Rolland v. Patrick , 592 F.3d 242 ( 2010 )

United States Court of Appeals
For the First Circuit
No. 08-1874
ERIC VOSS, LAURA THIBAULT, FREDERICK CARTER, CHRISTOPHER PALEO,
ANGEL AGOSTA, KIMBERLY LAWRENCE, KELLEY SCHNAIR, ROBERT BUCKMAN,
NICOLE KEATING, MUSA NURISLAM, CHERYL COURTNEY, LENNIE LEBLANC,
LAURA PUTTERMAN, PEDRO CAVALLARO, DAVID BRAGA, AMANDA WATTS, ERIN
POULIN, SHERI BELVILLE, ALISSA CORMIER, BELEN GARCIA-SIMMONS, JESSE
STEWART, MARK CHAPMAN, UCHENNA OBI, STEFANIE PETRIE, LINDA KLAIBER,
JEANNETTE MCGINNIS, LAURA PROUTY, JILLIAN HUME, ANDRE AMATO, SHARIA
PITTS, PETER LIDDY, JOSHUA GREANEY, HOMER SWAIN, ANDREW PATTERSON,
PATRICK SHEEHAN, ANDREW CHAN, DYLAN KEENE, ABRAHAM CARRO, WILLIAM
CAMPBELL, POLO DEJESUS, EMILY SAM, ZACHARY FOSTER, WENDELL ROQUE,
Plaintiffs, Appellants,
v.
LORETTA ROLLAND, MARGARET PINETTE, TERRY NEWTON, BRUCE AMES,
FREDERICK COOPER, LESLIE FRANCIS, TIMOTHY RAYMOND, ARC
MASSACHUSETTS, and STAVROS CENTER FOR INDEPENDENT LIVING,
Plaintiffs, Appellees,
v.
DEVAL PATRICK, JAY GONZALEZ, JUDYANN BIGBY, BRUCE M. BULLEN, ELIN
M. HOWE, CHARLES CARR, JOHN AUERBACH, and TERESA O'HARE, in their
official capacities,*
Defendants, Appellees.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Kenneth P. Nieman, U.S. Magistrate Judge]
*
Pursuant to Fed. R. App. P. 43(c)(2), several defendants
have been substituted for their predecessors in office.
Before
Lynch, Chief Judge,
Selya and Stahl, Circuit Judges.
Stephen M. Sheehy with whom Anthony S. Fiotto, Jr., Michelle
R. Gonnam, Christiaan H. Highsmith, and Goodwin Proctor, LLP were
on brief for plaintiffs-appellants.
Steven J. Schwartz with whom Cathy E. Costanzo, Center for
Public Representation, Jeffrey S. Follett, Catherine H. Wicker,
Foley Hoag LLP, Frank J. Laski, Mental Health Legal Advisors
Committee, Matthew Engel, and Disability Law Center were on brief
for plaintiffs-appellees.
Kenneth W. Salinger, Assistant Attorney General, with whom
Martha Coakley, Attorney General, was on brief for defendants-
appellees.
January 19, 2010
LYNCH, Chief Judge. This appeal by a small number of the
plaintiff class challenges the 2008 approval of an amended
settlement agreement between the remaining plaintiff class members
and the state in a longstanding class action. See Rolland v.
Patrick (Rolland XI), 562 F. Supp. 2d 176 (D. Mass. 2008). The
original suit, brought in 1998 by developmentally disabled nursing
home residents on behalf of over 1000 class members, alleged that
Massachusetts did not provide appropriate treatments in appropriate
settings to them as federal law required. Here, 43 class members
at one nursing facility object to the 2008 amended settlement under
which many class members will be transitioned to community
placements. They fear it will lead to them being forced out of
their particular nursing facility, where they prefer to stay.
The 2008 settlement resulted from the state's inability
to comply fully with an earlier settlement, reached in 2000. Under
the 2000 settlement, the state successfully moved many class
members to the community but failed to provide specialized
services, including "active treatment," to those remaining in
nursing homes. See Rolland v. Cellucci (Rolland IV), 138 F. Supp.
2d 110, 120 (D. Mass. 2001). The parties negotiated the amended
settlement in 2008 to lessen the state's active treatment
obligations and, instead, move most class members remaining in
nursing homes to the community.
-3-
The appealing Groton parents,1 who are parents and
guardians, challenged the amended settlement in May 2008 on behalf
of residents of the Seven Hills Pediatric Center (Seven Hills) in
Groton, Massachusetts. They say their children and wards are more
severely disabled than the rest of the plaintiff class and would
not benefit from leaving Seven Hills. They objected that the
amended settlement was unfair and sought decertification of the
plaintiff class, which the district court had certified in 1999.
The district court found that the amended settlement was
fair, reasonable, and adequate ("fairness"), Rolland XI, 562 F.
Supp. 2d at 178, and denied the motion to decertify, Rolland v.
Patrick (Rolland XII), No. 98-30208-KPN, 2008 WL 4104488 (D. Mass.
Aug. 19, 2008) (order denying motion to decertify).2 The court
entered Rule 54(b) judgment on the Groton parents' objections to
the settlement's fairness. Rolland v. Patrick (Rolland XIII), No.
98-3028-KPN (D. Mass. Nov. 20, 2009).
On appeal the Groton parents untimely attack the 1999
class certification order. More significantly, they challenge the
1
To avoid confusion, we will call the appellants the
"Groton parents" and reserve the term "plaintiffs" for the
plaintiff class, the appellees in this case.
2
The parties agreed that a magistrate judge would handle
all proceedings, Rolland v. Cellucci (Rolland I), No. 98-3028-KPN
(D. Mass. Dec. 3, 1998) (order keeping case before magistrate
judge), so we refer to the magistrate judge as the district court.
The magistrate judge has issued a number of orders over the years
and is very familiar with the case. See Rolland XI, 562 F. Supp.
2d at 177 n.1 (listing decisions).
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approval of the settlement, objecting that it does not adequately
protect class members who should not be transferred from their
nursing homes to the community. We affirm.
I.
We review for abuse of discretion the district court's
two decisions: whether to certify or decertify the class and
whether to approve the amended settlement. García-Ruberia v.
Calderón, 570 F.3d 443, 460 (1st Cir. 2009); McKenna v. First
Horizon Home Loan Corp., 475 F.3d 418, 422 (1st Cir. 2007); City
P'ship Co. v. Atl. Acquisition Ltd. P'ship, 100 F.3d 1041, 1043
(1st Cir. 2003). We review underlying legal issues de novo.
McKenna, 475 F.3d at 422.
The parties litigated and settled this case against the
backdrop of a series of federal statutes3 designed to move disabled
individuals from institutions and integrate them into society. The
class plaintiffs sued under three statutes that were passed as part
of this "deinstitutionalization" or "integration" movement4:
3
See, e.g., Rehabilitation Act of 1973, Pub. L. No. 93-
112, 87 Stat. 355 (codified as amended in scattered sections of 29
U.S.C.); Education of All Handicapped Children Act of 1975, Pub. L.
No. 94-142, 89 Stat. 773 (codified as amended at 20 U.S.C. §§ 1405-
06, 1415-20); Developmental Disabilities Assistance and Bill of
Rights Act, Pub. L. No. 95-602, tit. V, 92 Stat. 2955 (1978)
(codified as amended in scattered sections of 42 U.S.C.); Fair
Housing Amendments Act of 1988, Pub. L. No. 100-430, 102 Stat. 1619(codified as amended at 42 U.S.C. §§ 3601-19, 3631).
4
The integration movement argued that the practice in the
mid-twentieth century of confining the disabled in institutions was
unnecessary and often harmful. It believed the best and most
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Medicaid, the Nursing Home Reform Amendments (NHRA), and the
Americans with Disabilities Act (ADA).
Although Medicaid5 originally funded mostly institutional
services for disabled individuals,6 Congress added optional
programs that encouraged states to provide community-based Medicaid
services to disabled individuals. See, e.g., Bryson v. Shumway,
308 F.3d 79, 82 (1st Cir. 2002). Massachusetts participates in
several community programs.
In 1987 Congress amended Medicaid by enacting the NHRA.
It had found that many states were reducing crowding at state
institutions by transferring mentally disabled people to geriatric
nursing facilities, which were poorly equipped to care for them.
H.R. Rep. No. 100-391(I), at 459 (1987), as reprinted in 1987
U.S.C.C.A.N. 2313-1, 2313-279. The NHRA limits states to using
dignified setting for the disabled was their communities. See,
e.g., J. tenBroek & F.W. Matson, The Disabled and the Law of
Welfare, 54 Cal. L. Rev. 809, 816 (1966); see also Ricci v. Okin,
823 F. Supp. 984, 985 (D. Mass. 1993) (reporting the "deplorable
conditions" the court found when visiting state institutions in the
1970s).
5
Medicaid, created in 1965, uses state and federal funds
to provide medical services to needy individuals. Rio Grande Cmty.
Health Ctr., Inc. v. Rullan, 397 F.3d 56, 61 (1st Cir. 2005).
States can choose whether to participate in Medicaid and some
optional programs. See Bryson v. Shumway, 308 F.3d 79, 81-82 (1st
Cir. 2002). Once states do, they must meet applicable federal
requirements. Rio Grande Cmty. Health Ctr., 397 F.3d at 61.
6
See J. Karger, Note, "Don't Tread on the ADA": Olmstead
v. L.C. ex rel. Zimring and the Future of Community Integration for
Individuals with Mental Disabilities, 40 B. C. L. Rev. 1221, 1229
(1999).
-6-
Medicare funding for nursing home residents found, through a
screening process, to need the level of care nursing homes provide.
See 42 U.S.C. § 1396r(e)(7)(D)(ii).
That screening process is called a Preadmission Screening
and Annual Resident Review (PASARR), and it requires states to
assess whether "mentally retarded"7 individuals (1) need the level
of care nursing homes provide and (2) require specialized services.
Id. § 1396r(e)(7)(B)(ii). States had to review all mentally
retarded nursing home residents when the NHRA was enacted and still
must review new admissions and residents whose conditions change
significantly.8 Id. § 1396r(e)(7)(B)(ii)-(iii). Generally nursing
homes may not admit or must discharge anyone found not to need
their services. See id. §§ 1396r(b)(3)(F)(ii), (e)(7)(C)-(D).
Title II of the ADA prohibits public entities from
excluding disabled individuals from entities' "services, programs,
or activities." 42 U.S.C. § 12132. This "integration mandate"
requires states to place people in the "most integrated setting
7
The NHRA uses the term "mentally retarded" to refer to
individuals who have mental retardation or "a related condition" as
defined in another provision. 42 U.S.C. § 1396r(e)(7)(G)(ii). The
plaintiffs use the word "developmentally disabled" to reflect more
precisely who the NHRA and similar provisions in this litigation
cover. We generally use "developmentally disabled" except to
accurately represent the text of the NHRA.
8
Originally the NHRA required annual reviews of residents.
Omnibus Budget Reconciliation Act of 1987, Pub. L. No. 100-203,
tit. IV, 101 Stat. at 1330-198. Congress amended the statute to
only require PASARR review if a resident's condition changes. See
42 U.S.C. § 1396r(e)(7)(B)(iii).
-7-
appropriate," 28 C.F.R. § 35.130(d), often the community. See
Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 597-602 (1999).
II.
A. Historical Context
To provide context for the 2008 settlement, we briefly
review the history of the litigation. Greater detail may be found
in the district court's opinions.
The original suit, brought under 42 U.S.C. § 1983 and
Title II of the ADA, claimed Massachusetts was violating the ADA,
several Medicaid provisions, and the NHRA by illegally limiting
access to community programs and ignoring PASARR findings.
Consequently, the state was allegedly confining many individuals to
nursing homes who belonged in community placements and not
providing them with specialized services while in nursing homes.
The district court certified the plaintiff class in 1999. Rolland
v. Cellucci (Rolland II), No. 98-30208-KPN, 1999 WL 34815562, at
*1-2 (D. Mass. Feb. 2, 1999) (order certifying class).9
In 2000, the court approved a settlement between the
parties. Rolland v. Cellucci (Rolland III), 191 F.R.D. 3, 15-16
(D. Mass. 2000). In the 2000 settlement the state agreed to place
9
The court certified a single class of "all adults with
mental retardation and other developmental disabilities in
Massachusetts who resided in nursing facilities on or after October
29, 1998, or who are or should be screened for admission to nursing
facilities pursuant to 42 U.S.C. § 1396r(e)(7) and 42 C.F.R 483.112
et seq." Rolland II, 1999 WL 34815562, at *1-2.
-8-
many class members in appropriate placements, divert people who
would have been admitted to nursing homes to community placements,
and provide class members with specialized services. Id. at 7.
The state was not required to provide community placements to
objecting class members. Id.
Over the next several years, the state satisfied its
community-placement and diversion obligations, see Rolland v.
Patrick (Rolland VIII), No. 98-30208-KPN, 2007 WL 184626, at *1 (D.
Mass. Jan. 16, 2007) (order denying noncompliance motion). It
placed about 1,000 class members in the community. But as all
parties acknowledge, it largely failed to provide specialized
services to about 800 class members who remained in nursing homes.
The district court held, and this court affirmed, that
the 2000 agreement's specialized-services provisions required the
state to provide "active treatment" to nursing home residents.
Rolland v. Romney (Rolland VI), 318 F.3d 42, 57-58 (1st Cir. 2003);
Rolland IV, 138 F. Supp. 2d at 115-16; Rolland v. Cellucci (Rolland
V), 198 F. Supp. 2d 25, 28-35, 46 (D. Mass. 2002). Designed to
cultivate independence in the developmentally disabled, "active
treatment" is the federal standard of care for residents in
Intermediate Care Facilities for Persons with Mental Retardation
(ICF/MRs). See 42 C.F.R. § 483.440(a)(1). In 2007, the court and
the parties agreed on a rigorous standard for active treatment
based on federal ICF/MR regulations. See Rolland v. Patrick
-9-
(Rolland X), No. 98-30208-KPN (D. Mass. Aug. 2, 2007) (order
adopting revised active treatment standards); Rolland v. Patrick
(Rolland IX), 483 F. Supp. 2d 107, 117-18 (D. Mass. 2007).
The court also ordered the state to better coordinate
with nursing home staff to ensure class members received active
treatment in all settings. Rolland V, 198 F. Supp. 2d at 36-37,
46. It mandated what came to be called Rolland Integrated Service
Plans (RISPs) for class members, which were "coherent, integrated
treatment plan[s] which [would] guide[] [class members'] services
across all settings." Id.10
For the state, these federal active treatment standards
were difficult to coordinate and expensive, especially because
class members were scattered in nursing homes across the state.
The court found the state was not complying with its settlement
obligations and with the court's orders four times between 2000 and
2007. See Rolland IX, 483 F. Supp. 2d at 117-18; Rolland v. Romney
(Rolland VII), 273 F. Supp. 2d 140, 143 (D. Mass. 2003); Rolland V,
198 F. Supp. 2d at 36; Rolland IV, 138 F. Supp. 2d at 118, 120-21.
10
RISPs act as Rolland class members' individual service
plans (ISPs), which state officials generally must develop for
developmentally disabled individuals. See 115 Mass. Code Regs.
6.20. ISPs identify physical, developmental, and social goals for
the person and what services the state will provide to help the
individual meet those goals. Id. 6.23(4). An ISP team, which
includes state service coordinators, individuals, their families,
and their service providers, reviews these plans at least annually.
Id. 6.21, 6.24.
-10-
In January 2008, a court monitor, whom the court
appointed in 2007, Rolland IX, 483 F. Supp. 2d at 119, also
determined that the state was largely failing to provide active
treatment to class members in nursing homes.11 She concluded that
many nursing homes were not equipped to provide active treatment,
and class members in those homes should be moved to more
appropriate settings.
B. The 2008 Settlement
The state and the plaintiffs negotiated a new settlement
to reduce the state's active-treatment burden in 2008. In the 2008
settlement, the state agreed to move 640 of the 800 or so class
members remaining in nursing homes to community placements over
four years, based on preliminary assessments of the number of class
members who could live in the community. In exchange, only those
not moved to the community would receive "active treatment" at the
nursing home. Class members identified for transfer to the
community would receive any specialized services they were already
receiving and some additional community-based services in lieu of
active treatment.
This appeal primarily concerns the agreement's process
for identifying class members for community placements. As the
agreement required, staff of the Department of Mental Retardation
11
Among the 35 class members she surveyed, she found 94
percent did not receive active treatment as the court had defined
it.
-11-
(DMR)12 initially placed 666 people on a Rolland Community Placement
List (the List) who they believed could benefit from community
placement. DMR staff also identified 39 class members who were too
medically fragile to move and 53 who should not be moved because of
personal circumstances.
The agreement allowed DMR to remove people from the List
whose condition changed, making community placement inappropriate.
Anticipating that many new class members would be admitted to
nursing homes, the agreement also permitted DMR to add up to 160
new class members to the List and substitute some new admissions
for class members who died or were removed from the List.
The agreement provided DMR could move a List member to
the community if it "determine[d], through the PASARR process,
that" the person could "be safely served in the community, and that
appropriate community services are, or will soon be, available for
that individual." It gave class members no express right to veto
transfer. The settlement agreement reserved all other rights,
including appeals rights, of parties and nonparties. It also
required the parties to notify class members and educate them about
the agreement before final approval.
After a hearing, the district court granted preliminary
approval of the amended settlement on April 14, 2008. Responding
12
After the settlement, DMR's name was changed to the
Department of Developmental Services.
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to concerns the court had expressed during the preliminary-approval
process, the parties fleshed out, in a Joint Plan for Transition
Services (the Joint Plan), how the state would conduct "transition
planning." Specifically, the Joint Plan, which was part of the
settlement agreement, outlined how the state would decide during
"transition planning" whether "appropriate community services and
supports" were available in the community for List members and what
specialized services they should receive while awaiting transfer.
The Joint Plan required coordinators or case managers13
to propose a detailed plan for moving any List member to the
community in a twenty-nine-page planning sheet.14 On that sheet,
coordinators and a registered nurse would first describe class
members' lifestyle, abilities, needs, and medical histories. They
would compile this information based on clinical assessments and
prior work with class members and their families. Coordinators
would review that proposal with RISP team members, who include
13
A service coordinator is a DMR staff member who
supervises state-provided services for mentally retarded
individuals. A case manager is the staff member of a University of
Massachusetts program who coordinates services for individuals with
other developmental disabilities. See Rolland V, 198 F. Supp. 2d
at 43, 46. We use "coordinator" to refer to both positions.
14
The planning sheet required coordinators to plot every
aspect of a proposed transition into the community. For example,
it asked what services and supports the individual would need,
where the person would live, and where the person would receive
services. It also asked how the person's financial, health-and-
safety, equipment, and medical needs would be met in the new
setting.
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class members, their families, representatives from their nursing
homes, DMR clinical and professional staff, and relevant clinical
professionals. State officials would review the RISP team's plan.
C. The Groton Parents' Objections to the Settlement
On May 12, 2008, the Groton parents filed a motion
objecting to the settlement and to class certification, after the
plaintiffs presented the proposed settlement at a meeting at Seven
Hills. On May 20, they filed a motion to decertify the class. Of
the 800 class members affected by the amended settlement, these 43
Seven Hills residents were the only objectors.
Seven Hills is a pediatric nursing facility that
specializes in caring for developmentally delayed children and
young adults with significant medical problems. The Groton parents
argued that the differences between their children and the class
representatives made class certification improper and made the
class representatives inadequate. They also sought a provision
giving them the right to veto a transition decision, as the 2000
settlement had done.
The court held a fairness hearing on May 22, 2008, on the
2008 amended agreement. The plaintiffs and the state argued that
the agreement offered a new chance for most of the rest of the
class to be placed in the community and better used the state's
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limited resources.15 They insisted that class members had no right
to reject community placement, but they assured the court that the
state would not move any class members unless it found them
appropriate placements.
In support, the state DMR commissioner explained how DMR
would decide whether to move class members to the community. She
emphasized that the List was tentative. Through transition
planning DMR would consider every aspect of a possible move,
including whether the move would be safe and whether it would match
the class member's needs and preferences. She said the state
wanted to use that process to work with families before anyone
eliminated community placement as an option; in her experience,
many families who initially resisted community placement eventually
found it very satisfactory.
One class member and two relatives of class members
testified about their positive experiences with community services.
But four Groton parents expressed concern that community settings
were inadequate, described the high quality of care at Seven Hills,
and asked for authority to decide the best placement for their
children and wards.
Counsel for the state also clarified that the state would
not move class members "over their objection, if efforts to come up
15
Most of the 92 class members not currently on the List
lived in three pediatric facilities; the state believed it could
afford to provide and coordinate active treatment for this group.
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with the right individualized placement and to work with family
members or guardians regarding the merits of the move prove to be
unsuccessful." Counsel agreed with the court's assessment that the
state was reserving the right, in "extreme" cases, to decide that
community placement is best for a class member if the person's
family was unreasonable.
The district court approved the settlement as fair,
reasonable, and adequate at the hearing and explained its reasoning
in an order issued on June 16, 2008. Rolland XI, 562 F. Supp. 2d
176. In a separate decision, dated August 19, 2008, the court
denied the Groton parents' motion to decertify the class. Rolland
XII, 2008 WL 4104488, at *1. We discuss the court's findings and
reasoning in our discussion below.
In light of the entry of the Rule 54(b) judgment, the
parties agree we have appellate jurisdiction over the issues
regarding the settlement's fairness; they disagree whether we have
jurisdiction over the other issues the Groton parents raise.
III.
A. Scope of the Appeal
The only judgment over which we have appellate
jurisdiction, for various reasons, is the Rule 54(b) judgment of
the district court as to the fairness of the class settlement. We
do not reach the Groton parents' arguments that the district court
improperly certified the class or denied class decertificaiton.
-16-
The class was certified in 1999, but the Groton parents
did not then appeal within ten days16 after the class certification
order, as they could have done under Rule 23(f). See Fed. R. Civ.
P. 23(f). Nor did they for the next decade seek entry of a Rule
54(b) order allowing them to appeal the class's certification.
They try to excuse this failure by arguing that they never received
notice of the litigation or the class and that, in any event, the
district court had some obligation to monitor the defined class.
On these facts, these excuses are unavailing.17
The Groton parents did move to decertify the class. The
district court expressly found that they had notice of the
16
Rule 23(f) now gives parties fourteen days to appeal.
See Fed. R. Civ. P. 23(f).
17
It is true that, "[e]ven after a certification order is
entered, the judge remains free to modify it in light of subsequent
developments in the litigation." Gen. Tel. Co. of Sw. v. Falcon,
457 U.S. 147, 160 (1982); see also Fed. R. Civ. P. 23(c)(1)(C).
That rule does not modify Rule 23(f)'s filing deadline for
interlocutory review of a certification or decertification order.
The Groton parents try to rely, first, on Amchem Products,
Inc. v. Windsor, 521 U.S. 591 (1997). That case discussed courts'
obligations when reviewing class certification for settlement only
and not for litigation. Id. at 620. It does not apply.
They also cannot rely on Stephenson v. Dow Chem. Co., 273 F.3d
249 (2d Cir. 2001), vacated in part on other grounds, 539 U.S. 111(2003). In Stephenson the class members suffered exposure to Agent
Orange; the individuals collaterally attacking the settlement had
not become ill from exposure until after the settlement was
approved and its funds disbursed. Id. at 260-61. The court held
that because they did not know they suffered injury from exposure
when the case concluded, they lacked notice and adequate
representation. Id. Binding them to the settlement through res
judicata would violate due process. Id. The Groton parents are
not challenging this settlement after it terminated; indeed the
district court let them object to class certification.
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settlement and heard their objections to the class. Rolland XII,
2008 WL 4104488, at *6. Significantly, they failed to file a
notice of an appeal from that order. That dooms their attempt to
raise the class certification issue before us.18
B. Fairness, Reasonableness, and Adequacy of the Settlement
The heart of this appeal is a challenge to the district
court's approval of the amended settlement. District courts may
only approve class action settlements that are fair, reasonable,
and adequate. City P'ship, 100 F.3d at 1043. They enjoy great
discretion to "balance [a settlement's] benefits and costs" and
apply this general standard. Nat'l Ass'n of Chain Drug Stores v.
New England Carpenters Ass'n, 582 F.3d 30, 45 (1st Cir. 2009).
As we understand their briefs, the Groton parents raise
two objections to the proposed settlement. First, they claim they
lacked timely notice of the settlement. Second, they urge that the
settlement is unfair because it does not give the Groton parents
power to refuse community placement for their children and could
force their children to leave Seven Hills, against their parents'
wishes or view of their children's best interests.
18
On appeal the Groton parents advance an entirely
frivolous standing argument, purportedly based on Article III, not
raised in the trial court and not within the scope of our
interlocutory jurisdiction. There is simply no question that the
certified class met all Article III requirements.
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1. Notice
The Groton plaintiffs do not dispute that they eventually
learned about the settlement, but they contend that notice was
tardy. They point out they were notified of the settlement after
it was negotiated and after DMR had created the List. With earlier
notice they say they could have negotiated for a provision granting
them the right to refuse community placement in the settlement and
consulted with DMR about their children's placement on or absence
from the List.
In its opinion denying class decertification, the
district court found that they had adequate notice of the proposed
settlement; indeed, plaintiffs' counsel personally explained the
agreement to Groton parents at Seven Hills on May 6, 2008. Rolland
XII, 2008 WL 4104488, at *6. This conclusion was not clearly
erroneous, and the district court did not abuse its discretion by
rejecting this notice argument as an attack on the settlement. It
gave the Groton parents a full and fair hearing on their
objections. The Groton parents also cite no authority saying they
were entitled to participate in settlement negotiations, a
questionable proposition given Rule 23's provision for class
counsel. See Fed. R. Civ. P. 23(g)(4).
2. Method for Placing Class Members in the Community
At bottom, the Groton parents contend the settlement is
unfair because it does not adequately protect class members from
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being forced to move to community placements. Their concerns are
threefold. First, they say the settlement creates a final List for
transfer and does not require the state to assess class members
individually or consult with their families. Second, they fear the
settlement creates a "quota" for community placements, requiring
the state to transfer class members even if doing so is unwise.
Third, they argue that Olmstead and a grandfather provision in the
NHRA, 42 U.S.C. § 1396r(e)(7)(C)(i), give them a right to refuse
community placement and the settlement is flawed because it does
not expressly protect this right.
The district court did not abuse its discretion by
finding the agreement was fair despite these objections. The
Groton parents misunderstand key aspects of the agreement that, in
fact, sufficiently protect class members.
In part their reading is flawed because they overlook the
scope of the material that the court appropriately reviewed and
relied on to approve the settlement and that we may consider on
appeal. That material includes the amended Settlement Agreement on
Active Treatment, the Joint Plan that further elucidated the
procedures to be followed under the agreement, relevant federal and
state regulations, and representations that state officials made
-20-
about how they understood their obligations. See Rolland XI, 562
F. Supp. 2d at 178-79, 180-81, 183-84, 185 n.4.19
a. Finality of the List
The Groton parents urge us to accept their interpretation
of the agreement: that the List is final and the state will conduct
no further individualized review of class members. The district
court reached, and the record supports, two conclusions that
undermine the Groton parents' reading of the agreement.
First, the List reflects a preliminary but not final
determination that certain class members may be appropriate for
community placement and transition planning is warranted. Id. at
183. DMR will conduct individualized evaluations during transition
planning and consider the wishes of class members' families. Id.
at 180, 183-84. It will only recommend community placement if it
determines that all of a class member's needs, including medical
needs, can be met in an appropriately designed and staffed
community setting. Id. at 180.
19
We review the evidence presented during fairness hearings
when determining whether a district court abused its discretion by
approving a settlement. See, e.g., Dikeman v. Progressive Exp.
Ins. Co., 312 F. App'x 168, 171 (11th Cir. 2008) (affirming the
district court in part on "the testimony and evidence presented at
the fairness hearing"); United Auto., Aerospace, and Agric. Workers
of Am. v. General Motors Corp., 497 F.3d 615, 636 (7th Cir. 2007)
(reviewing "live testimony" from a fairness hearing); Walker v.
City of Mesquite, 858 F.3d 1071, 1072-73 (5th Cir. 1988) (noting
the district court considered "oral testimony and documentary
exhibits").
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The settlement limits when DMR may transfer List members.
DMR must "determine[], through the PASARR process, that a class
member [on the List] can be safely served in the community, and
that appropriate community services and supports are, or will soon
be, available." During PASARRs, the state assesses, in
consultation with class members and their families, 42 C.F.R.
§ 483.128(c)(3), whether a nursing home, community setting, or
another placement is best for each individual. Id. § 483.132. It
must decide by reviewing an individual's physical and mental health
and ability to perform daily tasks. Id. § 483.132(c).
If the state concludes a community placement is the best
setting, as the DMR commissioner and the state's counsel explained,
it will then determine whether an appropriate placement is
available during transition planning. Under the Joint Plan, the
state must review class members' personal and medical needs and
plan, in careful detail, transition to a "safe" and "appropriate"
community setting, as the settlement requires. Coordinators must
review this plan with RISP team members, including family members
and clinical professionals. The district court could accept, as
the DMR coordinator and the state's counsel requested, that the
state needs time to work with families during this process before
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making a final decision about community placement for List
members.20
Second, the district court found residents had appeal
rights from a decision by the state contrary to the wishes of a
parent or guardian, which the agreement did not limit. Rolland XI,
562 F. Supp. 2d at 184. The settlement reserves any other legal
rights class members have; the parties agree this clause preserves
class members' appellate rights.21
As the parties agree, the NHRA allows anyone adversely
affected by a PASARR determination to appeal through a state
process. 42 U.S.C. § 1396r(e)(7)(F); 42 C.F.R. § 431.220(a)(4);
id. § 483.204(a)(2). State regulations also let Medicaid
beneficiaries appeal decisions by the state Medicaid agency
"regarding the scope and amount of assistance (including, but not
limited to, level-of-care determinations)," 130 Mass. Code. Regs.
610.032(A)(5), and imposing "any condition . . . for assistance or
receipt of assistance that is not authorized by federal or state
law or regulations," id. 610.032(A)(7).
20
During transition planning the state will also consider
what enhanced specialized services List members should receive and
incorporate that plan into their RISPs. Though focused on services
and not placement, the RISP process is another time the state will
review class members' needs with them and their families.
21
The settlement also expressly creates some appellate
rights not relevant to the Groton parents' concerns.
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Class members may appeal PASARR and Medicaid
determinations in the state's administrative "fair hearing"
process. 130 Mass. Code Regs. 456.412(B); id. 610.032(A). The
fair hearing involves an evidentiary hearing before an impartial
agency officer who issues a final, written decision. See id.
610.012-.086. Some cases may receive a rehearing. Id. 610.091.
Parties may seek judicial review in Massachusetts state court. Id.
610.092.
b. Whether the Settlement Creates a Required Quota for
Placement
The Groton parents contend the agreement could force the
state to improperly transfer class members who belong in nursing
homes because it creates a "quota" for placing 640 individuals in
the community. This argument overlooks how the settlement protects
class members from inappropriate transfers and the size of the pool
of class members eligible for transfer.
Under the agreement, the state will transfer class
members incrementally over four years. As we explained above, the
state will carefully review whether a safe, appropriate placement
is available for individuals before moving anyone, and class
members may appeal adverse decisions. The state may also, per the
agreement, keep class members off the List who should not be
transferred because of medical needs or personal circumstances.
Indeed, roughly half of the residents of Seven Hills had been
"deemed inappropriate for community placement," including the
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children of two of the four parents who testified at the fairness
hearing, for this reason. Rolland XI, 562 F. Supp. 2d at 183.
The settling parties expect far more class members will
be eligible for transfer than the state can accommodate in
community placements. The state has initially determined 666 class
members could benefit from community placement. DMR can add up to
160 new nursing home admissions and substitute even more admissions
for class members who die or are removed from the List. If too few
class members could be safely transferred, the parties have
represented to this court that they will renegotiate the agreement.
c. Right to Refuse Community Placement
Finally, the Groton parents argue that the agreement is
unfair because it does not give them an absolute right to refuse
community placement for their children. They say Olmstead and,
especially, a grandfather provision in the NHRA, 42 U.S.C.
§ 1396r(e)(7)(C)(i), give them this right and the agreement is
unfair if it does not expressly protect it. We do not need to
interpret § 1396r(e)(7)(C)(i) definitively and believe it is unwise
to do so in the abstract. The settlement is nonetheless fair
because it allows individual class members to raise this objection
in other settings, where they can assert any rights they may have.
The "grandfather provision," § 1396r(e)(7)(C)(i), allows
some "long-term" residents of nursing homes to choose to remain in
their current nursing facility. At a minimum eligible residents
-25-
must have been determined to need specialized services but not
nursing home care during a PASARR and must have lived in a nursing
home "for at least 30 months before the date of the determination."
Id. The parties dispute when that PASARR determination needed to
occur; we need not resolve this issue.22
It is indisputable that whether an individual is a "long-
term resident" under the statute is a fact-based inquiry. It
depends on the timing and results of the person's PASARRs and where
the person has lived. This issue is best resolved in the
individualized review process we have described above: during class
members' PASARRs, during the transition process, and on appeal.
In light of these facts, it was not an abuse of
discretion for the district court to refuse to strike down the
settlement to more expressly protect any rights a few class members
may ultimately prove they individually have. The court could
choose to approve a settlement that benefits the vast majority of
the class, including those whom the state does not want to move
from Seven Hills, since it adequately protects objectors' rights.
22
The parties disagree whether the grandfather provision
applies only to residents who lived in nursing homes and received
their first PASARR before April 1, 1990, or to residents who lived
in a nursing home for thirty months before a PASARR finding that
they no longer need nursing home care. Nothing in the district
court's decision or this decision prejudices class members' right
to argue they are "long-term residents" under either interpretation
to the state and on appeal. The district court's conclusion that
class members had no legal right to remain in nursing homes, see
Rolland XI, 562 F. Supp. 2d at 185, is not precedent on this issue.
-26-
Olmsted, on which the Groton parents alternatively rely,
adds nothing to their claim. Olmstead interpreted the scope of
state authority to retain individuals in institutions under the
integration mandate of Title II of the ADA. 527 U.S. at 592-93,
602. But Title II is not the basis for the state's authority to
transfer class members to the community in the settlement
agreement; the NHRA is.23
IV.
We affirm the judgment approving the fairness,
reasonableness, and adequacy of the 2008 amended settlement
agreement. The Commonwealth has made many commitments to this
court about ensuring the fairness of the placement process going
forward, and we expect that they will abide by those commitments.
Costs are awarded to the plaintiffs and the state.
23
The Groton parents do not contend Olmstead or Title II
modified the NHRA. As the district court noted, the NHRA actually
requires the state to move most individuals from nursing homes if
they do not need that level of care. Rolland XI, 562 F. Supp. 2d
at 185. The NHRA prohibits federal Medicaid payments to cover
unnecessary nursing home care for individuals other than long-term
residents. See 42 U.S.C. § 1396r(e)(7)(D)(ii).
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