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Hatten-Gonzales v. Earnest

United States District Court, D. New Mexico

April 5, 2018

DEBRA HATTEN-GONZALES, et al., Plaintiffs,
v.
BRENT EARNEST, Secretary of the New Mexico Human Services Department, Defendant.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court upon the Special Master's Report (Report), filed January 31, 2018. (Doc. 810). On February 20, 2018, both Plaintiffs and Defendant responded to the Report. (Docs. 812 and 813). These responses contain, inter alia, objections to the Report.

         Also, on February 20, 2018, Defendant filed a motion to modify the Report (Motion to Modify). (Doc. 814). Plaintiffs responded to the Motion to Modify on February 28, 2018, and filed a supplemental response on March 9, 2018.[1] (Docs. 822 and 830). Defendant filed a reply to that response and to the supplemental response on March 16, 2018. (Doc. 831).

         On March 1, 2018, the Court held a hearing on the Special Master's Report and objections to the Report. See Fed. R. Civ. P. 53(f)(1) (in acting on special master's report, “court must give the parties notice and an opportunity to be heard” and “may receive evidence”). Daniel Yohalem, Jane Yohalem, Sovereign Hager, and Gail Evans represented Plaintiffs at the hearing while Christopher Collins, Paul Kennedy, and Jessica Hernandez represented Defendant. Defendant Secretary of the New Mexico Human Services Department (HSD), Brent Earnest, was also present at the hearing as were Sean Pearson, Natalie Campbell, Mary Brogdon, Shanita Harrison, the Regional Operation Managers, and 10 County Directors. See Amended Order Setting Hearing (Doc. 815) (requiring certain individuals to attend March 1, 2018, hearing). Defendant, Ms. Brogdon (the Director of the Income Support Division (ISD)), and Mr. Collins testified at the hearing. The Special Master, Lawrence Parker, and the Compliance Specialist, Ramona McKissic, were present at the hearing as well and both presented testimony.

         Having reviewed the Special Master's Report, the objections and other responses to the Report, the Motion to Modify and its briefing, the admissible evidence, and the testimony and argument at the March 1, 2018, hearing, the Court sustains the objections, in part; overrules the objections, in part; and grants the Motion to Modify, in part. The Court, therefore, adopts the Special Master's Report, in part, and modifies the Report as described below.

         A. The Special Master's Report

         1. The Special Master Appointment

         On November 17, 2016, the Court appointed Mr. Parker, an expert in the federal benefits programs at issue, as Special Master.[2] (Doc. 762). Aside from providing expertise and advice to Defendant on issues related to compliance with the Consent Decree, court orders, and federal law, the Court tasked the Special Master to report to the Court, by January 31, 2018, on Defendant's compliance with the Consent Decree, court orders, and federal law, including the propriety, if any, of a receivership. (Doc. 751) at 2; (Doc. 803) at 2. On January 31, 2018, the Special Master filed his Report, together with the Compliance Specialist's Compliance Review Report. (Doc. 810).

         2. The Special Master's Report

         a. Background[3]

         The Special Master first described the background of this lawsuit, the parties, and the Consent Decree. The Special Master included the Consent Decree's definition of the class: “present and future applicants.” (Doc. 810) at 5. The Special Master then commented that there is no “end date for applicants to be included in this class action.” Id.

         The Special Master further described Plaintiffs' counsel and their monitoring activities as follows:

Plaintiffs' advocate and counsel has extended the scope of the Consent Decree to include all SNAP and Medicaid programmatic changes made by the agency and federal oversight agencies. This effort allows the Plaintiffs' involvement in all aspects of the ISD operation, including ISD daily business operation. Plaintiffs' advocate, through a network of ISD employee confidential informants keeps tabs on the ISD operation and program issues. The information received from these ISD staff is used by Plaintiffs to demonstrate failures in the eligibility system. The evidence often indicates that the Defendants are making errors in processing applications. The Plaintiffs usually do not bring the issues identified to the immediate attention of the Defendant due to an inherent lack of trust between the parties.

Id. at 4.

         b. Findings

         Next, the Special Master made several “Findings.” First, the Special Master found that, although Defendant has historically not met the requirements of the Consent Decree, court orders, or federal law, there were times when Defendant complied with part of the United States Department of Agriculture's Food and Nutrition Service (FNS) regulations. (Doc. 810) at 6. FNS actually had, in the past, “awarded enhanced funding bonus money for HSD's performance in the areas of timeliness and Quality Control accuracy, ” areas corresponding to a section of the Consent Decree. Id. The Special Master noted that when Defendant received these awards neither “party filed a motion or sought relief from the court to demonstrate improvement or movement towards a resolution of the Consent Decree.” Id.

         Second, the Special Master found that “Defendant's current executive management team experiences difficulties in managing the ISD program in a positive manner.” Id. The Special Master acknowledged that the current Defendant, appointed in December 2014, and the previous Deputy Cabinet Secretary, appointed in January 2015 with his tenure ending in December 2017, inherited an ISD “program with a history of failure related to the Consent Decree and execution of the program requirements and during times of major operational change (Affordable Care Act and ASPEN implementation).” Id. at 7. Nonetheless, the Special Master found that the former Deputy Cabinet Secretary, who was “responsible for administration of the ISD program, ” had “distinct responsibility” for the following five program failures or crises, id. at 7-8, :

1. a September 26, 2016, FNS advance warning directive and request for a corrective action plan “for failure to meet FNS requirement in providing SNAP [Supplemental Nutrition Assistance Program] services to clients, ” id. at 7;
2. a January 20, 2017, Centers for Medicaid and Medicare Services (CMS) request for a corrective action plan “for failure to meet requirements in providing services to clients, ” id.;
3. the statewide denial of benefits when employees violated the law by adding “resources to client eligibility screens in ASPEN, ” id.;
4. an April 6, 2017, backlog of 36, 622 SNAP applications, recertifications, and interim reports; and
5. an April 6, 2017, backlog of 63, 141 Medicaid applications and recertifications.

         The Special Master then found that “[a]ccountability at all levels is almost nonexistent, creating an environment where failure is an accepted part of the ISD operation and culture.” Id. at 8.

         Finally, the Special Master found that “[t]imelines and deadlines for meeting expectations have little or no relevance in the ISD business operations, processes, or methods of administration” as evidenced by Defendant's actions with respect to “court orders, and federal requirements, including Plaintiffs' requests” and by the fact that Defendant did not meet time requirements and timeframes set forth in the Consent Decree in 1998. Id.

         c. Conclusions

         The Special Master then came to several conclusions as a result of his Findings. First, he concluded that Defendant is not in full compliance with the Consent Decree, court orders, and federal law. Specifically, the Special Master concluded that client services and employee development have not progressed because of deficient management decisions and communications. Even so, the Special Master recognized that since July 2017 Defendant has improved in “Consent Decree reporting, hiring of Family Assistant Analyst level staff, and performance in the area of eligibility determination approval timeliness.” Id. Nonetheless, the Special Master concluded that “management continues to struggle with strategic decision making and implementation of changes” due to a “reactionary management philosophy, ” and due to a lack of “sufficient knowledge, skills and abilities (KSA's) to appropriately manage the program or bring it into full compliance with the Consent Decree.” Id. at 8-9.

         Second, the Special Master concluded that despite “limited progress by the ISD program management, ” instituting a receivership, at this time, would “not result in immediate resolution of the ISD program deficiencies.” Id. at 9. The Special Master supported this conclusion by noting that “there is no evidence of immediate and irreparable harm to the class members.” Id. The Special Master further stated that “the issue of receivership should be reconsidered” if Defendant makes “limited or insufficient progress in meeting the requirements of the recommendations for improvement….” Id.

         d. Recommendations

         The Special Master then made the following nine Recommendations.

1. Remove from any position that directly or indirectly impacts ISD Field Operations: Assistant General Counselor, Former Deputy Cabinet Secretary, Income Support Director, Field Operations Deputy Director, and a Regional Operations Manager. After the changes are implemented, an assessment of County Directors and Line Managers will be completed to determine additional changes required.
Implementation Timeframe: 45 Calendar Days from the order
2. Revise the Consent Decree to give recognition to the parts that have been completed, update requirements, close the class (if allowed by law) and dismiss all court orders, in which the requirements have been met.
Implementation Timeframe: 30 Calendar Days from the Order
3. Implement an unbiased case review process to assist in validating that the ISD program is meeting the requirements of the Consent Decree. The case review process should include:
a) An independent random selection of the case sample.
b) A case sample that includes all case action types.
c) An independent dispute resolution process.
Implementation Timeframe: April 1, 2018
4. ASPEN-Develop and Implement ASPEN refresher training to include functionality and known work arounds for staff success.
Implementation Timeframe: 120 Days from Order
5. Reinstate auto denial and closure functions within ASPEN and eliminate manual eligibility review and completion of the Individual Eligibility Review form by workers.
Implementation Timeframe: March 1, 2018
6. Training-Enhance new employee training to align with realistic job expectations. Improve the accuracy of the training materials (e.g., streamline reporting and Immigration Training).
Implementation Timeframe: 180 Days from Order
7. Implement an agreed upon tolerance level for determining compliance in the area of timeliness to allow for client services and human error.
Implementation Timeframe: 60 Days from Order
8. Appoint knowledgeable subject matter experts for the ISD program areas for SNAP, Medicaid, and Immigration. The three positions will have exclusive responsibility for serving as liaison between ...

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