Jessica M. Karmasek May 14, 2013, 8:15pm

OLYMPIA, Wash. (Legal Newsline) -- The Washington Supreme Court heard oral arguments Tuesday in a case challenging an award of almost $100 million to a class of in-home care providers.

A jury found that the state Department of Social and Health Services breached its contractual duty of good faith and fair dealing toward the providers, and awarded the providers $57 million.

Then a judge added interest, bringing the total to nearly $100 million.

The agency appealed the judgment to the state's high court.

The plaintiffs claimed that the DSHS breached Independent Contractor Agreements when it used an existing, but later invalidated, agency rule to regulate public assistance awards.

For four years, the agency used the "shared living rule" as part of a needs-assessment tool applied to recipients of Medicaid-funded in-home assistance.

The DSHS started applying the rule in April 2003, and repealed the rule in June 2007 shortly after the state's high court held it invalid in Jenkins v. Department of Social & Health Services in 2007.

Although two superior courts in 2005 concluded the rule was invalid, the state Court of Appeals and the Supreme Court stayed those rulings, allowing the agency to use the rule while Jenkins was pending.

Two classes of plaintiffs filed suit immediately after Jenkins to claim damages.

One is a "client class" made up of persons whose public assistance was determined, in part, using the former rule.

The second is a "provider class" made up of the live-in providers selected and employed by members of the client class to provide services.

The Supreme Court agreed to hear the provider case in December.

Lawyers for the state want the court to reverse the verdict.

Lawyers for the providers, in their cross-appeal, argue that those who receive care also should have received an award.

From Legal Newsline: Reach Jessica Karmasek by email at

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