NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the
Reporter of Decisions, Supreme Court of the United States,
Washington, D. C. 20543, of any typographical or other formal
errors, in order that corrections may be made before the
preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
Nos. 09–958, 09–1158, and
10–283
_________________
TOBY DOUGLAS, DIRECTOR, CALIFORNIA DE-
PARTMENT OF HEALTH CARE SERVICES, PETITIONER
09–958
v.
INDEPENDENT LIVING CENTER OF
SOUTHERN
CALIFORNIA, INC., et al.
TOBY DOUGLAS, DIRECTOR, CALIFORNIA DE-
PARTMENT OF HEALTH CARE SERVICES, PETITIONER
09–1158
v.
CALIFORNIA PHARMACISTS ASSOCIATION
et al.
TOBY DOUGLAS, DIRECTOR, CALIFORNIA DE-
PARTMENT OF HEALTH CARE SERVICES, PETITIONER
10–283
v.
SANTA ROSA MEMORIAL HOSPITAL
et al.
on writs of certiorari to the united states
court of appeals for the ninth circuit
[February 22, 2012]
Chief Justice Roberts, with whom Justice
Scalia, Justice Thomas, and Justice Alito join, dissenting.
The Medicaid Act established a collaborative
federal-state program to assist the poor, elderly, and disabled in
obtaining medical care. The Act is Spending Clause legislation; in
exchange for federal funds a State agrees to abide by specified
rules in implementing the program. One of those rules is set forth
in §30(A) of the Act, which requires States to meet particular
criteria in establishing Medicaid reimbursement rates for those
providing services under the Act. 42 U. S. C.
§1396a(a)(30)(A). In 2008 and 2009, California enacted
legislation reducing the rates at which it would compensate some
providers. Certain providers and individuals receiving Medicaid
benefits thought the new reimbursement rates did not comply with
the criteria set forth in §30(A). They sued the State to
prevent the new rates from going into effect.
But those plaintiffs faced a significant
problem: Nothing in the Medicaid Act allows providers or
beneficiaries (or anyone else, for that matter) to sue to enforce
§30(A). The Act instead vests responsibility for enforcement
with a federal agency, the Centers for Medicare & Medicaid
Services (CMS). See,
e.g., 42 U. S. C.
§1316(a)(1). That is settled law in the Ninth Circuit. See
Sanchez v.
Johnson,
416 F.3d 1051, 1058–1062 (2005) (“[T]he flexible,
administrative standards embodied in [§30(A)] do not reflect a
Congressional intent to provide a private remedy for their
violation”). And it is the law in virtually every other cir-
cuit as well. See,
e.g.,
Long Term Care Pharmacy Alli-
ance v.
Ferguson,
362 F.3d 50, 57–59 (CA1 2004) (holding that it would be
inconsistent with this Court’s precedent to find that
§30(A) creates rights enforceable by private parties). The
respondents have never argued the contrary. Thus, as this case
comes to us, the federal rule is that Medicaid reimbursement rates
must meet certain criteria, but private parties have no statutory
right to sue to enforce those requirements in court.
The providers and beneficiaries sought to
overcome that difficulty by arguing that they could proceed against
the State directly under the Supremacy Clause of the Constitution,
even if they could not do so under the Act. They contended that the
new state reimbursement rates were inconsistent with the
requirements of §30(A). The Supremacy Clause provides that a
federal statute such as §30(A) preempts contrary state law.
Therefore, the providers and beneficiaries claimed, they could sue
to enforce the Supremacy Clause, which requires striking down the
state law and giving effect to §30(A). The Ninth Circuit
agreed with this argument and blocked the new state reimbursement
rates.
During briefing and argument in this case, the
parties have debated broad questions, such as whether and when
constitutional provisions as a general matter are directly
enforceable. It is not necessary to consider these larger issues.
It is not even necessary to decide whether the Supremacy Clause can
ever provide a private cause of action. The question presented in
the certiorari petitions is narrow: “Whether Medicaid
recipients and providers may maintain a cause of action under the
Supremacy Clause to enforce [§30(A)] by asserting that the
provision preempts a state law reducing reimbursement rates.”
To decide this case, it is enough to conclude that the Supremacy
Clause does not provide a cause of action to enforce the
requirements of §30(A) when Congress, in establishing those
requirements, elected not to provide such a cause of action in the
statute itself.
The Supremacy Clause operates differently than
other constitutional provisions. For example, if Congress says in a
law that certain provisions do not give rise to a taking without
just compensation, that obviously does not resolve a claim under
the Takings Clause that they do. The Supremacy Clause, on the other
hand, is “not a source of any federal rights.”
Chapman v.
Houston Welfare Rights Organization,
441 U.S.
600, 613 (1979); accord,
Dennis v.
Higgins,
498 U.S.
439, 450 (1991) (contrasting, in this regard, the Supremacy
Clause and the Commerce Clause). The purpose of the Supremacy
Clause is instead to ensure that, in a conflict with state law,
whatever Congress says goes. See The Federalist, No. 33,
p. 205 (C. Rossiter ed. 1961) (A. Hamilton) (the
Supremacy Clause “only declares a truth which flows
immediately and necessarily from the institution of a federal
government”).
Thus, if Congress does not intend for a statute
to supply a cause of action for its enforcement, it makes no sense
to claim that the Supremacy Clause itself must provide one. Saying
that there is a private right of action under the Supremacy Clause
would substantively change the federal rule established by Congress
in the Medicaid Act. That is not a proper role for the Supremacy
Clause, which simply ensures that the rule established by Congress
controls.
Indeed, to say that there is a federal statutory
right enforceable under the Supremacy Clause, when there is no such
right under the pertinent statute itself, would effect a complete
end-run around this Court’s implied right of action and 42
U. S. C. §1983 jurisprudence. We have em- phasized
that “where the text and structure of a statute provide no
indication that Congress intends to create new individual rights,
there is no basis for a private suit, whether under §1983 or
under an implied right of action
.”
Gonzaga
Univ. v.
Doe,
536 U.S.
273, 286 (2002). This body of law would serve no purpose if a
plaintiff could overcome the absence of a statutory right of action
simply by invoking a right of action under the Supremacy Clause to
the exact same effect. Cf.
Astra USA, Inc. v.
Santa Clara
County, 563 U. S. ___, ___ (2011) (slip op., at 7)
(rejecting contention that contract incorporating statutory terms
could be enforced in private action when statute itself could not
be; “[t]he absence of a private right to enforce the
statutory ceiling price obligations would be rendered meaningless
if [contracting] entities could overcome that obstacle by suing to
enforce the contract’s ceiling price obligations
instead”).
The providers and beneficiaries argue, however,
that the traditional exercise of equity jurisdiction supports
finding a direct cause of action in the Supremacy Clause. This
contention fails for the same reason. It is a longstand- ing maxim
that “[e]quity follows the law.” 1 J. Pomeroy, Treatise
on Equity Jurisprudence §425 (3d ed. 1905). A court of equity
may not “create a remedy in violation of law, or even without
the authority of law.”
Rees v.
Watertown, 19
Wall. 107, 122 (1874). Here the law established by Congress is that
there is no remedy available to private parties to enforce the
federal rules against the State. For a court to reach a contrary
conclusion under its general equitable powers would raise the most
serious concerns regarding both the separation of powers (Congress,
not the Judiciary, decides whether there is a private right of
action to enforce a federal statute) and federalism (the States
under the Spending Clause agree only to conditions clearly
specified by Congress, not any implied on an ad hoc basis by
the courts).
This is not to say that federal courts lack
equitable powers to enforce the supremacy of federal law when such
action gives effect to the federal rule, rather than contravening
it. The providers and beneficiaries rely heavily on cases of this
kind, most prominently
Ex parte Young,
209 U.S.
123 (1908). Those cases, however, present quite different
questions involving “the pre-emptive assertion in equity of a
defense that would otherwise have been available in the
State’s enforcement proceedings at law.”
Virginia
Office for Protection and Advocacy v.
Stewart, 563
U. S. ___, ___ (2011) (Kennedy, J., concurring) (slip op., at
1). Nothing of that sort is at issue here; the respondents are not
subject to or threatened with any enforcement proceeding like the
one in
Ex parte Young. They simply seek a private cause
of action Congress chose not to provide.
* * *
The Court decides not to decide the question
on which we granted certiorari but instead to send the cases back
to the Court of Appeals, because of the recent action by CMS
approving California’s new reimbursement rates. But the CMS
approvals have no impact on the question before this Court. If, as
I believe, there is no private right of action under the Supremacy
Clause to enforce §30(A), that is the end of the matter. If,
on the other hand, the Court believes that there is such a cause of
action, but that CMS’s recent rate approvals may have an
effect on that action going forward, then the Court should say just
that and
then remand to the Ninth Circuit for consideration
of the effect of the agency approvals.
I am not sure what a remand without answering
the preliminary question is meant to accomplish. The major- ity
claims that the agency’s recent action “may change the
[lower courts’] answer” to the question whether the
particular state rates violate §30(A).
Ante, at 6. But
that fact-specific question is not the one before us; we chose not
to grant certiorari on the question whether California’s
rates complied with §30(A), limiting our grant to the cause of
action question. 562 U. S. ___ (2011).
The majority also asserts that the lower courts
must “decide whether these cases may proceed directly under
the Supremacy Clause now that the agency has acted.”
Ante, at 8. The majority contends that the parties have not
“fully argued this question.”
Ibid. But the
agency proceedings that ultimately led to the CMS approvals were
well underway when this Court granted certiorari. The parties
debated the import of the parallel adminis- trative proceedings in
their initial briefs and at oral argument. See,
e.g., Brief
for Petitioner 28–29 (“Private lawsuits . . .
interfere with . . . CMS’s own enforcement
procedures,” as is “vividly demonstrated in the present
cases”); Brief for Respondents Santa Rosa Memorial Hospital
et al. in No.10–283, p. 46 (“This case vividly
illustrates why the [administrative] enforcement scheme
. . . cannot substitute for a constitutional preemption
claim”). No party—nor the United States as
amicus
curiae—argued that any action by CMS would affect the
answer to the question we granted certiorari to review. See,
e.g., Tr. of Oral Arg. 53–54 (counsel for respondents)
(arguing that, “to be sure,” there would be a cause of
action under the Supremacy Clause even after the agency took action
on the challenged rates).
Once the CMS approvals were issued, this Court
directed the parties to file supplemental briefs to address
“the effect, if any, of the [CMS approvals] on the proper
disposition of this case.” 565 U. S. ___ (2011). Again,
no one argued on supplemental briefing that the CMS approvals
affected the answer to the question before this Court. See,
e.g., Supp. Letter Brief for Certain Respondents 6
(“The CMS findings do not directly resolve whether the
Constitution supports a right of action”); Supp. Letter Brief
for Petitioner 6 (agreeing that “
if a preemption cause
of action may be stated here against the State, [CMS] approval may
affect its merits but not its existence”). It seems odd,
then, to claim that the parties have not had the opportunity to
fully address the impact of the agency action on the question that
we granted certiorari to review: whether the Ninth Circuit
correctly recognized a private cause of action under the Supremacy
Clause to enforce §30(A).
So what is the Court of Appeals to do on remand?
It could change its view and decide that there is no cause of
action directly under the Supremacy Clause to enforce §30(A).
The majority itself provides a compelling list of reasons for such
a result: “The Medicaid Act commits to the federal agency the
power to administer a federal program”; “the agency is
comparatively expert in the statute’s subject matter”;
“the language of the particular provision at issue here is
broad and general, suggesting that the agency’s expertise is
relevant”; and APA review would provide “an
authoritative judicial determination.”
Ante, at
6–7. Allowing for both Supremacy Clause actions and agency
enforcement “threatens potential inconsistency or
confusion,” and imperils “the uniformity that Congress
intended by centralizing administration of the federal program in
the agency.”
Ante, at 7–8; see
Gonzaga,
536 U. S., at 291–293 (Breyer, J., concurring in
judgment) (explaining that Congress often means to preclude a
private right of action in statutes where it employs an ad-
ministrative enforcement scheme that achieves “expertise,
uniformity, widespread consultation, and resulting administrative
guidance,” while “avoid[ing] the comparative risk of
inconsistent interpretations and misincentives that can arise out
of an occasional inappropriate application of the statute in a
private action for damages”).
The majority acknowledges, in light of all this,
that the Supremacy Clause challenge appears “at best
redundant,” and that “continuation of the action in
that form would seem to be inefficient.”
Ante, at 8.
Still, according to the majority, the Court of Appeals on remand
could determine that the Supremacy Clause action may be brought but
then must abate “now that the agency has acted,”
ibid.—as everyone knew the agency would. A Court
concerned with “inefficien[cy]” should not find that
result very palatable, and the majority cites no precedent for a
cause of action that fades away once a federal agency has acted.
Such a scenario would also create a bizarre rush to the courthouse,
as litigants seek to file and have their Supremacy Clause causes of
action decided before the agency has time to arrive at final agency
action reviewable in court.
Or perhaps the suits should continue in a
different “form,” by which I understand the Court to
suggest that they should morph into APA actions. The APA judicial
review provisions, however, seem to stand in the way of such a
transformation. To convert the litigation into an APA suit, the
current defendant (the State) would need to be dismissed and the
agency (which is not currently a party at all) would have to be
sued in its stead. 5 U. S. C. §§701–706.
Given that APA actions also feature—among other
things—different standards of review, different records, and
different potential remedies, it is difficult to see what would be
left of the original Supremacy Clause suit. Or, again, why one
should have been permitted in the first place, when agency review
was provided by statute, and the parties were able to and did
participate fully in that process.
I would dispel all these difficulties by simply
holding what the logic of the majority’s own opinion
suggests: When Congress did not intend to provide a private right
of action to enforce a statute enacted under the Spending Clause,
the Supremacy Clause does not supply one of its own force. The
Ninth Circuit’s decisions to the contrary should be
reversed.