Comacho v. Texas Workforce Com'n

• Decision Date: 29 April 2005
• Docket Number: No. 04-50649.,04-50649.
• Citation: 408 F.3d 229
• Parties: Soila COMACHO; Sonia Denise Grover; Texas Welfare Reform Organization; El Paso County Hospital District, doing business as R.E. Thomason General Hospital, Plaintiffs-Appellees, v. TEXAS WORKFORCE COMMISSION; Texas Health and Human Services Commission; Texas Department of Human Services, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

408 F.3d 229

Soila COMACHO; Sonia Denise Grover; Texas Welfare Reform Organization; El Paso County Hospital District, doing business as R.E. Thomason General Hospital, Plaintiffs-Appellees, v. TEXAS WORKFORCE COMMISSION; Texas Health and Human Services Commission; Texas Department of Human Services, Defendants-Appellants.

No. 04-50649.

United States Court of Appeals, Fifth Circuit.

April 29, 2005.

Pieter M. Schenkkan (argued), Mary A. Keeney, Austin, TX, Bruce Patrick Bower, Texas Legal Services Ctr., Austin, TX, for Comacho, Grover and Texas Welfare Reform Organization.

Kitty Schild, Jose R. Rodriguez, El Paso, TX, for El Paso Cty. Hosp. Dist.

William David Iverson (argued), Priti Seksaria Agrawal, Covington & Burling, Washington, DC, Nancy Kathleen Juren, Asst. Atty. Gen., Austin, TX, for Defendants-Appellants.

Appeal from the United States District Court for the Western District of Texas.

Before KING, Chief Judge, and GARZA and BENAVIDES, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

The Texas Workforce Commission ("TWC") redefined the Texas work requirements under the federal-state Temporary Assistance for Needy Families ("TANF") program. The new definition allows the TWC to terminate medical cash assistance to TANF recipients who fail to ensure their children's immunizations, wellness check-ups, school attendance, or who fail to avoid substance abuse. The sole issue in this case is whether these new rules are inconsistent with and thus preempted by the federal Medicaid Act. 42 U.S.C. § 1396-1396v. Plaintiffs Soila Camacho¹ ("Camacho"), Sonia Denise Grover ("Grover"), the Texas Welfare Reform Organization ("TWRO"), and the El Paso County Hospital District, doing business as R.E. Thomason General Hospital ("Thomason GH," collectively, the "Plaintiffs") sued TWC, the Texas Health and Human Services Commission ("THHSC") and the Texas Department of Human Services ("TDHS," collectively, the "Defendants"), seeking relief against enforcement of the new rules. After granting a preliminary injunction, the district court granted declaratory judgment, preventing TDHS from terminating cash assistance under the redefinition. The Defendants appeal. We address the declaratory judgment only, as we dismissed the preliminary injunction appeal as moot.

I

The material facts are undisputed. Camacho was a recipient of TANF and Medicaid, and reapplied for benefits after being terminated from her job. Grover is currently a recipient of TANF and Medicaid subject to the challenged rules. TWRO is an organization that advocates on behalf of its members, including recipients of TANF and Medicaid who are at risk of losing their Medicaid benefits under the new rules. Thomason GH is a county hospital required by state law to provide indigent care which, it contends, would lose funding under the new rules. TWC enacted the rules redefining Texas's work requirements. TDHS is the state agency authorized to terminate Medicaid assistance under the new rules. THHSC implements the Texas Medicaid program.

The Plaintiffs filed suit in state district court in Travis County, Texas, seeking a temporary injunction against the enforcement of the new rules. The Defendants removed the case to federal court. The district court granted Plaintiffs' application for a preliminary injunction. Later, the district court entered a final judgment, ruling that the new TWC rules are inconsistent with and preempted by the Medicaid statute. The district court reasoned that recipients could only have their benefits terminated for "refusing to work" under 42 U.S.C. § 607(d). The district court held that the new rules imposed requirements in addition to those set forth in 42 U.S.C. § 607(d). Specifically, the district court declared invalid, "[40 TEX. ADMIN. CODE] ... [§] 811.2(11)(A) and (B), 811.25(a)(1)(A), and 811.41(d)(3)(A)-(D), to the extent those rules apply the job readiness activities in ... 811.41(d)(3) and the parenting skills training in ... 811.52(4), (5), (6), and (7) as grounds for terminating Medicaid benefits."

Defendants appeal. They contend the definition of "job search and job readiness," an enumerated work activity under 42 U.S.C. § 607(d), includes ensuring child immunizations, wellness check-ups, school attendance and abstaining from substance abuse. Thus, they contend that the district court failed to properly defer to TWC's reasonable statutory interpretation. Plaintiffs respond that the plain language of the statute precludes TWC's redefinitions. Thus, they argue that there is no deference due and that the district court properly granted declaratory judgment.

II

In 1996, Congress reformed welfare with the Personal Responsibility and Work Opportunity Reconciliation Act ("PRWORA"). PRWORA replaced Aid to Families with Dependent Children with Temporary Assistance to Needy Families. 42 U.S.C. § 601-619. The purpose of the new program is "to increase the flexibility of States in operating a program designed to" meet certain goals including "end[ing] the dependence of needy parents on government benefits by promoting job preparation, work, and marriage." 42 U.S.C. § 601(a). As a condition of receiving TANF grants, states must ensure that certain percentages of recipients participate in "work activities." 42 U.S.C. § 607(a). PRWORA lists twelve work activities:

(1) unsubsidized employment;

(2) subsidized private sector employment;

(3) subsidized public sector employment;

(4) work experience (including work associated with the refurbishing of publicly assisted housing) if sufficient private sector employment is not available;

(5) on-the-job training;

(6) job search and job readiness assistance;

(7) community service programs;

(8) vocational educational training (not to exceed 12 months with respect to any individual);

(9) job skills training directly related to employment;

(10) education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency;

(11) satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate; and

(12) the provision of child care services to an individual who is participating in a community service program.

42 U.S.C. § 607(d)(1)-(12). A recipient is engaged in work if he or she is participating in one or more of these activities for at least thirty hours per week in certain proportions. 42 U.S.C. § 607(c). A state must submit a plan outlining its proposal to "[r]equire a parent or caretaker receiving assistance under the program to engage in work (as defined by the State) once the State determines the parent or caretaker is ready to engage in work." 42 U.S.C. § 602(a)(1)(A)(ii). The plan must "[e]nsure that parents and caretakers receiving assistance under the program engage in work activities in accordance with section 607." 42 U.S.C. § 602(a)(1)(A)(iii).

When an individual refuses to participate in a work activity, PRWORA requires the state to "(A) reduce the amount of assistance otherwise payable to the family pro rata (or more, at the option of the State) ...; or (B) terminate such assistance, subject to such good cause and other exceptions as the State may establish." 42 U.S.C. § 607(e)(1). In addition to losing TANF assistance for refusing to work, a recipient may lose Medicaid benefits. 42 U.S.C. § 1396u-1(b)(3)(A)(iii) (giving states the option to terminate medical assistance for refusing to work pursuant to 42 U.S.C. § 607(e)(1)(B)).

A

Medicaid, authorized under Title XIX of the Social Security Act of 1965, is a cooperative federal-state program through which the federal government provides financial aid to states that furnish medical assistance to eligible low-income individuals. See 42 U.S.C. § 1396-1396v; see also Atkins v. Rivera, 477 U.S. 154, 156, 106 S.Ct. 2456, 91 L.Ed.2d 131 (1986); Louisiana v. United States Dep't. of Health and Human Servs., 905 F.2d 877, 878 (5th Cir.1990). States electing to participate in the program must comply with requirements imposed by the Act and regulations of the Secretary of Health and Human Resources. See Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d 908, 915 (5th Cir.2000) ("The [Medicaid] program is voluntary; however, once a state chooses to join, it must follow the requirements set forth in the Medicaid Act and in its implementing regulations."). The federal government and states share the costs of medical care for eligible participants.

The Medicaid Act allows states to terminate medical assistance in certain circumstances. Specifically, the Act states

Option to terminate medical assistance for failure to meet work requirement.

(A) Individuals receiving cash assistance under TANF

In the case of an individual who—

(i) is receiving cash assistance under a State program funded under part A of subchapter IV of this chapter,

(ii) is eligible for medical assistance under this subchapter on a basis not related to section 1396a(l) of this title, and

(iii) has the cash assistance under such program terminated pursuant to section 607(e)(1)(B) of this title (as in effect on or after the welfare reform effective date) because of refusing to work,

the State may terminate such individual's eligibility for medical assistance under this subchapter until such time as there no longer is a basis for the termination of such cash assistance because of such refusal.

42 U.S.C. § 1396u-1(b)(3) (emphasis added). Therefore, states have the option to terminate a recipient's medical assistance for "refusing to work."

B

In 2003, the Texas legislature passed new legislation implementing PRWORA. The statute states, "[t]he department shall require each adult recipient to sign a bill of responsibilities that defines the responsibilities of the state and of the recipient and encourages personal responsibility." TEX....