1.         SETTLEMENT AGREEMENT, RELEASE and ORDER OF STAY      

            THIS SETTLEMENT AGREEMENT, RELEASE and ORDER OF STAY

(“Agreement”) is made and entered into this 27^th day of April, 2001, between “Plaintiffs” (as defined in paragraph 2.2) and Defendants (as defined in paragraph 2.3 and 2.4), for themselves and their “Representatives” (as defined in paragraph 2.6) in connection with this case (“Arc lawsuit”).

            1.1       “Plaintiffs”, through their counsel, Larry Jones and Christine Thompson Ibrahim, filed a Complaint in the United States District Court for the Western District of Tacoma, Washington.  The complaint alleged violations of the federal Medicaid Act, 42 U.S.C. x 1396, Rehabilitation Act, 29 U.S.C. x 794, Title II of the Americans with Disabilities Act (“ADA”), 42 U.S.C. x 12132, corresponding federal regulations, procedural due process, and 42 U.S.C. x 1983, for violations of the Fifth and Fourteenth Amendments of the U.S. Constitution (due process and equal protection), 42 U.S.C. x 1396n(c)(2)(C), by the State of Washington or one or more of its Representatives.  Specially, the complaint alleged that persons who are eligible for ICF-MR and HCBS waiver services in Washington State are not receiving those services with reasonable promptness.  This is a class action pursuant to FRCP 23 (b)(2).

            1.2       Plaintiffs may have other potential causes of action against the State of Washington and/or against one or more of its Representatives which may or may not have been initiated or asserted to date, arising out of or related to the alleged violations.

            1.3       The State of Washington has asserted various defenses to Plaintiffs’ allegations and claims for relief and does not admit liability.

            1.4       As a part of its Medicaid State Plan, the State of Washington has an Intermediate Care Facility for the Mentally Retarded (ICF/MR) program.

The State of Washington also operates its Home and Community Based Services (HCBS) Waivers, a waiver called the Community Alternatives Program (CAP) waiver for persons with developmental disabilities.

            NOW, THEREFORE, the Undersigned, in mutual consideration of the terms, covenants, and conditions of this Agreement, agree as follows:

2.         DEFINITIONS

            2.1       “Agreement” means this Settlement Agreement, Release and Order of  Stay.

            2.2       “Plaintiffs” means Guadalupe Cano, by and through her guardian Delia C. Cano;  Olivia L. Murguia, by and through her guardian Teri L. Hewett; Lorianne V. Ludwigson, by and through her guardians Donald and Sheryl Ludwigson;  the Arc of Washington State, Inc., on its own behalf and on behalf of its members; and the members of the Settlement Class certified under Rules 23(b)(2), Federal Rules of Civil Procedure, by the Court’s Order of December 22, 2000.

            2.3       “Settlement Class and Settling Parties”.

            The class as currently defined by the court is all developmentally disabled persons in the State of Washington who (i) meet the medical and financial requirements for eligibility for ICF/MR services; (ii) have applied for HCBS waiver services; and (iii) have not received HCBS waiver services, or not received them with reasonable promptness, and individuals who will be similarly situated in the future.

            The parties agree to jointly seek the court’s approval of the following settlement class which will be defined as:  all DDD clients who are eligible for ICF/MR and/or HCBS waiver services administered by DDD in the State of Washington and who are not receiving all the services they need with reasonable promptness and those who may become similarly situated in the future prior to December 31, 2006;  the Arc of Washington State, Inc., on its own behalf and on behalf of its members; and the following class representatives:  Guadalupe Cano, by and through her guardian Delia C. Cano;  Olivia L. Murguia, by and through her guardian Teri L. Hewett;  and Lorianne V. Ludwigson, by and through her guardians Donald and Sheryl Ludwigson.

            This settlement is conditioned on court approval of the settlement class.  Plaintiffs will ask the court to determine the adequacy of their representation of the entire settlement class.

            2.4       “State of Washington” means the State of Washington and the following name-defendants:

            Lyle Quasim, Secretary of the Washington State Department of Social & Health

            Services;

            The Washington State Department of Social & Health Services (DSHS);

            Marty Brown, Director of the Washington State Office of Financial Management;

            The Washington State Office of Financial Management;

            Timothy R. Brown, Director of the Washington State Department of Social &

            Health Services;

            The Washington State Division of Developmental Disabilities; and

            Gary Locke, Governor of the State of Washington

            2.5       “State Defendants” means the State of Washington and its Representatives and Departments and those individuals named as defendants in the above-captioned case, as defined in this Agreement.

            2.6       “Person” means any individual, corporation, association, partnership, agency, joint venture, institution, organization, governmental agency, or other entity, and his, her or its legal Representatives.

            2.7       “Representatives” means the past, present, and future Representatives, directors, officers, agents, servants, employees, shareholders, predecessors, successors, assigns, attorneys, and insurers of the person or entity, including their adjusters and all of their subsidiaries, and divisions.

            2.8       “Lawsuit” means The Arc of Washington State, Inc., a Washington corporation, on behalf of its members; Guadalupe Cano, by and through her guardian Delia C. Cano; Olivia L. Murguia, by and through her guardian Teri L. Hewett; Lorianne V. Ludwigson, by and through her guardians Donald and Sheryl Ludwigson, v. Lyle Quasim, The Washington State Department of Social and Health Services (DSHS); Marty Brown, in his official capacity as the Director of the Washington State Office of Financial Management;  The Washington State Office of Financial Management; and Timothy R. Brown, in his official capacity as the Director of the Washington State Division of Developmental Disabilities;  The Washington State Division of Developmental Disabilities, and Gary Locke, in his official capacity as Governor of the State of Washington, No. C99-5577 FDB.

            2.9       “Undersigned Parties” means the persons executing this Agreement and includes the Plaintiffs and the State of Washington and its Representatives.

            2.10     “Complaint” means the Complaint filed in this lawsuit on November 9, 1999.

            2.11     “Covered Claims” means any and all past, present or future claims, demands, obligations, actions, causes of action, rights damages, costs loss of services, expenses and compensation for pain and suffering, mental and emotional distress or other elements of general damages that are uncertain in amount caused by the alleged violations of the federal Medicaid Act, the Rehabilitation Act, 29 U.S.C. x 794. Title II of the ADA, 42 U.S.C. x 12132, corresponding federal regulations, procedural due process, and 42 U.S.C. x 1983 for violations of 42 U.S.C. x 1396a and the Fifth and Fourteenth Amendments of the U.S. Constitution (due process and equal protection), 42 U.S.C. x 1396 n (c)(2)(C), and all other alleged violations of State or Federal laws that are the subject of the Complaint filed by the Plaintiffs, whether bases on a constitutional claim, statute, regulation, contract, tort, or other theory of recovery, which Plaintiffs now have, or may hereafter accrue or otherwise be acquired which may not be anticipated at the time that this Agreement is signed, or in any way may grow out of the events that gave rise to the Complaint, including, but without limitation, any and all known or unknown claims for personal injuries and emotional distress to Plaintiffs.  “Covered Claims” shall also include claims for any medical expenses, expenses incurred for substitute services, loss of income, or any element of special damages, or any element of punitive damages or exemplary damages caused by or in any way arising out of the alleged violations referenced above.  “Covered Claims” also includes attorneys fees and costs awardable in the above-captioned lawsuit.  “Covered Claims” shall not include claims for personal injuries or emotional distress unrelated to claims brought in the complaint in this action.

3.      STAY ORDER AND RELEASE

3.1     Stay Order.  The parties understand and agree that upon signing of the Agreement by the parties, the lawsuit and covered claims shall be stayed and the trial date stricken; and the parties agree to take the actions set forth in this Agreement.

3.2     Expedited Trial.  The parties agree that if, at any time the stay is lifted pursuant to the terms of this Agreement either party may request an expedited trial schedule which shall set the matter for trial no later than 90 days from the day the stay is lifted, the date being subject to approval by the Court.

3.3     Release.  Upon dismissal of this action with prejudice (as provided for below), Plaintiffs fully release the Defendants, the State of Washington, and its Representatives for any of the Covered Claims in whole or in part.

3.4     Fully Binding.  This Settlement Agreement, Release and Order of Stay is a binding and complete settlement between the Plaintiffs and their Representatives and the State of Washington and its Representatives.

3.5     Advice of Counsel.  The undersigned attorneys for the Plaintiffs and Defendants acknowledge that they have advised their clients or the parents or legal guardians of their clients, of the nature and effect of this Agreement, that they believe their clients understand the nature and effect of this Agreement and that the undersigned attorneys believe that the settlement is fair and equitable.

4.  SPECIFIC TERMS OF SETTLEMENT AGREEMENT

4.1     DSHS and its attorneys shall seek legislative leadership approval to go forward with this agreement and the terms which differ from those presented to legislative leaders in January, 2001.  Notwithstanding the parties’ agreement to the specific terms and conditions contained in paragraphs 4.1(a) through 4.17 below, if legislative leadership does not authorize DSHS to go forward, then the Agreement shall be null and void, and either party may then ask the court to have the stay lifted and may request an expedited trail date schedule which shall set the matter for trial no later than 90 days from the day the stay is lifted, the trial date being subject to approval by the court.

(a)   The State of Washington, through its Department of Social and Health Services hereby agrees to recommend to the Governor of the State of Washington increased funding for services to be provided by the Division of Developmental Disabilities (DDD) in the amount of $14 million total dollars, both state and federal.  Said recommendation will be made for the 2002 Supplemental Budget for State of Washington Fiscal Year 2003.

(b)   Defendants agree that whatever funding is necessary to maintain the increased services funded by the amount of $14 million will be carried forward to the following biennium (2003-05), in an amount that is reasonably anticipated to be significantly more than $14 million per year.

4.1   The parties further agree that two or three representatives of plaintiff Arc, and two or three representatives of the DDD will meet and attempt to reach agreement on the following:

(a)      The manner in which the $14 million dollars described in paragraph 4.1 shall be expended.  In spending the funds there shall be an emphasis on implementing a choice-driven and self-directed system.  Some of the funds will be used to increase the availability of out-of parental-home residential options.  The agreement contemplated by this paragraph shall be concluded and memorialized in writing by June 30, 2001; and

(b)        A proposed amount of new additional funding for DDD services for the 2003 – 2005 Biennium, which DDD will recommend to the Secretary of DSHS, and the manner in which this additional appropriation shall be spent.  (These funds are in addition to the carry-forward or bow-wave mentioned in paragraph 4.1(b)).  Paragraph 4.2(b) of this agreement concerning the proposal for new funding for the 2003-2005 biennium shall be concluded and memorialized in writing by August 30, 2001.

4.3       If the representatives of Arc and DDD fail to reach agreement on the items described in Paragraph 4.2 (a) and (b) above by the said dates, either party may ask the court to have the stay lifted and may request an expedited trial schedule which shall set the matter for trial no later than 90 days from the day the stay is lifted, the trial date being subject to approval by the court.

4.4       If representatives of Arc and DDD reach the anticipated agreements contemplated in Section 4.2(a), the State of Washington through its Department of Social and Health Services agrees to meet with the Governor of Washington State by July 31, 2001 to recommend that the Governor include the agreed upon proposal for expenditure of the $14 million dollars in the Governor’s proposed 2002 Supplemental Budget for Fiscal Year 2003 and forward a copy of that recommendation to plaintiffs’ counsel.

4.5       If the Governor of the State of Washington does not include the agreed upon proposal for expenditure of the $14 million dollars in the Governor’s proposed 2002 Supplemental Budget for fiscal year 2003, then either party may ask the court to have the stay lifted and may request an expedited trial schedule which shall set the matter for trial no later than 90 days from the day the stay if lifted, the trial date being subject to approval by the court.

4.6       If the parties reach agreement on the items described in Paragraph 4.2(b), then DDD shall develop a final Supplemental Budget “Decision Package” for the $14 million dollars in accord with the agreement reached by the parties and forward a copy of that final Decision Package to plaintiffs’ counsel.

4.7       If the parties reach agreement on the items described in Paragraph 4.2(b), the Secretary of DSHS shall recommend to the Governor of the State of Washington the amount of the agreed, proposed funding for the 2003 – 2005 biennium by August 30, 2001 and forward a copy of that recommendation to plaintiffs’ counsel.

4.8       If the parties reach agreement as described in Paragraph 4.2(a) above, and the Governor has expressed willingness to consider including the proposal developed by the parties in his 2002 Supplemental Budget, then the Lawsuit shall remain stayed and by September 30, 2001 the Secretary of DSHS shall formally propose to the Governor the agreed upon $14 million dollar expenditure, together with the manner in which the funds shall be spent, for inclusion in the Governor’s 2002 Supplemental Budget for Fiscal Year 2003 and forward that Decision Package to Plaintiffs’ counsel.

4.9       If the Governor of the State of Washington includes the $14 million dollars appropriation and the manner of expenditure as agreed upon under Paragraph 4.2(a) above in his proposed 2002 Supplemental Budget for Fiscal Year 2003 as submitted to the Legislature in December 2001, the Lawsuit shall remain stayed; if however, the Governor does not include the above in his 2002 Supplemental Budget as submitted to the Legislature, either party may ask the court to have the stay lifted and may request an expedited trial schedule which shall set the matter for trial no later than 90 days from the day the stay is lifted, the trial date being subject to approval by the court.

4.10     If the Washington Legislature, at the close of the 2002 Legislative Session (including any Special Session thereof, but not later than July 31, 2002), adopts and passes a 2002 Supplemental Budget which includes both the $14 million dollar expenditure and the agreed upon manner in which it will be expended, the Lawsuit shall remain stayed; if however, the Legislature fails to include the above amount and manner of expenditure, either party may ask the court to have the stay lifted and may request an expedited trial schedule which shall set the matter for trial no later than 90 days from the day the stay is lifted, the trial date being subject to approval by the Court.

4.11     If the DSHS Agency Budget Decision Package for DDD for fiscal years 2003 – 2005 includes the appropriation and manner expenditure developed pursuant to paragraph 4.2(b) above, then the Lawsuit shall remain stayed; if however the Decision Package does not include the agreed upon appropriation, then either party may ask the court to have the stay lifted and may request an expedited trial schedule which shall set the matter for trial no later than 90 days from the day the stay is lifted, the trial date being subject to approval by the Court.

4.12     If the Governor’s Budget for the State of Washington for Fiscal Years 2003 – 2005, as submitted to the Legislature, includes the appropriation and manner of expenditure agreed upon in paragraph 4.2(b) above, and the Legislature appropriates the amount included in the Governor’s budget, then the Lawsuit shall be dismissed with prejudice, and the Release as provided herein shall become fully binding on the parties and upon the Settlement Class and the settling parties.

4.13     The levels of appropriations and authorizations referred to in 4.1 above are (1) in addition to current levels of appropriations and authorizations; and (2) in addition to the 2001-03 biennial appropriation, exclusive of any proposed 2001-03 supplemental budget.

4.14     The parties agree that plaintiffs may substitute new named plaintiffs or witnesses if such people die or move out of state, subject to defendants’ opportunity to conduct discovery with regard to any newly named plaintiffs or witnesses; and provide that the total number of named plaintiffs and witnesses shall not exceed the present number of named plaintiffs and witnesses; and that plaintiffs’ claims shall remain the same.

4.15     The parties agree that the service status of the named-plaintiffs for trial purposes shall be the services that were being provided at the time of the respective plaintiffs’ depositions.

4.16     Defendants shall provide quarterly reports to the plaintiffs, beginning July 1,2002 and continuing until June 30, 2003 regarding defendants’ progress in meeting the terms of this agreement, including how the funds pursuant to this settlement are being expended.

4.17     Within 30 days of the court’s approval of this agreement, defendants will designate an appropriate person who will coordinate and monitor implementation of the agreement.

5.         ATTORNEYS FEES

5.1       The State of Washington shall pay Plaintiffs’ reasonable attorneys fees in the amount of $275,440.25 and costs of $28,000.79 for a total sum of $303,441.04, subject to the terms and conditions set forth below.  Within two weeks after the attorneys sign this Settlement Agreement, Release, and Order of Stay and the legislative leadership has given approval to go forward with this Agreement, Plaintiffs’ attorney Larry Jones shall receive an initial payment of $100,000 as partial payment of fees and costs incurred in this litigation.  Within two weeks after legislative appropriation of the amounts included in the Governor’s budget for 2003-05 Plaintiffs’ attorney shall be paid the balance of attorneys fees of $203,441.04, contingent upon timely receipt by defendants of time sheets or billing statements supporting the above sums.  Plaintiffs’ attorney timesheets and billing statements shall identify dates of service, describe services rendered, state the amount of time spent thereon, and identify the attorney who performed the work.

5.2       Following completion of payment of attorneys fees pursuant to paragraph 5.1 above, Defendants agree to pay additional reasonable attorneys fees incurred by plaintiffs during the pendency of this settlement agreement, up to a total additional sum of $50, 000, with Larry Jones being paid at the rate of $205.00 per hour, and Christine Ibrahim being paid at the rate of $125.00 per hour.  The $50,000 limit shall not apply in the event this matter proceeds to trial.

5.3       If this matter proceeds to trial and there is an ultimate award of attorneys fees to plaintiffs’ attorneys, defendants shall be credited for any and all sums previously paid to plaintiffs’ attorneys under this Agreement.  Defendants’ payment of attorneys fees pursuant to this agreement shall not be used by plaintiffs to establish any additional liability by defendants or otherwise be used as support for future claims of attorneys fees in this litigation.

6.         NOTICE TO CLASS

6.1       Notice of Certification of the Settlement Class and Notice of Settlement to the Class shall be in a form approved by the court.

7.         MEDIATION

7.1       If either party believes that in the course of negotiations to reach the agreements contemplated by paragraphs 4.2(a) and 4.2(b) above, the other party is not acting in good faith, or if such negotiations have reached an impasse, then either party may request a non-binding mediation of the issues related to the matters set out in paragraph 4.2(a) or (b) above.  The parties further agree to participate in any mediation so requested.  The parties agree that the mediator shall be George Finkle, if he is available, or if not, a mutually agreed mediator.  The mediator fees and costs shall be divided equally between plaintiffs and defendants.

8.         INDIVIDUAL NAMED PLAINTIFFS

8.1       Defendants agree to continue the present level of funding for the individual named-plaintiffs Ludwigson and Murguia for a period of at least three years from the date this agreement is approved.  Defendants further agree to provide ITS or equivalent level of services for plaintiff Cano for a period of at least three years from the date this agreement is approved.

9.         RIGHT TO WITHDRAW

9.1       The parties agree that the Defendants and Plaintiffs have the right to withdraw from the Settlement Agreement and may, at their discretion, declare it null and void, if the court fails to approve the proposed terms or conditions of either the proposed Settlement Agreement, Release and Order of Stay or the proposed Definition of the Settlement Class.

10.       LAW

10.1     This Agreement shall be interpreted under the laws of the State of Washington.  If any action is taken by either party to enforce this Agreement, the party determined by a court to be in default of its obligations under this Agreement shall pay to the other party its reasonable attorneys fee and costs.

11.       MISCELLANEOUS

11.1     Covenant of Good Faith and Fair Dealing.  The parties agree that this settlement was reached after arm’s length bargaining, through a formal mediation process.  The parties further agree that counsel for the plaintiffs, as well as counsel for the defendants, are experienced counsel; and that there has been sufficient discovery to enable all counsel to be fully informed in order to act in their clients’ best interest.

The parties agree to cooperate to submit this settlement to the court promptly, to recommend acceptance of the settlement by all members of the class in this lawsuit, and to obtain whatever action by the court may be necessary to complete the settlement.  The parties agree to take all steps that may be requested by the court and shall otherwise use their respective best efforts to consummate this settlement and to obtain the entry of a final order of dismissal, and a judgment as contemplated herein of dismissing the civil action with prejudice and a judgment reflecting dismissal of the action with prejudice, immediately following the completed execution of this settlement agreement.  Said order and dismissal will be held by Judge Finkle at Judicial Dispute Resolution in their file, and will not be submitted to the court for entry until completion of the terms set forth in paragraph 4.12 herein.

11.2     No Representation.  Each Undersigned Party acknowledges that no promise, agreement, fact or opinion not expressed herein has been made by or to them to induce this Agreement, and that this settlement is made with full knowledge of the facts and possibilities of the subject matters of this Agreement and with advice of counsel.

11.3     Entire Agreement.  This Agreement contains all of the terms agreed upon between the Undersigned Parties, supersedes, and cancels each and every and every other conflicting Agreement, promise or negotiation between them.

11.4     Section and Paragraph Headings.  The section and paragraph headings in this Agreement are inserted solely as a matter of convenience and for reference and in no way define, limit, describe or affect the scope or intent of any provision of this Agreement.

11.5     No Admission of Liability.  This Agreement and each of its provisions and the implementation of this Agreement shall not be construed as an admission by the State of Washington or any of its Representatives of any fault, wrongdoing, negligence, willful misconduct, or liability of any kind whatsoever, and this Agreement is entered into solely as a compromise and to avoid further litigation, controversy, costs, and expenses.

11.6     Press Release .  The parties agree that within 10 days after approval of this Agreement by legislative leadership pursuant to paragraph 4.1 above, they shall issue a mutually agreed upon press release concerning the terms of this Agreement.

11.7     Interpretation.  The terms of this Agreement have been negotiated at arm’s length among parties represented by experience counsel.  As a result, the rule of “interpretation against the drafter” shall not apply in any dispute over interpretation of the terms of this Agreement.

11.8     Gender.  The use of “his”, “her”, “its”, and similar words is not intended to be gender-specific and each of such words includes the others.

11.9     Effective Date.  This Agreement between the parties becomes valid and binding upon signature.

11.10   Amendment of Agreement.  This Agreement, after its execution, shall only be amended by the parties in writing.  It is the intent of the parties that after the parties have reached agreement as to amount of funds and how any subsequently appropriated funds will be spent, that agreement will be memorialized in writing and subsequently incorporated into this Agreement.

11.10   Court Approval  Required.  The legal effectiveness of this Agreement is conditional upon Court approval.

                                                                        Attorneys for Plaintiffs

                                                                        ______________________________

                                                                        Larry A. Jones

                                                                        ______________________________

                                                                        Christine T. Ibrahim

                                                                        ATTORNEYS FOR DEFENDANTS

                                                                        ______________________________

                                                                        Lucy P. Isaki

                                                                        ______________________________

                                                                        Edward J. Dee

                                                                        ______________________________

                                                                        R. Happy Rons

If you have questions regarding the lawsuit settlement please call or e-mail Sue Elliott, Executive Director of The Arc of WA State at sue@arcwa.org or (360) 357-5596.

Thank you, for visiting our website!  
You are # since July 22, 2002

Return to the top of the page

Return to the Home Page The Arc of Washington State

If you have any problems with this page please email the webmaster at info@arcwa.org.

Revised 02/06/06