# Adkisson v. Eagleson

> District Court, N.D. Illinois · August 29, 2023

URL: https://www.frixlaw.com/law-library/cases/10149352

## Case

- **Court:** District Court, N.D. Illinois
- **Decided:** August 29, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

JOHN ADKISSON, WYRINE ROGERS,
and KEISHAN SHY, Individually
and as the representatives of a
class of similarly situated
persons,

Plaintiffs,

v.

THERESA A. EAGLESON, in her

official capacity as Director of
the Illinois Department of
Healthcare and Family Services, Case No. 22 C 63
201 South Grand Avenue East
Springfield, IL 62763, Judge Harry D. Leinenweber

and

GRACE B. HOU, in her official
capacity as Secretary of the
Illinois Department of Human
Services, 100 South Grand Avenue
East, Springfield, IL 62762,

Defendants.

MEMORANDUM OPINION AND ORDER

I. BACKGROUND
The underlying facts of this matter concern the Medicaid long-
term care application, approval, and payment disbursement
processes for residents in Illinois nursing homes. These processes
bear a brief explanation.
The Illinois Department of Healthcare and Family Services
(“HFS”) and the Illinois Department of Human Services (“DHS”)
(collectively, the “Defendants”) are the state agencies that
administer federal Medicaid programs in Illinois. To receive long-
term care benefits at a nursing home, the resident is required to
submit a two-part application process. First a resident must

submit a general application to receive Medicaid benefits, which
is processed by HFS and results in approval or denial. Second,
and separate from the general-eligibility determination is a long-
term care request, the approval for which results in nursing home
care coverage. In addition to the Medicaid and long-term care
application process for individual patients, there is a separate
application for nursing homes – which are responsible for providing
long-term care services – to receive financial reimbursements from
HFS and DHS. The parties refer to this separate application
process as the MEDI (which stands for “Medical Electronic Data
Interchange”) system. Specifically, nursing homes must submit
what is called a MEDI “admission packet” to HFS for every resident

who receives long-term care benefits. This is required regardless
of whether a resident was approved for Medicaid long-term care
services before or after entering the nursing home; either way,
when the resident enters a nursing home and begins to receive long-
term care, a MEDI admission packet must be submitted for each
resident.
If the MEDI admission is approved, then the nursing home
presumably receives reimbursements for any long-term care services
provided by the nursing home beginning on the date that the
beneficiary was “admitted” into the facility. But Plaintiffs
allege the MEDI admissions are frequently denied for a variety of

reasons. When these denials happen, the individual applicants are
not given notice or an opportunity to appeal their MEDI admission
denial. After a rejection, a new MEDI admission packet with the
correct information must be submitted for the resident, and if the
later application is approved, the reimbursements begin on the
later date. Plaintiffs allege that these MEDI rejections, coupled
with the lack of notice and opportunity to be heard, functionally
allow the Defendants “to avoid paying for care for Medicaid-
approved beneficiaries.” (Dkt. No. 5. (“Am. Compl.”) at 2.)
The original five Named Plaintiffs (“Plaintiffs”) were
Illinois nursing-home residents and had been approved for general
Medicaid, but their MEDI packets were denied. (Id. ¶¶ 92, 108,

124, 140.) Plaintiffs filed their original Complaint alleging
violations of due process under 28 U.S.C. § 1983 and claims under
the several provisions of Federal Medicaid Act, 42 U.S.C. § 1396.
Plaintiffs sought declaratory and injunctive relief, and included
Theresa Eagleson and Grace Hou, the Director of HFS and Secretary
of DHS, respectively, as named Defendants. Plaintiffs alleged
that HFS and DHS, by failing to give residents notice of or
opportunity to appeal such denial, violated the residents’ due
process rights as well as certain provisions of the Medicaid Act.
As a result of the benefits denial, Plaintiffs were allegedly
billed personally for the costs of their care by their nursing

homes. They also allegedly became subject to collections referrals
or other legal actions for the uncovered long-term care that
Defendants did not reimburse the nursing homes, despite
Plaintiffs’ eligibility for such care and despite having Medicaid
approval.
Plaintiffs then filed an Amended Class Action Complaint on
February 4, 2022, indicating their intent to bring the claims on
behalf of similarly situated persons. (Dkt. No. 5.) During the
pendency of the litigation, Defendants settled the claims with one
Plaintiff and one other Plaintiff died, leaving three Plaintiffs
left. The next year on May 1, 2023, Plaintiffs filed a Motion for
Class Certification. [Dkt. No. 31.] Although the timing of when

the remaining three Plaintiffs’ claims were mooted is disputed,
that they were at some point mooted by Defendants paying
Plaintiffs’ outstanding long-term care balances is not in dispute.
On July 26, 2023, Intervenors Salvatore Arcidiacono, and William
Brown (the “Substitute Plaintiffs”) filed a Motion to Intervene
and substitute for the Plaintiffs as class representatives. (Dkt.
No. 37.) These Intervenors seek the same relief as the Named
Plaintiffs.
As Plaintiffs highlight in their briefs, this is the second
suit filed to adjudicate the legality and constitutionality of
Defendants’ denial of the MEDI submissions on the basis of alleged
non-compliance. In Daly v. Eagleson, thirteen plaintiffs brought

claims that were virtually identical to those asserted in the
current suit. 2021 WL 4439428 (N.D. Ill. Sept. 27, 2021) (Chang,
J.) This previous case was ultimately dismissed because Defendants
mooted out some of the plaintiffs by paying their outstanding
invoices, while the remainder died pending resolution of their
claims. Id.
Before the Court is Plaintiffs’ Motion for Class
Certification [Dkt. No. 31], Unnamed Putative Class Members’
Motion to Intervene as Named Party Plaintiffs [Dkt. No. 37], and
Motion to Strike Defendants’ Affidavit [Dkt. No. 42]. For the
reasons stated herein, Plaintiff’s Motion to Strike is denied, and

the case is dismissed as Plaintiffs’ claims became moot in November
2022. Plaintiffs’ Motion for Class Certification and Unnamed
Putative Class Members’ Motion to Intervene are therefore
dismissed as moot.
II. ANALYSIS
On July 26, 2023, Intervenors Salvatore Arcidiacono and
William Brown filed their Motion to Intervene as party-plaintiffs
under Federal Rule of Civil Procedure 24(b). Rule 24(b) authorizes
a Court to permit anyone to intervene, on timely motion, who “has
a claim or defense that shares with the main action a common
question of law or fact.” Both parties agree that Defendants paid

the outstanding claims of the remaining three Plaintiffs thereby
mooting their claims. Intervenors moved to intervene to replace
these Plaintiffs as representatives of the putative class.
Primax Recoveries, Inc. v. Sevilla governs whether and the
extent to which the claims of the unnamed members of the putative
class are moot when the named plaintiffs’ claims become moot. 324
F.3d 544 (7th Cir. 2003). The Seventh Circuit in Primax held that
the mooting of the named plaintiffs’ claims in a putative class
action does not moot the entire action “so long as a motion for
class certification has been made and not ruled on, unless . . .
the movant has been dilatory.” Id. at 546-47. Thus, the timing of
when the named plaintiffs’ claims become moot vis-à-vis the filing

of a motion for class certification is important.
Defendants argue that the Plaintiffs’ claims were all moot by
November 2022, six months before Plaintiffs filed their Motion for
Class Certification in May 2023. Defendants submit an affidavit
from Elizabeth Lithila (“Lithila”) [Dkt. No. 39-1] to support this
timeline. Plaintiffs contend that it was not until May 2023 that
the last of the Plaintiffs’ claim became moot, after Plaintiffs
filed their Motion for Class Certification. Plaintiffs also allege
that the parties were not able to come to an agreement that the
outstanding invoices were paid until mid-June 2023.
A. Motion to Strike

Before deciding on the Motion to Intervene, the Court must
decide Plaintiff’s Motion to Strike Lithila’s affidavit, as this
concerns the timeline of when the claims became moot. Plaintiff
moved to strike the affidavit of Lithila under Rule 12(f) which
permits a court to “strike from a pleading an insufficient defense
or any redundant, immaterial, impertinent, or scandalous matter.”
F. RULE. CIV. P. 12(f). Plaintiffs request the Court strike the
affidavit because Defendants never disclosed Lithila in their
initial Rule 26(a)(1) disclosures, nor supplemented or corrected
their Rule 26(a)(1) disclosures, as required by Rule 26(e). FED.
R. CIV. P. 26(e)(1)(A). Federal Rule of Civil Procedure 37 prohibits
a party from using a witness to supply evidence when that witness

has not been disclosed unless that failure to disclose is
substantially justified or is harmless. FED. R. CIV. P. 37(c)(1).
Here, discovery has been stayed and there was no deadline by
which Defendants were required to supplement disclosures.
Further, Plaintiffs have not been prejudiced because of their
opportunity to respond to the affidavit through a reply brief.
See Berman v. Stryker, 2013 WL 5348324, at *2 (N.D. Ill. Sept. 24,
2013) (refusing to strike supplemental affidavit because “through
its reply, defendant has had a full opportunity to address the
supplement and affidavit.”); Ballard v. Zimmer, 2015 WL 110146, at
*8 (N.D. Ill. Jan. 7, 2015) (same). Nor did Plaintiffs provide

any evidence that the last of Plaintiffs’ outstanding invoices had
not been paid until May 2023, despite their opportunity to submit
such evidence on reply. The Court accordingly denies Plaintiffs’
Motion to Strike Lithila’s affidavit. As a result, the Court will
take at face value the timeline as stated in the affidavit, namely
that all of the claims were mooted by November 2022, six (6) months
before Plaintiffs filed their Motion to certify the class.
B. Motion to Intervene and Motion for Class Certification
Now to the merits of the Motion to Intervene. Defendants argue
the action should be dismissed (and Motion to Intervene and Motion
for Class Certification mooted) because Plaintiffs’ claims became
moot before the filing of the Motion for Class Certification.
Primax, 324 F.3d 544 (7th Cir. 2003). The cases this Court has

observed on this issue deal with defendants’ offers for settlements
under Federal Rule of Civil Procedure 68. Such offers are not at
issue here, but the state of this law is important to review at a
high level as a guide to this Court’s approach.
For several years before being overruled, the Seventh Circuit
in Damasco v. Clearwire Corp. held that Defendants’ mere offers to
settle mooted Plaintiffs’ claims by stripping the Court of
Article III jurisdiction, unless there was a pending Motion for
Class Certification. 662 F.3d 891 (7th Cir. 2011). It also held
that merely filing a class action complaint would not suffice to

keep the case in federal court if the plaintiffs had not also
already filed a motion for class certification. Id. at 896. The
Damasco Court acknowledged that defendants buying off plaintiffs’
claims by making these settlement offers before plaintiffs filed
a class certification motion was a risk, but that it ultimately
did not want to “forge a new rule that runs afoul of Article III.”
Id. at 895. The court offered “[a] simple solution to the buy-off
problem . . .: Class-action plaintiffs can move to certify the
class at the same time that they file their complaint. The
pendency of that motion protects a putative class from attempts to
buy off the named plaintiffs.” Id.
After Damasco, it became “common practice” for plaintiffs to

file a “placeholder” motion to certify a class to protect the
putative class from attempts to buy off the named plaintiff(s).
Fauley v. Royal Canin U.S.A., Inc., 143 F.Supp. 3d 763, 764 (N.D.
Ill. 2016). This changed after the Seventh Circuit in Chapman v.
First Index, Inc. overruled Damasco “to the extent [it held] that
a defendant’s offer of full compensation moots the litigation or
otherwise ends the Article III case or controversy.” 796 F.3d
783, 787 (7th Cir. 2015). The Court reasoned that a “fleeting
offer could not reasonably be equated to full compensation.” Id.
at 788. The Supreme Court confirmed Chapman’s holding in Campbell-
Ewald v. Gomez, 136 S.Ct. 663 (2016). Chapman thus presumably

left intact Damasco’s holding that “[t]o allow a case, not
certified as a class action and with no motion for class
certification even pending, to continue in federal court when the
sole plaintiff no longer maintains a personal stake defies the
limits on federal jurisdiction expressed in Article III.” Damasco,
662 F.3d at 896.
The “buy-off” concern is worth addressing here. As Plaintiffs
note, this very case is a byproduct of the defendants mooting
plaintiffs’ claims in the Daly case. Courts in the Supreme Court
and the Seventh Circuit do caution against authorizing defendants’
tactical maneuvers to buy off plaintiffs. See, e.g., Deposit
Guaranty Nat. Bank v. Roper, 445 U.S. 326, 339 (noting defendants’

“picking off” of plaintiffs’ claims, “before an affirmative ruling
on class certification” [] “would frustrate the objectives of class
actions” and “invite waste of judicial resources by stimulating
successive suits”); see also Primax, 324 F.3d at 547. And while
Defendants’ payments of the outstanding claims are admittedly more
difficult to label a “tactical maneuver” as they were acting
according to their authorized agency responsibilities, the
payments raise the same delay and efficiency concerns against which
courts have cautioned.
Yet despite this buy-off concern, the Court cannot find a way
in which Plaintiffs avoid the pitfalls of mootness under Primax.

Defendants’ payments of the outstanding balances moot Plaintiffs’
claims by extinguishing their injuries required for standing. This
Court adopts Judge Chang’s conclusion in Daly that Plaintiffs’
standing rests on the injury of the outstanding balances on their
accounts at the nursing homes. Daly v. Eagleson, 2021 WL 4439428
at *3 (N.D. Ill. Sept. 27, 2021) (Chang, J.) (finding plaintiffs’
injuries for standing resulting from the rejected MEDI admissions
to be the collections proceedings and bills for uncovered care).
Thus, without outstanding balances, Plaintiffs’ injuries-in-fact
required for standing are extinguished and the claims become moot.
United States Parole Comm'n v. Geraghty, 445 U.S. 388, 397 (1980)

(action becomes moot unless standing continues to exist at every
stage of review). Unlike settlement offers at the center of cases
like Chapman, Plaintiffs here were not afforded the opportunity to
wait on or “reject” Defendants payment of their outstanding
balances at their nursing homes. The payments outright moot
Plaintiffs claims.
The Court understands Plaintiffs to be requesting in part
that the Court find the claims did not become moot until Plaintiffs
were able to confirm the payments with each nursing home.
Unfortunately, the Court does not see how Plaintiffs’ confirmation
could change the fact that as of November 2022 when the final

payment was made, Plaintiffs no longer had outstanding invoices,
and thus no longer had standing.
Plaintiffs also cite to Parks v. Pavkovic for the proposition
that until Defendants “communicate” the mootness to Plaintiffs,
the claims are not moot. 753 F.2d 1397, 1403-1404 (7th Cir. 1985).
But the point the Court made in Parks was that a party cannot
“secretly conclude[]” to settle or moot the claims. Id. at 1404.
There, the State gave no indication that it was agreeing to pay
plaintiffs’ claims. Here, Defendants took specific action that
mooted the claims. Plaintiffs also cite to the Fifth Circuit
(though to no specific Fifth Circuit case) for the proposition
that merely filing a class action complaint should suffice to

preserve potential class members’ claims even if a motion for class
certification has not yet been filed. Unfortunately, the part of
Damasco’s holding left untouched by Chapman explicitly prohibits
this. Damasco, 662 F.3d at 896 (“That the complaint identifies
the suit as a class action is not enough by itself to keep the
case in federal court.”)
What does this mean for Plaintiffs going forward should they
decide to file another suit? This Court is hesitant to breathe
life into the Damasco “placeholder” motion solution in light of
the fact that Courts have considerably walked back from this tactic
after Campbell. In fact, the Court has not found a single case

that has held that Damasco’s recommended placeholder motion
strategy survives and is necessary after Chapman. Rather, to the
extent that placeholder motions are permissible, they are
“discouraged as they come with administrative costs and create an
unhelpful drag on efficiency and judicial economy.” Fauley v. Drug
Depot, Inc., 2016 WL 17309, at *2 (N.D. Ill. Aug. 16, 2016). But
Damasco’s placeholder solution has not technically been overruled,
and the context in which it has been walked back has been in
relation to Rule 68 offers for settlement. Because the same buy-
off concern that animated Damasco’s initial placeholder suggestion
is also at issue here, the Court finds it appropriate to reinstate
this suggestion.

Plaintiffs’ proposed solution was to file each plaintiff
under “John Doe” status to ensure Defendants cannot moot their
claims. Though not necessary to decide this request now, the Court
will note the lack of authority cited in support of using a John
Doe pseudonym under circumstances such as these. It will also
underscore the impracticality concerns Defendants raised that
arise from this degree of shielding the case from Defendants.
IIL. CONCLUSION
For the reasons stated herein the Court denies Plaintiffs’
Motion to Strike Lithila’s affidavit. Named Plaintiffs’ claims
were moot as of November 2022, six (6) months before Named
Plaintiffs filed a Motion for Class Certification. Under Primax,
the potential class members’ claims were thus not preserved and
Plaintiffs’ Motion for Class Certification and Unnamed Putative
Class Members’ Motion to Intervene are dismissed as moot. 324 F.3d
544, 546-47 (7th Cir. 2003). The case is dismissed without
prejudice.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated: 8/29/2023

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10149352. Public record. Not legal advice.