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Does v. Gillespie

United States Court of Appeals, Eighth Circuit

August 16, 2017

Jane Does, 1-3; Planned Parenthood of Arkansas & Eastern Oklahoma, doing business as Planned Parenthood Great Plains, Plaintiffs - Appellees,
Cindy Gillespie, [1] Director of the Arkansas Department of Human Services, Defendant-Appellant. American Public Health Association; National Center for Lesbian Rights; National Family Planning & Reproductive Health Association; National Health Law Program; National Latina Institute for Reproductive Health; National Women's Law Center; Sexuality Information and Education Council of the U.S., Amid on Behalf of Appellees. Planned Parenthood of Arkansas & Eastern Oklahoma, doing business as Planned Parenthood Great Plains; Jane Does, 1-3 Plaintiffs - Appellees,
Cindy Gillespie, Director of the Arkansas Department of Human Services, Defendant-Appellant.

          Submitted: September 21, 2016

         Appeals from United States District Court for the Eastern District of Arkansas - Little Rock

          Before COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.


         The Arkansas Department of Human Services terminated its Medicaid provider agreements with Planned Parenthood of Arkansas and Eastern Oklahoma after the release of controversial video recordings involving other Planned Parenthood affiliates. Planned Parenthood of Arkansas and Eastern Oklahoma could have challenged the termination through an administrative appeal and judicial review in the Arkansas courts, but it declined to do so. Instead, three Arkansas patients identified by the Planned Parenthood affiliate sued the Director of the Department under 42 U.S.C. § 1983, claiming that the Department violated a federal right of the patients under the Medicaid Act to choose any "qualified" provider that offers services that the patients seek.

         The district court enjoined the Department from suspending Medicaid payments to Planned Parenthood of Arkansas and Eastern Oklahoma for services rendered to the three patients. The court later entered a broader injunction that forbids suspending payments for services rendered to a class of Medicaid beneficiaries. The Director appeals, and we conclude that the plaintiffs do not have a likelihood of success on the merits of their claims. The provision of the Medicaid Act does not unambiguously create a federal right for individual patients that can be enforced under § 1983. We therefore vacate the injunctions.


         Planned Parenthood of Arkansas and Eastern Oklahoma, an affiliate of the Planned Parenthood Federation of America, operates health centers in Arkansas. We will call the local affiliate "Planned Parenthood" for short. The district court found that the Arkansas health centers "provide family planning services to men and women, including contraception and contraceptive counseling, screening for breast and cervical cancer, pregnancy testing and counseling, and early medication abortion."

         As of 2015, Planned Parenthood and the Arkansas Department of Human Services were parties to contracts under which Planned Parenthood participated in the Arkansas Medicaid program. The contracts provided that either party could terminate them without cause by giving thirty days' notice. The Department also could terminate the contracts immediately for several reasons, including for conduct that is sanctionable under the applicable Medicaid Provider Manual.

         On August 14, 2015, Governor Hutchinson of Arkansas directed the Department to terminate its Medicaid provider agreements with Planned Parenthood. The Governor said in a public statement that it was "apparent . . . after the recent revelations on the actions of Planned Parenthood, that this organization does not represent the values of the people of our state and Arkansas is better served by terminating any and all existing contracts with them." Context makes clear that the "recent revelations" to which the Governor referred were video recordings released by the Center for Medical Progress that purported to show employees of other Planned Parenthood affiliates discussing the sale of fetal tissue for profit. The parties dispute whether the Planned Parenthood affiliates involved in the recordings engaged in any unlawful or unethical conduct.

         The Department, on August 14, 2015, notified Planned Parenthood that it was terminating the Medicaid provider agreements, effective thirty days later, and notified Planned Parenthood of its right to file an administrative appeal. Before the thirty days expired, on September 1, the Department sent a second notice. This one stated that the Department was terminating its agreements with Planned Parenthood for cause, because "there is evidence that [Planned Parenthood] and/or its affiliates are acting in an unethical manner and engaging in what appears to be wrongful conduct." Rather than discontinue the contracts immediately, however, the Department set the termination date for September 14, 2015, the same date specified in the first letter.

         Federal regulations authorized by Congress and promulgated by the Secretary of Health and Human Services require each State to establish appeal procedures for Medicaid providers. 42 U.S.C. §§ 1396a(a)(4), (39); 42 C.F.R. § 1002.213. Under Arkansas law, a provider who is terminated has a right to file an administrative appeal within thirty days of the termination, and then to seek judicial review. Ark. Code R. § 016.06.35-161.400; Ark. Code Ann. § 20-77-1718. Planned Parenthood, however, declined to exercise its appeal rights under Arkansas law and instead identified three patients who were willing to join the organization in a federal lawsuit.

         On September 11, 2015, Planned Parenthood and three patients identified as "Jane Does" sued the Department's Director in the district court, seeking a temporary restraining order and a preliminary injunction to prevent the Department from terminating Planned Parenthood's contract. The plaintiffs alleged that they were likely to prevail on a claim that the Department, by excluding Planned Parenthood from the Medicaid program for a reason unrelated to its fitness to provide medical services, had violated § 23(A) of the Medicaid Act. This section is described as the Medicaid "free-choice-of-provider" provision. 42 U.S.C. § 1396a(a)(23)(A). The plaintiffs further asserted that without an injunction, they would suffer irreparable harm. The plaintiffs claimed that § 23(A) creates a judicially enforceable right, a violation of which can be remedied through an action under 42 U.S.C. § 1983. The district court granted a temporary restraining order.

         After further briefing by the parties, Planned Parenthood withdrew its claim for relief as a provider, but the Jane Does proceeded with their claims as patients, and the district court granted a preliminary injunction in favor of the Jane Does. The court concluded that § 23(A) creates a private right enforceable by the Jane Does under § 1983, and that they were likely to prevail on the merits of their claim that the Department unlawfully terminated its contract with Planned Parenthood. The court also determined that, without an injunction, the Jane Does would suffer irreparable harm. The Department appealed the grant of the preliminary injunction, and we heard oral argument.

         After the appeal was submitted, the district court granted the plaintiffs' motion to certify a class of "patients who seek to obtain, or desire to obtain, health care services in Arkansas at [Planned Parenthood] through the Medicaid program." The district court then issued a second, broader injunction that forbids the Department to suspend Medicaid payments to Planned Parenthood for services rendered to Medicaid beneficiaries who are members of the class. The district court's order granting the second injunction incorporated the court's reasoning from the first order.

         The Department filed a notice of appeal of the class-wide preliminary injunction. The parties then filed a joint motion requesting that we consolidate the two appeals, and they waived further briefing and argument. We consolidated the appeals and now consider them together.


         A party seeking a preliminary injunction must demonstrate, among other things, a likelihood of success on the merits. Munaf v. Geren, 553 U.S. 674, 690 (2008). In this case, a threshold question bearing on likelihood of success is whether the Jane Doe plaintiffs and the certified class of Medicaid patients have a judicially enforceable right under the cited provision of the Medicaid Act, 42 U.S.C. § 1396a(a)(23)(A). If the statute does not create an enforceable federal right, then the Jane Does and the class members cannot sue under § 1983, and there is no likelihood of success on the merits.

         Section 1983 provides a cause of action against any person who, under color of law, subjects a citizen to the deprivation of any rights secured by the laws of the United States. Generally speaking, § 1983 supplies the remedy for vindication of rights arising from federal statutes. Maine v. Thiboutot, 448 U.S. 1, 4-8 (1980). For legislation enacted pursuant to Congress's spending power, however, "the typical remedy for state noncompliance with federally imposed conditions is not a private cause of action for noncompliance but rather action by the Federal Government to terminate funds to the State." Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 28 (1981).

         To support an action under § 1983, a plaintiff relying on a federal law must establish that Congress clearly intended to create an enforceable federal right. Gonzaga Univ. v. Doe, 536 U.S. 273, 283 (2002). There was a time, illustrated by Wilder v. Virginia Hospital Ass'n, 496 U.S. 498 (1990), when the Medicaid Act was deemed to create an enforceable right if the provision in question was "intend[ed] to benefit the putative plaintiff." Id. at 509 (alteration in original) (quoting Golden State Transit Corp. v. City of L.A., 493 U.S. 103, 106 (1989)). Starting from that premise, Wilder held that the Boren Amendment to § 13(A) of the Medicaid Act created a federal right for providers that was enforceable under § 1983.

         Later decisions, however, show that the governing standard for identifying enforceable federal rights in spending statutes is more rigorous. It is not enough, as Wilder and Blessing v. Freestone, 520 U.S. 329 (1997), might have suggested, to show simply that a plaintiff "falls within the general zone of interest that the statute is intended to protect." Gonzaga, 536 U.S. at 283. It is now settled that nothing "short of an unambiguously conferred right" will support a cause of action under § 1983. Id.

         Most recently, therefore, the Court observed that Medicaid providers seeking to enforce § 30(A) of the Medicaid Act did not rely on Wilder to proceed under § 1983, because the Court's later decisions "plainly repudiate the ready implication of a § 1983 action that Wilder exemplified." Armstrong v. Exceptional Child Ctr., Inc., 135 S.Ct. 1378, 1386 n.* (2015). The Court explained that Gonzaga expressly rejected the notion, "implicit in Wilder, " that something "short of an unambiguously conferred right" can support a cause of action under § 1983. Id. Armstrong thus made explicit what was implicit in Gonzaga, where the dissenting opinion concluded that the Court "sub silentio overrule[d] cases such as . . . Wilder, " because the Boren Amendment did not "clear[ly] and unambiguous[ly] intend enforceability under § 1983." 536 U.S. at 300 n.8 (Stevens, J., dissenting) (second and third alteration and emphasis in original) (citation omitted). Congress repealed former § 13(A) and the Boren Amendment in 1997, see Balanced Budget Act of 1997, Pub. L. No. 105-33, § 4711, 111 Stat. 251, 507-08, so the Court will have no occasion formally to overrule Wilder. But for purposes of our obligation to apply Supreme Court precedent, see Agostini v. Felton, 521 U.S. 203, 237 (1997), the Court's "repudiation" of Wilder is the functional equivalent of "overruling, " as the Court uses the terms interchangeably. Obergefell v. Hodges, 135 S.Ct. 2584, 2606 (2015); Keene Corp. v. United States, 508 U.S. 200, 215 (1993); Planned Parenthood of Se. Pa. v. Casey, 505 U.S. 833, 864 (1992).[2]

         The provision at issue in this case appears in a section of the Medicaid Act concerning state plans for medical assistance. The Act provides, with exceptions not relevant here, that the Secretary of Health and Human Services "shall approve any plan which fulfills the conditions specified in subsection (a)." 42 U.S.C. § 1396a(b). Subsection (a), in turn, declares that "[a] State plan for medical assistance must" satisfy some eighty-three conditions. The condition involved here is § 23(A), namely, that the state plan must "provide that . . . any individual eligible for medical assistance (including drugs) may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services required . . . who undertakes to provide him such services." Id. § 1396a(a)(23)(A).

         The Jane Does contend that § 23(A) creates an enforceable federal right for individual patients to receive services from any provider who is "qualified to perform the service" that they seek. If Planned Parenthood is qualified to perform the service, they argue, then § 1983 provides a remedy through which a court can require the State to maintain its contract with Planned Parenthood, so that the Jane Does can obtain assistance from that provider.

         We see significant difficulties with the contention that § 23(A) unambiguously creates an enforceable federal right. First, the focus of the Act is two steps removed from the interests of the patients who seek services from a Medicaid provider. Like the provision at issue in Armstrong, "[i]t is phrased as a directive to the federal agency charged with approving state Medicaid plans, not as a conferral of the right to sue upon the beneficiaries of the State's decision to participate in Medicaid." 135 S.Ct. at 1387 (plurality opinion). In other words, "[i]t focuses neither on the individuals protected nor even on the funding recipients being regulated, but on the agenc[y] that will do the regulating." Alexander v. Sandoval, 532 U.S. 275, 289 (2001). A statute that speaks to the government official who will regulate the recipient of federal funding "does not confer the sort of 'individual entitlement' that is enforceable under § 1983." Gonzaga, 536 U.S. at 287 (quoting Blessing, 520 U.S. at 343). Even where a subsidiary provision includes mandatory language that ultimately benefits individuals, a statute phrased as a directive to a federal agency typically does not confer enforceable federal rights on the individuals. Univs. Research Ass'n, Inc. v. Coutu, 450 U.S. 754, 756 n.1, 772-73 (1981).

         Second, Congress expressly conferred another means of enforcing a State's compliance with § 23(A)-the withholding of federal funds by the Secretary. 42 U.S.C. § 1396c. Congress also authorized the Secretary to promulgate regulations that are necessary for the proper and efficient operation of a state plan. Id. § 1396a(a)(4). Under that authority, the Secretary has required States to give providers the right to appeal an exclusion from the Medicaid program. 42 C.F.R. § 1002.213.[3] Because other sections of the Act provide mechanisms to enforce the State's obligation under § 23(A) to reimburse qualified providers who are chosen by Medicaid patients, it is reasonable to conclude that Congress did not intend to create an enforceable right for individual patients under § 1983. See Suter v. Artist M., 503 U.S. 347, 360-61, 363 (1992), superseded by statute on other grounds, 42 U.S.C. §§ 1320a-2, 1320a-10; see also Gonzaga, 536 U.S. at 281 (applying Suter).

         Accepting the Jane Does' position would result in a curious system for review of a State's determination that a Medicaid provider is not "qualified." Federal law, as noted, requires that when a State terminates a Medicaid provider, the State must afford the provider an opportunity for administrative appeal and judicial review in the state courts. Under the Jane Does' vision, while the provider is litigating its qualifications in the state courts, or after the provider unsuccessfully appeals a determination that it is not qualified, individual patients separately could litigate or relitigate the qualifications of the provider in federal court under § 1983. Each adjudicator must apply a rather imprecise standard, asking whether the provider is "qualified to perform the service or services required." The potential for parallel litigation and ...

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