Lewis v. Alexander
2011 U.S. Dist. LEXIS 95109
E.D. Pa.2011Background
- This is a putative class action challenging Pennsylvania's Section 1414, 62 Pa. Stat. Ann. § 1414, governing pooled special needs trusts under Medicaid.
- Plaintiffs seek declaratory and injunctive relief against multiple state officials; cross-motions for summary judgment and class certification are before the court.
- Section 1414 imposes expenditure and eligibility requirements on pooled trusts, potentially affecting Medicaid eligibility for disabled individuals.
- Plaintiffs include two trusts (The Family Trust and ARC Community Trust) and eight individual pooled-trust account holders, later joined by four more after enactment.
- The court addresses standing and ripeness, then holds certain subsections are preempted by federal law and certifies a class, with severability for remaining provisions.
- The court determines that subsections (b)(1), (b)(2), (b)(3)(ii), (b)(3)(iii), and (c) are preempted, while remaining provisions are severable and may stay in effect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Section 1414 conflict with the no-more-restrictive rule and §1396p(d)(4)? | Young/ARC contend Section 1414 is more restrictive than federal trust rules. | Rendell defends Section 1414 as permissible state regulation aligned with trust policy. | Yes; subsections (b)(2) and (b)(3)(ii) are preempted. |
| Is Section 1414(c) enforcement mechanism preempted by federal law? | Preemption due to tying MA eligibility to other beneficiaries' conduct violates no-more-restrictive rule. | Enforcement mechanism is permissible state regulation under prerogatives of DPW. | Yes; Section 1414(c) preempted. |
| Does the 65-year age limit in §1414(b)(1) conflict with §1396p(d)(4)? | Age cap unnecessarily restricts eligibility not present in federal law. | Age limit reflects congressional design for payback trusts; no error for pooled trusts. | Yes; age limit preempted. |
| Do the expenditure restrictions (b)(3)(i)-(ii) conflict with federal law? | Expenditure rules limit uses of trust funds beyond treatment-related needs. | Restrictions align with state interpretation of trust governance. | Expenditure restrictions (i) neutral; (ii) preempted. |
Key Cases Cited
- Abbott Labs. v. Gardner, 387 U.S. 136 (1967) (pre-enforcement review and ripeness considerations in declaratory judgments)
- Massachusetts v. EPA, 549 U.S. 497 (2007) (standing and prudential considerations in federal cases)
- Lozano v. City of Hazleton, 620 F.3d 170 (3d Cir. 2010) (severability and severability doctrines in constitutional challenges)
- Pic-A-State Pa. v. Reno, 76 F.3d 1294 (3d Cir. 1996) (facial challenges and declaratory judgment posture in regulatory statutes)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (constitutional standing requirements (injury-in-fact, causation, redressability))