The opinion of the court was delivered by: SWEET
Plaintiff Ellen Stenson ("Stenson") has moved individually and on behalf of other persons similarly situated, for declaratory and injunctive relief against Barbara Blum, individually and in her capacity as Commissioner of the New York State Department of Social Services ("State defendant"), Blanche Bernstein, individually and in her former capacity as Commissioner of the New York City Department of Social Services ("City defendant"), and Joseph Califano, former Secretary of the Department of Health, Education and Welfare ("HEW"), individually and in his capacity as Secretary ("Federal defendant" or "Secretary"). Stenson seeks a declaratory judgment that termination of her Medicaid benefits without notice and opportunity for a hearing and without an Ex parte determination of eligibility for Medicaid benefits independent of her eligibility for Supplemental Security Income ("SSI") violates the Social Security Act and regulations promulgated thereunder and also the Fifth and Fourteenth Amendments to the United States Constitution.
Stenson also seeks class-wide injunctive relief providing that Medicaid benefits of individuals whose SSI payments have been terminated may not be suspended until their eligibility is redetermined and, if they are found to be ineligible, until they have received notice and an opportunity for a hearing.
Finally, plaintiff seeks: (a) compensatory damages for out-of-pocket medical expenses resulting from her termination from Medicaid; (b) compensatory damages for emotional distress; (c) punitive damages; and (d) attorney's fees.
The case is now before this court on Stenson's motion for summary judgment pursuant to Rule 56, Fed.R.Civ.P., State and Federal defendants' cross-motions for summary judgment pursuant to Rule 56, Fed.R.Civ.P. and City defendant's motion to dismiss
pursuant to Rule 12, Fed.R.Civ.P. For the reasons stated below, Stenson's motion is granted in part and denied in part; Federal and City defendants' motions are granted in whole; and State defendant's motion is denied in part and granted in part.
Stenson is a former recipient of benefits under the Federal SSI program, 42 U.S.C. § 1381 (1976). Because she was at one time eligible to receive SSI benefits, she was then categorically eligible to receive benefits under New York State's Medicaid program. New York Social Services Law § 363 Et seq. (McKinney's 1976). In July, 1978, Stenson was determined by the Department of HEW to be ineligible for SSI benefits. She received a notice from HEW informing her of her ineligibility and directing that any inquiries concerning continued Medicaid coverage be directed to her local Social Services Agency. Shortly thereafter, Stenson's Medicaid benefits were terminated without receipt of notice from the State and without an opportunity for a hearing. Subsequent to that termination, State defendant agreed to restore Stenson's Medicaid benefits pending resolution of this action.
On March 20, 1979, Michael Murtagh ("Murtagh") and Dorothy Wilson ("Wilson") moved to intervene as plaintiffs. Murtagh is a former recipient of Medicaid whose eligibility resulted from his eligibility for SSI. Following his termination from SSI, Murtagh, although continuing to receive a monthly Medicaid card from New York State, was orally informed that his Medicaid eligibility had been terminated and that his card would no longer be valid. Pending resolution of his request for a hearing concerning the termination of his SSI benefits, Murtagh has received a temporary Medicaid card. Like Murtagh, Wilson is a former recipient of Medicaid as a consequence of her eligibility for SSI. When her SSI payments were terminated by the Federal government because she had become eligible to receive Social Security disability benefits, she received a notice similar to that sent to Stenson and Murtagh regarding termination of SSI benefits. Wilson, however, received neither notice nor an opportunity for a hearing upon her termination from Medicaid. Like Stenson, Wilson has received a temporary Medicaid card from the State pending resolution of this litigation.
Title XIX of the Social Security Act, which set up the Medicaid program, was enacted in 1966 to improve state programs of medical assistance to the needy by providing additional Federal funding. Pursuant to 42 U.S.C. § 1396b, HEW offers Federal reimbursement to a participating state for a specified percentage of that state's cost of providing medical assistance under a federally approved state plan. Applicable Federal statutory provisions set forth two general groups of individuals who are eligible for such medical assistance. The first group is comprised of individuals as to whom the state is required, pursuant to 42 U.S.C. § 1396a(a)(10)(A), to extend Medicaid coverage. These individuals are defined to be "categorically needy."
Recipients of SSI
benefits are included within the mandatory Medicaid coverage available to persons classified as categorically needy. The second group is comprised of individuals who may, at the state's option, be included in the state's Medicaid program. 42 U.S.C. § 1396a(a)(10)(C). These individuals are defined to be "medically needy."
Unlike a categorically needy individual under Federal regulations, a person who is medically needy is not eligible for Medicaid unless his medical expenses, when subtracted from his total income, yield a figure that is less than a ceiling specified by HEW. If such is the case, the individual will be reimbursed for his medical expenses until his income reaches the ceiling limit. At this point the individual must pay the balance of his expenses. New York State's Medicaid plan provides for aid to both categorically needy and medically needy individuals. New York Social Services Law § 366(1)(a)-(e) (McKinney's 1976).
New York State has entered into an agreement with the Secretary of HEW (pursuant to New York Social Services Law § 363-b) under which the Secretary determines Medicaid eligibility for certain individuals, including SSI recipients, sends notices of his determinations to the State on a timely basis, and notifies the State of changes in the status of these individuals. This arrangement is intended to reduce New York's cost of processing Medicaid applications by having HEW make Medicaid determinations with respect to SSI recipients. See (1972) U.S. Code Cong. & Admin. News, pp. 4989, 5182. See generally, 42 C.F.R. § 435.909 (1979).
Pursuant to Rule 23(a),
in conjunction with Rule 23(b)(2), Stenson has moved for class certification. The motion is granted. The class will consist of New York State residents who received Medicaid due to their eligibility for SSI and whose Medicaid benefits have been terminated because of subsequent ineligibility for SSI without having received one or more of the following: (a) an Ex parte determination of continued eligibility for Medicaid, independent of eligibility for SSI; (b) timely and adequate notice of such termination; (c) an opportunity for a hearing.
The class, as herein defined, is "so numerous that joinder of all members is impracticable." Rule 23(a)(1), Fed.R.Civ.P. Stenson asserts, based on Federal defendant Califano's answers to interrogatories, that there are "thousands" of individuals who fit within the specified class. In fact, the actual number of individuals in the class cannot be ascertained with certainty. The answers to interrogatories submitted by Califano, however, indicate the following: at the relevant time, there were 376,890 New York State residents receiving SSI. Between December, 1977 and December, 1978, at least 6,736 New York State residents had benefits terminated, and, in the single month between November, 1978 and December, 1978, a decrease of 1,663 recipients occurred. Based on these figures, the court has determined that the issues raised by Stenson are better resolved by class action suit than by a host of separate actions. See Hurley v. Toia, 432 F. Supp. 1170, 1174 (S.D.N.Y.), Aff'd without opinion, 573 F.2d 1291 (2d Cir. 1977).
There are, in addition, "questions of law or fact common to the class." Rule 23(a)(2), Fed.R.Civ.P. Although each member of the class presents a slightly different factual situation, each presents a common legal question: whether the termination of his Medicaid benefits without receipt of an Ex parte determination of continued eligibility for Medicaid, adequate notice, or an opportunity for a hearing violates the Social Security Act and regulations promulgated thereunder. See Lyons v. Weinberger, 376 F. Supp. 248, 263 (S.D.N.Y.1974); 3B Moore's Federal Practice P 23.06-1, at 23-176, 23-180 (3d ed. 1978).
Third, Stenson's claims are "typical of the claims" of the class, Rule 23(a) (3), Fed.R.Civ.P., because all class members assert that the manner in which Medicaid benefits are terminated contravenes the Constitution and the Social Security Act.
Fourth, Stenson "fairly and adequately protect(s) the interest of the class." Rule 23(a)(4), Fed.R.Civ.P. The Court of Appeals for this circuit, in Eisen v. Carlisle & Jacquelin, 391 F.2d 555 (2d Cir. 1968) (Eisen II ), articulated various elements which would qualify a party as an adequate representative in a class action. All of these are met in the instant action: counsel for Stenson, the Legal Aid Society, is "qualified, experienced and generally able to conduct the proposed litigation." Id. at 562; there is little "likelihood that the litigants are involved in a collusive suit or that plaintiff has interests antagonistic to those of the remainder of the class," Id.; and the interest of Stenson, as a representative party, is "co-extensive with the interest of the entire class," Id., because all seek to enjoin defendant's actions. See Bacon v. Toia, 437 F. Supp. 1371, 1381 (S.D.N.Y.1977), Aff'd, 580 F.2d 1044 (2d Cir. 1978).
The requirements of Rule 23(b)(2)
, Fed.R.Civ.P., are also met. The defendants have allegedly denied class members the opportunity to have their continued eligibility for Medicaid reevaluated prior to termination and have failed to provide adequate notice of termination and of the right to a hearing. Although the reasons for the termination of SSI benefits may differ among class members, the grounds upon which defendants base their actions are the same. Moreover, because each class member has allegedly been denied the same constitutional and statutory guarantees, the relief here granted is appropriate with respect to the class as a whole.
Federal and State defendants argue that class certification is unnecessary, despite compliance with Rule 23 requirements, because the prospective effect of injunctive relief against government agencies or officers will necessarily inure to the benefit of all class members. This opposition is unconvincing, however. See, e.g., Rodriguez v. Percell, 391 F. Supp. 38 (S.D.N.Y.1975); Percy v. Brennan, 384 F. Supp. 800 (S.D.N.Y.1974). As one court has remarked: "(I)t seems advisable to cautiously safeguard the interests of the entire class by ensuring that any order runs to the class as a whole. . . . Were this unnecessary, class certification pursuant to Rule 23(b)(2) would, ...