Frederick L. v. Department of Public Welfare of Pennsylvania

Opinions of the United

2004 Decisions States Court of Appeals

for the Third Circuit

4-13-2004

L. v. Dept Pub Welfare PA

Precedential or Non-Precedential: Precedential

Docket No. 02-3721

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PRECEDENTIAL

UNITED STATES COURT OF Robert W. Meek

APPEALS FOR THE THIRD CIRCUIT Mark J. Murphy (Argued)

Robin Resnick

Disabilities Law Project

No. 02-3721 Philadelphia, PA l9l07

Attorneys for Appellants

FREDERICK L.; NINA S.; KEVIN C.;

STEVEN F., ON BEHALF OF D. Michael Fisher

THEMSELVES AND ALL PERSONS Attorney General

SIMILARLY SITUATED, Claudia M. Tesoro (Argued)

Senior Deputy Attorney General

Appellants Calvin R. Koons

Senior Deputy Attorney General

v. John G. Knorr, III

Chief Deputy Attorney General

DEPARTMENT OF PUBLIC Office of Attorney General of

WELFARE OF THE Pennsylvania

COMMONWEALTH OF Philadelphia, PA 19107

PENNSYLVANIA; FEATHER O.

HOUSTOUN, IN HER OFFICIAL Attorneys for Appellees

CAPACITY AS SECRETARY OF

PUBLIC WELFARE FOR THE Robert D. Fleischner

COMMONWEALTH OF Center for Public Representation

PENNSYLVANIA Northampton, MA 01060

Attorney for Amici-Appellants

On Appeal from the United States

District Court for the Eastern District of

Pennsylvania OPINION OF THE COURT

(D.C. No. 00-cv-04510)

District Judge: Berle M. Schiller

SLOVITER, Circuit Judge.

Argued October 15, 2003 Appellants represent a class of

mental health patients institutionalized in

Before: SLOVITER, ROTH, and the Norristown State Hospital, a large

CHERTOFF, Circuit Judges congregate psychiatric hospital located in

southeast Pennsylvania, who are qualified

(Filed April 13, 2004) for and wish to be placed in a community-

care setting.1 They seek declaratory and persistent mental disabilities who are

permanent injunctive relief to remedy what institutionalized at Norristown State

they claim are violations of their federal Hospital (“NSH”). Approximately 32% of

statutory rights to a more accelerated the class members are classified as short-

program of deinstitutionalization. They stay patients (approximately 10 months)

appeal from the judgment for the and 68% of the class members are

Commonwealth entered by the District c l a ss i f ie d a s l o n g -s t a y p a t i en t s

Court following a bench trial. Appellants (approximately 12 and a half years).

contend that the District Court erroneously Appellee Department of Public Welfare of

interpreted the applicable legal principles. the Commonwealth of Pennsylvania

The issue raised is significant as it ( “ DPW ” ) is an ag ency of the

implicates the extent to which the state Commonwealth of Pennsylvania (“the

may rely on general cost concerns to avoid Commonwealth”) that provides publicly

its statutory responsibility to eliminate funded mental health care in institutional

disabilities discrimination. and community settings. Also named as a

defendant is Feather O. Houston in her

I. official capacity as Pennsylvania’s

Secretary of Public Welfare. The Office

FACTS AND PROCEDURAL of Mental Health and Substance Abuse

HISTORY Services (“OM HSAS”), is a department of

DPW that has the responsibility to ensure

Appellants represent approximately local access to mental health and substance

300 class members with serious and abuse treatment. App. at 712. OMHSAS

operates nine psychiatric facilities and one

nursing facility throughout Pennsylvania.

1 NSH is one such facility. App. at 717.

The class includes all qualified

Amici curiae represent fourteen former

and willing “persons institutionalized at

state mental health agency administrators

Norristown State Hospital at any time

and have submitted a brief in support of

after September 5, 2000 with the

appellants.

following exceptions: persons who, at

the time of final adjudication, are: 1)

Appellants filed this class action

confined in the Regional Forensic Unit

lawsuit in September 2000, claiming that,

and Juvenile Forensic Unit; 2) are

because the class members are qualified

involuntarily committed . . . ; 3) have

and prepared for community-based

criminal charges pending who have been

services, their continued

found to be incompetent to stand trial; or

institutionalization violates the anti-

4) otherwise are subject to the

discrimination and integration mandates of

jurisdiction of the criminal courts.” App.

the Americans with Disabilities Act

at 711 (Jt. Stipulation).

(“ADA”), 42 U.S.C. §§ 12131-12134 and

2

28 C.F.R. § 35.130(d) (1998), and Section concerns alone do not provide the

504 of the Rehabilitation Act (“RA”), 29 Commonw ealth grounds for a

U.S.C. § 794 and 28 C.F.R. § 41.51(d) fundamental-alteration defense to their

(1998).2 They claim that DPW has failed claims.

to provide services to them in the most

integrated setting appropriate to their On May 6, 2002, the parties filed

needs and has developed no plan to assure extensive joint stipulations regarding the

that this be done. They also claim that facts underlying this case. App. at 710-39.

DPW has failed to require treatment teams In pertinent part, they stated that between

to prepare appropriate individualized 1976 and 1998, DPW closed thirteen state-

assessments of the service needs of the operated psychiatric facilities, including

class members that are a prerequisite for two facilities in southeastern Pennsylvania

community placement. In their answer, in 1990 and 1998. App. at 717.

defendants admit some of the detailed

allegations of the amended complaint and The joint stipulations explain that

deny others. Essentially, defendants assert one way in which DPW closed hospitals is

as an affirmative defense the analysis in by moving qualified patients into

Olmstead v. L.C., 527 U.S. 581 (1999), community care programs. In order to

where a plurality of the Supreme Court determine when a patient is ready for

allowed the states to resist modifications community care, NSH county program

that would effect a fundamental alteration officers hold “monthly Hospital/County

of the states’ services and programs. Discharge Planning meetings,” at which

Although Appellants acknowledge that the staff and county representatives conduct

statutes would not require additional “independent, ongoing assessments of

community placements if the increase each consumer’s discharge readiness and

would require a fundamental alteration of aftercare needs,” and address “unresolved

the Commonwealth’s policy and budget, impediments to discharge.” App. at 715.

Appellants argue that the cost of providing However, NSH does not maintain formal

the additional placements would be waiting lists for community services. App.

defrayed by cost-savings from bed closures at 722.

in NSH. They further argue that cost

The parties also stipulated that

DPW receives the bulk of its mental health

2 funding from the Commonwealth through

The language and implementing

a budgetary process set out in 71 P.S. §§

regulations of the ADA and the RA are

229-240. App. at 723. Under Pa. Code §

virtually the same and the parties

4215.21, county programs must annually

acknowledge the congruence of their

develop and submit to DWP and

integration mandates. Frederick L. v.

OMHSAS an assessment of needs for

Dep’t of Pub. Welfare, 217 F. Supp. 2d

community-based mental health services

581, 591 (E.D. Pa. 2002).

3

and budget estimates. App. at 724. 581 (E.D. Pa. 2002). The District Court

OMHSAS submits a proposed budget to held that Appellants were not entitled to

DPW, which can modify it, and DPW the requested relief because it would have

submits the budget to the Governor’s required a fundamental alteration of the

Office of Budget. The Governor then Commonwealth’s programming and

formulates a comprehensive budget and budgetary allocations. The District Court

submits it to the Legislature, which also found that providing additional

ultimately enacts DPW’s budget. App. at community placements would have

724. negatively affected other state residents

with mental disabilities who received

DPW’s primary funding mechanism services in an institutional setting.

for new community care placements has

been the Community Hospital Integration Appellants contend that the District

Projects Program (“CHIPP”) and the Court erred by stating that the immediate

Southeastern Integration Projects Program extra cost coupled with a lack of

(“SIPP”). App. at 15, 725. The number of immediate cost-savings associated with

community care placements has varied their requested relief, without more,

widely from year to year: 38 in 1996-97; provided DPW with a fundamental-

155 in 1997-98; 82 in 1998-99; 121 in alteration defense. Appellants further

1999-2000; 43 in 2000-01; and 60 argue that the District Court erred in

(proposed) in 2001-02. App. at 726-27. finding that DPW’s pre-budgetary

involvement in the legislative process was

The stipulations describe instances “beyond judicial scrutiny.” Frederick L.,

in which DPW did not request the full 217 F. Supp. 2d at 593.

amount of mental health monies requested

by the counties and instances in which II.

DPW initially requested add itional

community placements, but the Governor DISCUSSION

informed DPW that no funding would be

available or rejected the request. App. at We may set aside the District

725, 729. However, apart from the budget Court’s conclusions of fact only for clear

process, DPW has funded 48 additional error, but we subject its conclusions of law

community care slots through savings in to plenary review. See, e.g., Goldstein v.

overtime. App. at 730. Johnson & Johnson, 251 F.3d 433, 441 (3d

Cir. 2001).

Following a three-day bench trial in

May 2002, the District Court issued a A. Statutory Framework

memorandum opinion on September 5,

2002 in favor of DPW. Frederick L. v. This case arises under Title II of the

Dep’t of Pub. Welfare, 217 F. Supp. 2d ADA and Section 504 of the RA. Title II

4

of the ADA provides that “no qualified individuals with disabilities.” 28 C.F.R. §

individual with a disability shall, by 35.130(d). “[T]he most integrated setting

reasons of such disability, be excluded appropriate to the needs of qualified

from participation in or be denied the individuals with disabilities” is “a setting

benefit of services, programs, or activities that enables individuals with disabilities to

of a public entity, or be subjected to interact with nondisabled persons to the

discrimination by any such entity.” 42 fullest extent possible.” 28 C.F.R. pt. 35,

U.S.C. § 12132. The ADA largely mirrors App. A, p. 450 (1998). In short, where

Section 504 of the RA, which states as appropriate for the patient, both the ADA

follows: and the RA favor integrated, community-

based treatment over institutionalization.

No otherwise qualified Significantly, none of the parties contests

individual with a disability . that proposition.

. . shall, solely by reason of

her or his disability, be B. Olmstead v. L.C.

excluded f ro m the

participation in, be denied The parties agree that this case is

the benefits of, or be governed by the Supreme Court’s decision

subjected to discrimination in Olmstead v. L.C., 527 U.S. 581 (1999).

under any program or In Olmstead, two mental health patients

activity receiving Federal alleged that the State of Georgia violated

financial assistance or under the ADA integration mandate by

any program or activity unnecessarily segregating them in mental

conducted by any Executive health institutions and failing to place

agency or by the United them in community-based treatment

States Postal Service. programs. Id. at 593-94. The Court found

that the ADA reflects the congressional

29 U.S.C. § 794(a). We have construed conclusion that unjustified

the provisions of the RA and the ADA in institutionalization perpetuates prejudice

light of their close similarity of language against mental health patients and severely

and purpose. See Helen L. v. DiDario, 46 diminishes their quality of life. Id. at 600-

F.3d 325, 330-32 (3d Cir.), cert. denied, 01. The Olmstead plurality held that,

516 U.S. 813 (1995). under certain circumstances, unnecessary

institutionalization and segregation may

The ADA and RA’s anti- constitute discrimination. Id. at 597.

discrimination principles culminate in their

integration mandates, which direct states Justice Ginsburg, writing for the

to “administer services, programs, and

activities in the most integrated setting

appropriate to the needs of qualified

5

plurality, 3 emphasized that the integration mo difica tions would

mandate “is not boundless.” Id. at 603. It fundamentally alter the

is quali fied by the “reasonable nature of the service,

modifications” and “fundamental- program, or activity.

alteration” clauses, which provide that:

28 C.F.R. § 35.130(b)(7) (1998). In light

[a] public entity shall make of these qualifications, the plurality held

reasonable modifications in that unnecessary institutionalization only

policies, practices , or violates the ADA when the following

procedures wh en th e conditions are met:

modifications are necessary

to avoid discrimination on [1] the State’s treatment

the basis of disability, unless p r o f e s s io n als have

the public entity can determined that community

demonstrate that making the placement is appropriate, [2]

the transfer fro m

institutional care to a less

3 restrictive setting is not

Justice Ginsburg’s plurality

opposed by the affected

opinion was joined by Justices

individual, and [3] the

O’Connor, Souter, and Breyer. Although

placement can be reasonably

Justice Kennedy concurred in the

accommodated, taking into

judgment of the Court, he wrote

account [a] the resources

separately to explore the question of

available to the State and [b]

whether plaintiffs should have been

the needs of others with

required to prove that they had been

mental disabilities.

treated differently than similarly-situated

persons. See Olmstead, 527 U.S. at 611-

Olmstead, 527 U.S. at 587. The Olmstead

15 (Kennedy, J., concurring). Justice

plurality thus made clear that a state may

Kennedy agreed with the plurality that

defend against disability discrimination

States have a responsibility to provide

claims by establishing that the requested

community-based mental health services,

community services would require a

but characterized the responsibility as a

fundamental alteration of the state’s

limited one and emphasized that States

mental health system. Id.4

are entitled to considerable deference in

allocating their budgets. Id. at 615.

Justice Stevens also joined the judgment

4

of the plurality, but did not believe the Under this scheme, the plaintiff first

question was properly before the Court. bears the burden of articulating a

See Olmstead, 527 U.S. at 607-08 reasonable accommodation. The burden

(Stevens, J., concurring). of proof then shifts to the defendant, who

6

Here, the parties do not dispute that fundamental- alteratio n

Appellants have satisfied the first two component of the

Olmstead requirements. The District reasonable-modificatio ns

Court found that one-third of the regulation would allow the

Appellants were qualified for community- State to show that, in the

based mental health services and an even allocation of available

larger portion of the class expressed resources, immediate relief

affirmative interest in being placed in for the plaintiffs would be

community-based care. The point of inequitable, given the

contention instead arises from the responsibility the State has

interpretation of Olmstead’s third prong undertaken for the care and

regarding reasonable accommodation and treatment of a large and

the fundamental-alteration defense. diverse popula tion of

p e r s o n s w i th m e n t a l

C. Reasonable Modifications and the disabilities.

Fundamental-Alteration Defense

Id. at 604. The plurality thus characterized

The Olmstead plurality explained the state’s available resources and

the reasonable-modifications clause and responsibility to other institutionalized

fundamental-alteration defense as follows: mental health patients as primary

c o n s i d e ra t i o n s i n e v a lu a t i n g a

Sensibly construed, the fundamental-alteration defense.

Although Olmstead permits courts

to consider a state’s financial burdens in

must establish that the requested relief

evaluating the fundamental-alteration

would require an unduly burdensome or

defense, the Olmstead plurality expressly

fundamental alteration of state policy in

proscribed two methods of cost-analysis.

light of its economic resources and its

First, courts may not simply compare the

obligations to other mentally ill persons

cost of providing the plaintiffs with

in the institutional setting. Although

immediate relief against the entirety of the

Appellants argue that the District Court

state’s mental health budget because the

reversed the burden of proof by requiring

state’s mental health budget will almost

Appellants to demonstrate that their

always dwarf the requested relief. Id. at

requested relief did not require a

603. Second, courts may not merely

fundamental alteration, this contention is

compare the cost of institutionalization

belied by the fact that the District Court

against the cost of community-based

expressly acknowledged the appropriate

health services because such a comparison

burdens of proof in its memorandum

would not account for the state’s financial

opinion. See Frederick L., 217 F. Supp.

obligation to continue to operate partially

2d at 592 n.12.

7

full institutions with fixed overhead costs. State’s choices in basic

Id. at 604 n.15. It is notable for our matters such as establishing

purposes that the plurality did not envision or declining to establish new

the fundamental-alteration defense to be a programs. It is not

rare one that states would seldom be able reasonable to read the ADA

to invoke. See id. at 603 (eschewing to permit court intervention

formulation of fundamental-alteration in these decisions.

defense as one permitted “only in the most

limited of circumstances”). Id. at 612-13 (Kennedy, J., concurring).5

Justice Kennedy further stated that states

In his concurrence, Justice Kennedy have considerable latitude in analyzing the

underscored his opposition to judicial “comparative costs of treatment”:

involvement in political and/or budgetary

decisions outside the province of the law. The State is entitled to wide

He stated that federal courts should accord discretion in adopting its

deference to state policym akers’ o w n systems of cost

programmatic and political funding analysis, and, if it chooses,

decisions regarding mental health funding: to allocate health care

resources based on fixed

No State has unlimited and overhead costs for

resources, and each must wh ole institutions and

make hard decisions on how programs. We must be

m u c h t o a ll o c a te to cautious when we seek to

treatment of diseases and infer specific rules limiting

disabilities. If, for example, S t a t e s ’ choic es w h e n

funds for care and treatment Congress has used only

of the mentally ill, including general language in the

the severely mentally ill, are controlling statute.

reduced in order to support

programs directed to the Id. at 615 (Kennedy, J., concurring).

treatment and care of other

disabilities, the decision

may be unfortunate. The

judgment, however, is a 5

Justice Kennedy further opined

political one and not within

that a state without any community

the reach of the statute.

treatment programs in place would not be

G r a v e c o n st i tu t i o n al

required to create such programs under

concerns are raised when a

the ADA. Id. at 613 (Kennedy, J.,

federal court is given the

concurring). We express no opinion on

authority to review the

this view.

8

D. Needs of Other Mentally Ill Persons A. Budget Constraints and Needs of

Others

Olmstead explains that the ADA

does not compel states to provide relief As mentioned above, Olmstead

where the requested relief would require directs courts to evaluate the fundamental-

the state to neglect the needs of other alteration defense in light of the state’s

segments of the mentally disabled resources and its responsibility to continue

population who are not litigants before the providing services to mental health

court. Id. at 597 (recognizing “States’ patients other than those seeking

need to maintain a range of facilities for community care.

the care and treatment of persons with

diverse mental disabilities, and the States’ The bulk of Appellants’ objections

obligation to administer services with an have focused on the following statement in

even hand”). the “Conclusions of Law” section of the

District Court’s opinion:

In addition, the plurality reasoned

that a state may avoid liability by Even if cost savings may

providing “a comprehensive, effectively eventua lly be achieved

working plan for placing qualified persons t h r o u g h

with mental disabilities in less restrictive deinstitutionalization, the

settings, and a waiting list that moved at a immediate extra cost, and

reasonable pace [and was] not controlled the concomitant lack of

by the State's endeavors to keep its immediate aggregate cost

institutions fully populated.” Id. at 605-06. saving, is sufficient to

It is this language that informs our establish that a

decision in this case. “fundamental alteration”

would be required if the

III. relief sought by plaintiffs –

a c c e le ra te d c o m m unity

APPLICATION TO THIS CASE placements – were granted

in this case.

Appellants, along with Amici,

argue that the District Court erroneously Frederick L., 217 F. Supp. 2d at 593

construed the fundamental-alteration (internal citations omitted). Appellants

defense with respect to three primary a r gue that th e C ommonw e alth ’s

factors: 1) cost constraints and articulation of additional costs that would

consideration of institutionalized persons; attend deinstitutionalization does not

2) past progress in deinstitutionalization; automatically give rise to a fundamental-

a n d 3 ) l o ng-te r m p l a n n i n g fo r alteration defense. Fu rthermore ,

deinstitutionalization. Appellants continue, these cost concerns

9

do not automatically make a requested to the recipient’s overall

modification unreasonable. In sum, budget, but a “case-by-case

Appellants urge that the Commonwealth’s analysis weighing factors

fiscal concerns, without more, cannot that include: (1)[t]he overall

provide the sole basis for a fundamental- size of the recipient's

alteration defense. DPW acknowledges program with respect to

that government agencies frequently must number of e m ployees,

spend money in order to meet their ADA n u m b e r an d t yp e o f

and RA obligations, absent a windfall of facilities, and size of

cost-savings. budget; (2)[t]he type of the

r e c i p i e n t ’ s o p e r a t io n ,

We have not previously considered including the composition

the extent to which states may assert a a n d str uctur e of th e

fundamental-alteration defense based on recipient’s workforce; and

fiscal concerns alone, but now hold that if (3)[t]he nature and cost of

the District Court’s opinion is read as the accommodation

focusing only on immediate costs, as n e e d e d.” 2 8 C FR §

Ap pellants contend, it would be 42.511(c) (1998); see 45

inconsistent with Olmstead and the CFR § 84.12(c) (1998)

governing statutes. First, Olmstead lists (same).

several factors that are relevant to the

fundamental-alteration defense, including Id. at 606 n.16.

but not limited to the state’s ability to

continue meeting the needs of other Second, at least one court of

institutionalized mental health patients for appeals and one district court have held

whom community placement is not that a singular focus upon a state’s short-

appropriate, whether the state has a term fiscal constraints will not suffice to

waiting list for community placements, establish a fundamental-alteration defense.

and whether the state has developed a In Fisher v. Oklahoma Health Care

comprehensive plan to move eligible Authority, 335 F.3d 1175 (10th Cir. 2003),

patients into community care settings. the plaintiffs challenged the state’s

Olmstead, 527 U.S. at 605-06. The Court decision to limit the number of

noted that Section 504 of the RA specifies prescriptions provided for outpatients with

that: disabilities who received Medical

Assistance, irrespective of medical

[the fundamental-alteration necessity, while it continued providing

and undue hardship] inquiry unlimited prescriptions to disabled in-

requires not simply an patients in nursing homes. The Fisher

assessment of the cost of the plaintiffs argued that because the policy

accommodation in relation would require low-incom e disabled

10

persons to move to nursing homes in order F. Supp. 2d 1017 (D. Haw. 1999), a class

to continue receiving full coverage of all of mentally retarded persons on a waiting

of their prescriptions, the state had violated list for Hawaii’s community-based

the ADA integration mandate. Id. at 1177- program sued the state for violations of the

78. Oklahoma countered that granting ADA and the RA, seeking additional

plaintiffs’ requested relief would have com mu nity place men ts and the

required a fundamental alteration in light development of a program to encourage

of its fiscal crisis. Id. at 1178, 1182. The movement on the waiting list at a

district court entered summary judgment reasonable pace. Hawaii attempted to

against the plaintiffs because they were not assert a fundamental-alteration defense

currently institutionalized nor did they face based on the theory that increased

a risk of institutionalization. Id. at 1181. community placements would require the

state to ignore state and federal funding

After holding that limits and alter its existing programs by

institutionalization was not a prerequisite establishing an “unlimited” state fund for

to plaintiffs’ ADA claim, the Court of community mental health services. Id. at

Appeals for the Tenth Circuit rejected the 1034. The district court rejected the

state’s fundamental-alteration defense, state’s defense, noting that a potential

stating that Oklahoma’s fiscal problems funding problem, without more, did not

did not establish a per se fundamental- give rise to a fundamental-alteration

alteration defense. Id. at 1182. The court defense. Id. We agree with the Makin

reviewed the legislative history of the court and with Appellants that states

ADA and concluded that Congress cannot sustain a fundamental-alteration

contemplated that states sometimes would defense based solely upon the conclusory

be required to make short-term financial invocation of vaguely-defined fiscal

outlays, even in the face of mounting fiscal constraints.

problems. Id. at 1183. The court thus

decided that such financial obligations did We do not read the District Court’s

not automatically relieve the state from opinion in this case as relying solely on the

meeting Congress’ integration mandate. increased short-term costs that additional

Id. Because the court found that the community placements would entail,

plaintiffs may have had a meritorious notwithstanding the sentence in its opinion

claim under the ADA, it reversed the that suggests a lack of cost-savings alone

district court’s grant of summary judgment will sustain Pennsylvania’s fundamental-

and remanded for consideration of whether alteration defense. Although the court

the plaintiffs’ requested modifications noted the absence of cost-savings and the

would fundamentally alter the program. requisite spending that new community

Id. at 1186. placements would entail, it undertook

more comprehensive analyses that focused

Similarly, in Makin v. Hawaii, 114 upon DPW’s unsuccessful attempts at fund

11

procurement through the Governor’s First, Appellants dispute the District

budget. App. at 20-21. It recognized that Court’s factual conclusion that moving

DPW had submitted evidence that it had currently institutionalized persons into

responsibly spent its budgetary allocation, community settings wo uld req uire

re-allocated overtime savings to increase significant capital outlay by the

funding for community-based mental Commonwealth. Because Appellants

health services, and had a favorable bed anticipate that the lion’s share of the

closure rate when compared with western community care costs would be offset by

Massachusetts, which is considered to be the savings reaped from hospital bed

a model region for deinstitutionalization. closures, they estimate that the additional

App. at 7, 20-21, 30. Moreover, the community placements requested would

D i s t r ic t C o u r t e m p h a s i ze d t h at have a net cost of $1 million. Appellants’

OMHSAS’s ability to increase the number

of community care placements was

hampered by community opposition to

budget; that is, that the District Court

further expansion in the neighborhoods

erred in concluding that it should

where the community centers were

consider DPW’s mental health budget,

located, App. at 23, and that increasing the

rather than the entire budget for DPW.

number of community placements would

Frederick L., 217 F. Supp. 2d at 592

eventually lead to a diminution of services

(“The resources available to the State

for institutionalized persons under the

refers to the state's mental health budget

Commonwealth’s care. App. at 24.

and nothing beyond that budget.”)

(internal quotation and citation omitted).

Appellants c h a l le n g e th e

Although there are a few references to

Common wealth’s position on cost

“resources available to the State,”

constraints, arguing that 1) the relief they

DPW’s myriad non-mental health

request would require only negligible cost

responsibilities, which include cash

increases; 2) DPW could increase its

welfare distribution, medical assistance,

community care budget by simply

food stamps provision, youth centers,

requesting additional funds from the

forestry camps, and chaplaincies, have no

legislature; and 3) DPW could shuffle its

nexus to the “care and treatment” of the

current budget to favor increased

mentally ill described in Olmstead. Id. at

community care programs. We consider

587. Upon examination of the language

and reject each argument. 6

used in Olmstead, we agree with the

District Court that it is DPW’s mental

health budget, rather than DPW’s more

6

Appellants also argue that, in general budget, that must be considered.

undertaking its cost analysis of the See Olmstead, 527 U.S. at 595, 596, 597,

“resources available to the State,” the 603 (referring to state’s “mental health

District Court focused upon the wrong budget” six times).

12

cost comparisons, however, are precisely funding amounts beyond that which is

the sort of reductive cost comparisons p e r m i t te d unde r the Gov e r n o r ’ s

proscribed by the Olmstead plurality, 527 Guidelines.

U.S. at 603-04, as well as by Justice Finally, Appellants argue that the

Kennedy. Id. at 612-13 (Kennedy, J., District Court erred by concluding that

concurring). In following Olmstead and DPW responsibly used its budgeted

r e j e ct i n g A p p e l l a n ts’ d i s f a v o r e d monies because DPW should have shifted

methodology, the District Court did not money from other programs to fund

err. additional com mu nity placem ents .

Assuming a limited pool of budgetary

Second, Appellants argue that the resources, if DPW had siphoned off

District Court erred by not considering monies appropriated for institutional care

DPW’s ability to lobby the legislature for for mental health patients in order to

additional funds during the budgetary increase community placements, DPW

process. Under the budget process in the would have run afoul of Olmstead

Commonwealth, DPW must submit a prohibition on favoring those “who

report to the Commonwealth requesting an commenced civil actions” at the expense

operating budget for the upcoming year of institutionalized mental health patients

before DPW receives its budgetary who are not before the court. Any effort to

allocation. The Governor may then accept institute fund-shifting that would

or reject DPW’s request. Appellants disadvantage other segments of the

contend that DPW does not request the full mentally disabled population would thus

amount necessary to fund all of the fail under Olmstead. 527 U.S. at 604-06.

community placements requested. The

District Court concluded that the pre- However, Appellants argue that

budgetary process “is beyond judicial DPW should re-allocate its funds to favor

scrutiny.” Frederick L., 217 F. Supp. 2d at additional community placements to the

593. We agree. This is not an issue of detriment of budget items that are not

legislative immunity, which DPW has not associated with community care or the care

claimed, but a recognition of the realities of institutionalized persons. For example,

of the budgetary process. DPW explains the parties’ stipulations explain that DPW

that it would not have been able to request requested additional funding for several

the full amount required to fund all of the non-community care items, such as

community placements needed because it approximately $9.5 million for a general

must make its budget request pursuant to 3.5% salary increase for state psychiatric

the Governor’s Guidelines, which limit the services personnel; $2.5 million for

percent-increase that it may request. That contracted repairs; $186,000 for consultant

process is unchallenged here. We cannot fees; $5.7 million for specialized services;

hold, as Appellants would have us do, that $420,000 for contracted personnel

DPW should have requested additional services; $372,000 for travel; $47,000 for

13

out-service training travel; $1.1 million for had a comprehensive,

motorized and other rentals; $75,000 for effectively working plan for

library materials and supplies; $116,000 placing qualified persons

for other services and supplies; and $60.6 with mental disabilities in

million for information systems. App. at less restrictive settings, and

730-32. The Commonwealth explains that a waiting list that moved at

some of the aforementioned increases are a reasonable pace not

mandated under the terms of the controlled by the State’s

employees’ union contract and the other endeav ors to keep its

costs assist in providing “a safe and secure institutions fully populated,

environment” in which to provide “active t h e

treatment” to institutionalized patients. reasonable-modificatio ns

Appellees’ Br. at 53-54. standard would be met.

Because the judiciary is not well- Olmstead, 527 U.S. at 605-06. Appellants

suited to superintend the internal and Amici argue that DPW did not

budgetary decisions of DPW or evaluate main tain a waiting list or have

its physical plant needs, we decline to rely comprehensive, strategic plans to continue

on Appellants’ assertion that the deinstitutionalization.

aforementioned costs are not essential to

the upkeep of DPW’s care-giving The District Court found that DPW

apparatus. Our rejection of Appellants’ begins discharge planning as soon as a

challenges to the District Court’s analysis patient is admitted, with DPW holding

of the cost issues does not mean that we monthly meetings to determine which

similarly adopt the court’s acceptance of patients are ready for discharge. However,

the Commonwealth’s fundamental- the Court acknowledged that, while the

alteration defense. Southeast Region Mental Health Planning

Task Force, which is composed of

B. Past Progress and Future Planning OMHSAS administrators, mental health

for Deinstitutionalization care consumers and providers, had

developed a five-year plan for integration

In setting forth the circumstances in 1994, the Commonwealth has not

under which a state might be relieved of its demonstrated that it has a comprehensive

responsibility to provide ADA relief on the or actionable plan to support increased

basis of the fundamental-alteration integration through community placements

defense, the Olmstead plurality provided or any other mechanisms. App. at 18.

the following hypothetical:

S o m e c o u r t s h a v e giv e n

If, for example, the State considerable weight to the presence of a

were to demonstrate that it planning and/or waiting list referred to by

14

the Olmstead plurality as examples of indicates that the Supreme

factors to be considered in connection with Court intended to shield

the fundamental-alteration defense. The States that had focused on

Makin plaintiffs had alleged that the state and planned for the need to

affirmatively “mismanag[ed] the wait list” place peop le into the

for community care and the court found no community on a statewide

evidence of any “comprehensive plan[s] to basis, prior to and apart

keep the waiting list moving.” Makin, 114 from the litigation before

F. Supp. 2d at 1035 (internal quotation and the Court. A comprehensive

citation omitted). The court thus rejected plan is more than an annual

the state’s fundamental-alteration defense inquiry into whether there

in light of the absence of a comprehensive are extra funds left over in

integration plan, a slow-moving waiting the budget to fund creation

list, and the state’s vague protest of of community beds. It is

general fiscal problems. long-term and central to the

State’s mental health policy,

In contrast, a Maryland district not an “add-on” or “extra

court noted that Maryland maintained a funding” item subject to

waiting list and a waiting list equity fund elimination at the first chill

and also prioritized categories of crisis of budget difficulties.

resolution for services; further, there was

“no indication that the failure to move Amici’s Br. at 23. Appellants argue that

people off the waiting list result[ed] from the District Court should have rejected the

an endeavor to keep the State’s institutions Commonwealth’s fundamental-alteration

fully populated,” as proscribed in defense based on DPW’s failure to

Olmstead. Williams v. Wasserman, 164 F. develop comprehensive plans or a waiting

Supp. 2d 591, 633 n.37 (D. Md. 2001). list. The Commonwealth responds that

Based in part on these factors, the court Olmstead does not require the existence of

sustained the state’s fundamental- a comprehensive plan nor does it state that

alteration defense. Id. at 630-38. a non-stagnant waiting list is the only way

that a state can avoid liability. Appellees’

Appellants, joined by Amici, urge Br. at 41 n.27.

that we adopt long-term planning as a new

factor that should be used in determining Appellants also contend that under

whether a state is entitled to an affirmative the facts of this case the District Court

defense to an ADA or RA claim. Amici erred in crediting DPW’s past progress in

argue as follows: deinstitutionalization. The District Court

initially noted that “[t]he declining state

T he emp hasis on a hospital population is an important aspect

c o m prehensive plan of this changing healthcare environment.

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In the 1950s, Pennsylvania housed d e v e l o p m e n t a l d i s a b il i ti e s ,” a n d

approximately 40,000 people in its state M a r y l a n d ’ s l o n g - s t an d i n g p ol i c y

mental hospitals; at the time of trial [in leadership in supporting community-based

2002], fewer than three thousand patients mental health treatment. Williams, 164 F.

were housed in the ten remaining Supp. 2d at 633. The Williams court noted

OM HSAS-operated facilities.” Frederick that Maryland had “been gradually closing

L., 217 F. Supp. 2d at 583 n.4. At the institutions and expanding the number and

close of its opinion, the District Court range of community-based treatment

concluded that “the record as a whole programs it offers for people with severe

convincingly demonstrates that, over time, disabilities” and Maryland decreased its

DPW has used its mental health budget to mental hospital population from 7,114 in

establish more and more community-based 1970 to 1,200 in 1997. Id. at 634. As

programs, and DPW will continue to do noted above, the District Court in the case

so, to the extent possible given fiscal before u s a l s o cre d ited th e

realities.” Id. at 593. Commonwealth’s past progress. See

Frederick L., 217 F. Supp. 2d at 593.

There is no reference in Olmstead

to a state’s past progress in Although the District Court did not

deinstitutionalization as relevant to err in ta king in to acc oun t the

analyzing a fun dam ental-a lteration Commonwealth’s past progress in

defense. As Appellants argue, past evaluating its fundam ental-alteration

progress is not necessarily probative of defense, it was unrealistic (or unduly

future plans to continue optimistic) in assuming past progress is a

deinstitutionalizing. For example, reliable prediction of future programs. One

although DPW funded more than 200 of our principal concerns is the absence of

community placements in the past two anything that can fairly be considered a

fiscal years, only 33 placements are slated plan for the future. The District Court

for next year. As such, Appellants argue made a finding that “Defendants have not

that DPW’s past progress should not d e m o n s t r a te d that th e y ha ve a

provide grounds for relieving DPW of its comprehensive effectively working plan

responsibility to continue providing for placing qualified persons with mental

community care in the future. disabilities in less restrictive settings.” Id.

at 587. The court continued, “At trial, one

It is true that the district court in of Defendants’ witnesses, Gerald Radke,

Williams, which accepted Maryland’s Deputy Secretary for OMHSAS, admitted

fundamental-alteration defense, relied such a plan is not in place.” Id. The

most upon the state’s “role in the course of representative of the Commonwealth

de-institutionalization[, the] development arguing before us disagreed with the

of community-based treatment programs District Court’s conclusion that there was

for all Maryland citizens with mental and no such plan. She stated that “the district

16

court recognized several indicia of a plan vulnerable. It is a gross injustice to keep

at Norristown that we submit show that these disabled persons in an institution

there is a plan.” Tr. of Argument at 31. notwithstanding the agreement of all

She conceded, however, that there is no relevant parties that they no longer require

piece of paper that represents that plan but institutionalization. We must reflect on

her explanation of a plan (policies and that more than a passing moment. It is not

procedures at NSH utilized for ongoing enough for DPW to give passing

review of patients from the minute they acknowledgment of that fact. It must be

come in and for discharge planning for prepared to make a commitment to action

each patient individually) falls far short of in a manner for which it can be held

the type of plan that we believe the Court accountable by the courts.

referred to in Olmstead.

IV.

The issue is not whether there is a

piece of paper that reflects that there will CONCLUSION

be ongoing progress toward community

placement, but whether the In analyzing whether there was

Commonwealth has given assurance that sufficient evidence before the District

there will be. In that connection what is Court to justify its acceptance of the

needed at the very least is a plan that is Commonwealth’s fundamental-alteration

communicated in some manner. The defense, we conclude that its factual

D i s tr i c t C o u r t a c c e p te d t h e findings are fully supported by the

Commonwealth’s reliance on past progress evidence of record. As noted in the

without requiring a commitment by it to foregoing discussion, many of the court’s

take all reasonable steps to continue that conclusions of law are also consistent with

progress. Under the circumstances the governing legal principles. We believe

presented here, our reading of Olmstead that the cost constraints make it

would require no less. inappropriate for us to direct DPW to

develop 60 community residential slots per

After all, what is at issue is year as Appellants request. Unlike

compliance with two federal statutes Appellants, we credit the Commonwealth

enacted to protect disabled persons. The for its past progress in

courts have held states throughout the deinstitutionalization. We depart from the

country responsible for finding the manner District Court’s analysis in its assumption

to integrate the schools, improve prison or prediction that past actions auger future

conditions, and equalize funding to commitments.

schools within the respective states,

notwithstanding the states’ protestations Accordingly, we will vacate the

about the cost of remedial actions. The judgment of the District Court and remand

plaintiffs in this case are perhaps the most so that it can direct the Commonwealth to

17

make a submission that the District Court

can evaluate to determine whether it

complies with this opinion.

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