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BRILL v. WING

August 13, 1996

JOSEPH BRILL, EDITH BRILL, MAX BROWNSTEIN, and BEATRICE BROWNSTEIN, individually and on behalf of all other persons similarly situated, Plaintiffs,
v.
BRIAN WING, as Commissioner of the New York State Department of Social Services, GARY FRITZ, as Commissioner of the Ontario County Department of Social Services, and MARVA LIVINGSTON HAMMONDS, as Commissioner of the New York City Human Resources Administration, Defendants. DAVID WILLIAMSON, by his next best friend, JAMES ROBERTSON, on behalf of himself and all persons similarly situated, Plaintiffs, v. BRIAN WING, as Commissioner of the New York State Department of Social Services, MARY PAT DOLAN, as Commissioner of the Tompkins County Department of Social Services, and TOMPKINS COUNTY, a municipal corporation, Defendants.



The opinion of the court was delivered by: MUNSON

 Presently before the court are cross-motions concerning a consent decree entered into by the parties and "so ordered" on September 3, 1985. Doc. 47 in 79-CV-375; Doc. 24 in 82-CV-1271. *fn1" The consent decree resolved disputes that had arisen over New York State's policy respecting the calculation of Medicaid benefits during the first six months an aged, blind, or disabled person is institutionalized in a medical or nursing facility, when such a person also has a noninstitutionalized spouse who is blind, aged, or disabled. Notice of Proposed Class Action Settlement, Ex. C att'd to Consent Decree, Doc. 24, at 1. It also addressed issues involving the notification of affected persons about spousal financial responsibility. Id. Plaintiffs now move to reopen the consent decree and for summary judgment. Pls.' Notice Mot., Doc. 52. Defendant Commissioner of New York State Department of Social Services cross-moves for vacatur of the consent decree, or alternatively, in the event that the court grants plaintiffs' motion, for an order joining the Secretary of the United States Department of Health and Human Services as a party defendant. Defs.' Notice Mot., Doc. 55. Defendant Commissioner of New York City Human Resources Administration emphasizes that joinder of the Secretary is necessary to prevent subjecting any of the defendants to inconsistent obligations. Letter from David Drueding, Ass't Corp. Counsel, Doc. 66. The following constitutes the court's decision in this matter.

 I. BACKGROUND

 The consent decree provided for conditional discontinuance of the cases. Its terms required the New York State Department of Social Services ("DSS") to promulgate an administrative directive (ADM) which set forth new policies regarding the attribution of income between spouses. As explained in exhibits appended to the consent decree and intended for distribution to affected class members,

 
The settlement generally provides that the Department of Social Services (DSS) will not automatically consider the income and/or resources of the spouse of an institutionalized Medicaid applicant/recipient to be available after the calendar month following the month of institutionalization. In the past, the income and/or resources of an aged, blind or disabled spouse of an institutionalized aged, blind or disabled applicant/recipient may have been considered for the six calendar months following the month of institutionalization. The settlement does not change the right of DSS to sue the spouse in an appropriate court for contribution toward a recipient's medical bills.

 Notice of Proposed Class Action Settlement, Ex. C att'd to Consent Decree, Doc. 24, at 1-2.

 This Notice is incorporated by reference into the consent decree. Consent Decree, Doc. 24, P 14(b) at 11. The ADM also requires notification to applicants and noninstitutionalized spouses that Medicaid eligibility would not be affected by the community spouse's failure or refusal to contribute to the cost of medical care. Id. P 111(B) at 4.

 Although the consent decree represents a comprehensive settlement of the consolidated actions, paragraph nineteen provides that:

 
In the separate event that the statutes or other laws of the United States or of the State of New York, or the regulations of the United States Secretary of Health and Human Services shall be amended, changed, repealed or, in the case of the regulations of such Secretary, reinterpreted so as to require [DSS], in its judgment, to change the policies or procedures set forth under the terms of this decree . . . plaintiffs may apply to the Court for such relief as they may deem appropriate concerning such change in the policies or procedures set forth under the terms of this decree, provided however, that the failure of plaintiffs to make such application shall be without prejudice to any subsequent action in this or any other Court by any person concerning such new policies or procedures.

 Id. P 19 at 15.

 In 1989, after the execution of the consent decree, Congress passed and the President signed into law the Medicare Catastrophic Coverage Act ("the Act"), Pub. L. 100-360, 102 Stat. 683 (codified as amended in various sections of 26 and 42 U.S.C.). Under the Act, once an institutionalized spouse is determined eligible for medical assistance, federal and state Medicaid law govern the attribution of income to each spouse. 42 U.S.C. § 1396r-5; N.Y. Soc. Serv. Law § 366-c (McKinney 1992 & Supp. 1996). The Act provides rules for determining how much of the institutionalized spouse's income may be applied to the cost of his or her care in the institution, and how much may be contributed to the support of community spouse. 42 U.S.C. § 1396r-5(d).

 The defendants oppose plaintiffs' motion, and move to vacate the consent decree pursuant to Fed. R. Civ. P. 60(b). Defendants characterize plaintiffs' motion as one seeking "an advisory opinion concerning the State's interpretation of a statute that was not in existence when the consent decree was signed, and concerning issues that are only tangentially related to the issues resolved by the [consent] decree." Defs.' Mem. Law, Doc. 57, at 9. Further, the defendants argue that none of the parties contemplated the wholesale change in federal law accomplished by the Medicare Catastrophic Coverage Act. Id. at 10. Because its substantive provisions have been "entirely superceded" by the new law, the defendants assert that the consent decree should be vacated. Id. at 11. In the event that the court rules in favor of plaintiffs, the defendants seek to join as a party-defendant the Secretary of the United States Department of Health and Human Services. Id. at 25. The Commissioner of the New York City Human Resources Administration concurs in the motion for joinder. Letter from David Drueding, Ass't Corp. Counsel, May 10, 1991, Doc. 66.

 II. DISCUSSION

 A. General Principles

 The court commences analysis of these cross-motions with the observation that consent decrees have the attributes of both contracts and judicial orders. United States v. ITT Cont'l Baking Co., 420 U.S. 223, 236 n.10, 95 S. Ct. 926, 43 L. Ed. 2d 148 (1975); Securities & Exchange Comm'n v. Levine, 881 F.2d 1165, 1178 (2d Cir. 1989). Interpretations of consent decrees for the purposes of enforcement and for determining its scope generally are guided by traditional contract principles. ITT Cont'l Baking Co., 420 U.S. at 238; Schurr v. Austin Galleries, 719 F.2d 571, 574 (2d Cir. 1983). But cf. New York State Ass'n for Retarded Children v. Carey, 596 F.2d 27, 37 (2d Cir. 1979) ("The Consent Judgment is no mere contract, even though reference to contract principles may be useful."). Modification of decrees affording purely prospective relief, however, present different considerations. Such motions are governed by Fed. R. Civ. P. 60(b). Rufo v. Inmates of Suffolk Cty. Jail, 502 U.S. 367, 378, 116 L. Ed. 2d 867, 112 S. Ct. 748 (1992). When a district court is confronted with a motion to modify a consent decree, particularly one which resulted from institutional reform litigation, the Supreme Court has directed that the standard should be an equitable, flexible one. Id. at 380-83; see also New York State Ass'n for Retarded Children v. Carey, 706 F.2d 956, 969-70 (2d Cir.), cert. denied, 464 U.S. 915, 78 L. Ed. 2d 257, 104 S. Ct. 277 (1983). *fn2"

 The plaintiff class in this case seeks relief on two theories: contractual and equitable. Pursuant to the contractual prong of its motion, plaintiffs demand declaratory and injunctive relief under Paragraph 19 of the consent decree. Pls.' Notice Mot., Doc. 52. By its own terms, that provision is only applicable when DSS initiates changes in the "policies or procedures set forth under the terms of [the] decree." Consent Decree, Doc. 24. Hence, even before the merits of plaintiffs' contentions are reached, the court applies traditional contract principles to determine whether the issues raised are cognizable under paragraph 19. See ITT Cont'l Baking Co., 420 U.S. at 238; Shurr, 719 F.2d at 574.

 However, in the event that paragraph 19 does not encompass the challenged actions of defendants, plaintiffs have alternatively asked for equitable relief, viz., modification of the consent decree to the effect that the defendants must seek approval from this court for the new policies. Pls.' Mem. Law, Doc. 53, at 8-9. The court will apply the equitable standards explained in Rufo in evaluating whether this form of relief is appropriate. See EEOC v. Local 580, Int'l Ass'n, 925 F.2d 588, 593 (2d Cir. 1991) (observing equitable power to modify supplements court's power pursuant to contractual continuing jurisdiction clause).

 1. Contractual Standards

 Addressing the first basis for reopening the consent decree, the applicable contract principles are relatively clear. The language of the consent decree defines the obligations of the parties. United States v. Armour & Co., 402 U.S. 673, 681-82, 29 L. Ed. 2d 256, 91 S. Ct. 1752 (1971). When the decree is "plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument without resort to extrinsic evidence of any nature." Goodheart Clothing v. Laura Goodman Enters., 962 F.2d 268, 272 (2d Cir. 1992) (internal quotations omitted). On the other hand, when the terms of the consent decree are ambiguous, extrinsic evidence may be considered. United States v. O'Rourke, 943 F.2d 180, 187 (2d Cir. 1991). Language is ambiguous if it is "reasonably susceptible of more than one interpretation." Burger King Corp. v. Horn & Hardart Co., 893 F.2d 525, 527 (2d Cir. 1990) (citing Curry Rd. Ltd. v. K Mart Corp., 893 F.2d 509, 511 (2d Cir. 1990)). Conversely, contractual language is unambiguous if it has a "definite and precise meaning." John ...


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