INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION v. CAISTER (2025)

MEMORANDUM DECISION ON REHEARING

[1] The Indiana Family and Social Services Administration and related entities and officers (collectively, “FSSA”) petition for rehearing following our memorandum decision in FSSA v. Caister, 24A-MI-3039, 2025 WL 1742846 (Ind. Ct. App. June 24, 2025) (mem.). We grant this petition to address two issues:

1. Whether we erroneously applied the current version of Indiana Code section 4-21.5-5-11 rather than a prior version of the statute.

2. Whether we erroneously applied the current version of Indiana Code section 12-15-1.3-15(c)(4) rather than a prior version of the statute.

[2] We acknowledge our errors in the application of the current versions of these statutes to this case. However, the 2024 amendments do not change the law relevant to our review of questions of law under Indiana's Administrative Orders and Procedures Act (“IAOPA”), which, even before the 2024 amendments, we reviewed de novo. See, e.g., Moriarity v. Ind. Dep't of Natural Resources, 113 N.E.3d 614, 619-20 (Ind. 2019) (stating that an agency's conclusions of law are ordinarily reviewed de novo and we are not bound by an agency's conclusions of law); NIPSCO Indus. Grp. v. N. Ind. Pub. Serv. Co., 100 N.E.3d 234, 241 (Ind. 2018) (stating that we review questions of law de novo and “accord the administrative tribunal below no deference”). Thus, regardless of which version of the statutes we apply here, our analysis of whether FSSA misinterpreted the Community Integration and Habilitation (“CIH”) waiver statute is the same.¹

[3] We therefore issue this memorandum decision on rehearing to correct our misapplication of the current statutory framework to this case, affirm our prior decision, and remand for findings under Indiana Code section 12-15-1.3-15(c)(4) (2021).

Issue One: Indiana Code section 4-21.5-5-11

[4] As we acknowledged in our prior decision, Indiana Code section 4-21.5-5-11, which governs our standard of review, was amended with an effective date of July 1, 2024 (“2024 amendment”). In the 2024 amendment, the statute provides:

(a) Judicial review of disputed issues of fact must be confined to the agency record for the agency action supplemented by additional evidence taken under section 12 of this chapter. A court is not bound by a finding of fact made by the ultimate authority if the finding of fact is not supported by the record.

(b) The court shall decide all questions of law, including any interpretation of a federal or state constitutional provision, state statute, or agency rule, without deference to any previous interpretation made by the agency.

Id. (emphasis added). The prior version provided that

[j]udicial review of disputed issues of fact must be confined to the agency record for the agency action supplemented by additional evidence taken under section 12 of this chapter. The court may not try the cause de novo or substitute its judgment for that of the agency.

I.C. § 4-21.5-5-11 (2023) (emphasis added).

[5] In our prior decision, we explained that, pursuant to Indiana Code section 1-1-5.5-24(b)(1), Mireille's appeal to this Court is a “proceeding for judicial review commenced after June 30, 2024,” and we concluded that the 2024 amendment applies here. We read the broadly-worded “proceeding for judicial review” to include Mireille's appeal, but FSSA's argument on rehearing persuades us that the prior version of the statute applies here. Indeed, another panel of this Court has twice applied the former statute where, as here, the claimant's petition for judicial review was pending before the effective date of the 2024 amendment.² See Ind Bureau of Motor Vehicles v. Craig, 245 N.E.3d 162, 166 n.3 (Ind. Ct. App. 2024); Brookston Res., Inc. v. Dep't of Nat. Res., 243 N.E.3d 1127, 1138 (Ind. Ct. App. 2024), trans. denied.

[6] Therefore, we correct our prior decision to show that Indiana Code section 4-21.5-5-11 (2023) applies to this case.

Issue Two: Indiana Code section 12-15-1.3-15(c)(4)

[7] Next, FSSA correctly points out that we cited the wrong version of Indiana Code section 12-15-1.3-15(c)(4) in our prior decision. Therefore, we further correct our prior decision to show that Indiana Code section 12-15-1.3-15(c)(4) (2021) applies to this case.

[8] As amended in 2024, Indiana Code section 12-15-1.3-15(c)(4) provides that a CIH waiver can be approved for an individual where

[t]here is evidence of other health and safety risks, as determined by the division director, where other available services through:

(A) the Medicaid program and other federal, state, and local public programs; and

(B) supports that families and communities provide;

are insufficient to address the other health and safety risks, as determined by the division director.

[9] The prior version of the statute, which was effective at the time Mireille filed her application for the CIH waiver, provided that a CIH waiver could be approved for an individual where

[t]here are other health and safety risks, as determined by the division director, and alternate placement in a supervised group living setting is not available or is determined by the division to be an inappropriate option.

I.C. § 12-15-1.3-15(c)(4) (2021).

[10] While the two versions of this statute are substantively different, our use of the former version of the statute does not change our analysis. Neither version places any burden on Mireille to prove an exhaustion of all available services. This additional burden FSSA placed on Mireille is a matter of law which, as stated above, we review de novo.

[11] As we explained in our prior decision and here reiterate,

Harlan-York's assessment of Mireille's application was based on an erroneous interpretation of the law. While FSSA is correct that the division director may consider whether available resources are adequate to address Mireille's needs, Harlan-York went well beyond that to require Mireille to exhaust services where no such requirement exists. The error was not incidental, and it was, therefore, not harmless.

[12] On remand, we instruct FSSA to assess Mireille's eligibility for the CIH waiver based only on the requirements set out in Indiana Code section 12-15-1.3-15(c)(4) (2021), namely, whether “[t]here are other health and safety risks, as determined by the division director, and alternate placement in a supervised group living setting is not available or is determined by the division to be an inappropriate option.”

[13] For all of these reasons, and with the corrections set forth above, we grant FSSA's petition for rehearing and affirm our prior decision.

[14] Affirmed and remanded for further proceedings.

FOOTNOTES

1.   In its brief on appeal, FSSA acknowledged that we review “an agency's legal conclusions de novo.” Appellant's Br. at 24.

2.   Mireille filed her petition for judicial review on June 13, 2024.

Mathias, Judge.

May, J., and Bradford, J., concur.