MASSACHUSETTS ASSOCIATION OF OLDER AMERICANS, et al., Plaintiffs, Appellees, v. COMMISSIONER OF PUBLIC WELFARE, Defendant, Appellant.
No. 86-1126
United States Court of Appeals, First Circuit
Decided Oct. 15, 1986
Argued Sept. 5, 1986.
It is not clear to us that GANCI raised before the district court the Article XVIII objections now being made before us. It is clear, however, that GANCI never introduced any evidence that the November 19 telephone call was made prior to 5:00 p.m. and that GANCI had at that or any other time raised the two Article XVIII objections at issue on appeal. Salvadore, in testifying regarding the content of the November 19 conversation, stated merely that “I told [Nichols] that they were in violation of the agreement of September 28th and that they had no right to terminate.” As noted previously, the evidence was uncontroverted that GANCI accepted the two amendments at issue, and to overcome or retract such a prior manifestation of assent, GANCI was obligated to do more than raise the amorphous eleventh hour objection that it did. Accordingly, given that GANCI offered no evidence to refute the assertions of Nichols that GANCI had assented to the provisions at issue today, and even accepting Salvadore‘s testimony regarding the November 19 phone call as true, the content of the phone call did not in our view suffice to retract GANCI‘S prior, and undisputed, manifestation of assent.
Three salient points, then, emerge on the issue of waiver. First, the district court found as fact that GANCI never raised an Article XVIII objection prior to late afternoon on November 19. Second, the evidence is uncontroverted that, as to the two specific Article XVIII objections noted in GANCI‘s appellate brief, GANCI never raised these, or even intimated that they existed, during the November 19 phone call or at any point prior (i.e., during the relevant time period in which GANCI could make objections below). Third, the evidence is not only uncontroverted that GANCI remained silent, but it is undisputed that GANCI approved, in the course of negotiations below, the provisions that allegedly shock it so now. Thus, GANCI‘s argument—that it did not waive an Article XVIII objection because it did not approve the Second Restated Agreement as a binding contract—completely obfuscates the limited nature of its Article XVIII objections and the undisputed testimony that GANCI‘s assent to these provisions was never retracted. Accordingly, that the amendments GANCI objects to may violate the clear mandate of Article XVIII is irrelevant, for we conclude that, as to these amendments, the undisputed facts establish a waiver by GANCI of its Article XVIII right to object.
For the foregoing reasons, the judgment of the district court is affirmed.
Thomas E. Noonan, First Deputy General Counsel, Dept. of Public Welfare, Hyde Park, Mass., with whom Francis X. Bellotti, Atty. Gen., and E. Michael Sloman, Asst. Atty. Gen., Government Bureau, Boston, Mass., were on brief, for defendant, appellant.
J. Paterson Rae, Western Massachusetts Legal Services, for plaintiffs, appellees.
Before CAMPBELL, Chief Judge, BOWNES and TORRUELLA, Circuit Judges.
The Massachusetts Commissioner of Public Welfare, defendant-appellant, appeals from a district court order holding him in civil contempt. The district court found that defendant violated an injunction contained in a so-called Partial Final Judgment issued on May 25, 1983, the judgment having been issued in accordance with the decision of this court in Massachusetts Ass‘n of Older Americans v. Sharp, 700 F.2d 749 (1st Cir. 1983). The Commissioner contends that his implementation of the judgment does not violate the injunction, and, moreover, that, read in conjunction with the contempt finding‘s remedial order, the terms of that judgment are too vague to constitute a valid exercise of judicial authority. We affirm the district court‘s ruling.
I. Prior Proceedings
The injunction allegedly violated stems from a challenge to the Massachusetts Department of Public Welfare‘s practice of automatically terminating a person‘s Medicaid benefits when his or her Aid to Families with Dependent Children (AFDC) or Supplemental Security Income (SSI) benefits were terminated. AFDC and SSI recipients, the “categorically needy,”
The Massachusetts Department of Public Welfare (“the Department“) had been fol-
The Department responded to the Partial Final Judgment by converting AFDC and SSI recipients who had had their benefits terminated to an appropriate “medically needy” category of Medicaid and continuing to provide Medicaid benefits without interruption. It then reexamined the cases to verify continuing eligibility for those benefits. The Department‘s conduct of this reexamination process, the history of which was the reason for the contempt citation, proceeded differently in the case of former AFDC, as opposed to former SSI, recipients.
For AFDC cases, the Department initially had Medicaid workers reexamine the files of the terminated recipients. Based on the materials in the file, the worker would take one of three actions: make a determination of Medicaid eligibility or ineligibility; request further information from the recipient if necessary to complete the file; or schedule a full redetermination if eligibility could not be otherwise deter-1mined. If, after this procedure, the recipient was found to be ineligible, he or she would be terminated from Medicaid. If the recipient was determined to be eligible, Medicaid entitlement was considered to be established as of the day after the AFDC termination and a full redetermination was scheduled for six months after that date.
This verification system essentially remained unchanged until September, 1984.1 At that time, the Department, without informing the district court, the plaintiffs or the public, modified its procedures by dividing the AFDC cases into three categories. First, if AFDC benefits had been terminated for unearned excess income or excess assets, continuing eligibility for Medicaid was determined by computer and the recipient sent the appropriate notification. Second, if the AFDC case had been terminated for reasons that suggested that the recipient would soon reestablish AFDC eligibility, and therefore Medicaid eligibility, no action was taken for thirty days. If this reestablishment did not occur, the recipient was sent a “redetermination form,” requesting information relating to eligibility. This form, mailed out at regular intervals to all Medicaid recipients as part of verification of continuing eligibility, requested information substantially identical to that requested of new applicants for Medicaid. The third category consisted of the remaining recipients terminated from AFDC; they were sent Medicaid redetermination forms at the same time as their AFDC termination.
As to SSI recipients whose benefits had been terminated, the Department‘s reexamination process, implemented after the Partial Final Judgment, remained unchanged throughout the period at issue. Upon termination from SSI, recipients were mailed a Medicaid redetermination form by the Department.
For those former AFDC and SSI recipients sent redetermination forms, continued
In April, 1985, the plaintiffs requested the district court to hold the Department in contempt. They alleged that the Department had failed to obey the Partial Final Judgment for AFDC terminations since September, 1984, and had never complied with the court‘s order regarding the SSI cases. Plaintiffs contended that the Department‘s practice was substantially similar to its prejudgment practice of notifying recipients at the time of their termination from AFDC that they could reestablish Medicaid eligibility by filing an independent Medicaid application. Plaintiffs claimed, and the Department did not dispute, that, at least with regard to the terminated AFDC cases, recipients had often undergone a redetermination just prior to their termination from that program. There was testimony to the effect that the various requests for information confused recipients and were often duplicative. The Department, on the other hand, contended that the continuation of benefits, the possibility of redetermination, and the opportunity to request a hearing distinguished its practice from that of the prejudgment period. It also offered the results of a Department study which indicated that, in cases where recipients were terminated for failure to provide information, the requested information had not already been available in the case file.
II. Standard of Review
We first consider the appropriate standard of review for civil contempt, about which the parties disagree. The general rule subjects the grant or denial of a motion for contempt to the discretion of the trial court, whose decision is only reviewable for an abuse of that discretion. Massachusetts Ass‘n for Retarded Citizens v. King 668 F.2d 602, 607 (1st Cir. 1981); Donald F. Duncan, Inc. v. Royal Tops Manufacturing Co., 343 F.2d 669, 669-70 (7th Cir. 1965). It is assumed that a trial court will consider the gravity of any exercise of the contempt power, which, as the Supreme Court has noted, is a “potent weapon.” International Longshoremen‘s Ass‘n, Local 1291 v. Philadelphia Marine Trade Ass‘n, 389 U.S. 64, 76 (1967).
The general rule must be adapted to the context in which a particular case arises. Thus, as we have observed, the “wide variety of circumstances in which contempt proceedings may arise” has led to “differing articulations of the standard of review.” AMF, Inc. v. Jewett, 711 F.2d 1096, 1101 (1st Cir. 1983). For example, because a consent decree entered into by private parties must be interpreted according to principles analogous to those involved in contract interpretation, “[c]ourts of appeal have considerable freedom to review the district court‘s determination of such matters, which are often characterized, whether or not correctly, as ‘questions of law.‘” Id. at 1100. On the other hand, in examining a decree issued in public law litigation, as in the present case, the appellate court should recognize that broad “judicial discretion may well be crucial” for the district judge to secure “complex legal goals.” Id. at 1101. In such cases, the district judge often must undertake a “continuing” involvement in the case, an involvement requiring flexibility both in the formulation of the decree and in the determination of the appropriate response to ensuing requests for “enforcement or modification of the original order in light of changing circumstances.” Chayes, The Role of the Judge in Public Law Litigation, 89 Harv. L.Rev. 1281, 1292-98 (1976); Massachusetts Ass‘n for Retarded Citizens v. King, 668 F.2d at 607-08.
Finally, the reviewing court‘s deference to the district court‘s manner of enforcing compliance with the decree must vary according to the substantive matter at issue.
In the present case, the interest at stake—entitlements to subsistence-level benefits—is great, see Mathews v. Eldridge, 424 U.S. 319, 340-43 (1976); Goldberg v. Kelly, 397 U.S. 254, 264 (1970), making the consequences of failure to comply quite serious.
These considerations concerning the “interest at stake” and the “consequences” of compliance or a failure to comply are certainly applicable to the matter now before us since it involves financial assistance to the needy for medical services.
III. The Contempt Finding
In light of the foregoing principles, we consider whether the district court has abused its discretion in its formulation of the Partial Final Judgment, in its finding of a violation of the judgment‘s terms and in its use of the contempt power to enforce compliance with those terms. The Partial Final Judgment issued by the district court stated:
(1) The defendant‘s present practice of automatically terminating the medicaid benefits of any recipient whose AFDC or SSI benefits are terminated, is hereby declared to be invalid.
(2) The defendant is enjoined permanently from terminating the Medicaid benefits of any recipient whose AFDC or SSI benefits have been or are about to be terminated, unless and until he has first:
(a) Determined on the basis of facts in the recipient‘s case file that the recipient no longer meets the eligibility criteria for receiving Medicaid benefits; and
(b) Provided the recipient with written notice of the proposed termination, at least ten days in advance of the effective date of the proposed termination, which notice must explain: (i) the precise reasons for the termination, including a citation to the regulations on which it is based; (ii) the recipient‘s right to a fair hearing to challenge the Medicaid termination and the manner in which such a fair hearing may be requested; and (iii) that, if the recipient‘s fair hearing is filed by a date certain (which date must be no earlier than ten days from the date on which notice is provided), the recipient‘s Medicaid benefits will be continued pending the fair hearing decision.
Appellant contends that the Department‘s method of verifying continuing eligibility through the use of redetermination forms is not excluded by the language of § 2(a) of the Partial Final Judgment. Specifically, he argues that the redetermination form, once submitted by the recipient, may be considered to be a “fact in the case file” and that the failure to submit the form may also be viewed as such a “fact.”
The Partial Final Judgment was issued pursuant to our decision in Sharp, 700 F.2d 749. We stated our holding in part as follows:
The case is remanded to the district court with instructions to issue forthwith a preliminary injunction reinstating the Medicaid benefits ... [and] requiring redetermination of Medicaid eligibility prior to termination of benefits....
Id. at 754. Appellant contends that this language, particularly the words, “requiring redetermination,” supports the acceptability of the Department‘s method of reconsidering the terminated recipients’ Medicaid status.
In reaching our conclusion, however, we made reference to a closely related case, a reference which clarifies the meaning of the above paragraph:
In Stenson v. Blum, 476 F.Supp. 1331 (S.D.N.Y. 1979), aff‘d without opinion, 628 F.2d 1345 (2d Cir.), cert. denied, 449 U.S. 885 (1980), the District Court for the Southern District of New York was confronted with an issue that is nearly identical to the one presented in this case. ... In a comprehensive and well-reasoned opinion, Judge Sweet concluded that [federal] regulations require the state agency,
upon receipt of notification of an individual‘s termination from SSI, to reconsider the recipient‘s eligibility for Medicaid benefits. Pending this ex parte determination the state must continue to furnish such individuals with Medicaid benefits.... We agree with the Stenson court‘s conclusion as appropriate to the case before us.
It seems clear that the district court designed the language of the Partial Final Judgment, requiring a redetermination “on the basis of facts in the recipient‘s case file,” to conform to our approval in Sharp of the Stenson requirement of an ”ex parte determination” by the defendant. The Stenson court, as well as this court, used “determination” and “redetermination” explicitly in connection with an ex parte procedure, which is contrary to the Department‘s interpretation of redetermination: a detailed form to be submitted by the recipient.2 An ex parte procedure, such as, for example, the Department‘s own initial postjudgment system for AFDC cases, does not forbid the request of additional information when necessary. It does, however, place the onus on the Department to examine the case file either to make a decision concerning eligibility or to determine the need for additional information. The consistent line running from Stenson to our own earlier decision and the Partial Final Judgment was further extended by the language of the contempt finding: “Terminating the recipients without first looking at the file is the vice....”
Appellant, citing
Unlike the decrees in those cases, the Partial Final Judgment here satisfies the requirements of
a) Either, within thirty (30) days of this Order complete arrangements with the Social Security Administration so that the Department will have and utilize access to any former recipient‘s file for the purpose of determining, pursuant to the procedures set forth in AP/ADM-83-56 and MA-TN 62, that person‘s current ongoing eligibility for Medicaid benefits; or
b) Continue the Medicaid benefits of any such person for no less than four months before scheduling that person for a Medicaid redetermination.
The first option provides for a system of reexamination basically similar to that provided for in the case of AFDC terminations: an ex parte determination of continuing eligibility, followed in six months by a redetermination which would be required of any Medicaid recipient. The Department has delegated the responsibility for determination and redetermination of Medicaid eligibility for people who receive SSI benefits to the Social Security Administration. Therefore, to conduct the ex parte examination of the files of those terminated from SSI, the Department must first obtain access to those files from the Social Security Administration. The second option allows the Department to forego the initial ex parte file examination by simply continuing the benefits for four months before scheduling a redetermination.
The order does not specify the reason for this second option. Its presence in the order, however, does not support appellant‘s contention that a different procedure for SSI terminations, as opposed to AFDC terminations, is required. The specific instructions in the order, including the second option, flow reasonably from the contempt finding‘s statement of “the reasons for its issuance,”
We find that the Department failed to comply with the terms of the Partial Final Judgment. If the Commissioner of Public Welfare felt that those terms were inappropriate, he should have sought relief in the form of a modification of the Partial Final Judgment under
Affirmed.
LEVIN H. CAMPBELL, Chief Judge (concurring).
I concur in the court‘s opinion. I think the district court reasonably found that the Department was not adhering to the terms of the injunction contained in the Partial Final Judgment.
I wish to emphasize, however, that our opinion should not be read as tying the state to cumbersome, wheel-spinning administrative procedures. We say that appellant violated the injunction because it sought a whole new application from an applicant without first checking his or her file to see if, on the basis of existing data, medicare benefits should be continued. But I do not read our opinion as preventing the Department from requesting a beneficiary to furnish additional information when existing file data is inadequate or is questionable, nor from cutting off benefits
I also do not read our opinion as preventing the Department from moving to amend the terms of the Partial Final Judgment or the district court‘s present contempt order if it believes that the mandated procedures are technically unworkable or ambiguous, and that better procedures can be implemented consistent with the intent of Massachusetts Ass‘n of Older Americans v. Sharp, 700 F.2d 749 (1st Cir. 1983). It was not the purpose of Sharp to cause medicare benefits to be paid to ineligible receivers for any longer than strictly necessary to ensure that all eligible receivers enjoy their entitled benefits without needless interruption. Nor is it the purpose of Sharp or the present opinion to prevent the implementation of efficient cost-effective administrative procedures provided only they do not cut off the substantial rights of medicare recipients. Thus, if the Department feels that changes in the present court orders must be made, consistent with the law as laid down in Sharp, in order to provide better administration, it should feel free to bring such proposed changes to the attention of the district court, and the district court should give the matter careful attention.