Murphy v. Minnesota Department of Human Services

Background

The plaintiffs were individuals with disabilities who received Home and Community Based Disability Waivers from Minnesota and lived, or had lived, in Community Residential Setting facilities, also called corporate adult foster care facilities. They sought individualized housing services that would help them explore and pursue more integrated housing options. The certified class covered adults who were eligible for and had received a Disability Waiver, lived in a licensed Community Residential Setting, and had not been given the choice and opportunity to live in the most integrated residential setting appropriate to their needs.

The amended complaint asserted four claims against Jodi Harpstead, in her official capacity as Commissioner of the Minnesota Department of Human Services: failure to provide Medicaid services with reasonable promptness, enforced under 42 U.S.C. § 1983; Fourteenth Amendment and Medicaid due-process violations, also enforced under § 1983; a Title II Americans with Disabilities Act claim; and a Rehabilitation Act § 504 claim. The motions addressed in this opinion were the plaintiffs’ motion for partial summary judgment on the notice-policy issue and the Commissioner’s motion for summary judgment on all claims.

Plaintiffs’ Partial Summary-Judgment Motion

The plaintiffs argued that federal law requires a written Notice of Action when the state denies individualized housing services or does not act on a request with reasonable promptness. They contended that the Commissioner’s policy did not clearly explain what counted as a denial and did not instruct local agencies what notice to provide when they failed to act within a reasonable time. According to the plaintiffs, the policy allowed recipients to go months or years without services or an explanation of a denial.

The Commissioner argued that the Medicaid Act did not create a privately enforceable right to sue under § 1983 and that notice was required only after a specific application for benefits or services was denied. She also argued that routine documents already informed recipients of their appeal rights and that the requested injunction was too vague.

The court rejected these arguments. It reaffirmed its earlier conclusion that the Medicaid Act’s reasonable-promptness and fair-hearing provisions are privately enforceable under § 1983. The court held that a denial is not limited to rejection of a formal application. A denial also occurs when an agency does not authorize services requested by a beneficiary or authorizes less than the requested type or amount of services.

The court further held that a Notice of Action must contain the information required by federal regulation, including the action the agency intends to take, its effective date, the specific reasons for the action, the supporting regulations or legal changes, and information about hearing rights and continuation of Medicaid during an appeal. The Commissioner’s general appeal information did not satisfy these requirements because it was not tied to a specific request and did not explain the reason for a denial. The court therefore found that the policy violated the Medicaid Act’s notice and fair-hearing requirements and corresponding procedural due-process rights under the Fourteenth Amendment.

The court concluded that the requested injunction was clear enough under Federal Rule of Civil Procedure 65. It nevertheless declined to issue an injunction at that time. Instead, it encouraged the parties to jointly develop clear and mutually acceptable policy revisions and stated that further evidence could be required to determine the proper scope of an injunction if the parties could not agree.

Commissioner’s Summary-Judgment Motion

The Commissioner argued that the named plaintiffs lacked standing and that Tenner Murphy and Marrie Bottelson’s claims were moot because they had moved to their desired settings. The court disagreed. It found that the plaintiffs had provided evidence supporting the connection between individualized housing services and greater community integration. It also held that the later move by Murphy and Bottelson did not make the class action moot because the class had already been certified, and there was no evidence that Dionne Swanson’s claims were moot.

On the reasonable-promptness claim, the court held that the provision was privately enforceable and that the Commissioner could potentially be held liable in her official capacity because she had ultimate responsibility for administering Minnesota’s Medicaid plan and the unclear policy could itself contribute to delays. The court found disputes about whether waiver services had been provided with reasonable promptness and therefore declined to grant summary judgment on that claim.

The court also declined to grant summary judgment on the Americans with Disabilities Act and Rehabilitation Act claims. It rejected the Commissioner’s argument that the integration requirement applied only to people who were institutionalized or at imminent risk of institutionalization. The court held that unjustified segregation can extend beyond institutional settings and that the plaintiffs’ requested changes to the existing waiver system did not necessarily demand new services or a guaranteed move.

The court found material factual disputes about whether the Community Residential Setting facilities provided sufficient integration, whether the Commissioner’s conduct was a substantial cause of the plaintiffs’ inability to obtain services needed for more integrated housing, whether the requested changes were reasonable and necessary, and whether Minnesota’s Olmstead Plan was comprehensive and effectively working. The court also rejected the argument that the alleged harm was too limited to justify systemwide relief, noting the evidence of alleged harm to nearly 192 people in the relevant group.

Disposition

The court granted in part and denied in part the plaintiffs’ motion for partial summary judgment. It ruled that the Commissioner’s policy violated Fourteenth Amendment due-process rights and the Medicaid Act’s advance-notice and fair-hearing requirements, enforced under 42 U.S.C. § 1983, but declined to issue an injunction at that time. The court denied the Commissioner’s motion for summary judgment in full. It did not enter a final merits ruling resolving every remaining claim; instead, factual disputes prevented summary judgment on the reasonable-promptness, Americans with Disabilities Act, and Rehabilitation Act issues.