Coe v. DC Department of Human Services ( 2022 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 17-AA-590
EBONY COE, PETITIONER,
V.
DISTRICT OF COLUMBIA DEPARTMENT OF HUMAN SERVICES, RESPONDENT.
On Petition for Review of an Order of the
District of Columbia Office of Administrative Hearings
(DHS-859-16)
(Argued May 16, 2019 Decided September 1, 2022)
Chelsea Sharon, Legal Aid Society for the District of Columbia, with whom
David Carpman, Jonathan H. Levy, and Jennifer Mezey, Legal Aid Society for the
District of Columbia, were on the brief, for petitioner.
Richard S. Love, Senior Assistant Attorney General, with whom Karl
A. Racine, Attorney General for the District of Columbia, Loren L. AliKhan,
Solicitor General at the time the brief was filed, and Caroline S. Van Zile, Deputy
Solicitor General, were on the brief, for respondent.
Before BECKWITH, Associate Judge, and RUIZ and FISHER, ∗ Senior Judges.
Opinion of the court by Associate Judge BECKWITH.
Dissenting opinion by Senior Judge FISHER at page 12.
∗
Judge Fisher was an Associate Judge at the time of argument. His status
changed to Senior Judge on August 23, 2020.
2
BECKWITH, Associate Judge: In early December 2016, the District of
Columbia Department of Human Services (DHS) notified petitioner Ebony Coe
that her Medicaid benefits would be terminated at the end of the month. Ms. Coe
appealed the agency’s determination to the Office of Administrative Hearings
(OAH). She argued that DHS erred in terminating her benefits and that the error
was part of an unlawful policy of terminating Medicaid coverage without
conducting the pretermination assessment required by federal law. An
Administrative Law Judge (ALJ) found that DHS erroneously terminated Ms.
Coe’s benefits due to a misapplication of federal law, but ruled that he lacked
authority to order the mayor to correct the unlawful policy. He determined that
such an order could be issued only by a judge of the Superior Court upon a request
for equitable relief made in that court. DHS argues that this is a proper
interpretation of the relevant statutes and Ms. Coe contends that it is not. We agree
with Ms. Coe and we reverse and remand for further proceedings.
I.
States that participate in Medicaid must comply with federal requirements in
administering the program. See Naccache v. Taylor, 199 A.3d 181, 187 (D.C.
3
2018). 1 Medicaid provides health care benefits to, among others, people who are
“aged, blind, or disabled,” as well as people whose Modified Adjusted Gross
Income (MAGI) falls below a certain level. See 42 U.S.C. § 1396-1. Some people
qualify for Medicaid under more than one provision. The District must reevaluate
the eligibility of individuals who are enrolled in Medicaid due to disability at least
every twelve months. See 42 C.F.R. § 435.916(b). Before terminating an enrolled
person from Medicaid, the Department of Human Services (DHS) “must consider
all bases of eligibility.” Id. § 435.916(f)(1). Until DHS has found an enrolled
individual to be ineligible, it must “[c]ontinue to furnish Medicaid regularly” to
that person. 42 C.F.R. § 435.930(b).
Ms. Coe was receiving Medicaid coverage due to her disability when she
received a notice that she would “not be eligible for medical assistance of any
type” as of January 2017 because she was “neither aged or disabled.” The notice
also stated, “[Y]ou can apply for Medicaid at DC Health Link.” Believing that she
might qualify for Medicaid based on her MAGI, Ms. Coe began the online DC
Health Link application. She was stopped by an error message that said she could
not apply because she had active Medicaid coverage. A DHS caseworker
1
The term “state” includes the District of Columbia. See 42 C.F.R.
§ 400.203 (2021).
4
confirmed that she could not apply until her current benefits expired, and a DHS
supervisor suggested that she apply once her disability-based coverage ended.
Ms. Coe filed a request for a hearing with OAH, seeking reversal of the
agency’s termination decision on the ground that DHS had failed to screen her for
MAGI eligibility as it was legally required to do. She also requested an order
pursuant to D.C. Code § 4-210.16 directing DHS to correct its policy of
terminating non-MAGI Medicaid coverage without conducting the necessary
pretermination review of MAGI eligibility. DHS conceded that it failed to
evaluate alternate bases for Ms. Coe’s Medicaid eligibility because of a
“technological barrier”—namely, a “built-in failsafe to prevent fraud and duplicate
case creation.” DHS asserted that it would address cases “on an ad-hoc basis as
they are brought to the Agency’s attention” while it modified the certification
process. DHS also stated that it would help Ms. Coe obtain a determination of her
income-based eligibility and “ensur[e] that she [would] not experience a break in
coverage” if she still qualified for Medicaid.
The ALJ reversed DHS’s termination of Ms. Coe’s benefits because DHS
violated Ms. Coe’s right under 42 C.F.R. § 435.930(b) to receive benefits until
“found to be ineligible.” The ALJ also found that the termination was “based on ‘a
misapplication of law’ within the meaning of [s]ection 4-210.16.” It declined,
5
however, to issue an order directing the mayor to take corrective action. Stating
that ALJs have “expressly-defined statutory and regulatory powers” that are
distinct from the “broad, equitable powers of a court,” the ALJ concluded that an
order directing the mayor to correct the unlawful policy would constitute “purely
declaratory relief that may overstep the boundaries of [his] authority as an
administrative law judge.”
II.
On petition for review, Ms. Coe argues that D.C. Code § 4-210.16(b) gives
ALJs authority to issue an order directing the mayor to correct a policy that does
not comply with federal law. DHS counters that § 4-210.16(b) does not confer
such authority and that in the absence of explicit statutory authorization, ALJs are
limited to sustaining or reversing a mayoral action. 2
“The proper construction of a statute raises a question of law, and our review
is de novo.” Washington v. District of Columbia Dep’t of Pub. Works, 954 A.2d
945, 948 (D.C. 2008). “Because the OAH is simply an all-purpose adjudicatory
body, without a particular subject-matter focus, its legal interpretations do not
command deference.” United Dominion Mgmt. Co. v. District of Columbia Rental
2
DHS did not appeal the ALJ’s decision reversing the notice of termination.
6
Hous. Comm’n, 101 A.3d 426, 430 (D.C. 2014) (citing Williams v. District of
Columbia Dep’t of Pub. Works, 65 A.3d 100, 104 (D.C. 2013)).
The OAH Establishment Act gives ALJs the power to issue “interlocutory
orders and orders.” D.C. Code § 2-1831.09(b)(5). (An order is defined as “the
whole or any part of the final disposition (whether affirmative, negative,
injunctive, or declaratory in form) of the Mayor or of any agency in any matter
other than rulemaking, but including licensing.” 3 See id. § 2-1831.01(12) (stating
that for purposes of the act establishing OAH, “order” has the “meaning provided
that term in § 2-502(11)”). D.C. Code § 2-1831.09(e) provides that an ALJ, “or a
party in interest in an adjudicated case, may apply to” a Superior Court judge “for
an order issued on an expedited basis to show cause why a person should not be
held in civil contempt for refusal to comply with an order or an interlocutory order
issued by an Administrative Law Judge.” Further, a “party in interest may also
bring an action for any other equitable or legal remedy authorized by law to
compel compliance with the requirements of an order or interlocutory order of an
Administrative Law Judge.” Id. The government argues that this language
signifies that the Superior Court is the only proper forum for requesting and
3
The OAH Establishment Act incorporates this definition from a statute that
also discusses the authority of the D.C. Council and other bodies. In this context,
the phrase “of the Mayor or of any agency” is a vestige of the original statute and
has no independent meaning in this context.
7
receiving equitable relief relevant to an OAH order. That the Superior Court is
empowered to provide relief, however, does not mean an ALJ is barred from doing
so, as long as the ALJ’s actions are authorized by statute. See Paschall v. District
of Columbia Dep’t of Health, 871 A.2d 463, 467, 469 n.6 (D.C. 2005).
The Public Assistance Act allows any aggrieved applicant for or recipient of
public assistance to request a hearing, which will “be conducted in accordance with
the provisions of this subchapter.” D.C. Code § 4-210.01. One such provision
instructs that “the Mayor will correct” a challenged policy when (1) the petitioner
“challenges a departmental policy”; (2) the petitioner’s claim for relief is granted;
and (3) the relief is based on “a misapplication of law contained in the policy.” Id.§ 4-210.16(b).
It is undisputed that the ALJ who heard Ms. Coe’s case found that all three
requirements were met: (1) Ms. Coe challenged the departmental policy 4 of
terminating Medicaid benefits without conducting the pretermination review
4
DHS argued before the ALJ that a “technological barrier,” not DHS policy,
was responsible for the misapplication of law that jeopardized Ms. Coe’s benefits.
DHS concedes, however, that the ALJ “found that the misapplication of law was
contained in a District ‘policy.’” The ALJ found a policy because DHS was aware
of the problem but rather than “declining to issue the Medicaid termination
notice—and continuing to provide benefits—until it was able to perform the
legally required eligibility determination,” it instead “chose to issue a notice of
termination in violation of federal law.”
8
required by 42 C.F.R. § 435.930(b); (2) the ALJ granted Ms. Coe’s request for
relief by reversing her termination from Medicaid; and (3) the ALJ granted such
relief because DHS had terminated Ms. Coe’s benefits “based on a misapplication
of the law.” The question, then, is whether the statutory scheme authorizes an ALJ
to order the Mayor to “correct” the proscribed policy. D.C. Code § 44-1003.09.
DHS argues that the ALJ here was limited to either “sustaining or reversing
the challenged mayoral action aggrieving Ms. Coe—the proposed termination of
benefits.” It posits this as the logical extension of the principle that “administrative
law tribunals . . . do not have the inherent ‘equitable authority’” of courts in the
judicial branch. District of Columbia Off. of Tax & Revenue v. Shuman, 82 A.3d
58, 70 (D.C. 2013) (quoting Ramos v. District of Columbia Dep’t of Consumer &
Regul. Affs., 601 A.2d 1069, 1073 (D.C. 1992)). In Shuman, an OAH ALJ
considered a “glitch” in a District computer system that caused a series of
erroneous tax bills and notices to be sent to a household. Id. at 61. The ALJ
prohibited the tax agency from sending further incorrect notices or bills to the
couple, imposed “conditional monthly fines potentially adding up to many tens of
thousands of dollars,” and ordered “the unconditional transfer of a large amount of
money from one District agency” to another. Id. at 61–62. This court reversed the
ALJ’s decision, finding that the “totally unprecedented” order by the ALJ was
9
based on a subjective “sense of justice” rather than “the provisions of the statute in
question.” Id. at 69–70.
But Shuman does not bar ALJs from imposing declaratory or injunctive
relief in all circumstances. It simply reinforces that ALJs must operate within the
bounds prescribed by statute. 5
In Paschall, a petitioner was seeking readmission to a nursing facility under
D.C. Code § 44–1003.09(c), which provides that “[i]f as a result of a hearing held
under this section a resident is to be returned to a facility, the Mayor shall facilitate
that return . . . .” See 871 A.2d at 468. The ALJ determined that he could not
order the patient’s readmission to the facility before a hearing and that “such an
order could be issued only by a judge of the Superior Court upon request for
equitable relief made in that court.” Id. at 464. Although the court ultimately
5
To the extent DHS argues that only § 4-210.16(a), not § 4-210.16(b), could
authorize “broad” and “systemic” relief, that argument is without merit.
Subsection (a) allows multiple similarly situated individuals to seek resolution as a
class while subsection (b) instructs that misapplications of the law will be
corrected. There is no indication that a claimant must pursue class-action status
under subsection (a) in order to obtain relief under subsection (b), and “[e]ach
provision of the statute should be given effect, so as not to read any language out
of a statute ‘whenever a reasonable interpretation is available that can give
meaning to each word in the statute.’” Bd. of Dirs. of the Wash. City Orphan
Asylum v. Board. of Trs. of the Wash. City Orphan Asylum, 798 A.2d 1068, 1080
(D.C. 2002) (quoting Sch. St. Assocs. Ltd. P’ship v. District of Columbia, 764 A.2d
798, 807 (D.C. 2001) (en banc)).
10
rested its decision on a federal regulation, see id. at 469 (citing 42 C.F.R.
§§ 431.205, -246), it also considered the proper interpretation of D.C. Code § 44–
1003.09(c). Ultimately concluding that § 44–1003.09(c) empowered “the ALJ [to]
order readmission after a hearing,” we also noted that the petitioner made “a strong
case” that § 44-1003.09(c) implicitly authorized the ALJ to order readmission even
before the hearing. Id.
The language “the Mayor will” in D.C. Code § 4-210.16 authorizes an ALJ
to order the mayor to correct an unlawful policy. 6 See Paschall, 871 A.2d at 468–
69 (drawing a similar conclusion based on language in D.C. Code § 44–1003.09(c)
that “the Mayor shall facilitate” the return of a successful hearing applicant). The
government argues, and Ms. Coe agrees, that the ALJ does not have authority to
enforce an order for equitable relief. That does not, however, prevent the ALJ
from issuing an order that may then be enforced by the Superior Court. See D.C.
Code §§ 2-1831.01(12), 2-502(11), 2-1821.09(e).
We need not decide whether such an order would be appropriate in this case.
“To hold, as we do, that the ALJ possesses such authority is not to say that he must
6
DHS contends that the language “the Mayor will correct that challenged
policy” leaves no room for an injunction and it must be the Mayor herself who
takes action. We are not persuaded by this reading, which presumably would
prevent a Superior Court judge, and not just an OAH ALJ, from issuing an
injunction.
11
exercise it or that to do so will be appropriate in all cases, including this one.”
Paschall, 871 A.2d at 469. DHS contends in its brief that “after identifying the
issue that caused the premature proposed termination of Ms. Coe’s benefits, the
Mayor put a process in place to correct the mistake.” DHS made similar
representations to the ALJ but, as DHS acknowledges, the ALJ did not address
them. Ms. Coe, for her part, provided evidence that other people had experienced
unlawful termination of benefits, suggesting that her termination was the result of
“standard practice,” rather than “isolated employee error.” Ms. Coe made similar
representations to this court, which DHS contested. On remand, the ALJ should
consider whether DHS’s unlawful policy still exists and whether an order directing
the mayor to correct the policy is warranted in this case. See id. (remanding for
factfinding by ALJ and determination whether requested order was still necessary);
Badawi v. Hawk One Sec., Inc., 21 A.3d 607, 614 (D.C. 2011) (“Normally, when
an agency fails to make a finding on a materially contested issue of fact, we do not
‘fill the gap by making [our] own determination from the record, but must remand
the case for findings on that issue.’” (alteration in original) (quoting Morris v.
EPA, 975 A.2d 176, 181 (D.C. 2009))).
12
III.
For the foregoing reasons, we reverse the ALJ’s ruling that he lacked the
authority to order the mayor to correct the unlawful policy and remand for further
proceedings not inconsistent with this opinion.
So ordered.
FISHER, Senior Judge, dissenting: The ALJ granted Ebony Coe all the relief
she needed and all that she was entitled to receive. Nevertheless, petitioner’s
lawyers are determined to use this case as a vehicle to obtain a ruling that may
benefit other clients in future cases. I believe that we should “confine ourselves to
a resolution of the only question fairly presented to us by this appeal . . . .” District
of Columbia v. Wical Ltd. P’ship, 630 A.2d 174, 182 (D.C. 1993).
Petitioner sought reversal of the agency’s decision to terminate her benefits,
arguing that DHS had failed to screen her for MAGI eligibility, as the law
required. DHS responded that it indeed should have considered whether Coe was
13
eligible for Medicaid coverage on alternative bases. The agency attributed the
error to a faulty process; its computer system had “a built-in failsafe to prevent
fraud and duplicate case creation” which blocked active Medicaid enrollees from
receiving an eligibility determination. DHS did not have “a policy, construction,
or interpretation containing a misapplication of th[e] law.” DHS assured the ALJ
that it was “actively working” to change the certification process and, in the
meantime, averred that it would address cases “on an ad-hoc basis as they are
brought to the Agency’s attention.” As for Coe, DHS stated that it would “assist
her in obtaining” a determination of her income-based eligibility and “ensur[e] that
she does not experience a break in coverage” if she still qualified for Medicaid.
Because the notice of termination was “based on a misapplication of law,”
the ALJ reversed the agency’s decision. He concluded: “By noticing the
termination of Petitioner’s Medicaid benefits without having considered whether
she was eligible for benefits based on her MAGI, DHS violated Petitioner’s right,
under federal law, to continue receiving Medicaid benefits until ‘found to be
ineligible,’” citing 42 C.F.R. § 435.930(b). However, the ALJ declined to issue
“the broad remedial order [Coe] seeks,” adding that the reversal of the termination
notice “provides Petitioner with adequate relief in this case.” He also decided not
to grant “declaratory relief beyond that which explains [the] order of reversal.”
14
Here, the parties primarily dispute whether the ALJ had the power to order
the mayor to comply with the law through an injunction and, if so, whether he was
obliged to issue such an order here. Those are not easy questions. The statute
clearly indicates that the mayor “will” correct a challenged policy if a claimant is
granted relief because of a misapplication of law — but the text is silent as to
whether an ALJ is empowered to order the mayor to do so.
In this case it is unnecessary to decide whether an ALJ has the authority to
issue an injunction, either stemming from the specific language of § 4-210.16(b) or
based on other statutory or implied authority. “An injunction is a drastic and
extraordinary remedy, which should not be granted as a matter of course.”
Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 165 (2010). No need for an
injunction exists if a “less drastic remedy” is “sufficient to redress” the injury. Id.at 165–66. The language of § 4-210.16(b) already instructs the Mayor to “correct
the challenged policy, construction or interpretation,” and petitioner has not shown
why that legislative directive is inadequate or ineffective.
Here, moreover, petitioner already received the relief that she needed:
a comprehensive review of her eligibility for Medicaid. The ALJ’s order, which
15
reversed the notice of termination, effectively kept petitioner in her previous
enrollment status; petitioner’s reply brief confirms that the District has complied
with the ALJ’s order. Additionally, DHS declared that it would review Coe’s
eligibility for MAGI-based Medicaid and that Coe would not face a gap in her
coverage if she qualifies. Regarding individuals who are similarly situated to Coe,
the District represents that it has developed a practice to manually process such
applications. As the District’s brief promises: “Under the current ABD renewal
process, if the beneficiary is no longer eligible under their current category, the
agency will evaluate the beneficiary for another Medicaid eligibility category prior
to terminating Medicaid coverage.”
This makeshift process no doubt is cumbersome and inefficient. Should the
District again fail to meet the requirements of the Medicaid program, one potential
avenue for seeking broader relief is a consolidated administrative hearing based on
the provision that allows “a class action on behalf of . . . others similarly situated,”
D.C. Code § 4-210.16(a), (a procedure which petitioner did not invoke here. We
also note that the Superior Court “can assuredly issue equitable relief in an
appropriate case.” D.C. Office of Tax and Revenue v. Shuman, 82 A.3d 58, 74
(D.C. 2013).
16
The ALJ properly concluded that DHS had misapplied the law, he reversed
the notice of termination that the agency had sent to petitioner prematurely, and the
District has devised an interim solution. Because petitioner’s injury has been
redressed, there is no need in this case to determine whether a more “drastic and
extraordinary remedy,” such as an injunction, would be available in other
circumstances.