Babbitt v. State of Mich.

778 F. Supp. 941, 1991 U.S. Dist. LEXIS 17075, 1991 WL 248640
CourtDistrict Court, W.D. Michigan
DecidedOctober 30, 1991
Docket1:91-cv-00056
StatusPublished
Cited by6 cases

This text of 778 F. Supp. 941 (Babbitt v. State of Mich.) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Babbitt v. State of Mich., 778 F. Supp. 941, 1991 U.S. Dist. LEXIS 17075, 1991 WL 248640 (W.D. Mich. 1991).

Opinion

OPINION

ENSLEN, District Judge.

This case is before the Court on two motions: 1) defendants’ May 6,1991 motion for dismissal, or in the alternative, for summary judgment; and 2) plaintiffs’ motion for designation as a class action. 1 Plaintiffs are proposed representatives of three classes and one subclass of medicare and medicaid beneficiaries in the State of Michigan: all persons in the State of Michigan who are medicaid recipients or who have an active medicaid “spend-down case”; recipients of the aid to families with dependent children program (AFDC) or those who had been recipients of AFDC prior to the ratable reduction imposed March 1, 1991; all persons who, on or after April 1, 1991, were eliminated from the OBRA/QMB medicaid program or who have been denied eligibility for medicaid benefits but would have qualified for medicaid benefits if OBRA/QMB had not been eliminated; and *943 medicaid beneficiaries who receive or are medically in need of podiatry services. 2

This lawsuit arises out of various actions taken by defendants to reduce the expenditures of the Michigan Department of Social Services (DSS). Plaintiffs claim that certain of defendants’ budget-cutting actions violate federal law. The claims remaining at issue are: 1) an approximate 8-9% cut in benefits 3 to recipients under AFDC; and 2) elimination of medicaid eligibility for certain qualified medicare beneficiaries. Plaintiffs seek injunctive and declaratory relief in their underlying complaint.

Plaintiffs’ original complaint, filed April 19,1991, was amended on May 1,1991, and plaintiffs moved for a temporary restraining order and preliminary injunction on May 2, 1991. The Court issued a temporary restraining order as to one of plaintiffs’ claims on May 2, 1991. The Court denied plaintiff’s motion for a preliminary injunction on May 10, 1991. I concluded that even though plaintiffs had shown irreparable harm, plaintiffs had not demonstrated a likelihood of success on the merits and any public benefit that would have resulted from issuance of the injunction was offset by the harm to third parties that would have occurred as a result of the state budget limitations imposed by the state legislature.

I. Background

The Michigan Constitution mandates a balanced state budget. Mich. Const, art. V, §§ 18 & 20. Responding to a projected deficit in excess of $800 million by the end of the fiscal year ending September 30, 1991, the Michigan legislature enacted an across-the-board 9.2% cut in appropriations of state general purpose/general funds for all state agencies and programs, with certain enumerated exceptions relating to educational organizations. 1990 P.A. 357. Because the DSS and the legislature were unable to agree on a revenue transfer package by January 22, 1991, the 9.2% reduction was automatically applied to the DSS budget. As a result, the DSS director had the obligation to implement cost-saving measures within the department, subject to applicable state and federal laws.

Due to the legislative mandate, on March 1, 1991, the DSS reduced AFDC benefit levels by 17%. 4 Pursuant to Michigan Public Act 68, approximately one-half of the March 1st cuts have been restored, but the benefits are allegedly still well below those in effect in 1988. Plaintiffs’ Response at 1-2. Although an amendment for the 17% cuts was allegedly submitted and approved by HHS, it is not known whether another amendment has been submitted as to the restored benefits.

On April 1,1991, the DSS also eliminated an optional program enacted pursuant to the Omnibus Budget Reconciliation Act of 1986 (the OBRA/QMB program), 5 which enabled qualified medicare beneficiaries with incomes less than 90% of the federal poverty level to be eligible for medicaid benefits. Plaintiff alleges that this elimination affects approximately 12,000 state residents. On June 18, 1991, DSS submitted an amendment eliminating the OBRA/QMB program effective April 1st, but it is unknown whether the Department of Health and Human Services (HHS) has responded to it.

Plaintiffs’ amended complaint, brought pursuant to 42 U.S.C. § 1983, contains three counts: 1) defendants’ reduction in the AFDC benefits violates 42 U.S.C. §§ 1396a(c) & 1396b(i)(9); 2) defendants’ reduction in AFDC benefit levels has re- *944 suited in the state failing to provide benefits in conformity with its state plan, which violates 42 U.S.C. § 602(a)(1); and 3) defendants’ elimination of the OBRA/QMB program violates 42 U.S.C. § 1396a(a)(l).

II. AFDC Reductions

AFDC is a cooperative, voluntary federal-state program which provides aid and services to needy families with children. 42 U.S.C. § 601. The federal government may make payments to only those states which have “submitted and had approved by the Secretary, State plans for aid and services to needy families with children.” 6 Id. The state plan must describe the nature and scope of the state’s AFDC program and provide assurances that “it will be administered in conformity with the specific requirements stipulated” in the Social Security Act, its regulations, and other “applicable official issuances of the Department.” 45 C.F.R. § 201.2. Plaintiffs allege that the reductions in benefits implemented by the State of Michigan are a violation of the Social Security Act because the state is no longer in compliance with its approved state plan and because the reductions are below the allegedly mandatory maintenance of level provisions.

A. Colorado River Abstention

At least several months prior to the institution of this action, a number of individuals and organizations sought declaratory and injunctive relief against certain aspects of the DSS budget reductions in a state court action, Michigan Ass’n for the Education of Young Children v. Miller, Wayne County Cir. Court No. 91-104221-CL. One of the organizational plaintiffs in the state court action was the Michigan Fair Budget Action Coalition, which is a confederation of human service organizations that includes the Michigan Welfare Rights Organization — the organizational plaintiff in this action. In the state court action, plaintiffs asserted 12 grounds for relief, including a section 1983 claim that defendants’ ratable reduction in the AFDC grant levels violated the Social Security Act. First Amended Complaint, Count XII, Defendants’ Brief in Support, Ex. 2.

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Bluebook (online)
778 F. Supp. 941, 1991 U.S. Dist. LEXIS 17075, 1991 WL 248640, Counsel Stack Legal Research, https://law.counselstack.com/opinion/babbitt-v-state-of-mich-miwd-1991.