Did a federal court-approved Medicaid settlement require Louisiana lawmakers to appropriate program funds?

Plain-English summary

Louisiana legislative leaders asked about state funding for a settlement in litigation over services for people with physical disabilities. The Department of Health and Hospitals had agreed to plans involving Medicaid personal care services, and the federal court had incorporated the agreement into its order. In Opinion 03-0241, the AG said only the Legislature could decide whether to appropriate funds to implement those plans.

The AG also warned that an appropriation decision had consequences beyond the state budget. The suit remained pending, and the court's order included the settlement. The opinion said failure by the department to fund the program would violate that order and that a refusal to appropriate could have "significant repercussions to the State." It discussed federal courts' powers to enforce incorporated settlements, without deciding what sanction the court would impose in this case.

Currency note

The full issue date is not legible in the available official extract. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant at issuance

Legislators

The AG placed the appropriation decision with the Legislature. It also flagged possible federal court consequences if the settlement plans incorporated into the order went unfunded.

Health department and service organizations

The opinion described the settlement as a court order while the litigation was still pending. It did not treat legislative control of appropriations as an assurance that nonperformance would have no federal court consequences.

Common questions

Q: Could the health department itself appropriate money for the settlement? A: No. The AG said appropriation power belonged exclusively to the Legislature.

Q: Could lawmakers decline to fund the settlement without any consequence? A: The opinion warned of significant potential repercussions because the settlement had been incorporated into a federal court order.

Q: Had the federal lawsuit already ended?
A: No. The AG said it remained pending and that the federal court had entered the settlement as its order.

Q: Did the AG say exactly what a federal judge would do if the state failed to fund the plan? A: No. The opinion discussed enforcement powers and possible consequences but did not predict a particular ruling or sanction.

Background and statutory framework

The opinion described the Barthelemy litigation, a 2001 settlement, and a supplemental settlement approved by the court in 2003. The AG cited La.Const. Art. III, Sec. 16 for the Legislature's authority to authorize withdrawals of state funds. It then considered the separate question of enforcing a federal court order that incorporated the settlement.

Citations and references

Constitutional provision cited: La.Const. Art. III, Sec. 16.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/03-0241

Original opinion text

One American Place
301 Main Street, Suite 600
DEPARTMENT OF JUSTICE
P.O. Box 94005
CIVIL DIVISION
TEL.: (225) 342-7013
FAX: (225) 342-2090
BATON ROUGE
RICH^F,~ P. IEYOUB j. z0804-9005
ATTORNEY GENERAL
UN !2 2003
OPINION NUMBER 03-0241
3 APPROPRIATIONS
62B LEGISLATURE
Art. III, §16

Power to appropriate is vested in the legislature. However, if the legislature fails to appropriate funds in compliance with a federal court order, there may be repercussions to the State.

Hon. Charlie DeWitt
Hon. John J. Hainkel, Jr.
Speaker of the House
President of the Senate
P. O. Box 94062
P. O. Box 94183
Baton Rouge, LA 70804
Baton Rouge, LA 70804

Dear Rep. DeWitt and Sen. Hainkel:

You each requested the opinion of this office concerning the obligations of the State in connection with the settlement entered into by the Department of Health and Hospitals in the matter entitled Lee Barthelemy, et al. v. Louisiana Department of Health and Hospitals, Civ. Action No. 00-1083, Section =N" Mag. 3, U.S. Distdct Court for the Eastern Distdct of Louisiana. Because your opinion requests are so similar, we have combined both requests into one opinion.

The Barthelemy suit was filed in 2000 on behalf of physically disabled individuals who were receiving care in nursing facilities and also by the Resources for Independent Living (=RIL’).
The suit alleged that the Louisiana Department of Health and Hospitals (=DHH’) violated the Americans with Disabilities Act by failing to offer and provide services in the most !ntegrated setting and the Medicaid ACt by failing to provide persons a choice between institutional and community services and failing to provide services with reasonable promptness. Accordingly, RIL challenged DHH’s failure to provide adequate and prompt services under the Personal Care Attendant ("PCA"), Elderly and Disabled Adult ("EDA’), and Adult Day Health Care (=ADHC") Medicaid waivers.

On August 3, 2001, RIL and DHH entered into a settlement agreement to avoid further litigation. The settlement agreement was approved by the Court on October 17, 2001. The court order stays the litigation and states that "... the Agreement is entered as the Court’s Order’.

We have been advised by DHH that the settlement agreement required DHH to seek approval from the federal govemment for PCA services as a Medicaid state plan option and implement this option by January, 2002. DHH was unable to comply with this provision of the settlement. The parties then began negotiating a supplemental settlement that delayed the implementation date of the PCA state plan option from January 1, 2002 to July 1, 2003. The supplemental settlement agreement was signed by the parties on January 30, 2003 and it was approved by the court on March 31, 2003.

Page 2

Rep. Charlie DeWitt
OPINION NUMBER 03-0241
Page -2-

As to whether the Louisiana legislature is required under Louisiana law to appropriate funds for this State obligation, our courts have stated:

It is elementary that the "fiscal affairs of the state, the possession, control, administration, and disposition of the property, funds, and revenues of the state, are matters appertaining exclusively to the legislative department." State v. Duhe, 201 La. 192, 9 So.2d 517, 521 (1942) (citing Carter v. State, 42 La.Ann. 927, 933, 8 So. 836, 837 (1890)).

Meredith v./eyoub, 96-1110, p. 5 (La.9/9/97), 700 So.2d 478, 481.

The legislature has absolute control over the finances of the state, except as limited by constitutional provisions. Woodard v. Reily, 244 La. 337, 152 So.2d 41 (La. 1963). It is the legislature that decides how the branches and departments of govemment shall be funded from the public fisc. Segura v. Louisiana Architects Selection Board, et al., 353 So.2d 330 (La.App. 1st Cir. 1977); Louisiana Public Facilities Authority v. Foster, 2001-0009 (La. 9/18/01), 795 So.2d 288; Quarles v. Jackson Parish Police Jury, 482 So.2d 833 (La.App. 2 Cir. 1986), citing State ex rel. Assistant Dist. Attys. Ass’n v. Theriot, 242 So.2d 49 (La.App. 1 Cir. 1970). The power to appropriate funds to operate state government belongs exclusively to the legislature. La.Const. Art. III, Sec. 16; Bruneau v. Edwards, 517 So.2d 818 (La.App. 1st Cir. 1987). An appropriation is a legislative act of authorization for the withdrawal of public funds by warrant from the state treasury by designated officers or institutions for expenditure for certain public purposes specified by the legislature. La.Const. Art. III, Sec. 16; Ops.Atty.Gen. 91-174, 02-0243.

Except as expressly provided by the Constitution, no other branch of government, nor any person holding office in one of them, may exercise the legislative function. New Orleans Firefighters Association v. Civil Service Commission of the City of New Orleans, 422 So.2d 402, 406 (La.1982); Louisiana Association of Educators v. Edwards, 521 So.2d 390 (La.1988).

Thus, under the Louisiana Constitution, the legislature and only the legislature has the authority to determine whether or not it will fund the plans DHH agreed to implement under the Barthelemy settlement.

However, should the legislature determine not to appropriate the funds necessary to implement the settlement, we must note that there could be significant repercussions to the State.

The lawsuit has not been dismissed but is still pending before the federal court. The settlement agreement was incorporated in the Court’s order. If DHH does not fund the

Page 3

Rep. Charlie DeWitt
OPINION NUMBER 03-0241
Page -3-

program, it will be in violation of a federal court order. To bring a settlement agreement under the contempt power of the district court, an order or judgment of the court must incorporate the settlement agreement such that a breach of the agreement also violates the court’s decree. National Presto Indus. Inc. V. Dazey Corp., 107 F.3d 1576 (Fed.Cir. 1997). A consent decree, enforceable by the court, is a settlement agreement that contains an injunction. Masters Mates v. Riley, 957 F.2d 1020 (2d Cir.1991). Federal district courts have inherent and statutory power to enforce their decrees and to punish violators for contempt. Roadway Express. Inc. v. Piper, 447 U.S. 752, 764-65 (1980). The federal courts have jurisdiction to enforce settlement agreements when necessary "to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees". Kokkonen v. Guardian Life Insurance Company of America, 511 U.S. at ,114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); In re City Equities Anaheim. Ltd., 22 F.3d 954, 957 (9th Cir.1994); Ca/lie v. Near, 829 F.2d 888, 890 (9th Cir.1987). If the parties’ obligation to comply with the terms of the settlement agreement is made part of the courts’ order "a breach of the agreement would be a violation of the order". Kokkonen, supra. The power to implement a settlement agreement between the parties inheres in the distdct court’s role as supervisor of the litigation, and the exercise of that power is entrusted to the court’s sound discretion. Carr v. Runyan, 89 F.3d 327, 331 (7th Cir.1996), cert. denied, 519 U.S. 1117 (1997); Wilson v. Wilson, 46 F.3d 660, 664 (7th Cir.1995).

The district court’s enforcement power includes the authority to award damages for failure to comply wit the settlement agreement, Hobbs & Co. V. American Investors Management, Inc., 576 F.2d 29 (3d Cir.1978); breach of the agreement entitled the nonbreaching party to specific performance or an award of unliquidated damages, as appropriate. Village of Kaktovik v. Watt, 689 F.2d 222 (D.C.Cir. 1982). Under certain circumstances, a district court may summarily enforce a settlement agreement without an evidentiary hearing. See, e.g., Murchison v. Grand Cypress Hotel Corp., 13 F.3d 1483, 1486 (1 lth Cir.1994); United States v. Hardage, 982 F.2d 1491, 1496 (10th Cir.1993). The court also has the power to compel the payment of opposing party’s attorney’s fees as sanction for misconduct. Chambers v. NASCOI, Inc., 501 U.S. 32, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991).

Trusting this adequately responds to your request, we remain

Yours very truly,

RICHARD P. IEYOUB
;eneral

BY:
S. HESS
Attorney
RPI/MSH