Salazar v. Dist. of Columbia
Opinion
This case involves an injunction garbed in the clothing of a consent decree modification. While district courts generally have discretion under Federal Rule of Civil Procedure 60(b)(5) to adjust the terms of an existing consent decree in light of changed circumstances, the issuance of a new injunction must meet the strict preconditions for such exceptional relief set out in Federal Rule of Civil Procedure 65. Because the district court's order in this case provided brand new relief based on brand new facts alleging violations of a new law without the requisite findings for an injunction, it crossed the line from permissibly modifying into impermissibly enjoining. For that reason, we reverse the district court's order, vacate the new injunctive relief, and remand for proceedings consistent with this opinion.
I
A
By way of background, under long-established practice, federal courts may enter, as final judicial orders, consent decrees that reflect the agreement of the parties to forward-going injunctive relief, as long as the consent decree arises from and resolves a dispute "within the court's subject-matter jurisdiction[.]"
Frew v. Hawkins
,
As relevant here, Rule 60(b) permits modification or relief from a judgment when: (i) it "has been satisfied, released or discharged;" (ii) "it is based on an earlier judgment that has been reversed or vacated;" (iii) "applying it prospectively is no longer equitable," FED. R. CIV. P. 60(b)(5) ; or (iv) there is "any other reason that justifies relief," FED. R. CIV. P. 60(b)(6).
When a party seeks relief under Rule 60(b), that party bears the threshold burden of proving that a "significant change" in legal or factual circumstances "warrants revision of the decree."
Rufo v. Inmates of Suffolk Cty. Jail
,
B
Title XIX of the Social Security Act,
With exceptions not relevant here, both federal and local law have long required the District of Columbia to make Medicaid eligibility determinations within 45 days of an application for benefits,
Historically, the District conducted the application and recertification processes by paper and mail. That system required beneficiaries to take the affirmative step of mailing in the required paperwork to continue their benefit eligibility.
See
Liability Order
,
In 2010, the Patient Protection and Affordable Care Act, Pub. L. 111-148,
For such tax-based eligibility determinations, the District had to replace its old paper recertification system with a new passive renewal model. The passive renewal program first attempts to automatically renew eligibility based on available electronic federal and local tax records.
See
The District began to implement its passive renewal system in late 2012 by building a new, automated eligibility system called the DC Access System. When the DC Access System is fully realized, the District plans to retire its legacy application and recertification system. However, the transition from the old system to the new DC Access System has been halting, due to "technology challenges, contracting issues, and funding." J.A. 827. The plodding transition between systems proved problematic for many individuals' Medicaid application and renewal process. J.A. 1298.
C
1
In 1993, long before the Affordable Care Act emerged on the scene, Plaintiffs-a broad group of Medicaid applicants and recipients-filed a class action against the District of Columbia principally alleging that the District's administration of its Medicaid program violated the Medicaid statute, its implementing regulations, District of Columbia law, and the United States Constitution.
The putative class action proved actually to be an amalgamation of several subclasses, and within each subclass the Medicaid applicants and recipients asserted a distinct and "particular set of claims."
Salazar v. District of Columbia
,
After a bench trial in 1996, the District was found liable to Subclasses III, IV, and V for numerous violations of the law.
See
Liability Order
,
As for the individuals in Subclass IV facing suspension or termination of their benefits, the court held that a pattern of critical failures in the District's Medicaid recertification process violated the due process rights of the Subclass members and also ran afoul of various statutes and regulations.
Liability Order
,
Finally, for the children and their parents that composed Subclass V, the court ruled that the District was violating its Early Childhood Services obligations by failing (i) to adequately notify eligible families about Early Childhood Services, (ii) to ensure that children eligible for such services receive complete screening services and necessary follow-up diagnoses and treatments, and (iii) to provide scheduling and transportation assistance to Early
Childhood Services recipients.
Liability Order
,
2
The District appealed. In 1999, while that appeal was still pending, the parties reached a settlement agreement, which the district court approved as the governing Consent Decree in this case. The Consent Decree divided the District's obligations by sections that very roughly mapped onto the remaining Subclasses, albeit (alas) with non-corresponding roman numerals.
Sections II and IV of the Consent Decree (which, to escape all the roman numerals, we will refer to as the "Eligibility Provisions") addressed Subclass III's grievances concerning the District's slow handling of initial Medicaid applications. It generally required the District to determine Medicaid eligibility within 45 days of an application's submission.
Section III of the Consent Decree (the "Renewal Provisions") addressed the District's failure to provide the legally required notice to Subclass IV members of the need to renew their Medicaid eligibility, and it mapped out a detailed schedule for the District to follow in processing recertification forms and providing advance notice to beneficiaries of the District's eligibility determinations.
Finally, Sections V and VI (the "Early Childhood Provisions") remedied the District's failures to provide notice of and to deliver Early Childhood Services to the Subclass V members by requiring the District to adopt a variety of measures designed to improve access to and the provision of Early Childhood Services. Section V of the Consent Decree applies only to "Medicaid recipients"-that is, persons already enrolled in the Medicaid program. Section VI of the Consent Decree required the District to "effectively inform all pregnant women, parents, child custodians, and teenagers" whom the District had "found eligible for Medicaid benefits" of the availability of Early Childhood Services. J.A. 286 ¶ 54.
Each Consent Decree section prescribed specific criteria for measuring when the District had satisfied the terms of the Consent Decree and could exit from its governance, generally framed in terms of demonstrated levels of compliance over a specified period of time. 1 The Consent Decree would automatically terminate in its entirety "at the same time" the last remaining section of the Consent Decree was satisfied and coverage ended. J.A. 296.
The district court "retain[ed] jurisdiction of this matter to make any necessary orders enforcing or construing this Order." J.A. 296 ¶ 79. The Decree also provided that either party could, at any time, move the court to modify the Consent Decree if a "change of law" materially affected the District's continuing obligations under the Consent Decree. J.A. 293 ¶ 70. The district court's review of any request for modification was to be controlled by the "general body of federal law governing motions to modify orders in contested matters pursuant to Rule 60(b) of the Federal Rules of Civil Procedure[.]" J.A. 294 ¶ 72.
3
Over the next fourteen years, several provisions of the Consent Decree terminated. In 2009, the parties agreed that the District had come into compliance with the standards governing the timely processing of initial Medicaid applications for the Plaintiffs in Subclass III. As a result, the district court "vacated" the Eligibility Provisions (Sections II and IV) of the Consent Decree. Salazar v. District of Columbia , No. 93-452, MINUTE ORDER (D.D.C. Feb. 24, 2009) (" 2009 Vacatur Order "). The district court also specifically ordered that its "supervision over" the Eligibility Provisions of the Consent Decree "is ended." Id . (adopting the language of the proposed order).
The Renewal Provisions for Subclass IV were the next to go. The District requested termination of the Renewal Provisions following enactment of the Affordable Care Act because that law materially changed the law governing the renewal of beneficiaries' Medicaid eligibility. Specifically, the Act required the District (and States) to implement a passive renewal system that started with the individual's federal tax filing and generally required no affirmative action by the beneficiary.
See
42 U.S.C. § 1396a(e)(14) ;
In October 2013, the district court granted the District's motion. The court explained that the Affordable Care Act "created a 'significant change in circumstances' "-indeed, "almost a seismic change" in the governing law-"that justifies termination of the [Renewal P]rovisions of Section III[.]"
Salazar v. District of Columbia
,
In particular, the Affordable Care Act's "brand new recertification procedure" was "in direct conflict with the renewal process set forth in" the Renewal Provisions of the Consent Decree, and rendered the steps required of the District under the notice requirements of the Consent Decree "inaccurate, confusing, and unnecessary."
2013 Termination Order
,
After the 2009 Vacatur Order and the 2013 Termination Order , no provisions of the Consent Decree relating to Medicaid eligibility determinations or renewals remained in effect. The only portions of the Consent Decree that were still operative on the District were the Early Childhood Provisions, which governed issuing notice about and the delivery of Early Childhood Services for already Medicaid-eligible children and their family members in Subclass V. Over the next two years, the parties continued to litigate various issues concerning those portions of the Consent Decree, as well as ancillary reimbursement issues.
D
In December 2015, the Plaintiffs filed a motion for a preliminary injunction to require the District to (i) provisionally approve all Medicaid applications that had been pending for more than 45 days, until the District made a final determination, and (ii) continue the eligibility of all Medicaid recipients due to be renewed, until the District was able to demonstrate that its technology and business processing systems function in an adequate and timely manner. The motion alleged widespread failures by the District to process Medicaid applications and renewals under the Affordable Care Act, as well as significant technological problems that resulted in the improper termination of Medicaid benefits.
While the preliminary injunction motion was being briefed, the District resolved "all of the thousands of remaining" Medicaid processing errors.
Salazar v. District of Columbia
,
Roughly one week after briefing on the preliminary injunction concluded, the Plaintiffs filed a motion under Federal Rules of Civil Procedure 60(b)(5) and (b)(6) to "modify" the Consent Decree to achieve precisely the same relief as the pending motion for a preliminary injunction, with the small difference that the Rule 60(b) motion also asked for monthly reporting by the District.
Salazar
, No. 93-452, PLS.' MOTION FOR MODIFICATION OF THE SETTLEMENT ORDER , ECF No. 2093 at 1 (Feb. 9, 2016);
see
2016 Order
,
On April 4, 2016, the district court granted the Plaintiffs' motion to modify the Consent Decree and then denied the motion for a preliminary injunction as moot.
2016 Order
,
On that basis, the district court ordered the District (i) to provisionally approve all Medicaid applications pending more than 45 days, and (ii) to continue for ninety days the eligibility of Medicaid recipients who were up for renewal.
See
2016 Order
,
The district court subsequently entertained several motions concerning the 2016 Order . On May 17, 2016, the court granted the District's motion to stay the 2016 Order pending appeal. Salazar , No. 93-452, ORDER GRANTING MOTION TO STAY , ECF No. 2134 (D.D.C. May 17, 2016). Two weeks later, the court denied the District's motion to alter or amend the 2016 Order because the stay was in place and the District's appeal of the 2016 Order was already pending in this court. Id ., ORDER DENYING MOTION TO AMEND , ECF No. 2141 (D.D.C. June 2, 2016). Finally, on July 12, 2016, the district court granted in part Plaintiffs' motion to narrow the stay entered in May, causing portions of the 2016 Order to go into immediate effect. Id ., ORDER GRANTING IN PART MOTION TO MODIFY STAY , ECF No. 2150 (D.D.C. July 12, 2016). The District appealed the district court's April 4th, June 2nd, and July 12th Orders separately, and we consolidated the three appeals.
II
The district court exercised jurisdiction over the class action under
We generally review orders on Rule 60(b) motions for an abuse of discretion,
Twelve John Does v. District of Columbia
,
III
There is a critical difference between a district court's power to modify an ongoing consent decree and its authority to impose a new injunction. By trying to force the square peg of a new injunction into the round hole of modification, the district court impermissibly crossed that line.
An injunction is an exceptional form of relief.
Monsanto Co. v. Geertson Seed Farms
,
Ordinarily, to obtain a running structural injunction, the plaintiff bears the burden of proving both the facts that warrant such intrusive relief and that (i) the plaintiff(s) suffered an irreparable injury, (ii) traditional legal remedies cannot redress the injury, (iii) the balance of hardships between the parties justifies extraordinary relief, and (iv) the injunction is not counter to the public interest.
See
,
e.g.
,
eBay Inc. v. MercExchange, LLC
,
The standard for obtaining a consent decree is somewhat less demanding,
but that is because it depends centrally on the parties' mutually agreed resolution of a legal dispute.
Local 93, Int'l Ass'n of Firefighters v. City of Cleveland
,
When an injunction or consent decree has been entered as a final judgment, the district court retains the authority under Federal Rule of Civil Procedure 60(b) to provide "[r]elief from [the] Judgment" if, as relevant here, "applying it prospectively is no longer equitable," or "any other reason * * * justifies relief" from the injunctive order. FED. R. CIV. P. 60 (title) & 60(b)(5) & (6). Rule 60(b)'s standard is a "flexible" one.
Rufo
,
As Rule 60(b)'s title indicates, the overwhelming majority of motions to modify the terms of a consent decree are filed by the
enjoined
party seeking "relief from" the court's judgment. That is not to say that such Rule 60(b) motions can never be filed by the plaintiff seeking to enforce the terms of the injunction. We have previously recognized that a court's "broad[ ] and flexible" equitable powers, which Rule 60(b) codifies, may allow a district court to "tighten [a] decree" as well.
Western Elec.
,
When a plaintiff seeks to enhance a consent decree's terms, courts must be careful to ensure that the new injunctive terms give effect to and enforce the operative terms of the original consent decree. Courts may not, under the guise of modification, impose entirely new injunctive relief. That practice would end run the demanding standards for obtaining injunctive relief in the first instance, would deny the enjoined party the contractual bargain it struck in agreeing to the consent decree at the time of its entry, and would destroy the predictability and stability that final judgments are meant to provide.
Frew
,
Undoubtedly in some cases, the line between the permissible tautening of an injunction's terms and the impermissible imposition of a new injunction will be difficult to discern. Not so here. This injunction comes as an injunction.
First , the district court's opinion admits as much. The decision announced that it was imposing " additional injunctive relief, based on the new factual circumstances,"
2016 Order
,
In that same vein, it bears noting that the Plaintiffs themselves originally sought a brand new preliminary injunction to obtain the relief they wanted. It was not until almost three months later, after their preliminary injunction motion had been fully briefed, that the Plaintiffs decided to try the Rule 60(b) route. As it turns out, their first instinct that they were seeking a new injunction was the correct one.
Second
, the district court's order provided relief for Subclasses of Plaintiffs and corresponding sections of the Consent Decree that had already been vacated or terminated. The new injunctive obligations sought to enforce compliance with the Affordable Care Act's provisions governing the initial eligibility for and renewal of Medicaid eligibility.
2016 Order
,
The district court insisted that its order did not revive closed aspects of the Consent Decree, but instead gave effect to the "only [executory] portions" of the Consent Decree still "in force"-the Early Childhood Provisions governing notification for and the delivery of Early Childhood Services.
2016 Order
,
The court's order also applies unqualifiedly to all Medicaid applicants and beneficiaries seeking renewal, without regard to whether they are children or have children. The order, in other words, based a remedy of classwide structural reform on anecdotal evidence and individual testimonies, only a subset of which implicated the children for whose benefit the Early Child Services exist. Indeed, despite a lengthy recitation of Affordable Care Act implementation issues culled from a voluminous record, the district court cited only four instances where the putative Medicaid recipients even had eligible children.
See
2016 Order
,
The district court's new injunctive obligations, in short, have no anchor in the remaining executory portions of the Consent Decree and seek to provide benefits to many individuals wholly outside the remaining operative Subclass. Writing new injunctive obligations governing eligibility and renewal into Consent Decree provisions that never addressed those matters and extending the protections to individuals never included within the corresponding Subclass would turn the power to modify a consent decree into an injunctive blank check. "Who would sign a consent decree if district courts had free-ranging interpretive or enforcement authority untethered from the decree's negotiated terms?"
Pigford
,
Third
, and finally, this case vividly illustrates the hazards of an uncabined conception of Rule 60(b) modification. The district court imposed brand new injunctive commands on governmental operations without any of the ordinary protections for such exceptional relief. The district court resolved factual disputes in the record against the District.
See
2016 Order
,
Yet no such showing of a persisting structural breakdown was made on this record. The court made no factual finding of a pattern or high volume of eligibility or renewal delays. Instead, the district court faulted the District for not "
entirely
remediat[ing]" the problems arising from the transition to the Affordable Care Act.
Id
. (emphasis added). But a local government cannot be subjected to ongoing classwide structural relief simply because a problem has not been 100% eradicated.
See
Lewis v. Casey
,
Even crediting the district court's finding of a handful of individual processing errors by the District-disputed facts that were resolved without a hearing or discovery-the district court's assertion that it could not "separate individual mistakes" from "systemic" ones,
2016 Order
,
* * * * *
The district court's imposition of sweeping new injunctive obligations to redress new factual problems arising under a new law and providing relief under no longer operative provisions of the Consent Decree cannot be forced into the mold of a Rule 60(b) modification. For the foregoing reasons, we reverse the orders of the district court, vacate the modification, and remand for further proceedings consistent with this opinion.
So ordered.
See, e.g. , J.A. 254 ¶ 8, 294 ¶ 74 (establishing that the District would satisfy the Eligibility Provisions' application processing obligations by timely processing at least 95% of all initial applications averaged over any four consecutive months for three years); J.A. 261 ¶ 17, 262 ¶ 19, 294-295 ¶ 75 (the Renewal Provisions' recertification compliance would be satisfied upon the District's processing of at least 95% of all recertifications for "non-Public Assistance, non-foster care, Medicaid recipients" averaged over any four consecutive months for three years); J.A. 295 ¶ 76 (District could end court oversight of the Early Childhood Provisions' eligibility renewal processes by showing its systems "accurately confirmed the eligibility status of 98% of all requests for eligibility verification for twenty-two (22) of twenty-four (24) consecutive months and accurately confirmed the eligibility status of at least 95% of all requests for each of the other two (2) months * * * and have accurately confirmed the eligibility status of at least 98% of all requests for" one month that Plaintiffs were designated to randomly select).
Reference
- Full Case Name
- Oscar SALAZAR, BY His Parents and Next Friends, Adela and Oscar SALAZAR, Et Al., Appellees v. DISTRICT OF COLUMBIA, Et Al., Appellants Chartered Health Plan, Appellee
- Cited By
- 15 cases
- Status
- Published