In Olmstead v. L.C., 527 U.S. 581 (1999), United States Supreme Court held that it violated the Americans with Disabilities Act for for a State to have a system that did not allow persons with mental illness to be treated in the community. Since that time, the United States government has been very aggressive in pursuing actions all over the country so that people who have been served in institutions are given the ability to be served in the community. The Department of Justice has a regulation mandating integration of persons with disabilities. Olmstead is now evolving in some other ways.
Just other day, Oregon was warned by the Department Of Justice that its system of not giving people in sheltered workshops the opportunity to develop skills so that they could work in the community instead of sheltered workshops was in violation of the Americans with Disabilities Act. In May of this year, a District Court judge in Oregon, in Lane v. Kitzhaber, 2012 WL 1802031 (D. OR. May 15, 2012), relying on the reasoning in Olmstead held that a State could be in violation of the Americans with Disabilities Act if their system was set up so that it did not give opportunities for persons in sheltered workshops to otherwise be given the opportunity to participate in integrated activities. Id. at *6. That is, there has to be employment services offered to persons with disabilities other than sheltered workshops or to say it in another way, it is in violation of the ADA to unnecessarily segregate persons with disabilities into sheltered workshops. Id. at *8
Preventive tip: the State will want to ensure that persons in sheltered workshops are individually assessed to see whether they may be able to function in integrated settings. The State will also want to ensure that programs are in place so that such individuals currently in sheltered workshops who can function in integrated settings (it is possible the number of such persons is not that high), are given the opportunity to take advantage of those programs.
The State of Washington ran into some serious budget issues. The agencies were directed to cut 10% from the budget. As a result of the political process the State of Washington decided to cut 10% from their budgets. In particular, the personal care program was significantly reduced. This meant that many people receiving care under this program could well need to be institutionalized as a result of these reductions. The question is whether the State is subjecting itself to violations of the Americans with Disabilities Act by making a decision to reduce services where that decision may lead to increased institutionalization of persons with disabilities. The Ninth Circuit in M.R. v. Dreyfus, 2012 WL 2218824 (9th Cir. June 18, 2012) agreed. The State of Washington then petitioned for an en banc hearing of the Ninth Circuit. There were not sufficient votes to rehear the case en banc, and so the panel decision stands. However, there was a vigorous dissent with regards to the denial of the en banc hearing filed by Judge Rawlinson.
Does Olmstead really say that a State could lose an Americans with Disabilities Act lawsuit when due to insufficient funds it decides to cut its budget? While it is true that Olmstead mandates that persons with disabilities be integrated into the community, one of the things that has been neglected over the years about that case is that there was no majority view as to when the obligation of the State to integrate persons with disabilities into the community kicks in. That is, when might a State have a defense for not integrating persons with disabilities into the community. On that point, only a plurality existed in Olmstead.
Under title II of the ADA, there is a defense if the modification would create an undue burden (financial) or fundamentally alter (operational) the nature of the program. With respect to undue burden, the question has always been whether you would measure it against the entire operations of the governmental entity or perhaps against the budget of a particular program. Justice Ginsburg in Olmstead said that to measure it against the entire State budget would mean that the fundamental alteration defense would be no defense at all. Id. at 603. Rather, the allocation of available resources given the responsibility of the State has undertaken for the care and treatment of a large and diverse population of persons needed to be considered. Id. at 604. Justice Ginsburg also said that the State would be able to successfully defend such a suit if they could demonstrate that it had a comprehensive, effectively working plan for placing qualified person with mental disabilities in less restrictive settings as well as a waiting list moving at a reasonable pace not controlled by the State’s endeavors to keep the institution fully populated. Id. at 605-606. Finally, Justice Ginsburg turned to § 504 regulations, which deal with employment, to say that undue hardship (undue burden and undue hardship are the same concepts except that undue hardship applies to title I and undue burden applies to title II and title III of the ADA), do not refer to overall budget but a case-by-case analysis weighing a variety of factors including: the overall size of the program with respect to the number of employees, number and type of facility, and size of budget; the type of recipients operation, including the composition and structure of their workforce; and the nature and cost of the accommodation needed. Id. at 606 fn 16.
What does this mean? First, it is unfortunate that fundamental alteration and undue burden seem to be confused since in ADA speak, the cases and regulations have referred to undue burden as pertaining to financial and fundamental alteration as pertaining to operations. This distinction also allows for two different phrases to reflect different concepts; otherwise, why have the different phrases in all? Second, it is simply very unclear whether Justice Ginsburg, who was joined by Justice O’Connor (no longer on the court), Justice Souter (no longer on the court) with respect to this section, would say that Olmstead could be used as a sword to prevent budget cuts. In particular, Justice Ginsburg reference to “overall resources,” suggest that the State may have some leeway in how it decides to parcel out its resources particularly, in light of the other points discussed above, if the State has other ways of ensuring that persons with disabilities do not face unnecessary institutionalization.
Justice Kennedy and Justice Breyer while agreeing with the majority in terms of result did not agree with the section of Justice Ginsburg’s opinion that talked about fundamental alteration/undue hardship. In particular, in the Kennedy opinion, Justice Kennedy states that no State has unlimited resources and that each State must make hard decisions on how much to allocate the treatment of diseases and disabilities. Id. at 612 (Justice Kennedy concurring). He goes on to say that if funds for care and treatment of the mentally ill, including the severely mentally ill, are reduced in order to support programs directed to the treatment and care of other disabilities, that decision may be unfortunate but it is a political one and not within the reach of the Americans with Disabilities Act. Id. Further, Justice Kennedy continues by saying that grave constitutional concerns would be raised when a federal court is given the authority to review the State’s choices on basic matters such as establishing or declining to establish new programs. Id. at 612-613. That is, it is simply not reasonable to read the ADA to permit court intervention on those kinds of decisions. Id. at 613. These statements are quite clear. From these statements, it is hard to believe that Justice Kennedy, whose opinion was joined by Justice Breyer, would allow for the Americans with Disabilities Act to be used in a way to prevent budget cuts.
Justice Thomas wrote an opinion joined by Justice Scalia. Much of that opinion doesn’t really apply to the situation here. However, he does say that constitutional principles of federalism places limits on the federal government’s ability to direct State officers or to interfere with the functions of state government. Id. at 624. That statement by itself, especially considering the jurisprudence of Justice Thomas and Justice Scalia over time, strongly indicates that they would not support using the ADA as a sword to stop budget cuts.
In short, it seems that using the ADA as a sword to stop budget cuts in light of the Supreme Court decision in Olmstead would face very tough going at the Supreme Court. While the Ninth Circuit has a panel that is now on record as supporting this use of the ADA, it seems entirely likely to me that other circuits will not follow suit. Ultimately, it will head to the United States Supreme Court where if this analysis is any guide, and it may not be, there would seem to be five votes against using the Americans with Disabilities Act as a sword to prevent budget cuts (of course, I am assuming that there would not be any evidence that the budget cuts were done in such a way out of animus towards persons with disabilities).