D.C. Cir: denies motion to vacate Medicaid order re dental services

In a Medicaid suit involving the provision of dental care to children, the United States Court of Appeals for the District of Columbia affirmed the denial of a motion to vacate a consent decree under Rule 60(b)(6), but suggested that the District could move to vacate under other Rules.  The court found that the District of Columbia had not met the necessary requirement of Rule 60(b)(6) to show extraordinary circumstances, emphasizing that the District had withdrawn its appeal.  On a preliminary issue, the circuit court reversed the district court’s holding that the motion was not timely, because there was no prejudice and there were extensive settlement negotiations and motions filed during the period between the entry of an order and the motion to vacate.  Salazar v. District of Columbia, 2011 WL 403448 (D.C. Cir. Feb. 8, 2011).  The decision was written by Judge Rogers (Clinton), and joined by Judge Griffith (Bush II) and Judge Edwards (Carter).

A settlement order concerning the District of Columbia’s Medicaid program was entered in January 1999.  In October 2004, the district court found that the government had violated the settlement order with regard to the percentage of children receiving dental services and the court ordered the District to meet specific participation goals of 70 to 85%.  The District filed an appeal in November 2004, but then moved to stay the appeal pending filing a motion to dissolve the order.  In January 2006, a report by the court-appointed monitor suggested that a participation rate of 57% set by the U.S. Department of Health and Human Services indicated that the district court’s order set unrealistic utilization rates.  In March 2006, the District dismissed its circuit court appeal.  Four months later, in May 2006, the District moved to dismiss the district court order under Rule 60(b)(6), which permits a court to vacate an order for “any other reason that justifies relief.”  Arguing that this rule provides a court with wide discretion, the District characterized the order as unrealistic and beyond the obligations negotiated by the parties. In Feb 2010 (3½ years later), the district court denied the motion, finding the motion to be untimely and concluding that relief was unwarranted because the District had not demonstrated exceptional circumstances.

The Circuit Court reversed on the timeliness issue, stating that Rule 60(b)’s “reasonable time” requirement “does not carry the same significance in long-running equitable relief as it would in an action where the court’s role had ended and the litigants relied on the repose inherent in the end of litigation.”  The court noted that the district court had indicated that the length of time taken to decide the motion was due to efforts to settle the case, including nine status conferences with the judge.  The court also explained that the motion was filed shortly after the monitor’s report, which offered “new policy insights.”  The court concluded: “Because there is no argument of prejudice caused by the timing of the District government’s moving to vacate the Dental Order, the district court abused its discretion in ruling that the motion was not brought within a reasonable time.”

Nevertheless, the Circuit Court held that the District had not met the requirement for “extraordinary circumstances” to justify vacating an order under Rule 60(b)(6).  The court explained that this requirement was not found in the language of 60(b)(6), but had been imposed by the Supreme Court.  Circuit precedent held that 60(b)(6) could not be utilized in lieu of an appeal, unless the failure to appeal was an involuntary decision, e.g. when the party was incarcerated or suffered health and financial difficulties.  The court found that the District had made the “considered choice” to withdraw its appeal and held that relief under Rule 60(b)(6) is not a substitute for an appeal.

The Court closed its opinion by giving the District legal advice: “The District government is not without remedies, however. Paragraph 71 of the Settlement Order provides for modification ‘at any time for any reason.’ The District government’s legal argument may present a jurisdictional argument cognizable under Rule 60(b)(4), while its impossibility argument may be raised under Rule 60(b)(5).”  Rule 60(b)(4)  permits a court to vacate an order when “the judgment is void,” and Rule 60(b)(5) permits a court to vacate an order when applying it “prospectively is no longer equitable.”

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