567 F. App'x 496
9th Cir.2014Background
- Before: Judges Tallman, Bea, and Murphy; appeal by Idaho IDHW Directors Armstrong and Clement; Providers sue for injunctive relief under Supremacy Clause regarding Medicaid rate law; district court granted summary judgment for Providers; issue concerns whether state rate setting violated federal Medicaid requirements; court interprets §1396a(a)(30)(A) and related caselaw; district court found 2006–2009 rate study and new methodology not implemented due to legislative appropriation, rendering rates not reasonably related to costs; court relied on Orthopaedic Hospital v. Belshe to require rates bear a reasonable relationship to costs; Directors conceded 2006 rates remained due to budgetary reasons; court affirmed dismissal of inaction as inaction not fitting preemption theory, but waived issue argument.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Supremacy Clause private right of action viability | Providers rely on Supremacy Clause to enjoin state law | Directors argue no private right to preempted state action | Yes, implied right of action exists |
| Whether §1396a(a)(30)(A) requires rates bear a reasonable relationship to provider costs | Rates should substantially reimburse costs | Budgetary constraints justify lower rates | Yes, must bear reasonable relationship to costs |
| Whether district court properly granted summary judgment based on cost study and budgetary inaction | Reimbursement shortfalls violate federal standard | Inaction due to legislature funding is non-pretextual | affirmed district court ruling for Providers |
| Whether inaction argument was waived on appeal | N/A | Appellate waiver due to not raising argument in district court/briefing | Waived |
Key Cases Cited
- Orthopaedic Hosp. v. Belshe, 103 F.3d 1491 (9th Cir. 1997) (rates must bear a reasonable relationship to costs; pure budgetary reasons insufficient)
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (U.S. 1983) (Supremacy Clause private action recognized)
- Bud Antle, Inc. v. Barbosa, 45 F.3d 1261 (9th Cir. 1994) (private right of action under Supremacy Clause cited)
- Indep. Living Ctr. of S. Cal. v. Shewry, 543 F.3d 1050 (9th Cir. 2008) (private action to enjoin enforcement of state legislation preempted by federal law)
- United States v. Vasquez-Ramos, 531 F.3d 987 (9th Cir. 2008) (precedent on circuit decisions and standards)
- Smith v. Marsh, 194 F.3d 1045 (9th Cir. 1999) (issues not raised below are waived on appeal)