No Individual Right to Sue When State Drops Planned Parenthood from Medicaid, Says Eighth Circuit

Steven D. Schwinn, John Marshall Law School

The Eighth Circuit ruled this week that Planned Parenthood patients didn't have an individual right to sue Arkansas when the state terminated its Medicaid provider agreement with the organization. But the two judges in the majority differed as to their reasoning, and a third judge sharply dissented. The ruling creates a circuit split on the question and sets the case up for possible en banc review or even cert.

The issue in the case was whether Planned Parenthood patients could sue the state under Section 23(A) of the Medicaid Act and Section 1983. Here's how it works: The Medicaid Act requires the Secretary of HHS to "approve any plan which fulfills the conditions specified in subsection (a)." Subsection (a), in turn, says that "[a] State plan for medical assistance must" satisfy certain conditions, including the one at issue here, Section 23(A), that is, that the state plan must "provide that . . . any individual eligible for medical assistance (including drugs) may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services requires . . . who undertakes to provide him such services."

So the issue was whether this last provision created a private right of action for the patients. The court said no.

Judge Colloton wrote that the provision didn't create a private right of action, because recent Supreme Court doctrine set a higher standard for determining whether a congressional act created an individual cause of action, and that standard wasn't met here. Judge Colloton explained:

There was a time, illustrated by Wilder v. Virginia Hospital Association when the Medicaid Act was deemed to create an enforceable right if the provision in question was "intend[ed] to benefit the putative plaintiff." Starting from that premise, Wilder held that the Boren Amendment to Section 13(A) of the Medicaid Act created a federal right for providers that was enforceable under Section 1938.

Later decisions, however, show that the governing standard for identifying enforceable federal rights in spending statutes is more rigorous. It is not enough, as Wilder and Blessing v. Freestone might have suggested, to show simply that a plaintiff "falls within the general zone of interest that the statute is intended to protect." It is now settled that nothign "short of an unambiguously conferred right" will support a cause of action under Section 1983.

Judge Colloton went on to argue that the Court's recent ruling in Armstrong v. Exceptional Child Ctr. repudiated Wilder and thus supported this conclusion. Judge Colloton went on to argue that this higher standard wasn't met here, because "the focus of the Act [a directive to HHS to approve certain state Medicaid plans] is two steps removed from the interests of the patients"; Congress authorized other ways of enforcing the Act (by withdrawing federal funds); and the Medicaid Act, with its "aggregate focus," "do[es] not give rise to individual rights." Judge Colloton also noted that there's an administrative appeal process for Planned Parenthood (which it did not pursue here).

Judge Shepherd concurred, but for a different reason. Judge Shepherd argued that even if Section 23(A) provided a substantive right to sue under Section 1983, "the right provided is to a range of qualified providers--not the right to a particular provider the State has decertified."

Judge Melloy dissented, siding with the several circuits and district courts that have found an individual right of action under Section 23(A). Judge Melloy wrote that Blessing established a three-part test--(1) whether Congress intended that the provision benefit the plaintiff, (2) whether the right "is not so vague and amorphous that is enforcement would strain judicial competence," and whether the provision "impose[s] a binding obligation of the States"--that Gonzaga simply amended the first part (by heightening the requirement, to an "unambiguously conferred right"), and that the plaintiffs satisfied the test here.