Blown up Sir!: Olmstead Budget Cuts Litigation Just Got A LOT Harder for Plaintiffs

One of my favorite movies of all time is Stripes with Bill Murray and Harold Ramis and John Candy and others. There is a scene in that movie where the Sergeant is on a platform and that platform gets destroyed by mortar fire because the commanding officer, John Larroquette, who is absolutely incompetent, demands that a mortar round be fired. That means Bill Murray’s basic training group has to finish the training on their own. They do so with spectacular colors being selected to go abroad as an elite unit as a result of what they did at the graduation activities. During the graduation activities, a General ask Bill Murray where is the basic training Sergeant? Bill Murray responds “blown up sir!” I was reminded of that scene when I read the case of Clinton L v. Wos. If this case prevails, the ability of people to challenge budget cuts leading to an increased risk of institutionalization being a violation of the ADA, just became incredibly difficult, i.e. “blown up.”

As is my usual practice, I have the blog entry divided into three categories: facts, court’s reasoning, and takeaways. The reader is free to focus on any or all of the categories.

I
Facts

This case involved a reduction in funding by the State of North Carolina with respect to community services offered to people with intellectual disabilities and/or mental illness. As a result of that reduction in funding, one of the local management entities (local management entities manage, funds and plan, develop, implement and monitor mental health and developmental disability services within the catchment area), reduced the reimbursement rate it pays to its service providers for supervised living services from what it was paying for one and two person placements to the same level that it paid for supervised living services provided in three-person placements. Plaintiff sued saying that this decision made as a result of the state funding cuts, meant that they were at an increased risk of institutionalization and therefore, the ADA was violated. There was a 39 day trial and what the court did is discussed below:

II
Court’s Reasoning

The court said not so fast to litigation of this kind and here is why:

1. It is absolutely true that unjustified institutionalization of individuals with disabilities is a form of discrimination under the ADA per Olmstead.

2. But that doesn’t answer the question because: 1) what is meant by an institution?; 2) what is meant by institutionalization; and 3) when can you say that the budget cuts cause the increased risk of institutionalization?

3. With respect to what is an institution or what is institutionalization, neither Olmstead nor title II define the terms. Therefore, the court was left to fashion its own definition.

4. In determining what is an institution, a proper focus would be on size of the facility, isolation it generates, segregation, and lack of choice common to those institutions. Also, the court cited to proposed rules offered by the Centers for Medicare and Medicaid services that said institutions also include but are not limited to settings that are isolated from the larger community, do not allow individual to choose whether or with whom they share a room, limit the freedom of individuals with respect to choices pertaining to daily living experiences such as meals, visitors, and activities, or limit individuals opportunity to pursue community activities. In short, the court decided that an institution is a large, congregate facility for the treatment of those with mental illness or intellectual disabilities that exhibit qualities such as isolation, segregation and lack of personal choice as exemplified by the large, congregate facilities run by the state of North Carolina as well as by ICFMR (intermediate care facilities for those with mental retardation), facilities. (The court actually uses the term mental retardation and developmental disabilities. Those terms are out of date, and so I am using intellectual disabilities).

5. Even where a person would be admitted to an institution as defined in paragraph 4 above, that doesn’t mean that being admitted into such an institution means they are being institutionalized. To determine whether they are being institutionalized, the court said one has to look at the length of the admission and the reasons for the institutional placement.

6. For a person to be able to use Olmstead in this way, that person must be at serious risk of institutionalization or segregation. While it must be a serious risk, that risk does not have to be imminent. If the risk is not imminent, then the public entity’s failure to provide community services due to its cuts to such services must be shown that it will likely cause a decline in health, safety, or welfare leading to the individual’s eventual placement in in institutions. That is, the significant risk of institutionalization has to be found to be causally related to the budget cuts or reduction in reimbursement rates. Causation is governed by a substantially related test (think substantial factor in tort law), because in this kind of situation, there is invariably more than one cause involved in whether a person winds up in an institution.

Takaways:

1. Until this case, it wasn’t all that hard to argue that the ADA may be violated if there is a reduction in budget cuts with respect to having a plaintiff get to first base. Whether the ADA would even apply to budget cuts at all is a separate question and one which I have discussed previously here.

2. This case sets an incredibly high bar for plaintiffs being able to succeed with respect to a case alleging ADA violations creating a risk of institutionalization due to budget cuts because the plaintiff will now have to show a serious risk that they would be placed in an institution; 2) that even though they were placed in an institution, they were also being institutionalized; and 3) that being institutionalized will be substantially related to the budget cuts.

3. Will this case extend throughout the country? It’s unclear. From a plaintiff point of view, this case makes things incredibly difficult and extremely expensive (this case had dueling experts and a 39 day trial and plaintiffs lost). On the other hand, it doesn’t make it impossible, and as mentioned in the blog entry that I linked to in paragraph 1 of this section, it is possible that United States Supreme Court could say that the ADA does not apply in this situation at all. Therefore, if you are a plaintiff, a slim chance is better than no chance. The other reason this case may prove attractive to courts throughout the country, is because courts may be reluctant to say that there is no chance for such a claim to succeed, though they could be within their rights to make that claim, as just mentioned, and instead opt for a situation that would be narrowly tailored to deal with clear cut situations where unnecessary institutionalization is going on.

Medical inquiries, medical exams, disability related inquiries, job relatedness, and consistent with business necessity

I
Overview

The ADA has a whole scheme that deals with medical inquiries/exams/ disability related inquiries. Basically, the way it works is this:

1. Preemployment medical inquiries/ exams are prohibited. However, nothing wrong with asking whether a person can do what would be an essential function of the job. That said, if you are going to make a preemployment medical inquiry pertaining to an essential function of the job, you better be sure that your essential function of the job is airtight. Also, you need to be sure that you are not screening out persons with disabilities through your testing per 42 U.S.C. 12112(b)(6).

2. After a conditional job offer, just about anything is permissible. However, two caveats to that. First, don’t forget about the Genetic Information Nondiscrimination Act. Second, if the information from the medical exam subsequent to a conditional job offer leads the employer to revoke the offer, that revocation must be based upon information that is job-related and consistent with business necessity and the performance of the job cannot be accomplished with reasonable accommodations.

3. With respect to post employment medical inquiries/exams they can only be done when they are job-related and consistent with business necessity. 42 U.S.C. § 12112(d)(4)(A)

Therefore, we need to know several things: what is a medical exam? (II of this blog entry); What is a disability related inquiry? (II 3 of this blog entry); What is job-related? (III of this blog entry); and what is consistent with business necessity? (III of this blog entry)

Two recent cases from the Sixth Circuit (Bates v. DuraAuto Systems and Kroll v. White Lake Ambulance Authority answer both of these questions.

As is my usual practice, I have divided the blog entry into categories. They are: overview; Bates v. DüraAuto Systems; Kroll v. White Lake Ambulance Authority; and takeaways. The reader is free to focus on any or all of the categories.

II
Bates v. DuraAuto Systems

Turning to the first question as to what is a medical exam, Bates does a great job of discussing the area. they noted that the EEOC in their enforcement guidance pertaining to disability related inquiries and medical examinations of employees under the ADA defines a prohibited medical exam as any tests or procedures seeking information about an individual’s physical and mental impairment or physical or psychological health, and they identify several factors for making that determination including: whether the test is administered by a health care professional; whether the test is interpreted by a health care professional; whether the test is designed to reveal an impairment or physical or mental health; whether the test is invasive; whether the test measures an employee’s performance of the task or measures his or her physiological response to performing the task; whether the test is normally given in a medical setting; and whether medical equipment is used. In many cases, some combination of factors will be relevant in figuring out whether a test or procedure is a medical examination, but it is also possible that one factor may be enough. A nonexclusive list of medical examinations include: vision test, blood pressure and cholesterol screening, range of motion test, and diagnostic procedures such as x-rays, CAT scans, and MRIs. The guidance even identifies two qualifying urine tests (discovering alcohol use and detecting diseases that are genetic markers), as also being medical exams.

So is this a medical exam:

An employer orders a plant wide drug screening of a plant’s more than 400 employees. It instructs a third party to test for 12 substances (amphetamines, barbiturates, benzodiazepines, cocaine, ecstasy, marijuana, methadone, meta-amphetamines, opiates, oxycodone, phencyclidine, and propoxyphene). The third-party conducts the urinalysis testing in private at the facility’s technology center and reported to company representatives the result of the tests. Following the results of that test, the employer sent home those employees who tested positive. Where that test was positive, the third-party followed a certain procedure. First, it sent samples out for confirmatory testing to reveal which of the 12 substances triggered the positive result and the amount of that substance in the employee’s system. Second, a person then reviewed the chain of custody and interpreted the test results. In reviewing the results, that person questioned employees and sought medical explanations, sometimes requesting prescription information or documentation from the employee’s physician. If it was determined that the employee had a valid reason for the positive result, including use of prescription medication, the person changed the final test results to negative. That would then be forwarded along to the employer. However, regardless of the reason for the positive result, the employer opted to prohibit any employee from using machine restricted drugs. Further, the employer instructed positive testing employees to bring the medications into the third-party for documentation. The third-party would then report same to the employer and the employer would promptly inform the employee that they would terminate them if they continued to use those medications.

Exactly the facts in : Bates v. DuraAuto Systems.

1. The Sixth Circuit said that these particular facts raised a question of fact as to whether a preemployment medical exam/inquiries were occurring. Very importantly, it bears noting that the screen out provisions were not applicable because none of the plaintiffs were persons with disabilities. For a person to claim violation of the screen out provisions, that person must have a disability, which is not the case for the preemployment medical exam/inquiry provisions.

2. A question of fact existed because:

A. the employer refrained from asking plaintiffs about their medical conditions;

B. The plaintiffs offered no evidence showing how the third parties urinalysis of the posttest reporting of machine restricted medication revealed information to the employer about their medical conditions;

C. No one suggested that the consumption of prescription medication containing the chemicals that the test sought constituted protected medical information or even an impairment under the EEOC definition of medical examinations;

D. An employer would struggle to figure out medical conditions from the prescription drugs discovered through this testing regimen, and clearly the employer had designed the whole program in a way to avoid obtaining information about employees medical conditions and to avoid discriminating against all employees taking prescription drugs.

E. Inconsistencies between the employer’s written and actual drug testing policies, which existed, and disparate treatment of individual employees could show an impermissible motive;

F. It is possible that the plaintiffs could present evidence showing that the disclosure of machine restricted medication typically revealed confidential health information so that a jury would determine that the test targets information about an employee’s physical and mental health regardless of the employer’s intent.

3. But that isn’t the end of the matter because the ADA also prohibits disability related inquiries. A disability related inquiry is any inquiry likely to elicit information about a disability. The court said that a question of fact existed here as well because the system was designed in such a way so that a jury could reasonably conclude either way with respect to whether the ADA’s prohibition on disability related inquiries was violated.

A. Happy Trails to Employer?

So defendant wins? Pyrrhic victory and here’s why. First, since the court found that a question of fact existed with respect to whether a medical exam or a disability related inquiry occurred, that means the case has to go to trial, which will be very expensive with a very uncertain result. Second, for reasons we will explore in our next case, the Sixth Circuit affirmed the jury verdict finding that assuming a medical exam or a disability related inquiry occurred, such exams or inquiries were not job-related nor were they consistent with business necessity. Further, the court also said that certain facts supported the jury’s award of punitive damages, but that the jury needed to have meaningful opportunity to consider the employer’s defense that they tried to craft and carry out its policy in compliance with the law. Accordingly, yes the employer did win so to speak, but if they take this matter to trial and lose with respect to the medical inquiry or medical exam, they are without a defense and potentially facing punitive damages.

III
Kroll v. White Lake Ambulance Authority

The Sixth Circuit in Kroll v. White Lake Ambulance Authority, the prior decision of the Sixth Circuit in this case saying that a medical exam occurred is something I discuss in my book, discusses what it means for a medical exam/inquiry to be job-related and consistent with business necessity. Basically, what happened in this case, is that the plaintiff had an affair with a coworker and that affair went bad. There were then allegations about erratic behavior and without any information about poor job performance and without consulting a psychologist or other mental health professional, the employer decided to force the plaintiff into counseling. When she refused because she could not afford to pay for it, she was no longer scheduled for any additional shifts. As mentioned above, in the first case, the Sixth Circuit found that forcing someone into a medical examination, is a medical examination under the ADA. The question here was whether the medical examination was job-related and consistent with business necessity. With respect to that, the following bears noting:

1. With respect to job-related and consistent with business necessity, the burden of proof is on the employer.

2. In particular, job-related involves the employer showing that the employee requested an accommodation; the employee’s ability to perform the essential functions of the job was impaired; or the employee posed a direct threat to himself or others.

3. With respect to business necessity, an employer is not going to be able to make a bare assertion that a medical examination was merely convenient or expedient. Instead, an employer that decides to require medical examination of an employee has to have a reasonable belief based on objective evidence that the employee’s behavior threatens a vital function of the business.

4. Whether a medical examination [in this case mental examination], is job-related and consistent with business necessity is governed by an objective standard (the reasonable prudent person).

5. The employer also argued that direct threat existed, but the court was having none of it because the assessment of whether an employee poses a direct threat has to be individualized to the employee’s abilities and job functions and based upon a reasonable medical judgment relying on the most current medical knowledge and/or on the best available objective evidence. In this case, the facts were such that there was no evidence in the record that the employer made any kind of medical judgment at all let alone one based upon a reasonable medical judgment. Further, evidence existed that the employer made the decision based on moral convictions rather than on medical concerns, which the court found very troubling.

IV
Takeaways:

1. Both of these cases give a great deal of clarity as to what is a medical exam/disability related inquiry as well as what is job-related and consistent with business necessity.

2. With respect to medical exams/disability related inquiries, it is my opinion that an employer can kill two birds with one stone, and particularly so, if the employer is a governmental contractor. If the employer is a governmental contractor, they are required to have an affirmative action program in place designed to get 7% of their workforce to be persons with disabilities, though we will see how long those regulations stay in place for. It is my experience, that persons with disabilities are uniquely situated with respect to determining, or helping to assess, whether a medical exam or disability related inquiry has occurred. Therefore, if you have persons with disabilities on your payroll, whether it be as an attorney, or as a staff person, consider drafting them to help figure out whether a medical exam or disability related inquiry has occurred. You may get a conservative result, but that would not necessarily be a bad thing. Of course, by no means am I suggesting that all persons with disabilities be pigeonholed into this area as that would be wrong. Even so, it may be something that could work to the mutual advantage of both the employee with a disability and the employer.

3. If an employer is going to defend on the grounds that something is job-related and consistent with business necessity, they’re going to have to meet a fairly high standard and further, that standard is an objective one. The same can be said for the direct threat defense.

4. If you are in a union environment and jobs are involved that are highly dangerous, in addition to this blog entry, you also want to check out this other blog entry of mine as well.

5. If you are considering adopting the Bates drug testing regimen, you might want to consider this from the Sixth Circuit opinion:

“Dura’s drug testing protocol pushes the boundaries of the EEOC’s medical examination and disability inquiry definitions. It certainly goes further than what the ADA’s drug testing exemption specifically permits…” While it is true, as the Sixth Circuit noted, that the regimen does not clearly fit the EEOC’s definitions and examples of prohibited conduct, do you really want to take that chance?

Why the majority and dissenting opinion in the Ninth Circuit case of Weaving v. City of Hillsboro both got it wrong

I first found out about this case- Weaving v. City of Hillsboro, a published decision from the Ninth Circuit decided August 15, 2014- from reading Jon Hyman’s excellent blog entry on it, which can be found here.

Jon does an excellent job of describing the facts of the case and I quote from his blog entry on this:

“Matthew Weaving was diagnosed with ADHD as a child. As an adult, he pursued a career as a police officer, and later a police detective. He joined the Hillsboro, Oregon, Police Department in 2006. His performance record at the HPD was spotty. His co-workers complained that he was often sarcastic, patronizing, and demeaning. After a 2009 complaint by a subordinate about Weaving’s bullying, the HPD placed him on paid administrative leave. While on leave, Weaving sought a mental-health evaluation, which concluded that some of his interpersonal difficulties had been caused by his continuing ADHD. Shortly thereafter, the HPD finished its investigation, finding that Weaving had “fostered a hostile work environment for his subordinates and peers,” was “tyrannical, unapproachable, non-communicative, belittling, demeaning, threatening, intimidating, arrogant and vindictive,” and noting that he “does not possess adequate emotional intelligence to successfully work in a team environment, much less lead a team of police officers.” As a result, the HPD fired Weaving, who sued under the ADA, claiming that the HPD fired him after he disclosed his ADHD diagnosis. The 9th Circuit reversed a jury verdict of more than $500,000. Surprisingly, it did so based on a finding that Weaving’s inability to get along with others as a result of his difficult personality did not qualify as an ADA-protected disability.”

Jon was not the only one surprised. I will go even further than that. I believe that the Ninth Circuit majority and dissenting opinions both got it wrong and here is why:

1. The majority opinion says that the plaintiff’s mental impairment, ADHD, did not substantially limit a major life activity of interacting with others because it simply was not severe enough.

2. The dissenting opinion says there was plenty of evidence to indicate that the major life activity of interacting with others was plenty severe and that it was up to the jury to decide that issue as a question of fact, which they did in the plaintiff’s favor.

3. Both the majority opinion and the dissenting opinion are, in my opinion, wrong for the reasons that follow in the following paragraphs.

4. In Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184 (2002), the Supreme Court of the United States held that for a person to be substantially limited in the major life activity of performing manual tasks, that person has to be severely restricted or prevented from performing that major life activity. This severely restricted or prevented principal was then adopted by the courts across a whole range of major life activities. The result of which was to severely limit the number of people covered by the ADA.

5. The severe curtailment of the scope of the ADA led to the passage of the Americans With Disabilities Act Amendments Act signed by George W. Bush, which went into effect January 1, 2009.

6. The amendments to the ADA specifically state that the previous standard used by the EEOC to define what is a substantial limitation on a major life activity (“significantly restricted”), was too high of a standard. Further, the amendments to the ADA also specifically state that it is rejecting the Toyota Motor standard with respect to what it means to be substantially limited in a major life activity.

7. The amendments to the ADA also specifically state that regulatory bodies have the authority to implement definitional terms.

8. The EEOC took advantage of its authority to implement definitional terms by adding the major life activity of interacting with others to what would be considered a major life activity (the Department of Justice has taken the same approach with respect to its proposed regulations implementing titles II and title III of the ADA).

9. The EEOC defines substantial limitation as being whether a person is substantially limited in a major life activity as compared to most people in the general population.

10. As discussed in this blog entry and in this case, the EEOC regulations are entitled to Chevron deference by the courts.

11. What paragraphs 4-10 mean is that under the ADA as amended whether a physical or mental impairment is severe to some degree is not the issue. Rather, the issue is whether the individual is substantially limited in a major life activity as compared to most people in the general population. To say otherwise, means that you are either not giving the EEOC regulation the deference that it is due or you are bringing back the Toyota Motor standard, which was specifically overruled by the amendments to the ADA, neither of which makes any sense. Alternatively, I suppose you can make an argument that for EEOC added disabilities, the standard for what is a substantial limitation could be higher than the standard for disabilities specifically mentioned in the ADA. However, even that argument doesn’t fly because the EEOC was given the authority under the amendments to the ADA to implement definitional terms and the implementation of that authority is entitled to deference.

Okay, so now we know that the Ninth Circuit majority and dissenting opinions in this case, again in my opinion, got on the wrong highway. What would be next under this analysis?

11. In order to be protected under the ADA, you must have a disability and you must be qualified. Under title I of the ADA, a person with a disabling condition is qualified if he or she satisfies the requisite skill, experience, and education requirements of the position and can, with or without reasonable accommodation, perform the essential functions of the job. (29 C.F.R. § 1630.2(m)).

12. Was interacting with others an essential function of this person’s job? I don’t see how you could claim otherwise. After all, this person was a police officer which meant interacting with his peers, supervisors, and members of the public in order to do his job. Could he do the essential functions of the job with or without reasonable accommodations? On that, the dissent thought it was possible.

13. It is the jury that gets to decide what are the essential functions of the job and that determination is entitled to a high degree of deference. See Barber v. Nabors Drilling USA, Inc., 130 F.3d 702, 708 (5th Cir. 1997).

14. Accordingly, absent evidence that no reasonable juror could have found in the plaintiff’s favor, the jury verdict should have been allowed to stand if the proper analysis was used.

Takeaways:

1. I agree with Jon that even with Weaving, employers should not hold out much hope that they will be able to win many ADA cases on an argument that an employee’s medical condition is not an ADA disability. I also agree with John that in the right case, faced with the right employee, the right performance issues, and the right claimed medical condition, an employer might be able to prevail with arguing the employee’s medical condition does not rise to the level of a substantial limitation on a major life activity and therefore, is not a person with a disability.

2. However, Takeaway 1 leads to the question of who gets to frame the issues before the judge. Is it the parties or is it the judge. To confirm my own experience, I actually asked that question to a seasoned litigator, my friend and colleague Robin Shea who also has a blog in my blogroll. She told me that it is often the parties that get to frame the issues, but there are judges that will step in and direct the parties to go in a different direction. Therefore, if I am a plaintiff attorney and the defense is trying to frame the issue to argue that the plaintiff’s physical or mental impairment does not rise to the level of a disability using the Weaving construct, I would counter that argument with the approach in this blog entry. It should be an extraordinarily unusual case where the defense would be successful in successfully arguing that the medical condition does not rise to the level of a substantial limitation.

3. I do agree with John that the better (safer?) course of action, is to assume the medical condition is an ADA-protected disability, and instead argue the employer cannot offer any reasonable accommodation enabling the employee to perform the essential functions of one job.

4. I agree with John that you can get to the same place using the proper ADA analysis rather than the Weaving construct, BUT not always so. This case may be, and is in my opinion, one of those cases where the Weaving construct, which brings back Toyota Motor from the dead, and the proper ADA analysis, which would take you into essential functions of the job, do lead to different conclusions.

5. Finally, this blog entry may point out the need for judges to get training on the ADA so that they don’t get taken down the wrong highway by the parties.