Murphy v. Minnesota Department of Human Services

Background

The plaintiffs are individuals with disabilities and Medicaid recipients who receive Home and Community-Based Disability Waivers from Minnesota. They reside, or previously resided, in licensed Community Residential Setting facilities. They alleged that Jodi Harpstead, in her capacity as Commissioner of the Minnesota Department of Human Services, relied too heavily on those facilities, failed to inform waiver recipients about individualized housing services, failed to explain how to access them, and failed to provide adequate notice and information about hearing rights when services were denied.

The plaintiffs asserted four claims: failure to provide Medicaid services with reasonable promptness; violations of Fourteenth Amendment due-process rights and Medicaid advance-notice and fair-hearing requirements; violation of Title II of the Americans with Disabilities Act; and violation of Section 504 of the Rehabilitation Act. The court certified a class consisting of adults who 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.

Before settlement, the court denied the defendant’s motion to decertify the class. It also granted in part and denied in part the plaintiffs’ motion for partial summary judgment, concluding that the defendant’s policy violated the plaintiffs’ due-process rights under the Fourteenth Amendment and the Medicaid Act’s advance-notice and fair-hearing requirements. The court denied the defendant’s motion for summary judgment. The parties later reached an agreement during mediation, and the court preliminarily approved it.

Settlement Terms

The agreement provides injunctive relief in five areas:

1. Inform and educate. The Community-Based Services Manual will instruct case managers to discuss service and housing options with people who want to move or learn about moving. Case managers must help interested people access Housing Stabilization Services. MnCHOICES assessors must provide information and resources about those services, explain appeal rights after a denial, and provide a completed eligibility-denial notice when authorization is denied.

2. Train. MnCHOICES assessors must determine whether a person would prefer to live in a setting not controlled by a service provider. Case managers must complete training on supporting a person’s move and report compliance with that requirement.

3. Assess. MnCHOICES assessors must ask people living in Community Residential Settings whether they are interested in moving or learning about moving to an “own home” setting. The defendant must create a report identifying interested waiver recipients and noting whether they lack a housing goal in their service plan or have not been authorized for Housing Stabilization Services.

4. Provide services. For people identified in the report, case managers must provide information about Housing Stabilization Services. The defendant must review those individuals annually, determine whether they have moved, obtain reports from lead agencies about those who have not moved, and contact individuals to discuss barriers to moving.

5. Measure outcomes. The defendant must make data publicly available concerning applications and approvals for Housing Stabilization Services, moves out of Community Residential Settings, the number of people identified in the original report, and contacts with lead agencies.

Objections and Fairness Review

The court held a fairness hearing on May 12, 2023. It received fourteen objections from individuals and organizations. The court concluded that the class representatives and counsel adequately represented the class, the parties negotiated at arm’s length, and the agreement provided adequate relief in light of the risks, costs, and delay of further litigation. The court also found that the notice process was reasonable and that the agreement treated class members equitably.

The principal objections concerned direct-care services. The court held that expanding access to or funding for direct-care services was outside the scope of this lawsuit. It also stated that, even if the issue were within the case, the record did not establish what changes would be legally required or whether they would fundamentally alter Minnesota’s waiver system. The court noted that claims involving mistreatment or retaliation by service providers were outside the lawsuit and would not be released by the agreement. It also stated that claims based on the defendant’s actions after the agreement’s effective date could be pursued.

The court rejected objections that the notice was inadequate, that the class was too narrow, that the agreement improperly required individuals to express interest in moving, that the court should retain jurisdiction over compliance disputes, and that the agreement should last indefinitely. The court emphasized that the question was whether the agreement was fair, adequate, and reasonable—not whether objectors could have negotiated a better agreement.

Attorney’s Fees and Order

The parties jointly requested $1,138,000 in attorney’s fees and costs. Plaintiffs’ counsel documented more than 17,000 hours of work, estimated approximately $5 million in total fees, and reported more than $187,000 in costs. The court found the requested award appropriate and reasonable given the case’s lengthy history and complexity.

Judge Donovan W. Frank granted the parties’ joint motion for final approval of settlement and their joint motion for attorney’s fees and costs. The order directed that judgment be entered accordingly.