Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
J.G. was born in December 2005. In January 2007, she suffered an adverse reaction to a measles-mumps-rubella-varicella vaccine, leading to serious health consequences.
Through her mother and then-conservator, J.G. petitioned for compensation in the Court of Federal Claims under the National Childhood Vaccine Injury Act of 1986. While her petition was pending, J.G. applied for and was approved to receive benefits under Colorado’s Medicaid program, including Home and Community-Based Children’s Extensive Support Waiver services, which are offered to children with developmental delays or disabilities.
In 2011, while J.G. was receiving Medicaid benefits, a special master in the Court of Federal Claims approved a settlement between J.G. and the Department of Health and Human Services. The settlement included compensation for several categories of damages, including a lump-sum payment into a reversionary trust that DHHS created, Regions Bank managed as trustee and J.G. could access for only therapy expenses, and a lump-sum payment to purchase an annuity, providing J.G. annual payments during her life. A Colorado state court also approved the settlement terms.
For roughly five years, the Colorado Department of Health Care Policy and Financing expressed no concerns with J.G.’s settlement. That changed in April 2016, when the department began questioning the settlement’s terms. J.G.’s representatives tried addressing the concerns but to no avail. In 2017, J.G. was notified that her Medicaid benefits were being terminated. The notice stated that the reversionary trust was a countable resource that placed J.G. above the allowable-resource limit to qualify for Medicaid assistance. It also said that money received under the annuity contract put J.G. over the allowable income limit.
J.G. appealed that decision to the Office for Administrative Courts. The appeal was assigned to Administrative Law Judge Tanya Light. During those proceedings, the parties agreed that the case could be decided on a summary-judgment briefing, without a hearing. So they submitted their briefs and supporting exhibits, some of which were stipulated. After considering the arguments, Light issued an initial decision that reversed the department’s ineligibility ruling, concluding that neither the reversionary trust nor the annuity were countable assets for determining J.G.’s Medicaid eligibility.
The department objected and J.G. filed a response to the objections. Christine Nierenz, an ALJ in the department’s Office of Appeals, issued a final agency decision in 2019 that reversed Light’s initial decision, concluding that the reversionary trust and the annuity were countable assets, making J.G. ineligible for Medicaid assistance.
While the decision stated that J.G. could seek judicial review of the decision by suing in the appropriate state district court within 35 days, J.G. didn’t pursue that option and instead turned to federal court and filed a complaint in the District of Colorado. She asserted five claims against Nierenz and Director Kim Bimestefer in their official capacities as members of the Office of Appeals.
J.G. alleged that Nierenz failed to evaluate her Medicaid eligibility “in accordance with the regulations and law as set forth in the [Supplemental Security Income] program,” that the reversionary trust isn’t a countable asset and by interpreting it otherwise the department misstepped, that the department erred in interpreting the annuity as a countable resource and that the department violated policy by “counting income and resources for [her] in a manner that is more restrictive than the [Supplemental Security Income] program.”
Nierenz and Bimestefer moved to dismiss, arguing that J.G.’s claims were barred by issue and claim preclusion. They also claimed J.G. lacked enforceable federal rights under the Medicaid statutes. The district court granted their motion on claim-preclusion grounds, concluding that the final decision was entitled to preclusive effect and that each of J.G.’s claims either had been raised or could have been raised during the administrative proceedings.
J.G., through her father and current conservator Mark Grimes, appealed, alleging an abuse of discretion.
According to the 10th Circuit Court of Appeals, when an agency acts in a judicial capacity, resolves disputed issues of fact before it and the parties have an adequate opportunity to litigate issues, the agency’s decision has the same preclusive effect it would have in state court. These elements are satisfied in this instance, according to the court. Additionally, the court determined that not only does the final decision have a preclusive effect, it precludes J.G.’s lawsuit.
Claim preclusion bars re-litigation of matters that were decided or could have been raised in a prior proceeding. In Colorado, claim preclusion applies when “the judgment in the prior proceeding was final; the prior and current proceedings involved identical subject matter; the prior and current proceedings involved identical claims for relief and the parties to the proceedings were identical or in privity with one another.”
According to the court, the injury underlying J.G.’s claims is her loss of Medicaid benefits — the same injury she sought to remedy during her administrative proceedings — and under Colorado claim-preclusion law, the identity-of-claims element is satisfied when a party seeks redress for the same injury as before.
J.G. hasn’t identified a misapprehension of any facts, arguments or law that warrants granting her reconsideration motion, the court said in its opinion. Throughout her briefing on appeal, she presented arguments and issues that she could have raised — and did raise — during the administrative proceedings and before the district court. Those matters are inappropriate for a reconsideration motion and as such the 10th Circuit determined the district court didn’t abuse its discretion.
The 10th Circuit Court of Appeals affirmed the district court’s ruling on all counts.