United States District Court, D. South Carolina, Columbia Division
Richard Stogsdill, Nancy Stogsdill, Mother of Richard Stogsdill, Robert Levin, and Mary Self, Mother of Robert Levin, Plaintiffs,
Anthony Keck and the South Carolina Department of Health and Human Services, Defendants
For Richard Stogsdill, Nancy Stogsdill, Parent of Richard Stogdill, of behalf of themselves and other similarly situated persons, Robert Levin, Mary Self, Parent of Robert Levin, on behalf of themselves and other similarly situated persons, Plaintiffs: Patricia L Harrison, Patricia Logan Harrison Law Office, Columbia, SC.
For Anthony Keck, South Carolina Department of Health and Human Services, Defendants: Damon C Wlodarczyk, LEAD ATTORNEY, Nikole H Boland, Roy F Laney, Riley Pope and Laney, Columbia, SC.
Joseph F. Anderson, Jr., United States District Judge.
This case arises out of the reduction in benefits provided to two Medicaid-eligible individuals and seeks to challenge the policies and procedures in the operation of two Medicaid programs. Richard Stogsdill (" Stogsdill"), Nancy Stogsdill, Mother of Richard Stogsdill, Robert Levin (" Levin"), and Mary Self, Mother of Robert Levin (collectively " Plaintiffs") allege violations of statutory and constitutional due process, violations of the S.C. Administrative Procedures Act, violations of the Americans with Disabilities Act, violations of Section 504 of the Rehabilitation Act, and violations of 42 U.S.C. § § 1983 and 1985 (Civil Rights) against Anthony Keck (" Keck") and the South Carolina Department of Health and Human Services (" SDHHS") (collectively " Defendants").
II. BACKGROUND FACTS
Plaintiffs are Medicaid-eligible disabled adults who have been receiving services under either the South Carolina Intellectually Disabled and Related Disabilities waiver or the Head and Spinal Cord Injury waiver. Waivers are mechanisms within the Medicaid Program that allow participants to receive a mix of services through the South Carolina Department of Disabilities and Special Needs (" SCDDSN"). The waivers allow certain generic requirements of the Medicaid program to be " waived" so states can provide services to Medicaid-eligible participants in ways not allowed under the regular Medicaid program. SCDHHS is the single agency that administers Medicaid in South Carolina. SCDHHS contracts with SCDDSN to administer the day-to-day operations of the waiver programs.
On January 1, 2010, the five (5) year renewal of the waivers, as approved by the Centers for Medicare and Medicaid Services (" CMS") went into effect. The renewed waivers included a cap or limit on some services and completely excluded others. These limits and exclusions form the basis of Plaintiffs' lawsuit.
A. Richard Stogsdill
Prior to the January 1, 2010, waiver changes, Stogsdill was receiving 96 hours of Personal Care Aide and Companion services per week. He also received approximately 36 hours per week of Respite Care. Personal Aide II services consist of hands-on care that a participant requires for daily living, such as bathing, dressing, and toileting. Adult Companion services are similar, except they include an aspect of community integration. Respite Care includes a range of services designed to provide care for the participant when the normal caregiver is absent or needs relief. The January 1, 2010, waiver capped any combination of Personal Aide II services and Adult Companion services at 28 hours per week. Respite Care services under the January 1, 2010, waiver is typically 68 hours per month, but can be increased up to 240 hours per month under certain circumstances.
Effective January 1, 2010, Stogsdill's Personal Aide II services and Adult Companion Services were reduced to 28 hours per week combined. Respite Care services were limited to 68 hours per month; however, an increase of 172 hours per month of Respite Care was granted following the reductions at the request of Stogsdilll's service coordinator. Stogsdill's Occupational and Speech Therapies were discontinued.
On February 13, 2009, after Stogsdill's services were reduced, he sought reconsideration by SCDDSN. This request was subsequently denied on March 3, 2009. On April 1, 2009, Stogsdill then appealed the SCDDSN determination to the Appeals Division. The Appeals Division affirmed the reductions on September 14, 2010. This decision was then appealed to the South Carolina Administrative Law Court (" ALC") on October 20. 2010. While the appeal was pending at the ALC, the current suit was filed in Federal Court. On March 13, 2013, the ALC issued an order upholding the decision rendered by SCDDSN. Subsequently, Stogsdill appealed the ALC decision to the South Carolina Court of Appeals. The Court of Appeals heard oral argument in March of 2014, but at the time of briefing of these motions, had not rendered a decision.
However, prior to this Court's hearing on the parties' cross motions, a judgment was entered by the South Carolina Court of Appeals on several issues pending before this Court. The Court of Appeals ruling (1) affirmed that approval by state regulation was not required to give the waiver's provisions the force and effect of law, (2) affirmed Stogsdill fully exercised his opportunity for a hearing and judicial review, and thus, his due process rights were not violated, (3) reversed the Administrative Law Court's conclusion that Stogsdill's risk of institutionalization was speculative, and (4) under Pashby found SCDHHS failed to establish a fundamental alteration defense. The case was " remanded for consideration of the appropriate services to be provided without the restrictions of the 2010 waiver." Id. at *7. The Court of Appeals has denied both parties' petitions for rehearing. However, according to representations made by counsel at the hearing on this matter, the parties may still seek appellate review of the Court of Appeals' decision by the South Carolina Supreme Court.
B. Robert Levin
Levin receives services under the HASCI waiver. Effective January 1, 2010, Levin's Attendant Care/Personal Services were reduced from 56 hours per week to 49 hours per week. Levin is authorized for 30 hours per year of back up emergency attendant care for use through an agency, should one of his attendants not be available to provide his regularly scheduled care, and he also receives incontinence supplies through both the Medicaid Sate Plan and the HASCI waiver. Subsequent to his reduction in services, Levin never requested reconsideration of this determination, and his caregivers never took an appeal to SCDHHS challenging the reduction.
Plaintiffs' complaint lists six causes of action and seeks both declaratory and injunctive relief. Both parties have moved for summary judgment on all six causes of action, and the Court heard oral argument on October 27, 2014. Because subject matter jurisdiction presents a threshold matter, the Court will address it fist.
III. Subject Matter Jurisdiction
Subject matter jurisdiction refers to a court's authority to hear a case and can be raised at any time, even sua sponte by the court. United States v. Beasley, 495 F.3d 142, 147 (4th Cir. 2007); Plyler v. Moore, 129 F.3d 728, 732 n. 6 (4th Cir. 1997). Because Federal courts are courts of limited jurisdiction, " they possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) (internal citations omitted). Parties cannot bestow federal courts with subject matter jurisdiction by consent. See, e.g., Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982); Roche v. Lincoln Prop. Co., 373 F.3d 610, 621 (4th Cir.2004), rev'd on other grounds, 546 U.S. 81, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005); City Nat. Bank v. Edmisten, 681 F.2d 942, 945 n. 5 (4th Cir. 1982). Accordingly, " a federal court is obliged to dismiss a case whenever it appears the court lacks subject matter jurisdiction." Fed.R.Civ.P. 12(h)(3); Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999).
After review of the briefs submitted and the underlying state court proceedings, the Court concludes there are several impediments to exercising subject matter jurisdiction over the claims made by Stogsdill.
A. Declaratory Judgment Act
The Declaratory Judgment Act empowers federal district courts to hear declaratory judgment actions. However, " the operation of the Declaratory Judgment Act is procedural only" in that, " Congress enlarged the range of remedies available in the federal courts but did not extend their jurisdiction. [T]he requirements of jurisdiction--the limited subject matters which alone Congress had authorized the District Courts to adjudicate--were not impliedly repealed or modified." Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 672, 70 S.Ct. 876, 94 L.Ed. 1194 (1950) (internal quotations marks and citations omitted).
Accordingly, " the exercise of jurisdiction under the Federal Declaratory Judgments Act is certainly not compulsory; it is discretionary." Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 499, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942). Federal courts have discretion in deciding whether to hear a declaratory action. Mitcheson v. Harris, 955 F.2d 235, 237 (4th Cir. 1992); See also, 28 U.S.C. § 2201 (" In a case of actual controversy within its jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.") (emphasis added). " Consistent with the nonobligatory nature of the remedy, a district court is authorized, in the sound exercise of its discretion, to stay or to dismiss an action seeking a declaratory judgment before trial or after all arguments have drawn to a close. In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration." Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 257 (4th Cir. 1996) (citing Wilton v. Seven Falls, Co., 515 U.S. 277, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995)).
Other considerations are especially appropriate when a related state court proceeding is pending at the time the parties to federal litigation request declaratory relief from the district court. In such situations, the federal court should consider whether the controversy " can better be settled in the proceeding pending in the state court." Brillhart, 316 U.S. at 495 (1942). This consideration should be guided by a number of factors, including the nature and scope of the state proceeding and " whether the claims of all parties in interest can satisfactorily be adjudicated in that proceeding . . ." Id .; see also Mitcheson v. Harris, 955 F.2d 235 (4th Cir. 1992). In light of these principles and other concerns related to federalism and comity, the Fourth Circuit has set forth specific factors for consideration by district courts in determining whether to invoke their discretionary prerogative to decline jurisdiction of claims seeking declaratory relief. These include:
(i) the strength of the state's interest in having the issues raised in the federal declaratory action decided in the state courts; (ii) whether the issues raised in the federal action can more efficiently be resolved in the court in which the state action is pending; (iii) whether permitting the federal action to go forward would result in unnecessary entanglement between the federal and state court systems, because of the presence of overlapping issues of fact or law [; and (iv) ] whether the declaratory judgment action is being used merely as a device for procedural fencing--that is, to provide another forum in a race for res judicata or to achiev[e] a federal hearing in a case otherwise not removable.
Centennial Life Ins., 88 F.3d at 257 (citing Nautilus Ins. Co. v. Winchester Homes, Inc., 15 F.3d 371, 377 (4th Cir.1994)) (internal quotation marks omitted).
A review of these factors as it relates to the claims brought by Stogsdill is appropriate given the fact that a large majority of the claims asserted in this action are already pending before the state court for disposition. Specifically, Stogsdill has raised analogous claims in state court for violations of due process, the South Carolina Administrative Procedure Act, the Americans with Disabilities Act, and Section 504 of the Rehabilitation Act . The documentation in the record demonstrates that the parties have fully presented all claims and defenses in the state court proceeding. Therefore, there are substantial overlapping issues of fact and law. Further, there is no indication that the state courts are not adequately conversant on the issues related to Stogsdill's claims. In fact, the recently issued opinion of the Court of Appeals, assuages any reservations about the state court's ability to fully adjudicate these issues. Further, because these claims implicate a state agency's administration of its own regulatory scheme and review process, it is clear the state court has a vested interest in having these issues resolved in its jurisdiction.
As expressed to the parties during the hearing, this Court has great reservation about the appropriateness of its involvement with these issues, given the state court's adjudication, the possible appeal of that decision, and the ordered remand of some issues to SCDHHS. The potential for entanglement between the federal and state courts is great and may result in conflicting rulings, requiring protracted litigation and additional expense. Moreover, the Court is cognizant of the risk of duplicative efforts by competing courts resulting in waste of judicial resources. ...