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Tuesday, March 31, 2015

Armstrong: Is Utterly Disingenuous Statutory Interpretation Ever Worth It?

Howard already promised that my reaction to today's Supreme Court decision in Armstrong v. Exceptional Child Center would be "blistering," and I'd hate to disappoint.

In a nutshell, a 5-4 conservative majority (the usual suspects, but for Breyer and Kennedy switching sides) held that Medicaid providers may not pursue suits for injunctive relief against state officers who allegedly violate the "equal access" provision of the Medicaid act because (1) the Supremacy Clause itself doesn't provide a freestanding cause of action; and (2) even if such a cause of action has traditionally been available in equity, Congress displaced such remedies when it enacted Medicaid in 1965 (or, at the very least, when it codified the equal access provision in 1989). [Full disclosure: I co-authored a brief on behalf of former HHS officials as amici curiae in support of the Respondents.]

As a result, the only way to enforce the "equal access" mandate--one of the most significant substantive requirements of the Medicaid program--is for the Department of Health and Human Services to withhold Medicaid funding from violating states, something the Department neither has the ability nor the inclination to do. But whereas I had warned in an earlier post that a bad result in Armstrong could mean doom for Ex parte Young (which I elsewhere described as the sleeper Federal Courts case of the Court's October 2014 Term), the hyper-specific focus on the equal access provision in both Justice Scalia's majority opinion and Justice Breyer's concurrence almost certainly reduces the precedential effect of today's decision. The only downside (for anyone other than Medicaid recipients and providers, anyway), is that it does so at the expense of any shred of credibility--reigniting the debate over the virtues (and vices) of "this train only" analyses.

I.  Congress's Intent to Foreclose Equitable Relief

The basic thrust of Justice Scalia's majority opinion has three prongs: (1) the Supremacy Clause does not provide a freestanding cause of action; (2) causes of action to enjoin allegedly preempted state laws probably are available under traditional principles of equity; but (3) in the Medicaid statute, Congress intended to displace those principles, much as the Court held with respect to the Indian Gaming Regulatory Act in Seminole Tribe. Federal Courts scholars can (and surely will) debate the significance of (1) in light of (2), but the heart of the matter is (3).

In the key passage of the majority opinion, Justice Scalia invokes two aspects of the equal access provision that, in his view, demonstrate Congress's intent to foreclose traditional equitable remedies: "First, the sole remedy Congress provided for a State’s failure to comply with Medicaid’s requirements—for the State’s 'breach' of the Spending Clause contract—is the withholding of Medicaid funds by the Secretary of Health and Human Services." Second, while "[t]he provision for the Secretary’s enforcement by withholding funds might not, by itself, preclude the availability of equitable relief. . . . it does so when combined with the judicially unadministrable nature of §30(A)’s text." Thus, "[t]he sheer complexity associated with enforcing §30(A), coupled with the express provision of an administrative remedy, shows that the Medicaid Act precludes private enforcement of §30(A) in the courts."

There are two separate, but equally fatal flaws with this analysis:

First, the equal access provision is not remotely "unadministrable." In the immediate wake of the equal access mandate’s enactment, HHS not only acquiesced to judicial administration of the provision; it actively participated in the process. Indeed, from 1989 through Gonzaga (after which private suits to enforce the equal access provision became far more difficult), there were any number of cases in which courts considered whether state Medicaid plans were consistent with the equal access provision. But even if there weren't this history (which Justice Scalia completely ignores), the logic is in any event internally inconsistent. After all, the more aggressive administrative review that Justice Scalia holds out as the alternative to private enforcement would presumably only increase the number of adverse actions taken by HHS--and, as such, administrative appeals by states--which would return the question of state compliance with the equal access provision to the courts. 

Second, if the point of this exercise is to divine Congress's intent, how could the creation of an administrative review scheme (in 1965) thereby communicate Congress's view that it means for a provision it enacted 24 years later to not be judicially administrable? Of course, it can't. What matters is what Congress thought in 1989 when it codified the equal access provision. And if the touchstone of Justice Scalia's analysis is Congress's intent, how does he reconcile this analysis with the familiar (if nowhere mentioned) presumption that Congress must speak clearly when it wishes to displace traditionally available equitable remedies? (Needless to say, no such clarity can be found in the 1989 statute.) At a more fundamental level, if congressional intent is so essential to Justice Scalia's analysis, why is there no discussion whatsoever of the history of the equal access provision, or what Congress thought it was doing when it codified what had previously been a regulatory requirement in 1989? (Or how the regulation had been interpreted prior to 1989--and whether Congress was codifying that understanding?)

Taken together, these two flaws suggest that Justice Scalia was attempting to do through the back door what he must not have had five votes to do through the front: To incorporate the deeply skeptical approach to implied causes of action in cases like Sandoval and Gonzaga into the context of Ex parte Young-like suits for injunctive relief against state officers for violating federal law. As in Sandoval and Gonzaga, the congressional intent question seems really to be asking whether Congress meant for the right at issue to be privately enforceable; but if it did, then there'd be no need for implied causes of action--the statute would be read to furnish one expressly.

The difference between Sandoval and Gonzaga, on the one hand, and Armstrong, on the other, is that this inquiry now takes the form of congressional intent for "judicial administrability," and it remains to be seen how skeptically lower courts will approach that inquiry going forward. Whether Armstrong will be a big deal or a little deal depends entirely on the answer to that question.

II.  The Resurgence of Westside Mothers

Compared to the flaws documented above, the "plurality" part of Justice Scalia's opinion---Part IV--hardly merits a mention. But it's still alarming that, in a case where it didn't matter, four Justices still went out of their way to dredge up the long-since-discredited "Westside Mothers" approach to Spending Clause statutes, named after a district court decision that held that Spending Clause statutes are more like "contracts" for constitutional purposes than they are Acts of Congress--which, among other things, means they ought not to be enforcable by third-party beneficiaries. 

What's more troubling than the revitalization of this idea in the abstract is what Justice Scalia does with it--erecting a presumption that statutes won't authorize private parties to challenge Spending Clause statutes absent some "unambiguously conferred" right to sue (citing Gonzaga). To be sure, this part of the opinion was only joined by Chief Justice Roberts and Justices Thomas and Alito--but it doesn't bode well for future efforts to enforce any Spending Clause statutes against states absent an express cause of action (and, as in Gonzaga, perhaps even then).

III.  Justice Breyer's Inexplicable Deference to the Agency

Lots of folks may have been most surprised by Justice Breyer's role here--joining the otherwise conservative majority while Justice Kennedy sided with the dissent. To be honest, I wasn't; many of us who were involved in Armstrong had long assumed that he was the key, and his opinion concurring in the judgment makes quite clear his near-absolute preference to defer to administrative enforcement where complex cooperative regimes are implicated. In his words, "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. If withholding funds does not work, the federal agency may be able to sue a State to compel compliance with federal rules."

Had Justice Breyer actually read the amicus brief by former HHS officials (yes, I'm biased), he might have understood the naivete of resting on the specter of administrative enforcement here. Indeed, as we explained in detail, it has never been HHS's position that private enforcement of the equal access provision would in any way interfere with the Secretary's ability to enforce Medicaid more generally; it's only been the Justice Department's position. I'm all for deferring to agencies on matters within their expertise, but doesn't that deference also suggest that we ought to listen to them when they say they're not in a position to enforce this provision by themselves? Breyer closes his concurrence by suggesting that "Congress decided to vest broad discretion in the agency to interpret and to enforce § 30(A)." Of course that's true. But if the agency's position is that its enforcement of federal law is aided, not hindered, by private suits, why shouldn't that matter? There may well be an answer; Justice Breyer doesn't say.

IV.  Howard's § 1983 Question

Finally, I'd be remiss in not saying a quick word about the question Howard raised in his post--whether, for folks like me (and Justice Sotomayor, in her dissent), the suits in equity we believe are available renders § 1983 superfluous. Candidly, I think Howard has the matter entirely backwards. If one assumes that courts will hesitate to infer causes of action for injunctive relief from background principles of equity when Congress has spoken expressly to the matter at hand, then it's § 1983 that should have rendered the cause of action at issue in Armstrong superfluous--not the other way around.

It's worth reiterating that the equal access provision was routinely enforced through suits for injunctive relief under § 1983 in the 13 years between when it was formally codified and when the Supreme Court scaled back the availability of § 1983 suits in Gonzaga. (One especially poignant case in point is an en banc Third Circuit decision written in 2002 by then-Judge Alito.) Thus, the fact that Howard is even asking this question after and in light of Armstrong shows how successful the Court has been in changing the narrative--from the general availability of causes of action like the one in Armstrong as recently as 15 years ago to their increasing (if not categorical) unavailability today. But for SandovalGonzaga, and a run of other decisions, plaintiffs might not be left with falling back on implied remedies that had previously been overrun by far clearer cause-of-action rules. 

To be sure, the Armstrong Court didn't go so far as Chief Justice Roberts suggested it ought to in his dissent in Douglas, and so perhaps did not do as much damage to Ex parte Young and other theories of federal remedies as I (among others) had feared. But is a decision based on an utterly disingenuous interpretation of a critically important federal statute so much better?

Posted by Steve Vladeck on March 31, 2015 at 08:27 PM in Steve Vladeck | Permalink


"To be sure, the Armstrong Court didn't go so far as Chief Justice Roberts suggested it ought to in his dissent in Douglas, and so perhaps did not do as much damage to Ex parte Young and other theories of federal remedies as I (among others) had feared. But is a decision based on an utterly disingenuous interpretation of a critically important federal statute so much better?"

As Steve knows, I think the answer to his rhetorical question is: "Unequivocally, yes."

This decision -- especially Breyer's determinative concurrence -- is far less troubling than what many of us feared. As Steve's analysis implies, it turns critically on whether the statute in question offers judicially administrable standards--something that most statutes in future disputes presumably will include.

I agree with Steve, and with Justice Sotomayor, that this statute *is*, at least in some cases, judicially "administrable." But it's not obvious how effective such judicial review would be (as compared with HHS enforcement), *even under Justice Sotomayor's approach.* She writes, for instance, that the "breadth" of the statutory standard "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." She also emphasizes that even in such "rare and extreme" cases where a State has violated the norm, "because the authority invoked for enforcing §30(A) is equitable in nature, a plaintiff is not entitled to relief as of right, but only in the sound discretion of the court." And in the footnote, she signals that she and her fellow dissenters would reject the CTA9's mode of analysis, and "read §30(A) to require only that rates be high enough to ensure that services are available to Medicaid participants," and would "enjoin a state agency’s implementation of rates" only where they are "so unreasonably low as to violate §30(A)."

Justice Breyer's response to this is, in effect: "If that's the case, why bother with regular and costly litigation"? Now, I think Steve V. is right that there *is* reason to bother (mostly because the prospect of litigation might deter states from adopting unreasonable positions in the first instance), and so I would have voted with Justice Sotomayor. But the distance between the Breyer and Sotomayor positions is not that vast. And it's decidedly *good* news that Justices Kennedy and Breyer (presumably) would recognize the authority of courts to enjoin state action under a statute that offers a greater prospect of real teeth (and administrability). (Recall as well Justice Kennedy's vote in VOPA, which the Court cites as governing authority.)

There is certainly reason to be disappointed in the outcome. And the opinion of four Justices is alarming (although not beyond anything Steve and everyone else already knew about their view of Ex parte Young and Westside Mothers). But the Court certainly dodged the Ex parte Young bullet; and it appears that there are not (yet) five votes for "Sandoval"izing EPY. That's very good news, indeed.

Posted by: Marty Lederman | Apr 1, 2015 6:28:55 AM

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