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Armstrong v. Exceptional Child Ctr., Inc.

United States Supreme Court

March 31, 2015

RICHARD ARMSTRONG, ET AL., PETITIONERS
v.
EXCEPTIONAL CHILD CENTER, INC., ET AL

[135 S.Ct. 1379] Argued January 20, 2015.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Reversed.

SYLLABUS

[135 S.Ct. 1380] [191 L.Ed.2d 474] Providers of " habilitation services" under Idaho's Medicaid plan are reimbursed by the State's Department of Health and Welfare. Section 30(A) of the Medicaid Act requires Idaho's plan to " assure that payments are consistent with efficiency, economy, and quality of care" while " safeguard[ing] against unnecessary utilization of . . . care and services." 42 U.S.C. § 1396a(a)(30)(A). Respondents, providers of habilitation services, sued petitioners, Idaho Health and Welfare Department officials, claiming that Idaho reimbursed them at rates lower than § 30(A) permits, and seeking to enjoin petitioners to increase these rates. The District Court entered [191 L.Ed.2d 475] summary judgment for the providers. The Ninth Circuit affirmed, concluding that the Supremacy Clause gave the providers an implied right of action, and that they could sue under this implied right of action to seek an injunction [135 S.Ct. 1381] requiring Idaho to comply with § 30(A).

Held : The judgment is reversed.

567 F.App'x 496, reversed.

JUSTICE SCALIA delivered the opinion of the Court, except as to Part IV, concluding that the Supremacy Clause does not confer a private right of action, and that Medicaid providers cannot sue for an injunction requiring compliance with § 30(A). Pp. 3-10.

(a) The Supremacy Clause instructs courts to give federal law priority when state and federal law clash. Gibbons v. Ogden, 22 U.S. 1, 9 Wheat. 1, 210, 6 L.Ed. 23. But it is not the " 'source of any federal rights,'" Golden State Transit Corp. v. Los Angeles, 493 U.S. 103, 107, 110 S.Ct. 444, 107 L.Ed.2d 420, and certainly does not create a cause of action. Nothing in the Clause's text suggests otherwise, and nothing suggests it was ever understood as conferring a private right of action. Article I vests Congress with broad discretion over the manner of implementing its enumerated powers. Art I, § 8; McCulloch v. Maryland, 17 U.S. 316, 4 Wheat. 316, 421, 4 L.Ed. 579. It is unlikely that the Constitution gave Congress broad discretion with regard to the enactment of laws, while simultaneously limiting Congress's power over the manner of their implementation, making it impossible to leave the enforcement of federal law to federal actors. Pp. 3-5.

(b) Reading the Supremacy Clause not to confer a private right of action is consistent with this Court's preemption jurisprudence. 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. This Court has never held nor suggested that this judge-made remedy, in its application to state officers, rests upon an implied right of action contained in the Supremacy Clause. Pp. 5-6.

(c) Respondents' suit cannot proceed 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, 517 U.S. 44, 74, 116 S.Ct. 1114, 134 L.Ed.2d 252. Here, the express provision of a single remedy for a State's failure to comply with Medicaid's requirements--the withholding of Medicaid funds by the Secretary of Health and Human Services, 42 U.S.C. § 1396c--and the sheer complexity associated with enforcing § 30(A) combine to establish Congress's " intent to foreclose" equitable relief, Verizon Md. Inc. v. Public Serv. Comm'n of Md., 535 U.S. 635, 647, 122 S.Ct. 1753, 152 L.Ed.2d 871. Pp. 6-10.

Carl J. Withroe argued the cause for petitioner.

Edwin S. Kneedler argued the cause for the United States, as amicus curiae, by special leave of court.

James M. Piotrowski argued the cause for respondent.

SCALIA, J., delivered the opinion of the Court with respect to Parts I, II, and III, in which ROBERTS, C. J., and THOMAS, BREYER, and ALITO, JJ., joined, and an opinion with respect to Part IV, in which ROBERTS, C. J., and THOMAS and ALITO, JJ., joined. BREYER, J., filed an opinion concurring in part [191 L.Ed.2d 476] and concurring in the judgment. SOTOMAYOR, J., filed a dissenting opinion, in which KENNEDY, GINSBURG, and KAGAN, JJ., joined.

OPINION

[135 S.Ct. 1382] SCALIA, JUSTICE.

We consider whether Medicaid providers can sue to enforce § (30)(A) of the Medicaid Act. 81 Stat. 911 (codified as amended at 42 U.S.C. § 1396a(a)(30)(A)).

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, 835 F.Supp.2d 960 (2011). The Ninth Circuit affirmed. 567 F.App'x 496 [135 S.Ct. 1383] (2014). It said that the providers had " an implied right of action under the Supremacy Clause to seek injunctive relief against the enforcement or implementation of state legislation." Id., at 497 (citing Independent Living Center of Southern Cal. v. Shewry, 543 F.3d 1050, 1065 (CA9 2008)). We [191 L.Ed.2d 477] granted certiorari. 573 U.S. ___, 135 S.Ct. 939; 190 L.Ed.2d 718 (2014).

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 ...

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