After a coalition of state government departments warned the Colorado Supreme Court that there could be dire consequences for public health and safety if it allowed a lower court ruling to stand, the Judges agreed that government agencies didn’t just have 35 days to seek judicial enforcement of their regulatory orders.
Monday’s ruling found that the state Court of Appeals misunderstood the time limit enshrined in state law when it ruled last year that the Arapahoe County Department of Social Services should not could not attempt to recover more than $79,000 in overpayments from public benefits because he had waited too long. The appeals court ruled that the department had just 35 days to ask a judge to enforce its refund order.
Because Arapahoe County issued the order in 2008 and sought judicial enforcement more than 10 years later against the people who allegedly defrauded the government, the effect of the appeal ruling was to end to the legal effort to pursue reimbursement.
Upon further review, the Supreme Court determined that the 35-day window did not, in fact, apply to government agencies that wanted to enforce their orders, but rather to people who wanted to challenge the orders in the first place.
When drafting the law, Judge Carlos A. Samour Jr. wrote for the court that lawmakers “clearly distinguished between a judicial review of an agency action, which an aggrieved or aggrieved person may request, and judicial enforcement of an agency’s final orderthat the body that issued the prescription may request.”
The overturning of the Court of Appeals ruling came as a relief to government agencies whose portfolios ranged from agriculture to natural resources to transportation. Fifteen state departments and the administrator of the Uniform Consumer Credit Code wrote to alarmed judges, saying the appeals court had effectively nullified their ability to enforce regulatory orders through the courts.
The concern of government entities boiled down to the fact that many types of regulatory orders take longer than 35 days to comply. The Colorado Department of Labor and Employment, for example, can order an employer to pay unpaid wages to an employee for several months. The Colorado Medical Board could order a doctor to practice under supervision for a year. The Mined Land Reclamation Board can order an abandoned mine to be cleared within 10 years.
“In all of these examples, compliance with the order cannot be confirmed until the end of the compliance period and therefore the agency cannot seek judicial enforcement of its order within 35 days,” wrote Assistant Attorney General Keenan Lorenz, representing government services. “Similarly, under the precedent set here, those subject to a final order from the agency could comply with the order for 35 days and then fall into non-compliance on the 36th day without any recourse for the agency. “
The appeal to the court stems from a discovery by the Arapahoe County Department of Social Services that Monica Velarde and Michael Moore received nearly $96,000 in overpayments for food and medical benefits. The government alleged that Velarde misrepresented his income and obtained the aid fraudulently between 2002 and 2004.
In February 2008, the department notified Velarde and Moore of the overpayments and began collecting the money through the couple’s tax refunds and by reducing future child support. A decade later, only $79,591.17 in Medicaid overpayments remained, and the government filed a civil lawsuit in January 2019 to enforce its agency order and collect the debt, plus interest.
However, District Court Judge Elizabeth Beebe Volz dismissed the government’s suit after determining she lacked jurisdiction over the dispute. In his reading of the law, Volz thought the Department of Social Services was bound by the time limit for people who are negatively affected by an agency’s action. People in this category”may bring an action for judicial review in the district court within thirty-five days after the agency action becomes effective,” the law states.
A three-judge panel of the Court of Appeal agreed with this interpretation last year. Arapahoe County was due to file for judicial enforcement in 2008 and had waited a decade too long to initiate the process, the panel decided.
Velarde and Moore did not respond to the government’s appeal and they participated minimally in the district court case.
Addressing the Supreme Court, Arapahoe County argued that the appeals panel confused the 35-day window for judicial review as also applying to judicial enforcement, which are two different processes. As a result, the county continued, anyone who ceases to comply with Department of Social Services reimbursement orders after 35 days will effectively receive debt forgiveness.
“With respect to the specific situation that presents itself in this case, the notice, if not corrected, will radically impair the ability of county departments to recover overpaid public assistance benefits,” a said Assistant County Attorney Annette M. Powell. “The notice will have immediate negative impacts on the recovery of millions of dollars in public assistance taxes and social fraud by significantly impeding the collection of overpayments owed to county social service departments.”
Again, Velarde and Moore did not participate in the call.
The Supreme Court sided with the county in ruling that the appeals panel improperly applied the 35-day deadline to Arapahoe County’s attempt to recover overpaid benefits. Samour, in the court’s view, nodded to government departments’ concerns by acknowledging that the judges were aware of the “significant impact and far-reaching ramifications” of the Court of Appeals’ interpretation.
Samour agreed that the logic of the Court of Appeals could favor the “game” by requiring government agencies to file enforcement briefs within 35 days in all cases or they would lose their ability to enforce their guidelines. He referred to the example raised by the attorney general’s office in which the Colorado Medical Board orders a doctor to undergo one year of professional follow-up. Even though the monitoring would have barely begun, the board would have reason to go to court almost immediately if it was within 35 days.
“Otherwise, he would risk being forever barred from seeking judicial enforcement of his order,” Samour wrote. “Such an approach would stifle and undermine attempts by agencies and sponsors to resolve compliance issues on their own. And it would significantly increase litigation in court enforcement.”
The court ordered the reinstatement of the county’s civil suit. The deal is Arapahoe County Department of Social Services v. Velarde et al.