Today the Supreme Court granted certiorari in one case of interest to the business community:

• Medicaid—Private Right of Action Under Supremacy Clause

Medicaid—Private Right of Action Under Supremacy Clause

Under 42 U.S.C. § 1396a(a)(30)(A), a state that accepts federal Medicaid funds must adopt a state plan containing methods and procedures to "safeguard against unnecessary utilization of” Medicaid services and to “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 . . . at least to the extent that such care and services are available to the general population.” Today the Supreme Court consolidated and granted certiorari in three cases to decide whether the Supremacy Cause gives Medicaid providers and beneficiaries a private cause of action to enforce that provision through a preemption challenge to a state law reducing Medicaid reimbursement rates. Maxwell-Jolly v. Indep. Living Ctr. of S. Cal., 09-958; Maxwell-Jolly v. Cal. Pharmacists Ass’n, 09-1158; Maxwell-Jolly v. Santa Rosa Mem. Hosp., 10-283.

The potential significance of these cases extends far beyond the Medicaid program. The Supreme Court’s eventual decision could determine whether and, if so, to what extent a private party may bring a preemption challenge under other federal statutes that are not otherwise enforceable by private parties.

Each of the three cases followed California’s legislative reductions of the rates paid to certain Medicaid providers as part of an effort to address the state’s recent fiscal crisis. The plaintiffs in each case—Medicaid providers and beneficiaries—sought to enjoin implementation of the reductions by arguing that the California legislature and relevant state agency did not adequately consider whether the reductions were consistent with the § 1396a(a)(30)(A) factors. The Ninth Circuit and several other circuits had previously held that § 1396a(a)(30)(A) does not create any rights that are privately enforceable under § 1983. But in the first of the cases consolidated today, the Ninth Circuit held that a private “party may seek injunctive relief under the Supremacy Clause regardless of whether the federal statute at issue confers any substantive rights on would-be plaintiffs.” Indep. Living Ctr. of S. Cal. v. Shewry, 543 F.3d 1050, 1062 (9th Cir. 2008). The D.C., Fifth, and Eighth Circuits have reached the same conclusion, while the Eleventh Circuit has rejected it.

The Ninth Circuit ultimately blocked the rate reductions at issue in each case, holding that the reductions were unsupported by studies that adequately considered the § 1396a(a)(30)(A) factors. The Supreme Court did not grant certiorari on the validity of this holding.

Absent extensions, amicus briefs in support of the petitioners will be due on March 11, 2011, and amicus briefs in support of the respondents will be due on April 11, 2011. Any questions about this case should be directed to Andrew Tauber (+1 202 263 3324) in our Washington, D.C. office.

Today the Supreme Court also invited the Solicitor General to file a brief expressing the views of the United States in the following case of interest to the business community:

National Meat Association v. Brown, No. 10-224. The questions presented are whether the Ninth Circuit erred in holding that: (1) a “presumption against preemption” requires a “narrow interpretation” of the express preemption provision of the Federal Meat Inspection Act (FMIA); (2) a state law requiring that animals that are or become nonambulatory be immediately euthanized is not preempted by FMIA regulations; and (3) a state law providing that no slaughterhouse may buy, sell, receive, process, butcher, or hold a nonambulatory animal is not preempted by the FMIA.

Mayer Brown's Supreme Court & Appellate practice distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community and distributes a Docket Report-Decision Alert whenever the Court decides such a case. We hope you find the Docket Reports and Decision Alerts useful, and welcome feedback on them (which should be addressed to Andrew Tauber, their general editor, at atauber@mayerbrown.com or +1 202 263 3324).

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Mayer Brown's Supreme Court & Appellate practice distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community and distributes a Docket Report-Decision Alert whenever the Court decides such a case. We hope you find the Docket Reports and Decision Alerts useful, and welcome feedback on them (which should be addressed to Andrew Tauber, their general editor, at atauber@mayerbrown.com or +1 202 263 3324).

Mayer Brown Supreme Court Docket Reports provide information and comments on legal issues and developments of interest to our clients and friends. They are not a comprehensive treatment of the subject matter covered and are not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed.