September 28, 2011

Private: Opening Day at the Supreme Court Could Shut Courthouse Doors to the Poor

Douglas v. Independent Living Center of Southern California, Medicaid

By Rochelle Bobroff, Directing Attorney, Herbert Semmel Federal Rights Project, National Senior Citizens Law Center

On October 3rd at 10 am, the Supreme Court will hear, at its very first oral argument of the new term, a case of vital importance to low-income individuals who rely on safety-net programs, such as health insurance through the federal Medicaid program. The case, Douglas v. Independent Living Center, addresses whether people with limited income and resources can sue states that enact laws which conflict with federal Medicaid requirements, the same way that businesses sue states to challenge state consumer protection laws. The Supreme Court has declined to hear the merits of the Douglas case, not taking the question of whether the slashing of Medicaid reimbursement rates by California violated federal law. The only issue before the Supreme Court is whether the Supremacy Clause of the Constitution – commonly invoked by businesses challenging state environmental or consumer protection laws – applies to the claims of poor people, including low income older adults, who were unable to obtain medication from pharmacies due to the reimbursement rates being below cost.

As in many cases that have denied disadvantaged individuals court access, the case involves a technical legal principle that doesn’t make for a great sound bite on the evening news. Specifically, the lawyers on Monday will debate whether beneficiaries of federal safety net programs, like Medicaid, are protected by the Supremacy Clause of the Constitution. That fundamental provision says that the “Constitution and the laws of the United States shall be the supreme law of the land, anything in the constitutions or laws of any State to the contrary notwithstanding.” The federal courts, including the Supreme Court, routinely permit businesses to get into court to argue that state consumer and worker protections conflict with federal laws, and, hence, must be “preempted,” i.e., invalidated. And all the federal circuit courts of appeal have held that that there is no basis in the text of the Constitution or in prior case law for denying low income individuals the same access to courts as businesses.

The question is whether the Supreme Court will find a basis for holding that preemption under the Supremacy Clause does not protect claims by poor people as it clearly does claims by wealthy corporations. The federal government and the state of California are urging the Supreme Court to carve poor people out of the scope of the Constitution and deny them the protection of federal law.

Very regrettably, the Obama Justice Department is supporting the states’ pitch for a carve-out. The federal government’s position is, in a nutshell, HHS regulators and Justice Department litigators should have exclusive authority to enforce – or to leave unenforced – federal legal protections. The department’s position seems to be: “Mere individuals can’t play in my sandbox.” But, while the federal government administers the Medicaid program, it has neither the resources nor the political will to challenge states every time they enact a law that conflicts with federal mandates. When the Supreme Court was deciding whether to take the case, the federal government told the Court that enforcement of federal law by injured individuals made government enforcement efforts more “effective.” But once the Supreme Court decided to hear the case, the government did a 180-degree turn and argued that allowing private parties to stand up for themselves in court would be inconsistent with federal enforcement. The government’s brief does not acknowledge the inconsistency in its own analysis. But an amicus brief by members of Congress points out that the federal government is squarely contradicting the position it has taken in former cases. And an amicus brief by former federal agency officials argues that exclusive enforcement by the federal government is “logically, practically, legally, and politically unfeasible.”

The state of California, supported by an amicus brief from 31 other states, argues that it costs too much money for states to comply with federal law, ignoring the important fact that the federal government picks up at least half, and in some states the vast majority, of the bill. The amicus brief predicts a “financial catastrophe” if states are subject to court enforcement of federal law in suits by injured individuals. This sounds exactly like state requests for Congress to block grant Medicaid, since a block grant gives states money with no strings attached. While states could not convince Congress to eliminate the requirements of federal law in exchange for federal funds, the states are now trying to convince the Supreme Court to let them off the hook when they violate the Medicaid statute. A decision in favor of the states will be equivalent to the Supreme Court ripping pages out of the federal statute books. States will be free to completely ignore many federal requirements once beneficiaries are barred from the court house. If so, the opening of the Supreme Court term will mean slamming shut the doors of justice.

For a past post on the ACSblog on the Douglas cases, click here.