Court Opinion: 10th Circuit Court of Appeals Opinion for Aug. 1

The 10th Circuit Court of Appeals

Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.

Hatten-Gonzales v. Scrase

This interlocutory appeal stems from a long-running class action suit challenging the state of New Mexico’s administration of federal social benefits programs. The state sought a review of a district court order interpreting an injunction. Because the challenged order neither modified nor expanded the injunction nor altered the parties’ legal relationship, a 10th Circuit Court of Appeals panel out of Albuquerque, New Mexico, dismissed this appeal.

In 1988, Debra Hatten-Gonzales sued the secretary of the New Mexico Human Services Department to challenge how the state processed applications for the Supplemental Nutrition Assistance Program, Medicaid and other federal benefits. The 10th Circuit has heard other appeals stemming from the case and issued its decisions in Hatten-Gonzales v. Earnest and Hatten-Gonzales v. Hyde. A federal district court certified a class of benefits applicants. The parties settled. The resulting consent decree specified how the state must process applications. In 1998, the district court modified the consent decree and adopted it as an injunction. In 2018, the court again modified the consent decree.

The current consent decree required the state to follow federal laws and guidelines regarding benefit application processing timelines. It provided that a case file review is “necessary to measure compliance . . . and to verify that systemic or programmatic barriers to proper application determinations and access to benefits do not exist within [the State’s] application processing practices.” According to the 10th Circuit, the state must periodically permit a case file review for benefits programs based on a statewide representative sample.

The state complies when the case file review reveals no “systematic or programmatic barriers” to benefits access. The consent decree defines a “systemic or programmatic barrier” as a “policy or prevalent practice implemented at one or more of the Income Support Division offices that results in the failure to comply with federal law in the SNAP and/or Medicaid program and is not due to an isolated event or action.” 

On July 25, 2022, the special master appointed to administer the consent decree submitted a report to the district court recommending case file review procedures. His report recommended the case file review cover 288 randomly sampled cases submitted between March and August 2022, including applications that were submitted based on federal government waivers to certain application requirements that were granted due to the pandemic. By contrast, the special master also recommended the case review sample exclude certain Disaster SNAP applications related to New Mexico wildfires, the 10th Circuit opinion noted.

The district court adopted the special master’s recommendation. It rejected the state’s objection that because “pandemic-related federally approved waivers and special circumstances are isolated events and actions . . . under the decree,” cases subject to pandemic-related waivers shouldn’t be included in the sample universe. 

The state appealed, seeking a “review of an interlocutory order modifying an injunction.” It then moved to the district court to stay proceedings during the appeal. Granting the motion in part and denying it in part, according to the 10th Circuit opinion, the court certified the appeal was frivolous as to any matter unrelated to the case review. The state next moved the district court to dismiss for lack of Article III jurisdiction, arguing that a “viable class no longer exists…” That issue is pending in the district court.

According to the opinion, the 10th Circuit reviews only the final decisions of the district courts. “There are, of course, several exceptions to the finality rule,” the court noted in the opinion, citing a previous Hatten-Gonzales decision. The 10th Circuit has jurisdiction to review “[interlocutory] orders of the district courts of the United States . . . granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions.” “[The] appellant . . . bears the burden of establishing our appellate jurisdiction,” the opinion noted, citing the 10th Circuit Court of Appeals decision Est. of Ceballos v. Husk.

“Section 1292(a) was intended to carve out only a limited exception to the final- judgment rule of 28 U.S.C. § 1291 and the long-established policy against piecemeal appeals,” the opinion noted, citing the 10th Circuit Court of Appeals decision Pimentel & Sons Guitar Makers, Inc. v. Pimentel. “Consequently, the Supreme Court has cautioned that the statute should be narrowly construed to ensure that appeal as of right under § 1292(a)(1) will be available only in limited circumstances.”

According to Pimentel, “[unless] a district court order addressing an existing injunction substantially and obviously alters the parties’ pre-existing legal relationship, as set forth in the existing injunction, the order is an unappealable interpretation or clarification of the prior order.” “Whether an order interprets or modifies an injunction is determined by its actual, practical effect,” the opinion noted, citing the 10th Circuit Court of Appeals decision Fed. Trade Comm’n v. Zurixx.

According to Pimentel, “an interpretation or clarification does not alter the status of the parties, but merely restates that relationship in new terms, while a modification either alters the legal relationship between the parties or substantially changes the terms and force of the injunction.” As well as, “to change the legal relationship of the parties, the order must change the command of the earlier injunction, relax its prohibitions, or release any respondent from its grip.” 

The state challenged the district court’s rejection of its argument that the federal pandemic waivers constituted an “isolated event or action” warranting the exclusion of pandemic-waiver cases from the case file review. The 10th Circuit rejected this challenge finding the state failed to show the 10th Circuit has 1292(a)(1) jurisdiction.

The district court didn’t expand or modify the injunction. Its determination the federal pandemic waivers weren’t an “isolated event or action” was a reasonable interpretation of the consent decree, the 10th Circuit opinion noted. The court didn’t “alter the status of the parties, but merely [restated] [their] relationship in new terms,” wrote the appeals panel, citing Pimentel. The court didn’t change the consent decree’s compliance mandates, enforcement mechanisms or otherwise alter “the command of the earlier injunction, relax its prohibitions, or release any respondent from its grip.” 

Because the 10th Circuit lacked interlocutory jurisdiction under 1292(a)(1) to review the district court’s order, it dismissed this appeal.

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