Wednesday, April 1, 2015

Court Says No Injunctive Relief Under Supremacy Clause, Medicaid Act

The Supreme Court ruled this week that the Supremacy Clause does not confer a private right of action for injunctive relief against state officers who are allegedly violating the Medicaid Act. The sharply divided ruling (along conventional ideological lines, except for Justices Kennedy and Breyer) is a blow to the courts' equitable powers and access to justice, and, as Justice Sotomayor wrote in dissent, "threatens the vitality of our Ex Parte Young jurisprudence."

More immediately, the Court's ruling is a blow to underpaid Medicaid providers. They now cannot seek an injunction against an under-paying state in federal court; instead, they have to petition the federal government to withhold Medicaid funds from a state that violates the Medicaid Act--a much harder way to get relief.

The case, Armstrong v. Exceptional Child Care, Inc., arose when habilitation service providers sued Idaho for paying them too little under the federal Medicaid program. The providers based their claim on Section 30(A) of the Medicaid Act and the Supremacy Clause. Section 30(A) requires Idaho (and other states) to provide payment for services sufficient "to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan . . . ." The providers argued that this requirement preempted Idaho's low payment rate and sought injunctive relief against state officers who implement Idaho's Medicaid plan.

Justice Scalia wrote for the Court, joined by Chief Justice Roberts and Justices Thomas, Breyer, and Alito. He said that the Supremacy Clause does not confer a right of action for injunctive relief, because the Clause doesn't provide for it, and because to allow it would permit private parties to enforce congressional actions, "significantly curtailing [Congress's] ability to guide the implementation of federal law."

Justice Scalia also wrote that the Court lacked equitable power to enjoin Idaho's unlawful action under the Medicaid Act, because Section 30(A) demonstrates "Congress's 'intent to foreclose' equitable relief." He said that the "sole remedy" for a state's violation of the Medicaid Act is withholding of federal funds, and he said that Section 30(A) is couched in judicially unadministrable terms and standards.

Justice Breyer concurred in all but Part IV of Justice Scalia's majority opinion. (Part IV argued that the Medicaid Act itself didn't provide an express cause of action for the plaintiffs, third-party beneficiaries to Idaho's Medicaid agreement with the federal government.) He argued that administrative agencies are better suited to applying Section 30(A) than federal courts in an action like this.

Justice Sotomayor wrote the dissent, joined by Justices Kennedy, Ginsburg, and Kagan. Justice Sotomayor wrote that there's a long history of suits for equitable protection against a preempted state law, and that "we have characterized 'the availability of prospective relief of the sort awarded in Ex Parte Young' as giving 'life to the Supremacy Clause.'" Justice Sotomayor argued that there's only a single prior decision "in which we have ever discerned . . . congressional intent to foreclose equitable enforcement of a statutory mandate" (as the majority did here), and that was in Seminole Tribe, a case easily distinguished from this one. She wrote that "the Court . . . threatens the vitality our Ex Parte Young jurisprudence."

http://lawprofessors.typepad.com/conlaw/2015/04/court-says-no-injunctive-relief-under-supremacy-clause-medicaid-act.html

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