Capitol People First v. State Department of Developmental Services

C. Agnews Closure Plan

In 2005, the Department submitted a plan to the Legislature calling for the closure of Agnews Developmental Center (Agnews) by June 30, 2007. The Bay Area regional centers collaborated in this effort by engaging in the individualized planning and resource development and other activities authorized in their CPP pursuant to section 4418.25. The Agnews closure plan proposes “an enhanced community service delivery system in the Bay Area that can meet the needs of the majority of Agnews’ residents.” To that end the plan provides for development of new resources and innovative programs, including a sustainable increase in appropriate housing.

D. Coffelt

In 1991, the Coffelt class action was brought against the Department and others challenging the state’s implementation of the Lanterman Act on many fronts. The parties stipulated to a class action settlement in 1994. The settlement included certification of a settlement class comprised of developmental center residents recommended for community placement, and required systemic reforms as well as a net reduction in 2,000 persons in the developmental center population over a five-year period.

During the settlement period, the developmental center population declined by more than the targeted amount, but thereafter movement of individuals from these institutions to the community settings slowed considerably. In the words of a Department employee: “[A]fter the Coffelt settlement agreement was over, the pressure was off. . . .”

E. The Present Litigation

Appellants filed suit in January 2002. The fifth amended complaint is the operative pleading, filed in July 2005. The proposed class is defined as

Appellants requested declaratory and injunctive relief as well as orders pursuant to a writ of mandate compelling defendants to comply with enumerated duties.

F. Appellants’ Evidence and Claims

According to appellants’ evidence, respondents have acknowledged that the vast majority of class members could live in less restrictive settings with appropriate supports and services. One Department official indicated “it is possible to serve the majority of people in the community if the appropriate resources are there and if the capacity of the community exists as a general principle.” When queried about the percentage of people in developmental centers who could live in the community with appropriate supports and services, another Department official responded “100 percent” and agreed that people with the most significant support challenges can be served in noninstitutional settings. One regional center director stated his belief that “everyone who is in the developmental center can be served in a community setting.” Another testified that “all of the approximately 125 people that reside at the developmental center from the [catchment] area are capable of living in the community successfully.”

Appellants point to the Agnews closure plan as a model demonstrating the feasibility of moving a substantial majority of developmental center residents

And, although the Department is responsible for establishing policies and procedures for the annual CPP’s developed by the regional centers, it has not developed “a priori standards as such” for determining whether CPP placement goals are adequate. The Department has never directed a regional center to raise its placement goal, but it has requested that a center lower its goal.

The Department has developed an incentive system whereby operational dollars will be withheld proportionally from a regional center if it does not meet its placement goals. In fact, this system can work as an incentive for regional centers to seek fewer placements than possible in order to avoid penalties for trying harder. At least one regional center penalized under this system subsequently reduced the number of placements in its CPP by half to avoid a future penalty. The CPP manager for that center called the allocation system “very troubling.”

Lyn Rucker, with decades of national as well as international experience working with government agencies and the courts to develop and implement systems that promote community services for individuals with developmental disabilities, declared that under the CPP process “except for residents of [Agnews], the majority of developmental center residents will have to wait for decades for an opportunity to live in the community at the pace currently being achieved in California.” As an example, Sonoma Developmental Center is the largest developmental center with a population of 754 as of August 31, 2005. This institution averages 20 community placements a year. Nonetheless, Sonoma Developmental Center serves a population of persons with developmental disabilities that are no more severe than those in Agnews, where 85 percent of residents will move to the community under the closure plan.

In addition to residents of developmental centers, another 4,462 persons live in other congregate institutions. Although the CPP applies only to those residing in developmental centers or who are at risk of developmental center placement, the CPP “is not intended to limit the department’s or regional centers’ responsibility to otherwise conduct assessments and individualized program planning, and to provide needed services and supports in the least restrictive, most integrated setting in accord with the [Lanterman Act].”

As well, in assessing the appropriateness of certification trial courts are charged with carefully weighing the respective benefits and burdens of class litigation to the end that maintenance of the class action will only be permitted where substantial benefits accrue to the litigants and the court. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429 , 435 [ 97 Cal.Rptr.2d 179 , 2 P.3d 27 ].) This obligation entails considering the role of the class action mechanism in deterring and redressing wrongdoing. (Id. at pp. 445-446.) Further, the substantial benefits analysis raises the question whether a class action is superior to individual lawsuits and other alternative procedures for resolving the controversy. (Basurco v. 21st Century Ins. Co. (2003) 108 Cal.App.4th 110 , 120-121 [ 133 Cal.Rptr.2d 367 ]; Caro v. Procter & Gamble Co. (1993) 18 Cal.App.4th 644 , 660-661 [ 22 Cal.Rptr.2d 419 ].)

Trial courts have wide discretion with regard to class certification. Thus we will not overturn the lower court’s certification decision which is supported by substantial evidence unless it (1) used improper criteria; or (2) made erroneous legal assumptions. (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462 , 470 [ 174 Cal.Rptr. 515 , 629 P.2d 23 ]; Reese v. Wal-Mart Stores, Inc. (1999) 73 Cal.App.4th 1225 , 1229, 1233 [ 87 Cal.Rptr.2d 346 ].) We do not decide in the first instance whether the requested class is appropriate. Rather, our job is to decide whether the trial court abused its discretion in denying certification. (Reese, supra, 73 Cal.App.4th at p. 1233.) A certification ruling not supported by substantial evidence will not stand. (Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at p. 1106.) By the same token, even if the decision denying certification is supported by substantial evidence, we will reverse if it is based on improper criteria or incorrect assumptions. (Linder v. Thrifty Oil Co., supra, 23 Cal.4th at p. 436.)

B. Commonality

1. Introduction

It is the burden of the proponent of class certification to show, with substantial evidence, that common questions of law or fact predominate over questions affecting individual members. (Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at pp. 1104, 1106.) And whether such substantial

2. Sav-On Sets the Standard

Sav-On teaches that in resolving whether there is substantial evidence to support the trial court’s certification order, “we consider whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.” (Sav-On, supra, 34 Cal.4th at p. 327.) As part of this process, we consistently look to the allegations in the complaint and the declarations of attorneys representing the class. (Ibid.)

Sav-On concerned allegations that the drugstore chain misclassified employees as exempt from overtime laws and thus failed to pay overtime compensation owing to the plaintiffs. Despite the defendant’s argument that determination of any liability for unpaid overtime compensation depended on making individual computations, the plaintiff produced substantial evidence that the defendant’s policy and practice was one of deliberate misclassification and that due in part to operational standardization, a uniform classification policy based solely on job descriptions resulted in widespread de facto miscalculation. (Save-On, supra, 34 Cal.4th at pp. 328-329.) Overturning the Court of Appeal’s denial of class certification, the Supreme Court held that even allowing for individual damage determinations, either of the plaintiffs’ theories was amenable to class treatment. (Id. at pp. 329-330.) Thus, while calculation of individual damages might be required down the road, this possibility did not foreclose taking common evidence on the misclassification issues. (Id. at p. 332.) Moreover, the court emphasized the community of interest requirement for certification does not mandate that class members have uniform or identical claims. (Id. at p. 338.) Further, in deciding whether the commonality requirement has been satisfied, courts may consider pattern

In this same memorandum, appellants also detailed the legal and factual issues common to the class. Common legal issues were threefold: (1) Whether respondents’ policies and procedures violate the rights of class members under various enumerated state and federal statutes to avoid unnecessary institutionalization and receive services in the least restrictive, most integrated setting consistent with their needs and choices; (2) whether policies and procedures resulting in actual or potential unnecessary institutionalization violate or place at risk class members’ constitutional rights; and (3) whether regional centers’ violations of these rights also violate Business and Professions Code section 17200. Common factual issues were described this way: (1) Whether respondents “properly conduct individualized assessments by qualified professionals that are sufficiently person-centered and comprehensive to determine the community-based services” necessary to end or prevent unnecessary institutionalization; (2) whether respondents provide or ensure development of such services and options so that class members for whom institutionalization is not necessary actually receive the services to which they are entitled in a timely manner; and (3) whether defendants conduct the oversight and monitoring responsibilities designed to prevent violations of class members’ federal and state rights.

We reiterate that these common issues were framed more broadly than the examples appellants offered to illustrate typicality which the court relied on to base its identification and discussion of “discrete alleged wrongs.” Appellants’ typicality evidence was generated from declarations of plaintiffs and their guardians whereas the commonality evidence was generated from expert testimony and the testimony of respondents’ staff.

In support of certification and the underlying assertion that proof of systemic deficits in respondents’ policies and practices was amenable to class treatment as required by Sav-On, appellants submitted pattern and practice evidence including testimony from respondents about their policies and practices; admissions; documents; statistics; expert testimony; and sampling. They also explained their intended use of statistics and additional sampling for trial. For example, challenging the legal sufficiency of the assessment process, appellants identified as a common factual issue whether respondents used proper standards and criteria for conducting the assessments. They presented expert testimony and deposition testimony from the ranks of respondents’ professionals on this point. Further, appellants explained that at

As another example, for the common factual issue of whether respondents provide or ensure development of community-based services and placement options, appellants likewise presented expert testimony and testimony from the ranks of respondents’ professionals on this point. Again, appellants explained that statistical sampling of individual records could be submitted to confirm and corroborate what had been forthcoming through testimony.

Additionally, appellants proffered common evidence in support of their theory of illegality, namely that after the Coffelt settlement period ended, the “pressure was off” and respondents lacked the motivation to continue the pace of community placement despite acknowledging that the vast majority of plaintiffs could live in less restrictive settings with appropriate services and supports. The parties’ experts dueled on the issue of why there was a decreased pace of community placements after Coffelt and whether the present community placement system was sufficient to address the issue of unnecessary institutionalization. However, resolution of this dispute goes to the question of the legality of respondents’ behavior, and does not involve the kind of individual factors that erroneously concerned the trial court.

4. The Trial Court Erroneously Discarded Appellants’ Theory of Recovery and Rejected Standard Methods of Proof

Rejecting a focus on respondents’ classwide conduct despite the suitability of this approach where only declaratory and injunctive relief is sought to remedy allegedly illegal practices and policies, the court adhered to the misguided assumption that significant individual inquiries would be necessary to provide class relief. By discarding out of hand appellants’ pattern and practice evidence, the trial court turned its back on methods of proof commonly allowed in the class action context. Over the years, numerous courts have approved the use of statistics, sampling, policies, administrative practices, anecdotal evidence, deposition testimony and the like to prove classwide behavior on the part of defendants. (Sav-On, supra, 34 Cal.4th at p. 333; Employment Development Dept. v. Superior Court (1981) 30 Cal.3d 256 , 265-266 [ 178 Cal.Rptr. 612 , 636 P.2d 575 ]; Alch v. Superior Court (2004) 122 Cal.App.4th 339 , 380-381 [ 19 Cal.Rptr.3d 29 ] [noting that in employment discrimination class actions, plaintiffs “ ‘normally seek to establish a pattern or practice of discriminatory intent by combining statistical and nonstatistical evidence, the latter most commonly consisting of anecdotal

The court’s assumption that the individualized nature of each IPP “would restrict the use of sampling or statistical proof at trial” was incorrect. This assumption, if followed to its logical conclusion, would turn all pattern and practice class litigation upside down. It suggests that the trier of fact would have to look at each person’s IPP to see if a proper assessment was conducted, proper recommendations were made, appropriate community services were available, etc. Following this flawed logic, if at some critical mass of individual inquiries it appeared that a pattern and practice of deviating from statutory and constitutional promises was emerging, then plaintiffs would have made their case. On the other hand, consistent with California law, appellants’ theory of recovery and approach is to reveal the patterns and practices in the first instance, through expert testimony, admissions, statistical proof, documentary evidence and the like, and then support the findings with corroborative, anecdotal evidence and sampling.

The court misunderstood the nature of practice and pattern litigation and therefore based its determination that common factual and legal issues did not predominate on improper criteria and erroneous legal assumptions. These errors led the court to prejudge the merits of appellants’ case. Either sampling is valid and reliable, or it is not. Either statistical proof is compelling and convincing, or it is not. These inquiries go to the merits—the quantum of proof appellants are able to amass. It is not the trial court’s role to become enmeshed with the merits of the underlying action, or to concern itself with which side’s experts are more qualified. At the class certification stage, the concern is whether the evidence plaintiffs will offer is “sufficiently generalized in nature.” (In re Cipro Cases I & II (2004) 121 Cal.App.4th 402 , 412-413 [ 17 Cal.Rptr.3d 1 ].) Here, appellants only proffered evidence that was generalized in nature.

C. Adequacy of Representation

1. Guiding Principles

The adequacy of representation component of the community of interest requirement for class certification comes into play when the party opposing certification brings forth evidence indicating widespread antagonism

While it is true that the putative representative cannot adequately protect the class if his or her interests are antagonistic to or in conflict with the objectives of those he or she seeks to represent, a party’s claim of representative status will only be defeated by a conflict that “ ‘goes to the very subject matter of the litigation.’ ” (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 470.) Thus, antagonism per se by members of a class will not automatically preclude certification, given the state’s policy of encouraging the use of the class action device. (Id. at p. 473.) As the Richmond court pointed out, “ ‘[differences which do not raise questions as to the very legitimacy of the class action process, . . . but which merely reflect variances in view as to the proper outcome of a suit, do not provide reason for a court to refuse to hear a class suit.’ ” (Ibid., quoting Developments in the Law: Class Actions (1976) 89 Harv. L.Rev. 1318 , 1490 (Developments).) Thus, where factual circumstances differ, or class members disagree as to the proper theory of liability, the trial judge, through resort to subclasses, intervention, and the like, may incorporate class differences into the litigation process and afford all members their due in deciding the proper outcome. (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 475, citing Developments, at pp. 1490-1492.) “ ‘Even if differences among class members are more fundamental, having to do with the type of relief which should be sought . . . , judicial accommodation appears to provide a sufficient mechanism for the protection of absentee interests. So long as a dispute concerns the outcome of litigation, the trial judge is in a position to isolate the differing positions, judge their validity in light of the substantive law governing the case, and shape the outcome of the suit to give the various class interests the weight to which the law entitles them.’ ” (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 473, quoting Developments, supra, 89 Harv. L.Rev. at pp. 1490-1492.)

2. The Trial Court’s Ruling

Treating the adequacy of representation issue, the trial court stated: “This is a peculiar case because the Court can safely presume that all the class

For example, interveners asserted and continue to assert that appellants “seek to end all institutional care in California, and advocate placement of all persons with developmental disabilities in small, community-based programs.” The referenced pages of the complaint alleged that thousands of Californians with developmental disabilities are unnecessarily institutionalized, but in no manner does the complaint assert that institutional care should be ended. And again, interveners insisted below that appellants “seek to move nearly every individual currently living in a [developmental center] into a community care facility” and repeat here that appellants have so stated their intention to do that. The pages interveners reference make it clear that the relief sought in this lawsuit would not dictate the outcome of the process for any individual class member and spoke of avoiding unnecessary institutionalization, not of moving everyone into the community.

The trial court perceived the differing philosophical perspectives as a chasm: On the one hand are the named plaintiffs who assert class members’ entitlement to live in the least restrictive environment appropriate to the circumstances, and take the position that many will benefit from moving from large institutions to a community setting. On the other hand are interveners who argue that for many the best services are available in institutions and community placement would be detrimental. These differing perspectives do not comprise a legal conflict because they are not categorical—-rather, they represent “half-full” and “half-empty” variations on the theme of residential placement. As the trial court understood, both views share the common, overarching goal of ensuring the proper and thorough development of IPP’s and the availability of services to meet each class member’s needs. There is no conflict between that overarching goal and the subject matter of this lawsuit, namely whether respondents’ policies and practices violate legal mandates calling for placement options and support services in the least restrictive environment commensurate with personal needs.

It appears that the trial court was particularly concerned with the reality that interveners could not opt out because the relief sought was systemwide injunctive relief which, if provided, everyone would have to live with. Interveners stress that more cohesiveness within a class is required when the remedy is limited to injunctive and declaratory relief, citing Barnes v. American Tobacco Co. (3d Cir. 1998) 161 F.3d 127 , 142—143. First, the plaintiffs in Barnes pursued certification of a medical monitoring class under rule 23(b)(2); they did not pursue institutional reform. Second, what the court

D. Superior Means for Resolving the Litigation

Finally, consistent with the misunderstanding that marked its decision on commonality, the trial court ruled that the alleged wrongs could not readily be cured on a classwide basis and that the fair hearing procedure set forth at section 4701 et seq. an adequate substitute for resolving appellants’ claims. This ruling cannot stand. Nonetheless, respondents and interveners continue to cling to the notion that individual action will solve the core issues defined in this litigation.

Respondents and interveners are unable, or unwilling, to grasp the “big picture” nature of this litigation. Appellants’ position is this: Before the outcome of improved individualized assessment, services and community supports tailored to the unique needs of each person with a developmental disability can be realized, the policies that undergird decisionmaking and allocation of resources must be changed. As we explain, the class action mechanism is the only alternative that can achieve this end.

The Lanterman Act’s fair hearing procedures are designed generally to decide “all issues concerning the rights of persons with developmental disabilities to receive services under [the Lanterman Act].” (§ 4706, subd. (a).) Any applicant for or recipient of services, or his or her authorized representative, “who is dissatisfied with any decision or action of the service agency which he or she believes to be illegal, discriminatory, or not in the recipient’s or applicant’s best interests” is afforded the opportunity for a statutory fair hearing. (§ 4710.5, subd. (a).)

Appellants have sought systemic mandamus, injunctive and declaratory relief—relief that the fair hearing process cannot provide. By definition, design, structure and scope, the Lanterman Act fair hearing procedure is for individual adjudication of claims and is thus unavailable for, and/or incapable of, delivering classwide systemic relief. No one disputes, for example, that a

Further, without class treatment there could be multiple actions that would burden the litigants and the courts with cumulative and excessive expenses, discovery efforts and evidence. We recognize that the devices of joinder, consolidation, intervention and the test case are available in the context of multiple litigation, and the Department specifically points out that putative class members could intervene in a test case to ensure that a writ of mandate was properly enforced. First, the outcome of a motion to intervene would not be a foregone conclusion. Second, these devices are insufficient to vindicate legal rights because their use is premised on a group of parties with the economic and general wherewithal, willingness and ability to look after their own interests individually through individual suits. (Rose v. City of Hayward (1981) 126 Cal.App.3d 926 , 934-935 [ 179 Cal.Rptr. 287 ].)

The very nature of this class cries out for class treatment and a systemic approach because the individuals whose rights allegedly have been violated are persons with cognitive or other severe disabilities, many without the resources to undertake the complex and daunting task of suing the myriad agencies involved in the delivery of services. The reviewing court in Reyes v. Board of Supervisors, supra, 196 Cal.App.3d at page 1270, footnote 6, said it well: “ ‘It is well settled that class actions are an appropriate procedure in government benefit cases where statutes and policies are likely to have an impact upon a broad class of recipients. . . .’ [Citation.] . . . [C]lass actions for injunctive or declaratory relief serve the additional objectives particularly important in government benefits litigation, including institutional changes, ‘facilitating enforcement of a favorable judgment, and protecting the interests of affected class members from the burden of bringing individual actions to establish the applicability of a decision for their benefit. . . .’ [Citation.]”

The order denying class certification cannot stand because it was based on improper criteria and incorrect legal assumptions. Had the trial court properly analyzed appellants’ theory of recovery and approach, it would have

Sepulveda, J., and Rivera, J., concurred.

The petition of all respondents for review by the Supreme Court was denied January 3, 2008, S157911. Werdegar, J., did not participate therein.