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Disability Rights of West Virginia v. Crouch

United States District Court, S.D. West Virginia, Charleston Division

December 6, 2017

BILL CROUCH, in his official capacity as Secretary of the Department of Health and Human Services of the State of West Virginia, Defendant.



         Pending before the Court are Defendant's Motion to Dismiss, (ECF No. 11), and Plaintiff Disability Rights of West Virginia's (“DRWV”) Motion for Award of Service Expenses and Attorney Fees, (ECF No. 21). For the reasons discussed below, the Court GRANTS the motion to dismiss, (ECF No. 11), and DENIES the motion for expenses and attorney's fees, (ECF No. 21).

         I. BACKGROUND

         This case arises out of a decision by the West Virginia Department of Health and Human Services (“DHHR”) to hold in abeyance certain Medicaid fair hearings pending the outcome of T. v. Crouch, which is currently before this Court. (ECF No. 1 at 1; see Civil Action No. 2:15-cv-09655.) In that underlying case, individuals enrolled in West Virginia's Intellectual/Developmental Disability Home and Community Based Services waiver program (“I/DD Waiver Program”) are challenging reductions in their benefits that began in 2015. DRWV brought this action against Defendant, alleging that DHHR's decision to hold certain hearings in abeyance pending the underlying litigation challenging aspects of the I/DD Waiver Program is a violation of federal law and regulations governing the state's Medicaid program by failing to hold recipients' Medicaid fair hearings within the required period. (ECF No. 1 at 7-10 (citing 42 U.S.C. § 1396(a)(3), (8); 42 C.F.R §§ 431.220, 431.244(f), 435.930).) Because of these allegedly unlawful actions, DRWV seeks injunctive and compensatory relief. (Id. at 10-11.)

         Defendant filed the current Motion to Dismiss on June 5, 2017. (ECF No. 11.) DRWV responded to the motion on June 8, 2017, (ECF No. 14), and DRWV filed its reply on June 15, 2017, (ECF No. 15). DRWV filed its Motion for Award of Service Expenses and Attorney Fees on August 15, 2017, (ECF No. 21), and Defendant responded on August 29, 2017, (ECF No. 23). Accordingly, the two motions are briefed and ripe for adjudication.


         Pursuant to Federal Rule of Civil Procedure 8(a), a complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” See Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). The rule requires the plaintiff to allege sufficient facts, which, if proven, would entitle him to relief under a cognizable legal claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-55 (2007). A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the complaint, and the factual allegations must be taken as true and construed in the light most favorable to the plaintiff. See Randall v. United States, 30 F.3d 518, 522 (4th Cir. 1994). Consequently, a motion to dismiss should be granted only if, after accepting all well-pleaded allegations contained in the complaint as true, the plaintiff fails to allege enough facts to state a cognizable legal claim that is plausible on its face. Twombly, 550 U.S. at 570. “Factual allegations must be enough to raise a right to relief above the speculative level[, ]” and if a plaintiff does not “nudge” his claim “across the line from conceivable to plausible[, ]” then the complaint should be dismissed. Id. at 555, 570. “Conclusory allegations in a complaint, if they stand alone, are a danger sign that the plaintiff is engaged in a fishing expedition.” Migdal v. Rowe Price-Fleming Int'l Inc., 248 F.3d 321, 325 (4th Cir. 2001) (citing DM Research v. Coll. of Am. Pathologists, 170 F.3d 53, 55 (1st Cir. 1999)).


         The individuals on whose behalf DRWV sued are recipients of benefits under West Virginia's I/DD Waiver Program, which provides for qualified individuals with intellectual and development disabilities an annual budget by which those recipients may purchase home and community-based services. (See ECF No. 1 at 7 ¶¶ 29-30.) The Complaint states that West Virginia's Medicaid program must “provide Medicaid applicants and recipients with recourse to an administrative fair hearing when Medicaid benefits are denied, reduced, or terminated, or when a claim for medical assistance ‘is not acted upon with reasonable promptness.'” (Id. ¶ 31 (citing 42 U.S.C. § 1396a(a)(3); 42 C.F.R. § 431.220).) DHHR's Board of Review (“BOR”) is the entity in front of which I/DD Waiver Program recipients may seek a fair hearing under federal law, and the Complaint notes that BOR must “‘take final administrative action' on a fair hearing request ‘within 90 days' of the date the fair hearing was requested.” (Id. at 8 ¶ 34 (citing 42 C.F.R. § 431.224(f)).)

         The Complaint alleges that “[s]tarting as late as August of 2016, BOR established a practice of holding Medicaid fair hearings in abeyance pending any settlement, voluntary dismissal, compromise, final decision by the Court, or becomes moot due to the expiration of the Appellant's current service year in the Michael T. litigation, Civil Action No.[ ]2:15-CV-09665.” (Id. ¶ 37 (internal quotation marks omitted).) DRWV claims that one I/DD Waiver Program recipient requested a fair hearing but never received one and was never informed of BOR's decision to hold the hearings in abeyance. (Id. ¶ 38.) The organization also alleges that another recipient was informed via telephone that his or her requested fair hearing was being held in abeyance. (Id. ¶ 39.) Because of these actions, DRWV argues that program recipients were forced “to go without hearings and final administrative decisions for a time extending beyond 90 days, ” resulting in a loss of “waiver benefits needed for long-term maintenance of their integrated living arrangements.” (Id. at 9 ¶ 43.)

         A. Motion to Dismiss

         Defendant's motion is premised on two grounds. First, Defendant argues that DRWV's equitable claims are moot given certain actions DHHR has taken since the Complaint was filed. (See ECF No. 12 at 3.) Specifically, Defendant attaches to his motion an affidavit from Ms. Cheryl Henson, BOR Chairman, noting that all I/DD Waiver Program recipients with Medicaid fair hearings held in abeyance received letters notifying them that their hearing was scheduled for a status conference to set a final hearing date. (See ECF No. 11-1.) Ms. Henson further provided that “members of the I/DD Waiver program [who] have filed for a Medicaid fair hearing, and whose case has not already been adjudicated, will have a final hearing scheduled in the immediate future, unless he or she exercises his or her right to request a continuance of such hearing.” (Id. at 2.) Second, Defendant avers that DRWV does not have standing to pursue the compensatory or other monetary relief requested on behalf of the I/DD Waiver Program recipients because there are no named individual plaintiffs in this case and the organization lacks representational standing. (See ECF No. 12 at 4-5.) In terms of representational standing, Defendant states that DRWV cannot meet the third prong of the Supreme Court's test in Hunt v. Washington State Apple Advertising Commission because “[t]he very nature of the relief sought in the Complaint is individualized and will require participation by each and every such individual to determine the appropriate alleged amounts owed to each individual and any alleged harm that each individual suffered.” (Id. (citing 432 U.S. 333, 343 (1977)).)

         In DRWV's response to the motion, it argues that “Defendant's summation of the issues at large grossly oversimplifies the matters at controversy and the relief sought by DRWV through the Complaint.”[1] (ECF No. 14 at 2.) DRWV claims that the issues in this case are not moot as Defendant suggests because DHHR's voluntary cessation of conduct does not guarantee that the alleged misconduct will not occur again in the future. (See Id. at 3-4 (“[I]t is quite reasonable to assume based on the increase in litigation activity involving the WV I/DD waiver program that new abeyance orders could be issued by the BOR.”).) Further, DRWV states that it is seeking a claim pursuant to 42 U.S.C. § 1983 “to address any failure by Defendant to comply with the reasonable promptness provision of the Medicaid Act, ” which encompasses a private right of action not mooted by DHHR's change in practice. (See Id. at 4-5; see also Id. at 6 (“The violation of the promptness period is the core injury here not the denial of the fair hearings.”).) Lastly, DRWV argues that it has standing in the representational context because the damages suffered and remedies sought are “common to the group, ” meaning that the individually harmed I/DD Waiver Program recipients do not need to participate or be named in this litigation. (See Id. at 5- 6 (noting also that the organization itself “has been and continues to be injured by this suit”).)

         Defendant's reply contends that many of DRWV's arguments are red herrings in the sense that DRWV ignores the crux of Hunt's third prong regarding the necessity of individual participation in this suit based on the relief requested. (See ECF No. 15 at 1, 2 (“DRWV's argument can be summed up as follows: the case is not moot and the organization has standing because Defendant could reinstate the abeyance orders at any time and there is case law that states a § 1983 claim is the appropriate vehicle for an individual to pursue a private action for violation of a Medicaid Act provision.”).) Defendant states that DRWV's belief that DHHR may decide to reinstate the abeyance orders sometime in the future is “completely speculative and not actionable . . . .” (Id. at 2.) Defendant also contests DRWV's discussion regarding its § 1983 claim, noting that the main case cited in support of that discussion concerned “an individual recipient . . . who was personally aggrieved . . . and, therefore, filed a personal action . . . to recover personal damages.” (Id. at 3 (emphasis in original) (citing Doe v. Kidd, 501 F.3d 348 (4th Cir. 2007)) ...

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