Linton ex rel. Arnold v. Commissioner of Health & Environment
973 F.2d 1311 (1992)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under Federal Rule of Civil Procedure 24(a), a non-party has a right to intervene post-judgment if the application is timely, the applicant has a substantial legal interest that may be impaired by the disposition of the action, and that interest is not adequately represented by existing parties.
Facts:
- The State of Tennessee's Medicaid program was administered by the Tennessee Department of Health and Environment (TDHE).
- Six nursing homes (movants) participated in the program through Medicaid provider agreements which allowed either party to cancel with 30 days' written notice.
- Initially, TDHE permitted a "limited bed policy," allowing nursing homes to certify only a portion of their beds for Medicaid use.
- This policy led to a lawsuit by Medicaid recipients alleging discrimination and lack of access to care.
- As a remedy, the court ordered TDHE to create a new plan, which was ultimately adopted on July 5, 1990.
- This final 1990 State Plan mandated 100% Medicaid certification of beds and included a "lock-in" provision.
- The "lock-in" provision prevented facilities wishing to exit the Medicaid program from transferring existing Medicaid patients, compelling them to provide care indefinitely until patients left voluntarily, which conflicted with the 30-day cancellation clause in their provider agreements.
Procedural Posture:
- Medicaid recipients sued the Tennessee Department of Health and Environment (TDHE) in federal district court, challenging its 'limited bed policy.'
- The district court certified the case as a class action.
- The district court found TDHE's policy violated the Medicaid Act and Title VI and ordered TDHE to submit a remedial plan.
- TDHE submitted a proposed 1990 State Plan, which the district court adopted in its entirety in a final judgment on July 5, 1990.
- On July 30, 1990, six nursing homes filed motions to intervene to appeal the judgment.
- The district court denied the nursing homes' motions to intervene as untimely and for lack of standing.
- The nursing homes appealed the district court's denial of their motions to intervene to the U.S. Court of Appeals for the Sixth Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a non-party have a right to intervene in a lawsuit after a final judgment is entered when its contractual and statutory rights are directly impaired by that judgment, the motion to intervene is filed within the time for an appeal, and its interests were not adequately represented by the original parties?
Opinions:
Majority - Krupansky, Senior Circuit Judge
Yes, a non-party has a right to intervene under these circumstances. The court found that the nursing homes met all four requirements for intervention as of right under Federal Rule of Civil Procedure 24(a). First, the motion to intervene was timely because it was filed 25 days after the final judgment, well within the 30-day period for filing an appeal, and the movants' interests were not clearly threatened until the final plan's adoption. Second, the movants possess a substantial legal interest because the 'lock-in' provision directly impairs their contractual right to terminate their provider agreements, their statutory right to voluntary participation, and their economic interests. Third, their ability to protect this interest would be impaired by the stare decisis effect of the district court's order, precluding them from challenging the plan in future litigation. Finally, their interests were inadequately represented, as the TDHE acted as both a regulator and a purchaser of services, creating inherent conflicts with the movants' private financial interests.
Analysis:
This case clarifies the standard for timeliness in post-judgment motions to intervene, establishing that filing within the period for appeal is a major factor favoring timeliness. It reinforces that non-parties whose direct contractual and economic rights are impaired by a court-ordered remedy have a significant protectable interest warranting intervention. The decision serves as a crucial protection for third parties who are unexpectedly and adversely affected by the outcome of litigation, ensuring they have an opportunity to be heard on appeal when the existing parties did not adequately represent their unique interests.
