United States Court of Appeals, Third Circuit
United States Court of Appeals, Third Circuit
2d 1114
Under Title XIX of the Social Security Act federal funds are made available to
the states to cover the major part of the cost of medical assistance for the poor.
As a condition of participation, the statute requires each state to make EPSDT
services available to children of eligible poor families. Under the EPSDT
program, children are screened for medical abnormalities by physical
examinations and a battery of specified medical tests. Most problems
discovered by screening are then treated under the EPSDT program, either by
the examining physician or by other participating doctors. Children are eligible
for screening under the EPSDT program from infancy, on a periodic schedule
of one screen every three months up to the age of a year and a half, and
thereafter once a year until age 21.
The plaintiffs' complaint was filed on February 13, 1973. Its central allegation
was that although Pennsylvania was a Medicaid participant it had not complied
with the provisions of Title XIX requiring an EPSDT program. The defendants
defaulted, and on September 7, 1973 the district court entered a default
judgment. That judgment set forth an injunction directing the defendants to
refrain from depriving eligible persons of the screening, diagnosis and
treatment required by 42 U.S.C. 1396d and required the defendants within 30
days (a) to promulgate regulations extending EPSDT coverage to all eligible
persons, and (b) to implement a statewide outreach program. The defendants
were required to establish, within 60 days, a full statewide program for all
eligible children. They were also directed to request appropriations from the
Pennsylvania legislature adequate to implement the required EPSDT program.
In late 1975 the plaintiffs, dissatisfied with the defendants' performance under
the 1974 consent decree, moved to hold them in contempt. Before that motion
was adjudicated the parties entered into a new agreement. The plaintiffs agreed
to a postponement of the payment provisions of the 1974 decree, on condition
that the defendants perform 180,000 EPSDT screens during the 1976 calendar
year. In the event that the defendants met this goal during 1976 the entire 1974
decree would become void. If not, the payment provisions would remain in
effect. The Commonwealth undertook to perform 210,000 screens in 1977, to
provide screening appointments within 45 days of a request, and to schedule
treatment for medical conditions discovered within 60 days of the screening.
The Commonwealth also undertook to make other specific improvements in the
Pennsylvania EPSDT program. The district court incorporated the new consent
agreement as an order of the court on March 15, 1976 (the 1976 decree). Thus
under the 1976 decree the defendants were obliged to achieve 180,000 screens
by December 31, 1976 or incur liability for the payments provided for in the
1974 decree.
provisions of the March 15, 1974 decree. A motion filed on March 18, 1977,
sought to hold the defendants in contempt for failure to provide any orthodontic
services.1 On March 7, 1978, prior to the hearing on the foregoing motions, the
plaintiffs filed a third motion to hold defendants in contempt for failing to meet
the goal of 210,000 screens in 1977, for continuing failure to provide treatment
within 60 days of screening, and for failing to issue certain monthly reports
required by the 1976 decree. This motion also sought to enforce the payment
provisions of the 1974 decree for eligible persons not screened in 1977.
d) The Hearing and the District Court Rulings
11
12
A hearing on the several motions was held by the district court on March 28
and 29, 1978. The uncontradicted evidence presented at the hearing showed
that screens performed under the Pennsylvania EPSDT program had increased
from 115,000 in calendar 1975 to 176,000 in calendar 1976, an increase of over
50%. Simultaneously, the "no show" rate for screening appointments had
decreased from 50% To between 35% And 45%. The evidence also showed
that Pennsylvania performed the highest number of screens in absolute terms of
any state in the nation, and ranked eighth in terms of the percentage of eligible
persons screened, ahead of all states of comparable size except for Texas.
James McKittrick, the Welfare Department official in charge of the EPSDT
program, testified, again without contradiction, that the Pennsylvania EPSDT
program was among the 5 or 6 best programs in the country. Chapin Wilson,
the HEW official responsible for EPSDT oversight, testified that Pennsylvania's
outreach program was superior, and that the state's extensive provider
recruitment program was "unique" and impressive.
13
14
15
To explain the failure to meet the 180,000 screen standard, the defendants
introduced evidence that the total population eligible for EPSDT screening in
1976 was between 230,000 and 250,000 persons, a figure which, due to
declining welfare rolls, was significantly lower than had been expected at the
time of the consent decree. Given that figure, they argued, and the 35-45% No
show rate, achievement of the screening goals was virtually impossible.
Substantial testimony was also presented indicating that the Department of
Welfare's screening program had been badly set back by unanticipated
difficulties in obtaining the cooperation and assistance of the Pennsylvania
Department of Health.
16
At the close of the hearing on March 29, 1978 the district court ruled from the
bench on all motions except that directed to providing orthodontic services. On
each of the other motions he ruled in favor of the defendants, at least in part.
The court refused to hold the defendants in contempt, finding that although they
had not complied with the 1976 decree, to the extent it lay within their power
they had attempted in good faith to do so. The Rule 60(b) motion was granted,
and a modified decree entered. The modified decree eliminated the numerical
requirements of the two earlier decrees, the related payment provisions, and the
absolute 60 day time limit for treatment, but in other respects continued in effect
provisions substantially identical with those embodied in the 1976 order. The
effect of the modification was a refusal to enforce the payment provisions of
the 1974 and 1976 decrees. An order reflecting these rulings was entered on
July 18, 1978.
17
II
THE RULE 60(b) DETERMINATION
18
The plaintiffs contend that the district court erred in modifying the 1976 decree
because the defendants failed to establish grounds for relief from a judgment.
As noted above, the 1976 decree was modified in only three respects. First, the
strict numerical quotas for annual EPSDT screens, applicable for the years
1976 and 1977, were eliminated. Second, the related provision for payment of
133% Of the cost of such screens to eligible but unscreened persons fell with
the elimination of the quotas. Third, the defendants' duty to provide treatment
for discovered abnormalities within 60 days of the EPSDT examination in
which they were discovered was qualified.3 A broad and detailed injunction
mandating the continued operation of the Pennsylvania EPSDT program in
compliance with federal law remains in effect. Moreover paragraph 13 of that
injunction requires that the defendants set for each county its share of an annual
statewide screening goal.
19
Although the district court did not say so specifically, we conclude that the
modification was made pursuant to Rule 60(b)(5), which provides for relief
from judgment when "it is no longer equitable that the judgment should have
prospective application." We have observed that the standard for reopening a
consent final judgment is a strict one. The Rule confers on district judges "(no)
standardless residual discretionary power to set aside judgments . . . ."
Mayberry v. Maroney, 558 F.2d 1159, 1163 (3d Cir. 1977). Such relief is
extraordinary and may be granted only upon a showing of exceptional
circumstances. Id. We recognize, as well, that while consent decrees are
judicial acts, they have often been recognized as having many of the attributes
of a contract voluntarily undertaken. See United States v. ITT Continental
Baking Co., 420 U.S. 223, 236, 95 S.Ct. 926, 43 L.Ed.2d 148 (1975); United
States v. Armour Co., 402 U.S. 673, 681, 91 S.Ct. 1752, 29 L.Ed.2d 256
(1971). And where, as here, the defendants made a free, calculated and
deliberate choice to submit to an agreed upon decree rather than seek a more
favorable litigated judgment their burden under Rule 60(b) is perhaps even
more formidable than had they litigated and lost. Nevertheless it is undisputed
that the court has the power to modify a decree when the danger which the
decree sought to prevent has been "attenuated to a shadow" or the decree if
unmodified could become for the future "an instrument of wrong." United
States v. Swift & Co., 286 U.S. 106, 115, 119, 52 S.Ct. 460, 76 L.Ed. 999
(1932).
20
We note, first, that the decree continues in force most of the provisions
designed to enforce the Commonwealth's obligation to comply with 42 U.S.C.
1396d(a)(4)(B), provisions which have produced one of the most successful
EPSDT programs in the country. The modifications in question thus do not
leave class members open to the evils to which the lawsuit was first addressed.
This fact distinguishes this case from those relied on by the appellants. In
United States v. Swift & Co., 286 U.S. 106 (1932), for example, the proposed
23
Thus we conclude that the order of July 18, 1976 modifying the 1976 decree
should be affirmed.
III
THE ORTHODONTIA ISSUE
24
The district court held that defendants' conceded failure to provide medically
necessary, as distinguished from cosmetic, orthodontic dental care to eligible
children as a part of its EPSDT program was not inconsistent with Title XIX of
the Social Security Act or with the implementing HEW regulations. The
possible consequences of the Commonwealth's omission of medically necessary
orthodontic care are demonstrated on the present record by the case of Laureen
Jerico, the eleven year old daughter of Arlene Millard, a plaintiff class
representative. A report from Dr. James A. Bond, D.D.S., Chairman,
Department of Orthodontics, Temple University School of Dentistry, indicated
that Laurene had a medical need for orthodontic treatment. According to Doctor
Bond:
26
27
Any state which participates in the Medicaid program must provide to the
categorically needy a number of specified health services. 42 U.S.C.
1396d(a). Among the mandatory programs is EPSDT. A state must provide:
.28. . such early and periodic screening and diagnosis of individuals who are eligible
under the plan and are under the age of 21 to ascertain their physical or mental
defects, and such health care, treatment, or other measures to correct or ameliorate
defects and chronic conditions discovered thereby, as may be provided in regulations
of the Secretary. . . .
29
42 U.S.C. 1396d(a)(4)(B).
30
31
(a) the medicaid agency must make available, to recipients under age 21, early
and periodic screening and diagnosis to determine physical and mental defects
and treatment of conditions discovered within the limits in the plan on amount,
duration, and scope.
32
(b) Subject to utilization controls it may impose, the agency must also make
available, if they are not otherwise included in the plan
33
34
(2) Dental services needed for relief of pain and infection, restoration of teeth,
and maintenance of dental health.
35
36
37 a minimum, the dental services that must be provided include . . . services for
"(a)s
dental disease which, if left untreated, may become acute dental problems or may
cause irreversible damage to the teeth or supporting structures."
38
39
40
In the only case which has been called to our attention dealing with the
availability of orthodontia to EPSDT recipients, the Supreme Judicial Court of
Maine rejected the same contention which the Commonwealth makes here.
Brooks v. Smith, 356 A.2d 723 (Me.1976). Justice Weatherbee held, and we
agree, that the federal regulation and treatment manual cannot fairly be read as
requiring the complete removal of a child's teeth and the substitution of a
removable prosthesis if the child has a dental condition correctable by less
drastic orthodontic procedures.
41
Against the foregoing reading of the statute, regulations and manual the
defendants offer the testimony of Mr. Chapin Wilson, a HEW employee
charged with the responsibility of implementing the EPSDT program
nationwide. He testified that federal regulations do not require the provision of
orthodontic services. He did not, however, advance any persuasive reason for
this legal opinion, and the authoritative voice of the agency is the text of the
regulation. We read it, as does the Supreme Court of Maine, as mandating the
provision of all dental services, including orthodontia, "needed for relief of pain
and infection, restoration of teeth, and maintenance of dental health."
42
Thus the order of October 3, 1978 denying injunctive relief against the denial
of orthodontic services under the Pennsylvania EPSDT program must be
reversed.
VI
CONCLUSION
43
The Order of July 18, 1978 appealed from in No. 78-2221 will be affirmed. The
Order of October 3, 1978 appealed from in No. 78-2353 will be reversed and
the case remanded for the entry of an appropriate supplementary injunction
requiring the Commonwealth to provide to eligible EPSDT recipients those
orthodontic services which we have held to be required by HEW's
implementing regulations.
This motion was later orally modified to a motion for a preliminary injunction
The complaint asserts jurisdiction under 28 U.S.C. 1331 and alleges that the
amount in controversy exceeds $10,000. That allegation was never put in issue,
and the consent judgment of March 15, 1974 must be deemed to have
adjudicated the court's subject matter jurisdiction since the time for direct
appeal from that judgment has already run. See, e. g., Dowell v. Applegate, 152
U.S. 327, 14 S.Ct. 611, 38 L.Ed. 463 (1894); Des Moines Navig. & R. Co. v.
Iowa Homestead Co., 123 U.S. 552, 8 S.Ct. 217, 31 L.Ed. 202 (1887);
McCormick v. Sullivan, 23 U.S. (10 Wheat.) 192, 6 L.Ed. 300 (U.S.1825). Cf.
Durfee v. Duke, 375 U.S. 106, 84 S.Ct. 242, 11 L.Ed.2d 186 (1963). The
defendants have not contested subject matter jurisdiction under 1331 in their
Rule 60(b) motion or on appeal. We have no occasion, therefore, to consider
the alternative allegation of jurisdiction under 28 U.S.C. 1343(3). Cf.
Chapman v. Houston Welfare Rights Org., --- U.S. ----, 99 S.Ct. 1905, 60
L.Ed.2d 508 (1979)
Under the 1976 decree the defendants' duty to provide treatment within 60 days
was absolute. The new decree permits relief from the 60 days obligation where
"good reason for a greater length of time is documented in the recipient's case
record."