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Edward Day, et al v. District of Columbia

February 14, 2012


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiffs, five individuals who have sued on their behalf and on behalf of a proposed class of similarly-situated individuals, commenced this action for declaratory and injunctive relief against the District of Columbia, its Mayor, and several city officials (collectively "defendants"),*fn1 alleging that individuals with disabilities who are covered by Medicaid are being unnecessarily institutionalized in nursing facilities and isolated from their communities in violation of Title II of the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12131 et seq., and Section 504 of the Rehabilitation Act, 29 U.S.C. §§ 794 et seq. Before the Court is defendants' motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure or, in the alternative, for summary judgment pursuant to Rule 56.*fn2 For the reasons stated herein, defendants' motion is granted in part and denied in part.



A. Statutory and Regulatory Background

Title II of the ADA provides that "no qualified individual with a disability*fn3 shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity,*fn4 or be subjected to discrimination by any such entity." 42 U.S.C. § 12132. One "for[m] of discrimination," according to Congressional findings," includes "segregation" of persons with disabilities." Id. § 12101(a)(2) ("historically, society has tended to isolate and segregate individuals with disabilities, and, despite some improvements, such forms of discrimination against individuals with disabilities continue to be a serious and pervasive social problem"); see also id. § 12101(a)(5) ("individuals with disabilities continually encounter various forms of discrimination, including . . . segregation"). The ADA's implementing regulations*fn5 include an express "integration" provision, requiring that "[a] public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities," 28 C.F.R. § 35.130(d), which is defined as "a setting that enables individuals with disabilities to interact with nondisabled persons to the fullest extent possible." 28 C.F.R. pt. 35, App. B.

Section 504 of the Rehabilitation Act similarly provides that "[n]o otherwise qualified individual with a disability "shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance." 29 U.S.C. § 794(a).*fn6 Although the Rehabilitation Act contains no express recognition that isolation or segregation of persons with disabilities is a form of discrimination, its implementing regulations require that programs, services, and activities be administered in "the most integrated setting appropriate" to the needs of individuals with disabilities. 28 C.F.R. § 41.51(d).

In addition to directing that programs, services and activities be administered in the "most integrated setting appropriate," the implementing regulations for both the ADA and the Rehabilitation Act prohibit either "directly or through contractual or other arrangements," the utiliz[ation of] criteria or methods of administration: (i) That have the effect of subjecting qualified individuals with disabilities to discrimination on the basis of disability; [or] (ii) That have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the public entity's program with respect to individuals with disabilities.

28 C.F.R. § 35.130(b)(3)(i)-(ii) (ADA); see also 45 C.F.R. § 84.4(b)(4)(i)-(ii) (Rehabilitation Act); 28 C.F.R. § 41.51(b)(3)(i)-(iii) (same).

Under the ADA, a public entity must make reasonable modifications in policies, practices, or procedures when the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program, or activity.

28 C.F.R. § 35.130(b)(7) (1998). Similarly, under the Rehabilitation Act, the recipient of federal funds must make reasonable accommodation to the known physical or mental limitations of an otherwise qualified handicapped applicant or employee unless the recipient can demonstrate that the accommodation would impose an undue hardship on the operation of its program. 28 C.F.R. § 41.53.*fn7

B. Olmstead v. L.C. ex rel. Zimring

In Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999), the Supreme Court considered whether the "proscription of discrimination" in Title II of the ADA "may require placement of persons with mental disabilities in community settings rather than in institutions."*fn8 Id. at 587. The Court's answer was "a qualified yes." Id. at 587. The Court first held that "[u]njustified isolation . . . is properly regarded as discrimination based on disability." Id. at 597.*fn9 However, the Court also recognized that "nothing in the ADA or its implementing regulations condones termination of institutional settings for persons unable to handle or benefit from community settings," there is no "federal requirement that community-based treatment be imposed on patients who do not desire it,"*fn10 and States "need to maintain a range of facilities for the care and treatment of persons with diverse mental disabilities, and [have an] obligation to administer services with an even hand." Id. at 601-02. In light of these considerations, the Court held*fn11 that community placement for individuals with mental disabilities is in order when the State's treatment professionals have determined that community placement is appropriate, the transfer from institutional care to a less restrictive setting is not opposed by the affected individual, and the placement can be reasonably accommodated, taking into account the resources available to the State and the needs of others with mental disabilities.

Id. at 607.*fn12 Although the plaintiffs in Olmstead had exclusively mental disabilities (mental retardation and mental illness), its holding also applies to individuals with physical disabilities. See 42 U.S.C. § 12102(1)(A) (qualifying disability under the ADA includes "a physical or mental impairment that substantially limits one or more of the major life activities of such individual" (emphasis added)); see, e.g., M.R. v. Dreyfus, 663 F.3d 1100 (9th Cir. 2011) (Olmstead case where plaintiffs had both mental and physical disabilities); Grooms v. Maram, 563 F. Supp. 2d 840, 852 (N.D. Ill. 840) (Olmstead case where plaintiff had physical rather than mental disability).

In Olmstead, there was no dispute that the two plaintiffs were individuals "'qualified' for non-institutional care" who did not "oppose[] such treatment." Id. at 602-03. As for whether community placement for those plaintiffs was a "reasonable accommodation," the Court majority expressed no opinion, simply remanding "for further proceedings." Id. at 607. A plurality, however, went on to address in greater detail what might be the scope of "[t]he State's responsibility, once it provides community-based treatment to qualified persons with disabilities," noting that it was "not boundless." Id. at 603. The plurality started its analysis with the "reasonable-modifications regulation," pointing out that it "speaks of 'reasonable modifications' to avoid discrimination, and allows States to resist modifications that entail a 'fundamenta[l] alter[ation]' of the States' services and programs." Id. at 603 (quoting 28 C.F.R. § 35.130(b)(7)). The plurality went on to observe that "[t]o maintain a range of facilities and to administer services with an even hand, the State must have more leeway than the courts below understood the fundamental-alteration defense to allow." Id. at 605. For example, the plurality stated:

The Court of Appeals' construction of the reasonable-modifications regulation is unacceptable for it would leave the State virtually defenseless once it is shown that the plaintiff is qualified for the service or program she seeks. If the expense entailed in placing one or two people in a community-based treatment program is properly measured for reasonableness against the State's entire mental health budget, it is unlikely that a State, relying on the fundamental-alteration defense, could ever prevail.

Id. at 603.*fn13 Thus, the plurality opined:

Sensibly construed, the fundamental-alteration component of the reasonable-modifications regulation would allow the State to show that, in the allocation of available resources, immediate relief for the plaintiffs would be inequitable, given the responsibility the State has undertaken for the care and treatment of a large and diverse population of persons with mental disabilities.

Id. at 604. Finally, the plurality set forth one way that it believed a State could meet its burden of establishing a fundamental alteration defense:

If, for example, the State were to demonstrate that it had a comprehensive, effectively working plan for placing qualified persons with mental disabilities in less restrictive settings, and a waiting list that moved at a reasonable pace not controlled by the State's endeavors to keep its institutions fully populated, the reasonable-modifications standard would be met.

Id. at 605-606 (emphasis added).*fn14

C. Compliance with Olmstead's Integration Mandate

Since Olmstead, public entities and courts (although none in this Circuit) have grappled with what is required to demonstrate the existence of an Olmstead Integration Plan and/or what is required to satisfy the Integration Mandate. See Terence Ng, Alice Wong, and Charlene Harrington, Home and Community Based Services: Introduction to Olmstead Lawsuits and Olmstead Plans, Table 2 (2011), available at A number of States (26 as of August 2011) have expressly adopted so-called Olmstead Plans. See id. at Table 1, available at And the Department of Justice (DOJ) has issued a Statement setting forth its view "[t]o assist individuals in understanding their rights under title II of the ADA and its integration mandate, and to assist state and local governments in complying with the ADA and its integration mandate, and to assist state and local governments in complying with the ADA." U.S. Department of Justice, Statement of Department of Justice on Enforcement of the Integration Mandate of Title II of the Americans with Disabilities Act and Olmstead v. L.C. (2011) ("DOJ Statement") (attached as Pls.' Ex. J.) In the District, it is undisputed that no formal Olmstead Plan has been adopted,*fn15 but the District maintains that its existing programs and services for individuals with disabilities meet the requirements of an Olmstead Integration Plan and, thus, satisfy the Integration Mandate.


A. The District's Provision of Long-Term Care to Individuals with Disabilities

Medicaid is a joint federal and state program that provides medical services to certain low-income persons, including individuals with disabilities, pursuant to Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. Participation is voluntary, but all 50 States and the District participate. States submit Medicaid Plans, which must be approved by the federal government. See 42 USCS § 1396a(a); 42 C.F.R.§ 430.*fn16 Under the Medicaid Act, there are twenty-eight services which may be provided as part of a State's Medicaid Plan, seven of which, including nursing facility services, are mandatory.*fn17 42 U.S.C. § 1396a(a)(10)(A)(1). In the District, individuals with physical or mental health disabilities who are covered by Medicaid can receive long-term care services either in: (1) nursing facilities; (2) the community if the services needed are covered by DC's Medicaid State Plan; or (3) the community through a Medicaid waiver program. (Am Compl. ¶¶ 58, 59.)

1. Nursing Facilities

A "nursing facility" (or a "nursing home") is defined a "24-hour inpatient facility, or distinct part thereof, primarily engaged in providing professional nursing services, health-related services, and other supportive services needed by the patient/resident."*fn18 D.C. Code § 4-204.61(3).*fn19 The District provides nursing facility-based services "through privately-owned and operated nursing facilities . . . and through nursing facilities . . . that are owned by the District and operated through leasing arrangements or contracts with nursing facility management companies." (Am. Compl. ¶ 53.) Whether an individual is eligible for nursing facility care under the District's Medicaid Plan is determined by Delmarva Foundation for Medical Care, Inc., the agency the District contracts with the to determine the "level of care" designation for Medicaid eligible consumers. (Pls.' Ex. G at 19:19 -- 20:20, 22:6 -- 24:17 & Ex. 2.)

There are approximately 2,700 beds in the District's nursing facilities, with an approximate occupancy rate of over 90 percent. (Am. Compl. ¶ 54; Pls.' Facts ¶ 17 (citing Pls.' Ex. G at 150:4-152:2 (Dep. of Ericka Bryson-Walker, Interim Program Manager, Office of Chronic and Long Term Care, DHCF) (nursing facilities have been over 90% occupied since 2000); US Ex. BB at 158:8-159:8 (Bryson-Walker Dep.) (2009 nursing facility population was 2,531; 2005 population of 2,576). Approximately 70 percent of nursing facility residents are D.C. Medicaid recipients (Am. Compl. ¶ 50), plus there are approximately 200 additional D.C. Medicaid recipients currently placed in out-of-state nursing facilities. (Am. Compl. ¶ 55.) Pursuant to federal law, Delmarva collects information about all of the District's nursing facility residents on a quarterly basis (known as Minimum Data Set ("MDS") information), including whether any resident wishes to speak to someone about the possibility of returning to the community. (Defs.' Facts ¶ 17; see 42 C.F.R. 483.20(c) ("A facility must assess a resident using the quarterly review instrument specified by the State and approved by CMS not less frequently than once every 3 months.") Presently, according to the most recent data, there are between 526 and 580 nursing facility residents who, in response to the MDS written questionnaire, have expressed a preference for living in the community.*fn20 (Defs.' Ex. 8, at 35; Pls.' Facts ¶ 33; Pls.' Ex. H at 32:18-33:16; Pls.' Ex. G at 48:4-20;.)

2. District's Medicaid State Plan

The District's Medicaid State Plan covers certain community-based services, including personal care assistance, skilled nursing and mental health rehabilitation services. (Pls.' Facts ¶ 29 (citing Pls.' Ex. H at 23:14-24:5); Am. Compl. ¶ 57.) For example, the District covers home-based personal care aide services for up to 1,040 hours per year, with additional hours available pursuant to physicians' orders and DHCF prior authorization. (Am. Compl. ¶ 90.) The present record does not reflect how many individuals are receiving services under this aspect of the District's Medicaid Plan.

3. Medicaid Waiver Program -- EPD Waiver

Finally, since 1981, Medicaid has provided funding for home and community-based care for individuals, who would otherwise require institutional care, through the Medicaid Home and Community-Based Services (HCBS) Waiver Program. See 42 U.S.C. § 1396n(c).*fn21

The [waiver] program permits a State to furnish an array of home and community-based services that assist Medicaid beneficiaries to live in the community and avoid institutionalization. The State has broad discretion to design its waiver program to address the needs of the waiver's target population. Waiver services complement and/or supplement the services that are available to participants through the Medicaid State plan and other federal, state and local public programs as well as the supports that families and communities provide. (Defs.' Ex. 4, at 4.) The federal government reimburses the District 70% of the cost of services and supports for people enrolled in a HCBS Waiver. In order to obtain approval of a waiver program, a State submits an application to the Center for Medicaid and Medicare Services ("CMS"). Among other requirements, a State must demonstrate that the program is "cost- neutral" -- that the "cost of the program in its entirety cannot exceed the cost of care absent a waiver program."*fn22 (Defs.' Facts ¶ 6 (citing Defs.' Ex. 2, ¶ 9); Pls.' Facts ¶ 12; Pls.' Ex. M at 53:4 -- 54:14).) In addition, the number of beneficiaries who can participate in a waiver program is limited to the number proposed by a State and approved by CMS. (Defs.' Facts ¶ 6 (citing Defs.' Ex. 2, ¶ 10)); see 42 C.F.R. § 441.303(f)(6); Pls.' Facts ¶ 32.)

Waiver programs vary from state to state. In the District, individuals with physical disabilities or those who are over sixty-five years old who would otherwise require the level of care provided in a nursing facility can receive home and community-based care through the District's "Elderly and Physically Disabled Waiver" ("EPD Waiver").*fn23 (Defs. Ex. 4, at 1-2; Defs.' Facts ¶¶ 1,2; Defs.' Ex. 2, ¶ 4 (Aff. of Ericka Bryson-Walker); Am. Compl. ¶ 57); see also 42 USCS § 1396a (a)(10)(ii)(VI); 42 USC § 1396n(c); 42 C.F.R. § 441.301. The District first received approval for the EPD Waiver in 1999 (Defs.' Facts ¶ 1; Defs.' Ex. 2, ¶ 3), and it has since been renewed twice, most recently on March 29, 2007.*fn24 (Defs.' Ex. 2, ¶ 3; Defs.' Ex. 4.)*fn25

Under the EPD Waiver, which is administered by DHCF, the District may pay for case management services, homemaker services, personal care aides, respite care, environmental accessibility adaptation services and accessibility, personal emergency response system services, assisted living services, and chore aide services (Defs.' Facts ¶ 4; Defs' Ex. 2, ¶ 5; Defs.' Ex. 4, at 1, 48-88), but not "[h]ousing, meals, room and board or 24-hour skilled care or supervision." (Defs.' Facts ¶ 4 (citing Defs.' Ex. 2, ¶ 8).) In order to demonstrate cost-neutrality, the District projected "average costs for services each year of the waiver to be thousands of dollars less that nursing facility costs of services, with projected savings ranging from $19,970.10 in year one to $32,875.05 in year five." (Pls.' Facts ¶ 13 (citing Pls.' Ex. M at 62:20-63:19 & Ex. 3).)

To qualify for the EPD Waiver, an individual need not already be institutionalized (Defs.' Facts ¶ 3 (citing Defs.' Ex. 2, ¶ 4)), and spots are not set aside for individuals already in nursing facilities nor allocated between the elderly and physically disabled. (Pls.' Facts ¶¶ 1, 5 (citing Pls.' Ex. G at 54:12-17).)Enrollment for the EPD Waiver is capped at 3,940 individuals (Defs.' Facts ¶ 6 (citing Defs.' Ex. 2, ¶ 10)), and the District has no present plan to seek an increase in that number. (Pls.' Facts ¶ 18 (citing Pls.' Ex. G at 66:5-20).) As of July 29, 2011, approximately 3700 of the spots had been filled,*fn26 many by individuals who were already in the community receiving services under the District's Medicaid State Plan (Pls.' Facts ΒΆ 18 (citing Pls.' Ex. G at 59:8-60:18, 63:4-16)), although the precise distribution between individuals in nursing facilities versus individuals who were already in the community is not part of the record and is not tracked by DHCF. (Pls.' ...

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