United States v. TN

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0542n.06
Filed: June 23, 2005
Nos. 03-6389/6628
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
PEOPLE FIRST OF TENNESSEE, ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
Intervenor-Appellant, THE WESTERN DISTRICT OF
TENNESSEE
WEST TENNESSEE PARENT-GUARDIAN
ASSOCIATION,
Intervenor-Appellees,
v.
STATE OF TENNESSEE; PHIL BREDESEN,
Governor of the State of Tennessee; VIRGINIA
TROTTER BETTS, Commissioner, Tennessee
Department of Mental Health and Mental
Retardation; LEON OWENS, Superintendent,
Arlington Developmental Center,
Defendants-Appellees.
/
Before: MARTIN and ROGERS, Circuit Judges, and McKINLEY, District Judge.*
BOYCE F. MARTIN, JR., Circuit Judge. These cases have a long and tortured history. In
addition to two different district judges, we are the seventh different Sixth Circuit panel to review
*
The Honorable Joseph H. McKinley, Jr., United States District Judge for the Western
District of Kentucky, sitting by designation.
Nos. 03-6389/6628
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Page 2
the case. Three cases were consolidated for purposes of oral argument. We now render our decision
on two of those appeals. In Nos. 03-6389 and 03-6628, the United States appeals the district court’s
rejection of the parties’ settlement agreement. We conclude that the district court improperly relied
on testimony not in the record and not subject to cross-examination in rejecting the parties’
settlement agreement and we therefore VACATE its decision and REMAND for further
proceedings. We further instruct the district court to reconsider this settlement agreement, in
addition to the parties’ new settlement agreement at the previously scheduled July 25-29, 2005,
fairness hearing.1
I.
The parties to these appeals are the United States, the State of Tennessee, People First of
Tennessee, a statewide advocacy organization for people with disabilities, and the West Tennessee
Parent-Guardian Association of Arlington Developmental Center, a state-operated facility for
persons with mental retardation. The United States initiated this case against the State of Tennessee
on January 21, 1992, by filing a complaint pursuant to the Civil Rights of Institutionalized Persons
Act, 42 U.S.C. §§ 1997, et seq. The complaint challenged the conditions at Arlington
Developmental Center and sought injunctive relief, requiring the State “to take such action as will
provide constitutional conditions of care to persons who reside at Arlington.” After a trial, the
district court found that the conditions at Arlington violated the federal constitutional and statutory
rights of its residents and ordered the submission of a remedial plan. The district court later
1
In the third appeal, No. 00-6120, the State of Tennessee appeals the district court’s July 17,
2000, order regarding the scope of the certified class of plaintiffs. Although the appeals were argued
together, it is not necessary that they be decided simultaneously.
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approved a negotiated Remedial Order, on September 2, 1994, as a full and appropriate remedy for
the constitutional violations.
The Remedial Order mandated corrective action in order “to guarantee the statutory and
constitutional rights of residents of Arlington Developmental Center.” The Remedial Order also
committed the State to reducing Arlington’s population to no more than two hundred residents by
placing qualified individuals into community residences and programs. The Remedial Order
agreement between the United States and Tennessee also provided for a court-appointed Monitor
to evaluate the State’s compliance.
Prior to the United States-initiated suit, on December 12, 1991, People First filed its own suit
challenging the conditions at Arlington. By the time of the Remedial Order in 1994, the People
First case was not yet resolved. In light of the Remedial Order, the plaintiffs in People First filed
a renewed motion for class certification on June 12, 1995. On September 26, 1995, the district court
certified a class to include
all persons who on or after December 12, 1989, have resided, or are residing at the
Arlington Developmental Center; all persons who have been transferred from
Arlington Developmental Center to other settings such as intermediate care facilities
or skilled nursing facilities but remain defendants’ [State of Tennessee]
responsibility; and all persons at risk of being placed at Arlington Developmental
Center.
The district court then adopted the findings of fact in the United States case into the People First
case, and granted People First intervenor status in the United States action, in effect consolidating
the cases.
In the consolidated actions, the Parent-Guardian Association appealed various issues to this
Court. The panel concluded that there was “no abuse of discretion in this or any other aspect of the
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district court’s treatment of the class certification issue,” but noted, however, that “the state itself
questioned certain aspects of the class definition,” i.e., the “at risk” language, but because the State
did not appeal, “these matters [were] not properly before the court.” People First of Tennessee v.
Arlington Developmental Center, 145 F.3d 1332 (6th Cir. 1998) (unpublished).
In the meantime, the United States filed numerous motions for contempt regarding conditions
at Arlington based on Tennessee’s failure to comply with the Remedial Order. A settlement was
reached between the United States and Tennessee, which led to the creation of the Community Plan
for West Tennessee. On August 21, 1997, the Community Plan was approved and adopted by the
district court, and then entered as an Order. The district court ordered that the Plan “shall apply to
all members of the class certified” in the People First case, and that the Plan “supplements, but does
not rescind, the Remedial Order.”
The State appealed to this Court. According to the new panel,
Tennessee now claims that the district court wrongly determined that the consent
order in United States v. Tennessee applies to the People First class, that
modifications to the consent order were an abuse of discretion, and that judicial
enforcement of the consent order inordinately infringes upon state sovereignty.
While this panel does not adopt every aspect of the district court's opinion, it will
affirm the judgment.
United States v. Tennessee, 181 F.3d 105, 1999 WL 357785 (6th Cir. 1998) (unpublished).
Subsequently, People First of Tennessee moved for an order of contempt against the State
for failing to provide services to class members consistent with the Remedial Order and the
Community Plan. On June 29, 1999, the district court issued an order finding the State in contempt
and set a hearing to determine the remedy. Prior to the hearing, the parties negotiated an Agreed
Order that was approved by the court on August 12, 1999.
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When the State later refused to provide services to those the other parties believed were
among the “at risk” class, the district court directed the parties to “submit briefs on the scope of the
existing class definition (including the history and definition of individuals at risk of being admitted
to ADC) and its possible application as an eligibility criterion under the waiver.” A hearing was
held on June 13 and 17, 2000, and the district court then issued an order on July 17, 2000, clarifying
the scope of the “at risk” class. The district could held
that the ‘at risk’ portion of the class consists of all individuals who reside in the
geographic region served by Arlington Developmental Center [] and who have
demonstrated medical needs sufficient to require institutional care in the absence of
home or community based services . . . . [T]his definition utilizes existing Medicaid
eligibility guidelines as objective medical criteria for determining which individuals
are ‘at risk’ of being placed at ADC.
This order is the subject of appeal in No. 00-6120.
The State filed a notice of appeal and on September 22, 2000, another different panel of this
Court entered a stay pending appeal noting that “the state raises serious questions regarding the
standing of those included in the ‘at risk’ group to obtain relief.” See Order of September 22, 2000,
No. 00-6120.
The parties then engaged in additional settlement negotiations and submitted a joint motion
to the district court on December 11, 2001, requesting that the (new) district court (judge) vacate
the July 17, 2000 order regarding the “at risk” class and approve the settlement agreement. The
district court entered an order on December 14, 2001 to the effect that it was inclined to grant the
parties motion should the matter be remanded by this Court. On January 8, 2002, a motions panel,
composed of a different set of judges of this Court, entered an order remanding the matter to the
district court for consideration of the parties’ joint motion for approval of the settlement agreement.
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The settlement agreement resolved the “at risk” class issue — the parties agreed on a new
definition, not as broad as the district court’s definition, but one that encompassed individuals not
within the first two clauses of the class definition. The United States, the State of Tennessee, People
First of Tennessee, and the Parent-Guardian Association all signed the settlement agreement and a
stipulation to the court asking approval of the agreement. The district court then held a fairness
hearing.
Just prior to the fairness hearing, the Parent-Guardian Association decided it no longer
agreed to the settlement agreement and asked the court to reject the agreement. The district court
ruled that the Parent-Guardian Association was bound by its stipulation, but the court would permit
the Association to proffer its evidence to provide a more complete record. The United States,
Tennessee, and People First objected to the introduction of any adverse evidence, and further stated
that if the evidence was later admitted, the parties were entitled to cross-examine the Association’s
witnesses. The district court stated that it was capable of differentiating between what evidence was
in the record and what was not, and recognized the parties continuing objection. Thus, the
Association’s witnesses testified and were not cross-examined. The district court then rejected the
settlement agreement, finding it “as not being in the best interest of the class.” United States v.
Tennessee, 256 F. Supp. 2d 768, 771 (W.D.Tenn.2003). In its order, the district court specifically
relied on the testimony of Parent-Guardian Association witnesses who were part of the proffer, and
whose testimony was not in the record, and consequently, were not cross-examined. The United
States’ motion to alter or amend the order was denied on October 7, 2003, and a notice of appeal in
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Nos. 03-6389 and 03-6628 was filed by the United States and intervenor People First of Tennessee.2
Following entry of the final order rejecting the settlement agreement, a motion was filed in
this Court seeking to reinstate the State’s appeal from the July 17, 2000, order regarding the “at risk”
class — an issue that had been tentatively resolved by the now-rejected settlement agreement.
Another new panel of this Court denied the motion to reinstate the appeal on February 5, 2004. One
month later, upon a motion to reconsider, this Court without explanation entered an order reinstating
the appeal. The appeal in No. 00-6120 is also before this panel, but we have not yet decided that
appeal.
On April 5, 2004, the district court, pursuant to its continuing jurisdiction over the Remedial
Order and Community Plan, issued an Order Requiring the Defendants to Appear and Show Cause
relative to contempt proceedings for violations of the Remedial Order. The parties yet again began
settlement negotiations and eight months later, on December 1, 2004, the United States, the State
of Tennessee, and People First of Tennessee signed a new Agreement Resolving Show Cause
Motion, that, according to these three parties, “would, if entered, fully resolve the issues in [Nos.
03-6389 and 03-6628].” On December 28, 2004, the Parent-Guardian Association filed a motion
asking the district court to reject the New Settlement Agreement and requesting a Temporary
Restraining Order enjoining the State from implementing any terms of the New Agreement. This
motion is currently pending before the district court. A new fairness hearing was held on January
10, 2005, on April 11, 2005, and is scheduled to continue from July 25, 2005 through July 29, 2005.
2
People First’s argument on appeal is that the district court abused its discretion in rejecting
the settlement agreement. Because of our conclusion in the United States’ appeal, we need not reach
this issue.
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II.
In Nos. 03-6389 and 03-6628, we conclude that the district court improperly relied upon
testimony that was proffered, but excluded and not subject to cross-examination, in rejecting the
parties’ settlement agreement. We therefore vacate the district court’s order rejecting the settlement
agreement and remand for further consideration and instruct the district court to consider both
settlement agreements at its upcoming fairness hearing.
At the fairness hearing in 2003, after finding that Parent-Guardian Association was bound
by its signing of the settlement agreement, the district court permitted the Association to proffer
testimony for purposes of developing the record for appeal. Assuring the United States that the
testimony was not in the record and was only being heard for purposes of a proffer, the district court
ruled that cross-examination was unnecessary despite the continuing objections of the United States.
The crux of the United States’ appeal is that in rejecting the parties’ settlement agreement, the
district court relied on and specifically cited to evidence that was part of the proffer, unchalleged
by cross-examination, and not in the record. Essentially, the United States asserts that it was entitled
to cross-examine the Parent-Guardian Association’s witnesses if the district court intended to rely
upon them in rendering its decision.
We agree with the United States that it is reversible error for the district court to prohibit
cross-examination of witnesses it then relies upon for its decisions. See Francis v. Clark Equip. Co.,
993 F.2d 545, 550 (6th Cir. 2003) (“refusal to permit cross-examination of a witness concerning
matters testified to on direct examination constitutes prejudicial error”); see also Goldberg v. Kelly,
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397 U.S. 254, 269 (1970) (“In almost every setting where important decisions turn on questions of
fact, due process requires an opportunity to confront and cross-examine adverse witnesses.”).
Here, the district court conclusively stated that it was permitting only a proffer of evidence
to develop the record for appeal, but that the evidence would not be admitted into the record. The
district court recognized the United States’, Tennessee’s, and People First’s continuing objections
to the evidence and their objection to any consideration of the evidence by the district court in the
absence of cross-examination. The district court then relied on proffered evidence in denying
approval of the settlement agreement, specifically relying upon Dr. Kastner, an expert witness
presented by the Parent-Guardian Association.
Parent-Guardian Association asserts that Dr. Kastner’s testimony was merely cumulative of
the testimony of numerous parents, guardians, family members, and other interested parties, whose
testimony was properly admitted and considered by the district court. Thus, they claim, any error
was harmless. The United States points out that Dr. Kastner was the only expert to testify against
the settlement agreement, and that Dr. Kastner’s testimony formed the basis for the district court’s
concerns.
The testimony elicited by the Parent-Guardian Association against the settlement agreement
essentially concerned the Association’s opposition to the closing of Arlington Developmental Center
and the eventual community placement of its residents.3 Many family members testified that they
3
We note only in passing that the major objections to the settlement agreement by the Parent-
Guardian Association and the district court appear to be over the closing of Arlington
Developmental Center. While we express no opinion about the wisdom or lack thereof of closing
Arlington, it is our understanding that the State of Tennessee has the power to close Arlington
regardless of a provision to that effect in the settlement agreement.
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preferred that Arlington remain open. Dr. Kastner testified that he does not believe adequate
evidence exists to show that community care is better than institutional care, and that community
care is often insufficient. Dr. Kastner also testified that this fact often leads to placement of the
mentally retarded in nursing homes, which is not an ideal environment. Dr. Kastner also testified
that there is a significantly increased risk of death in community placement versus institutional
settings.
The district court’s opinion stated that it “finds troubling, testimony that persons unable to
receive adequate medical care in the community may be placed in nursing homes.” Furthermore,
the Court finds compelling the testimony concerning mortality rates in the
community versus in institutions. Dr. Kastner opined that studies indicate that a
substantial increase in actual deaths exists as opposed to expected deaths among
those placed in the community. Moreover, Dr. Kastner asserted that studies indicate
that there is a significant increase in the relative risk of mortality in the community
versus in institutions . . . The Court cannot take lightly expert testimony that
indicates that an increase in mortality rates exists in the community.
It is evident to us that the district court relied upon Dr. Kastner’s testimony as a basis for its rejection
of the settlement agreement. While the district court also stated that it cannot “cavalierly ignore the
observations and the real life stories of the guardians and family members who live with these issues
daily,” thereby also relying on the personal stories of families affected by Arlington Developmental
Center, we cannot ignore the fact that Dr. Kastner was the only expert to testify against the
settlement agreement. In fact, Dr. Kastner’s testimony regarding a lack of adequate community care,
inadequacy of nursing home facilities, and increased mortality rates in community care facilities
went well beyond the personal stories of those affected, and was not merely cumulative. The district
court’s reliance on this testimony, without the benefit of cross-examination, was error.
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III.
We therefore VACATE the district court’s order and REMAND for further consideration
at the July 25-29th hearing.