that case, the defendants argued that the class did not satisfy the commonality and typicality requirements
because plaintiffs made no showing that at least one of the named plaintiffs possessed individual standing to
raise each class claim. 221 F.3d at 1277. Addressing the defendants' objection, we held that "prior to the
certification of a class, and technically speaking before undertaking any formal typicality or commonality
review, the district court must determine that at least one named class representative has Article III standing
to raise each class subclaim." Id. at 1279; see also Tucker v. Phyfer, 819 F.2d 1030, 1033 (11th Cir.1987)
(concluding that where no exception applies, class action is moot if no named plaintiff's claim is live on date
of certification). Our holding in Prado-Steiman reconfirmed the well-settled rule that "any analysis of class
certification must begin with the issue of standing...." Griffin v. Dugger, 823 F.2d 1476, 1482 (11th
Cir.1987). Nevertheless, in Prado-Steiman, we determined that the record was not sufficiently developed
to enable us to conduct the fact-specific inquiry necessary to resolve the defendants' standing challenge on
appeal. Accordingly, we remanded the case to the district court and directed it to ensure that the standing
requirement was satisfied. 221 F.3d at 1280.
In the present case, Defendants argue that none of the named plaintiffs had live claims at the time the
court certified the class because "every one of the named plaintiffs either voluntarily decided not to seek a
service allegedly denied, had obtained it, or did not actually need it." We believe that a resolution of this
3
In addition, plaintiffs have to demonstrate that one of the three conditions of Rule 23(b), subsections
(1), (2), or (3) apply: "that either (1) prosecution by separate actions would create a risk of inconsistent
results; (2) the defendant has acted in ways generally applicable to the class, making declaratory or
injunctive relief appropriate; or (3) common questions of law or fact predominate over individual issues."
Moore v. American Fed'n of Television and Radio Artists, 216 F.3d 1236, 1241 (11th Cir.2000). The
district court found that the plaintiffs' action met the threshold requirements of Rule 23(b)(2) because
Plaintiffs alleged that Defendants refused to provide services to Medicaid eligible individuals on grounds
generally applicable to the class.
standing/mootness challenge necessitates the same fact-specific inquiry required in Prado-Steiman. As in
Prado-Steiman, this inquiry requires that we examine "factual proffers, through affidavits and other
evidentiary documents, that have not been developed sufficiently as of now."4 221 F.3d at 1280. In
accordance with our holding in Prado-Steiman, we remand this case to the district court and direct it to
conduct an evidentiary inquiry to determine whether at least one named representative of the class has
standing to bring a non-moot claim.5 See id. If the district court finds that the named plaintiffs' claims were
moot at the time of certification, then it should consider whether any exceptions to the mootness doctrine
apply. See, e.g., Jews for Jesus, Inc. v. Hillsborough County Aviation Auth., 162 F.3d 627, 629 (11th
Cir.1998) (explaining that voluntary cessation of challenged practice renders case moot only if there is no
reasonable expectation that challenged practice will resume after lawsuit is dismissed); Sierra Club v. Martin,
110 F.3d 1551, 1554 (11th Cir.1997) ("To satisfy the 'capable of repetition, yet evading review' exception
to mootness, the Supreme Court has required that (1) there be a reasonable expectation or a demonstrated
probability that the same controversy will recur involving the same complaining party, and (2) the challenged
action is in its duration too short to be fully litigated prior to its cessation or expiration.").
B.
In addition, Defendants argue that the named plaintiffs lack commonality and typicality of claims
with other class members because issues subject to individualized proof allegedly predominate over issues
subject to generalized proof. For example, Defendants contend that in order to establish liability, each
Plaintiff must demonstrate that he or she is eligible to receive a particular HCBW service. According to
Defendants, the chief criteria for eligibility are medical necessity and individual need, two elements which
they contend may only be determined through individual hearings. See Chandler v. City of Dallas, 2 F.3d
1385, 1396 (5th Cir.1993) (holding that determinations of whether an individual is handicapped are
necessarily individualized inquiries, making class certification and class relief inappropriate). In addition,
Defendants contend that individual hearings are necessary to determine why Plaintiffs were denied a
particular service.
4
It does not appear that the district court conducted any standing/mootness inquiry before concluding
that Plaintiffs met the commonality and typicality requirements.
5
Although Prado-Steiman specifically dealt with issues of standing, its holding equally applies to the
mootness doctrine. See Atlanta Gas Light Co. v. FERC, 140 F.3d 1392, 1401 (11th Cir.1998) ("Mootness
has been described as the doctrine of standing set in a time frame ....") (internal quotation marks and
citation omitted).
A class representative must possess the same interest and suffer the same injury as the class members
in order to be typical under Rule 23(a)(3). See Prado-Steiman, 221 F.3d at 1279. The typicality requirement
may be satisfied despite substantial factual differences, however, when there is a "strong similarity of legal
theories." See Appleyard v. Wallace, 754 F.2d 955, 958 (11th Cir.1985). Under the Rule 23(a)(2)
commonality requirement, a class action must involve issues that are susceptible to class-wide proof. See
Hudson v. Delta Air Lines, Inc., 90 F.3d 451, 457 (11th Cir.1996). Nevertheless, because the district court
certified this class under Rule 23(b)(2) rather than Rule 23(b)(3), there is no requirement here that issues
subject to generalized proof predominate over those subject to individualized proofs. See Rutstein v. Avis
Rent-A Car Sys., Inc., 211 F.3d 1228, 1233 (11th Cir.2000); Barnes v. American Tobacco Co., 161 F.3d 127,
143 (3rd Cir.1998) ("While 23(b)(2) class actions have no predominance ... requirements, it is well
established that the class claims must be cohesive."); Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999,
1005 (11th Cir.1997) ("The predominance inquiry ... is far more demanding than Rule 23(a)'s commonality
requirement.") (internal quotation marks and citation omitted).
In this case, all of the named plaintiffs suffer from severe physical disabilities and all seek injunctive
and declaratory relief from the same alleged illegal policy of Defendants. Review of the record and the
parties' briefs reveals that Plaintiffs' class action is primarily aimed at forcing the state to end its policy of
"capping" the amount it will spend on a participant of the Waiver Program. This policy, which allegedly
forces an individual to select between two necessary services for which that individual is admittedly eligible,
raises issues common to all class members and is susceptible to generalized proof. Furthermore, the need for
complex, individualized hearings to determine eligibility is reduced in this case because Defendants already
have identified approximately 9,000 individuals whom Defendants deemed eligible and qualified to receive
a particular needed HCBW service but are not receiving it. Thus, apart from the standing issue, it was not
an abuse of discretion for the district court to find that Plaintiffs' claims for injunctive and declaratory relief
satisfy the commonality and typicality requirements.
We agree with Defendants, however, that Plaintiffs' claim for damages presents a problem in this
case. In addition to their claims for declaratory and injunctive relief from Defendants' policy, Plaintiffs seek
compensatory damages under the ADA for their individual "pain and suffering, mental anguish, and
humiliation." The district court did not address Plaintiffs' damage claim in the class certification order.
Therefore, we assume that the court did not intend to exempt it from class treatment.
Monetary relief may be obtained in a Rule 23(b)(2) class action so long as the predominant relief
sought is injunctive or declaratory. See Allison v. Citgo Petroleum Corp., 151 F.3d 402, 411 (5th Cir.1998);
Holmes v. Cont'l Can Co., 706 F.2d 1144, 1155 (11th Cir.1983). "[M]onetary relief predominates in (b)(2)
class actions unless it is incidental to requested injunctive or declaratory relief." Allison, 151 F.3d at 415(emphasis added); see also Lemon v. Int'l Union of Operating Eng'rs., 216 F.3d 577, 581 (7th Cir.2000);
Williams v. Owens-Illinois, Inc., 665 F.2d 918, 928-29 (9th Cir.1982). Because the Eleventh Circuit has not
yet established specific criteria for determining when monetary damages are incidental to equitable relief, we
look to a Fifth Circuit case for guidance. In Allison v. Citgo Petroleum Corp., the court explained:
By incidental, we mean damages that flow directly from liability to the class as a whole on the claims
forming the basis of the injunctive or declaratory relief.... Ideally, incidental damages should be only
those to which class members automatically would be entitled once liability to the class (or subclass)
as a whole is established.... Liability for incidental damages should not ... entail complex
individualized determinations. Thus, incidental damages will, by definition, be more in the nature
of a group remedy, consistent with the forms of relief intended for (b)(2) class actions.
151 F.3d at 415. Here, Plaintiffs do not seek damages as a "group remedy." See id. Instead, they seek
damages as a remedy for their alleged individual "pain and suffering, mental anguish and humiliation." Thus,
it appears that Plaintiffs seek damages to which they would not be automatically entitled even if Defendants'
liability to the class is established. See id. Moreover, assessing damages for these inherently individual
injuries compels an inquiry into each class member's individual circumstances. See id. Accordingly, we
conclude that the plaintiff class's damages claim predominates over its claims for equitable relief such that
the district court abused its discretion by not exempting the damages claim from class treatment under
Fed.R.Civ.P. 23(b)(2).
Plaintiffs argue that even if it were improper for the district court to give Rule 23(b)(2) class
treatment to their damages claim, the class is also certifiable under Rule 23(b)(3). Rule 23(b)(3) permits class
certification when "questions of law or fact common to the members of the class predominate over any
questions affecting only individual members, and that a class action is superior to other available methods
for the fair and efficient adjudication of the controversy." Fed.R.Civ.P. 23(b)(3). The district court made no
findings concerning whether the plaintiffs' class is certifiable under Rule 23(b)(3). Therefore, if the district
court decides on remand that standing requirements have been satisfied, it should then determine whether
Plaintiffs' case meets the threshold requirements Rule 23(b)(3) such that Plaintiffs may assert their damages
claim.
C.
Defendants also contend that the district court abused its discretion by adopting an improper class
definition. They argue that the current class definition forces the district court to make complex,
individualized inquiries to identify class members and that the class includes people not affected by Plaintiffs'
core claim that they are denied HCBW services due to the state's lack of money.
Defendants' objection may be resolved by making a limited alteration to the existing class definition.
The present class definition includes participants in the Waiver Program "who are not receiving needed
services under the Waiver for which they are qualified and eligible." On remand, we direct the district court
to clarify that the class definition includes only those individuals whom the state already has determined or
will determine to be eligible and qualified to receive a medically necessary HCBW service. Changing the
class definition in this manner will limit the need for complex, individual hearings to determine class
membership. The class should further be limited to those individuals whom the state has documented or will
document as having been denied services for purely budgetary reasons. As a result, the class definition will
more clearly reflect Plaintiffs' core claim for declaratory and injunctive relief from Defendants' alleged policy
of "capping" the amount of money that they will spend on needed HCBW services.
D.
Finally, we address Defendants' argument that the class in this case should be decertified because it
is subsumed within the Prado-Steiman class. Like the instant case, Prado-Steiman involved claims brought
by developmentally disabled plaintiffs against the State of Florida and various state officials responsible for
the administration of the Waiver Program. See Prado-Steiman, 221 F.3d at 1268-69. The plaintiffs in Prado-
Steiman filed a class action on May 13, 1998, one day after Plaintiffs filed this suit. Although the district
court certified the class in Prado-Steiman prior to class certification in the present case, we vacated the
certification order on August 11, 2000. See id. at 1283. To our knowledge, the district court has not yet
entered another class certification order in Prado-Steiman. Accordingly, we decline to address the issue
whether the class-which in the future may or may not be certified by the district court in this case-will be
subsumed by the class that may or may not be certified by the district court in Prado-Steiman. Instead, we
leave the district court with the same advice given in Prado-Steiman: "[T]he district court also should be
careful not to certify [classes] overlapping with certified classes in other related ICF/DD litigation now
pending." Id. at 1282.
III. CONCLUSION
Based on the foregoing reasons, we VACATE the district court's certification order and REMAND
to the district court with instructions that it determine whether at least one named plaintiff has Article III
standing and possesses a non-moot claim. Furthermore, the district court should determine whether a class
may be certified under 23(b)(3) and if not, exempt the damages claim from class treatment. Finally, we direct
the district court to redefine the class as set forth in this opinion.
VACATED AND REMANDED.