Case: Clinton L. v. Cansler

The Plaintiffs are individuals with dual diagnoses of intellectual disabilities and mental illness who receive 24-hour in-home care through North Carolina Medicaid, administered in their county by Piedmont Behavioral Healthcare (PBH) (the local management entity). The Plaintiffs receive care through the state-funded "Supervised Living" service and the North Carolina "Innovations Waiver." In early 2010, PBH announced that it was reducing reimbursement rates for service providers. On February 11, 2010, Plaintiffs filed this lawsuit in the U.S. District Court for the Middle District of North Carolina against the Secretary of the Department of Health and Human Services of North Carolina and PBH, challenging these rate reductions and alleging that the reductions violated the Americans with Disabilities Act (ADA). According to the complaint, the rate reduction would ultimately reduce the services that allow the Plaintiffs to live in the community and receive community-based treatment. Without the option of community-based treatment, the Plaintiffs faced the risk of being institutionalized. The Plaintiffs argued that this risk of unnecessary institutionalization amounted to a violation of both the ADA (under the Supreme Court ruling in Olmstead v. L.C., which held that the unjustified institutionalization of individuals with disabilities is a form of discrimination under the ADA) and Section 504 of the Rehabilitation Act of 1973.

The Plaintiffs filed a motion for preliminary injunction, and the United States filed a statement of interest in support of this motion. On May 12, 2010, the court (Judge James A. Beaty) denied the motion in part (with respect to enjoining the rate reductions or otherwise setting specific reimbursement rates) but granted it in limited part, ordering the Defendants to ensure that all plaintiffs were provided with community-based care throughout the course of this litigation.

The case proceeded to the discovery phase. The Defendants filed a motion to dismiss on August 16, 2010, arguing that the Plaintiffs lacked standing, that the case was not ripe for litigation, and that the Plaintiffs had failed to state a claim because there is no federal right to be served in a single-serve placement or by a particular provider. Ultimately, the court denied this motion in June 2011, and also denied the Plaintiffs' request to appoint a special master to oversee the allocation of services to the Plaintiffs. After several more months of discovery, the Defendants filed a motion for summary judgment in January 2012, claiming that although there had been some service changes, each plaintiff lives in the community and faces no risk of institutionalization due to the current reimbursement rates. On October 31, 2012, the court denied the motion for summary judgment, finding that issues of fact remained as to the risk of institutionalization that the Plaintiffs currently face.

At the end of discovery, the Plaintiffs filed their third amended complaint. While the original complaint alleged claims on behalf of a putative class, the final amended complaint alleged claims on behalf of six individual plaintiffs. The amended complaint also added a claim for one named plaintiff under ADA regulation 28 C.F.R. §35, alleging that the Defendants had violated the regulation by failing to take into account this plaintiff’s deafness and failing to provide appropriate auxiliary aids and services.

On July 24, 2013, the case was reassigned to Judge N.C. Tilley, Jr. The case proceeded to a 39-day trial beginning on September 10, 2013. On August 28, 2014, the Court ruled in favor of the Defendants, finding that the Plaintiffs could not carry the burden of proof as to any of their claims. The court held that no plaintiff was able to show that (1) he or she was at a “serious risk of institutionalization” and that (2) the Defendants’ reimbursement rate reduction was “substantially related” to that serious risk of institutionalization. With respect to the ADA regulation claim, the court held that the Plaintiffs could not show that there was a discrepancy in the quality of care. The Court explained that this claim focused almost entirely on the discrepancy in American Sign Language (ASL) abilities between the patient and his staff as opposed to other deaf-oriented accommodations. Because the facility provided ASL training to the staff and they were able to sign basic communication as this particular patient needed, the Court found that there was insufficient evidence that discrepancies between the plaintiff’s ASL ability and staff’s resulted in unequal quality of care. 2014 WL 4274251.

The Plaintiffs filed a motion to alter or amend the judgment (under Federal Rule of Civil Procedure 59(e)), arguing primarily that Fourth Circuit precedent ((Pashby v. Delia, 709 F.3d 307 (4th Cir. 2013)) only required plaintiffs to show a “significant” risk of institutionalization rather than a “serious” or “severe” one. On March 29, 2016, the Court denied the motion, reasoning that the court in Pashby did not intend to alter the existing standard espoused by the DOJ. The case is now closed.