Developmental Services Network v. Toby Douglas
666 F.3d 540
| 9th Cir. | 2011Background
- Providers filed suit challenging California Welfare and Institutions Code § 14105.191(f), which amended the Medicaid Plan to cap provider reimbursement rates for the 2009-10 rate year and thereafter.
- The statute purportedly complied with 42 U.S.C. § 1396a(a)(30)(A) by considering quality of care in rate setting, and implemented prior to federal approval of the SPA.
- The district court granted a preliminary injunction finding likely violations and irreparable harm stemming from lack of federal approval for the SPA amendment.
- The State appealed, arguing lack of likelihood of success on the merits, no irreparable harm, and improper balance of equities; the State sought to stay or dissolve the injunction.
- The Ninth Circuit vacated the preliminary injunction and remanded, holding that the Providers lack an unambiguous § 1983 right to enforce SPA approval and that the district court should reevaluate on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the state need obtain federal approval before implementing SPA amendments | Providers contend the SPA amendments must be federally approved before implementation. | Douglas argues amendments may be implemented before CMS approval. | Judicial review vacates injunction; issue requires further proceedings on merits. |
| Whether § 1983 provides a private right to enforce SPA approval | Providers rely on § 1983 to challenge unapproved SPA. | State argues no unambiguous federal right to enforce SPA approval exists under § 1983. | No unambiguously conferred federal right; § 1983 action not available for this claim. |
| Whether Supremacy Clause grounds supported the injunction | Providers may invoke Supremacy Clause to enforce federal approval requirements. | State declines reliance on Supremacy Clause pleading; court should not decide at this stage. | Court declines to decide on Supremacy Clause issue; remand for district court to address. |
Key Cases Cited
- Wilder v. Va. Hosp. Ass’n, 496 U.S. 498 (U.S. 1990) (federal-state plan cooperation and need for approved state plan)
- Washington State Health Facilities Ass’n v. Wash. Dep’t of Soc. & Health Servs., 698 F.2d 964 (9th Cir. 1982) (federal approval prerequisite for enforcement of state Medicaid plan)
- Exeter II, 145 F.3d 1106 (9th Cir. 1998) (all plans and amendments require federal approval before implementation)
- Blessing v. Freestone, 520 U.S. 329 (U.S. 1997) (factors for recognizing a federal right under § 1983)
- Gonzaga Univ. v. Doe, 536 U.S. 273 (U.S. 2002) (Congress must create rights that are unambiguously conferred for § 1983 claims)
- San Lazaro Ass’n, Inc. v. Connell, 286 F.3d 1088 (9th Cir. 2002) (no private right to enforce federal statutory provisions via § 1983)
- Alaska Dept. of Health & Soc. Servs. v. CMS, 424 F.3d 931 (9th Cir. 2005) (limitations on private rights under § 1983 for rates adequacy)
- Suter v. Artist M., 503 U.S. 347 (U.S. 1992) (Suter framework for implied private rights under federal statutes)
- Guzman v. Shewry, 552 F.3d 941 (9th Cir. 2009) (regulations alone cannot create § 1983 rights)