Timothy B. v. Kinsley

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TIMOTHY B., by and through his Guardian ad Litem Robert War, FLORA P., by and through her Guardian ad Litem Robert War, ISABELLA A., by and through her Guardian ad Litem Jeffrey C. Holden, STEPH C, by and through his Guardian ad Litem Jeffrey C. Holden, for themselves and for those similarly situated, LONDON R., a minor, DISABILITY RIGHTS NORTH CAROLINA, and NORTH CAROLINA STATE CONFERENCE OF NAACP, Plaintiffs, v. KODY KINSLEY, Secretary of the North Carolina Department of Health and Human Services "DHHS" in his official capacity, Defendant.

No. 1:22-cv-1046

United States District Court, M.D. North Carolina

March 29, 2024

MEMORANDUM OPINION AND ORDER

OSTEEN, JR., DISTRICT JUDGE

Before this court is a Motion to Dismiss Plaintiffs' Amended Complaint, filed by Defendant Kody Kinsley, in his official capacity as Secretary of the North Carolina Department of Health and Human Services ("DHHS" or "Defendant"). (Doc. 40.)

For the reasons explained below, this court will deny Defendant's Motion to Dismiss.

I. FACTUAL AND LEGAL BACKGROUND

On a motion to dismiss, a court must "accept as true all of the factual allegations contained in the complaint and draw all reasonable inferences in favor of the plaintiff." Ray v. Roane, 948 F.3d 222, 226 (4th Cir. 2020) (internal quotation marks omitted) (quoting King v Rubenstein, 825 F.3d 206, 212 (4th Cir. 2016)). The facts, taken in the light most favorable to Plaintiffs, are as follows. Additional facts will be discussed in the analysis as necessary.

Plaintiffs are children with disabilities who are in the custody of North Carolina's child welfare system. (Am. Class Action Compl. for Declaratory and Inj. Relief ("Compl.") (Doc. 35) ¶¶ 1, 5.)^[1] Plaintiffs filed an Amended Complaint on March 6, 2023, naming Kody Kinsley in his official capacity as Secretary of the North Carolina Department of Health of Human Services ("DHHS" or "Defendant") as Defendant. (See id. ¶ 141.) Defendant "oversees and operates all aspects of the North Carolina child welfare system." (Id. ¶ 144.)

Plaintiffs allege Defendant discriminates against children with disabilities within the North Carolina child welfare system by unnecessarily segregating them from their home communities and routinely isolating them in institutions knowns as psychiatric residential treatment facilities ("PRTFs"), in violation of Title II of the Americans with Disabilities Act ("Title II"), 42 USC §§ 12131 et seq., and Section 504 of the Rehabilitation Act ("Section 504"), 29 U.S.C §§ 794 et seq. (Id. ¶¶ 1, 12.) "PRTFs are designed to provide intensive, short-term, residential psychiatric treatment for temporary stabilization." (Id. ¶ 4.)

As a public entity, Defendant is required to comply with Title II and Section 504. (Id. ¶ 269.) Both Title II and Section 504 prohibit discrimination on the basis of disability. See 42 U.S.C. § 12132; 29 U.S.C. § 794.^[2] In order to implement the anti-discrimination provisions of Title II, the Attorney General has issued two relevant regulations: the integration mandate, 28 C.F.R. § 35.130(d), and the methods of administration regulation, 28 C.F.R. § 35.130(b)(3).

The "integration mandate" requires a public entity to "administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28 C.F.R. § 35.130(d). The "methods of administration" regulation prohibits public entities from utilizing "criteria or methods of administration . . . [t]hat have the effect of subjecting qualified individuals with disabilities to discrimination." 28 C.F.R. § 35.130(b)(3) (i).

In Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999), the Supreme Court, relying on the integration mandate, recognized unjustified institutional isolation of persons with disabilities as a form of discrimination. Id. at 597. "Since Olmstead, public entities and courts . . . have grappled with . . . what is required to satisfy the Integration Mandate." Day v. District of Columbia, 894 F.Supp.2d 1, 7 (D.D.C. 2012); see Darian B. Taylor, Annotation, Unjustified Institutionalization of Individuals with Disabilities as Violation of Federal Antidiscrimination Provisions - Post-Olmstead Cases, 90 A.L.R. Fed. 2d 1 § 2 (2014) ("As a result of the Olmstead decision, disabled persons both in and out of state institutions have engaged in what has become known as 'Olmstead litigation' - suits filed often as class actions alleging that a state entity has discriminated against those individuals under the ADA and RA by failing to provide community-based treatment services that would either allow them to be released from institutionalization or that jeopardize their ability to remain in their home or community and outside the confines of an institution.").

Plaintiffs' discrimination claims are based on two separate but related theories: (1) a failure by Defendant to provide child welfare services in the most integrated setting appropriate, in violation of the integration mandate and Olmstead; and (2) employing criteria or methods of administration that prioritize or permit unjustified institutionalization of Plaintiffs, in violation of the "methods of administration" regulation. (Compl. (Doc. 35) ¶¶ 273, 274, 277-80.)

Plaintiffs allege "Defendant has a pervasive, system-wide practice of unnecessarily segregating children in its care in PRTF institutions instead of providing care and placement for them in their communities." (Id. ¶ 187.) While Defendant "ostensibly offers community-based placements and services," the availability of such services is too limited - fueling an overreliance on placement in PRTFs. (Id. ¶ 14.) Children with disabilities in North Carolina's child welfare system face significant barriers to accessing community-based placements and services, including "shortages or waitlists for intensive in-home services, crisis intervention services, outpatient mental health and substance abuse services, and inadequate transportation to and from such services." (Id.) However, instead of addressing these barriers and expanding community-based placements and services, Defendant sends children to PRTFs "because it has nowhere else to put them." (Id.)

Defendant is "a principal department of the North Carolina Executive Branch with wide-ranging functions, powers, duties, and obligations." (Id. ¶ 144.) The Complaint outlines the various divisions within Defendant's department, as they relate to the child welfare care system in North Carolina:

The DSS (Division of Social Services) within DHHS supervises and provides technical assistance to county DSS offices, which make placement decisions for youth in foster care, including PRTF placement. The Division of Health Services Regulation ("DHSR") within DHHS monitors and oversees all licensed mental health facilities in North Carolina, including PRTFs. DHHS administers North Carolina's statewide Medicaid program ("NC Medicaid") through its Division of Health Benefits. DHHS also oversees mental health and developmental disability services, including treatment at PRTFs, through its Division of Mental Health, Developmental Disabilities, and Substance Abuse Services ("DMH/DD/SAS"). This division is also responsible for ensuring that high-quality mental health and developmental disability services are available to people that need them. The DMH/DD/SAS division contains the statutorily-created Commission for Mental Health, Developmental Disabilities and Substance Abuse Services, which has the authority to adopt and repeal rules pertaining to all mental health programs, including operating standards for licensed mental health facilities such as PRTFs.

(Id.) Defendant is "statutorily responsible for supervising the regional- and county-level administration of North Carolina's child welfare system." (Id. ¶ 150.)

Defendant also administers North Carolina's statewide Medicaid program through its Division of Health Benefits. (Id. ¶ 144.) Plaintiffs allege children within the putative class are eligible for community-based services provided through the statewide Medicaid program but are unable to receive these services in an integrated setting. (Id. ¶ 277.) As a result, Plaintiffs are forced into institutions to receive care, which is isolating and often inadequate. (Id. ¶ 14.)

From fiscal year 2020 to 2021, Defendant placed at least 572 children in PRTFs, including Named Plaintiffs, referred to by the pseudonyms Timothy B., Flora P., Isabella A., Steph C, and London R. (Id. ¶ 5.) Named Plaintiffs bring this action on behalf of themselves, through their Guardians Ad Litem,^[3] and a putative class of similarly situated children. (Id. ¶ 154.)

Two advocacy organizations, Disability Rights North Carolina ("DRNC") and the North Carolina State Conference of NAACP ("NC NAACP") (together, "Associational Plaintiffs"), join Named Plaintiffs in this action as associational plaintiffs. (Id. ¶¶ 25, 32.) DRNC is an independent nonprofit organization organized under the laws of the State of North Carolina. (Id. ¶ 25.) DRNC is designated as the statutorily authorized Protection and Advocacy system for the State of North Carolina, charged with protecting and advocating for the rights of individuals with disabilities. (Id. ¶ 27.) Named Plaintiffs and members of the putative class are constituents of DRNC. (Id. ¶ 28.) The NC NAACP is a membership-based nonprofit civil rights organization whose mission is to "ensure the rights of all persons to equality and to eliminate racial discrimination." (Id. ¶ 32.) African Americans and children of color within the putative class, such as Flora P., Steph C and London R., are constituents of NC NAACP. (Id. ¶ 36, 38.) Plaintiffs allege children of color are disproportionately affected by the harms...