Linda Frew v. Chris Traylor
820 F.3d 715
5th Cir.2016Background
- Long-running class action challenging Texas administration of EPSDT (Medicaid) led to a 1996 consent decree and a 2007 Corrective Action Order (CAO) with eleven particularized orders (CAO 637-1 through 637-11).
- Defendants moved under Rule 60(b)(5) to terminate three CAO orders (637-3, 637-8, 637-9); the district court granted termination of all three; this appeal concerns termination of CAO 637-9.
- CAO 637-9 ("Adequate Supply of Health Care Providers") contains 13 bullet points ordering (inter alia) four provider-base assessments (2008–2011) and plans to address shortages (bullets 8–10), maintenance of accurate provider lists (bullets 6–7 and consent decree ¶93), and adequate reimbursement rates (bullet 5).
- Defendants argued for Rule 60(b)(5) relief both because the requirements had been “satisfied” (prong 1) and because prospective application was no longer equitable (prong 3).
- The district court terminated all 13 bullet points; Plaintiffs appealed as to six bullet points and one consent-decree paragraph (waiving challenge to the rest). The Fifth Circuit reviews Rule 60(b) rulings for abuse of discretion and reviews legal questions de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs forfeited challenge to district court’s prong‑3 (equitable‑prospective) ruling | Plaintiffs largely brief prong‑1 (satisfaction) and say separate prong‑3 briefing unnecessary because prong‑3 relied on prong‑1 findings | Defendants contend Plaintiffs forfeited by not defending prong‑3 and that prong‑3 independently supports vacatur | Court: Plaintiffs did not forfeit; prong‑3 in this case depends on prong‑1 satisfaction, so prong‑3 cannot independently sustain vacatur absent prong‑1. |
| Whether Defendants demonstrated “satisfaction” (substantial compliance) for assessments (bullets 8–10) — specifically producing four assessments and using the correct definition of "available" | Frew: initial assessments used 12‑month window (not required 6‑month definition); Plaintiff says that unilateral deviation lost contemporaneous monitoring value and precludes termination | Janek/State: corrected assessments using 6‑month definition were produced; initial broader window was chosen for statistical reasons and Plaintiffs delayed objecting | Court: Defendants ultimately produced corrected assessments; district court correctly terminated the assessment‑production obligation portion of bullets 8–10. |
| Whether Defendants satisfied obligation to "develop a plan to address shortages" where assessments showed declines in provider:patient ratios | Frew: declines in provider:class‑member ratios across specialties/regions constitute "shortages" and require plans | Janek/State: no shortages under a functional metric; challenges Plaintiffs’ headcount ratio approach as lacking a benchmark | Court: "shortage" must be defined by comparing provider:class‑member ratio to actual average provider client loads (method the district court used in earlier orders). Because Defendants produced no evidence on those ratios/loads, the court erred to terminate the plan obligation; vacated and remanded. |
| Whether Defendants used their “best efforts” to maintain accurate provider lists (bullets 6–7 and ¶93) | Frew: directories are inaccurate; declarations/affidavits and complaint records show systemic problems; incentives and 24‑month removal policy are inadequate | Janek/State: multiple overlapping measures, contractual MCO obligations, monitoring, and reasonable practices (e.g., 24‑month removal) show best efforts | Court: "best efforts" is judged by what a reasonable person would do under circumstances; record supports district court’s factual finding of best efforts; termination of bullets 6–7 and ¶93 affirmed. |
| Whether payment levels sentence in bullet 5 was satisfied (rates “sufficient to attract enough providers”) | Frew: rates are inadequate because many class members lack required services; Plaintiffs offered no specific target rates but argue shortages show rates insufficient | Janek/State: no proven shortages; Plaintiffs offered no evidence of what rates would be sufficient or that small rate reductions reduced supply | Court: Because Defendants bore the burden to show satisfaction and did not prove rates sufficient (given unresolved shortage question), the district court erred in terminating the challenged sentence of bullet 5; vacated and remanded. |
Key Cases Cited
- Frew v. Janek, 780 F.3d 320 (5th Cir. 2015) (clarifies substantial‑compliance standard and prior CAO litigation context)
- Frew ex rel. Frew v. Hawkins, 540 U.S. 431 (2004) (Supreme Court on federalism concerns and enforcement of consent decrees)
- Frazar v. Ladd, 457 F.3d 432 (5th Cir. 2006) (earlier appeals in this litigation addressing decree dissolution and enforcement)
- Horne v. Flores, 557 U.S. 433 (2009) (Rule 60(b)(5) grounds are disjunctive; standard for modification/termination)
- Rufo v. Inmates of Suffolk Cty. Jail, 502 U.S. 367 (1992) (two‑step test for modification under Rule 60(b)(5))
- Interstate Contracting Corp. v. City of Dallas, 407 F.3d 708 (5th Cir. 2005) (explains "substantial compliance" concept under Rule 60(b)(5))