Polk v. Yee
| Decision Date | 08 June 2022 |
| Docket Number | 20-17095, No. 20-55266 |
| Citation | 36 F.4th 939 |
| Parties | Delores POLK; Scott Ungar; Heather Herrick; Lien Loi; Jolene Montoya; Peter Loi; Susan McKay, as individuals and representatives of the requested class, Plaintiffs-Appellants, v. Betty YEE, in her official capacity as State Controller of California; Service Employees International Union Local 2015, Defendants-Appellees. Alicia Quirarte, Plaintiff, and Nora Maya, an individual; Anh Le, an individual; Viet Le, an individual; Jose Diaz, an individual, Plaintiffs-Appellants, v. United Domestic Workers of America, AFSCME Local 3930, a labor organization; Betty T. Yee, in her official capacity as State Controller of the State of California, Defendants-Appellees, Rob Bonta, in his official capacity as Attorney General of California, Intervenor-Defendant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
William L. Messenger (argued), Heidi E. Schneider, and Amanda K. Freeman, National Right to Work Legal Defense Foundation Inc., Springfield, Virginia; Rebekah C. Millard, Mariah Gondeiro, Karin Sweigart, and Robert Alan Bouvatte, Jr., Freedom Foundation, Olympia, Washington; for Plaintiffs-Appellants.
Anthony O'Brien (argued), Jeffrey A. Rich, and Lara Haddad, Deputy Attorneys General; Anthony R. Hakl and
Mark R. Beckington, Supervising Deputy Attorneys General; Thomas S. Patterson, Senior Assistant Attorney General; Rob Bonta, Attorney General; Office of the Attorney General, Sacramento, California; for Defendants-Appellees Betty Yee and Rob Bonta.
Stacey M. Leyton (argued) and Scott A. Kronland, Altshuler Berzon LLP, San Francisco, California, for Defendants-Appellees Service Employees International Union Local 2015, and United Domestic Workers of America, AFSCME Local 3930.
Before: Richard A. Paez and Jacqueline H. Nguyen, Circuit Judges, and John R. Tunheim,** District Judge.
Appellants, Medicaid providers and former members of public-sector unions, challenge the district courts' dismissals of these two cases, which we consolidated on appeal. When appellants joined the unions, they authorized the California State Controller to deduct union dues from their Medicaid reimbursements. Appellants now contend that, when the Controller made these deductions, she violated the "anti-reassignment" provision of the Medicaid Act, which prohibits state Medicaid programs from paying anyone other than the providers or recipients of covered services. See 42 U.S.C. § 1396a(a)(32).
Appellants brought these putative class actions under 42 U.S.C. § 1983, which makes state actors liable for violating federal rights. But not every federal law gives rise to a federal right that private parties can enforce under § 1983. We must therefore decide a threshold question — not whether the anti-reassignment provision has been violated, but whether that provision confers a federal right on Medicaid providers.
For a federal statute to confer a right, "Congress must have intended that the provision in question benefit the plaintiff." Blessing v. Freestone , 520 U.S. 329, 340, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997). Here, the text and legislative history of the anti-reassignment provision make clear that Congress was focused on preventing fraud and abuse in state Medicaid programs rather than on serving the needs of Medicaid providers. Because Congress did not intend to benefit Medicaid providers, we hold that the anti-reassignment provision does not confer a right that they can enforce under § 1983. We therefore affirm.
Under Medicaid, the federal government provides funding to state programs that offer health care for people of limited means. The Medicaid Act imposes numerous conditions on states concerning the operation of their Medicaid programs, which the Secretary of Health and Human Services may enforce by withholding funds from non-compliant states. See 42 U.S.C. §§ 1396a, 1396c ; see also Planned Parenthood Ariz. Inc. v. Betlach , 727 F.3d 960, 963 (9th Cir. 2013). As one such condition on state Medicaid programs, the anti-reassignment provision prohibits states from making payments for services to anyone other than the provider or recipient. See 42 U.S.C. § 1396a(a)(32).
California uses some of its Medicaid funding to provide assistance with daily activities to elderly and disabled beneficiaries under a program called In-Home Support Services (IHSS). See Cal. Welf. & Inst. Code § 12300 et seq. The recipients of these services are responsible for employing and overseeing the work of their IHSS providers, who are often family members.
IHSS providers are paid by the State Controller because California law treats them as public employees. See id. § 12301.6(c)(1). The Controller makes a variety of standard payroll deductions, including for federal and state income tax, unemployment compensation, and retirement savings. See id. § 12302.2(a)(1). California law also authorizes the Controller to deduct union dues from the paychecks of IHSS providers. See id. § 12301.6(i)(2).
Appellants provide services through California's IHSS program. They all became members of the public-sector union with exclusive bargaining rights in their counties — either the Service Employees International Union Local 2015 (SEIU) or the United Domestic Workers of America AFSCME Local 3930 (UDW). When they signed up, appellants authorized the State Controller to deduct union dues from their paychecks. That authorization included an agreement that they could only revoke their consent during brief annual windows.
Appellants resigned from their unions outside the annual revocation windows. But they wanted their dues deductions to stop immediately. When the dues deductions continued, they brought these two putative class actions under 42 U.S.C. § 1983 against their former unions and State Controller Betty Yee.
Appellants alleged that the continuing dues deductions violated their rights under the First Amendment and the Medicaid Act's anti-reassignment provision. In Polk v. Yee , the district court granted a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), and the Polk appellants elected not to amend their complaint. In Quirarte v. UDW , the district court granted a motion for judgment on the pleadings under Rule 12(c).
Both district courts dismissed these cases for the same reasons. As to the First Amendment claim, the district courts concluded that the unions were not state actors and that appellants' consent to pay union dues precluded any First Amendment liability. This court subsequently decided Belgau v. Inslee , which rejected a virtually identical First Amendment claim on the same rationale. 975 F.3d 940 (9th Cir. 2020), cert. denied , ––– U.S. ––––, 141 S. Ct. 2795, 210 L.Ed.2d 928 (2021). Appellants now concede that Belgau forecloses their First Amendment claim. As to the Medicaid Act claim, both district courts held that the anti-reassignment provision does not confer a right on providers that is enforceable under § 1983.
Appellants in both cases timely appealed. Shortly before oral argument, we consolidated these appeals for all purposes under Federal Rule of Appellate Procedure 3(b)(2).
We have jurisdiction under 28 U.S.C. § 1291. Reviewing de novo, see Daewoo Elecs. Am. Inc. v. Opta Corp. , 875 F.3d 1241, 1246 (9th Cir. 2017) (); Dougherty v. City of Covina , 654 F.3d 892, 897 (9th Cir. 2011) (dismissal under Rule 12(b)(6) ), we affirm.
In Blessing v. Freestone , the Supreme Court established a three-part test to determine whether a federal statute confers a right enforceable under § 1983 :
"(1) ‘Congress must have intended that the provision in question benefit the plaintiff,’ (2) ‘the plaintiff must demonstrate that the right assertedly protected by the statute is not so "vague and amorphous" that its enforcement would strain judicial competence,’ and (3) ‘the statute must unambiguously impose a binding obligation on the States.’ " Anderson v. Ghaly , 930 F.3d 1066, 1073 (9th Cir. 2019) (quoting Blessing , 520 U.S. at 340–41, 117 S.Ct. 1353 ). "If all three prongs are satisfied, ‘the right is presumptively enforceable’ through § 1983." Planned Parenthood , 727 F.3d at 966 (quoting Gonzaga Univ. v. Doe , 536 U.S. 273, 284, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002) ).
To demonstrate that the anti-reassignment provision confers a federal right, appellants must satisfy the first prong by showing that Congress intended to benefit Medicaid providers. See Sanchez v. Johnson , 416 F.3d 1051, 1062 (9th Cir. 2005) (). Under this prong, we must "determine whether Congress ‘unambiguously conferred’ a federal right," which above all "requires ‘rights-creating language.’ " Henry A. v. Willden , 678 F.3d 991, 1005 (9th Cir. 2012) (quoting Gonzaga , 536 U.S. at 283–84 & n.3, 122 S.Ct. 2268 ). "[I]t is Congress's use of explicit, individually focused, rights-creating language that reveals congressional intent to create an individually enforceable right in a spending statute." Sanchez , 416 F.3d at 1057. Because the Medicaid Act "does not describe every requirement in the same language," we carefully examine the language of the particular Medicaid provision at issue. Id. at 1062. And to confirm what that language reveals, we may look to other indicia of congressional intent, including structure, legislative history, and agency interpretations. See Ball v. Rodgers , 492 F.3d 1094, 1112–15 (9th Cir. 2007).
Crucially, whether Congress intended to confer a right is a distinct question from whether the correct interpretation of the statute would benefit the plaintiff. " ‘[F]alling within the general zone of interest that the statute is intended to protect’ is not enough." All. of Nonprofits for Ins., Risk Retention Grp. v. Kipper , 712 F.3d 1316, 1326 (9th Cir. 2013) (quoting Gonzaga , 536 U.S. at 283, 122 S.Ct. 2268 ). "[I]t is rights , not...
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...states and regulated facilities from presenting evidence refuting or contradicting H HS's justification for the rule.Polk v. Yee, 36 F.4th 939 (9th Cir. 2022) [Healthcare providers may not enforce the Medicaid Act's anti-reassignment provision under 42 U.S.C. § 1983]Global Rescue Jets, LLC ......