Steward ex rel. Minor v. Abbott, 189 F. Supp. 3d 620

Background

Twelve individuals with intellectual or developmental disabilities (IDD) and two advocacy organizations sued Texas and state officials, alleging Medicaid administration resulted in unnecessary institutionalization and exclusion from community-based Home and Community-based Services (HCS) waiver supports.
The United States intervened as a plaintiff seeking substantially the same injunctive and declaratory relief as the private plaintiffs.
Defendants moved to dismiss: (1) the U.S. intervention claims for lack of standing/authority to sue under Title II of the ADA and the Rehabilitation Act; and (2) the plaintiffs’ Second Amended Complaint for lack of Article III standing and for failure to state claims under Title II/Section 504, the Medicaid Act, and the Nursing Home Reform Amendments (NHRA), including § 1983 claims asserting private enforceability of Medicaid/NHRA provisions.
Plaintiffs abandoned certain comparability claims and claims against the Governor; the Court considered standing (individual and organizational), the sufficiency of pleadings under Rule 12(b)(6), and whether specific Medicaid/NHRA provisions create enforceable rights under § 1983.
The Court denied both motions to dismiss in all respects it reached, denied dismissal of the United States’ intervention, found individual and organizational plaintiffs had standing, upheld ADA/Rehabilitation Act Olmstead-based claims, and allowed plaintiffs’ § 1983 claims asserting enforceable rights under certain Medicaid and NHRA provisions to proceed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
United States’ intervention/standing	U.S. may intervene and raise claims congruent with plaintiffs; need not independently satisfy Article III when seeking same relief.	Texas: AG lacks authorization to sue under Title II/Rehab Act; intervernor must have standing/statutory authority.	Denied dismissal; intervenor may proceed because it seeks the same relief as parties with standing; court need not decide AG’s independent authority now.
Individual and organizational Article III standing	Individuals suffer ongoing or at-risk institutionalization; orgs divert resources and represent affected members.	Defendants: many named individuals now have HCS slots (mooting claims); plaintiffs fail to identify specific policies causing injury.	Denied dismissal; relation-back doctrine and disputed facts prevent mootness; plaintiffs adequately pled injury and traceability; orgs have standing (direct and associational).
ADA/Section 504 (Olmstead) claims	State policies and administration screen IDD persons out of community services and maintain segregated institutionalization; violates Title II/§504 and Olmstead.	Defendants: Plaintiffs don’t identify a service Texas offers in institutions but denies in community; claims fail.	Denied dismissal; segregation and methods of administration that result in exclusion violate Title II/§504 under Olmstead and implementing regs.
Medicaid/NHRA claims and § 1983 private enforceability	Specific Medicaid provisions (e.g., § 1396a(a)(8), § 1396n(c)) and NHRA (§ 1396r provisions) create individual rights enforceable via § 1983; alleged failures caused institutionalization.	Defendants: statutes regulate state plans or facilities and do not create private rights; HCS program capacity undermines eligibility/claims.	Denied dismissal; court finds § 1396a(a)(8) actionable (Fifth Circuit precedent), § 1396n(c) and NHRA PASARR provisions contain rights-creating, mandatory language (and § 1320a-2 supports enforceability), so plaintiffs plausibly state § 1983 claims.

Key Cases Cited

Ruiz v. Estelle, 161 F.3d 814 (5th Cir. 1998) (intervenors need not independently satisfy Article III where they seek the same relief as a party with standing)
Newby v. Enron Corp., 443 F.3d 416 (5th Cir. 2006) (intervention and standing principles)
League of United Latin Am. Citizens v. City of Boerne, 659 F.3d 421 (5th Cir. 2011) (intervention/standing discussion)
McConnell v. Fed. Election Comm’n, 540 U.S. 93 (2003) (standing of governmental parties and intervenors)
Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999) (Title II requires placement in community settings when appropriate)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing elements)
Blessing v. Freestone, 520 U.S. 329 (1997) (test for whether a statute creates rights enforceable under § 1983)
Gonzaga Univ. v. Doe, 536 U.S. 273 (2002) (clarified rights-creating language needed for § 1983 enforcement)
Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498 (1990) (Spending Clause statute can create enforceable rights; vagueness analysis)
Romano v. Greenstein, 721 F.3d 373 (5th Cir. 2013) (Medicaid § 1396a(a)(8) creates private § 1983 cause of action)
S.D. ex rel. Dickson v. Hood, 391 F.3d 581 (5th Cir. 2004) (Medicaid provision construed as rights-creating under § 1983)
Rolland v. Romney, 318 F.3d 42 (1st Cir. 2003) (NHRA § 1983 enforceability discussion)
Grant ex rel. Family Eldercare v. Gilbert, 324 F.3d 383 (5th Cir. 2003) (PASARR/NHRA context and assumption of enforceability)