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No. 12-41187
In the
United States Court of Appeals
for the Fifth Circuit
BRADLEY KOENNING, BRIAN MARTIN, AND MORGAN RYALS, Plaintiffs-Appellees,
v.
KYLE JANEK, in his Official Capacity as Executive Commissioner, Texas Health and Human Services Commission,
Defendant-Appellant.
On Appeal from the United States District Court for the Southern District of Texas, Victoria Division
Case No. 6:11-CV-00006
APPELLANT’S REPLY BRIEF
GREG ABBOTT Attorney General of Texas DANIEL T. HODGE First Assistant Attorney General OFFICE OF THE ATTORNEY GENERAL P.O. Box 12548 (MC 059) Austin, Texas 78711-2548 Tel.: (512) 936-1695 Fax: (512) 474-2697
JONATHAN F. MITCHELL Solicitor General Counsel of Record
RANCE L. CRAFT ARTHUR C. D’ANDREA DOUGLAS D. GEYSER MICHAEL P. MURPHY Assistant Solicitors General
DREW L. HARRIS Assistant Attorney General Counsel for Defendant-Appellant
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ii
TABLE OF CONTENTS
Table of Contents ................................................................................................................... ii
Index of Authorities .............................................................................................................. iv
I. There Is No Cause Of Action Allowing Private Litigants To Sue To Enforce The Reasonable-Standards Requirement Or The “Amount, Duration, And Scope” Regulation. ............................................. 7
A. There Is No Language In The Supremacy Clause That Implicitly Or Explicitly Authorizes Private Lawsuits To Enforce Federal Law. .......................................................................... 8
B. The Supreme Court’s Rulings In Alexander, Horne, And Thibotout Directly Contradict The Plaintiffs’ Construction Of The Supremacy Clause. ............................................................... 10
C. The Plaintiffs’ Construction Of The Supremacy Clause Disables Congress From Precluding The Private Enforcement Of Federal Statutes Against State Officials. ........... 15
D. Planned Parenthood of Houston Is Irreconcilable With Horne And Should Be Overruled Or Limited To Claims Brought To Enforce Title X. ........................................................................... 15
II. It Is Not Possible For State Officials To “Violate” The Medicaid Act. .................................................................................................................. 17
III. Pennhurst’s Clear-Statement Requirement Compels This Court To Reject The Plaintiffs’ Medicaid Act Claims. ............................................... 23
IV. The Plaintiffs Failed To Present Sufficient Evidence Of Medical Necessity To Survive A Motion For Summary Judgment. ...................... 29
V. The District Court Was Required To Abstain Under The Doctrine Of Primary Jurisdiction. ............................................................... 31
VI. The Plaintiffs’ Due-Process Claims Are Either Meritless Or Moot. ...... 33
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iii
VII. The District Court Had No Authority To “Reverse” The Decisions Of HHSC And TMHP Or To “Remand[]” The “Case” To TMHP. ...................................................................................................... 34
Conclusion ............................................................................................................................. 36
Certificate of Service ............................................................................................................ 37
Certificate of Electronic Compliance ................................................................................. 38
Certificate of Compliance .................................................................................................... 39
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iv
INDEX OF AUTHORITIES
Cases
ACORN v. Edgar, 56 F.3d 791 (7th Cir. 1995) ........................................................................................... 6, 7
Alberto N. v. Gilbert, Case No. 6:99-cv-00459 (E.D. Tex. April 19, 2002) .................................................... 26
Alexander v. Sandoval, 532 U.S. 275 (2001) ................................................................................................... passim
Arizonans for Official English v. Arizona, 520 U.S. 43 (1997) ............................................................................................................ 12
Arkansas Department of Health & Human Sevices v. Ahlborn, 547 U.S. 268 (2006) .......................................................................................................... 22
Beal v. Doe, 432 U.S. 438 ...................................................................................................................... 24
Bellotti v. Baird, 428 U.S. 132 (1976) .......................................................................................................... 32
Brecht v. Abrahamson, 507 U.S. 619 (1993) .......................................................................................................... 22
Camreta v. Greene, 131 S. Ct. 2020 (2011) ...................................................................................................... 25
Caspari v. Bohlen, 510 U.S. 383 (1994) ............................................................................................................ 6
Cort v. Ash, 422 U.S. 66 (1975) .............................................................................................................. 9
Creel v. Johnson, 162 F.3d 385 (5th Cir. 1998) ......................................................................................... 5, 6
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v
Day v. McDonough, 547 U.S. 198 (2006) 419 F. App’x 411 (4th Cir. 2011) ............................................................................... 6, 16
Doe v. Kidd, 419 F. App’x 411 (4th Cir. 2011) ................................................................................... 17
Douglas v. Independent Living Center of Southern California, Inc. 132 S. Ct. 1204 (2012) .......................................................................................... 15, 16, 31
Ex parte Young, 209 U.S. 123 (1908) .................................................................................................... 13, 14
Fred C. v. Texas Health and Human Services Commission, 988 F. Supp. 1032 (W.D. Tex. 1997) ....................................................................... passim
Frew v. Hawkins, No. 3:93-cv-00065 (E.D. Tex. 1995) ............................................................................. 26
Goldberg v. Kelly, 397 U.S. 254 (1970) .......................................................................................................... 34
Golden State Transit Corp. v. Los Angeles, 493 U.S. 103 (1989) ............................................................................................................ 7
Gonzalez v. Seal, 702 F.3d 785 (5th Cir. 2012) ........................................................................................... 31
Hope Medical Group for Women v. Edwards, 63 F.3d 418 (5th Cir. 1995) ............................................................................................. 24
Horne v. Flores, 557 U.S. 433 (2009) .................................................................................................... passim
Kamen v. Kemper Fin. Servs., 500 U.S. 90 (1991) .............................................................................................................. 5
Legal Servs. Corp. v. Velazquez, 531 U.S. 533 (2001) .................................................................................................... 22, 23
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vi
Lewis v. Alexander, 685 F.3d 325 (3d Cir. 2012) ............................................................................................ 17
Maine v. Thiboutot, 448 U.S. 1 (1980) ........................................................................................................ 13, 14
Meyers v. Reagan, 776 F.2d 241 (8th Cir. 1985) ........................................................................................... 34
Murray v. Anthony J. Bertucci Constr. Co., 958 F.2d 127 (5th Cir. 1992) ............................................................................................. 6
Nationwide Mut. Ins. Co. v. Unauthorized Practice of Law Committee, 283 F.3d 650 (5th Cir. 2002) ........................................................................................... 32
NFIB v. Sebelius, 132 S. Ct. 2566 (2012) ................................................................................................ 19, 21
Planned Parenthood of Houston & Southeast Texas v. Sanchez, 403 F.3d 324 (5th Cir. 2005) .......................................................................... 8, 15, 16, 17
Printz v. United States, 521 U.S. 898 (1997) .......................................................................................................... 19
Rush v. Parham, 625 F.2d 1150 (5th Cir. 1980) ......................................................................................... 24
Schlesinger v. Councilman, 420 U.S. 738 (1975) .......................................................................................................... 32
Suter v. Artist M., 112 S. Ct. 1360 (1992) ...................................................................................................... 20
United States Nat’l Bank v. Independent Ins. Agents of Am., 508 U.S. 439 (1993) ............................................................................................................ 5
United States v. Arizona, 689 F.3d 1132 (9th Cir. 2012) ......................................................................................... 32
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vii
United States v. Munsingwear, Inc., 340 U.S. 36 (1950) ............................................................................................................ 33
Waters v. Churchill, 511 U.S. 661 (1994) (plurality opinion) ......................................................................... 22
Wos v. E.M.A., No. 12-98, __ S. Ct. __, 2013 WL 1131709 (U.S. Mar. 20, 2013) .............................. 23
Younger v. Harris, 401 U.S. 37 (1971) ............................................................................................................ 32
Statutes
1 TEX. ADMIN. CODE § 354.1039(a)(4)(D) ............................................................ 1, 2, 4, 33
1 TEX. ADMIN. CODE § 357.3 ............................................................................................... 3
1 TEX. ADMIN. CODE § 357.3(b)(1) ..................................................................................... 2
23 U.S.C. § 158(a)(1)(A) ................................................................................................. 17, 18
28 U.S.C. § 2254(d ................................................................................................................ 21
42 C.F.R. § 431.205(d) ......................................................................................................... 34
42 C.F.R. § 440.150 .............................................................................................................. 28
42 C.F.R. § 440.230 .............................................................................................................. 26
42 U.S.C. § 1320a-2 .............................................................................................................. 20
42 U.S.C. § 1396a(a)(10)(D) ................................................................................................ 24
42 U.S.C. § 1396a(a)(17) .......................................................................................... 19, 24, 26
42 U.S.C. § 1396a(a)(3) ........................................................................................................ 34
42 U.S.C. § 1396a(a)(43) ................................................................................................ 26, 27
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viii
42 U.S.C. § 1396a(a)(62) ...................................................................................................... 27
42 U.S.C. § 1396a(l) .............................................................................................................. 27
42 U.S.C. § 1396a(s) ............................................................................................................. 27
42 U.S.C. § 1396c ............................................................................................................ 18, 19
42 U.S.C. § 1396d(a)(4)(A) .................................................................................................. 28
42 U.S.C. § 1396d(a)(4)(B) ................................................................................................... 26
42 U.S.C. § 1396d(a)(4)(B) ................................................................................................... 27
42 U.S.C. § 1396d(a)(7)-(12) ................................................................................................ 24
42 U.S.C. § 1396d(a)(i) ......................................................................................................... 28
42 U.S.C. § 1396d(h) ............................................................................................................ 28
42 U.S.C. § 1396d(r) ............................................................................................................. 28
42 U.S.C. § 1983 ............................................................................................................... 7, 13
TEX. HUM. RES. CODE ANN. § 32.024(e)............................................................................. 4
Other Authorities
Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 STAN. L. REV. 953 (2005) ................................................................................................................ 12
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No. 12-41187
In the
United States Court of Appeals
for the Fifth Circuit
BRADLEY KOENNING, BRIAN MARTIN, AND MORGAN RYALS, Plaintiffs-Appellees,
v.
KYLE JANEK, in his Official Capacity as Executive Commissioner, Texas Health and Human Services Commission,
Defendant-Appellant.
On Appeal from the United States District Court for the Southern District of Texas, Victoria Division
Case No. 6:11-CV-00006
APPELLANT’S REPLY BRIEF
The plaintiffs continue to misrepresent state law by claiming that Texas
categorically excludes mobile standers from Medicaid coverage. As noted in the
Commissioner’s opening brief, the Texas Administrative Code explicitly provides that
non-covered medical equipment (such as mobile standers) “may, in exceptional
circumstances, be considered for payment” when it “serve[s] a specific medical
purpose on an individual case basis.” 1 TEX. ADMIN. CODE § 354.1039(a)(4)(D).
Two Medicaid beneficiaries have been awarded mobile standers after appealing the
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2
initial denials and demonstrating that their requests were based on medical necessity.
See USCA5 356-379. And Texas Health and Human Services Commission (HHSC)
policy explicitly states that “durable medical equipment (DME) that is not covered
under Texas Medicaid” may nevertheless be covered in “exceptional circumstances.”
See Appellant’s Br. Addendum at 43.
Yet the plaintiffs still insist that the Commissioner categorically excludes
mobile standers from coverage—in the teeth of all this evidence to the contrary.
First, the plaintiffs complain that Texas Medicaid and Healthcare Provider (TMHP)
did not consider whether the plaintiffs’ requests could be approved under 1 TEX.
ADMIN. CODE § 354.1039(a)(4)(D). See Appellees’ Br. at 11. But their submissions to
TMHP never asserted that their request qualified as an “exceptional circumstance[].”
That other Medicaid beneficiaries have received approval for mobile standers under
section 354.1039(a)(4)(D) proves that the plaintiffs could have been considered for
“exceptional circumstances” had they argued the point—or (at the very least) that
they could have been considered under section 354.1039(a)(4)(D) had they pursued
the administrative appeal provided by 1 TEX. ADMIN. CODE § 357.3(b)(1).
The plaintiffs also rely on a deposition statement from TMHP employee
Patricia Cannizzaro. See Appellees’ Br. at 11. But Cannizzaro stated that the
“exceptional circumstances” allowance is inapplicable only at TMHP’s initial-denial phase,
not during HHSC’s “fair hearing” appeals process:
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3
Q: . . . Prior to the issue of the denial notice, that first denial notice, did anyone at TMHP make a determination whether the request for power wheelchair with built-in standing feature could be approved based upon exceptional circumstances? A: No. Q: Okay. Now, looking at that point in time prior to the denials that were issued for each of these plaintiffs, why was there no consideration of whether the equipment that they were requesting, the custom power wheelchair with built-in standing feature, could be approved based upon exceptional circumstances? A: We have to apply the policy as is.
USCA5 294 (emphases added). Elsewhere in her deposition, Cannizzaro made clear
that “exceptional circumstances” are considered during the “fair hearing.” See
USCA5 294. The plaintiffs (and the district court) misapprehend Cannizzaro’s
testimony by equating her statements about TMHP’s initial denials with statements
about the “fair hearing” process on appeal.
Even if Cannizzaro had stated that TMHP categorically excludes mobile
standers from coverage, that would not establish that the Commissioner (the only
named defendant in this case) or HHSC has a policy that categorically excludes
mobile standers from coverage. TMHP is not a state agency; it is a private consulting
company that contracts with the State of Texas, and it is not even named as a
defendant in this case. The administrative appeal process is handled by HHSC’s
Appeals Division, not TMHP, and HHSC (not TMHP) makes the “exceptional
circumstances” determination. See 1 TEX. ADMIN. CODE § 357.3; USCA 295; 1 TEX.
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4
ADMIN. CODE § 354.1039(a)(4)(D); Appellant’s Br. Addendum at 43. Yet none of the
plaintiffs bothered to appeal to HHSC before filing suit against the Commissioner.
The plaintiffs also tout the declaration of Robert Perez, but Perez never stated
that mobile standers are categorically excluded from consideration under the
“exceptional circumstances” test. See USCA5 347-351. All that Perez said is that the
“exceptional circumstances” allowance “does not apply to those categories of DME
specifically called out as a non-covered service as these items would not be eligible for FFP
[federal financial participation].” USCA5 350 (emphasis added). Perez is simply repeating
the state statutory provision that forbids HHSC to provide any medical service unless
federal matching funds are available to pay the cost. See TEX. HUM. RES. CODE ANN.
§ 32.024(e) (“The department may not authorize the provision of any service to any
person under the program unless federal matching funds are available to pay the cost
of the service.”). The plaintiffs do not allege that mobile standers are ineligible for
federal financial participation, so they have no basis for regarding Perez’s statement as
excluding mobile standers from consideration under the “exceptional circumstances”
test. In all events, neither a deposition statement from Cannizzaro nor a declaration
statement from Perez can nullify or contradict the unambiguous language of section
354.1039(a)(4)(D) and the HHSC policy, nor can it change the fact that past
beneficiaries have managed to obtain coverage for mobile standers.
Finally, the plaintiffs object that the HHSC policy included in the addendum of
the Commissioner’s brief was formally promulgated after the district court ruled. See
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Appellees’ Br. at 52. That does not allow this Court to disregard it. The HHSC
policy either reflects the law that existed at the time of the district court’s ruling, or
else it represents a change in policy that moots the plaintiffs’ due-process claims.1
The plaintiffs also contend throughout their brief that the Commissioner
“waived” his ability to rely on certain binding Supreme Court decisions by failing to
cite those cases before the district court. Id. at 19, 20 n.9. But it has long been
recognized that courts of appeals may consider cases and arguments that were not
presented below. See U.S. Nat’l Bank v. Indep. Ins. Agents of Am., 508 U.S. 439, 447
(1993) (“[A] court may consider an issue antecedent to . . . and ultimately dispositive
of the dispute before it, even an issue the parties fail to identify and brief”) (citation
and internal quotation marks omitted); Kamen v. Kemper Fin. Servs., 500 U.S. 90, 99
(1991) (“When an issue or claim is properly before the court, the court is not limited
to the particular legal theories advanced by the parties, but rather retains the
independent power to identify and apply the proper construction of governing law.”).
And this Court has held that it should consider an issue or argument raised for the
first time on appeal when it involves a “pure question of law” and when the refusal to
consider it will “lead to an incorrect result or a miscarriage of justice.” See Creel v.
Johnson, 162 F.3d 385, 390 n.3 (5th Cir. 1998) (“Creel contends we should not review
1 The plaintiffs do not (and cannot) contend that this alleged due-process injury is “capable of repetition yet evading review,” or that the HHSC policy triggers the voluntary-cessation exception to mootness.
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6
this issue because the State did not argue it to the district court. We resolve the issue
because uncertainty exists with respect to a pure question of law.”) (citation omitted);
Murray v. Anthony J. Bertucci Constr. Co., 958 F.2d 127, 128 (5th Cir. 1992) (“[W]hen a
question is one of pure law, and when refusal to consider it will lead to an incorrect
result or a miscarriage of justice, appellate courts are inclined to consider questions
first raised on appeal.”) (citation omitted).
For at least three reasons, this Court should consider all of the cases and legal
theories relied upon by the Commissioner. First, each of the arguments that the
plaintiffs ask this Court to disregard involves a pure question of law, and the refusal to
consider those arguments will lead to an incorrect result. The Commissioner’s
arguments rely on binding pronouncements of the Supreme Court that this Court is
obligated to follow. A court of appeals should not disregard a decision of the
Supreme Court solely because the State’s trial lawyers did not cite it in the district
court. Second, courts may and should consider arguments sua sponte “when the
ground involves the relation between governments, including the relation between the
federal government and the states.” ACORN v. Edgar, 56 F.3d 791, 797 (7th Cir.
1995) (Posner, J.); see also id. (collecting authorities). This is why federal habeas courts
may raise defenses sua sponte even when the State’s lawyers are content to ignore
them. See, e.g., Caspari v. Bohlen, 510 U.S. 383 (1994); Day v. McDonough, 547 U.S. 198
(2006). Third, each of the Commissioner’s arguments relates to the “propriety or
scope of an injunction,” another matter on which courts may and should raise
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7
arguments on their own initiative—even arguments that were never presented to any
court. ACORN, 56 F.3d at 797; see also id. (collecting authorities).
I. THERE IS NO CAUSE OF ACTION ALLOWING PRIVATE LITIGANTS TO
SUE TO ENFORCE THE REASONABLE-STANDARDS REQUIREMENT
OR THE “AMOUNT, DURATION, AND SCOPE” REGULATION.
A plaintiff cannot obtain judicial relief merely by showing that a defendant has
violated a provision of federal law. The plaintiff must also identify a law that
authorizes him to sue the defendant. Unless a cause of action allows these plaintiffs
to sue the Commissioner, their Medicaid claims must be dismissed for failure to state
a claim. The Commissioner fully preserved this contention by explicitly and
repeatedly contesting the existence of a cause of action before the district court. See
USCA5 399-401, 702-703, 810 (acknowledging the Commissioner’s argument “that
there is no private right of action under the Supremacy Clause to enforce the
Medicaid Act”).
The Medicaid Act does not contain any provision authorizing private lawsuits
against state officials. And the plaintiffs cannot use 42 U.S.C. § 1983 to enforce the
“reasonable standards” requirement because that provision does not create federal
“rights.” See Golden State Transit Corp. v. Los Angeles, 493 U.S. 103, 106 (1989). This
much is common ground among the parties. But the plaintiffs continue to insist that
the Supremacy Clause somehow creates an “implied right of action” for private
litigants to enforce any provision of federal law. This view is incompatible with the
text of the Supremacy Clause and contradicts no fewer than three binding decisions of
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8
the Supreme Court. The plaintiffs cannot evade these problems by clinging to judicial
decisions from outside the Fifth Circuit, which are not law in this Court and lack even
the power to persuade.
A. There Is No Language In The Supremacy Clause That Implicitly Or Explicitly Authorizes Private Lawsuits To Enforce Federal Law.
Arguments about what “the Constitution” requires must begin with the text of
the Constitution, not judicial precedent. Although previous rulings of this Court are
generally followed by three-judge panels, the decision whether to construe a precedent
narrowly or broadly, or whether to overrule it in response to a later decision of the
Supreme Court, will depend on whether the precedent properly interpreted the
Constitution in the first place. The Commissioner candidly acknowledged Planned
Parenthood of Houston & Southeast Texas v. Sanchez, 403 F.3d 324 (5th Cir. 2005), in the
opening brief, yet respectfully maintained that Planned Parenthood of Houston should be
narrowly construed or overruled because the text of the Supremacy Clause does not
authorize private lawsuits to enforce federal law. See Appellant’s Br. at 14-16, 21-26.
The plaintiffs do not even attempt to show how the language of the Supremacy
Clause can authorize private lawsuits against state officials (or anyone else).
The plaintiffs’ amicus asserts that “the text of the Supremacy Clause is broadly
worded to confer a right to relief upon the people.” See CAC Amicus at 3. That is a
conclusion, not an argument. The amicus brief never points to any language in the
Supremacy Clause that could be read to establish a private right of action, nor does it
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9
cite any evidence that the Framers believed that the Supremacy Clause would convert
each citizen into a private attorney general empowered to sue state officials who
violate federal law. Much of the amicus brief is wasted arguing points that the
Commissioner does not dispute, such as the supremacy of federal law or the ability of
spending legislation to preempt state law. See CAC Amicus at 8-10, 12-17. As if there
were any doubt on this score, the Commissioner readily acknowledges that the
Medicaid Act represents “supreme” law and that federal spending legislation
(including the Medicaid Act) preempts conflicting state laws. See Appellant’s Brief at
26-27. The Commissioner denies that the Supremacy Clause creates a cause of action that
empowers private litigants to sue persons who violate federal law, and denies that any
“conflict” exists between the Medicaid Act and Texas law. Nothing that the amicus
cites from the Federalist or other writings of the Framers comes close to addressing
whether a private cause of action can be derived from the Supremacy Clause.
The plaintiffs and their amicus apparently believe that this Supremacy Clause
cause of action extends only to “preemption” claims, and does not authorize lawsuits
against private citizens who violate federal law. See Cort v. Ash, 422 U.S. 66 (1975).
There is no language in the Supremacy Clause that could be read to limit this putative
“implied cause of action” in that manner, as everyone is bound to respect federal law
as the “supreme law of the land.” The plaintiffs need to explain how the text of the
Supremacy Clause could support such an “implied cause of action” with such a
limited scope. They have not made any effort to do so.
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10
B. The Supreme Court’s Rulings In Alexander, Horne, And Thibotout Directly Contradict The Plaintiffs’ Construction Of The Supremacy Clause.
Alexander v. Sandoval, 532 U.S. 275 (2001), unambiguously declares that “private
rights of action to enforce federal law must be created by Congress,” and that without
“[s]tatutory intent . . . a cause of action does not exist and courts may not create one.” Id. at
286 (emphasis added). These statements are incompatible with the cause of action
that the plaintiffs assert in this case.
The plaintiffs do not attempt to explain how their “implied cause of action”
could be reconciled with these pronouncements in Alexander. Instead, they suggest
that the Court ignore this discussion because the plaintiffs in Alexander were seeking
to enforce regulations implementing Title VII rather than regulations implementing
the Medicaid Act. But the Supreme Court decided Alexander on the principle that
causes of action to enforce federal law must be created by Congress; that holding is as
applicable to the Medicaid Act and its regulations as it is to Title VII regulations. The
plaintiffs do not argue that the Medicaid regulations and statutory provisions in this
case can be distinguished from the Title VII regulations in Alexander, nor do they deny
that their arguments would compel the Supreme Court to reach a different outcome
in Alexander.
The plaintiffs also think that because Alexander “makes no mention of the
Supremacy Clause or preemption,” it therefore does not “address the question
whether there is an implied private right of action to enforce the Supremacy Clause.”
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11
Appellees’ Br. at 19. The plaintiffs are badly mistaken. When Alexander declared that
private rights of action to enforce federal law “must be created by Congress,” it
necessarily rejected the possibility of any non-congressionally created cause of action
to enforce federal statutes or regulations. Any such cause of action must come from
congressional legislation; it cannot be derived from common law or from any
provision of the Constitution. Alexander did not need to delineate and refute each of
the ways in which litigants might try to concoct implied causes of action from non-
congressional sources, because Alexander declared the entire enterprise illegitimate.
That declaration remains binding on the plaintiffs and on this Court.
The plaintiffs also do not argue that their “implied” cause of action can be
squared with Horne v. Flores’s decisive rejection of a private right of action to assert
preemption claims under the No Child Left Behind Act. See 557 U.S. at 456 n.6.
Instead, the plaintiffs declare that Horne’s discussion can be ignored as “dicta” because
“the issue of the enforceability of NCLB . . . was not before the Court.” Appellees’
Br. at 19. That is demonstrably false; as the Court noted in Horne, “both the District
Court and the Court of Appeals [had] held that HB 2064’s funding mechanism
violates NCLB,” and the Justices expressly disapproved those lower-court holdings on
the ground that NCLB is not judicially enforceable. See 557 U.S. at 456 n.6. There
were other grounds on which the Justices disapproved the court of appeals’s ruling in
that case, as the plaintiffs correctly note, but it cannot be said that the private
enforceability of NCLB “was not before the Court” in Horne. In all events, any
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12
proposition that leads to and explains a court’s judgment qualifies as a holding,
regardless of whether it addresses an issue that is formally “before the Court.” See
Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 STAN. L. REV. 953 (2005).
We do not think the Justices would countenance the cavalier disregard of their
pronouncements that the plaintiffs in this case are proposing. Cf. Arizonans for Official
English v. Arizona, 520 U.S. 43, 77 (1997).
The plaintiffs also suggest that Alexander and Horne address only the propriety
of implying a private right of action from a statute, and leave open the possibility of
deriving implied rights of action from the Constitution itself. Appellees’ Br. at 20.
The plaintiffs again mischaracterize those decisions. The holdings in Alexander and
Horne are absolute: No private right of action exists to enforce the Title VII
regulations or the No Child Left Behind Act, period. No right of action exists in the
U.S. Code, no right of action exists in federal common law, and no right of action
exists in any provision of the Constitution. The plaintiffs want this Court to hold that
the Supreme Court in Horne didn’t really mean that “neither court below was
empowered to decide” whether state officials were violating the No Child Left Behind
Act. 557 U.S. at 456 n.6. On the plaintiffs’ construction of the Supremacy Clause,
both the district court and the court of appeals in Horne were empowered to decide the
NCLB claim, because (in the plaintiffs’ view) the Supremacy Clause authorizes private
litigants to bring “preemption” claims whenever state law is alleged to violate any
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13
federal statute. It is obvious from Horne that the Supreme Court does not share this
view.
As for Maine v. Thiboutot, 448 U.S. 1 (1980), the plaintiffs claim that it “holds
that § 1983 authorizes private individuals to bring claims for purely statutory
violations.” Appellees’ Br. at 19. Indeed so, and Thibotout reached that conclusion
only after holding that earlier cases allowing private litigants to enforce the Social
Security Act had necessarily relied on section 1983 because that was the only possible
basis for a cause of action. See 448 U.S. at 5-6. The plaintiffs have no response to this
other than to issue a conclusory denial that Thibotout recognized section 1983 as the
exclusive means for enforcing the Social Security Act. See Appellees’ Br. at 20. The
Commissioner is content to allow the Thibotout opinion to speak for itself.
The plaintiffs’ amicus never so much as mentions Alexander, Horne, or Thibotout.
Instead, the amicus relies on Ex parte Young, 209 U.S. 123 (1908), and some older
Supreme Court decisions to support its claim that the Supremacy Clause authorizes
private litigants to sue any state official who violates any federal law. See CAC Amicus
at 18-20. Ex parte Young provides no help to the plaintiffs because the Commissioner
is not contesting the right of private litigants to bring “preemption” claims when state
officials threaten an individual’s constitutional or federally protected rights. That right
of action is secured by 42 U.S.C. § 1983, and that explains why Ex parte Young allowed
private railroads to sue the Attorney General of Minnesota for allegedly violating their
constitutionally protected rights. Ex parte Young never established that private litigants
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could sue to enjoin the enforcement of any state law that conflicts with a federal
statute, regardless of whether federally protected “rights” are at stake. If it had, then
Horne would have permitted the litigants in that case to challenge Arizona’s statute as
“preempted” by the No Child Left Behind Act, rather than declaring that the federal
court were not “empowered to decide the issue.” 557 U.S. 433, 456 n.6 (2009). And
much of the language that the amicus quotes from Ex parte Young deals with the scope
of Eleventh Amendment immunity, which has nothing to do with whether the
Constitution creates an implied cause of action for private litigants to enforce federal
laws.
None of the other cases cited by the amicus asserts that the Supremacy Clause
authorizes private litigants to bring “preemption” claims against state officials
whenever state law conflicts with a federal statute, and they cannot be read to
establish that proposition without contradicting Alexander, Horne, and Thibotout.
Indeed, no decision of the Supreme Court has ever stated that the Supremacy Clause
establishes an implied cause of action for private litigants seeking to enforce federal
law. Neither the plaintiffs nor their amicus can escape that fact, nor can they escape
the fact that their construction of the Supremacy Clause is incompatible with
Alexander, Horne, and Thibotout.
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C. The Plaintiffs’ Construction Of The Supremacy Clause Disables Congress From Precluding The Private Enforcement Of Federal Statutes Against State Officials.
The plaintiffs’ construction of the Supremacy Clause will allow private litigants
to sue state officials for violating a federal statute even when that statute explicitly
prohibits private rights of action against state officials. See Appellants’ Br. at 20.
Neither the plaintiffs nor their amici deny that their construction of the Supremacy
Clause will produce this rather bizarre result, nor do they make any attempt to justify
a regime that strips Congress of the power to determine the circumstances under
which its statutes may be judicially enforced against state officials.
D. Planned Parenthood Of Houston Is Irreconcilable With Horne And Should Be Overruled Or Limited To Claims Brought To Enforce Title X.
Horne prohibits private litigants from bringing “preemption” claims against
state laws that allegedly violate the No Child Left Behind Act. 557 U.S. at 456 n.6.
This holding cannot be squared with Planned Parenthood of Houston’s suggestion that
private litigants may sue to enjoin any “state or local regulation that is preempted by a
federal statutory or constitutional provision.” 403 F.3d at 334. Unless Planned
Parenthood of Houston is narrowed or overruled, litigants in the Fifth Circuit may assert
“preemption” claims against state laws that allegedly violate NCLB, even though
Horne says that this can’t be done.
The plaintiffs correctly note that Douglas v. Independent Living Center, 132 S. Ct.
1204 (2012), avoided deciding whether the Supremacy Clause authorizes private
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litigants to enforce the Medicaid Act. See Appellees’ Br. at 21-22. But the Supreme
Court’s punt in Douglas presents a more serious problem for the plaintiffs than it does
for the Commissioner. If the plaintiffs’ construction of the Supremacy Clause is
correct, then the Douglas Court should have issued a ringing affirmation of the Ninth
Circuit’s opinion, which embraced the same reasoning that the plaintiffs are advancing
here. Of course, under the Commissioner’s view of the Supremacy Clause, the
Supreme Court in Douglas should have reversed the Ninth Circuit rather than ducking
the issue by remanding. But as between Horne and Douglas, the plaintiffs face one
Supreme Court decision that explicitly rejects a private right of action to assert
“preemption” claims against state laws that violate the No Child Left Behind Act, and
one decision that avoids deciding whether private right of action exists to enforce the
Medicaid Act. Taken together, those decisions mean that the Supremacy Clause cannot
be construed to authorize private lawsuits whenever a state law allegedly conflicts with
a federal statute or regulation, as this Court held in Planned Parenthood, and as the
plaintiffs assert in this case. The plaintiffs are unable to combine Douglas’s
ambivalence with a Supreme Court ruling that supports their view of the Supremacy
Clause, because no decision of the Supreme Court that has ever endorsed the notion
that the Supremacy Clause authorizes private litigants to assert “preemption” claims
against state officials who allegedly violate federal law. Planned Parenthood of Houston is
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incompatible with Horne, and the Commissioner respectfully asks this Court to resolve
the conflict by overruling Planned Parenthood of Houston or limiting it to its facts.2
II. IT IS NOT POSSIBLE FOR STATE OFFICIALS TO “VIOLATE” THE
MEDICAID ACT.
The Medicaid Act is no different from the statute withholding federal highway
money from States with a sub-21 drinking age. See 23 U.S.C. § 158(a)(1)(A). It offers
federal reimbursement to States that comply with the criteria in the Medicaid Act, and
threatens to withhold part or all of that money from noncompliant States. That a
State may be docked federal money for its policy decisions does not make those
policy decisions unlawful.
The oft-repeated statements that a State is “bound” to comply with every
provision of the Medicaid Act once it accepts federal Medicaid money are simply
wrong. See Appellees’ Br. at 23-24. A State is not “bound” to maintain a 21-year-old
drinking age once it accepts federal highway money. Texas could lower its drinking
age tomorrow, wait for the Secretary of Transportation to respond by reducing federal
highway funds on the first day of the next fiscal year, and then proceed with business
as usual. If anyone tried to sue Texas officials on the ground that 23 U.S.C.
§ 158(a)(1)(A) “preempts” their efforts to lower the State’s drinking age, the lawsuit
2 The plaintiffs cite Lewis v. Alexander, 685 F.3d 325 (3d Cir. 2012), and Doe v. Kidd, 419 F. App’x 411 (4th Cir. 2011), but neither of these decisions even cites Horne, let alone attempts to explain how the plaintiffs’ interpretation of the Supremacy Clause might be reconciled with that ruling.
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would be dismissed on the ground that State officials have not violated any federal
law.3
Medicaid works the same way. Noncompliant States may lose some or all of
their federal Medicaid reimbursement, but they do not violate federal law by
provoking the Secretary of Health and Human Services to reduce or eliminate their
federal funding. It is perfectly lawful to operate a non-compliant Medicaid program;
nothing in federal law compels the States to permanently establish a fully compliant
Medicaid program once they accept federal Medicaid money. And 42 U.S.C. 1396c
removes any doubt on this score by allowing the Secretary to continue funding partially
compliant States, by withholding only a portion of their federal Medicaid allotment.
See Appellant’s Br. at 28-29. On the plaintiffs’ view, no State could ever opt out of
Medicaid, because a private litigant will be able to sue and enjoin the State’s officials
as soon as they deviate from the criteria of the Medicaid Act. Only a belief that
Medicaid is forever can support the arguments in the plaintiffs’ brief.4
3 The plaintiffs do not contend that 23 U.S.C. § 158(a)(1)(A) imposes a legal obligation on States to maintain a 21-year-old drinking age once they accept federal highway funds. Yet their only effort to distinguish the Medicaid Act from 23 U.S.C. § 158(a)(1)(A) is to note that withholding federal funds under section 158(a)(1)(A) “appears automatic,” while withholding funds under the Medicaid Act “requires specific findings of noncompliance and provision of notice and opportunity for a hearing.” Appellees’ Br. at 27. How this can establish that the Medicaid Act imposes binding legal obligations on participating States the plaintiffs do not endeavor to explain.
4 The Commissioner is not arguing that withholding federal funds represents “the exclusive means of enforcing obligations in the Medicaid Act.” Appellees’ Br. at 24; see also CAC Amicus at 26. The Commissioner is arguing that the Medicaid Act does not impose any legal obligations on participating States. Like the federal highway statute and the 21-year-old drinking age, the Medicaid Act merely offers federal reimbursement to State Medicaid programs that satisfy certain criteria. There simply
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The plaintiffs’ amicus contends that the Medicaid Act imposes binding legal
obligations on state officials because it provides that “[a] State plan for Medical
Assistance must . . . include reasonable standards . . . ” 42 U.S.C. § 1396a(a)(17)
(emphasis added). See CAC Amicus at 23 (“[T]his language is obligatory.”). That
construction of the Medicaid Act runs headlong into the anti-commandeering rule of
Printz v. United States, 521 U.S. 898 (1997). States cannot be required by Congress to
establish Medicaid programs, nor can they be compelled to establish programs that
comport with federal standards. When 42 U.S.C. § 1396a says that a State Medicaid
program “must” do something, it means that it “must” do that thing in order to continue
receiving full federal funding under 42 U.S.C. § 1396c. There is no freestanding legal
obligation to maintain a Medicaid program that comports with 42 U.S.C. § 1396a, and
any such requirement would run afoul of Printz. Cf. NFIB v. Sebelius, 132 S. Ct. 2566,
2600 (2012) (opinion of Roberts, C.J.) (invoking the constitutional-avoidance canon
to construe the individual mandate as an option to forgo insurance and pay a tax). All
of the Medicaid Act is optional; its so-called “mandatory” services are nothing more
than conditions for receiving full federal reimbursement.5
are no “obligations” to “enforce,” because a State acts legally when it deviates from provisions in the federal Medicaid Act.
5 The plaintiffs’ amicus is also mistaken to assert that “states accepting Medicaid funds must spend them in accordance with federal requirements.” CAC Brief at 25. Federal Medicaid funds reimburse States for expenditures made under state law. Medicaid is not a regime in which the federal government hands a State money and then instructs it to spend that money in a certain way. See 42 U.S.C. § 1396c.
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The plaintiffs’ amicus also relies on 42 U.S.C. § 1320a-2, which we quote in full:
In an action brought to enforce a provision of this chapter, such provision is not to be deemed unenforceable because of its inclusion in a section of this chapter requiring a State plan or specifying the required contents of a State plan. This section is not intended to limit or expand the grounds for determining the availability of private actions to enforce State plan requirements other than by overturning any such grounds applied in Suter v. Artist M., 112 S. Ct. 1360 (1992), but not applied in prior Supreme Court decisions respecting such enforceability; provided, however, that this section is not intended to alter the holding in Suter v. Artist M. that section 671(a)(15) of this title is not enforceable in a private right of action.
42 U.S.C. § 1320a-2 (emphasis added). The amicus quotes only the first sentence of
this statute, but omits the all-important second sentence. The first sentence in section
1320a-2 says only that provisions of the Social Security Act cannot be deemed
unenforceable in private actions because of their “inclusion in a section of this
chapter requiring a State plan or specifying the required contents of a State plan.” But
the Commissioner’s argument does not rest on the inclusion of any statutory
provision in sections that require State plans or specify the required contents of such
plans. Instead, it rests on the proposition that the Medicaid Act does nothing more
than establish criteria for federal reimbursement and fails to impose legal obligations
on States that receive federal funds. The second sentence makes clear that section
1320a-2 serves no function except to reject the novel reasoning that the Supreme
Court deployed in Suter, while still preserving (paradoxically) the result that the Court
reached in that case. Nothing in the Suter opinion invokes the argument that the
Commissioner is making here; the Court focused instead on the open-ended nature of
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the statutory requirement of “reasonable efforts” to prevent removal of children from
their homes and facilitate reunification of families where removal has occurred.
The plaintiffs’ position also cannot be reconciled with NFIB v. Sebelius, because
on their view a federal court could enjoin state officials who refuse to comply with the
Medicaid Act as amended by the Affordable Care Act. As the plaintiffs see matters,
any State that accepts Medicaid money and fails to comply with every requirement of
the Medicaid Act is acting unlawfully and subject to judicial correction. That stance is
impossible to square with NFIB, which purports to give the States freedom to decline
to participate in the Affordable Care Act’s Medicaid expansion without losing all
federal Medicaid funding. NFIB’s holding would be rendered a nullity if federal
courts could enjoin state officials whose Medicaid programs fail to comply with the
requirements of the Affordable Care Act, on the ground that the Medicaid Act
“preempts” their non-compliant (or partially compliant) programs.
The plaintiffs are coy about whether they believe that a federal court could
entertain a “preemption” lawsuit against state officials who choose not to participate
in the Medicaid expansion envisioned by the Affordable Care Act (ACA). But there
are only two possible approaches for the plaintiffs to take. Either the Medicaid Act
imposes a legal obligation on participating States to comply with its provisions, or it
does not. If the former, then State officials can be enjoined for opting out of the
ACA’s Medicaid expansion—even though NFIB holds that Medicaid-participating
States have the freedom to decide whether they want to participate in the expanded
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Medicaid program. If the latter, then the plaintiffs’ preemption lawsuit must be
dismissed on the ground that States cannot “violate” the Medicaid Act. The plaintiffs
cannot maintain their “preemption” lawsuit without simultaneously insisting that
federal courts must enjoin state officials that refuse to participate in the ACA’s
Medicaid expansion.
Finally, the plaintiffs and their amici note that Arkansas Department of Health &
Human Services v. Ahlborn, 547 U.S. 268 (2006), proceeded on the assumption that the
Medicaid Act is capable of preempting state law. But in Ahlborn, the State never
questioned whether private litigants could assert “preemption” claims under the
Medicaid Act; Arkansas staked its entire case on its claim that its statutes complied
with the Medicaid Act’s anti-lien provision. See Br. for the Petitioners, Arkansas
DHHS v. Ahlborn, No. 04-1506, 2005 WL 3156905 (2005). Ahlborn therefore does not
and cannot establish a precedential holding that the Medicaid Act is capable of
preempting state law, or that private litigants may assert preemption claims whenever
a State deviates from the Medicaid Act’s criteria for reimbursement. See Brecht v.
Abrahamson, 507 U.S. 619, 630-631 (1993) (“[S]ince we have never squarely addressed
the issue, and have at most assumed [an answer], we are free to address the issue on
the merits.”); Waters v. Churchill, 511 U.S. 661, 678 (1994) (plurality opinion) (“These
cases cannot be read as foreclosing an argument that they never dealt with.”); Legal
Servs. Corp. v. Velazquez, 531 U.S. 533, 557 (2001) (Scalia, J., dissenting) (“Judicial
decisions do not stand as binding ‘precedent’ for points that were not raised, not
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argued, and hence not analyzed.”). The same goes for Wos v. E.M.A., No. 12-98, __
S. Ct. __, 2013 WL 1131709 (U.S. Mar. 20, 2013). North Carolina’s attorneys in that
case were content to concede that the Medicaid Act is capable of preempting state
law, and argued the case on other grounds. Br. for the Petitioner, Wos v. E.M.A., No.
12-98, 2012 WL 5532211 (2012). In none of the other cases cited by the plaintiffs’
amicus did the litigants present the argument that Texas is advancing here: that the
Medicaid Act does not impose legal obligations on participating States. See, e.g., Pharm.
Research & Mfrs. of Am. v. Walsh, 538 U.S. 644 (2003); Blessing v. Freestone, 520 U.S. 329
(1997). The State of Texas cannot be precluded from making this argument on
account of the failure of lawyers from other States to present this argument to the
Supreme Court.
III. PENNHURST’S CLEAR-STATEMENT REQUIREMENT COMPELS THIS
COURT TO REJECT THE PLAINTIFFS’ MEDICAID ACT CLAIMS.
Private insurance does not cover mobile standers, yet the plaintiffs insist that
state Medicaid benefits must exceed those that would be available under any private-
sector insurance plan. And the plaintiffs still cannot identify any language in the
Medicaid Act, the CMS regulations, or the “DeSario letter” that clearly notifies State
officials that they cannot exclude mobile standers from coverage. All that the
plaintiffs can offer is a conclusory assertion that “Medicaid’s reasonable standards
provision, amount, duration, and scope regulation, and the DeSario letter clearly
notify the Commissioner that HHSC is required to cover medically necessary DME
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consistent with federal guidance.” Appellees’ Br. at 29. Needless to say, that is not
sufficient to satisfy the clear-statement requirement of Pennhurst. As the Supreme
Court recognized in Beal v. Doe, 432 U.S. 438, the “reasonable standards” provision of
42 U.S.C. § 1396a(a)(17) confers “broad discretion on the States to adopt standards for
determining the extent of medical assistance, requiring only that such standards be
‘reasonable’ and ‘consistent with the objectives’ of the Act.” Id. at 444 (emphasis
added).
Even without Pennhurst, the plaintiffs cannot escape the fact that federal law
simply does not define the scope of “medical equipment” that States must provide to
Medicaid beneficiaries. See Appellant’s Br. at 31-32; USCA5 12, 169. And no decision
from the Supreme Court or from this Court limits the prerogative of States to exclude
items from the “medical equipment” that a State will cover in its Medicaid program
(especially items that no private insurance plan would cover).6 The plaintiffs cite Rush
v. Parham, 625 F.2d 1150 (5th Cir. 1980), and Hope Medical Group for Women v. Edwards,
63 F.3d 418, 427 (5th Cir. 1995), but neither of those decisions addressed the scope of
“medical equipment” that States must cover under 42 U.S.C. § 1396a(a)(10)(D). The
plaintiffs’ claim that “[t]his circuit . . . [has] held that state Medicaid programs cannot
lawfully exclude items of durable medical equipment (DME) for reasons unrelated to
6 How can a State possibly violate a requirement to provide “reasonable standards” for determining “the extent of medical assistance” by refusing to pay for an item that no private insurance plan covers?
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medical need when the item fits within the definition of a service category in the
state’s Medicaid plan” is patently false. See Appellees’ Br. at 3 (emphasis added).
The plaintiffs rely primarily on Fred C. v. Texas Health and Human Services
Commission, 988 F. Supp. 1032 (W.D. Tex. 1997), but “[a] decision of a federal district
court judge is not binding precedent . . . even upon the same judge in a different
case.” Camreta v. Greene, 131 S. Ct. 2020, 2033 n.7 (2011). Fred C. may therefore be
followed only to the extent that it provides persuasive reasons for its decision. As we
will explain, the Fred C. opinion is not persuasive and should be expressly disavowed
by this Court.
The plaintiff in Fred C. had asked HHSC to fund an “augmentative
communication device.” Texas Medicaid covered this device for beneficiaries under
the age of 21, but not for beneficiaries over the age of 21. The district court in Fred C.
concluded that the refusal to cover this device for beneficiaries over the age of 21 was
unlawful. See 988 F. Supp. at 1037. But missing from the district court’s analysis (and
from the plaintiffs’ brief) is any explanation of how the State’s policy in Fred C.
contradicted any requirement of the federal Medicaid Act or its implementing
regulations. The district court in Fred C. acknowledged that “[t]he term durable
medical equipment has no federal Medicaid definition,” yet insisted that Texas must
nevertheless provide augmentative communication devices to all Medicaid
beneficiaries because these devices satisfied the State’s definition of “durable medical
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equipment” and because the State provided those devices to persons under the age of
21. See 988 F. Supp. at 1035-36.
One of the many problems with Fred C.’s approach is that federal courts may
enjoin state officials only to prevent violations of federal law, and whether an
augmentative communication device falls within the State’s definition of “durable
medical equipment” is irrelevant to this inquiry. The district court in Fred C. thought
it could compel state officials to adhere to a state-law definition of “durable medical
equipment,” but Pennhurst II bars a federal court from enjoining state officials to obey
state law. See Pennhurst State Sch. v. Halderman, 465 U.S. 89 (1984). The plaintiffs’
invitation for this Court to “str[ike] down state Medicaid agencies’ exclusions of
medical equipment that m[eets] states’ Medicaid DME definition and serve[s] a
medical need,” is likewise incompatible with Pennhurst II, and is not supported by any
judicial decision that represents law in this circuit.7 Appellees’ Br. at 31-32.
That Texas provides mobile standers (or augmentative communication devices)
to persons under the age of 21 is likewise irrelevant to the State’s obligations under
Medicaid. Persons under 21 receive services from the Early and Periodic Screening,
Diagnostic, and Treatment services (EPSDT) benefit, a program that provides
children with more generous benefits than those provided to adults. See 42 U.S.C.
7 The plaintiffs have no answer to the Commissioner’s Pennhurst II objection other than to assert (without citations or explanation) that the reasonable-standards requirement and the amount, duration, and scope regulation “incorporate state-law principles.” Appellees’ Br. at 39. Neither 42 U.S.C. § 1396a(a)(17) or 42 C.F.R. § 440.230 says anything about state law or purports to incorporate state law in any manner.
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§ 1396a(a)(43). Texas’s EPSDT program is also subject to two institutional-reform
injunctions that compel state officials to provide benefits beyond those that are
strictly required. See Consent Decree, Frew v. Hawkins, No. 3:93-cv-00065 (E.D. Tex.
Feb. 20, 1996), ECF No. 135; Order, Alberto N. v. Gilbert, Case No. 6:99-cv-00459,
(E.D. Tex. April 19, 2002), ECF No. 133; Motion, Alberto N. v. Gilbert, Case No. 6:99-
cv-00459 (E.D. Tex. May 19, 2005), ECF No. 176. It was absurd for Fred C. to have
held that Texas must provide the same benefits under Medicaid that it provides under
EPSDT, and that the State violates the “rational basis” test by distinguishing between
the recipients of these different benefits. 988 F. Supp. at 1036. It is equally absurd
for the plaintiffs to ask this Court to adopt Fred C.’s reasoning.
Fred C. must be expressly disavowed because it calls into question numerous
provisions of the federal Medicaid Act, as well as many other health benefits that
Texas offers only to children. Age-based classifications are ubiquitous in the federal
Medicaid Act, and each of these provisions becomes constitutionally suspect under
the reasoning of Fred C. See 42 U.S.C. § 1396a(a)(43) (requiring special notification to
recipients under the age of 21 regarding the availability of services under section
1396d(a)(4)(B)); 42 U.S.C. § 1396a(a)(62) (mandates use of pediatric vaccines); 42
U.S.C. § 1396a(l) (drawing age distinctions between infants under one year of age,
children between 1 and 6, and children between 6 and 19); 42 U.S.C. § 1396a(s)
(adjustment in payment for hospital services furnished to low-income children under
age 6); 42 U.S.C. § 1396d(a)(i) (provision of medical services for individuals under the
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age of 21, or at the option of the State, under the age of 20, 19, or 18); 42 U.S.C.
§ 1396d(a)(4)(A) (nursing facility services for individuals 21 years of age or older); 42
U.S.C. § 1396d(a)(4)(B) and 1396d(r) (early and periodic screening, diagnostic, and
treatment services); 42 U.S.C. § 1396d(h) (inpatient psychiatric services for individuals
under age 21). There are many other medical benefits that Texas offers to children
but not necessarily to adults, including private-duty nursing,8 dental and orthodontal
services,9 and hearing aids for both ears.10 Under Fred C.’s reasoning (and under the
reasoning in the plaintiffs’ brief), all of these age-based classifications are unlawful.
Finally, the plaintiffs have yet to identify any federal statute or regulation, or any
language in the DeSario Letter, that limits a State’s prerogative to exclude items from
“medical equipment” covered by its Medicaid program. The plaintiffs’ discussion of
the DeSario Letter simply fabricates requirements that appear nowhere in that
document. See Appellees’ Br. at 37-38. The DeSario Letter nowhere says that
“exclusive coverage lists and lists of expressly excluded DME items are prohibited,” as
the plaintiffs assert. Id. at 37. What the Letter says is that there must be a process for
requesting items that do not appear on a pre-approved DME list. That does not preclude
8 Adults may receive home health nursing, but private duty-nursing extends beyond the regular skilled nursing provided under home health.
9 Adults do not receive dental or orthodontal coverage unless they are enrolled in ICF/MRs, as defined in 42 C.F.R. § 440.150.
10 EPSDT beneficiaries can obtain hearing aids for both ears, while adult Medicaid beneficiaries get only one even if hearing loss is in both ears.
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a State from categorically excluding items because they do not qualify as “medical
equipment” (yachts, Rolex watches), or because they are too extravagant even if they
may provide therapeutic value (in-home bowling alleys, hot tubs). (Do the plaintiffs
really believe that no item can ever be categorically excluded from DME?) The only
restriction that the DeSario Letter imposes on a State’s prerogative to limit the scope
of available medical equipment is to prohibit exclusions of DME “based solely on
diagnosis, type of illness, or condition.” DeSario Letter at 1 (emphasis added);
USCA5 433; see also Appellant’s Br. at 36. The plaintiffs refuse even to acknowledge
this language from the DeSario Letter.
IV. THE PLAINTIFFS FAILED TO PRESENT SUFFICIENT EVIDENCE OF
MEDICAL NECESSITY TO SURVIVE A MOTION FOR SUMMARY
JUDGMENT.
The plaintiffs’ brief fails to present any evidence that a mobile stander is
medically necessary, as opposed to merely convenient, for any of the plaintiffs.
Conclusory assertions from the plaintiffs’ hand-picked physicians are not sufficient;
the record as a whole must allow a reasonable factfinder to conclude that medical
necessity exists. Much of the plaintiffs’ discussion continues to equate a medical need
for standing with a medical need for a mobile stander (as opposed to a stationary stander).
Plaintiff Koenning has been using a stationary stander twice a week, and there
is no evidence in the record that this regime has threatened his health. Koenning’s
physician did not claim that Koenning’s use of a stationary stander poses health risks,
and she acknowledged that the Permobil C500 wheelchair was not necessary to reduce
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the risks of transfer injury. USCA 670. Koenning’s physician stated that her “goal
with him would be to stand every day, with a minimum of three times a week, and as
long as we’re doing that and as long as we’re not losing range of motion and we’re
meeting the goals, I’m happy.” Id. But a “goal” is not a claim of medical necessity,
and in all events a Permobil C500 wheelchair is not needed for Koenning to meet this
goal. Avoiding the need to travel to a rehabilitation facility does not establish medical
necessity.
The plaintiffs’ brief denies that Plaintiff Martin failed a standing-treatment
program but does not provide any citations, and the record unmistakably shows that
the goal for Martin’s 2009 standing program was “[n]ot achieved.” USCA 607. The
Commissioner’s opening brief further noted that “even if Martin is capable of
standing, there is no evidence in the record that using a stationary stander rather than
a mobile stander will jeopardize his health.” Appellants’ Br. at 40. The plaintiffs do
not cite anything from the record to refute this claim, nor could they. Dr. Donovan
even admitted in his deposition that a “medically necessary” benefit of the Permobil
C500 wheelchair was “a heightened sense of confidence and equality by enabling eye-
to-eye conversations with the non-disabled society,” and declared that he understood
“health” to mean “a state of complete physical, mental, and social well-being and not
merely the absence of disease or infirmity.” USCA 679.
The plaintiffs attempt to establish “medical necessity” for plaintiff Ryals by
citing deposition testimony from Dr. Nuruddin. Appellees’ Brief at 43. But Dr.
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Nuruddin testified only that Ryals needs to stand, not that a mobile stander is
medically necessary vis-à-vis a stationary stander. The only reasons that Dr. Nuruddin
could offer for the mobile stander is that a stationary stander would be “less
convenient,” and that Ryals’s mother alone would be unable to transfer her from the
wheelchair to the stander. USCA5 682, 688. That is not evidence that a mobile
stander is “medically necessary,” as Texas could accommodate Ryals’s need to stand
through other means—such as providing a stationary stander along with additional
caretakers or providing standing opportunities at a rehabilitation clinic.
Finally, the plaintiffs wrongly assert that denials of motions for summary
judgment are reviewed for abuse of discretion. See Gonzalez v. Seal, 702 F.3d 785, 787
(5th Cir. 2012) (“We review the district court’s denial of summary judgment de novo.”);
Appellees’ Br. at 12, 40.
V. THE DISTRICT COURT WAS REQUIRED TO ABSTAIN UNDER THE
DOCTRINE OF PRIMARY JURISDICTION.
The plaintiffs falsely assert that the Commissioner’s primary-jurisdiction
argument was not presented to the trial court. See Appellees’ Br. at 45. But the
Commissioner expressly and repeatedly asked the district court to stay its hand and
await CMS’s determination. See USCA5 399 (“To the extent HHSC’s state plan
violates the federal Medicaid Act, it should be address[ed]—at least in the first instance—by
CMS. See Douglas v. Independent Living Center of Southern California, Inc. 132 S. Ct. 1204,
1210-11 (2012).”) (emphasis added); see also USCA 703.
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In all events, it has long been established that courts may and should consider
abstention doctrines on their own initiative—even if a State fails to present the
argument to any court. See Bellotti v. Baird, 428 U.S. 132, 143 n.10 (1976)
(“[A]bstention may be raised by the court sua sponte.”); Schlesinger v. Councilman, 420
U.S. 738, 743 (1975); Younger v. Harris, 401 U.S. 37, 40-41 (1971). In Arizona v. United
States, the Supreme Court accepted Arizona’s abstention argument even though it was
raised for the first time in the Supreme Court. Compare Br. for Pet’rs, 132 S. Ct. 2492
(2012) (No. 11- 182), 2012 WL 416748, at *40-41, with Appellants’ Opening Br.,
United States v. Arizona, 689 F.3d 1132 (9th Cir. 2012) (No. 10-16645), 2010 WL
5162518, at *23-43, and Defs.’ Resp. to Pl.’s Mot. for Prelim. Inj. at 15-21, 703 F.
Supp. 2d 980 (D. Ariz. 2010) (No. 10-CV-01413), 2010 WL 3154413.
The plaintiffs also overstate the degree of deference owed to the district court
on this matter. Although a district court’s abstention ruling is reviewed for abuse of
discretion, this Court “reviews de novo whether the requirements of a particular
abstention doctrine are satisfied.” Nationwide Mut. Ins. Co. v. Unauthorized Practice of
Law Committee, 283 F.3d 650, 652 (5th Cir. 2002).
Finally, we cannot help but to note the irony of the plaintiffs asking this Court
to defer to the views expressed in the CMS DeSario Letter, while simultaneously
insisting that this Court rule on the legality of the State’s policies without first
soliciting the views of CMS. If CMS’s interpretations of the Medicaid Act are indeed
entitled to deference—as the plaintiffs obviously believe given their reliance on the
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DeSario Letter—then it is hard to understand why a federal court should plow ahead
without any input from the agency charged with administering the Medicaid Act. The
plaintiffs’ stance also risks embarrassing a federal court that issues a permanent
injunction against a State’s policy, only to have CMS later confer formal approval
upon the very policy that the court declared unlawful.
VI. THE PLAINTIFFS’ DUE-PROCESS CLAIMS ARE EITHER MERITLESS
OR MOOT.
The plaintiffs’ due-process arguments are premised on their insistence that the
Commissioner categorically excludes mobile standers from coverage and makes no
allowance for “exceptional circumstances.” The HHSC’s “exceptional circumstances”
policy shows that this is false. See supra at 1-5. The plaintiffs seem to suggest that this
policy was not in effect at the time the district court rendered its decision—even
though 1 TEXAS ADMINISTRATIVE CODE § 354.1039(a)(4)(D) unambiguously allows
non-covered DME to be covered when “exceptional circumstances” are shown. If
this Court believes the plaintiffs, then their due-process claims are moot, and this
Court must vacate the district court’s judgment on those claims. See United States v.
Munsingwear, Inc., 340 U.S. 36 (1950). If this Court disbelieves the plaintiffs, then their
due-process claims are meritless, for the reasons discussed in the Commissioner’s
opening brief.
The Commissioner is not arguing that the plaintiffs were required to “exhaust”
their due-process claims before filing suit, nor is he asserting that the plaintiffs’ due-
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34
process claims should be dismissed for failure to exhaust. Rather, the Commissioner’s
contends that the plaintiffs’ due-process claims must be rejected on the merits, because
they cannot prove that the “fair hearing” offered by the State would have been biased
or useless when they never bothered to take advantage of it. It is a problem of proof,
not a lack of exhaustion, that sinks the plaintiffs’ due-process claims.
Finally, the plaintiffs are wrong to suggest that Goldberg’s constitutional holding
applies to initial denials of Medicaid services. See Appellees’ Br. at 55 n.26 (citing
Goldberg v. Kelly, 397 U.S. 254 (1970)). The federal regulations that incorporate
Goldberg’s requirement do so not as a matter of constitutional obligation, but as a
federal statutory requirement. See 42 U.S.C. § 1396a(a)(3). The Commissioner is
contending only that the plaintiffs cannot maintain a Fourteenth Amendment due-process
claim based on a State’s alleged failure to comply with 42 U.S.C. § 1396a(a)(3) or 42
C.F.R. § 431.205(d). The plaintiffs fail to cite any binding judicial authority that
extends Goldberg’s constitutional holding to the initial denial of welfare benefits, and
they do not make any effort to explain how these Permobil C500 wheelchairs are
“property” belonging to Koenning, Martin, and Ryals. Neither do the decisions that
they cite from other courts.
VII. THE DISTRICT COURT HAD NO AUTHORITY TO “REVERSE” THE
DECISIONS OF HHSC AND TMHP OR TO “REMAND[]” THE
“CASE” TO TMHP.
Federal courts have no authority to “reverse” the decisions of state agencies,
and the plaintiffs do not argue to the contrary. The plaintiffs attempt to defend only
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the district court’s “remand” to TMHP. But they do not cite any provision of federal
law that authorizes federal courts to “remand” Article III cases to state agencies. And
the opinion in Meyers v. Reagan, 776 F.2d 241, 244 (8th Cir. 1985), does not even
attempt to answer the objections in the Commissioner’s opening brief. Finally,
TMHP was not even named as a defendant in this case, and the plaintiffs do not
begin to explain how a federal court can enter judgment or direct an order against a
person or entity that is not a named party to the federal judicial proceeding.
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CONCLUSION
The judgment of the district court should be vacated, and the case remanded
with instructions to enter judgment in favor of the Commissioner or (in the
alternative) to abstain in favor of CMS’s primary jurisdiction.
Respectfully submitted. GREG ABBOTT Attorney General of Texas DANIEL T. HODGE First Assistant Attorney General /s/ Jonathan F. Mitchell JONATHAN F. MITCHELL Solicitor General State Bar No. 24075463
RANCE L. CRAFT ARTHUR C. D’ANDREA DOUGLAS D. GEYSER MICHAEL P. MURPHY Assistant Solicitors General DREW L. HARRIS Assistant Attorney General
OFFICE OF THE ATTORNEY GENERAL P.O. Box 12548 (MC 059) Austin, Texas 78711-2548 Tel.: (512) 936-1695 Fax: (512) 474-2697
Counsel for Defendant-Appellant
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CERTIFICATE OF SERVICE I certify that this document has been filed with the Clerk of the Court and served by ECF on April 1, 2013, upon: Maureen A. O'Connell SOUTHERN DISABILITY LAW CENTER 1307 Payne Avenue Austin, TX 78757-0000 Lewis Alan Golinker, Esq. ASSISTIVE TECHNOLOGY LAW CENTER Suite 300 401 E. State Street Ithaca, NY 14850-0000 Maryann Overath 1404 Crestwood Road Austin, TX 78722 Martha Jane Perkins Sarah Jane Somers NATIONAL HEALTH LAW PROGRAM, INC. 101 E. Weaver Street, Suite G-7 Carrboro, NC 27510 Attorneys for Plaintiffs-Appellees /s/ Jonathan F. Mitchell
JONATHAN F. MITCHELL Solicitor General Counsel for Defendant-Appellant
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CERTIFICATE OF ELECTRONIC COMPLIANCE
Counsel also certifies that on April 1, 2013, this brief was transmitted to Mr. Lyle W. Cayce, Clerk of the United States Court of Appeals for the Fifth Circuit, via the Court’s CM/ECF Document Filing System, https://ecf.ca5.uscourts.gov/.
Counsel further certifies that: (1) required privacy redactions have been made, 5TH CIR. R. 25.2.13; (2) the electronic submission is an exact copy of the paper document, 5TH CIR. R. 25.2.1; and (3) the document has been scanned with the most recent version of Symantec Endpoint Protection and is free of viruses.
/s/ Jonathan F. Mitchell
JONATHAN F. MITCHELL Counsel for Defendant-Appellant
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CERTIFICATE OF COMPLIANCE
With Type-Volume Limitation, Typeface Requirements, and Type Style Requirements
1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because: [ ] this brief contains 8994 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii), or [ ] this brief uses a monospaced typeface and contains [state the number of] lines of text, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). 2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because: [ X] this brief has been prepared in a proportionally spaced typeface using Microsoft Word in Garamond 14-point type face, or [ ] this brief has been prepared in a monospaced typeface using [state name and version of word processing program] with [state number of characters per inch and name of type style].
/s/ Jonathan F. Mitchell
JONATHAN F. MITCHELL Counsel for Defendant-Appellant Dated: April 1, 2013
Case: 12-41187 Document: 00512193697 Page: 47 Date Filed: 04/02/2013