Lewis Ex Rel. Young v. Alexander
685 F.3d 325
| 3rd Cir. | 2012Background
- Medicaid is a federal-state program; Pennsylvania's Section 1414 regulates pooled special needs trusts to prevent asset sheltering.
- OBRA 1993 codified trust-counting rules and exemptions; pooled trusts are one exempted category under § 1396p(d)(4)(C).
- PA enacted Section 1414 to regulate pooled trusts, including requirements for premium distributions and reimbursements.
- Plaintiffs, including individuals with pooled trusts and two pooled-trust sponsors ARC-CT (ARC) and The Family Trust, challenge Section 1414 as preempted in part.
- District Court held most provisions preempted; court severability and class certification were also at issue; this appeal addresses standing, private rights of action, and preemption merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue? | Plaintiffs have injury in fact from enforcement of §1414. | Defendants contend no imminent injury for some provisions. | Yes; plaintiffs have standing to challenge §1414. |
| Private right of action under §1983 and Supremacy Clause? | Statutes confer individual rights and allow private enforcement. | Defendants argue no private right of action for some provisions. | Yes; private rights of action exist under §1983 and the Supremacy Clause. |
| Preemption of 50% repayment, special needs, and expenditure provisions? | Sections 1414(b)(3)(iii), (b)(2), and (b)(3)(ii) conflict with federal law. | States may impose additional state-law constraints within trust rules. | Preempted for 50% repayment, special needs, and expenditure provisions. |
| Age restriction on pooled trusts? | No age limit in federal statute; PA cannot add age restriction. | PA may regulate through state trust-law powers. | Age restriction preempted; no age limit allowed for pooled trusts. |
| Enforcement provision §1414(c) admissibility of enforcement actions? | Enforcement provision is a reasonable exercise of state authority. | Preemption would bar enforcement mechanisms. | Not preempted; enforcement provision upheld as a valid state tool when not conflicting with preempted provisions. |
Key Cases Cited
- Sabree ex rel. Sabree v. Richman, 367 F.3d 180 (3d Cir. 2004) (Medicaid private right of action recognized for prompt medical assistance rights)
- Gonzaga University v. Doe, 536 U.S. 273 (U.S. 2002) (Rights-creating language for private rights under statutes)
- Gonzalez v. Young, 560 F.2d 160 (3d Cir. 1977) (Supremacy Clause action in federal-question context (noting jurisdictional issues))
- Farina v. Nokia, Inc., 625 F.3d 97 (3d Cir. 2010) (Overarching Congressional intent in preemption analysis)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (U.S. 1996) (Statutory preemption analysis; text and structure guide intent)
- Schweiker v. Gray Panthers, 453 U.S. 34 (U.S. 1981) (Medicaid trust planning and eligibility standards context)
- Russello v. United States, 464 U.S. 16 (U.S. 1983) (Expressio unius and statutory interpretation principles)