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H.O.P.E., Inc. v. Eden Management LLC

United States District Court, N.D. Illinois, Eastern Division

September 3, 2015

H.O.P.E., INC., d/b/a/ HOPE FAIR HOUSING CENTER, an Illinois Not-for-Profit Corporation; KIMBERLY O'CONNOR; and TAMMY MORMINO; Plaintiffs,
v.
EDEN MANAGEMENT LLC d/b/a EDEN SUPPORTIVE LIVING; 311 LINCOLNWAY PROPERTIES LLC d/b/a/ EDEN FOX VALLEY; 222 STATE STREET PROPERTIES LLC, d/b/a/ EDEN CHAMPAIGN LLC; MICHAEL HAMBLET JR.; MARIA DROSOS; CARLEEN CURALLI; KIMBERLYCROSS; GOVERNOR PATRICK QUINN, in his official capacity; JULIE HAMOS, in her official capacity as Director of the Illinois Department of Healthcare and Family Services; THERESA EAGELSON WYATT, in her official capacity as Acting Medicaid Director for DHFS; KELLY CUNNINGHAM, in her official capacity as Chief of DHFS Bureau of Long Term Care; JOHN K. HOLTON, in his official capacity as Director of the Illinois Department of Aging; and MICHELLE R.B. SADDLER, in her official capacity as the Secretary of the Illinois Department of Human Services, Defendants

Page 1067

          For Kimberly O'Connor, H.O.P.E., INC., an Illinois Not-for-Profit Corporation, doing business as Hope Fair Housing Center, Plaintiffs: Jennifer K Soule, LEAD ATTORNEY, James Brady Griffin, Kelly K. Lambert, Soule, Bradtke & Lambert, Elmhurst, IL; Susan Ann Silverstein, PRO HAC VICE, Aarp Foundation Litigation, Washington, DC.

         For Tammy Mormino, Plaintiff: James Brady Griffin, Kelly K. Lambert, Jennifer K Soule, Soule, Bradtke & Lambert, Elmhurst, IL.

         For Eden Management LLC, doing business as Eden Supportive Living, 311 Lincolnway Properties LLC, doing business as Eden Fox Valley, 222 State Street Properties LLC, doing business as Eden Champaign LLC, Michael Hamblet, Sr., Michael Hamblet, Jr., Maria Drosos, Carleen Curalli, Kimberly Cross, Defendants: Jason T. Lundy, LEAD ATTORNEY, Polsinelli Shughari PC, Chicago, IL; Matthew Joseph Murer, LEAD ATTORNEY, Mark Thomas Deming, Polsinelli PC, Chicago, IL.

         For Patrick Quinn, Governor, in his official capacity, John K Holton, in his official capacity as Director of the Illinois Department on Aging, Michelle R.B. Saddler, in her official capacity as the Secretary of the Illinois Department of Human Services, Defendants: Thomas A. Ioppolo, LEAD ATTORNEY, Illinois Attorney General's Office (100 W), Chicago, IL; Colin B White, Sunil Shashikant Bhave, Illinois Attorney General, Chicago, IL.

         For Julie Hamos, in her official capacity as Director of the Illinois Department of Healthcare and Family Services, Theresa Eagelson Wyatt, in her official capacity as Acting Medicaid Director for DHFS, Kelly Cunningham, in her official capacity as Chief of DHFS Bureau of Long Term Care, Defendants: John E. Huston, LEAD ATTORNEY, Karen Elaine Konieczny, Illinois Attorney General's Office, Chicago, IL.

         For Champaign Capital Venture LLC, Defendant: Jason T. Lundy, LEAD ATTORNEY, Polsinelli Shughari PC, Chicago, IL.

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         MEMORANDUM OPINION AND ORDER

         JOAN B. GOTTSCHALL, United States District Judge.

         Plaintiffs, Kimberly O'Connor and Tammy Mormino, are Medicaid recipients who believe they are eligible for the Illinois Medicaid Waiver Supportive Living Program on the basis of their physical disabilities. These two plaintiffs (the " Individual Plaintiffs" ), on behalf of themselves and a class, along with H.O.P.E., Inc. (" HOPE" ), a private, nonprofit corporation, bring this suit against, inter alia, several current and former employees of the State of Illinois (collectively, " State Defendants" ).[1] Plaintiffs

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allege that the State Defendants have unlawfully excluded individuals with mental disabilities from participating in the Supportive Living Program in violation of the Fair Housing Act (" FHA" ), 42 U.S.C. § 3601 et seq., the Americans with Disabilities Act (" ADA" ), 42 U.S.C. § 12101 et seq., and the Rehabilitation Act, 29 U.S.C. § 794.

         Now before the court are the State Defendants' motions to dismiss. For the reasons set forth herein, the motions are granted, and Plaintiffs' claims against the State Defendants (Counts IV, V, and VI) are dismissed.

         I. Background

         A. The Supportive Living Program

         Medicaid, enacted in 1965 as an amendment to the Social Security Act of 1935, is a joint federal-state program that provides medical assistance to low income individuals.[2] See 42 U.S.C. § 1396 et seq. Although the federal government does not require states to participate in the Medicaid program, once they do, they " must comply with federal statutes and regulations." Bertrand v. Maram, No. 05-cv-0544, 2006 WL 2735494, at *1-2 (N.D. Ill. Sept. 25, 2006) (citing 42 U.S.C. § 1396a(a)(10)), aff'd sub nom. Bertrand ex rel. Bertrand v. Maram, 495 F.3d 452 (7th Cir. 2007); see, e.g., 42 C.F.R. § 440.210, 440.220 (listing mandatory services a participating state must provide to the " categorically needy" and " medically needy" ).

         In this case, the State Defendants' provision of mandatory services is not at issue. Rather, the Amended Complaint centers on a voluntary program, the Supportive Living Program, which the state of Illinois initiated after " apply[ing] for and receiv[ing] a waiver of Medicaid's normal rules" in order to provide " home and community-based services." See Bertrand, 495 F.3d at 454 (citing 42 U.S.C. § 1396n(c)(1)). Under § 1396n(c)(1), a participating state may offer services in community settings to qualified individuals who: (a) but for the provision of such services, would require a level of institutional care such as a nursing home; (b) are members of a target group that is included in the waiver; (c) meet applicable Medicaid financial eligibility criteria; (d) require one or more waiver services in order to live in the community; and (e) have the right to participate in the waiver program in lieu of receiving institutional care. See Am. Compl. ¶ 64.

         In total, the state of Illinois operates nine separate " Home and Community-Based" waiver programs. Each program targets a different segment of the state's population. See http://www2.illinois.gov/hfs/MedicalPrograms/HCBS/Pages/default.aspx (last visited Aug. 2, 2015). The waivers are: Children and Young Adults with Developmental Disabilities (" DD" )-Support Waiver; Children and Young adults

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with DD-Residential Waiver; Children that are Technology Dependent/Medically Fragile; Persons with Disabilities; Persons with Brain Injuries; Adults with Developmental Disabilities; Persons who are Elderly; Persons with HIV or AIDS; and the Supportive Living Program. Id.

         For an applicant to qualify for the last in the foregoing list of programs, the Supportive Living Program, he or she must:

1) be age 22 years or over with a disability (as determined by the Social Security Administration) or elderly (age 65 years or over);
2) be screened by the DHFS or other State agency screening entity and found to be in need of nursing facility level of care and that Supportive Living Facility placement is appropriate to meet the needs of the individual;
3) be without a primary or secondary diagnosis of developmental disability or serious and persistent mental illness, as determined by a qualified Department of Human Services screening agent; and
4) have his or her name checked against government offender websites and databases.

See 89 Ill. Adm. Code § 146.220(a).[3]

         If an individual satisfies these and other criteria, then a Supportive Living Facility (" SLF" ) may admit or retain that individual as a resident. An SLF is

a residential setting in Illinois that provides or coordinates flexible personal care services, 24 hour supervision and assistance (scheduled and unscheduled), activities, and health related services with a service program and physical environment designed to minimize the need for residents to move within or from the setting to accommodate changing needs and preferences; has an organizational mission, service programs and a physical environment designed to maximize residents' dignity, autonomy, privacy and independence; and encourages family and community involvement.

See 89 Ill. Admin. Code § 146.200.

         B. The Individual Plaintiffs

         1. O'Connor

         O'Connor is a recipient of Social Security disability payments. Her physical disabilities range from a severe heart condition and ruptured discs to diabetes, neuropathy, and recurring bleeding ulcers. These conditions affect her mobility, equilibrium, and physical endurance. O'Connor also suffers from mental health disabilities, including a " longstanding disorder," which, without medical treatment, interferes with her " work, housekeeping, personal care, and relationships." Am. Compl. ¶ 113.

         In October 2012, O'Connor was hospitalized. Before she was discharged, the hospital's discharge planner provided O'Connor with information regarding SLFs. O'Connor thereafter called the Fox Valley location of defendant Eden Supportive Living (" Eden" ), an SLF regulated by DHFS. Eden provides apartment-style housing and health-related services to those who are elderly (over age 65) and persons with physical disabilities age 22 and older.

         During the call, the Eden representative asked O'Connor several health-related questions. O'Connor informed the representative that she had heart ...


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