Armstrong v. Exceptional Child Center, Inc.
Armstrong v. Exceptional Child Center, Inc.
Opinion
We consider whether Medicaid providers can sue to enforce § (30)(A) of the Medicaid Act.
I
Medicaid is a federal program that subsidizes the States' provision of medical services to "families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services." § 1396-1. Like other Spending Clause legislation, Medicaid offers the States a bargain: Congress provides federal funds in exchange for the States' agreement to spend them in accordance with congressionally imposed conditions.
In order to qualify for Medicaid funding, the State of Idaho adopted, and the Federal Government approved, a Medicaid "plan," § 1396a(a), which Idaho administers through its Department of Health and Welfare. Idaho's plan includes "habilitation services"-in-home care for individuals who, "but for the provision of such services ... would require the level of care provided in a hospital or a nursing facility or intermediate care facility for the mentally retarded the cost of which could be reimbursed under the State plan," § 1396n(c) and (c)(1). Providers of these services are reimbursed by the Department of Health and Welfare.
Section 30(A) of the Medicaid Act requires Idaho's plan to:
"provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary to safeguard against unnecessary utilization of such care and services and 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 at least to the extent that such care and services are available to the general population in the geographic area...." 42 U.S.C. § 1396a(a)(30)(A).
Respondents are providers of habilitation services to persons covered by Idaho's Medicaid plan. They sued petitioners-two officials in Idaho's Department of Health and Welfare-in the United States District Court for the District of Idaho, claiming that Idaho violates § 30(A) by reimbursing providers of habilitation services at rates lower than § 30(A) permits. They asked the court to enjoin petitioners to increase these rates.
The District Court entered summary judgment for the providers, holding that Idaho had not set rates in a manner consistent with § 30(A).
Inclusion, Inc. v. Armstrong,
*1383
II
The Supremacy Clause, Art. VI, cl. 2, reads:
"This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding."
It is apparent that this Clause creates a rule of decision: Courts "shall" regard the "Constitution," and all laws "made in Pursuance thereof," as "the supreme Law of the Land." They must not give effect to state laws that conflict with federal laws.
Gibbons v. Ogden,
Hamilton wrote that the Supremacy Clause "only declares a truth, which flows immediately and necessarily from the institution of a Federal Government." The Federalist No. 33, p. 207 (J. Cooke ed. 1961). And Story described the Clause as "a positive affirmance of that, which is necessarily implied." 3 Commentaries on the Constitution of the United States § 1831, p. 693 (1833). These descriptions would have been grossly inapt if the Clause were understood to give affected parties a constitutional (and hence congressionally unalterable) right to enforce federal laws against the States . And had it been understood to provide such significant private rights against the States, one would expect to find that mentioned in the preratification historical record, which contained ample discussion of the Supremacy Clause by both supporters and opponents of ratification. See C. Drahozal, The Supremacy Clause: A Reference Guide to the United States Constitution 25 (2004); The Federalist No. 44, at 306 (J. Madison). We are aware of no such mention, and respondents have not provided any. Its conspicuous absence militates strongly against their position.
Additionally, it is important to read the Supremacy Clause in the context of the Constitution as a whole. Article I vests Congress with broad discretion over the manner of implementing its enumerated powers, giving it authority to "make all Laws which shall be necessary and proper for carrying [them] into Execution." Art. I, § 8. We have said that this confers upon the Legislature "that discretion, with respect to the means by which the powers [the Constitution] confers are to be carried into execution, which will enable that body to perform the high duties assigned to it,"
McCulloch v. Maryland,
To say that the Supremacy Clause does not confer a right of action is not to diminish the significant role that courts play in assuring the supremacy of federal law. For once a case or controversy properly comes before a court, judges are bound by federal law. Thus, a court may not convict a criminal defendant of violating a state law that federal law prohibits. See,
e.g.,
Pennsylvania v. Nelson,
Respondents contend that our preemption jurisprudence-specifically, the fact that we have regularly considered whether to enjoin the enforcement of state laws that are alleged to violate federal law-demonstrates that the Supremacy Clause creates a cause of action for its violation. They are incorrect. It is true enough that we have long held that federal courts may in some circumstances grant injunctive relief against state officers who are violating, or planning to violate, federal law. See,
e.g.,
Osborn v. Bank of United States,
The ability to sue to enjoin unconstitutional actions by state and federal officers is the creation of courts of equity, and reflects a long history of judicial review of illegal executive action, tracing back to England. See Jaffe & Henderson, Judicial Review and the Rule of Law: Historical Origins, 72 L.Q. Rev. 345 (1956). It is a judge-made remedy, and we have never held or even suggested that, in its application to state officers, it rests upon an implied right of action contained in the Supremacy Clause. That is because, as even the dissent implicitly acknowledges, post, at 1391 - 1392 (opinion of SOTOMAYOR, J.) it does not. The Ninth Circuit erred in holding otherwise.
*1385 III
A
We turn next to respondents' contention that, quite apart from any cause of action conferred by the Supremacy Clause, this suit can proceed against Idaho in equity.
The power of federal courts of equity to enjoin unlawful executive action is subject to express and implied statutory limitations. See,
e.g.,
Seminole Tribe of Fla. v. Florida,
Two aspects of § 30(A) establish Congress's "intent to foreclose" equitable relief.
Verizon Md., Inc. v. Public Serv. Comm'n of Md.,
The provision for the Secretary's enforcement by withholding funds might not,
by itself,
preclude the availability of equitable relief. See
Virginia Office for Protection and Advocacy v. Stewart,
B
The dissent agrees with us that the Supremacy Clause does not provide an implied right of action, and that Congress may displace the equitable relief that is traditionally available to enforce federal *1386 law. It disagrees only with our conclusion that such displacement has occurred here.
The dissent insists that, "because Congress is undoubtedly aware of the federal courts' long-established practice of enjoining preempted state action, it should generally be presumed to contemplate such enforcement unless it
affirmatively
manifests a contrary intent."
Post,
at 1392 (emphasis added). But a "long-established practice" does not justify a rule that denies statutory text its fairest reading. Section 30(A), fairly read in the context of the Medicaid Act, "display[s] a[n] intent to foreclose" the availability of equitable relief.
Verizon, supra, at 647,
Equally unavailing is the dissent's reliance on § 30(A)'s history. Section 30(A) was amended, on December 19, 1989, to include what the dissent calls the "equal access mandate,"
post,
at 1394-the requirement that reimbursement rates be "sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area." § 6402(a),
This argument appears to rely on the prior-construction canon; the rule that, when "judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a new statute" is presumed to incorporate that interpretation.
Bragdon v. Abbott,
Finally, the dissent speaks as though we leave these plaintiffs with no resort. That is not the case. Their relief must be sought initially through the Secretary rather than through the courts. The dissent's complaint that the sanction available to the Secretary (the cut-off of funding) is too massive to be a realistic source of relief seems to us mistaken. We doubt that the Secretary's notice to a State that its compensation scheme is inadequate will be ignored.
IV
The last possible source of a cause of action for respondents is the Medicaid Act itself. They do not claim that, and rightly so. Section 30(A) lacks the sort of rights-creating language needed to imply a private right of action.
Sandoval, supra at 286-287,
Spending Clause legislation like Medicaid "is much in the nature of a contract."
Pennhurst State School and Hospital v. Halderman,
* * *
The judgment of the Ninth Circuit Court of Appeals is reversed.
It is so ordered.
Justice BREYER, concurring in part and concurring in the judgment.
I join Parts I, II, and III of the Court's opinion.
Like all other Members of the Court, I would not characterize the question before us in terms of a Supremacy Clause "cause of action." Rather, I would ask whether "federal courts may in [these] circumstances grant injunctive relief against state officers who are violating, or planning to violate, federal law." Ante, at 1384; post, at 1391 - 1392 (SOTOMAYOR, J., dissenting). I believe the answer to this question is no.
That answer does not follow from the application of a simple, fixed legal formula separating federal statutes that may underlie this kind of injunctive action from those that may not. "[T]he statute books are too many, the laws too diverse, and their purposes too complex, for any single legal formula to offer" courts "more than general guidance."
Gonzaga Univ. v. Doe,
For one thing, as the majority points out, § 30(A) of the Medicaid Act, 42 U.S.C. § 1396a(a)(30)(A), sets forth a federal mandate that is broad and nonspecific. See
ante,
at 1385. But, more than that, § 30(A) applies its broad standards to the setting of rates. The history of ratemaking demonstrates that administrative agencies are far better suited to this task than judges. More than a century ago, Congress created the Interstate Commerce Commission, the first great federal regulatory rate-setting agency, and endowed it with authority to set "reasonable" railroad rates. Ch. 104,
Reading § 30(A) underscores the complexity and nonjudicial nature of the rate-setting task. That provision requires State Medicaid plans to "assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers" to assure "care and services" equivalent to that "available to the general population in the geographic area." § 1396a(a)(30)(A). The methods that a state agency, such as Idaho's Department of Health and Welfare, uses to make this kind of determination may involve subsidiary determinations of, for example, the actual cost of providing quality services, including personnel and total operating expenses; changes in public expectations with respect to delivery of services; inflation; a comparison of rates paid in neighboring States for comparable services; and a comparison of any rates paid for comparable services in other public or private capacities. See App. to Reply to Brief in Opposition 16;
At the same time, § 30(A) applies broadly, covering reimbursements provided to approximately 1.36 million doctors, serving *1389 over 69 million patients across the Nation. See Dept. of Health and Human Servs., Office of Inspector General, Access to Care: Provider Availability in Medicaid Managed Care 1, 5 (Dec. 2014). And States engage in time-consuming efforts to obtain public input on proposed plan amendments. See, e.g., Kansas Medicaid: Design and Implementation of a Public Input and Stakeholder Consult Process (Sept. 16, 2011) (prepared by Deloitte Consulting, LLP) (describing public input on Kansas' proposed Medicaid amendments).
I recognize that federal courts have long become accustomed to reviewing for reasonableness or constitutionality the rate-setting determinations made by agencies. See
I recognize that courts might in particular instances be able to resolve rate-related requests for injunctive relief quite easily. But I see no easy way to separate in advance the potentially simple sheep from the more harmful rate-making goats. In any event, this case, I fear, belongs in the latter category. See
Belshe, supra, at 1496. Compare Brief for Respondents 2, n. 1 (claiming that respondents seek only to enforce federally approved methodology), with Brief for United States as
Amicus Curiae
5, n. 2 (the relevant methodology has not been approved). See also
For another thing, like the majority, I would ask why, in the complex rate-setting area, other forms of relief are inadequate. If the Secretary of Health and Human Services concludes that a State is failing to follow legally required federal rules, the Secretary can withhold federal funds. See
ante,
at 1385 (citing 42 U.S.C. § 1396c). If withholding funds does not work, the federal agency may be able to sue a State to compel compliance with federal rules. See Tr. of Oral Arg. 23, 52 (Solicitor General and respondents acknowledging that the Federal Government might be able to sue a State to enjoin it from paying less than what § 30(A) requires). Cf.,
e.g.,
Arizona v. United States,
567 U.S. ----,
Moreover, why could respondents not ask the federal agency to interpret its rules to respondents' satisfaction, to modify those rules, to promulgate new rules or to enforce old ones? See
*1390
I recognize that the law may give the federal agency broad discretionary authority to decide when and how to exercise or to enforce statutes and rules. See
Massachusetts v. EPA,
Justice SOTOMAYOR, with whom Justice KENNEDY, Justice GINSBURG, and Justice KAGANjoin, dissenting.
Suits in federal court to restrain state officials from executing laws that assertedly conflict with the Constitution or with a federal statute are not novel. To the contrary, this Court has adjudicated such requests for equitable relief since the early days of the Republic. Nevertheless, today the Court holds that Congress has foreclosed private parties from invoking the equitable powers of the federal courts to require States to comply with § 30(A) of the Medicaid Act, 42 U.S.C. § 1396a(a)(30)(A). It does so without pointing to the sort of detailed remedial scheme we have previously deemed necessary to establish congressional intent to preclude resort to equity. Instead, the Court relies on Congress' provision for agency enforcement of § 30(A)-an enforcement mechanism of the sort we have already definitively determined not to foreclose private actions-and on the mere fact that § 30(A) contains relatively broad language. As I cannot agree that these statutory provisions demonstrate the requisite congressional intent to restrict the equitable authority of the federal courts, I respectfully dissent.
I
A
That parties may call upon the federal courts to enjoin unconstitutional government action is not subject to serious dispute. Perhaps the most famous exposition of this principle is our decision in
Ex parte Young,
A suit, like this one, that seeks relief against state officials acting pursuant to a state law allegedly preempted by a federal statute falls comfortably within this doctrine. A claim that a state law contravenes a federal statute is "basically constitutional in nature, deriving its force from the operation of the Supremacy Clause,"
Douglas v. Seacoast Products, Inc.,
Thus, even though the Court is correct that it is somewhat misleading to speak of "an implied right of action contained in the Supremacy Clause," ante, at 1384, that does not mean that parties may not enforce the Supremacy Clause by bringing suit to enjoin preempted state action. As the Court also recognizes, we "have long held that federal courts may in some circumstances grant injunctive relief against state officers who are violating, or planning *1392 to violate, federal law." Ante, at 1384.
B
Most important for purposes of this case is not the mere existence of this equitable authority, but the fact that it is exceedingly well established-supported, as the Court puts it, by a "long history."
Ante,
at 1384 - 1385. Congress may, if it so chooses, either expressly or implicitly preclude
Ex parte
Young
enforcement actions with respect to a particular statute or category of lawsuit. See,
e.g.,
In this respect, equitable preemption actions differ from suits brought by plaintiffs invoking 42 U.S.C. § 1983or an implied right of action to enforce a federal statute. Suits for "redress designed to halt or prevent the constitutional violation rather than the award of money damages" seek "traditional forms of relief."
United States v. Stanley,
II
In concluding that Congress has "implicitly preclude[d] private enforcement of § 30(A)," ante, at 1384 - 1385, the Court ignores this critical distinction and threatens the vitality of our Ex parte Young jurisprudence. The Court identifies only a single prior decision- Seminole Tribe -in which we have ever discerned such congressional intent to foreclose equitable enforcement of a statutory mandate. Ante, at 1384 - 1385. Even the most cursory review of that decision reveals how far afield it is from this case.
In
Seminole Tribe,
the plaintiff Indian Tribe had invoked
Ex parte Young
in seeking to compel the State of Florida to
*1393
"negotiate in good faith with [the] tribe toward the formation of a compact" governing certain gaming activities, as required by a provision of the Indian Gaming Regulatory Act,
What is the equivalent "carefully crafted and intricate remedial scheme" for enforcement of § 30(A)? The Court relies on two aspects of the Medicaid Act, but, whether considered separately or in combination, neither suffices.
First, the Court cites 42 U.S.C. § 1396c, which authorizes the Secretary of Health and Human Services (HHS) to withhold federal Medicaid payments to a State in whole or in part if the Secretary determines that the State has failed to comply with the obligations set out in § 1396a, including § 30(A). See
ante,
at 1385 - 1386. But in striking contrast to the remedial provision set out in the Indian Gaming Regulatory Act, § 1396cprovides no specific procedure that parties actually affected by a State's violation of its statutory obligations may invoke in lieu of
Ex parte Young
-leaving them without any other avenue for seeking relief from the State. Nor will § 1396calways provide a particularly effective means for redressing a State's violations: If the State has violated § 30(A) by refusing to reimburse medical providers at a level "sufficient to enlist enough providers so that care and services are available" to Medicaid beneficiaries to the same extent as they are available to "the general population," agency action resulting in a reduced flow of federal funds to that State will often be self-defeating. § 1396a(30)(A); see Brief for Former HHS Officials as
Amici Curiae
18 (noting that HHS is often reluctant to initiate compliance actions because a "state's non-compliance creates a damned-if-you-do, damned-if-you-don't scenario where the withholding of state funds will lead to depriving the poor of essential medical assistance"). Far from rendering § 1396c"superfluous," then,
Ex parte Young
actions would seem to be an anticipated and possibly necessary supplement to this limited agency-enforcement mechanism.
Seminole Tribe,
Section 1396calso parallels other provisions scattered throughout the Social Security Act that likewise authorize the withholding of federal funds to States that fail to fulfill their obligations. See,
e.g.,
§§ 609(a), 1204, 1354. Yet, we have consistently authorized judicial enforcement of the Act. See
Maine v. Thiboutot,
Second, perhaps attempting to reconcile its treatment of § 1396c (2012 ed.)with this longstanding precedent, the Court focuses on the particular language of § 30(A), contending that this provision, at least, is so "judicially unadministrable" that Congress must have intended to preclude its enforcement in private suits. Ante, at 1385. Admittedly, the standard set out in § 30(A) is fairly broad, requiring that a state Medicaid plan:
"provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan ... as may be necessary to safeguard against unnecessary utilization of such care and services and 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 at least to the extent that such care and services are available to the general population in the geographic area." § 1396a(a)(30)(A).
But mere breadth of statutory language does not require the Court to give up all hope of judicial enforcement-or, more important, to infer that Congress must have done so.
In fact, the contention that § 30(A)'s language was intended to foreclose private enforcement actions entirely is difficult to square with the provision's history. The specific equal access mandate invoked by the plaintiffs in this case-that reimbursement rates be "sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area"-was added to § 30(A) in 1989.
"provide ... for payment ... of the hospital services, nursing facility services, and services in an intermediate care facility for the mentally retarded provided under the plan through the use of rates ... which the State finds, and makes assurances satisfactory to the Secretary, are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable State and Federal laws, regulations, and quality and safety standards and to assure that individuals eligible for medical assistance have reasonable access ... to inpatient hospital services of adequate quality." § 1396a(a)(13)(A)(1982 ed., Supp. V).
It is hard to believe that the Congress that enacted the operative version of § 30(A) could have failed to anticipate that it might be similarly enforceable. Even if, as the Court observes, the question whether the Boren Amendment was enforceable under § 1983was "unsettled at the time," ante, at 1386 (emphasis deleted), surely Congress would have spoken with far more clarity had it actually intended to preclude private enforcement of § 30(A) through not just § 1983but also Ex parte Young .
Of course, the broad scope of § 30(A)'s language is not irrelevant. But rather than compelling the conclusion that the provision is wholly unenforceable by private parties, its breadth counsels in favor of interpreting § 30(A) to provide substantial leeway to States, so that only in rare and extreme circumstances could a State actually be held to violate its mandate. The provision's scope may also often require a court to rely on HHS, which is "comparatively expert in the statute's subject matter."
Douglas v. Independent Living Center of Southern Cal., Inc.,
565 U.S. ----, ----,
*1396
In sum, far from identifying a "carefully crafted ... remedial scheme" demonstrating that Congress intended to foreclose
Ex parte
Young
enforcement of § 30(A),
Seminole Tribe,
The Court's error today has very real consequences. Previously, a State that set reimbursement rates so low that providers were unwilling to furnish a covered service for those who need it could be compelled by those affected to respect the obligation imposed by § 30(A). Now, it must suffice that a federal agency, with many programs to oversee, has authority to address such violations through the drastic and often counterproductive measure of withholding the funds that pay for such services. Because a faithful application of our precedents would have led to a contrary result, I respectfully dissent.
That is not to say that the Court of Appeals in this case necessarily applied § 30(A) correctly. Indeed, there are good reasons to think the court construed § 30(A) to impose an overly stringent obligation on the States. While the Ninth Circuit has understood § 30(A) to compel States to "rely on responsible cost studies," and to reimburse for services at rates that "approximate the cost of quality care provided efficiently and economically,"
Orthopaedic Hospital v. Belshe,
The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See
United States v. Detroit Timber & Lumber Co.,
Respondents do not claim that
Wilder
establishes precedent for a private cause of action in this case. They do not assert a § 1983 action, since our later opinions plainly repudiate the ready implication of a § 1983 action that
Wilder
exemplified. See
Gonzaga Univ. v. Doe,
Reference
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- Richard ARMSTRONGet Al., Petitioners v. EXCEPTIONAL CHILD CENTER, INC., Et Al.
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