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United States v. State

United States District Court, E.D. North Carolina, Western Division

September 22, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
STATE OF NORTH CAROLINA, Defendant.

          ORDER

          James C. Dever III, Chief United States District Judge

         On August 23, 2012, the United States of America sued the State of North Carolina ("the State") over alleged violations of Title II of the Americans with Disabilities Act, 42 U.S.C.§ 12132, Title II's implementing regulations, Section 504 of the Rehabilitation Act, 29 U.S.C. § 794, and Section 504's implementing regulations [D.E. 1]. That same day, the parties jointly moved to dismiss the case and for the court to retain jurisdiction to enforce a settlement agreement the parties had executed [D.E. 2]. On October 5, 2012, the court granted the motion to dismiss and retained jurisdiction to enforce the settlement agreement [D.E. 13].

         On January 9, 2017, the United States moved to enforce the settlement agreement [D.E. 15]. On March 1, 2017, the State responded in opposition [D.E. 23]. On March 22, 2017, the United States replied [D.E. 25]. As explained below, the court grants the United States' motion in part and denies it in part.

         I.

         The Americans with Disabilities Act ("ADA") prohibits public entities-such as North Carolina-from discriminating against individuals with disabilities. "[N]o qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity." 42 U.S.C. § 12132.[1] Congress directed the Attorney General to issue regulations implementing this discrimination proscription. See Id. § 12134(a). One of the ADA's implementing regulations, called the "integration regulation, " requires public entities "to administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." 28C.F.R. § 35.130(d). "[T]he most integrated setting appropriate to the needs of qualified individuals with disabilities" means "a setting that enables individuals with disabilities to interact with non-disabled persons to the fullest extent possible." 28 CFR pt. 35, app. B. The integration regulation recognizes "that unjustified placement or retention of persons in institutions, severely limiting their exposure to the outside community, constitutes a form of discrimination based on disability prohibited by Title II." Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 596(1999).

         On November 17, 2010, the United States began investigating North Carolina's mental-health-service system for compliance with Title EL See [D.E. 15-3] 4. Before the investigation, the State relied heavily on adult-care homes in administering its mental-health-service system. See Compl. [D.E. 1]¶¶23, 26. Adult-care homes "provide room and board, housekeeping, and personal care services for two or more unrelated adults." Id. ¶ 22. The facilities are not, however, designed to serve their residents' mental-health needs. See Id. North Carolina's adult-care homes isolated residents-"a significant percentage of whom have diagnoses of mental illness"-from nondisabled persons. Id. ¶¶ 31, 36. Several reports from North Carolina agencies acknowledged that adult-care homes fell short of integrating disabled persons into the community. See Id. ¶¶ 37-38.

         On July 28, 2011, the United States sent North Carolina's Attorney General Roy Cooper a letter detailing the investigation's findings. See [D.E. 15-3]. The United States concluded that North Carolina "fails to provide services to individuals with mental illness in the most integrated setting appropriate to their needs in violation of the ADA." Id. at 2. Specifically, North Carolina "plans, administers, and funds its mental health service system in a manner that unnecessarily segregates persons with mental illness in institutional adult care homes, rather than providing services to them in community-based settings." Id. at 6. As the Supreme Court has held, the "unjustified institutional isolation of persons with disabilities is a form of discrimination" prohibited under Title II. Qlmstead, 527 U.S. at 600. Title II and its integration regulation requires states

to provide community-based treatment for persons with mental disabilities when the State's treatment professionals determine that such placement is appropriate, the affected persons do not oppose such treatment, and the placement can be reasonably accommodated, taking into account the resources available to the State and the needs of others with mental disabilities.

Id. at 607. According to the United States, North Carolina's use of adult-care homes violated the ADA and Qlmstead. See [D.E. 15-3] 7.

         After the State received the letter detailing the investigation's findings, the parties exchanged proposals for resolving the identified deficiencies. See Compl. ¶ 51. Ultimately, the parties executed a settlement agreement that includes certain remedial measures. See id.; [D.E. 2-2]. The measures aim "to provide adequate and appropriate public services and supports ... in the most integrated setting appropriate to meet the needs" of individuals with serious mental illness "who are in or at risk of entry to an adult care home." [D.E. 2-2] § III (A). Two provisions concerning housing and employment are relevant here.

         The settlement agreement requires the State to "develop and implement measures to provide individuals... access to community-based supported housing." Id. § III (B)(1). Community-based supported housing enables residents to attain and maintain affordable housing that integrates them with the community to permit "individuals with disabilities to interact with individuals without disabilities to the fullest extent possible." Id. § III (B)(7)(c). Under the settlement agreement, by July 1, 2020, the State must increase its capacity for supported housing by "provid[ing] access to 3, 000 Housing Slots." Id. § III(B)(3). "Housing Slots" are "State or federal housing vouchers and/or rental subsidies for community-based supported housing" that include "a package of tenancy support, transition support[, ] and rental support." Id. § II(A). In short, supported housing slots combine permanent housing that includes tenancy rights with tenancy support services "that enable residents to attain and maintain integrated, affordable housing." Id. § III(B)(7)(b). The settlement agreement establishes annual, incremental obligations for the number of such housing slots the State must provide. See Id. § III(B)(3). By July 1, 2016, the State was required to provide such housing slots "to at least 1, 166 individuals." Id. § m(B)(3)(d).

         The settlement agreement also requires the State to provide "Supported Employment Services" to individuals with serious mental illness "who are in or at risk of entry to an adult care home." Id. § III(D)(1). "Supported employment services" are "services that will assist individuals in preparing for, identifying, and mamtaining integrated, paid, competitive employment." Id. Again, the settlement agreement establishes annual, incremental obligations dictating the pace at which the State must increase its capacity to provide supported employment services. See Id. § III(D)(3). By July 1, 2016, the State was required to provide supported employment services "to a total of 1, 166 individuals." Id.

         II.

         According to the United States, as of July 1, 2016, the State failed to meet its obligations under the settlement agreement. The State had provided only 650 of the required 1, 166 housing slots and provided supported employment services to only 708 of the required 1, 166 individuals. See [D.E. 15-19] 3, 8.

         As for the events leading to the States' alleged failure, in April 2014, the State began providing monthly reports on its progress toward compliance with the settlement agreement's housing and employment-services requirements. See[D.E. 15-1] 11 n.5. In the monthly reports for April, May, June, and July of 2014, the State reported its compliance with its obligations to provide certain numbers of housing slots by counting the number of individuals "in housing with confirmed lease, " i.e., by counting only occupied housing slots. See [D.E. 15-7] 2, 6 (April 2014 monthly report); [D.E. 15-6] 2, 5 (May 2014 monthly report); [D.E. 15-5] 2, 9 (June 2014 monthly report); [D.E. 15-4] 3, 6 (July 2014 monthly report). Beginning with the August 2014 monthly report, in addition to the occupied housing slots the State displayed a column labeled "total." See [D.E. 15-8] 4. According to the United States, the "total" column represented the total number of occupied and vacant housing slots, the latter being housing slots yet to be reassigned after the former tenant left. See [D.E. 15-1] 12&n.6. Starting with the January 2015 report, the State measured compliance by referencing the combined number of occupied and vacated housing slots. See [D.E. 15-9] 3.

         On March 17, 2015, the United States advised the State that the federal government disagreed with the State's interpretation of how to measure compliance with the supported-housing provisions. See[D.E. 15-10] 3-4. The United States noted the State's position as being that "[c]ompliancewith the supported housing obligations should be measured against the gross number of people who have ever transitioned into supported housing under the Settlement Agreement, regardless of whether they left supported housing, when they left, what services and supports they received while in supported housing, or why they left." Id. at 3. According to the United States, "[c]ompliance with the supported housing provisions of the Settlement Agreement is measured by examining the net number of people in supported housing on the given compliance dates." Id.

         On June 29, 2015, the State responded. See [D.E. 15-11]. The State "disagree[d] with counting only the 'net' number of individuals in housing slots on a certain date." Id. at 3. Instead, the State contended that "[i]f the individual enters into a qualifying residence, and has tenancy support, transition support and rental support, that individual has been provided a Housing Slot, and counts towards the numeric goal, " even if the individual later vacates the slot. Id. On May 27, 2016, the State reiterated this position in a letter: "[T]he State will continue to report (currently monthly) the number of individuals in the priority populations who have been ...


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