Application by the Commissioner of the New York Department of
Social Services to stay, pending the filing and disposition of a
petition for certiorari, the Court of Appeals' mandate affirming
the District Court's preliminary injunction against enforcement of
a New York statute limiting eligibility for Medicaid assistance to
those medically needy persons who have not made a voluntary
transfer of property for the purpose of qualifying for such
assistance within 18 months prior to applying for Medicaid, is
denied. Applicant has not satisfied her burden of showing, with
respect to the risk of irreparable harm, that the balance of
equities favors her as against respondent aged, blind, and disabled
persons who were denied Medicaid under New York's "no transfer"
rule, nor has she met her burden of showing that four Members of
this Court would vote to grant certiorari.
MR. JUSTICE MARSHALL, Circuit Justice.
Applicant Barbara Blum, the Commissioner of the New York State
Department of Social Services, seeks a stay of the mandate of the
United States Court of Appeals for the Second Circuit pending
filing and disposition of her petition for a writ of certiorari.
The mandate of the Court of Appeals will issue on May 7, 1980, and
that court has denied a motion for a stay. This application for a
stay was filed on May 5, 1980. Oral argument was heard in chambers.
For the reasons that follow, I deny the application for a stay.
This case involves medical assistance to the needy pursuant to
the Medicaid program. Subchapter XIX of the Social Security Act, 42
U.S.C. §§ 1396-1396k, establishes the federal
Page 446 U. S. 1312
statutory guidelines which govern plans for medical assistance
if a State chooses to participate in the Medicaid program. Any
State which participates in Medicaid must extend medical benefits
to all persons receiving supplemental security income (SSI)
benefits under Subchapter XVI (Supplemental Security Income for the
Aged, Blind, and Disabled), see
42 U.S.C. §
1396a(a)(10)(A). Such persons are known as the "categorically
needy." The State may also provide medical assistance under
Medicaid for persons
"who would, except for income and resources, be eligible . . .
to have paid with respect to them supplemental security income
benefits under subchapter XVI of this chapter, and who have
insufficient (as determined in accordance with comparable
standards) income and resources to meet the costs of necessary
medical and remedial care and services,"
42 U.S.C. § 1396a(a)(10)(C)(i). Such persons are known as the
New York opted to participate in the Medicaid program and to
provide Medicaid payments to the medically needy as well as the
categorically needy. The State has imposed an eligibility
requirement for those persons seeking to qualify as medically
needy. New York Soc.Serv.Law § 366.1(e) (McKinney Supp. 1979)
limits eligibility to those persons who have not made
"a voluntary transfer of property (i) for the purpose of
qualifying for such [medical] assistance, or (ii) for the purpose
of defeating any current or future right to recovery of medical
assistance paid, or for the purpose of qualifying for, continuing
eligibility for or increasing need for medical assistance."
A transfer of property within 18 months prior to application for
Medicaid is presumed to have been for the purpose of qualifying for
medical assistance. Any such transfer results in the denial of
Medicaid benefits. See also
18 N.Y.C.R.R. § 360.8 (1979).
No such "no-transfer" rule applies to the categorically needy,
since an applicant is allowed
Page 446 U. S. 1313
to transfer property in order to qualify for SSI benefits.
42 U.S.C. § 1382b(b).
Respondents are aged, blind, or disabled persons who would be
eligible for SSI benefits but for their income and resources and
who have been denied medical assistance benefits for the medically
needy because they voluntarily transferred property prior to
application for such benefits or while receiving such benefits.
They filed suit in the Federal District Court for the Northern
District of New York pursuant to 42 U.S.C. § 1983 to challenge
N.Y.Soc.Serv.Law § 366.1(e) (McKinney Supp. 1979) and 18 N.Y.C.R.R.
§ 360.8 as violative of due process, equal protection, and the
Supremacy Clause. The District Court found jurisdiction under 28
U.S.C. § 1343(3). The suit was certified by the District Court as a
class action on behalf of all aged, blind, or disabled persons who
have been denied or will in the future be denied medical assistance
benefits for the medically needy in New York State on the basis of
a transfer of assets in violation of Soc.Serv.Law § 366.1(e) and 18
N.Y.C.R.R. § 360.8.
The District Court granted respondents' motion for a preliminary
injunction. The court concluded first that there had been a
sufficient showing by respondents of likelihood of success on the
merits. The Social Security Act provides that, if the State chooses
to provide benefits to the medically needy, the State must make
such assistance available to all persons who would, except for
income and resources, be eligible for SSI benefits
"and who have insufficient (as determined in accordance with
standards) income and resources to meet the
costs of necessary medical and remedial care and services."
42 U.S.C. § 1396a(a)(10)(C)(i) (emphasis supplied). The
Department of Health, Education, and Welfare (HEW), in its
accompanying regulation, has provided that a state agency
"must not use requirements for determining eligibility [for
Medicaid benefits] for optional coverage groups [such as the
medically needy] that are . . .
Page 446 U. S. 1314
(2) For aged, blind, and disabled individuals, more restrictive
than those used under SSI. . . ."
42 CFR § 435.401(c) (1979). Since, under SSI, an applicant may
transfer assets voluntarily in order to become eligible, the
District Court concluded that the more restrictive no-transfer rule
of New York for the medically needy was in "apparent" conflict with
federal law. The court noted that HEW officials had notified New
York that its no-transfer rule violated federal requirements. The
court therefore found that the respondents' likelihood of success
was "strong." The District Court also concluded that the balance of
harms weighed in favor of granting the injunction, because
"the very survival of these individuals and those class members
in similar situations is threatened by a denial of medical
assistance benefits during the pendency of these actions."
The preliminary injunction was entered by the District Court on
December 3, 1979. Pursuant to a stipulation by the parties, the
Court of Appeals entered a temporary stay of the injunction on
January 3, 1980. On April 16, 1980, the Court of Appeals affirmed
the grant of the preliminary injunction, "substantially for the
reasons stated by Judge Munson." The Court of Appeals noted that
the only other Court of Appeals to address this issue reached the
same result, see Fabula v. Buck,
598 F.2d 869 (CA4 1979)
(Maryland no-transfer rule). The New York Supreme Court, Appellate
Division, has also found that Soc.Serv.Law § 366.1(e) conflicts
with the Social Security Act, and therefore violates the Supremacy
Clause, see Scarpuzza v. Blum,
73 App.Div.2d 237, 426
N.Y.S.2d 505 (1980). The Court of Appeals also noted that Congress
is considering legislation to authorize States to impose a
no-transfer rule for Medicaid benefits, which suggests that such a
rule is not presently allowed. The Court of Appeals agreed with the
District Court that the "balance of hardships . . . would tip
decidedly toward [respondents] if relief were denied." The court
also vacated its stay.
Page 446 U. S. 1315
On April 30, 1980, the Court of Appeals denied a motion for a
stay of the mandate pending filing of a petition for writ of
Applicant states in her motion papers that she will argue in her
petition for certiorari that Congress has not expressed any
intention to preempt state no-transfer rules. Applicant will also
argue that HEW regulation 42 CFR § 435.401(c) (1979), interpreting
the Social Security Act to prohibit the New York no-transfer rule,
is beyond the authority of the agency.
The criteria for determining whether to grant a stay pending the
filing and disposition of a petition for writ of certiorari are
well established. First, the Circuit Justice must balance the
equities to determine on which side the risk of irreparable harm
weighs most heavily. Holtzman v. Schlesinger, 414 U.
, 414 U. S.
-1309 (1973) (MARSHALL, J., in chambers); Beame
v. Friends of the Earth, 434 U. S. 1310
434 U. S.
(1977) (MARSHALL, J., in chambers). Second, if the
balance of equities favors the applicant, the Circuit Justice must
determine whether it is likely that four Members of this Court
would vote to grant a writ of certiorari. Holtzman v.
414 U. S. 1310
; Beame v. Friends of the Earth,
at 434 U. S.
. The burden of persuasion on both these issues is
on the applicant, ibid.
That burden is particularly heavy
here, since the Court of Appeals has vacated its original stay and
denied the motion for a new stay. Cf. ibid.
by District Court and Court of Appeals).
The applicant has not satisfied her burden in this case. Blum
contends that compliance with the preliminary injunction will cost
the State of New York "millions" of dollars. At oral argument on
this application, counsel for applicant estimated that the State
will have to expend an additional $150 million per year in Medicaid
benefits as a result of the decision
Page 446 U. S. 1316
below, but the economic harm to be considered on this stay
application is only the additional expenditure during the time in
which the petition for certiorari is pending. Such harm must be
considerably less than $150 million. *
On the other
side of the balance are the life and health of the members of this
class: persons who are aged, blind, or disabled and unable to
provide for necessary medical care because of lack of resources.
The District Court noted that some of the members of the class have
already died since this suit was filed, and the denial of necessary
medical benefits during the months pending filing and disposition
of a petition for writ of certiorari could well result in the death
or serious medical injury of members of this class. The balance of
equities therefore weighs in favor of the respondents.
In addition, Blum has failed to carry her burden of showing that
four Members of this Court would be likely to vote to grant a writ
of certiorari. There is no conflict in the courts of appeals, but
rather uniformity of decision in the two Circuits which have
addressed the issue. The intermediate appellate court in New York
is also in agreement with the decision below. The terms of the
Social Security Act support the judgment of the Court of Appeals,
and the agency responsible for administering the Act is in complete
Page 446 U. S. 1317
with the decision below. Finally, Congress is presently
considering legislation to amend the Act on this very issue. Under
the circumstances, it is not sufficiently likely that four Members
of this Court would vote to grant a writ of certiorari to warrant
issuing a stay of the mandate. The application for a stay is
* New York entered into an agreement with HEW in 1973 whereby
the Secretary of HEW determines the eligibility for medical
assistance benefits of persons who are also eligible for SSI
benefits. This eliminates the need for a separate medical
assistance application and eligibility determination by New York
State. Blum has notified the Secretary of HEW that New York will
terminate the agreement in 120 days, as provided by the agreement,
because of HEW's determination that the New York no-transfer rule
violates federal eligibility requirements. Applicant cites the
added administrative costs to New York of having to establish an
eligibility agency of its own as an additional harm to be weighed
in the balance on this stay application. The cancellation of the
agreement, however, is a voluntary act by Blum, and the added
burdens of that voluntary act should not weigh in the balance of