BAILEY, Judge.
The ACLU of Indiana ("the ACLU") brought a class action complaint, pursuant to 42 U.S.C. § 1983, to enjoin the practice of the Indiana Family and Social Services Administration ("the FSSA") to issue adverse action notices pertaining to Medicaid, Temporary Assistance to Needy Families ("TANF"), and Supplemental Nutrition Assistance Program ("SNAP") (collectively, "public benefits programs"), which notices generically alleged a failure to cooperate but did not specify which verification document was missing (according to FSSA records). The complaint further alleged that, with respect to SNAP, the FSSA failed to comply with the federally-mandated "refusal to cooperate" standard, instead implementing a "failure to cooperate" standard. With regard to Sheila Perdue, it was alleged that the FSSA violated the Americans with Disabilities Act of 1990 ("the ADA") and the Rehabilitation Act of 1973, 29 U.S.C. § 701, et seq., when Perdue was automatically scheduled for a telephonic interview notwithstanding her known hearing impairment and was subsequently denied benefits for "failure to cooperate." Finally, the complaint sought costs and attorney's fees pursuant to 42 U.S.C. § 1988.
Upon cross-motions for summary judgment, the trial court found that, despite the lack of specificity in an adverse action notice in particular, the FSSA procedures (as a whole) satisfied procedural due process requirements and FSSA was entitled to summary judgment in that regard. However, the trial court issued a declaratory judgment and injunction against the FSSA on two bases: that the FSSA had, in violation of federal law governing SNAP, utilized a "failure to cooperate" standard as opposed to a "refusal to cooperate" standard, and had violated Perdue's rights under the ADA and the co-extensive provisions of the Rehabilitation Act.
The certified classes of persons applying for or receiving public benefits ("the Recipients") appeal the denial of relief regarding notification practices; the FSSA cross-appeals, challenging an injunction to the FSSA to comply with federal SNAP regulations and to refrain from terminating Perdue's benefits absent accommodation for her disability. We affirm in part, reverse in part, and remand with instructions to enter summary judgment for the Recipients.
The Recipients present the issue of whether they, as opposed to the FSSA, are entitled to summary judgment because the FSSA notification practices denied them procedural due process. On cross-appeal, the FSSA presents the issue of whether the trial court erroneously granted injunctive relief.
The FSSA is responsible for public benefits programs in Indiana. This case arises from the privatization of employee functions traditionally entrusted to the FSSA. Two main changes ensued: the elimination of individually-assigned caseworkers and a drastic reduction of paper records.
In 2006 or 2007, the FSSA entered into a contract with private organizations, including IBM and Affiliated Computer Systems ("ACS"), whereby the contractors would assume responsibility for much of the daily operations of certain welfare programs, including SNAP, Medicaid, and TANF. On March 19, 2007, approximately 70% of FSSA employees became ACS employees.
Concurrent with this "privatization," a "modernization" process was implemented. "Modernization" included changes in the application process to include increased use of computers and the scanning of documents instead of maintaining paper documents. On October 29, 2007, twelve north central Indiana counties were "rolled out" into a "modernized" system. This was followed by an additional twenty-seven counties in western and southeastern Indiana being "rolled out" on March 24, 2008, and an additional twenty counties in southwestern and northeastern Indiana being "rolled out" on May 19, 2008.
For applicants and recipients in the "modernized" counties, there would no longer be an individually-assigned caseworker.
An individual seeking public benefits in Indiana must be "certified" as eligible and, if deemed eligible, must be "recertified" as eligible either annually or semi-annually (depending upon the particular program). The first step is an interview between a caseworker and a client, which is scheduled by the agency's computer system. The interview may occur in-person or telephonically, with a trend toward telephonic interviewing. In the "modernized" areas of Indiana, clients are simply sent a notice scheduling a telephonic interview. A client who fails to "appear" is sent a notice of missed interview, after which SNAP benefits cease or, with respect to Medicaid and TANF, a notice of adverse action is sent. If the client fails to reschedule within
Following the initial interview, the client is sent State Form 2032 entitled "Pending Verifications for Applicants/Recipients." Form 2032 includes boxes to be checked regarding the documentation to be provided by the client in the eligibility process (for example, Residence, Shelter, Utility Expense). Clients are advised to place their Social Security numbers on each document. An agency employee scans each document received, classifying it by using printed barcodes or other identifying characteristics, such as a case number or Social Security number. It is estimated that 1.2% of the total documents received remain "un-indexed."
When an adverse decision is made with respect to certification or recertification, the agency assigns a three-digit reason code. These have included such reasons as failure to cooperate in establishing eligibility, failure to cooperate in verifying income, failure to cooperate in verifying the value of resources, failure to verify Indiana residency, failure to cooperate in verifying assistance group composition, and failure to submit medical information. Depending upon the benefit program, other reasons may apply, such as failure to complete a personal interview and failure to return a signed redetermination form.
An individual who has received an adverse decision with respect to benefits receives a denial letter which may state:
(Ex. 8, App.265.) The notices do not necessarily specify which information remains unverified or which document is missing.
On March 26, 2008, the instant Verified Class Action Complaint for Declaratory and Injunctive Relief was filed by the ACLU. The first amended complaint was filed on May 16, 2008. The parties stipulated to certain classes. Class A (represented by all plaintiffs) is defined as:
Sub-class A consists of only those members of Class A who were denied from or will be denied from, or have been terminated from or will be terminated from, the Medicaid program. Class C consists of individuals who are denied or terminated from the SNAP program. It is represented by Kenneth Zachary. The certification of Class B was contested, the trial court denied certification, the decision was affirmed on appeal, on remand the plaintiffs withdrew the request, and ultimately, the disability discrimination claim proceeded to judgment on behalf of Perdue individually.
(Tr. 29.) (emphasis added.)
(App.30.)
(App.37-38.)
(App.38.) This appeal ensued.
We review a grant of summary judgment to determine whether there are genuine issues of material fact, and whether the moving party is entitled to judgment as a matter of law. Yates v. Johnson
The Recipients contend that, when there is an applicant or recipient failure to provide one or more eligibility documents to the FSSA, it is incumbent upon the FSSA to provide a notice that specifically identifies what eligibility document(s) is (are) missing. They challenge the use of generic "failure to cooperate" language as constitutionally inadequate. Also, the Recipients identify four situations which might give rise to an erroneous determination of "failure to cooperate" because of missing documents:
Appellant's Brief at 22-23.
"Procedural due process imposes constraints on governmental decisions which deprive individuals of `liberty' or `property' interests within the meaning of the Due Process Clause of the Fifth our Fourteenth Amendment." Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). Procedural due process requires "timely and adequate notice detailing the reasons for a proposed termination" of welfare benefits. Goldberg v. Kelly, 397 U.S. 254, 267-68, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970).
Goldberg does not specify what information a written notice must provide to satisfy due process; thus, courts must determine what detail is required. Goldberg invoked a balancing test involving a determination of the precise nature of the government function as well as of the private interest that has been affected by governmental
The Recipients have argued that a notice of adverse action letter must independently notify a recipient of the specific omission in order to meet fundamental due process requirements. The FSSA has taken the approach that all notification documents inherent in the eligibility process may be aggregated, and the trial court agreed.
The trial court did not specifically find that the challenged adverse action notices afforded the Recipients procedural due process. Rather, the trial court found that the Recipients had been afforded a "multistep process for eligibility determinations, the totality of which fully satisfies due process requirements." (App.29.) The trial court observed that the process included: "an initial interview, verbal instructions for what is needed to establish eligibility, written notice of what is needed to establish eligibility (the Form 2032), the availability of a toll free 1-800 number for assistance, the submission of the materials by the client, evaluation of the submitted materials, and, if the materials submitted by the client are inadequate to establish eligibility, a notice of adverse action describing what information was insufficient and what is still needed to establish eligibility." (App.29.)
However, this does not accurately reflect the designated record. The adverse action letters in the designated materials do not "describe what information was insufficient and what is still needed to establish eligibility." At best, the applicant has a category of omission identified in the letter. It appears that the applicant is apprised of what to provide and then, upon receipt of an adverse action notice, is expected to determine which item or items are missing or presumed missing based on the recipient's understanding of past instructions. Also, while the trial court's order might suggest otherwise, the advisement that questions may be answered during certain hours via the operation of a toll-free number appears on forms for eligibility determination, as opposed to adverse action notices.
In Driver v. Housing Authority of Racine County, 289 Wis.2d 727, 713 N.W.2d 670 (2006), the court found that public housing notices that advised tenants they had "violated a family obligation under Section 8" were constitutionally defective and thus invalid. The court noted: "Both the initial notices and the ultimate decisions, essentially form letters, fell woefully short of the level of specificity that due process requires. Nowhere did these documents specify who had violated what specific obligation and when the violation occurred, and neither gave even a rudimentary description of the incidents giving rise to the charges." Id. at 673 (emphasis in original).
In Baker v. Dep't of Health and Social Services, 191 P.3d 1005 (Alaska 2008), recipients of Medicaid-provided home care services brought a class action suit to challenge the sufficiency of notices sent from the Department of Health and Human Services indicating that services would be terminated or reduced. At the outset, the Court "reject[ed] the suggestion that `notice' here can be broadly construed to include not only the written letter, but also `information the recipients already had about the assessment process and the information the recipients already had about themselves.'" Id. at 1009. The Court indicated its agreement with "diverse authorities holding that although an agency may have latitude to provide notice by a variety of media under Goldberg, the agency must actively provide `complete' notice" and further observed that the burden of acquiring notice may not be placed upon the recipient, as due process requires the agency to supply it. Id. at 1010. The Court held "that the department cannot presume that recipients already have a basis for understanding why services are being reduced; whatever information the department is required to provide must be part of the written notice itself." Id.
In Vargas v. Trainor, 508 F.2d 485 (7th Cir.1974), the agency argued that its notice was sufficient because it invited the recipient to seek additional information. However, the Court rejected this argument, stating that the notice recipient "would be unable or disinclined, because of physical handicaps and, in the case of the aged, mental handicaps as well, to take the necessary affirmative action." Id. at 489. The Court expressed concern that many agency mistakes would stand uncorrected. Id. at 490.
The FSSA relies upon Rosen v. Goetz, 410 F.3d 919, 931 (6th Cir.2005) (holding that due process does not specifically require "notice to come in just one letter, as opposed to two"). See also Ho v. Donovan, 569 F.3d 677, 680 (7th Cir.2009) (finding notice to be adequate if it conveys all of the salient information and enables the
The FSSA also points to the availability of an administrative appeal. It contends that no agency can be expected to operate with infallibility, and the remedy of administrative appeal exists precisely to address error in administrative proceedings. The Recipients respond that the appellate process is meaningless if they are not informed as to the specific nature of missing documentation; in other words, they cannot defend on grounds that they supplied X document as opposed to Y document if the omission is not identified.
We are persuaded by the Recipients' argument that they may not effectively exercise a right to be heard on appeal absent sufficient information to adequately prepare for and pursue the appeal. Mindful that an individual receiving an FSSA adverse action notice likely has a physical, mental, or economic disadvantage (or combination thereof), it is unreasonable to expect that the recipient can act to protect his or her interests without specific information. The recipient who has received a generic-code letter theoretically has the same right of appeal as does the person who has received a more detailed letter, but is at a distinct disadvantage in preparing for an appeal. Regardless of the particular document of concern to the FSSA caseworker in reaching the decision that the recipient was uncooperative, he or she is forced to be prepared to demonstrate on appeal that each and every document was timely provided. This places a great burden upon the disadvantaged individual.
On the other hand, while the fiscal responsibility interest of the State is a factor to be considered, Mathews, 424 U.S. at 348, 96 S.Ct. 893, we can discern no great burden upon the FSSA to identify the specific reason for its denial decision. Indeed, at oral argument, the FSSA was not able to articulate a reason why the caseworker could not readily identify the particular omission that caused the caseworker to reach the conclusion of lack of cooperation. More importantly, even if a task is burdensome, it may not be avoided when its completion is a component of due process. See Goldberg, 397 U.S. at 270, 90 S.Ct. 1011 (observing that "evidence used to prove the Government's case" must "be disclosed to the [welfare applicant] so that he has an opportunity to show that it is untrue").
The Recipients had due process rights, at a minimum including the right to notice and an opportunity to be heard. However, Recipients were routinely given non-specific notice of adverse decisions, hampering their right to be heard on appeal. Moreover, the provision of a telephone number as part of the advice of right to appeal essentially provided a mechanism whereby the individual could seek more specific notice, that which should already have been provided. Accordingly, procedural due process was not afforded the Recipients. The Recipients demonstrated their entitlement to injunctive relief; the grant of summary judgment in favor of the FSSA is reversed.
Order Pertaining to SNAP. The FSSA, upon cross-appeal, raises the issue
In the summary judgment order, the trial court observed that neither party had argued any disputed issue of fact. The trial court essentially ordered the FSSA to follow the law—to apply a "refusal to cooperate" standard as opposed to a "failure to cooperate" standard. The FSSA does not dispute that this is the law, and has even submitted a post-hearing "Declaration" indicating that it follows the law. Even so, the FSSA claims that summary judgment was improper because the properly designated materials did not establish a violation. The FSSA seeks to disregard factual allegations of the complaint as self-serving and not corroborated. Nonetheless, the exhibits of FSSA form letters include the "failure to cooperate" language.
As for the allegedly overbroad injunctive relief, the FSSA contends that the trial court enjoined the FSSA from denying SNAP benefits even when applicants refused to cooperate. The FSSA argues that the injunction must be set aside "because it is not tailored to the actual findings and conclusions made by the trial judge on the food stamp issue." Appellee's Brief at 33. Certain of the findings addressed a lack of notice required by 7 C.F.R. § 273.2(c)(5) (informing the household of the agency's responsibility to assist the household in obtaining required verification). The finding is superfluous; the order for injunctive relief did not mirror this "notice" language in directing the FSSA to follow the law. The FSSA argues:
Appellee's Brief at 34. This is a perplexing argument. It assumes (incorrectly) that the trial court's injunction prohibited denial for "refusal to cooperate" and assumes (incorrectly) that the FSSA could properly deny SNAP applications upon mere "failure to cooperate." The FSSA has not demonstrated that the injunction is overbroad. Nor has it identified a genuine issue of material fact precluding summary judgment.
Sheila Perdue. On prior appeal from the denial of certification, the factual allegations relative to Perdue's claim were stated as follows:
Perdue, 915 N.E.2d at 501-02.
Perdue claimed that FSSA violated Title II of the ADA and also the Rehabilitation Act of 1973. The ADA provides in relevant part that "no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity." 42 U.S.C. § 12132. Section 504 of the Rehabilitation Act provides that "[n]o otherwise qualified individual with a disability ... shall, solely by reason of her or his disability, be excluded from the participation in or be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance." 29 U.S.C. § 794(a). There are subtle differences between the disability acts, but generally the standards are the same. Jones v. Housing Authority of South Bend, 915 N.E.2d 490, 494 (Ind.Ct.App.2009), trans. denied.
Perdue's claim of discrimination under the acts required her to establish: she is disabled; she is otherwise qualified for the benefits sought; she was excluded from participation or benefits because of her disability, and the entity denying her benefits received federal assistance. See id. at 495. A person is disabled pursuant to the ADA and the Rehabilitation Act if she (1) has a physical impairment which substantially limits one or more of her major life activities; (2) has a record of such impairment; or (3) may be regarded as having such an impairment. Id.
The FSSA argues that the record of designated materials does not establish Perdue's entitlement to summary judgment, claiming: "there is absolutely no evidentiary support for the trial court's findings that Perdue is deaf or that her disability was known to the agency for years and that no assistance or accommodation was provided to her." Appellee's
The trial court ordered the FSSA to refrain from terminating Perdue's benefits absent the provision of accommodation for her disability. Again, the FSSA was essentially ordered to follow the law, in this instance the ADA. Perdue is not seeking a damages award. It is unclear how the FSSA has suffered harm, but for the specter of attorney's fees. At oral argument, the FSSA conceded that it was not demonstrably harmed by injunctive orders that amounted to orders to follow existing law.
Pursuant to Indiana Trial Rule 61,
Here, we do not disturb the order of the trial court with regard to compliance with SNAP and the ADA. We find the trial court order not inconsistent with substantial justice.
Adverse action notices lacking specificity as to missing or allegedly missing eligibility documents do not comport with the requirement of procedural due process. Accordingly, the Recipients established their entitlement to injunctive relief and summary judgment in favor of the FSSA is reversed. The FSSA has demonstrated no substantial harm from an injunction to refrain from denying or terminating public welfare benefits in contravention of federal law.
Affirmed in part, reversed in part, and remanded with instructions to enter summary judgment for the Recipients.
RILEY, J., and KIRSCH, J., concur.
