The Indiana Court of Appeals affirmed the denial of certification of a proposed class suing the Family and Social Services Administration because plaintiffs believed the modernized public benefits program system has a disparate impact on people with disabilities. Even though the contract with the company providing the system was terminated earlier this month, the parties don't claim this action alters their appeal.

In Sheila Perdue, et al., v. Anne Waltermann Murphy, in her official capacity as Secretary of the Indiana Family and Social Services Administration, et al., No. 49A02-0901-CV-8, the appellate court determined the current class was too broad but remanded for the trial court to determine whether a more specific class to sustain the Americans with Disabilities Act action can be defined.

The Indiana Family and Social Services Administration contracted with IBM in March 2007 to provide welfare programs in the state. The process for obtaining food stamps, Medicaid, and other services changed; under the new system, clients weren't assigned individual caseworkers and electronic files were used instead of hard copies. The determination of eligibility under this new system also changed.

Sheila Perdue was enrolled in the food stamp and Medicaid for Disabled programs, but after IBM took over, she was denied food stamps and Medicaid under the new requirements. Perdue and others filed suit against the FSSA and represent three classes and one subclass claiming violations of the ADA and Rehabilitation Act of 1973. All were certified except Class B, the one at issue in the instant case; the trial court denied certifying the class, which led to this interlocutory appeal.

The trial court deemed the instant action as a series of individual ADA/RA actions that would require mini-trials and individualized inquires before class membership could be established. The Court of Appeals agreed, citing the recent decision in Hohider v. United Parcel Service, Inc., 574 F.3d 169, 200 (3d Cir. 2009), in which the 3rd Circuit Court of Appeals held the individualized inquiries necessary to determine ADA eligibility rendered class certification improper, even if plaintiffs were only seeking injunctive and declaratory relief pursuant to Federal Rule of Civil Procedure 23. The plaintiffs need to be evaluated to see if they were "qualified" as required under the ADA.

Class B names no unifying or limiting conditions suffered or accommodations/modifications sought to allow classwide evaluation of whether they are "qualified" under the ADA such that discrimination against them on the basis of their disabilities is unlawful, wrote Judge Cale Bradford.

"Without such limiting conditions, we conclude, pursuant to Hohider, that the necessary inquiries to establish the alleged discrimination in the instant case are too individualized and divergent to warrant certification," he wrote.

However, it may be possible to define a more limited class of people challenging the FSSA's policy under the ADA that would be appropriate for class certification. A class action can't be maintained without a properly defined class, but a court can redefine the class in order to sustain the lawsuit, wrote Judge Bradford.

The state announced Oct. 15 that it terminated the contract with IBM for the delivery of welfare services because the company didn't make satisfactory progress to improve services to applicants and recipients under a plan to correct deficiencies.