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EVANS v. WILLIAMS

February 10, 1999

JOY EVANS, ET AL., PLAINTIFFS, UNITED STATES OF AMERICA, PLAINTIFF-INTERVENOR
v.
ANTHONY A. WILLIAMS, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Stanley S. Harris, District Judge.

OPINION

Before the Court are plaintiffs' motion for sanctions, plaintiff-intervenor's memorandum in support thereof, defendants' motion for modification of the 1983 Consent Order, the Special Master's Recommended Findings of Fact and Conclusions of Law regarding the preceding motions, and related pleadings. Also before the Court are defendants' demand for a jury trial and related pleadings. On July 22, 1998, the parties presented their positions to the Court in a hearing on the legal issues pertinent to the pending motions. Upon full consideration of all the pleadings and the entire record, the Court adopts in part, and rejects in part, the Special Master's Recommended Findings of Fact and Conclusions of Law.*fn1

Background

Plaintiffs are members of a class consisting of former residents of the long-since closed Haven facility. An integral part of this litigation has been the relocation of the class members from Forest Haven to community living arrangements with adequate habilitation suited to each class member. To this end, the Court has entered numerous orders, including consent orders agreed to by the parties to safeguard the rights of class members and ensure their adequate and appropriate habilitation.

A Consent Order was entered on February 8, 1983 ("1983 Consent Order"). To help ensure a viable network of private vendors which would provide the class members with appropriate care ("Evans, care providers"), the Consent Order required defendants to pay for goods and services within 30 days of the receipt of an acceptable voucher. Consent Order, Feb. 8, 1983, Section IX, Para. 10. On October 11, 1995, the Court found defendants in contempt of the 1983 Consent Order for failure to make timely vendor payments during the years 1994 and 1995. The Court appointed a Special Master to recommend a plan for purgation of defendants' contempt.

The Special Master submitted a report on January 22, 1996, and a supplemental report on June 17, 1996. On August 2, 1996, the Court issued an Order adopting in large part the Special Master's recommendations. In that Order, the Court updated its October 11, 1995, finding of contempt by concluding that defendants continued to be in contempt between October 11, 1995, and June 17, 1996 (when the Special Master submitted her supplemental report). In the "Order Adopting Proposed Findings of Fact of Special Master," the Court stated in part:

    Defendants have, for over two years, and
  unapologetically violated terms of nearly every
  aspect of this Court's multiple Consent Orders.
  Defendants' unrelenting contempt of this Court's
  orders and their seeming inability to bring themselves
  into compliance therewith, have created chaos for the
  care providers vested with day-to-day responsibility for
  the members of this plaintiff class. . .

Accompanying that Order, the Court also issued a Remedial Plan ("Remedial Plan"). The Remedial Plan reasserted defendants' obligation (originally imposed in the 1983 Consent Order) to pay acceptable vendors' vouchers within 30 days of their submission (Section I.B). The Remedial Plan also established the conditions by which defendants could purge their civil contempt as adjudicated by the Court's October 11, 1995, and the August 2, 1996, Orders. Section I.D of the Remedial Plan states:

Accordingly, it hereby is

    ORDERED, that should defendants fail to purge their
  contempt by paying acceptable invoices within 30 days
  of, as required by this Remedial Plan, at the end of
  the first month in which report that there are outstanding
  Medicaid payments due but not paid within 30 days of
  submission  an acceptable, defendants shall be assessed
  a civil fine of $5,000 a day, until the overdue payments
  are made. . . . It hereby is
    Order, that with respect to non-Medicaid payment
  found to be overdue, shall be assessed a coercive
  civil fine of twice the amount overdue. . . .
  It hereby further is
    ORDERED, that civil fines shall be paid to the Clerk
  of the Court and placed in a account, from which the
  Court, the recommendation of the Special Master, may
  order payment to providers.

Such fines are to be calculated relying the information provided by defendants' sworn monthly submissions to the Court (required by Section I.C of the Remedial Plan) Medicaid and non-Medicaid vendors have not been paid within the required 30-day time period.

On April 2, 1997, plaintiffs filed a motion for sanctions for defendants' alleged violation of the provisions of the Remedial Plan requiring timely payment of Evans care providers.*fn2 Defendants filed their opposition to plaintiffs' motion for sanctions as well as own motion for modification of the 30- day payment period which was established by the 1983 Consent Order and reaffirmed by the Remedial Plan.

Plaintiffs and plaintiff-intervenor contend that defendants have conceded, in their sworn submissions to the Court, their failure to comply with the provisions of the Remedial Plan regarding timely payment of vendors, and that sanctions should therefore be imposed. Defendants contend that no sanctions should be imposed because they were unable to comply with the timeliness provisions of the Remedial Plan. Defendants also request modification of both the 1983 Consent Order and the Remedial Plan pursuant to Federal Rules 60(b)(5) and (6) to extend the 30-day payment period to 45 days, a proposal which is opposed by both plaintiffs and plaintiff-intervenor. Defendants further contend that even if sanctions were applicable, the sanctions may not properly he imposed absent a criminal jury trial because the proposed fines allegedly are criminal rather than civil in nature.

In addition, the Special Master offered several independent modifications to the 1983 Consent Order and the Remedial Plan: (1) changing the amount of the per diem fines for delinquent Medicaid payments and replacing the current fines for delinquent non-Medicaid payments with per diem fines; (2) including a provision that would permit forgiveness of per diem fines assessed for failure to make timely payments if defendants paid vendors within 45 days of the submission of uncontested vouchers; and (3) requiring the Special Master, within a year of the date of this Opinion, to propose a plan for the disposition of the fines paid by defendants, including suggestions regarding their utilization to establish a mechanism to protect the habilitation interests of the plaintiff class after the hoped-for conclusion of this now 23- year-old lawsuit.

On February 9, 1998, defendants appealed the Special Master's recommendations to this Court. On February 20, 1998, defendants filed a jury demand and their objections to the Special Master's Recommended Findings of Fact and Conclusions of Law. Also on that date, plaintiffs filed their response and objections to the Special Master's Recommended Findings of Fact and Conclusions of Law, and the United States filed a memorandum in support of the Special Master's recommendations.*fn4 On July 22, 1998, the Court held a hearing on the legal issues raised by the pending motions and the Special Master's Recommended Findings of Fact and Conclusions of Law (and the objections and responses thereto).

Findings of Fact and Conclusions of Law

The Court adopts the Special Master's conclusion that defendants owe substantial fines due to their noncompliance with the purgation conditions of the Remedial Plan, and relies on her factual determinations in calculating the amount owed.*fn5 Thus, the Court grants plaintiffs' motion for sanctions. However, the Court does not adopt the Special Master's position that such fines are automatic in nature and that no action on the part of plaintiffs, plaintiff-intervenor, or the Court is necessary to render them due. Accordingly, the Court also declines to accept her recommendation that the Remedial Plan be amended to clarify the automatic nature of the fines and to provide an administrative mechanism for their collection. As to defendants' motion for modification of the 30-day period for payment of vouchers, the Court adopts the Special Master's recommendation that it be denied.

The Court also adopts the Special Master's independent suggestions that, for the sake of comparability and efficiency, the per diem fine for delinquent payment of Medicaid vouchers be increased and that the non-Medicaid fine be changed to a per diem fine. Furthermore, the Court adopts her recommendation that the Remedial Plan be amended to permit forgiveness of fines accrued by defendants for failure to make required payments within the 30-day period when payment is made within 45 days of the submission of an uncontested Medicaid or non-Medicaid voucher. Finally, the Court adopts the Special Master's recommendation that the Remedial Plan be amended to require the Special Master to submit a report including suggestions for the ...


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