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Lightfoot v. District of Columbia

January 16, 2007

ELIZABETH LIGHTFOOT, ET AL., PLAINTIFFS,
v.
DISTRICT OF COLUMBIA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

This case is currently before the Court on remand from the Court of Appeals for the District of Columbia Circuit. In Lightfoot v. District of Columbia, 448 F.3d 392 (D.C. Cir. 2006) (per curiam) (herein after "Lightfoot Appeal"), the D.C. Circuit reversed this Court's previous grant of partial summary judgment in favor of Plaintiffs on Claims Six and Seven of Plaintiffs' Third Amended Class Action Complaint for Declaratory and Injunctive Relief (hereinafter "Third Amended Complaint"), vacated this Court's order reinstating disability benefits for class members, and remanded Claim Seven back to this Court for reconsideration of this Court's decision to exercise supplemental jurisdiction over that claim. Presently pending before the Court is the motion to dismiss Claims One, Three, Four, and Five of the Third Amended Complaint, brought by Defendant the District of Columbia (hereinafter the "District"), which Plaintiffs oppose.

Upon a searching review of the memoranda filed by each party, the attached exhibits, the D.C. Circuit's opinion on appeal, other relevant case law, and the entire record herein, the Court shall grant the District's motion to dismiss as to Claims Three, Four, and Five of the Third Amended Complaint and shall deny without prejudice the District's motion to dismiss as to Claim One of the Third Amended Complaint.The Court shall also decline to exercise supplemental jurisdiction over Claim Seven, and shall therefore dismiss without prejudice that claim. Furthermore, in order to allow the parties the opportunity to address the application of United States v. Salerno, 481 U.S. 739, 107 S.Ct. 2095, 95 L.Ed. 2d. 697 (1987), to Claim One of the Third Amended Complaint, the Court shall order the parties to submit a joint proposed schedule for additional briefing on that limited issue on or before January 26, 2007.

I. BACKGROUND

This case has been the subject of numerous opinions and orders of this Court as well as of the Court of Appeals for the District of Columbia Circuit. As such, the Court shall recite herein only those facts that are relevant to the motion to dismiss currently before the Court and shall assume familiarity with the factual background of this case.*fn1 Plaintiffs, a class of former District of Columbia employees, challenge the policies and procedures applied to terminate, suspend, and modify their disability compensation benefits pursuant to Title 23 of the District of Columbia Comprehensive Merit Personnel Act ("CMPA") of 1978, as it existed prior to April 5, 2005.*fn2

Plaintiffs' Third Amended Complaint includes eight claims. Claim One mounts a facial challenge to the CMPA, alleging that the statute violates the Due Process Clause of the Fifth Amendment to the United States Constitution because it does not afford "beneficiaries adequate and timely notice and opportunity to demonstrate a continuing entitlement to benefits." Third Am. Compl. (hereinafter "TAC") ¶¶ 131-132. Claim Two alleges that, as applied, the CMPA violates the Due Process Clause. Id. ¶¶ 133-134. Claim Three alleges that the notices of termination, suspension, or modification issued by Defendants violate the Due Process Clause because they inadequately and inaccurately advise beneficiaries of various procedural rights, including the right to appeal, right to review their case file, the nature of reconsideration review, and right to retain legal counsel. Id. ¶¶ 135-136. Claim Four alleges that the notices issued by Defendants violate the Due Process Clause because they provide an insufficient and inadequate explanation of the basis for the termination, suspension, or modification, by failing to include the rationale for the decision, a statement of facts, and the evidence and legal standard relied upon. Id. ¶¶ 137-138. Claim Five alleges that Defendants failed to engage in reasoned decision-making, in violation of the Due Process Clause. Id. ¶¶ 139-140. Claim Six alleges that the Defendant's failure to adopt written standards governing the termination, suspension, or modification of benefits violates the Due Process Clause. Id. ¶¶ 141-142. Claim Seven alleges that the District's implicit adoption of unwritten practices without public notice and comment violates the District of Columbia Administrative Procedure Act. Id. ¶¶ 143-144. Finally, Claim Eight alleges that Defendant CLW/CDM materially breached its contract with the District, to which Plaintiffs are a third party beneficiary. Id. ¶¶ 145-146.

In its September 24, 2004 Memorandum Opinion and Order, this Court granted Plaintiffs' motion for partial summary judgment as to Claims Six and Seven. In so doing, the Court described the issue before the Court with respect to Claim Six as "purely legal: whether Due Process demands that notice and the potential for arbitrary decision-making requires that written policies and procedures exist to limit discretion and guide the termination, suspension or modification process." Lightfoot, 339 F. Supp. 2d at 90. As to Claim Six, the Court concluded that the "largely unwritten system full of guesswork and innuendo fails to meet the strictures of Due Process." Id. at 91. With respect to Claim Seven, the Court determined that "Defendants' reliance on unwritten 'best practices' and unpublished procedures to guide the Disability Compensation Program constitutes rule-making under the DCAPA," and that, as Defendants did not engage in notice-and-comment rulemaking prior to implementing the policies, the "rules governing the termination, suspension or modification of Plaintiffs' disability compensation benefits therefore were promulgated unlawfully." Id. at 95.

In addition to granting Plaintiffs' motion for partial summary judgment, the Court remanded this case to the District for rulemaking and ordered the disability compensation benefits of all class members reinstated until individualized termination, suspension or modification determinations could be made under validly promulgated rules. Id. at 96. The Court further urged Defendants to "strongly consider including explicit written guidelines relating to:

* What regular opportunities do beneficiaries have to provide medical or vocational information to a claims adjuster prior to a decision to terminate, suspend or modify disability benefits?

* What are the protocols that govern the independent medical evaluation -- when, why, and where one is performed -- and the content of the resulting report?

* What weight is assigned to the independent medical evaluation v. the opinion or the treating physician, and does the treating physician have an opportunity to comment on the independent medical evaluation before a decision is made?

* Does the beneficiary have the right to access his/her file before the termination decision? What deadlines must the third party administrator follow once file access is requested?

* May a terminated beneficiary retain counsel, and does their attorney have the same right to review the beneficiary's file in order to prepare necessary argument?

* What standards are employed in making the termination decision, and what weight is afforded each piece of information before the adjuster?

* What standard of review is employed on reconsideration and appeal?

* What is the specific timeline for reconsideration and appeal?

* Are there extensions of time for good cause if a personal or other emergency prevents a beneficiary from responding to a termination notice in the outlined time period?

* What kinds of information may beneficiaries submit in response to a notice that their ...


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