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State and Local Legal Center Listserv: Supreme Court to Decide Significant Spending Clause Case

State and Local Legal Center Listserv: Supreme Court to Decide Significant Spending Clause Case

Source: Lisa Soronen, State & Local Legal Center

HI all:  This case is as dense and complicated as it is important. Since Wilder (1990) lower courts have allowed states to be sued by private parties under Spending Clause legislation (mostly various provisions of Medicaid) but cases have also been brought under the Food Stamp Act, the Adoption Act, and Low-Income Home Energy Assistance Act. This case could put an end to all of those lawsuits where Congress hasn't explicitly stated in Spending Clause legislation that private lawsuits are possible. Mostly states have been sued in these cases but some of the federal dollars under these statutes go to and/or is administered by local governments. Long as short summaries are below.     

In Health and Hospital Corp. of Marion County, Indiana v. Talevski the U.S. Supreme may decide two questions. First, it may review its holding that Spending Clause legislation allows private parties to bring lawsuits for money damages under 42 U.S.C. § 1983 (Section 1983). Assuming the Court doesn't overturn this holding it will decide whether such claims may be brought under the Federal Nursing Home Amendments Act (FNHRA) transfer and medication rules.

In 1990 in Wilder v. Virginia Hospital Association the Supreme Court held that private parties could sue under Section 1983 to enforce rights contained in some federal Spending Clause legislation, even where Congress didn't expressly provide for a private right of action in the statute. Wilder involved the Boren Amendment to Medicaid which Congress has repealed. Section 1983 is a federal statute which allows government officials and entities to be sued for money damages for constitutional and federal statutory violations.

Since Wilder the Supreme Court hasn't recognized any new Spending Clause-based private rights. But lower courts have, like the Seventh Circuit in this case. Valparaiso Care argues in its petition asking the Court to hear this case that if a Spending Clause statute lacks an express provision allowing for a private right of action the Supreme Court should hold that no private right of action exists. FNHRA lacks an express private right of action.   

Medicaid is Spending Clause statute. To receive Medicaid funding nursing homes must comply with FNHRA. Ivanka Talevski sued Valparaiso Care claiming it violated FNHRA's medication rules by giving her husband, who had dementia, unnecessary psychotropic medications for purposes of chemical restraint. She likewise claimed it violated FNHRA's transfer rules by transferring him to another facility without consent.  

The Seventh Circuit held that both statutory provisions create a private right of action allowing individuals to sue for money damages. 

Citing to Supreme Court precedent, according to the Seventh Circuit, for plaintiffs to sue under Section 1983 they must allege a violation of a federal right not a federal law. The Seventh Circuit considers three factors when determining whether a federal statute create a private right of action under Section 1983: whether Congress intended the provision to benefit the plaintiff, whether the right "assertedly protected" is not too "vague and amorphous" that enforcing it would "strain judicial competence," and whether the statute "unambiguously impose[s] a binding obligation on the states." 

The Seventh Circuit opined that all three of these factors indicate the FNHRA's transfer and medication rules create a private right of action. 

First, the court concluded Congress intended nursing-home patients to benefit from these sections because it has used "rights" language. For example, the statute states: "[a] skilled nursing facility must protect and promote the rights of each resident, including each of the following rights." 

Second, per the Seventh Circuit, the rights protected under FNHRA's transfer and medication provisions aren't "vague and amorphous." Nursing home facilities must not do exactly what was alleged in this case: "subject residents to chemical restraints for purposes of discipline or convenience and involuntarily transfer or discharge any resident absent one of several allowable justifications and notice." 

Finally, the court opined that the statutory provisions at issue in this case use mandatory rather than precatory terms. "Facilities must protect and promote the right against chemical restraints, must allow residents to remain in the facility, must not transfer, and must not discharge the resident; these are unambiguous obligations." 

The Supreme Court will hear oral argument in this case next fall. 

Supreme Court to Decide Significant Spending Clause Case

In Health and Hospital Corp. of Marion County, Indiana v. Talevski the U.S. Supreme may decide two questions. First, it may review its holding that Spending Clause legislation allows private parties to bring lawsuits for money damages under 42 U.S.C. § 1983. Assuming the Court doesn't overturn this holding it will decide whether such claims may be brought under the Federal Nursing Home Amendments Act (FNHRA) transfer and medication rules. In 1990 in Wilder v. Virginia Hospital Association the Supreme Court held that private parties could sue under Section 1983 to enforce rights contained in some federal Spending Clause legislation, even where Congress didn't expressly provide for a private right of action in the statute. Since Wilder the Supreme Court hasn't recognized any new Spending Clause-based private rights. But lower courts have, like the Seventh Circuit in this case. Valparaiso Care argues in its petition asking the Court to hear this case that if a Spending Clause statute lacks an express provision allowing for a private right of action the Supreme Court should hold that no private right of action exists. FNHRA lacks an express private right of action.   Ivanka Talevski sued Valparaiso Care claiming it violated FNHRA's medication rules by giving her husband, who had dementia, unnecessary psychotropic medications for purposes of chemical restraint. She likewise claimed it violated FNHRA's transfer rules by transferring him to another facility without consent.  The Seventh Circuit held that both statutory provisions create a private right of action allowing individuals to sue for money damages. The Seventh Circuit considers three factors when determining whether a federal statute create a private right of action under Section 1983: whether Congress intended the provision to benefit the plaintiff, whether the right "assertedly protected" is not too "vague and amorphous" that enforcing it would "strain judicial competence," and whether the statute "unambiguously impose[s] a binding obligation on the states." The Seventh Circuit opined that all three of these factors indicate the FNHRA's transfer and medication rules create a private right of action. First, the court concluded Congress intended nursing-home patients to benefit from these sections because it has used "rights" language. For example, the statute states: "[a] skilled nursing facility must protect and promote the rights of each resident, including each of the following rights." Second, per the Seventh Circuit, the rights protected under FNHRA's transfer and medication provisions aren't "vague and amorphous." Nursing home facilities must not do exactly what was alleged in this case: "subject residents to chemical restraints for purposes of discipline or convenience and involuntarily transfer or discharge any resident absent one of several allowable justifications and notice." Finally, the court opined that the statutory provisions at issue in this case use mandatory rather than precatory terms. "Facilities must protect and promote the right against chemical restraints, must allow residents to remain in the facility, must not transfer, and must not discharge the resident; these are unambiguous obligations."