O'Connor v. Eden Management LLC
1:13-cv-07391
N.D. Ill.Sep 29, 2017Background
- HOPE, a fair-housing nonprofit, and individual testers/alleged applicants sued Illinois officials and several Supportive Living Facility (SLF) operators, alleging categorical exclusion of people with mental disabilities from the Supportive Living Program (SLP).
- SLP is an Illinois Medicaid waiver program for community-based housing/services; Illinois’ SLP waiver and regulations condition eligibility on being "without a primary or secondary diagnosis of developmental disability or serious and persistent mental illness."
- Plaintiffs allege (through individual claims and testing) that SLFs and State actors effectively apply a "no mental illness" policy, denying otherwise-eligible persons admission and screening them out before need assessments.
- Plaintiffs seek only prospective injunctive relief to change waiver rules, screening, training, forms, and SLF certification practices under the Fair Housing Act (FHA), Title II of the ADA, and Section 504 of the Rehabilitation Act.
- The State Defendants moved to dismiss for lack of subject-matter jurisdiction (Eleventh Amendment/Ex parte Young and Article III) and for failure to state claims under FHA, ADA, and the Rehabilitation Act; the court denied dismissal of plaintiffs’ claims but dismissed a declaratory crossclaim by Tabor Hills for lack of a justiciable controversy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Eleventh Amendment / Ex parte Young: Are Governor and Dir. of Dept. on Aging proper defendants for prospective relief? | Governor and DOA have sufficient connection to enforcement of SLP (e.g., notices, role over DON procedures); Young allows prospective equitable relief. | Governor and DOA lack sufficient connection to enforcement of SLP screening and policies, so Young does not permit suit against them. | Denied dismissal: pleadings plausibly show the Governor and DOA have "some connection" to enforcement; Ex parte Young may apply at pleading stage. |
| Tabor Hills crossclaim for declaratory relief against State Defendants: is there Article III jurisdiction? | Tabor Hills sought declarations about whether state rules conflict with federal law and what it should follow. | State Defs. argued no justiciable controversy; crossclaim lacks a personal stake and is hypothetical/contingent on HOPE prevailing. | Granted dismissal: Tabor Hills took no position on whether federal law is violated and sought an advisory ruling contingent on HOPE's success; no concrete adverse interest shown. |
| ADA / Rehabilitation Act: Do plaintiffs plausibly allege state discrimination by excluding persons with mental disabilities from SLP? | Plaintiffs allege categorical exclusion based on mental diagnoses prevents otherwise-qualified individuals from community-based services; Olmstead’s integration mandate applies; regulations require non-discriminatory eligibility. | States have broad discretion in designing Medicaid waivers and selecting target subgroups; targeting may permissibly exclude certain diagnoses under waiver authority. | Denied dismissal: plaintiffs plausibly allege violations (incl. Olmstead theory). Regulatory discretion does not permit subgrouping that conflicts with ADA/Rehab Act; recent CMS rules require consistency with §504/ADA. |
| FHA: Are SLP participants "renters" or otherwise protected, and can SLFs/state exclude classes based on disability? | SLF participants pay room/board and receive dwelling-style services; FHA §3604(f) and §3617 can reach denial of housing/services and interference with fair housing rights. | State/SLF argue SLP participants are receiving government services (not renters) and HUD/§202 authority allows targeted occupancy, so exclusion of some disability classes can be permissible. | Denied dismissal: pleadings adequately allege plaintiffs paid consideration and that categorical exclusion made dwellings unavailable; FHA claims adequately pleaded against State Defendants. |
Key Cases Cited
- Olmstead v. L.C., 527 U.S. 581 (1999) (Title II forbids unjustified institutional isolation; states must provide services in most integrated setting appropriate)
- Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002) (prima facie evidentiary frameworks are not pleading requirements)
- Doe v. Mutual of Omaha, 179 F.3d 557 (7th Cir. 1999) (distinguishing regulation of the content of services from requiring new goods/services; limits of Title II/III reach)
- Ex parte Young, 209 U.S. 123 (1908) (Eleventh Amendment does not bar federal suits for prospective equitable relief against state officials enforcing unconstitutional state action)
- Tennessee v. Lane, 541 U.S. 509 (2004) (scope of Title II and Congress’ intent to remedy discrimination in public services)