DEVELOPMENTAL SERVICES NETWORK; United Cerebral Palsy/Spastic Children‘s Foundation of Los Angeles and Ventura Counties, Plaintiff-Appellee, v. Toby DOUGLAS, Director of the Department of Health Care Services, State of California; California Department of Health Care Services, Defendants-Appellants. California Association of Health Facilities, Plaintiff-Appellee, v. Toby Douglas, Director of the Department of Health Care Services, Statе of California, Defendant-Appellant.
Nos. 11-55851, 11-55852
United States Court of Appeals, Ninth Circuit
Nov. 30, 2011
666 F.3d 540
Before: FERDINAND F. FERNANDEZ and CONSUELO M. CALLAHAN, Circuit Judges, and RALPH R. ERICKSON, District Judge.
Argued and Submitted Oct. 12, 2011.
Finally, even if the majority opinion‘s holding were correct, it is nevertheless inappropriate to apply this novel interpretation of the regulation without first giving the BIA the opportunity to consider this casе in view of the new interpretation of the regulation. See Pannu v. Holder, 639 F.3d 1225, 1228 (9th Cir.2011) (remanding for the BIA to apply intervening legal interpretations).
Because the majority departs from our precedent, misinterprets the governing regulation, gives no deference to the agency, and refuses to remand, I respectfully dissent.
Kenneth K. Wang, Office of the Attorney General of California, Los Angeles, CA, and Tracey L. Angelopoulos, Office оf the Attorney General of California, San Diego, CA, for the defendants-appellants.
OPINION
FERNANDEZ, Circuit Judge:
Toby Douglas, the Director of the California Department of Health Care Services,1 appeals the district court‘s preliminary injunction precluding enforcement of
BACKGROUND
The Providers are trade associations representing, among other facilities, intermediate care facilities for the mentally retarded and for the developmentally disabled, and free standing pediatric subacute facilities. The Providers filed suit in federal district court on April 30, 2011. They alleged that the State‘s implementation of
The district court had jurisdiction pursuant to
We review the grant of a preliminary injunction for abuse of discretion. Am. Trucking Ass‘ns, Inc. v. City of L.A., 559 F.3d 1046, 1052 (9th Cir.2009). Our review is “limited and deferential, and [w]e do not review the underlying merits of the case.” Id. (internal quotation marks omitted). “Nevertheless, a district court necessarily abuses its discretion when it bases its decision on an erroneous legal standard or on clearly erroneous findings of fаct.” Id. (internal quotation marks omitted).
DISCUSSION
“Plaintiffs seeking a preliminary injunction in a case in which the public interest is involved must establish that they are likely to succeed on the merits, that they are likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in their favor, and that an injunction is in the public interest.” Cal. Pharmacists Ass‘n v. Maxwell-Jolly, 563 F.3d 847, 849 (9th Cir.2009). We have glossed that standard by adding that there is a “sliding scale”9 approach which allows a plaintiff tо obtain an injunction where he has only shown “‘serious questions going to the merits’ and a balance of hardships that tips sharply towards the plaintiff ... so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir.2011). Nevertheless, if a plaintiff fails to show that he has some chance on the merits, that ends the matter. Global Horizons, Inc. v. U.S. Dep‘t of Labor, 510 F.3d 1054, 1058 (9th Cir.2007).
Here the State attacks the district court‘s decision on all four parts of the preliminary injunction test and on other bases as well. We, however, will only consider whether the Providers can succeed on the merits, for, as we will show, our conclusion on that ground requires that we vacate the preliminary injunction and remand for further proceedings. While we agree with the district court that the State was required to obtain approval of the amendment wrought in its Medicaid Plan by section 14105.191(f)‘s provisions, we disagree with its determination that the Providers have a cause of action pursuant to
I. Approval of the Change
“Medicaid is a cooperative federal-state program through which the Federal Government provides financial assistance to States so that they may furnish medical care to needy individuals.” Wilder v. Va. Hosp. Ass‘n, 496 U.S. 498, 502, 110 S.Ct. 2510, 2513, 110 L.Ed.2d 455 (1990). “To qualify for federal assistance, a State must submit to the Secretary [of the Department of Health and Human Services] and have approved a ‘plan for medical assistance,’ § 1396a(a)” that complies with statutory requirements. Id. If CMS determines that a state plan or plan amendment does not comply with those requirements, it may deny the state federal funds.
We say counterintuitive because it would be surprising if a state were required to adhere to a complex list of requirements10 in order to obtain approval of a plan in the first place, but then, perhaps immediately after approval, matеrially change that plan to its heart‘s content without first having the changes themselves approved. For example, despite the fact that a plan must “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area,”11 the State suggests that if it adopted changes that did not meet those requirements, even though it must submit an SPA, it could implement the changes forthwith. We suppose that the law could have been written that way, but we question why it would have been. As it turns out, we have previously held that it was not.
Our first foray into this area was over twenty-five years ago. Sеe Wash. State Health Facilities Ass‘n v. Wash. Dep‘t of Soc. & Health Servs., 698 F.2d 964 (9th Cir.1982) (per curiam). We were then faced with a claim that a state could enforce a state regulation which conflicted with the approved Medicaid plan before it obtained approval of the amendment. Id. at 964-65. We would have none of it. We held:
We previously have held that proper [DHHS] evaluation and approval is a prerequisite to enforcement of a state Medicaid plan. In addition, federal regulations specify the procedures a state must follow if it wishes to amend provisions of its federally approved plan. Accordingly, we find without merit appellants’ contention that [the state] may enforce changes in its method of reimbursing nursing care facilities without receiving federal approval.
Id. at 965 (citations and footnote references omitted).
Nor was that our only visit to this territory. In 1993, a state, again, insisted that it could change its standards and methods under Medicaid before it submitted an SPA. Or. Ass‘n of Homes for the Aging, Inc. v. Oregon, 5 F.3d 1239, 1241 (9th Cir.1993). We rejected that position again. We noted that the state plan must be amended to reflect “material changes in state law, organization, policy, or operation” and that the amendments “must be submitted for ... approval.” Id. We went on to point out that: “[a] law that effects a change in payment methods or standards without [DHHS] approval is invalid.” Id.
Finally, in 1998, we were again required to enter that territоry. See Exeter Mem‘l Hosp. Ass‘n v. Belshe, 145 F.3d 1106, 1108 (9th Cir.1998) (Exeter II), adopting 943 F.Supp. 1239 (E.D.Cal.1996) (Exeter I). That time the State asked us to hold that it could implement changes before the federal government approved them. Id. at 1107. We were no more impressed with the argument than we had been some sixteen years earlier. We rejected it and said:
Most important, our opinion in Washington was premised on the overall statutory framework rather than the particular language of the statute relating to amendments to state plans. That framewоrk required then, and at all relevant times since, that all plans receive approval by the federal government before they may be implemented, and that all amendments to plans must also be federally approved. In Washington, we held that from these requirements logically flows the requirement that amendments to plans be approved before implementation. See Washington, 698 F.2d at 965. That conclusion is as valid now as it wаs then....
Id. at 1108. But here we are again. Why?
Well, the State now says that our prior cases were decided when the Boren Amendment12 was in effect, but that the current version of the statute has removed the Boren Amendment language.13 No doubt there is some truth in that statement.14 We, however, fail to see how it makes even a minim of difference for this purpose. The fact remains that the State‘s obligation to follow the substantive provisions of
Thus, we repeat an old refrain: the State was obligated to submit and obtain approval of its SPA before implementation. But that leads us to the next question before us, and there the Boren Amendment repeаl has a bit more bite.
II. Cause of Action Under Section 1983
It is pellucid that the mere fact that an action by the State, like obtaining approval of a SPA before implementation, is required does not mean that the Providers have a cause of action under § 1983. See San Lazaro, 286 F.3d at 1097 (“[i]n order to seek redress through § 1983, ... a plaintiff must assert the violation of a
More important is the relatively recent refinement of federal law by the Supreme Court. As the Court noted, when our court considered a claim that plaintiffs were entitled to child support services, we had held that a right of action was based on the overall scheme of the statute in question. Blessing v. Freestone, 520 U.S. 329, 332-33, 117 S.Ct. 1353, 1356, 137 L.Ed.2d 569 (1997). The Court eschewed that approach and declared:
In order to seek redress through § 1983, however, a plaintiff must assert the violation of a federal right, not merely a violation of federal law. We have traditionally lоoked at three factors when determining whether a particular statutory provision gives rise to a federal right. First, Congress must have intended that the provision in question benefit the plaintiff. Second, the plaintiff must demonstrate that the right assertedly protected by the statute is not so “vague and amorphous” that its enforcement would strain judicial competence. Third, the statute must unambiguously impose a binding obligation on the States. In other words, the provision giving rise to the asserted right must be couched in mandatory, rather than precatory, terms.
Id. at 340-41 (citations omitted). The Court vacated our decision. Id. at 349. Lest there be any doubt, the Court returned to the issue a few years later. Gonzaga Univ. v. Doe, 536 U.S. 273, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002). There, the Court emphasized: “We now reject the notion that our cases permit anything short of an unambiguously conferred right to support a cause of action brought under § 1983.” Id. at 283. And it concluded by stating that if Congress wants to create “new rights enforceable under § 1983, it must do so in clear and unambiguous terms....” Id. at 290; see also Watson v. Weeks, 436 F.3d 1152, 1158-59 (9th Cir.2006); Sanchez v. Johnson, 416 F.3d 1051, 1059-60 (9th Cir.2005).
We do not overlook the fact that Washington20 and Homes for the Aging21 did allow for a § 1983 action, but neither actually discussed the question about what specific provision conferred a cause of action upon providers; they were quite general, even ambiguous, in that regard. In fact, in Exeter I,22 which we adopted in Exeter II,23 the district court stated that the parties had agreed that a § 1983 action
Therefore, when we consider Congress’ intent in repealing the Boren Amendment, the fact that no provision appears to unambiguously confer a right upon the Providers, the fact that the requirеment of the submission of SPAs to the federal authority appears to be a general25 or administrative26 provision rather than one which confers individual entitlements, and the fact that our prior cases do not require a different decision under the circumstances, we are constrained to the view that notwithstanding our prior cases,27 no individual right has been created for the Providers.28
The Providers also argue that the federal authorities are of the opinion that SPAs must be approved before they are implemented, a proposition with which we agree. But, as we have already noted, an agency cannot create a right enforceable through § 1983 where Congress has not done so. See Guzman, 552 F.3d at 952; Save Our Valley v. Sound Transit, 335 F.3d 932, 939 (9th Cir.2003). Nor is there a basis for deciding that an agency can accomplish the same result by taking a litigating position as an amicus in one or more cases, or by issuing dire warnings that a private individuаl might sue.
In fine, the Providers have not shown that they have an unambiguously conferred right to bring a § 1983 action. That being so, we must hold that there is no likelihood of success on the merits and that the preliminary injunction cannot stand.29 See Global Horizons, 510 F.3d at 1058; Gonzales v. DHS, 508 F.3d 1227, 1242 (9th Cir.2007).
Despite our contrary holdings over the past decades, the State has allowed its economic difficulties to obnebulate its analysis and render it purblind to the simple fact that it cannot properly imрlement changes to its Medicaid plan before the federal government (DHHS through CMS at this time) has approved a submitted SPA. Yet, while it is regrettable that the State refuses to abide by the law, that does not mean that a right which will support a cause of action under § 1983 has been unambiguously conferred upon the Providers; they cannot maintain an action under that section. Therefore, we must vacate the preliminary injunсtion.
VACATED and REMANDED.
FERDINAND F. FERNANDEZ
UNITED STATES CIRCUIT JUDGE