Supreme Court Issues Decision in Important Access to Justice Case

Yesterday, the Supreme Court issued its opinion in Douglas v. Independent Living Center of Southern California, deciding 5-4 to vacate the Ninth Circuit’s decision and remand the case for further consideration “in light of the changed circumstances.”

The Court did not resolve the central issue of whether individuals may use the Supremacy Clause of the U.S. Constitution to sue the state of California for adopting Medicaid laws that allegedly deny care to certain individuals in violation of the federal Medicaid statute.

The consolidated Douglas cases arose from California’s decision to issue cuts of up to ten percent in Medicaid benefits. A group of medical providers and low-income elderly and disabled individuals challenged the cuts under the Supremacy Clause, saying that they violated federal law by causing a reduction in the number of providers willing to participate in the program. The district court found that the reduction has forced or will force non-emergency medical transportation services and home health services providers to reduce the geographic area they are able to serve, to decline to take new Medicaid patients, and to end services to some existing patients or close their businesses.

The Ninth Circuit held that the claims could proceed and that a preliminary injunction preventing the cuts from going into effect should be granted. The Supreme Court was asked to decide the preliminary issue of whether the Supremacy Clause granted the plaintiffs a right to sue.

In an opinion penned by Justice Breyer, the Court held that the cases, although not moot, are now “in a different posture.” Between the Court’s grant of certiorari and the rendering of its decision, the federal agency charged with administering Medicaid determined that the rate reductions complied with federal law. As a result, the Supreme Court decided that the parties should reargue the Supremacy Clause claim in the Ninth Circuit. 

In dissent, Chief Justice Roberts, joined by Justices Scalia, Thomas, and Alito, would have held that there is no cause of action under the Supremacy Clause, regardless of the position taken by the federal agency.

According to California and the dissenters at the Supreme Court, no private individual should have the right to sue a state for noncompliance with federal Medicaid laws. However, as Alliance for Justice has shown in its report on the Douglas cases (.pdf download), former Housing and Human Services officials have said that private enforcement “has been the cornerstone of HHS policy throughout the history of the Medicaid act, and remains the prevailing view of those charged with administering the program.”

If Americans were left unable to use the Supremacy Clause to challenge illegal state laws, states would feel free to gut a range of other important federal programs and policies. Although the Supreme Court did not conclusively close the courthouse door to these plaintiffs, it did send the case back to the Ninth Circuit with the central issue unresolved. We also now know that the Supreme Court has at least four votes against allowing Americans to stand up for their rights under the Supremacy Clause.

Supreme Court Hears Oral Argument in Douglas v. Independent Living

Today the Supreme Court heard oral arguments in Douglas v. Independent Living of Southern California, a case which could affect the ability of Americans to have their day in court.

In the Douglas case, a group of Medicaid beneficiaries and providers challenged California’s attempt to cut reimbursement rates in violation of federal law. The Supreme Court today heard arguments on whether these private plaintiffs can bring a suit against the state for violating federal law.

If the Court finds in favor of California, Medicaid recipients will have their benefits reduced and have a harder time getting care. It will also pave the way for states to gut other federally-funded public assistance programs. 

In today’s arguments, the justices appeared split on the issue of whether private actors could bring such lawsuits. Chief Justice Roberts seemed inclined towards California’s argument, noting that the court does not generally allow private actors to sue unless a law expressly says they may. Justice Breyer said he was troubled by giving federal judges too much authority to weigh in on Medicaid payments because it could lead to courts preventing federal agencies from “doing their business.” 

However, other justices seemed more inclined to side with the plaintiffs. Justice Ginsburg noted that there was no effective way to enforce the Medicaid Act without private plaintiffs. Justice Kagan censured California for putting the new rates in place before receiving federal approval in an attempt to do an “end run” around the regulatory process. 

Last week, AFJ released a report on the Douglas Case and its potential impact on everyday Americans. You can download a PDF of the report here.

Coverage of the oral argument is available from the AP and from the LA Times. A transcript is available from the Supreme Court's website.