John/Jane Doe v. Jeb Bush

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
_____________________ ELEVENTH CIRCUIT
AUGUST 14, 2001
THOMAS K. KAHN
Nos. 99-14590 & CLERK
00-12097
_____________________
D.C. Docket No. 92-00589-CV-WDF
JOHN/JANE DOE, 1-13 by and through Mr./Mrs. Doe Sr. No.’s 1-13 as natural
guardians on and behalf of those similarly situated,
Plaintiffs-Appellees,
versus
JEB BUSH, in his official capacity as Governor of the State of Florida,
KATHLEEN KEARNEY, in her official capacity as Secretary of the Department
of Children and Family Services, et al.,
Defendants-Appellants.
_____________________
Appeals from the United States District Court
for the Southern District of Florida
____________________
(August 14, 2001)
Before ANDERSON, Chief Judge, CARNES, Circuit Judge, and NANGLE*,
District Judge.
CARNES, Circuit Judge:
State officials charged with the administration of the Medicaid program in
Florida appeal two separate orders arising out of the same litigation. The first
appeal is from a contempt order entered on October 7, 1999, for their alleged
failure to comply with the injunctive relief ordered in a 1996 final judgment
involving the state’s Medicaid program. The second appeal is from a class
certification order entered on February 11, 2000, approximately three months after
the defendants filed their notice of appeal from the contempt order and nearly four
years after the entry of final judgment in the case. We consolidated the two
appeals.
This litigation has been ill-fated since the district court entered its terse final
judgment in 1996. The scope and reach of that judgment has been a source of
contention between the parties leading to this point. There are a number of issues,
all of which we will discuss in the course of this opinion. For the present
introductory purposes, suffice it to say that we have concluded that the district
court’s finding of contempt, as well as its belated entry of the class certification
*
Honorable John F. Nangle, U.S. District Judge for the Eastern District of Missouri,
sitting by designation.
2
order, are due to be reversed, and the case remanded to the district court which
will then have an opportunity to more clearly define the obligations it intends to
impose upon the defendants.
I. PROCEDURAL BACKGROUND
In 1992, thirteen unnamed developmentally disabled individuals
(“plaintiffs”) who had been placed on waiting lists for entry into intermediate care
facilities (“ICF”)2 brought a § 1983 action against officials of the Florida
Department of Health and Rehabilitative Services3 (“defendants”). The suit
alleged that defendants were allowing eligible individuals to languish on waiting
lists for Intermediate Care Facilities for the Developmentally Disabled services
(“ICF/DD services”) for years in violation of the Medicaid Act, Title XIX of the
Social Security Act, 42 U.S.C. § 1396 et seq. In 1996, the district court granted
summary judgment in favor of plaintiffs, determining that 42 U.S.C. § 1396a(a)(8)
requires that defendants provide ICF/DD placement to all eligible individuals with
2
ICF’s are institutions that provide 24-hour residential care and services to severely
disabled individuals with developmental disabilities. See 42 U.S.C. § 1396a(a)(10)(C)(iv); Fla.
Admin. Code § 59G-4.170(d). ICF’s are reimbursed for care provided to residents through the
joint state-federal Medicaid program. Fla. Admin. Code § 59G-4.170(5)(a).
3
In 1996, the Department of Health and Rehabilitative Services was redesignated as the
Department of Children and Family Services. See Doe v. Chiles, 136 F.3d 709, 711 n.1 (1998).
In November of 1998, Jeb Bush was elected Governor of Florida. He subsequently replaced all
of the individuals who had been the named defendants in the original action. Upon defendants’
motion for substitution of parties, the case style was changed to reflect these new defendants.
3
“reasonable promptness.” Accordingly, in a separate order entered on August 28,
1996, the district court entered the following final judgment:
ORDERED AND ADJUDGED that Defendants’ shall, within 60 days
of the date of this Order, establish within the State’s Medicaid Plan a
reasonable waiting list time period, not to exceed ninety days, for
individuals who are eligible for placement in ICF/DD institutional
care facilities.
On appeal, this Court affirmed the district court. See Doe v. Chiles, 136 F.3d 709(11th Cir. 1998).
A. THE CONTEMPT ORDER
On June 16, 1998, two months after this Court affirmed the district court’s
final judgment order, plaintiffs filed a motion for contempt arguing that defendants
had not taken any steps to comply with the final judgment. On November 4, 1998,
the district court conducted a show cause hearing on whether defendants should be
held in contempt. At the hearing, defendants estimated that there were 600
developmentally disabled individuals in need of ICF/DD services who were not
receiving them. That number represented an estimate of the individuals who had
requested or were likely to request ICF/DD services, and was not based on
individualized eligibility assessments.4
4
Defendants now argue that the 600 number was an inaccurate estimate that included
people who were seeking any “alternative residential placements,” and that they never identified
any specific individuals who were actually in need of ICF/DD services.
4
Following the show cause hearing, on November 10, 1998, the district court
determined that defendants were not complying with the final judgment, but it did
not hold them in contempt. Instead, the district court entered an order that allowed
additional time to complete “specific acts of compliance.” The defendants were
ordered to provide Medicaid services to the “named members of the class,” to
identify and locate for immediate delivery of ICF/DD services the 600 persons
whom defendants had estimated were eligible for those services, and to fully
comply with the final judgment “as to all members of the numbered class.”
On January 11, 1999, defendants filed their plan of compliance, setting forth
the steps they had taken or intended to take in order to comply with the 1996 final
judgment. On May 24, 1999, the district court conducted a three day hearing in
order to determine whether the defendants were complying with the 1996
judgment. On October 7, 1999, the court held the defendants in contempt for
failure to comply with that final judgment and it fined them $10,000 per day “until
a comprehensive plan, which comports with the letter and spirit of the [final
judgment] is submitted, ready for implementation.” The validity of the contempt
order is the subject of the first half of the consolidated appeal.
B. THE CLASS CERTIFICATION ORDER
5
Plaintiffs originally captioned their complaint as “Civil Complaint (class
action).” The complaint stated repeatedly that it was filed on behalf of the named
plaintiffs and those “similarly situated.” On July 1, 1992, plaintiffs filed a motion
to certify the class. The magistrate judge filed a report and recommendation
(“R&R”) on the certification issue on August 26, 1996, recommending that
plaintiffs’ motion to certify the class be granted. The R&R described the scope of
the class as follows:
all developmentally disabled individuals in the State of Florida who
are entitled to Intermediate Care Facilities for the Mentally Retarded
(“ICF/MR”) placement but have not received a placement with
reasonable promptness.
Although the district court received the R&R two days prior to entering final
judgment, and acknowledged as much, the court entered final judgment without
addressing the class certification issue. In that same final judgment order, the
district court denied as moot all pending motions, including presumably, plaintiffs’
motion for class certification. The district court did not address the class
certification issue again before entering its contempt order in 1999.
In their appeal of the district court’s October 7, 1999 contempt order, one of
the arguments the defendants made was that no class had ever been certified.
Aware of that, the district court, on February 11, 2000, sua sponte and without
6
notice to the parties, entered an order adopting the magistrate’s four-year-old R&R
and granting class certification. The district court’s decision to certify a class at
that late date was motivated by the defendants’ appeal of the contempt order, as the
court’s Order Granting Class Certification acknowledged: “In a pending appeal
the defendants have challenged the breadth of an order on grounds that it compels
relief for a class of individuals beyond the named plaintiffs. This Order on class
certification is germane to that issue and should be added to the record on appeal as
a supplement.” The district court modified the class that was originally proposed
in the R&R to include:
Medicaid eligible individuals with developmental disabilities who
have formally requested placement in an Intermediate Care Facility
(“ICF/DD”) and for whom the placement would be medically and
otherwise appropriate but who have not received a placement with
reasonable promptness. Specifically included in this class are the
approximate 600 individuals the State of Florida had identified as
eligible for ICF/DD placement who have been awaiting placement for
more than 90 days. (footnote omitted).
The validity of the class certification order is the subject of the second half of the
consolidated appeal.
II. DISCUSSION: THE CONTEMPT ORDER
A. THE DEFENDANTS’ CONDUCT
7
Before discussing the district court’s holding that defendants were in
contempt of its 1996 final judgment, we need to set out in some detail precisely
what the defendants did following the issuance of the 1996 final judgment and this
Court’s mandate affirming that judgment, see Chiles, 136 F.3d 709.
1. Defendants Amend the Florida
State Medicaid Plan
On April 27, 1998, the Federal Health Care Financing Administration
approved an amendment, which had been submitted by defendants in response to
the final judgment, to the Florida State Medicaid Plan. Under the amended plan,
an applicant is not deemed eligible for ICF/DD services unless it is first determined
that such services are medically necessary. Specifically, the plan provides:
Intermediate Care Facility for the Developmentally Disabled
(ICF/DD) Service
Limitations
(1) The Recipient’s need for ICF/DD services must be determined by
the agency’s designee[5] based on medical necessity.
(2) The agency’s designee will maintain a waiting list for persons who
have been determined by the agency’s designee to be eligible for,
require and have chosen ICF/DD placement. The time from
placement on the waiting list until admission to an ICF/DD for such
persons will not exceed 90 days.
See Florida Medicaid Plan, Attachment 3.1-A(15)(1).6
5
The agency’s designee is the Department of Children and Family Services.
6
The previous incarnation of this provision of Florida’s Medicaid Plan provided:
8
Medical necessity is defined in Florida Administrative Code § 59G-
1.010(166), which provides that in order for a service to be considered “medically
necessary,” it must:
(a) Meet the following conditions:
1. Be necessary to protect life, to prevent significant illness or
significant disability, or to alleviate severe pain;
2. Be individualized, specific, and consistent with symptoms or
confirmed diagnosis of the illness or injury under treatment, and not in
excess of the patient’s needs;
3. Be consistent with generally accepted professional medical
standards as determined by the Medicaid program, and not
experimental or investigational;
4. Be reflective of the level of service that can be safely furnished, and
for which no equally effective and more conservative or less costly
treatment is available, statewide; and
5. Be furnished in a manner not primarily intended for the
convenience of the recipient, the recipient’s caretaker, or the provider.
Fla. Admin. Code. § 59G-1.010(166). Under the amended plan, the defendants
also look to the Code of Federal Regulations section 483.440 for further guidance
Services in an Intermediate Care Facility for the Mentally Retarded
The recipient’s need must be determined by the agency based on medical
necessity.
See Florida Medicaid Plan, Attachment 3.1-A, effective October 1, 1992, replaced by
amendment 96-12, April 27, 1998.
9
on how to determine medical necessity. Subsection (b) of that section of the
regulations provides that clients who are admitted into an ICF/DD “must be in
need of . . . active treatment services.” 42 C.F.R. § 483.440(b). “Active
treatment” is defined as “a continuous active treatment program, which includes
aggressive, consistent implementation of a program of specialized and generic
training, treatment, health services and related services described in this subpart,”
and does not include “services to maintain generally independent clients who are
able to function with little supervision or in the absence of a continuous active
treatment program.” 42 C.F.R. § 483.440(a); see also Fla. Stat. § 393.063(1)
(defining “Active treatment”); Fla. Admin. Code §§ 59G-1.010(2) (defining
“Active treatment plan”), & 59G-4.171(4) (establishing the recipient eligibility
criteria for “Intermediate Care Facilities for the Mentally
Retarded/Developmentally Disabled,” including the need for “continual active
treatment”). Thus, under Florida’s Medicaid Plan, an individual will not be
deemed eligible for ICF/DD services unless such services are “determined to be
medically necessary for the individual as expressed by a need for continuous active
treatment. . . .” See Central Admission Policy for Intermediate Care Facilities for
Persons With Developmental Disabilities (ICF/DD) in Compliance With Doe v.
Chiles.
10
2. Defendants Adopt the Status Tracking Survey
After entry of the final judgment, defendants designed and adopted what
they deemed a “uniform assessment instrument,” known as the Florida Status
Tracking Survey, to determine which applicants for ICF/DD services satisfy the
medical necessity standard. Under the Status Tracking Survey defendants evaluate
applicants for ICF/DD services to determine if their “level of need” indicates that
they require “continuous active treatment” so that ICF/DD services are “medically
necessary.”
The Status Tracking Survey was designed in part to evaluate an applicants’
level of need for ICF/DD services in three categories: daily functioning,
behavioral risk, and physical/medical status. Those individuals who score a
sufficiently high level of need are deemed to require 24-hour care for severe
medical, behavioral, and functional deficits. The purpose of the Status Tracking
Survey was explained during the show cause hearing by Dr. Ray Foster, who
consulted with the State in developing it:
In terms of taking a look at the [Status Tracking Survey], its purpose. .
. is really to identify individuals who are at higher Levels of Need for
assistance, support, intervention, service, supervision, the kinds of
things that you would need in your daily life day to day, to help you
eat and dress and function and get around, to take care of behaviors
that would pos[e] a risk to yourself or someone else and to take care
of health conditions that would require special treatment or extended
periods of monitoring or supervision in some way. . . . [I]n the end the
11
decision you have to come down to is whether or not, based on this
person’s characteristics and levels of need, are they high enough? Are
they substantial enough? Are they enduring enough to require the top
ended service that we can deliver in our State. That is really the
purpose of this tool.
The new eligibility criteria contained in the Status Tracking Survey were not
subject to notice and comment rulemaking and they have never been published.
3. Defendants Develop the Two-Step Review Process
Determining that an applicant has an appropriate level of need is only part of
the first of two steps in defendants’ revised eligibility determination process.
Under the first step, after an applicant submits an initial request for services,
defendants determine both whether the applicant is Medicaid eligible and, using
the Status Tracking Survey, whether the applicant is eligible to receive ICF/DD
services, i.e., whether such services are medically necessary. If the applicant is
determined to be eligible, defendants then schedule an interview with the applicant
to discuss alternative services, such as home and community-based waiver
services, to ensure that the applicant actually does want ICF/DD services. 7
Eligible applicants who do want ICF/DD services are placed on a waiting list.
7
In the Home and Community Based Services Waiver Act, Title XIX of the Social
Security Act, 42 U.S.C. § 1396n(c), Congress has authorized certain persons with developmental
disabilities to receive Medicaid services in a community setting rather than in an institutional
facility. As a result, certain individuals who would qualify for ICF/DD placement may instead
elect to remain in their homes. See id.
12
Under defendants’ revised two-step review process, they have 90 days from the
date the applicant is put on the waiting list after re-affirming the initial request for
services to place that applicant in an ICF/DD facility. See Florida Medicaid Plan,
Attachment 3.1-A(15)(2)
4. Defendants Apply the Status Tracking Survey
and the Two-Step Review Process
Utilizing their revised criteria and admissions practices, defendants began
evaluating the level of need of the 600 individuals they had previously identified to
the district court as requiring ICF/DD services, plus an additional 34 individuals
who were subsequently identified as potentially eligible candidates. Defendants
reviewed the files of these individuals using a uniform screening instrument (not
the Status Tracking Survey) that measured three indicators of eligibility: 1)
Medicaid eligibility; 2) a request for ICF/DD placement; and 3) a preliminary
indication that the individuals were likely to need active treatment. Of the
individuals screened, only 285 were identified for further evaluation.
Most of the 285 individuals8 who were identified as likely to meet the
criteria for ICF/DD services were further reviewed using the Status Tracking
Survey to evaluate their level of need. Of those individuals, 208 were identified as
8
Nineteen of the 285 individuals were unavailable due to circumstances beyond the
control of the defendants.
13
having a level of need of 4, or 5, which was required at that time to support a
finding of medical necessity.9 Those 208 individuals were subsequently
interviewed to determine whether they wanted ICF/DD placement or whether they
would prefer home and community-based waiver services. According to
defendants, of the 208 individuals, only 10 people requested ICF/DD placement
after the interviews. Thus, by application of the new eligibility criteria and the
revised two-step review process, the defendants reduced their initial estimate of
“eligible” individuals awaiting ICF/DD services from 634 to 10.
B. THE GROUNDS FOR THE CONTEMPT HOLDING
At the show cause hearing, the defendants argued that they should not be
held in contempt because they had offered services to all 10 of the remaining
“eligible” individuals. The district court was not impressed.
The primary reasons the court gave for finding the defendants in contempt of
its 1996 final judgment can be organized and listed as follows: 1) defendants had
9
The Status Tracking Survey scoring system is composed of five levels of need. When
the plan of compliance was originally submitted to the district court, only those applicants who
scored level 4 or 5 were considered eligible to receive continuous active treatment in an ICF.
However, when the defendants applied the Status Tracking Survey criteria to those individuals
who had been admitted to ICF’s before the change in criteria, they determined that only 78% of
those individuals would have scored a 4 or 5. Accordingly, the defendants have since lowered
the qualifying score to 3, which covers 91% of the people residing in ICF’s. Defendants also
represented to the district court that they were in the process of contacting those individuals who
had scored a 3 in order to offer them ICF/DD services.
14
failed to seek adequate funds from the Florida Legislature to comply with the
judgment, then had claimed inadequate funds as a basis for their non-compliance;
2) defendants had sought to avoid the effects of the final judgment by making
procedurally and substantively improper changes to the state law criteria used to
determine eligibility for ICF/DD services; 3) pursuant to the revised two-step
application review process, defendants had offered eligible plaintiffs “phantom
choices” of community-based treatment alternatives, and had unreasonably
interpreted the final judgment as allowing them two successive 90-day time
periods in which to determine eligibility for and then ensure the provision of,
ICF/DD services; and 4) defendants had offered improper or inappropriate
ICF/DD services to feign compliance.
C. STANDARD OF REVIEW
We generally review civil contempt orders for abuse of discretion, see Jove
Eng’g, Inc. v. I.R.S., 92 F.3d 1539, 1545-46 (11th Cir. 1996), and we review
findings of fact arising out of contempt proceedings under the clearly erroneous
standard, see Citronelle-Mobile Gathering, Inc. v. Watkins, 943 F.2d 1297, 1301
(11th Cir. 1991). “[T]he focus of the court’s inquiry in civil contempt proceedings
is not on the subjective beliefs or intent of the alleged contemnors in complying
with the order, but whether in fact their conduct complied with the order at issue.”
15
Howard Johnson Co., Inc. v. Khimani, 892 F.2d 1512, 1516 (11th Cir. 1990)
(citations omitted). But “a civil contempt order may be upheld only if the proof of
the defendant’s contempt is clear and convincing.” McGregor v. Chierico, 206
F.3d 1378, 1383 (11th Cir. 2000). “This clear and convincing proof must . . .
demonstrate that 1) the allegedly violated order was valid and lawful; 2) the order
was clear, definite and unambiguous; and 3) the alleged violator had the ability to
comply with the order.” Id. (internal marks and citation omitted).
D. ANALYSIS
1. Defendants’ Threshold Arguments
Before turning to the four grounds underlying the district court’s contempt
holding, we will first address two arguments the defendants make that do not
specifically involve those grounds. They argue in effect that the district court erred
by finding them in contempt for failing to provide relief to an extent and on a scale
not contemplated by the 1996 final judgment.
a. Defendants’ Reading of
the Final Judgment
Defendants’ first argument is that the final judgment, strictly construed,
required only that they amend Florida’s Medicaid Plan to include “a reasonable
waiting list time period” for the provision of ICF/DD services and not that they
actually provide those services within a reasonable time. Defendants point out that
16
they have already made an amendment to the Plan adopting the required reasonable
waiting list time period. Attachment 3.1-A of the Florida Medicaid Plan, which
was amended on April 27, 1998, now provides that:
(2) The agency’s designee will maintain a waiting list for persons who
have been determined by the agency’s designee to be eligible for,
require and have chosen ICF/DD placement. The time from
placement on the waiting list until admission to an ICF/DD for such
persons will not exceed 90 days.
The contention is that the final judgment did not require the defendants to actually
admit those on the waiting list to an ICF/DD as their own amendment to the Plan
requires, and that the district court should not have concerned itself with whether
the required waiting list time period was actually making any difference in the
provision of services.
This contention is untenable. The defendants themselves have not
previously interpreted the final judgment so narrowly. For example, in the
Emergency Motion to Stay the Final Judgment, which the defendants filed on
October 23, 1996, they argued: “Without a stay of the Final Judgment, defendants
will be required to immediately begin to create additional institutional
infrastructure in the form of bricks and mortar,” and that “[p]resumably, if there are
not sufficient ICF/DD beds available, the Final Judgment would require the actual
construction of facilities within 90 days, an impossible feat.” The defendants’
17
new-found interpretation of the final judgment is also directly at odds with our
prior interpretation of it. In Chiles, we rejected the defendants’ argument that the
district court abused its discretion “in enjoining them to provide the Medicaid
services at issue within ninety days.” 136 F.3d at 721-22.
b. Class-Wide Relief
Although the district court observed in the second sentence of the contempt
order that this lawsuit was brought by “thirteen developmentally disabled
individuals,” the court did not hold the defendants in contempt for failing to timely
provide ICF/DD services to those thirteen plaintiffs. Instead, it appears that the
court based its finding of contempt, in part, on the defendants’ alleged failure to
provide services on a system-wide or class-wide basis.10 Accordingly, one of the
grounds of the defendants’ challenge to the contempt order is that the district court
exceeded the scope of the final judgment by ordering defendants to provide class-
wide relief. This ground of challenge raises issues about the existence of a formally
certified class and an implied class.
10
For example, prior to finding the defendants in contempt, the district court ordered them
to complete specific “acts of compliance.” The defendants were ordered to provide Medicaid
services to the “named members of the class,” to identify and locate for immediate delivery of
ICF services the 600 persons whom defendants had estimated were eligible for those services,
and to fully comply with the final judgment “as to all members of the numbered class.” And in
the contempt order itself, the court stated that “[o]nly 634 eligible individuals are plaintiffs in
this lawsuit . . . .”
18
(i) The Existence of a Certified Class
The defendants contend that they cannot be held in contempt of the 1996
final judgment for failure to provide services to members of the “class” because no
class had been properly certified prior to the issuance of the contempt order.
Specifically, they say that:
The contempt order attempts to enforce class-wide relief, apparently
for all developmentally disabled people in Florida wanting services.
The district court neither defined (and hence appropriately limited)
this class, nor did it certify the class.
The district court did not certify a class before issuing its 1996 final
judgment or at any time while the case was still properly before it. Although the
magistrate judge had recommended that plaintiffs’ motion for class certification be
granted, the district court did not adopt the magistrate’s recommendation or
otherwise resolve the class certification question before entering final judgment.
Instead, at the time the court issued its final judgment it appears to have
deliberately decided not to certify a class. The court still had not done so four years
later when it found the defendants in contempt. The court explicitly recognized as
much in the contempt order, stating: “Only 634 eligible individuals are plaintiffs in
this lawsuit as an order certifying a class was never entered.”
However, as we discuss in the next section, the fact that the district court
failed to properly certify a class does not necessarily establish that no class exists,
19
or that the defendants cannot be held in contempt for failing to provide class-wide
relief.
(ii) The Existence of an “Implied Class”
In three pre-split Fifth Circuit cases, this Court addressed the question of
whether the absence of a proper class certification order entered pursuant to
Fed.R.Civ.P. 23 was necessarily fatal to the putative class members’ claims. See
Johnson v. Gen. Motors Corp., 598 F.2d 432 (5th Cir. 1979); Bolton v. Murray
Envelope Corp., 553 F.2d 881 (5th Cir. 1977); Bing v. Roadway Express, Inc., 485
F.2d 441 (5th Cir. 1973). Those decisions are binding upon us, see Bonner v. City
of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), and we find their
reasoning fits the circumstances of this case. Accordingly, although we recognize
that the district court failed to properly certify a class, we conclude, nevertheless,
that an “implied class” exists.
In Bing, the plaintiffs filed their complaint as a class action but did not
subsequently move the district court for a class certification order and one was
never entered. 485 F.2d at 446. Regardless, the former Fifth Circuit stated “we
may infer that the trial court approved the class action nature of this lawsuit” and
held that the class relief could stand. Id. In reaching its conclusion, the court was
persuaded by several factors, including: 1) that the complaint was brought on
20
behalf of the plaintiff and “all others similarly situated”; 2) that the defendants
never objected to the “class nature” of the action; 3) that the trial court made
statements that suggested it thought the case was a class action; and 4) the
judgment rendered by the district court contained relief that was “aimed at a class
of people.” Id. at 446-47. The Bing Court concluded that because “[defendant]
discriminated against a class, class relief was sought, and class relief was given. . . .
To say that this is not a class action would be to ignore the substance of the
proceedings below in favor of an excessively formalistic adherence to the Federal
Rules of Civil Procedure.” Id. The Court went on to conclude that the type of
class as well as the identity of the class members could be determined from the
nature of the relief contained in the judgment. Id. at 447-48. Bolton reaffirmed the
holding in Bing and also recognized that, as a general matter, a Rule 23(b)(2) class
does not require class-wide notice as a precondition for its existence.11 553 F.2d at
883; see also e.g., Jefferson v. Ingersoll Intn’l Inc., 195 F.3d 894, 897 (7th Cir.
1999) (“Rule 23(b)(2) authorizes a no-notice and no-opt-out class for ‘final
injunctive relief . . . [that operates] with respect to the class a whole.’”); Crawford
v. Honig, 37 F.3d 485, 487 n.2 (9th Cir. 1995) (observing that the right to notice
11
Fed.R.Civ.P. 23(b)(2) provides that a class may be maintained where “the party
opposing the class has acted or refused to act on grounds generally applicable to the class,
thereby making appropriate final injunctive relief or corresponding declaratory relief with
respect to the class as a whole.”
21
does not apply to class actions brought under Rule 23(b)(2)); Kincade v. Gen. Tire
& Rubber Co., 635 F.2d 501, 506 (5th Cir. 1981) (same).
In Johnson, the issue was whether a plaintiff who was seeking monetary
damages was barred from so doing by the preclusive effect of a prior class action.
Johnson, 598 F.2d at 434. The plaintiff argued that he was not barred because,
among other reasons, the class in the preceding action had never been certified. Id.Relying on Bing, the Johnson court rejected plaintiffs’ argument. Id. at 435. In the
course of doing so, it construed the holding in Bing as turning on the district
court’s, and not the parties’, treatment of the action as a class action. Id. As the
Johnson court stated, “In short, it is beyond dispute that despite the lack of a proper
order certifying [the previous action] as a class suit, the case was in fact a class
action and was specifically described and treated as such both at trial and on
appeal.” Id.There are a number of decisions from other jurisdictions that contain
language consistent with Bing’s holding. See e.g., Senter v. Gen. Motors Corp.,
532 F.2d 511, 522 (6th Cir. 1976) (recognizing that, although the district court
should have ruled on the class certification issue prior to resolving the merits, “the
simple fact is that no one was misled as to the class nature of the action”); see also
Navarro-Ayala v. Hernandez-Colon, 951 F.2d 1325 (1st Cir. 1991) (under similar
22
facts as in the present case, the First Circuit held that even in the absence of a Rule
23 certification order, “because this case was instituted by a complaint seeking
class relief, implicitly granted class relief, and was conducted for years as a de
facto class action, it should and may be recognized as such”); Graves v. Walton
County Bd. of Educ., 686 F.2d 1135, 1139-40 (5th Cir. 1982) (“[I]t is clear that
despite the lack of a formal order certifying this case as a class suit, this case was
in fact a class action and was specifically described and treated as such by the
parties and the trial court.”).
The present case is a strong one for recognizing the existence of an implied
class. The plaintiffs filed this suit as a class action and timely filed for class
certification. The magistrate judge recommended that class certification be
granted. The plaintiffs acted at all times as though the relief entered would extend
system-wide. So did the district court. It referred to plaintiffs as a “class” in the
final judgment, stating:
Currently pending, and rendered moot by this Order, is Plaintiffs’
Emergency Motion for Preliminary Injunction. . . . [T]he concerns
expressed in that motion are adequately addressed in a . . . case
pending before this Court. . . . Plaintiffs in this action, as a class, may
intervene in [that] action.
(emphasis added). This Court also appears to have treated the case as involving
Medicaid applicants other than the named plaintiffs, stating;
23
[The plaintiffs] have certainly established that the [defendants’]
ongoing violation of federal law is “systemwide.” . . . The record
reveals that hundreds, perhaps even thousands, of eligible
developmentally disabled persons are not being provided ICF/DD
services with anything resembling reasonable promptness.
Consequently, we reject the [defendants’] contention “that there was
no showing of statewide or ‘system’ wide injury.”
Chiles, 136 F.3d at 722 n.23.
Moreover, the defendants themselves have always understood that the relief
granted in the final judgment was intended to be system-wide, and not just limited
to the named plaintiffs. For example, in Defendants’ Emergency Motion to Stay
Final Judgment, filed October 23, 1996, they argued: “Without a stay of the Final
Judgment, defendants will be required to immediately begin to create additional
institutional infrastructure in the form of bricks and mortar,” and that
“[p]resumably, if there are not sufficient ICF/DD beds available, the Final
Judgment would require the actual construction of facilities within 90 days, an
impossible feat.” In defendants’ argument on appeal from the final judgment they
stated that the “system wide relief” in the “judgment below” was erroneous as
“there was no showing of statewide or ‘system’ wide injury.” And at the
November 8, 1998 show cause hearing, counsel for defendants agreed with the
court that an estimated 600 people were then in need of ICF/DD services but
argued that defendants should not be held in contempt, stating: “It does take time.
24
There are a lot of people, [a] lot of considerations. These decisions, even though
this is a class action, these are ultimately individualized decisions.” (emphasis
added).
Notwithstanding all of this, the defendants say that they have always
contested class certification. True, but they only contested formal class
certification; they did not contest the system-wide nature of the relief contemplated
by the final judgment. That much is evident from the objections they submitted to
formal class certification, where they argued: “Class Certification is Unnecessary
Because the Benefits Of the Relief Sought Will Inure To All Individuals [who are
potential] Members Of The Proposed Class” and that “no useful purpose would be
served by permitting the case to proceed as a class action inasmuch as the
injunction sought would benefit all members of the proposed class.” It was not
until the contempt proceedings – nearly four years after entry of final judgment –
that defendants first suggested that the relief ordered in the final judgment should
be limited to the named plaintiffs. In other words, everyone involved in this case,
including the defendants themselves, always treated the relief sought and provided
in the final judgment as extending system-wide, until the threat of contempt
sanctions inspired the defendants to see things differently for the first time. We do
not share their vision.
25
Additional factors militate in favor of recognizing the existence of an
implied class in this lawsuit. Plaintiffs did not occasion the delay in certifying the
class. They should not be penalized because the district court either forgot to
address the certification question sooner, or determined that it was not necessary to
do so. See Senter, 532 F.2d at 521 (recognizing that “[t]he language of Rule 23
(c)(1) is obviously directed to the District Court. It does not impose upon a
plaintiff the additional burden of ensuring that the District Court adhere to
23(c)(1)’s directive.”). Moreover, as in Bing, it is a simple matter to determine the
type and scope of the class by looking to the relief contained in the final judgment.
As to its type, because we are dealing with injunctive relief, the class is a Rule
23(b)(2) class, and would not require that notice be given to all potential class
members. See Bolton, 553 F.2d at 883. As to its scope, the district court defined
the relief as follows:
ORDERED AND ADJUDGED that Defendants’ shall, within 60 days
of the date of this Order, establish within the State’s Medicaid Plan a
reasonable waiting list time period, not to exceed ninety days, for
individuals who are eligible for placement in ICF/DD institutional
care facilities.
The general parameters of the class include all “individuals who are eligible for
placement in ICF/DD institutional care facilities.”
26
This is also how we viewed matters in our prior opinion in this case where
we construed the final judgment language to mean “that [defendants] must
incorporate into their present scheme of providing services procedures that ensure
a waiting list period of not more than ninety days.” Chiles, 136 F.3d at 721. That
language clearly envisioned a system-wide revision, as is also evident from our
recognition that “perhaps . . . thousands” of individuals were being denied ICF/DD
services in violation of federal law. Id. at 722 n.23.
Therefore, to the extent such recognition is necessary,12 we recognize the
existence of an implied class in this case. We also hold that the existence of that
implied class defeats the defendants’ challenges to the contempt order premised on
the court’s failure to certify a class. The parameters of the implied class are as
follows:
Medicaid eligible individuals with developmental disabilities who
have requested, and have been determined eligible for, placement in
an Intermediate Care Facility (“ICF/DD”) but who have not received a
placement with reasonable promptness.
12
Given the nature of the relief at issue, it is not entirely clear that there is a need to
recognize a class at all. The relief contained in the final judgment should inure to all Medicaid-
eligible developmentally disabled individuals who are eligible for, and request, ICF/DD services.
After all, it would seem axiomatic that defendants cannot continue to violate 42 U.S.C. §
1396a(a)(8) as to everyone except the named plaintiffs.
27
To keep the paper current, the district court should enter an order to that effect
upon remand.13
2. The Four Grounds Underlying the Contempt Holding
We turn now to the four grounds, which we have previously listed, upon
which the district court based its contempt order.
a. The Inadequate Funding Ground
The first ground is that the defendants sought inadequate funds from the
Florida Legislature to comply with the final judgment. The district court stated
that the defendants had requested only enough funds to reduce the waiting list by
53%, from which the court “inferred that there was never an intent to timely
comply with the mandate of the Eleventh Circuit or this Court’s Order.”
However, the district court made its inadequate funding determination based
upon the estimated “[t]wenty-three thousand individuals” who are currently on
waiting lists for services. That number is not even close to the number of
individuals who were actually eligible for IFC/DD services but who had not yet
received them at the time of the contempt hearing. As we have previously
discussed, the defendants estimate, and the plaintiffs do not appear to seriously
13
In Part III of this opinion, below, we vacate the court’s February 11, 2000 class
certification order because the court was without jurisdiction to enter it when the court did. The
district court will regain jurisdiction when this case returns to it on remand.
28
disagree, that the number of individuals actually eligible for placement in IFC/DD
facilities but who had not been placed at the time of the hearing is 634.14 Indeed,
the district court pretty much adopted that number in both its November 10, 1998
order and in the contempt order itself, where the court stated, “[o]nly 634 eligible
individuals are plaintiffs in this lawsuit. . . .” The defendants insist that the 23,000
figure represents an estimate of all individuals with developmental disabilities who
may need some state services of some kind, although only a small fraction of that
number need ICF/DD services.15 The plaintiffs do not disagree.
“Civil contempt proceedings are brought to enforce a court order that
requires a party to act in some defined manner.” Chairs v. Burgess, 143 F.3d 1432,
1436 (11th Cir. 1998) (internal marks omitted). Here, the final judgment did not
require the provision of services to any and all developmentally disabled
individuals, nor did it require the provision of any Medicaid services other than
ICF/DD services. Therefore, to the extent that the district court based its finding of
contempt on defendants’ failure to request sufficient funds to provide ICF/DD
services or any other kind of services to 23,000 individuals, it erred.
14
The original estimate was 600, but 34 individuals were subsequently added to the
estimate.
15
The defendants did not indicate whether the “services” sought by these 23,000
individuals was limited to Medicaid services.
29
b. The Modification of Eligibility Grounds – The Status Tracking Survey
The second ground upon which the district court relied to find defendants in
contempt involves their modification of the eligibility requirements, which they
accomplished through the development and implementation of the Status Tracking
Survey. The final judgment ordered the defendants to provide services within 90
days “for individuals who are eligible for placement in ICF/DD institutional care
facilities.” What the district court found is that instead of providing ICF/DD
services to the then-estimated 634 individuals who were “eligible for placement in
ICF/DD institutional care facilities, ” the defendants changed the definition of
“eligibility” for placement in those facilities in order to eliminate all but ten of the
634 people from eligibility. The district court reasoned:
The consequence and obvious intent of adopting the experimental
[Status Tracking Survey] tool for assessing need has been to remove a
large number of individuals from the list of those eligible for and
receiving ICF/DD services. Circumvention of the final judgment
entered in 1996, which ordered that services be provided to identified
eligible individuals, is thus effectively accomplished.
The court did not have any problem with the defendants requiring medical
necessity as an eligibility criterion for ICF/DD services.16 But it had serious
16
The plaintiffs have not argued to us that medical necessity is an invalid criterion and
could not legitimately do so. A state that elects to participate in Medicaid has the option of not
providing ICF/DD services at all. See 42 U.S.C. § 1396a(a)(10)(A)(ii); 42 C.F.R. § 440.225(“Any of the services defined in subpart A of this part [which includes the definition of ICF
services found at 42 C.F.R. § 440.150] that are not required under § 440.210 and 440.220 [ICF
30
problems with the use of the Status Tracking Survey to determine medical
necessity, and those problems were a large part of the reason the court concluded
that the defendants were in contempt of its 1996 final judgment order. The district
court did not suggest that the defendants would have been in contempt for making
valid changes to the criteria used to determine eligibility, but instead concluded
that their conduct was contemptuous because the changes they made with the
adoption of the Status Tracking Survey were procedurally and substantively
invalid.
services are not] may be furnished under the State plan at the State’s option.”). If a state elects
to provide ICF/DD services, as Florida has, it must set its eligibility standards in accordance with
certain broad federal rules. See 42 C.F.R. § 430.0 (“Within broad Federal rules, each State
decides eligible groups, types and range of services, payment levels for services, and
administrative and operating procedures.”). Section 1396d(a)(15) provides that the state may
elect to provide such services “for individuals who are determined, in accordance with section
1396a(a)(31)(A) of this title, to be in need of such care.” 42 U.S.C. § 1396d(a)(15). Section
1396a(a)(31)(A) provides that when the State elects to provide such services, the State Medicaid
Plan must provide for a “written plan of care, prior to admission to or authorization of benefits in
such facility, in accordance with regulations of the Secretary.” 42 U.S.C. § 1396a(a)(31)(A).
The relevant regulations provide that “[e]ach service must be sufficient in amount, duration, and
scope to reasonably achieve its purpose,” 42 C.F.R. § 440.230(b) and that otherwise, “[t]he
agency may place appropriate limits on a service based on such criteria as medical necessity. . .
.” 42 C.F.R. § 440.230(d).
What all of those statutory provisions and regulations mean is that the defendants were
free to limit the provision of ICF/DD services to only those applicants for whom ICF/DD
services were deemed medically necessary. See Rush v. Parham, 625 F.2d 1150, 1155 (5th Cir.
1980) (“[T]he Medicaid statutes and regulations permit a state to define medical necessity in a
way tailored to the requirements of its own Medicaid program.”); King by King v. Sullivan, 776
F.Supp. 645, 651 (D.R.I. 1991) (“[T]he medical eligibility criteria for ICF-MR placement under
the State Plan require ‘medical necessity’. . . . Such a restriction on eligibility is proper . . . .”).
31
The district court thought that adoption of the Status Tracking Survey
constituted unlawful rulemaking. The court also determined that the Status
Tracking Survey is not a “complete or ready” screening tool and that it is contrary
to the substance of the federal Medicaid statute. In particular, the court noted that
the Status Tracking Survey does not require a certification of need by a physician
and does not provide for an interdisciplinary evaluation prior to admission to an
ICF/DD facility. The court also thought that the Status Tracking Survey does not
address many important factors that should be considered under the federal
Medicaid statute in determining the need for continuous active treatment. Finally,
the court found the Status Tracking Survey lacking because it did not include
safeguards in the form of an independent review of adverse eligibility
determinations.
The reasoning that led the district court to conclude that creation and use of
the Status Tracking System to determine medical necessity violated the 1996 final
judgment order appears to have been this: 1) the new eligibility criteria contained
in the Status Tracking System are invalid, either because they were adopted in a
procedurally defective manner or because they are substantively in violation of the
Medicaid statute, or because they are simply unreliable; 2) using those new criteria
the defendants denied ICF/DD services to a number of individuals; 3) many of
32
these individuals would have been eligible under the old criteria; 4) with the result
that defendants have failed to timely provide ICF/DD services to individuals who
are “truly eligible,” meaning eligible under the original criteria which are the only
remaining ones after the Status Tracking Survey is thrown out. Therefore, the
reasoning goes, the defendants improperly circumvented and thereby violated the
final judgment.
The district court’s finding of contempt cannot stand if the first premise set
out above, which is that the Status Tracking Survey is invalid, falls. The district
court gave four reasons for concluding the Status Tracking Survey was invalid, and
we take up each one of those reasons in turn.
(i) Rulemaking and Procedural Requirements
The district court held that the Status Tracking Survey was procedurally
invalid because it had been adopted “without following formal rulemaking
procedures and without publishing the changes so that the public could understand
how eligible persons would be affected.” That failure to comply with rulemaking
requirements was fatal, in the court’s view.
(1) Compliance with the APA
33
In holding that the defendants, in adopting the Status Tracking Survey,
failed to comply with administrative rulemaking requirements,17 the district court
cited both federal cases applying the federal Administrative Procedure Act, 5
U.S.C. § 701 et seq. (“APA”), as well as state cases applying Florida’s
Administrative Procedure Act, Fla. Stat. § 120.52 et seq. See Cleveland Clinic
Florida Hosp. v. Agency for Health Care Admin., 679 So. 2d 1237, 1242 (Fla. 1st
Dist. Ct. App. 1996). (“The statutory framework under which administrative
agencies must operate in [Florida] provides ... mechanisms for the adoption or
amendment of rules.”). However, the federal APA clearly does not apply to state
agencies. See 5 U.S.C. § 701(b)(1) (defining “agency” as certain authorities of the
“Government of the United States”).
Moreover, to the extent that the defendants were in violation of Florida’s
own administrative procedures act, federal courts do not have the authority to
compel state actors to comply with state law. See Pennhurst State School & Hosp.
v. Halderman, 465 U.S. 89, 106, 104 S. Ct. 900, 911 (1984) (“[I]t is difficult to
think of a greater intrusion on state sovereignty than when a federal court instructs
state officials on how to conform their conduct to state law. Such a result conflicts
17
For purposes of this analysis, we assume, without deciding, that the adoption of the
Status Tracking Survey constituted “rulemaking.”
34
directly with the principles of federalism that underlie the Eleventh Amendment.”);
see also Walker v. Mintzes, 771 F.2d 920, 933 (6th Cir. 1985) (“[A] federal court
should not rule upon the validity of a state regulation challenged on the sole
ground that it was not properly adopted under state law by the state administrative
agency.”).
There is, to be sure, some authority holding that a state administrative
agency’s violation of state law can, under certain circumstances, also constitute a
violation of federal law thereby avoiding the Eleventh Amendment problems
described in the Pennhurst opinion. In Barnes v. Cohen, 749 F.2d 1009 (3rd Cir.
1984), the Third Circuit determined that state officials were not adhering to their
own regulations that were passed in accordance with the Aid to Families with
Dependent Children (“AFDC”) program. Id. at 1018. In response to the state’s
argument that such a holding contravened Pennhurst, the Court pointed to 42
U.S.C. § 602(a)(1), which requires state AFDC plans to “be in effect in all political
subdivisions of the State, and, if administered by them, be mandatory upon them.”
Id. at 1019. The Court interpreted that provision as requiring states to adhere to
their own AFDC regulations, and held that the state’s violation of its own
regulations also constituted a violation of 42 U.S.C. § 602(a)(1), rendering
Pennhurst inapplicable. Id.; see also Wisconsin Hosp. Ass’n v. Reivitz, 820 F.2d
35863, 868 (7th Cir. 1987) (“The decree might seem to raise problems under
[Pennhurst] . . . but it does not, because the federal regulations make compliance
with the state plan . . . a federal duty.”).
A similar argument could be made in this case because section 1396a(a)(1)
of the Medicaid Act contains language identical to that found in 42 U.S.C. §
602(a)(1).18 See 42 U.S.C. § 1396a(a)(1). But see Oberlander v. Perales, 740 F.2d
116, 119 (2d Cir. 1984) (rejecting a similar argument regarding section 1396a(a)(1)
as “tortuous,” noting that “there is no authority anywhere supporting the
proposition that a state Medicaid regulation becomes a federal law merely by virtue
of its inclusion in a state plan required by federal law.”).
But even if we were inclined to adopt the reasoning set out by the Third
Circuit in Barnes, it would not apply to the facts of this case. Here, unlike Barnes,
the defendants are not alleged to have violated a state Medicaid regulation or a
provision of the state Medicaid plan. Instead, the district court determined that
defendants violated certain general rulemaking requirements set forth in Florida’s
Administrative Procedure Act. There is nothing in the federal Medicaid statute or
18
Section 1396a(a)(1) provides:
A State plan for medical assistance must –
(1) provide that it shall be in effect in all political subdivisions of the
State, and, if administered by them, be mandatory upon them.
36
regulations that would require the defendants to follow Florida’s APA. As this
Court has previously explained in another Medicaid case where we distinguished
Barnes:
Assuming arguendo that Pennhurst II is not applicable to a case such
as that described in Barnes v. Cohen, we hold that we are not faced
with such a situation. [Plaintiff] has not alleged that [the
commissioner of the Alabama Medicaid Agency] has violated the
state Medicaid plan or regulations promulgated pursuant to the state
Medicaid plan. Instead he argues that [the commissioner] has not
complied with the state constitution and with state statutes which are
not part of the Medicaid plan. Thus, the principles announced in
Barnes are not relevant here.
Silver v. Baggiano, 804 F.2d 1211, 1214 (11th Cir. 1986). We have the same
situation here, and our holding in Silver fits this case precisely.
Thus, the federal APA did not apply to the defendants’ adoption of the
Status Tracking Survey, and any violations of Florida’s APA are not cognizable in
this type of federal court proceeding. Therefore, there is no proper basis for the
district court’s holding that defendants adopted the Status Tracking Survey in a
procedurally defective manner, and any procedural problems with its adoption
cannot serve as a reason for holding defendants in contempt.
(2) Compliance with the Medicaid Statute
37
In holding the defendants in contempt, the district court also concluded that,
under the Medicaid statute, “notice of the rule change” should have been provided
for the numerous individuals who would have been eligible under the old criteria,
but who were denied services under the revised criteria. It determined that such
notice is mandated, citing 42 U.S.C. § 1396a(a)(3) and 42 C.F.R. §§ 431.206,
431.210 431.220, 435.912 and 435.919(a).19 If we construe the district court’s
statement literally – that the defendants were required to provide the plaintiffs
with notice “of the rule change” – the statutory and regulatory provisions the
district court relied on are inapposite. Those provisions involve only notice of
denials of individual Medicaid applications, and impose no obligation to publish
notice of rule changes that will have a general impact on eligibility.
However, if we construe the district court’s statement to mean only that
those individuals denied services pursuant to the new criteria have a right to notice
and an opportunity to be heard, then the district court is correct on that point. See
19
Section 1396a(a)(3) provides, “A State plan for medical assistance must provide for
granting an opportunity for a fair hearing before the State agency to any individual whose claim
for medical assistance under the plan is denied ....” Section 431.206 of the Code of Federal
Regulations provides that a state agency must provide notice of an applicant’s right to a hearing.
42 C.F.R. § 431.206(c). Section 431.210 sets forth the contents of that notice. 42 C.F.R. §
431.210. Section 431.220 prescribes the circumstances under which an applicant who requests a
hearing is entitled to one. 42 C.F.R. § 431.220. Section 435.912 specifies that an applicant who
is determined to be ineligible for Medicaid must be provided written notice of the agency’s
decision and an explanation of their right to request a hearing. 42 C.F.R. § 435.912. Section
435.919(a) provides that Medicaid recipients whose services are to be terminated, discontinued
or suspended are to be given adequate notice. 42 C.F.R. § 435.919(a).
38
e.g., Cramer v. Chiles, 33 F.Supp. 2d 1342, 1351-52 (S.D. Fla. 1999) (“Medicaid
statutes require that a state provide individuals with an opportunity for a hearing
before the governmental agency when a claim for medical assistance is denied or is
not acted upon with reasonable promptness, including where the Medicaid agency
takes action to suspend, terminate, or reduce services.”); Parry v. Crawford, 990 F.
Supp. 1250, 1258 (D. Nev. 1998) (“[T]he Medicaid Act clearly provides for notice
upon the denial of an application. . . . In addition to denial of a claim for services,
certain other actions, such as termination, reduction, or suspension of services also
entitle the applicant to a hearing.”) (citation omitted); Catanzano v. Dowling, 847
F.Supp. 1070, 1081 (W.D.N.Y. 1994) (“Under federal regulation, the State
Medicaid agency must provide a proper notice to the patient informing him of the
proposed change and his right to a hearing both at the time that the individual
initially applies for Medicaid and at any time the Medicaid agency takes ‘any
action affecting his claim.’”) (emphasis in original).
The problem with this part of the district court’s reasoning is that
recognizing the plaintiffs have such a right does not establish that the right was
violated in this case. The court’s order contains no findings that anyone who was
denied services failed to receive notification of that denial or was deprived of a
requested hearing. More fundamentally, even if we assume that defendants
39
violated the Medicaid Act – either because they failed to provide notice to those
denied services or they failed to provide hearings to those who requested them –
that would not, by itself, establish that the defendants had violated the final
judgment. The final judgment dealt only with the timely provision of services, and
not with notice and a hearing in connection with the denial of services. It follows
that the defendants’ failure, if any, to provide notice and a hearing cannot support
the district court’s finding of contempt.
(ii) Eligibility Requirements
The district court also determined that the Status Tracking Survey
contravenes certain requirements of the Medicaid statute pertaining to eligibility
for ICF/DD services. In particular, the court stated that the federal regulations
require that “the initial certification of need for in-patient care be made by a
physician and that the evaluation for admission to an ICF/DD or payment for the
service be conducted by an interdisciplinary team.” The court was apparently
troubled by the fact that defendants employ the Status Tracking Survey to make
initial eligibility determinations even though it does not provide for an initial
certification of need by a physician or an evaluation by an interdisciplinary team.
While it is true that the federal Medicaid regulations prescribe certain
standards and procedures that must be satisfied before an applicant can be admitted
40
to an ICF, those provisions do not address, nor are they inconsistent with, the use
of a screening mechanism to identify applicants who are not likely to need
continuous active treatment services. For example, section 483.440 provides, in
pertinent part:
(b) Standards: Admissions, transfers, and discharge.
(1) Clients who are admitted by the facility must be in need of and
receiving active treatment services.
(2) Admission decisions must be based on a preliminary evaluation of
the client that is conducted or updated by the facility or outside
sources.
42 C.F.R. § 483.440. Section 456.360(a) mandates that “A physician must certify
for each applicant or recipient that ICF services are or were needed.” 42 C.F.R. §
456.360(a). Section 456.370 provides:
(a) Before admission to an ICF . . . an interdisciplinary team of health
professionals must make a comprehensive medical and social
evaluation and, where appropriate, a psychological evaluation of each
applicant’s . . . need for care in the ICF.
42 C.F.R. § 456.370.
None of these regulations, which are designed to ensure that only applicants
who are in need of ICF services are placed in institutional care facilities, suggest
that the defendants cannot use the Status Tracking Survey as a screening
mechanism in addition to the procedures mandated by the regulations. The Status
Tracking Survey does not supplant the mechanisms the regulations require, but
41
instead works in concert with them to screen out applicants who are unlikely to
need continuous active treatment services. Those applicants who satisfy the Status
Tracking Survey will still be evaluated, prior to their admission to an ICF, in
accordance with the appropriate regulations, including §§ 483.440, 456.360(a) and
456.370. Thus, to the extent that the district court’s finding of contempt was
predicated on the fact that the Status Tracking Survey is inconsistent with the
Medicaid eligibility requirements set out in the federal regulations, the finding of
contempt cannot stand.
In the context of analyzing the relationship between the Status Tracking
Survey and the eligibility requirements set out in the Medicaid statute, the district
court opined that the Status Tracking Survey “is not a complete or ready tool,” and
that “[n]othing offered by the defendants showed the survey to be a valid
instrument for measuring the needs of developmentally disabled individuals.” For
purposes of this analysis, we will assume that conclusion represents a finding of
fact that is not clearly erroneous. See generally Citronelle-Mobile Gathering, Inc.
v. Watkins, 943 F.2d 1297, 1301 (11th Cir. 1991). Nonetheless, it is irrelevant to
the issue of contempt.
The issue before the district court was whether the defendants had violated
the terms of the final judgment. Parties cannot be held in contempt unless they
42
have violated a clear, definite and unambiguous order. See McGregor v. Chierico,
206 F.3d 1378, 1383 (11th Cir. 2000). The final judgment did not address
eligibility requirements or the efficacy of screening mechanisms. It dealt only with
the timely provision of services to “individuals who are eligible for placement in
ICF/DD institutional care facilities.” For that reason, the defendants cannot be
held in contempt based solely on the district court’s appraisal of the Status
Tracking Survey, even if we assume that it is “not a complete or ready tool” and
that it is not “a valid instrument for measuring the needs of developmentally
disabled individuals.”
(iii) Continuous Active Treatment Requirements
The district court also questioned the validity of the Status Tracking Survey
on grounds that it fails to include all of the factors Medicaid requires to be
considered when determining an individual’s need for continuous active treatment.
The court was specifically concerned with the Status Tracking Survey’s failure to
contain any provisions to ensure that applicants who are denied services do not
regress to the point of needing them. Although the district court did not cite any
statutory or regulatory provision requiring anti-regression care, it may have had in
mind 42 C.F.R. § 483.440(a)(1). That regulation defines active treatment as:
[A] continuous active treatment program, which includes aggressive,
consistent implementation of a program of specialized and generic
43
training, treatment, health services and related services described in
this subpart, that is directed toward –
(i) The acquisition of the behaviors necessary for the client to function
with as much self determination and independence as possible; and
(ii) The prevention or deceleration of regression or loss of current
optimal functional status.
42 C.F.R. § 483.440(a)(1). Another part of the same section also requires that
“[c]lients who are admitted by the facility must be in need of and receiving active
treatment services.” 42 C.F.R. § 483.440(b)(1).
Regulations such as section 483.440 establish certain requirements that ICF
facilities must satisfy in order to participate in the Medicaid scheme. See 42
C.F.R. § 483.400 - 483.480. More specifically, section 483.440 imposes two
requirements relevant to the present discussion. First, it establishes the minimum
level of services that an ICF facility must provide before the facility will be
permitted to participate in Medicaid. See 42 C.F.R. § 483.440(a)(1). As the
district court correctly observed, those services must be designed to prevent the
regression of a client’s functional status. Second, it establishes that individuals
who are admitted to a facility must satisfy a certain baseline level of need before
the facility which houses those clients will be allowed to participate in the
Medicaid scheme. See 42 C.F.R. § 483.440(b)(1). If an ICF admits those who fall
below the baseline level of need prescribed in section 483.440(b)(1), then that
facility will not qualify to participate, at least with respect to those individuals.
44
However, to say, as the regulation does, that applicants who are admitted to
ICF’s must be in need of active treatment services, is not the same as saying that all
applicants who are in need of active treatment services must be admitted to ICF’s.
This is an important distinction, one that is fundamental to the joint federal-state
Medicaid scheme. As we have explained previously, the federal Medicaid statute
does not require states to provide ICF/DD services. See 42 U.S.C. §
1396a(a)(10)(A)(ii). And states that elect to provide those services are granted
substantial discretion in the formulation of their eligibility standards. See 42
C.F.R. § 430.0. Section 483.440 requires only that participating facilities provide
ICF/DD services in a particular manner and solely to those individuals who truly
need them. It does not require that ICF/DD services be provided to any individual
who might benefit from them.
(iv) Review Requirements
The district court’s final criticism of the Status Tracking Survey is that it
does not provide for review of adverse decisions that result from application of its
criteria, and that the absence of such review procedures renders the Status Tracking
Survey “substantively faulty.” The court explained:
[U]se of the [Status Tracking Survey] as a screening mechanism is
substantively faulty because it . . . fails to provide for an independent
45
review of an adverse determination. . . .There are no safeguards
against arbitrariness in canceling services to persons now receiving or
who were eligible for ICF/DD services. The claimed protection
against unfair cancellation of services, according to the defendants, is
an examination of records by the agency’s in-house physician. First,
as previously noted, the review is not independent. Second, the
records are admittedly incomplete for an adequate review . . . .
Assuming that the [Status Tracking Survey] could be constructed to
serve as a valid instrument it is clear that much is left to be done.
Those may (or may not) be valid criticisms of the Status Tracking Survey, but the
district court did not identify any particular provision of the Medicaid statute or its
accompanying regulations that would require a different review procedure. More
fundamentally, the district court’s reasoning goes outside of the appropriate
boundaries of the contempt proceeding. The defendants cannot be held in
contempt of the 1996 final judgment, which says nothing about review
mechanisms, simply because they adopted a “faulty” one.20
20
Even if we were to assume that the Status Tracking Survey violates a substantive
provision of federal law and is therefore invalid, that conclusion, by itself, would not provide a
sufficient basis for holding defendants in contempt of the final judgment. The district court
thought that by using the “invalid” Status Tracking Survey defendants had failed to timely
provide ICF/DD services to individuals who would have been eligible had they been evaluated
under the pre-Status Tracking Survey criteria. But even so, the defendants could not have been
found in contempt unless the district court identified at least one individual who was eligible for
ICF/DD placement under the original criteria, but who was left on a waiting list for more than 90
days as a result of the Status Tracking Survey. The district court made no such findings.
Though it was not a basis of contempt that was discussed in the district court’s order, the
plaintiffs also argue on appeal that the new eligibility criteria violates their substantive due
process rights. They argue that Florida has created a right to ICF/DD services in a particular
class of individuals - its Medicaid-eligible, developmentally disabled citizens - and cannot now
deprive those individuals of that right without due process of law. Regardless of the validity of
46
(v) Summary
The district court’s holding that defendants were in contempt of its 1996
final judgment was based in large part on the premise that the Status Tracking
Survey was procedurally and substantively invalid. That premise does not
withstand scrutiny. So far as procedural rulemaking requirements are concerned,
the federal APA does not apply to the defendants’ adoption of the Status Tracking
Survey, and violations of state administrative procedure law are not cognizable in
federal court in the circumstances of this case. It has not been established that the
defendants’ development and implementation of the Status Tracking Survey
violates any provision of the Medicaid statute or its accompanying regulations.
Finally, even if the Status Tracking Survey is a faulty screening mechanism, that
alone does not violate the terms of the 1996 final judgment. So, any perceived or
actual flaws in the Status Tracking Survey cannot serve as a basis for holding the
defendants in contempt for failure to comply with the 1996 final judgment.
c. The Two-Step Review Process
Moving beyond the Status Tracking Survey issues, the next two grounds
upon which the district court found defendants in contempt involve defendants’
this argument, a matter about which we express no opinion, it cannot serve as an independent
basis for upholding the district court’s finding of contempt, which is the only issue before us.
47
two-step application review process that is initiated when an applicant applies for
ICF/DD services. An application triggers two simultaneous inquiries: an inquiry
as to whether the applicant is Medicaid eligible and also an inquiry as to whether
the applicant is eligible for ICF/DD services. Under defendants’ interpretation of
the law, they have 90 days to complete these two inquiries, which are together the
first step of the process.
If the applicant is determined to be eligible for ICF/DD services under
Medicaid – the first step of the process – defendants then schedule an interview
with the applicant to explain the availability of alternative services, specifically
home and community-based waiver services, and to offer the applicant the choice
between those and ICF/DD services. If the applicant chooses ICF/DD services
after the interview, then there is a maximum 90 day waiting period for the
provision of services set out in the final judgment, and that 90 day period does not
begin running until the first step of the process is completed. The result is that
under defendants’ two-step application review process, from the time the applicant
initially requests ICF/DD services, defendants allow themselves not one but two
successive 90 day time periods to place the applicant in a facility. The district court
had two problems with the defendants’ two-step application process that
contributed to its conclusion that they had violated the 1996 final judgment.
48
(i) Phantom Choices
First, the district court was persuaded that defendants were offering
applicants “phantom choices” between ICF/DD services and the alternative
community-based waiver services. Specifically, the court was concerned that
applicants were not being told that if they elected to receive the alternative services
they were not assured of receiving them in the immediate future.
But the final judgment only involved the time period for providing ICF/DD
services. It said nothing at all about the provision of any other type of services, nor
did it even specify how the defendants were to go about offering ICF/DD services.
As we made clear in our prior decision in this case: “The plain language of the
district court’s injunction does not prevent the appellants from continuing to pursue
the home and community-based waiver services program in accordance with
federal statutory and regulatory dictates.” Chiles, 136 F.3d at 721. Counsel for the
plaintiffs recognized as much, in a statement made at a hearing before the district
court that we cited in Doe v. Chiles:
Our position to the state has always been, if they want to provide
everybody with services so that they don’t need to be taken out of
their current housing arrangement ... that’s great. There won’t be a
lawsuit. They are always welcome to provide services to people in the
manner in which they see fit. . . And if ... they want to entice people
away by offering some other package of services, that’s great.
136 F.3d at 721 n.22.
49
(ii) The Ninety-Day Time Period
The second problem the district court had with the two-step review process
concerned what it termed the “unreasonable” construction by the defendants of the
final judgment as allowing them 90 days from the date of the initial request for
services to determine eligibility, plus an additional 90 days to actually place an
applicant in an ICF/DD facility who is determined to be eligible and wants to be
placed. The district court thought it clear that the final judgment required ICF/DD
placement within 90 days of the application: “There is no ambiguity in the final
judgment. Any request from a developmentally disabled individual or his/her
guardian for ICF/DD services, in whatever form, starts the 90-day time period in
which the defendants are to evaluate the individual and provide or deny services.”
Again, it is worth emphasizing this is a contempt proceeding, and the
question properly before the district court was whether or not defendants had
violated “a clear, definite and unambiguous” order, McGregor, 206 F.3d at 1383.
Our reading of the final judgment in this case does not convince us that it clearly
and unambiguously prescribes the time limit for determining eligibility. The final
judgment provides only that defendants must establish a waiting list, “not to
exceed ninety days, for individuals who are eligible for placement in ICF/DD
institutional care facilities.” The final judgment does not address the question of
50
when that 90 day waiting period is triggered, or how long the defendants have to
determine who is eligible.
We need not choose between the competing interpretations of the final
judgment. It is enough that there are two reasonable, competing interpretations,
which is the very definition of ambiguity. Given the ambiguity in the final
judgment, defendants’ conduct in accordance with their reasonable interpretation
of the judgment as permitting them to run the eligibility determination phase and
the placement phase successively rather than concurrently cannot be
contumacious. See NBA Properties’ Inc. v. Gold, 895 F.2d 30, 32 (1st Cir. 1990)
(any ambiguities in a judgment are to be construed in favor of the alleged
contemnor).21
21
We add that it is by no means clear that defendants’ two-step application review
process is inconsistent with federal law. There is nothing in this Court’s prior opinion in this
case, or in the Medicaid Act, or the federal regulations that directly addresses the question.
Section 1396a(a)(8) provides that medical assistance shall be “furnished with reasonable
promptness to all eligible individuals.” 42 U.S.C. § 1396a(a)(8). In our prior opinion, we
upheld the district court’s conclusion that section 1396a(a)(8) “creates a federal right to
reasonably prompt assistance, that is, assistance provided without unreasonable delay.” Chiles,
136 F.3d at 717. Further, we upheld the district court’s conclusion that “reasonable
promptness” meant a period not to exceed 90 days. See id. at 721-22. That is as far as our
decision went. See id. at 722 (noting that “[t]he injunction is crafted only toward generating a
‘reasonable waiting list time period’ for eligible individuals.”) (emphasis in original). We did not
address the precise question of whether the time period for determining who is eligible for
ICF/DD services runs concurrently with the 90 day waiting period in which those services must
be furnished.
Section 435.911(a) of the Code of Federal Regulations provides that:
The agency must establish time standards for determining eligibility and inform
51
d. Improper Placements
The final ground on which the district court based its conclusion that the
defendants were in contempt concerns certain ICF/DD placements that the court
deemed improper because the facilities were not close to the beneficiaries’ homes,
or the beneficiaries were placed in co-ed facilities without first determining
whether they possessed the ability to use appropriate sexual caution, or for both
reasons. While these are concerns, they are not concerns that were addressed in the
final judgment. Therefore, defendants cannot be held in contempt of the 1996 final
judgment on the basis of the inappropriateness of any ICF/DD placements.
the applicant of what they are. These standards may not exceed –
(1) Ninety days for applicants who apply for Medicaid on the basis of disability
...
42 C.F.R. § 435.911(a). Under defendants’ reading of the statutory and administrative scheme,
they have 90 days to “determin[e] eligibility,” 42 C.F.R. § 435.911(a), followed by 90 days to
furnish assistance to those applicants determined to be “[Medicaid] eligible individuals,” 42
U.S.C. § 1396a(a)(8). The only regulation that specifically addresses the time period for
furnishing services, as opposed to determining eligibility therefor, provides only that the state
agency must “[f]urnish Medicaid promptly to recipients without any delay caused by the
agency’s administrative procedures.” 42 C.F.R. § 435.930. Beyond these provisions, neither
party has pointed us to any controlling authority that specifically addresses the question of
whether the eligibility determination and the provision of Medicaid services to eligible
individuals are to be performed successively or concurrently.
52
For all of these reasons, we conclude that the district court’s order holding
defendants in contempt must be reversed.22
3. Expansion of the Final Judgment
Defendants also challenge as overly broad the district court’s reading of the
injunctive relief provided in the final judgment. The district court stated that,
pursuant to the final judgment entered in 1996, it is “now settled law ... that the
defendants must provide a comprehensive, effectively working plan that provides
adequate and appropriate services to eligible individuals within a reasonable time
period.” The court went on to hold that defendants were to be fined $10,000 per
day “until a comprehensive plan, which comports with the letter and spirit of the
judgment entered August 28, 1996, is submitted, ready for implementation.”
Defendants contend that the district court’s requirement of a “comprehensive
plan” that provides “adequate and appropriate services” and that comports with the
“spirit” of the final judgment, inappropriately expands the original scope of that
judgment. They argue that the contempt order, read in its entirety, “can only mean
that the state of Florida must completely restructure its Medicaid program for the
developmentally disabled.” They base this assertion on the various grounds,
22
Because we conclude that the finding of contempt cannot be sustained, we need not
reach defendants’ arguments regarding whether the particular sanctions entered against them
constituted an abuse of discretion.
53
previously discussed, upon which the district court found them in contempt,
including the court’s conclusion that defendants sought inadequate funds to deal
with the 23,000 individuals on waiting lists, the court’s disapproval of the
defendants’ new standards for determining eligibility, its conclusion regarding the
time limits for determining eligibility and providing services, and its objections to
the manner in which defendants were offering and providing alternative services.
The district court perceived there to be a wide array of problems with the
manner in which defendants were providing ICF/DD services and decided that all
of those problems could be remedied with a contempt order. As we have already
decided, however, the matters that troubled the district court had not been
addressed in the final judgment, so they cannot serve as a valid basis for holding
defendants in contempt. See Reynolds v. Roberts, 207 F.3d 1288, 1300 (11th Cir.
2000) (“Long standing precedent evinces a strong public policy against judicial
rewriting of consent decrees.[23] A district court may not impose obligations on a
party that are not unambiguously mandated by the decree itself.”) (internal marks
and citations omitted).
23
Although Reynolds involved a consent decree, what it said is also applicable to non-
consent decrees, because a consent decree is treated as “a judicial decree that is subject to the
rules generally applicable to other judgments and decrees.” Rufo v. Inmates of the Suffolk
County Jail, 502 U.S. 367, 378, 112 S. Ct. 748, 757 (1992).
54
If the problems the district court perceived with the way in which
defendants are providing Medicaid services – the lack of sufficient funding, the
change in eligibility criteria, the time limit for determining eligibility, or the
manner in which alternative services are provided – result from violations of state
or federal law requiring judicial intervention, they can be addressed in another
action.24 Id. at 1301. Alternatively, under appropriate circumstances and after the
proper procedures have been followed, the original injunction in this case might
have been modified to address the problems. See Rufo v. Inmates of the Suffolk
County Jail, 502 U.S. 367, 380, 112 S. Ct. 748, 758 (1992) (“[S]ound judicial
discretion may call for the modification of the terms of an injunctive decree if the
circumstances, whether of law or fact, obtaining at the time of its issuance have
changed, or new ones have since arisen.”) (citation omitted); see also United States
v. United Shoe Mach. Corp., 391 U.S. 244, 251-52, 88 S. Ct. 1496, 1501 (1968)
(“If the decree has not ... achieved its principal objects ... the time has come to
prescribe other, and if necessary more definitive, means to achieve the result.”)
(internal marks omitted); Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407 (5th
Cir. 1971) (“It is well settled that the issuing court has continuing power to
24
In fact, there are currently multiple class action lawsuits before the district court that
involve at least some of the issues raised in this case. See Prado-Steiman v. Bush, 221 F.3d 1266,
1282 n.17 (11th Cir. 2000) (noting that there are a total of five cases pending before Judge
Ferguson pertaining to the provision of ICF/DD services).
55
supervise and modify its injunctions in accordance with changed conditions.”).
Notice must be given, along with an opportunity to be heard, and, if aggrieved,
either party may appeal.
Here, the principal object of the 1996 final judgment injunction, as
interpreted previously by this Court, is to enforce plaintiffs’ “federal right to
reasonably prompt provision of assistance under section 1396a(a)(8).” Chiles, 136
F.3d at 719. The “assistance” at issue is the provision of ICF/DD services to
eligible individuals. If ICF/DD services are not being provided in a reasonably
prompt manner to eligible individuals, the five-year old injunction may be
modified or a new one entered prescribing additional measures aimed at
accomplishing this result, but only after proper procedures are followed.
Compliance with the modified injunction or a new one can then be enforced, if
necessary, through a contempt proceeding.
4. Governor Bush as a Party
We are persuaded by defendants’ argument that because Governor Chiles
had been dismissed from this lawsuit in 1992, there was no basis for “substituting”
Governor Bush in the present case, and therefore there was no basis for holding the
Governor in contempt. Accordingly, Governor Bush is hereby dismissed from the
case and his name should be struck from the case style.
56
III. DISCUSSION: THE DELAYED CLASS
CERTIFICATION ORDER
In their second appeal, defendants challenge the district court’s February 11,
2000 order formally granting class certification, which was entered approximately
three months after the defendants had filed their notice of appeal from the
contempt order, and four years after the final judgment was entered. We have
already recognized the existence of an implied class in this case and have directed
the district court on remand to formally enter an order reflecting it, which takes
most of the weight off this part of the consolidated appeal, but the defendants are
entitled to have their appeal of the district court’s February 11, 2000 order, which
is still on the books, decided.
Defendants primarily contest the delayed certification order on jurisdictional
grounds. They assert that their act of filing the notice of appeal from the district
court’s contempt order divested the district court of jurisdiction to take further
action in the case. They are correct that, as a general rule, the filing of a notice of
appeal divests the district court of jurisdiction over those aspects of the case that
are the subject of the appeal. See Griggs v. Provident Consumer Disc. Co., 459
U.S. 56, 58, 103 S. Ct. 400, 402 (1982); Weaver v. Fla. Power & Light Co., 172
F.3d 771, 773 (11th Cir. 1999). However, it may not divest the district court of
jurisdiction over collateral matters not affecting the questions presented on appeal.
57
See Weaver, 172 F.3d at 773; cf. Resolution Trust Corp. v. Smith, 53 F.3d 72, 76
(5th Cir. 1995) (the district court maintains jurisdiction to order stays or modify
injunctive relief).
The existence or non-existence of a class certification order was one of the
issues on appeal from the contempt order. In their appeal of the contempt order,
defendants argued that the district court exceeded its jurisdiction on remand by
requiring class-wide relief in a case where no class had ever been certified.
Thus, the existence of a certified class is an “aspect of the case” that is the subject
of the appeal. See Griggs, 459 U.S. at 58, 103 S. Ct. at 402. Accordingly,
defendants’ filing of the notice of appeal divested the district court of jurisdiction
to enter an order that directly impacted one of the questions proffered for review.25
The February 11, 2000 order should be vacated.
IV CONCLUSION
We REVERSE the district court’s October 7, 1999 contempt order, and its
February 11, 2000 class certification order. We REMAND for further proceedings
consistent with this opinion.
25
Our decision that the district court lacked jurisdiction to enter the class certification
order renders moot the defendants’ other arguments about that order.
58
59