Thursday, November 29, 2012
Last term the Supreme Court decided Douglas v. Independent Living Center, a decision that almost shut down Supremacy Clause implied rights of action but instead deferred to CMS's authority to approve states' reimbursement cuts in Medicaid. Litigants now appear to be testing the boundaries of both the majority and the dissent in Douglas. A few weeks back, I mentioned a Seventh Circuit decision that endorsed the Douglas dissent's desire to severely limit implied rights of action (which would have substantially closed the courthouse doors to Medicaid providers and enrollees).
Now, a different aspect of the case has been tested. In Emma C. v. Eastin, California argued that the Douglas majority's remand deprives federal courts of jurisdiction where a federal agency approves of the state's approach to using federal funding. The district court flatly rejected this proposition, holding that the federal agency's imprimatur was not only absent, but even if it were not, agency approval does not deprive federal courts of their ability to review compaints regarding improper state acts in conditional spending programs. Though Emma C. is an IDEA case, one can imagine that California was ready to tackle the same proposition in additional Medicaid cases. No link is available, but the case can be found at 2012 WL 5904750 (N.D. Cal., Nov. 26, 2012). (Thanks to Sam Bagenstos at DisabilityLawBlog for the pointer.)
Douglas seems bound to return to the Court either through Medicaid or another conditional spending vehicle soon. Too many states are interested in testing the dissent's desire to limit implied causes of action for this decision to be a sleeper.