Kobe v. Haley

Kobe, Mark, and John, Plaintiffs,

v. Nikki Haley, in her capacity asGovernor and Chairman of the South Carolina Budget and ControlBoard; Daniel Cooper, Converse Chellis and Mark Sanford, in their capacities as former members ofthe South Carolina Budget and Control Board; Hugh Leatherman and Richard Eckstrom, in theircapacities as members of the South Carolina Budget and Control Board; Curtis Loftis and Brian White, asmembers of the South Carolina Budget and Control Board, Anthony Keck, in his capacity as the Directorof the South Carolina Department of Health and Human Services, Emma Forkner, in her capacity asthe former Director of the South Carolina Department of Health and Human Services, BeverlyBuscemi in her capacity as Director of the South Carolina Department of Disabilities and Special Needs,Eugene A. Laurent, former Interim Director of the South Carolina Department of Disabilities andSpecial Needs; Stanley Butkus, former Director of the South Carolina Department of Disabilities andSpecial Needs; Richard Huntress, in his capacity as Commissioner of the South Carolina Departmentof Disabilities and Special Needs; Kathi Lacy, Thomas P. Waring and Jacob Chorey, in their capacitiesas employees of the South Carolina Department of Disabilities and Special Needs, Mary Leitner, inher capacity as the Director of the Richland Lexington Disabilities and Special Needs Board;the Babcock Center, Judy Johnson, in her capacity as the Director of the Babcock Centerand other Unnamed Actors Associated with the Babcock Center, Defendants.

C/A No. 3:11-1146-TMC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA GREENVILLE DIVISION

Dated: August 10, 2012

ORDER

In their Amended Complaint, Plaintiffs seek actual and punitive damages, and declaratory and injunctive relief for violations of Title II of the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12132; Section 504 of the Rehabilitation Act of 1973 ("Section 504"); the Medicaid Act;¹ and 42 U.S.C. §§ 1983 and 1985. (Dkt. # 65 - Am. Compl. at 3).² This matter is before the court on four separate motions to dismiss filed by Defendants Nikki Haley (Dkt. # 73), Curtis Loftis and Brian White (Dkt. # 99), Daniel Cooper (Dkt. # 123), and Converse Chellis (Dkt. # 125). Plaintiffs have filed responses opposing the motions and Defendants have filed replies. These motions are now ripe for ruling.

I. Background/Procedural History

Plaintiffs in this action are three individuals who have varying degrees of mental and/or physical disabilities.³ Because of their disabilities, Plaintiffs receive Adult DayHealth Care Services ("ADHC") and other home and community based services. (Am. Compl. at 2). These services are provided to Plaintiffs through a Medicaid waiver program for persons with disabilities, the Mental Retardation/Related Disabilities ("MR/RD waiver"). Id.⁴ The South Carolina Department of Health and Human Services ("SCDHHS") contracts with the South Carolina Department of Disabilities and Special Needs ("SCDDSN") to operate the MR/RD waiver program and SCDSSN contracts with local Disabilities and Special Needs ("DSN") Boards.⁵ The local DSN Boards in turn contract with private entities to actually provide the ADHC services. The majority of SCDDSN's funding comes through SCDHHS from Medicaid.

Plaintiffs allege that SCDDSN, in violation of state and federal law, notified Plaintiffs of its termination or intent to terminate their ADHC services in an effort to force Plaintiffs to attend Work Activity Centers ("WAC") operated by local DSN Boards for the financial gain of SCDDSN and the local DSN Boards. Specifically, Plaintiffs allege that in 2009 after announcing reductions in MR/RD waiver services due to a budget deficit at SCDDSN, the South Carolina Budget and Control Board ("SCBCB") voted in September 2009 to transfer $2.8 million from a $7 million "reserve" account to "three agencies ittreated as local DSN Boards" to purchase WACs in exchange for Defendant Eugene Laurent's agreement to transfer $3.2 from this fund for the SCBCB to spend on a statewide computer project. (Am. Compl. at 23).⁶ Plaintiffs also allege the SCBCB voted to spend $7.8 million from the "excess funds" held by SCDSSN to purchase real estate knowing that on January 1, 2010, services would be reduced due to "false claims of 'budget deficits.'" (Am. Compl. at 24).

In addition to actual and punitive damages, Plaintiffs seek declaratory and injunctive relief finding Defendants have violated the ADA, Section 504 of the Rehabilitation Act, and the Medicaid Act, and prohibiting the Defendants from reducing ADHC services. (Am. Compl. at 70, 71). Further, Plaintiffs seek an order "requiring Defendants to provide such additional services as shall be medically necessary, as shall be determined by their treating physicians, so as to allow Plaintiff and Class Members to live in the most integrated settings possible in order to prevent regression and to allow them to function with the most independence possible." Id. Finally, Plaintiffs seek an "order requiring Defendants to provide Medicaid waiver services as shall be determined by the treating physicians to be necessary absent review . . . " as long as the cost of theses services is less than cost of the ICF/MR services. (Am. Compl. at 71).

II. Standard of Review⁷

A motion made pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedurechallenges the court's jurisdiction over the subject matter of the plaintiff's complaint. When the court's subject matter jurisdiction is challenged, the plaintiff bears the burden of proof. Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.1991). When ruling on a 12(b)(1) motion, the Court considers the pleadings, and it may also consider evidence outside of the pleadings without necessarily converting the motion to one for summary judgment. Evans v. B.F. Perkins Co., a Div. of Standex Intern. Corp., 166 F.3d 642, 647 (4th Cir. 1999) (citing Richmond, Fredericksburg & Potomac R.R. Co., 945 F.2d at 768). The moving party will prevail as a matter of law if material jurisdictional issues are not in dispute. Id.

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure is to test the sufficiency of the Plaintiff's Complaint. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). In evaluating a motion to dismiss under Rule 12(b) (6), the "court accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff . . . ." Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009) (citations omitted). The court, however, need not accept as true "legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement." Id. The complaint must contain sufficient well-pled facts to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). There must be "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662 (2009) (citing Twombly, 550 U.S. at 555). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Twombly, 550 U.S. at 556.

III. Discussion

In their Amended Complaint, Plaintiffs allege eight causes of action: 1) Violationsof the ADA against Defendants who were members of the SCBCB in 2009 (Am. Compl. 45-50); 2) Violations of Section 504 against individual Defendants Buscemi, Lacy, Waring, Huntress, Chorey, and Johnson (Am. Compl. 50-53); 3) Violations of 42 U.S.C. § 1983 against individual Defendants Haley, Sanford, Cooper, Eckstrom, Chellis, Leatherman, Forkner, Keck, Butkus, Laurent, Buscemi, Lacy, Waring, Chorney, Huntress, Johnson, and Leitner (Am. Compl. 53-56); 4) Violations of 42 U.S.C. §§1983 and 1988 against all Defendants (Am. Compl. 56-62);⁸ 5) Violations of 42 U.S.C. § 1983 (Conspiracy) against Defendants Buscemi, Forkner, Lacy, Waring, Chorey, and Johnson (Am. Compl. 62-64); 6) Violation of the Supremacy Clause against all Defendants (Am. Compl. 64); 7) Violation of RICO against Defendants Haley, Sanford, Butkus, Laurent, Forkner, Lacy, Waring, Chorey, and Johnson (Am. Compl. 64-69); and 8) Neglect, Deliberate Indifference, Assault and Battery, and Intentional Infliction of Emotional Distress against Defendants Babcock Center, Johnson, and the agents and employees of the Babcock Center in regard to the care of only Plaintiff Kobe (Am. Compl. 69-70).

Reviewing the allegations of the Amended Complaint, only Defendants Curtis Loftis and Brian White are being sued solely in their official capacities. (Am. Compl. at 5). The remaining individual Defendants, Mark Sanford, Hugh Leatherman, Daniel Cooper, Richard Eckstrom, Converse Chellis, Anthony Keck, Emma Forkner, Beverly Buscemi, Stanley Butkus, Eugene Laurent, Richard Huntress, Kathi Lacy, Thomas P. Waring, Judy Johnson, Jacob Chorey, and Mary Leitner are specifically being sued inboth their individual and official capacities. (Am. Compl. 5-8).⁹ While there are no specific allegations in the Amended Complaint as to the capacity in which Defendant Haley is being sued, Plaintiffs state in their memorandum that Governor Haley is being sued only in her official capacity. (Dkt. # 81 - Pls.' Mem. Opp. Mot. to Dismiss at 4). The court will address each motion in turn.

1. Defendant Haley's Motion to Dismiss¹⁰

As noted above, Defendant Haley is being sued solely in her official capacity as Governor of South Carolina and Chairman of the SCBCB. Governor Haley has filed a motion to dismiss on the ground that Plaintiffs' claims against her are barred by the Eleventh Amendment. Plaintiffs contend that Governor Haley is not entitled to Eleventh Amendment immunity because she has supervisory responsibility over DHHS and DDSN and she is responsible...