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Case Name L.S. v. Delia PB-NC-0003
Docket / Court 5:11-cv-00354-FL ( E.D.N.C. )
State/Territory North Carolina
Case Type(s) Disability Rights-Pub. Accom.
Public Benefits / Government Services
Special Collection Olmstead Cases
Attorney Organization Legal Services/Legal Aid
NDRN/Protection & Advocacy Organizations
Case Summary
In July 2011, Plaintiffs filed this lawsuit in the U.S. District Court for the Eastern District of North Carolina to prevent reductions in Medicaid waiver services. Plaintiffs are individuals with developmental disabilities who receive home-based Medicaid-funded services through the North Carolina " ... read more >
In July 2011, Plaintiffs filed this lawsuit in the U.S. District Court for the Eastern District of North Carolina to prevent reductions in Medicaid waiver services. Plaintiffs are individuals with developmental disabilities who receive home-based Medicaid-funded services through the North Carolina "Innovations Waiver." On July 1, 2011, it was announced that the Plaintiffs' services would be reduced because Piedmont Behavioral Health (PBH), a contractor of the state health department, implemented a new system to determine which services are "medically necessary." The Plaintiffs claim that although their medical conditions remain constant, their services have been unreasonably and arbitrarily reduced by PBH's "Support Needs Matrix" and that they have not been offered an avenue to appeal their service reductions. The complaint alleges that this new reduction of services violates the U.S. Constitution's guarantee of due process and the federal Medicaid statute.

The Plaintiffs filed a motion for class certification and for a preliminary injunction on August 29, 2011. After a period of discovery and a controversy regarding the disqualification of counsel and a motion in intervention, the plaintiffs moved for a temporary restraining order on December 20, 2011. The court (Judge Louise Wood Flanagan) denied this motion on December 28, 2011, but noted that the motion for preliminary injunctive relief was still pending. After resolving the disqualification issue, the court held a hearing on the motion for preliminary injunction in March 2012. On March 29, the court granted the Plaintiffs' motion for preliminary injunction and certified the class. The court found that Plaintiffs had demonstrated a likelihood of success on the merits, in part because federal Medicaid provides that adequate notice and a fair hearing process be made available before denying benefits, and there was no notice or available appeal here. Such a process is also required by the Constitution. Plaintiffs had also demonstrated irreparable harm.

The Defendants appealed the grant of preliminary injunction to the U.S. Court of Appeals for the Fourth Circuit, which affirmed the District Court. It upheld the district court's conclusion that the plaintiffs were likely to succeed on the merits of their ADA/Section 504 claims, and held that the district court had not abused its discretion in concluding that the new eligibility standards placed them at a significant risk of institutionalization. The state argued that the ADA does not prohibit placing people with disabilities at risk of institutionalization. The Fourth Circuit, deferring to the views of the Department of Justice, disagreed: "We are especially swayed by the DOJ's determination that 'the ADA and the Olmstead decision extend to persons at serious risk of institutionalization or segregation and are not limited to individuals currently in institutional or other segregated settings.' U.S. Dept. of Justice, Statement of the Department of Justice on the Integration Mandate of Title II of the ADA and Olmstead v. L.C., http://www.ada.gov/olmstead/q & a_ olmstead.htm. The state also argued that adult care homes are not institutions. But the Fourth Circuit, again deferring to the views of the Department of Justice, disagreed. And the state argued that "continuing to offer in-home PCS to the class members and named Appellees constitutes a fundamental alteration due to the administrative and financial burdens it entails." The Fourth Circuit rejected that argument, too. The court "join[ed] the Third, Ninth, and Tenth Circuits in holding that, although budgetary concerns are relevant to the fundamental alteration calculus, financial constraints alone cannot sustain a fundamental alteration defense." The Fourth Circuit also concluded that the plaintiffs satisfied the other three requirements for a preliminary injunction (irreparable harm, balance of hardships, and the public interest), so it agreed that a PI was warranted. The court remanded, however, because it concluded that the preliminary injunction issued by the district court failed to satisfy Rule 65's specificity requirement. It thus directed the district court to describe the enjoined conduct in greater detail. Pashby v. Delia, --- F.3d ----, 2013 WL 791829 (4th Cir., Mar. 5, 2013).

Beth Kurtz - 03/05/2013


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Issues and Causes of Action
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Issues
Benefit Source
Medicaid
Constitutional Clause
Due Process
Content of Injunction
Preliminary relief granted
Defendant-type
Hospital/Health Department
Jurisdiction-wide
Disability
disability, unspecified
Integrated setting
Least restrictive environment
Mental impairment
Discrimination-basis
Disability (inc. reasonable accommodations)
General
Deinstitutionalization/decarceration
Habilitation (training/treatment)
Public benefits (includes, e.g., in-state tuition, govt. jobs)
Plaintiff Type
Private Plaintiff
Causes of Action Title XIX of the Social Security (Medicaid) Act, 42 U.S.C §1396
42 U.S.C. § 1983
Defendant(s) NC Department of Health and Human Services
Piedmont Behavioral Healthcare (PBH)
Plaintiff Description Plaintiffs are individuals with developmental disabilities who receive home-based Medicaid-funded services under North Carolina's "Innovations Waiver."
Indexed Lawyer Organizations Legal Services/Legal Aid
NDRN/Protection & Advocacy Organizations
Class action status sought Yes
Class action status granted Yes
Prevailing Party Plaintiff
Public Int. Lawyer Yes
Nature of Relief Injunction / Injunctive-like Settlement
Preliminary injunction / Temp. restraining order
Source of Relief Litigation
Form of Settlement None on record
Order Duration 2012 - n/a
Case Closing Year n/a
Case Ongoing Yes
Docket(s)
5:11−cv−00354 (E.D.N.C.) 05/29/2012
PB-NC-0003-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Class Action Complaint 08/01/2011
PB-NC-0003-0001.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order Denying Temporary Relief 08/12/2011 (E.D.N.C.)
PB-NC-0003-0003.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Motion for Preliminary Injunction 08/24/2011
PB-NC-0003-0011.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Memorandum of Law in Support of Motion for Preliminary Injunction 08/24/2011
PB-NC-0003-0018.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Memorandum in Support of the Plaintiff's Motion for Class Certification 08/29/2011
PB-NC-0003-0004.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Plaintiff's Motion for Class Certification 08/29/2011
PB-NC-0003-0006.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Answer and Affirmative Defenses of Defendants Pamela L. Shipman and PBH 08/29/2011
PB-NC-0003-0008.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order on Intervention 12/05/2011 (2011 WL 6030075) (E.D.N.C.)
PB-NC-0003-0020.pdf | WESTLAW | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Memorandum of Law in Support of Motion for Temporary Restraining Order 12/20/2011
PB-NC-0003-0007.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Motion for Temporary Restraining Order 12/20/2011
PB-NC-0003-0009.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Defendants Pamela L. Shipman and PBH's Initial Response to Certain Plaintiffs Motion for Temporary Restraining Order 12/21/2011
PB-NC-0003-0010.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Plaintiff's Reply in Support of Motion for Temporary Restraining Order 12/22/2011
PB-NC-0003-0012.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order Denying Temporary Restraining Order 12/28/2011 (E.D.N.C.)
PB-NC-0003-0002.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Defendant Cansler's Response in Opposition to the Motion for Class Certification 02/01/2012
PB-NC-0003-0013.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Defendants Pamela L. Shipman and PBH's Memorandum in Opposition to Plaintiffs' Motion for Class Certification 02/01/2012
PB-NC-0003-0014.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Defendants Pamela L. Shipman and PBH's Response in Opposition to Plaintiff's Motion for Preliminary Injuction 02/01/2012
PB-NC-0003-0015.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Order 03/29/2012 (E.D.N.C.)
PB-NC-0003-0016.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Notice of Interlocutory Appeal 04/27/2012
PB-NC-0003-0017.pdf | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Flanagan, Louise W. (E.D.N.C.) [Magistrate]
PB-NC-0003-0002 | PB-NC-0003-0003 | PB-NC-0003-0016 | PB-NC-0003-0020 | PB-NC-0003-9000
Monitors/Masters None on record
Plaintiff's Lawyers Bills, Jennifer L. (Massachusetts)
PB-NC-0003-0001 | PB-NC-0003-0004 | PB-NC-0003-0006 | PB-NC-0003-0007 | PB-NC-0003-0009 | PB-NC-0003-0011 | PB-NC-0003-0012 | PB-NC-0003-0018 | PB-NC-0003-9000
Dhillon, Jina (North Carolina)
PB-NC-0003-0009 | PB-NC-0003-0011 | PB-NC-0003-0012 | PB-NC-0003-0018
McAdoo, Morris Fonville (North Carolina)
PB-NC-0003-0007 | PB-NC-0003-0012 | PB-NC-0003-9000
Perkins, Martha Jane (North Carolina)
PB-NC-0003-0001 | PB-NC-0003-0004 | PB-NC-0003-0006 | PB-NC-0003-0007 | PB-NC-0003-0009 | PB-NC-0003-0011 | PB-NC-0003-0012 | PB-NC-0003-0018 | PB-NC-0003-9000
Rittelmeyer, John R. (North Carolina)
PB-NC-0003-0001 | PB-NC-0003-0004 | PB-NC-0003-0006 | PB-NC-0003-0007 | PB-NC-0003-0009 | PB-NC-0003-0011 | PB-NC-0003-0018 | PB-NC-0003-9000
Sea, Douglas Stuart (North Carolina)
PB-NC-0003-0001 | PB-NC-0003-0004 | PB-NC-0003-0006 | PB-NC-0003-0007 | PB-NC-0003-0009 | PB-NC-0003-0011 | PB-NC-0003-0012 | PB-NC-0003-0018 | PB-NC-0003-9000
Defendant's Lawyers Bost, Alison R. (North Carolina)
PB-NC-0003-9000
Hollander, Reed J. (North Carolina)
PB-NC-0003-0010 | PB-NC-0003-0014 | PB-NC-0003-0015 | PB-NC-0003-0017 | PB-NC-0003-9000
Hollowell, Wallace C. (North Carolina)
PB-NC-0003-0008 | PB-NC-0003-0010 | PB-NC-0003-0014 | PB-NC-0003-0015 | PB-NC-0003-0017 | PB-NC-0003-9000
Martin, Stephen D. (North Carolina)
PB-NC-0003-0008 | PB-NC-0003-0010 | PB-NC-0003-0014 | PB-NC-0003-0015 | PB-NC-0003-0017 | PB-NC-0003-9000
Smith, Belinda A. (North Carolina)
PB-NC-0003-0013 | PB-NC-0003-9000
Stauffer, Iain (North Carolina)
PB-NC-0003-0013 | PB-NC-0003-9000
Wilder, Raboteau T. Jr. (North Carolina)
PB-NC-0003-9000
Other Lawyers None on record

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