No. 12-41187 In the United States Court of Appeals for the Fifth Circuit Law Hotlines/NYS AT...

No. 12-41187

In the

United States Court of Appeals

for the Fifth Circuit

BRADLEY KOENNING, BRIAN MARTIN, AND MORGAN RYALS, Plaintiffs-Appellees,

v.

KYLE JANEK, in his Official Capacity as Executive Commissioner, Texas Health and Human Services Commission,

Defendant-Appellant.

On Appeal from the United States District Court for the Southern District of Texas, Victoria Division

Case No. 6:11-CV-00006

APPELLANT’S REPLY BRIEF

GREG ABBOTT Attorney General of Texas DANIEL T. HODGE First Assistant Attorney General OFFICE OF THE ATTORNEY GENERAL P.O. Box 12548 (MC 059) Austin, Texas 78711-2548 Tel.: (512) 936-1695 Fax: (512) 474-2697

JONATHAN F. MITCHELL Solicitor General Counsel of Record

RANCE L. CRAFT ARTHUR C. D’ANDREA DOUGLAS D. GEYSER MICHAEL P. MURPHY Assistant Solicitors General

DREW L. HARRIS Assistant Attorney General Counsel for Defendant-Appellant

Case: 12-41187 Document: 00512193697 Page: 1 Date Filed: 04/02/2013

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TABLE OF CONTENTS

Table of Contents ................................................................................................................... ii

Index of Authorities .............................................................................................................. iv

I. There Is No Cause Of Action Allowing Private Litigants To Sue To Enforce The Reasonable-Standards Requirement Or The “Amount, Duration, And Scope” Regulation. ............................................. 7

A. There Is No Language In The Supremacy Clause That Implicitly Or Explicitly Authorizes Private Lawsuits To Enforce Federal Law. .......................................................................... 8

B. The Supreme Court’s Rulings In Alexander, Horne, And Thibotout Directly Contradict The Plaintiffs’ Construction Of The Supremacy Clause. ............................................................... 10

C. The Plaintiffs’ Construction Of The Supremacy Clause Disables Congress From Precluding The Private Enforcement Of Federal Statutes Against State Officials. ........... 15

D. Planned Parenthood of Houston Is Irreconcilable With Horne And Should Be Overruled Or Limited To Claims Brought To Enforce Title X. ........................................................................... 15

II. It Is Not Possible For State Officials To “Violate” The Medicaid Act. .................................................................................................................. 17

III. Pennhurst’s Clear-Statement Requirement Compels This Court To Reject The Plaintiffs’ Medicaid Act Claims. ............................................... 23

IV. The Plaintiffs Failed To Present Sufficient Evidence Of Medical Necessity To Survive A Motion For Summary Judgment. ...................... 29

V. The District Court Was Required To Abstain Under The Doctrine Of Primary Jurisdiction. ............................................................... 31

VI. The Plaintiffs’ Due-Process Claims Are Either Meritless Or Moot. ...... 33


iii

VII. The District Court Had No Authority To “Reverse” The Decisions Of HHSC And TMHP Or To “Remand[]” The “Case” To TMHP. ...................................................................................................... 34

Conclusion ............................................................................................................................. 36

Certificate of Service ............................................................................................................ 37

Certificate of Electronic Compliance ................................................................................. 38

Certificate of Compliance .................................................................................................... 39


iv

INDEX OF AUTHORITIES

Cases

ACORN v. Edgar, 56 F.3d 791 (7th Cir. 1995) ........................................................................................... 6, 7

Alberto N. v. Gilbert, Case No. 6:99-cv-00459 (E.D. Tex. April 19, 2002) .................................................... 26

Alexander v. Sandoval, 532 U.S. 275 (2001) ................................................................................................... passim

Arizonans for Official English v. Arizona, 520 U.S. 43 (1997) ............................................................................................................ 12

Arkansas Department of Health & Human Sevices v. Ahlborn, 547 U.S. 268 (2006) .......................................................................................................... 22

Beal v. Doe, 432 U.S. 438 ...................................................................................................................... 24

Bellotti v. Baird, 428 U.S. 132 (1976) .......................................................................................................... 32

Brecht v. Abrahamson, 507 U.S. 619 (1993) .......................................................................................................... 22

Camreta v. Greene, 131 S. Ct. 2020 (2011) ...................................................................................................... 25

Caspari v. Bohlen, 510 U.S. 383 (1994) ............................................................................................................ 6

Cort v. Ash, 422 U.S. 66 (1975) .............................................................................................................. 9

Creel v. Johnson, 162 F.3d 385 (5th Cir. 1998) ......................................................................................... 5, 6


v

Day v. McDonough, 547 U.S. 198 (2006) 419 F. App’x 411 (4th Cir. 2011) ............................................................................... 6, 16

Doe v. Kidd, 419 F. App’x 411 (4th Cir. 2011) ................................................................................... 17

Douglas v. Independent Living Center of Southern California, Inc. 132 S. Ct. 1204 (2012) .......................................................................................... 15, 16, 31

Ex parte Young, 209 U.S. 123 (1908) .................................................................................................... 13, 14

Fred C. v. Texas Health and Human Services Commission, 988 F. Supp. 1032 (W.D. Tex. 1997) ....................................................................... passim

Frew v. Hawkins, No. 3:93-cv-00065 (E.D. Tex. 1995) ............................................................................. 26

Goldberg v. Kelly, 397 U.S. 254 (1970) .......................................................................................................... 34

Golden State Transit Corp. v. Los Angeles, 493 U.S. 103 (1989) ............................................................................................................ 7

Gonzalez v. Seal, 702 F.3d 785 (5th Cir. 2012) ........................................................................................... 31

Hope Medical Group for Women v. Edwards, 63 F.3d 418 (5th Cir. 1995) ............................................................................................. 24

Horne v. Flores, 557 U.S. 433 (2009) .................................................................................................... passim

Kamen v. Kemper Fin. Servs., 500 U.S. 90 (1991) .............................................................................................................. 5

Legal Servs. Corp. v. Velazquez, 531 U.S. 533 (2001) .................................................................................................... 22, 23


vi

Lewis v. Alexander, 685 F.3d 325 (3d Cir. 2012) ............................................................................................ 17

Maine v. Thiboutot, 448 U.S. 1 (1980) ........................................................................................................ 13, 14

Meyers v. Reagan, 776 F.2d 241 (8th Cir. 1985) ........................................................................................... 34

Murray v. Anthony J. Bertucci Constr. Co., 958 F.2d 127 (5th Cir. 1992) ............................................................................................. 6

Nationwide Mut. Ins. Co. v. Unauthorized Practice of Law Committee, 283 F.3d 650 (5th Cir. 2002) ........................................................................................... 32

NFIB v. Sebelius, 132 S. Ct. 2566 (2012) ................................................................................................ 19, 21

Planned Parenthood of Houston & Southeast Texas v. Sanchez, 403 F.3d 324 (5th Cir. 2005) .......................................................................... 8, 15, 16, 17

Printz v. United States, 521 U.S. 898 (1997) .......................................................................................................... 19

Rush v. Parham, 625 F.2d 1150 (5th Cir. 1980) ......................................................................................... 24

Schlesinger v. Councilman, 420 U.S. 738 (1975) .......................................................................................................... 32

Suter v. Artist M., 112 S. Ct. 1360 (1992) ...................................................................................................... 20

United States Nat’l Bank v. Independent Ins. Agents of Am., 508 U.S. 439 (1993) ............................................................................................................ 5

United States v. Arizona, 689 F.3d 1132 (9th Cir. 2012) ......................................................................................... 32


vii

United States v. Munsingwear, Inc., 340 U.S. 36 (1950) ............................................................................................................ 33

Waters v. Churchill, 511 U.S. 661 (1994) (plurality opinion) ......................................................................... 22

Wos v. E.M.A., No. 12-98, __ S. Ct. __, 2013 WL 1131709 (U.S. Mar. 20, 2013) .............................. 23

Younger v. Harris, 401 U.S. 37 (1971) ............................................................................................................ 32

Statutes

1 TEX. ADMIN. CODE § 354.1039(a)(4)(D) ............................................................ 1, 2, 4, 33

1 TEX. ADMIN. CODE § 357.3 ............................................................................................... 3

1 TEX. ADMIN. CODE § 357.3(b)(1) ..................................................................................... 2

23 U.S.C. § 158(a)(1)(A) ................................................................................................. 17, 18

28 U.S.C. § 2254(d ................................................................................................................ 21

42 C.F.R. § 431.205(d) ......................................................................................................... 34

42 C.F.R. § 440.150 .............................................................................................................. 28

42 C.F.R. § 440.230 .............................................................................................................. 26

42 U.S.C. § 1320a-2 .............................................................................................................. 20

42 U.S.C. § 1396a(a)(10)(D) ................................................................................................ 24

42 U.S.C. § 1396a(a)(17) .......................................................................................... 19, 24, 26

42 U.S.C. § 1396a(a)(3) ........................................................................................................ 34

42 U.S.C. § 1396a(a)(43) ................................................................................................ 26, 27


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42 U.S.C. § 1396a(a)(62) ...................................................................................................... 27

42 U.S.C. § 1396a(l) .............................................................................................................. 27

42 U.S.C. § 1396a(s) ............................................................................................................. 27

42 U.S.C. § 1396c ............................................................................................................ 18, 19

42 U.S.C. § 1396d(a)(4)(A) .................................................................................................. 28

42 U.S.C. § 1396d(a)(4)(B) ................................................................................................... 26

42 U.S.C. § 1396d(a)(4)(B) ................................................................................................... 27

42 U.S.C. § 1396d(a)(7)-(12) ................................................................................................ 24

42 U.S.C. § 1396d(a)(i) ......................................................................................................... 28

42 U.S.C. § 1396d(h) ............................................................................................................ 28

42 U.S.C. § 1396d(r) ............................................................................................................. 28

42 U.S.C. § 1983 ............................................................................................................... 7, 13

TEX. HUM. RES. CODE ANN. § 32.024(e)............................................................................. 4

Other Authorities

Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 STAN. L. REV. 953 (2005) ................................................................................................................ 12


No. 12-41187

In the

United States Court of Appeals

for the Fifth Circuit

BRADLEY KOENNING, BRIAN MARTIN, AND MORGAN RYALS, Plaintiffs-Appellees,

v.

KYLE JANEK, in his Official Capacity as Executive Commissioner, Texas Health and Human Services Commission,

Defendant-Appellant.

On Appeal from the United States District Court for the Southern District of Texas, Victoria Division

Case No. 6:11-CV-00006

APPELLANT’S REPLY BRIEF

The plaintiffs continue to misrepresent state law by claiming that Texas

categorically excludes mobile standers from Medicaid coverage. As noted in the

Commissioner’s opening brief, the Texas Administrative Code explicitly provides that

non-covered medical equipment (such as mobile standers) “may, in exceptional

circumstances, be considered for payment” when it “serve[s] a specific medical

purpose on an individual case basis.” 1 TEX. ADMIN. CODE § 354.1039(a)(4)(D).

Two Medicaid beneficiaries have been awarded mobile standers after appealing the


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initial denials and demonstrating that their requests were based on medical necessity.

See USCA5 356-379. And Texas Health and Human Services Commission (HHSC)

policy explicitly states that “durable medical equipment (DME) that is not covered

under Texas Medicaid” may nevertheless be covered in “exceptional circumstances.”

See Appellant’s Br. Addendum at 43.

Yet the plaintiffs still insist that the Commissioner categorically excludes

mobile standers from coverage—in the teeth of all this evidence to the contrary.

First, the plaintiffs complain that Texas Medicaid and Healthcare Provider (TMHP)

did not consider whether the plaintiffs’ requests could be approved under 1 TEX.

ADMIN. CODE § 354.1039(a)(4)(D). See Appellees’ Br. at 11. But their submissions to

TMHP never asserted that their request qualified as an “exceptional circumstance[].”

That other Medicaid beneficiaries have received approval for mobile standers under

section 354.1039(a)(4)(D) proves that the plaintiffs could have been considered for

“exceptional circumstances” had they argued the point—or (at the very least) that

they could have been considered under section 354.1039(a)(4)(D) had they pursued

the administrative appeal provided by 1 TEX. ADMIN. CODE § 357.3(b)(1).

The plaintiffs also rely on a deposition statement from TMHP employee

Patricia Cannizzaro. See Appellees’ Br. at 11. But Cannizzaro stated that the

“exceptional circumstances” allowance is inapplicable only at TMHP’s initial-denial phase,

not during HHSC’s “fair hearing” appeals process:


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Q: . . . Prior to the issue of the denial notice, that first denial notice, did anyone at TMHP make a determination whether the request for power wheelchair with built-in standing feature could be approved based upon exceptional circumstances? A: No. Q: Okay. Now, looking at that point in time prior to the denials that were issued for each of these plaintiffs, why was there no consideration of whether the equipment that they were requesting, the custom power wheelchair with built-in standing feature, could be approved based upon exceptional circumstances? A: We have to apply the policy as is.

USCA5 294 (emphases added). Elsewhere in her deposition, Cannizzaro made clear

that “exceptional circumstances” are considered during the “fair hearing.” See

USCA5 294. The plaintiffs (and the district court) misapprehend Cannizzaro’s

testimony by equating her statements about TMHP’s initial denials with statements

about the “fair hearing” process on appeal.

Even if Cannizzaro had stated that TMHP categorically excludes mobile

standers from coverage, that would not establish that the Commissioner (the only

named defendant in this case) or HHSC has a policy that categorically excludes

mobile standers from coverage. TMHP is not a state agency; it is a private consulting

company that contracts with the State of Texas, and it is not even named as a

defendant in this case. The administrative appeal process is handled by HHSC’s

Appeals Division, not TMHP, and HHSC (not TMHP) makes the “exceptional

circumstances” determination. See 1 TEX. ADMIN. CODE § 357.3; USCA 295; 1 TEX.


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ADMIN. CODE § 354.1039(a)(4)(D); Appellant’s Br. Addendum at 43. Yet none of the

plaintiffs bothered to appeal to HHSC before filing suit against the Commissioner.

The plaintiffs also tout the declaration of Robert Perez, but Perez never stated

that mobile standers are categorically excluded from consideration under the

“exceptional circumstances” test. See USCA5 347-351. All that Perez said is that the

“exceptional circumstances” allowance “does not apply to those categories of DME

specifically called out as a non-covered service as these items would not be eligible for FFP

[federal financial participation].” USCA5 350 (emphasis added). Perez is simply repeating

the state statutory provision that forbids HHSC to provide any medical service unless

federal matching funds are available to pay the cost. See TEX. HUM. RES. CODE ANN.

§ 32.024(e) (“The department may not authorize the provision of any service to any

person under the program unless federal matching funds are available to pay the cost

of the service.”). The plaintiffs do not allege that mobile standers are ineligible for

federal financial participation, so they have no basis for regarding Perez’s statement as

excluding mobile standers from consideration under the “exceptional circumstances”

test. In all events, neither a deposition statement from Cannizzaro nor a declaration

statement from Perez can nullify or contradict the unambiguous language of section

354.1039(a)(4)(D) and the HHSC policy, nor can it change the fact that past

beneficiaries have managed to obtain coverage for mobile standers.

Finally, the plaintiffs object that the HHSC policy included in the addendum of

the Commissioner’s brief was formally promulgated after the district court ruled. See


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Appellees’ Br. at 52. That does not allow this Court to disregard it. The HHSC

policy either reflects the law that existed at the time of the district court’s ruling, or

else it represents a change in policy that moots the plaintiffs’ due-process claims.1

The plaintiffs also contend throughout their brief that the Commissioner

“waived” his ability to rely on certain binding Supreme Court decisions by failing to

cite those cases before the district court. Id. at 19, 20 n.9. But it has long been

recognized that courts of appeals may consider cases and arguments that were not

presented below. See U.S. Nat’l Bank v. Indep. Ins. Agents of Am., 508 U.S. 439, 447

(1993) (“[A] court may consider an issue antecedent to . . . and ultimately dispositive

of the dispute before it, even an issue the parties fail to identify and brief”) (citation

and internal quotation marks omitted); Kamen v. Kemper Fin. Servs., 500 U.S. 90, 99

(1991) (“When an issue or claim is properly before the court, the court is not limited

to the particular legal theories advanced by the parties, but rather retains the

independent power to identify and apply the proper construction of governing law.”).

And this Court has held that it should consider an issue or argument raised for the

first time on appeal when it involves a “pure question of law” and when the refusal to

consider it will “lead to an incorrect result or a miscarriage of justice.” See Creel v.

Johnson, 162 F.3d 385, 390 n.3 (5th Cir. 1998) (“Creel contends we should not review

1 The plaintiffs do not (and cannot) contend that this alleged due-process injury is “capable of repetition yet evading review,” or that the HHSC policy triggers the voluntary-cessation exception to mootness.


6

this issue because the State did not argue it to the district court. We resolve the issue

because uncertainty exists with respect to a pure question of law.”) (citation omitted);

Murray v. Anthony J. Bertucci Constr. Co., 958 F.2d 127, 128 (5th Cir. 1992) (“[W]hen a

question is one of pure law, and when refusal to consider it will lead to an incorrect

result or a miscarriage of justice, appellate courts are inclined to consider questions

first raised on appeal.”) (citation omitted).

For at least three reasons, this Court should consider all of the cases and legal

theories relied upon by the Commissioner. First, each of the arguments that the

plaintiffs ask this Court to disregard involves a pure question of law, and the refusal to

consider those arguments will lead to an incorrect result. The Commissioner’s

arguments rely on binding pronouncements of the Supreme Court that this Court is

obligated to follow. A court of appeals should not disregard a decision of the

Supreme Court solely because the State’s trial lawyers did not cite it in the district

court. Second, courts may and should consider arguments sua sponte “when the

ground involves the relation between governments, including the relation between the

federal government and the states.” ACORN v. Edgar, 56 F.3d 791, 797 (7th Cir.

1995) (Posner, J.); see also id. (collecting authorities). This is why federal habeas courts

may raise defenses sua sponte even when the State’s lawyers are content to ignore

them. See, e.g., Caspari v. Bohlen, 510 U.S. 383 (1994); Day v. McDonough, 547 U.S. 198

(2006). Third, each of the Commissioner’s arguments relates to the “propriety or

scope of an injunction,” another matter on which courts may and should raise


7

arguments on their own initiative—even arguments that were never presented to any

court. ACORN, 56 F.3d at 797; see also id. (collecting authorities).

I. THERE IS NO CAUSE OF ACTION ALLOWING PRIVATE LITIGANTS TO

SUE TO ENFORCE THE REASONABLE-STANDARDS REQUIREMENT

OR THE “AMOUNT, DURATION, AND SCOPE” REGULATION.

A plaintiff cannot obtain judicial relief merely by showing that a defendant has

violated a provision of federal law. The plaintiff must also identify a law that

authorizes him to sue the defendant. Unless a cause of action allows these plaintiffs

to sue the Commissioner, their Medicaid claims must be dismissed for failure to state

a claim. The Commissioner fully preserved this contention by explicitly and

repeatedly contesting the existence of a cause of action before the district court. See

USCA5 399-401, 702-703, 810 (acknowledging the Commissioner’s argument “that

there is no private right of action under the Supremacy Clause to enforce the

Medicaid Act”).

The Medicaid Act does not contain any provision authorizing private lawsuits

against state officials. And the plaintiffs cannot use 42 U.S.C. § 1983 to enforce the

“reasonable standards” requirement because that provision does not create federal

“rights.” See Golden State Transit Corp. v. Los Angeles, 493 U.S. 103, 106 (1989). This

much is common ground among the parties. But the plaintiffs continue to insist that

the Supremacy Clause somehow creates an “implied right of action” for private

litigants to enforce any provision of federal law. This view is incompatible with the

text of the Supremacy Clause and contradicts no fewer than three binding decisions of


8

the Supreme Court. The plaintiffs cannot evade these problems by clinging to judicial

decisions from outside the Fifth Circuit, which are not law in this Court and lack even

the power to persuade.

A. There Is No Language In The Supremacy Clause That Implicitly Or Explicitly Authorizes Private Lawsuits To Enforce Federal Law.

Arguments about what “the Constitution” requires must begin with the text of

the Constitution, not judicial precedent. Although previous rulings of this Court are

generally followed by three-judge panels, the decision whether to construe a precedent

narrowly or broadly, or whether to overrule it in response to a later decision of the

Supreme Court, will depend on whether the precedent properly interpreted the

Constitution in the first place. The Commissioner candidly acknowledged Planned

Parenthood of Houston & Southeast Texas v. Sanchez, 403 F.3d 324 (5th Cir. 2005), in the

opening brief, yet respectfully maintained that Planned Parenthood of Houston should be

narrowly construed or overruled because the text of the Supremacy Clause does not

authorize private lawsuits to enforce federal law. See Appellant’s Br. at 14-16, 21-26.

The plaintiffs do not even attempt to show how the language of the Supremacy

Clause can authorize private lawsuits against state officials (or anyone else).

The plaintiffs’ amicus asserts that “the text of the Supremacy Clause is broadly

worded to confer a right to relief upon the people.” See CAC Amicus at 3. That is a

conclusion, not an argument. The amicus brief never points to any language in the

Supremacy Clause that could be read to establish a private right of action, nor does it


9

cite any evidence that the Framers believed that the Supremacy Clause would convert

each citizen into a private attorney general empowered to sue state officials who

violate federal law. Much of the amicus brief is wasted arguing points that the

Commissioner does not dispute, such as the supremacy of federal law or the ability of

spending legislation to preempt state law. See CAC Amicus at 8-10, 12-17. As if there

were any doubt on this score, the Commissioner readily acknowledges that the

Medicaid Act represents “supreme” law and that federal spending legislation

(including the Medicaid Act) preempts conflicting state laws. See Appellant’s Brief at

26-27. The Commissioner denies that the Supremacy Clause creates a cause of action that

empowers private litigants to sue persons who violate federal law, and denies that any

“conflict” exists between the Medicaid Act and Texas law. Nothing that the amicus

cites from the Federalist or other writings of the Framers comes close to addressing

whether a private cause of action can be derived from the Supremacy Clause.

The plaintiffs and their amicus apparently believe that this Supremacy Clause

cause of action extends only to “preemption” claims, and does not authorize lawsuits

against private citizens who violate federal law. See Cort v. Ash, 422 U.S. 66 (1975).

There is no language in the Supremacy Clause that could be read to limit this putative

“implied cause of action” in that manner, as everyone is bound to respect federal law

as the “supreme law of the land.” The plaintiffs need to explain how the text of the

Supremacy Clause could support such an “implied cause of action” with such a

limited scope. They have not made any effort to do so.


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B. The Supreme Court’s Rulings In Alexander, Horne, And Thibotout Directly Contradict The Plaintiffs’ Construction Of The Supremacy Clause.

Alexander v. Sandoval, 532 U.S. 275 (2001), unambiguously declares that “private

rights of action to enforce federal law must be created by Congress,” and that without

“[s]tatutory intent . . . a cause of action does not exist and courts may not create one.” Id. at

286 (emphasis added). These statements are incompatible with the cause of action

that the plaintiffs assert in this case.

The plaintiffs do not attempt to explain how their “implied cause of action”

could be reconciled with these pronouncements in Alexander. Instead, they suggest

that the Court ignore this discussion because the plaintiffs in Alexander were seeking

to enforce regulations implementing Title VII rather than regulations implementing

the Medicaid Act. But the Supreme Court decided Alexander on the principle that

causes of action to enforce federal law must be created by Congress; that holding is as

applicable to the Medicaid Act and its regulations as it is to Title VII regulations. The

plaintiffs do not argue that the Medicaid regulations and statutory provisions in this

case can be distinguished from the Title VII regulations in Alexander, nor do they deny

that their arguments would compel the Supreme Court to reach a different outcome

in Alexander.

The plaintiffs also think that because Alexander “makes no mention of the

Supremacy Clause or preemption,” it therefore does not “address the question

whether there is an implied private right of action to enforce the Supremacy Clause.”


11

Appellees’ Br. at 19. The plaintiffs are badly mistaken. When Alexander declared that

private rights of action to enforce federal law “must be created by Congress,” it

necessarily rejected the possibility of any non-congressionally created cause of action

to enforce federal statutes or regulations. Any such cause of action must come from

congressional legislation; it cannot be derived from common law or from any

provision of the Constitution. Alexander did not need to delineate and refute each of

the ways in which litigants might try to concoct implied causes of action from non-

congressional sources, because Alexander declared the entire enterprise illegitimate.

That declaration remains binding on the plaintiffs and on this Court.

The plaintiffs also do not argue that their “implied” cause of action can be

squared with Horne v. Flores’s decisive rejection of a private right of action to assert

preemption claims under the No Child Left Behind Act. See 557 U.S. at 456 n.6.

Instead, the plaintiffs declare that Horne’s discussion can be ignored as “dicta” because

“the issue of the enforceability of NCLB . . . was not before the Court.” Appellees’

Br. at 19. That is demonstrably false; as the Court noted in Horne, “both the District

Court and the Court of Appeals [had] held that HB 2064’s funding mechanism

violates NCLB,” and the Justices expressly disapproved those lower-court holdings on

the ground that NCLB is not judicially enforceable. See 557 U.S. at 456 n.6. There

were other grounds on which the Justices disapproved the court of appeals’s ruling in

that case, as the plaintiffs correctly note, but it cannot be said that the private

enforceability of NCLB “was not before the Court” in Horne. In all events, any


12

proposition that leads to and explains a court’s judgment qualifies as a holding,

regardless of whether it addresses an issue that is formally “before the Court.” See

Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 STAN. L. REV. 953 (2005).

We do not think the Justices would countenance the cavalier disregard of their

pronouncements that the plaintiffs in this case are proposing. Cf. Arizonans for Official

English v. Arizona, 520 U.S. 43, 77 (1997).

The plaintiffs also suggest that Alexander and Horne address only the propriety

of implying a private right of action from a statute, and leave open the possibility of

deriving implied rights of action from the Constitution itself. Appellees’ Br. at 20.

The plaintiffs again mischaracterize those decisions. The holdings in Alexander and

Horne are absolute: No private right of action exists to enforce the Title VII

regulations or the No Child Left Behind Act, period. No right of action exists in the

U.S. Code, no right of action exists in federal common law, and no right of action

exists in any provision of the Constitution. The plaintiffs want this Court to hold that

the Supreme Court in Horne didn’t really mean that “neither court below was

empowered to decide” whether state officials were violating the No Child Left Behind

Act. 557 U.S. at 456 n.6. On the plaintiffs’ construction of the Supremacy Clause,

both the district court and the court of appeals in Horne were empowered to decide the

NCLB claim, because (in the plaintiffs’ view) the Supremacy Clause authorizes private

litigants to bring “preemption” claims whenever state law is alleged to violate any


13

federal statute. It is obvious from Horne that the Supreme Court does not share this

view.

As for Maine v. Thiboutot, 448 U.S. 1 (1980), the plaintiffs claim that it “holds

that § 1983 authorizes private individuals to bring claims for purely statutory

violations.” Appellees’ Br. at 19. Indeed so, and Thibotout reached that conclusion

only after holding that earlier cases allowing private litigants to enforce the Social

Security Act had necessarily relied on section 1983 because that was the only possible

basis for a cause of action. See 448 U.S. at 5-6. The plaintiffs have no response to this

other than to issue a conclusory denial that Thibotout recognized section 1983 as the

exclusive means for enforcing the Social Security Act. See Appellees’ Br. at 20. The

Commissioner is content to allow the Thibotout opinion to speak for itself.

The plaintiffs’ amicus never so much as mentions Alexander, Horne, or Thibotout.

Instead, the amicus relies on Ex parte Young, 209 U.S. 123 (1908), and some older

Supreme Court decisions to support its claim that the Supremacy Clause authorizes

private litigants to sue any state official who violates any federal law. See CAC Amicus

at 18-20. Ex parte Young provides no help to the plaintiffs because the Commissioner

is not contesting the right of private litigants to bring “preemption” claims when state

officials threaten an individual’s constitutional or federally protected rights. That right

of action is secured by 42 U.S.C. § 1983, and that explains why Ex parte Young allowed

private railroads to sue the Attorney General of Minnesota for allegedly violating their

constitutionally protected rights. Ex parte Young never established that private litigants


14

could sue to enjoin the enforcement of any state law that conflicts with a federal

statute, regardless of whether federally protected “rights” are at stake. If it had, then

Horne would have permitted the litigants in that case to challenge Arizona’s statute as

“preempted” by the No Child Left Behind Act, rather than declaring that the federal

court were not “empowered to decide the issue.” 557 U.S. 433, 456 n.6 (2009). And

much of the language that the amicus quotes from Ex parte Young deals with the scope

of Eleventh Amendment immunity, which has nothing to do with whether the

Constitution creates an implied cause of action for private litigants to enforce federal

laws.

None of the other cases cited by the amicus asserts that the Supremacy Clause

authorizes private litigants to bring “preemption” claims against state officials

whenever state law conflicts with a federal statute, and they cannot be read to

establish that proposition without contradicting Alexander, Horne, and Thibotout.

Indeed, no decision of the Supreme Court has ever stated that the Supremacy Clause

establishes an implied cause of action for private litigants seeking to enforce federal

law. Neither the plaintiffs nor their amicus can escape that fact, nor can they escape

the fact that their construction of the Supremacy Clause is incompatible with

Alexander, Horne, and Thibotout.


15

C. The Plaintiffs’ Construction Of The Supremacy Clause Disables Congress From Precluding The Private Enforcement Of Federal Statutes Against State Officials.

The plaintiffs’ construction of the Supremacy Clause will allow private litigants

to sue state officials for violating a federal statute even when that statute explicitly

prohibits private rights of action against state officials. See Appellants’ Br. at 20.

Neither the plaintiffs nor their amici deny that their construction of the Supremacy

Clause will produce this rather bizarre result, nor do they make any attempt to justify

a regime that strips Congress of the power to determine the circumstances under

which its statutes may be judicially enforced against state officials.

D. Planned Parenthood Of Houston Is Irreconcilable With Horne And Should Be Overruled Or Limited To Claims Brought To Enforce Title X.

Horne prohibits private litigants from bringing “preemption” claims against

state laws that allegedly violate the No Child Left Behind Act. 557 U.S. at 456 n.6.

This holding cannot be squared with Planned Parenthood of Houston’s suggestion that

private litigants may sue to enjoin any “state or local regulation that is preempted by a

federal statutory or constitutional provision.” 403 F.3d at 334. Unless Planned

Parenthood of Houston is narrowed or overruled, litigants in the Fifth Circuit may assert

“preemption” claims against state laws that allegedly violate NCLB, even though

Horne says that this can’t be done.

The plaintiffs correctly note that Douglas v. Independent Living Center, 132 S. Ct.

1204 (2012), avoided deciding whether the Supremacy Clause authorizes private


16

litigants to enforce the Medicaid Act. See Appellees’ Br. at 21-22. But the Supreme

Court’s punt in Douglas presents a more serious problem for the plaintiffs than it does

for the Commissioner. If the plaintiffs’ construction of the Supremacy Clause is

correct, then the Douglas Court should have issued a ringing affirmation of the Ninth

Circuit’s opinion, which embraced the same reasoning that the plaintiffs are advancing

here. Of course, under the Commissioner’s view of the Supremacy Clause, the

Supreme Court in Douglas should have reversed the Ninth Circuit rather than ducking

the issue by remanding. But as between Horne and Douglas, the plaintiffs face one

Supreme Court decision that explicitly rejects a private right of action to assert

“preemption” claims against state laws that violate the No Child Left Behind Act, and

one decision that avoids deciding whether private right of action exists to enforce the

Medicaid Act. Taken together, those decisions mean that the Supremacy Clause cannot

be construed to authorize private lawsuits whenever a state law allegedly conflicts with

a federal statute or regulation, as this Court held in Planned Parenthood, and as the

plaintiffs assert in this case. The plaintiffs are unable to combine Douglas’s

ambivalence with a Supreme Court ruling that supports their view of the Supremacy

Clause, because no decision of the Supreme Court that has ever endorsed the notion

that the Supremacy Clause authorizes private litigants to assert “preemption” claims

against state officials who allegedly violate federal law. Planned Parenthood of Houston is


17

incompatible with Horne, and the Commissioner respectfully asks this Court to resolve

the conflict by overruling Planned Parenthood of Houston or limiting it to its facts.2

II. IT IS NOT POSSIBLE FOR STATE OFFICIALS TO “VIOLATE” THE

MEDICAID ACT.

The Medicaid Act is no different from the statute withholding federal highway

money from States with a sub-21 drinking age. See 23 U.S.C. § 158(a)(1)(A). It offers

federal reimbursement to States that comply with the criteria in the Medicaid Act, and

threatens to withhold part or all of that money from noncompliant States. That a

State may be docked federal money for its policy decisions does not make those

policy decisions unlawful.

The oft-repeated statements that a State is “bound” to comply with every

provision of the Medicaid Act once it accepts federal Medicaid money are simply

wrong. See Appellees’ Br. at 23-24. A State is not “bound” to maintain a 21-year-old

drinking age once it accepts federal highway money. Texas could lower its drinking

age tomorrow, wait for the Secretary of Transportation to respond by reducing federal

highway funds on the first day of the next fiscal year, and then proceed with business

as usual. If anyone tried to sue Texas officials on the ground that 23 U.S.C.

§ 158(a)(1)(A) “preempts” their efforts to lower the State’s drinking age, the lawsuit

2 The plaintiffs cite Lewis v. Alexander, 685 F.3d 325 (3d Cir. 2012), and Doe v. Kidd, 419 F. App’x 411 (4th Cir. 2011), but neither of these decisions even cites Horne, let alone attempts to explain how the plaintiffs’ interpretation of the Supremacy Clause might be reconciled with that ruling.


18

would be dismissed on the ground that State officials have not violated any federal

law.3

Medicaid works the same way. Noncompliant States may lose some or all of

their federal Medicaid reimbursement, but they do not violate federal law by

provoking the Secretary of Health and Human Services to reduce or eliminate their

federal funding. It is perfectly lawful to operate a non-compliant Medicaid program;

nothing in federal law compels the States to permanently establish a fully compliant

Medicaid program once they accept federal Medicaid money. And 42 U.S.C. 1396c

removes any doubt on this score by allowing the Secretary to continue funding partially

compliant States, by withholding only a portion of their federal Medicaid allotment.

See Appellant’s Br. at 28-29. On the plaintiffs’ view, no State could ever opt out of

Medicaid, because a private litigant will be able to sue and enjoin the State’s officials

as soon as they deviate from the criteria of the Medicaid Act. Only a belief that

Medicaid is forever can support the arguments in the plaintiffs’ brief.4

3 The plaintiffs do not contend that 23 U.S.C. § 158(a)(1)(A) imposes a legal obligation on States to maintain a 21-year-old drinking age once they accept federal highway funds. Yet their only effort to distinguish the Medicaid Act from 23 U.S.C. § 158(a)(1)(A) is to note that withholding federal funds under section 158(a)(1)(A) “appears automatic,” while withholding funds under the Medicaid Act “requires specific findings of noncompliance and provision of notice and opportunity for a hearing.” Appellees’ Br. at 27. How this can establish that the Medicaid Act imposes binding legal obligations on participating States the plaintiffs do not endeavor to explain.

4 The Commissioner is not arguing that withholding federal funds represents “the exclusive means of enforcing obligations in the Medicaid Act.” Appellees’ Br. at 24; see also CAC Amicus at 26. The Commissioner is arguing that the Medicaid Act does not impose any legal obligations on participating States. Like the federal highway statute and the 21-year-old drinking age, the Medicaid Act merely offers federal reimbursement to State Medicaid programs that satisfy certain criteria. There simply


19

The plaintiffs’ amicus contends that the Medicaid Act imposes binding legal

obligations on state officials because it provides that “[a] State plan for Medical

Assistance must . . . include reasonable standards . . . ” 42 U.S.C. § 1396a(a)(17)

(emphasis added). See CAC Amicus at 23 (“[T]his language is obligatory.”). That

construction of the Medicaid Act runs headlong into the anti-commandeering rule of

Printz v. United States, 521 U.S. 898 (1997). States cannot be required by Congress to

establish Medicaid programs, nor can they be compelled to establish programs that

comport with federal standards. When 42 U.S.C. § 1396a says that a State Medicaid

program “must” do something, it means that it “must” do that thing in order to continue

receiving full federal funding under 42 U.S.C. § 1396c. There is no freestanding legal

obligation to maintain a Medicaid program that comports with 42 U.S.C. § 1396a, and

any such requirement would run afoul of Printz. Cf. NFIB v. Sebelius, 132 S. Ct. 2566,

2600 (2012) (opinion of Roberts, C.J.) (invoking the constitutional-avoidance canon

to construe the individual mandate as an option to forgo insurance and pay a tax). All

of the Medicaid Act is optional; its so-called “mandatory” services are nothing more

than conditions for receiving full federal reimbursement.5

are no “obligations” to “enforce,” because a State acts legally when it deviates from provisions in the federal Medicaid Act.

5 The plaintiffs’ amicus is also mistaken to assert that “states accepting Medicaid funds must spend them in accordance with federal requirements.” CAC Brief at 25. Federal Medicaid funds reimburse States for expenditures made under state law. Medicaid is not a regime in which the federal government hands a State money and then instructs it to spend that money in a certain way. See 42 U.S.C. § 1396c.


20

The plaintiffs’ amicus also relies on 42 U.S.C. § 1320a-2, which we quote in full:

In an action brought to enforce a provision of this chapter, such provision is not to be deemed unenforceable because of its inclusion in a section of this chapter requiring a State plan or specifying the required contents of a State plan. This section is not intended to limit or expand the grounds for determining the availability of private actions to enforce State plan requirements other than by overturning any such grounds applied in Suter v. Artist M., 112 S. Ct. 1360 (1992), but not applied in prior Supreme Court decisions respecting such enforceability; provided, however, that this section is not intended to alter the holding in Suter v. Artist M. that section 671(a)(15) of this title is not enforceable in a private right of action.

42 U.S.C. § 1320a-2 (emphasis added). The amicus quotes only the first sentence of

this statute, but omits the all-important second sentence. The first sentence in section

1320a-2 says only that provisions of the Social Security Act cannot be deemed

unenforceable in private actions because of their “inclusion in a section of this

chapter requiring a State plan or specifying the required contents of a State plan.” But

the Commissioner’s argument does not rest on the inclusion of any statutory

provision in sections that require State plans or specify the required contents of such

plans. Instead, it rests on the proposition that the Medicaid Act does nothing more

than establish criteria for federal reimbursement and fails to impose legal obligations

on States that receive federal funds. The second sentence makes clear that section

1320a-2 serves no function except to reject the novel reasoning that the Supreme

Court deployed in Suter, while still preserving (paradoxically) the result that the Court

reached in that case. Nothing in the Suter opinion invokes the argument that the

Commissioner is making here; the Court focused instead on the open-ended nature of


21

the statutory requirement of “reasonable efforts” to prevent removal of children from

their homes and facilitate reunification of families where removal has occurred.

The plaintiffs’ position also cannot be reconciled with NFIB v. Sebelius, because

on their view a federal court could enjoin state officials who refuse to comply with the

Medicaid Act as amended by the Affordable Care Act. As the plaintiffs see matters,

any State that accepts Medicaid money and fails to comply with every requirement of

the Medicaid Act is acting unlawfully and subject to judicial correction. That stance is

impossible to square with NFIB, which purports to give the States freedom to decline

to participate in the Affordable Care Act’s Medicaid expansion without losing all

federal Medicaid funding. NFIB’s holding would be rendered a nullity if federal

courts could enjoin state officials whose Medicaid programs fail to comply with the

requirements of the Affordable Care Act, on the ground that the Medicaid Act

“preempts” their non-compliant (or partially compliant) programs.

The plaintiffs are coy about whether they believe that a federal court could

entertain a “preemption” lawsuit against state officials who choose not to participate

in the Medicaid expansion envisioned by the Affordable Care Act (ACA). But there

are only two possible approaches for the plaintiffs to take. Either the Medicaid Act

imposes a legal obligation on participating States to comply with its provisions, or it

does not. If the former, then State officials can be enjoined for opting out of the

ACA’s Medicaid expansion—even though NFIB holds that Medicaid-participating

States have the freedom to decide whether they want to participate in the expanded


22

Medicaid program. If the latter, then the plaintiffs’ preemption lawsuit must be

dismissed on the ground that States cannot “violate” the Medicaid Act. The plaintiffs

cannot maintain their “preemption” lawsuit without simultaneously insisting that

federal courts must enjoin state officials that refuse to participate in the ACA’s

Medicaid expansion.

Finally, the plaintiffs and their amici note that Arkansas Department of Health &

Human Services v. Ahlborn, 547 U.S. 268 (2006), proceeded on the assumption that the

Medicaid Act is capable of preempting state law. But in Ahlborn, the State never

questioned whether private litigants could assert “preemption” claims under the

Medicaid Act; Arkansas staked its entire case on its claim that its statutes complied

with the Medicaid Act’s anti-lien provision. See Br. for the Petitioners, Arkansas

DHHS v. Ahlborn, No. 04-1506, 2005 WL 3156905 (2005). Ahlborn therefore does not

and cannot establish a precedential holding that the Medicaid Act is capable of

preempting state law, or that private litigants may assert preemption claims whenever

a State deviates from the Medicaid Act’s criteria for reimbursement. See Brecht v.

Abrahamson, 507 U.S. 619, 630-631 (1993) (“[S]ince we have never squarely addressed

the issue, and have at most assumed [an answer], we are free to address the issue on

the merits.”); Waters v. Churchill, 511 U.S. 661, 678 (1994) (plurality opinion) (“These

cases cannot be read as foreclosing an argument that they never dealt with.”); Legal

Servs. Corp. v. Velazquez, 531 U.S. 533, 557 (2001) (Scalia, J., dissenting) (“Judicial

decisions do not stand as binding ‘precedent’ for points that were not raised, not


23

argued, and hence not analyzed.”). The same goes for Wos v. E.M.A., No. 12-98, __

S. Ct. __, 2013 WL 1131709 (U.S. Mar. 20, 2013). North Carolina’s attorneys in that

case were content to concede that the Medicaid Act is capable of preempting state

law, and argued the case on other grounds. Br. for the Petitioner, Wos v. E.M.A., No.

12-98, 2012 WL 5532211 (2012). In none of the other cases cited by the plaintiffs’

amicus did the litigants present the argument that Texas is advancing here: that the

Medicaid Act does not impose legal obligations on participating States. See, e.g., Pharm.

Research & Mfrs. of Am. v. Walsh, 538 U.S. 644 (2003); Blessing v. Freestone, 520 U.S. 329

(1997). The State of Texas cannot be precluded from making this argument on

account of the failure of lawyers from other States to present this argument to the

Supreme Court.

III. PENNHURST’S CLEAR-STATEMENT REQUIREMENT COMPELS THIS

COURT TO REJECT THE PLAINTIFFS’ MEDICAID ACT CLAIMS.

Private insurance does not cover mobile standers, yet the plaintiffs insist that

state Medicaid benefits must exceed those that would be available under any private-

sector insurance plan. And the plaintiffs still cannot identify any language in the

Medicaid Act, the CMS regulations, or the “DeSario letter” that clearly notifies State

officials that they cannot exclude mobile standers from coverage. All that the

plaintiffs can offer is a conclusory assertion that “Medicaid’s reasonable standards

provision, amount, duration, and scope regulation, and the DeSario letter clearly

notify the Commissioner that HHSC is required to cover medically necessary DME


24

consistent with federal guidance.” Appellees’ Br. at 29. Needless to say, that is not

sufficient to satisfy the clear-statement requirement of Pennhurst. As the Supreme

Court recognized in Beal v. Doe, 432 U.S. 438, the “reasonable standards” provision of

42 U.S.C. § 1396a(a)(17) confers “broad discretion on the States to adopt standards for

determining the extent of medical assistance, requiring only that such standards be

‘reasonable’ and ‘consistent with the objectives’ of the Act.” Id. at 444 (emphasis

added).

Even without Pennhurst, the plaintiffs cannot escape the fact that federal law

simply does not define the scope of “medical equipment” that States must provide to

Medicaid beneficiaries. See Appellant’s Br. at 31-32; USCA5 12, 169. And no decision

from the Supreme Court or from this Court limits the prerogative of States to exclude

items from the “medical equipment” that a State will cover in its Medicaid program

(especially items that no private insurance plan would cover).6 The plaintiffs cite Rush

v. Parham, 625 F.2d 1150 (5th Cir. 1980), and Hope Medical Group for Women v. Edwards,

63 F.3d 418, 427 (5th Cir. 1995), but neither of those decisions addressed the scope of

“medical equipment” that States must cover under 42 U.S.C. § 1396a(a)(10)(D). The

plaintiffs’ claim that “[t]his circuit . . . [has] held that state Medicaid programs cannot

lawfully exclude items of durable medical equipment (DME) for reasons unrelated to

6 How can a State possibly violate a requirement to provide “reasonable standards” for determining “the extent of medical assistance” by refusing to pay for an item that no private insurance plan covers?


25

medical need when the item fits within the definition of a service category in the

state’s Medicaid plan” is patently false. See Appellees’ Br. at 3 (emphasis added).

The plaintiffs rely primarily on Fred C. v. Texas Health and Human Services

Commission, 988 F. Supp. 1032 (W.D. Tex. 1997), but “[a] decision of a federal district

court judge is not binding precedent . . . even upon the same judge in a different

case.” Camreta v. Greene, 131 S. Ct. 2020, 2033 n.7 (2011). Fred C. may therefore be

followed only to the extent that it provides persuasive reasons for its decision. As we

will explain, the Fred C. opinion is not persuasive and should be expressly disavowed

by this Court.

The plaintiff in Fred C. had asked HHSC to fund an “augmentative

communication device.” Texas Medicaid covered this device for beneficiaries under

the age of 21, but not for beneficiaries over the age of 21. The district court in Fred C.

concluded that the refusal to cover this device for beneficiaries over the age of 21 was

unlawful. See 988 F. Supp. at 1037. But missing from the district court’s analysis (and

from the plaintiffs’ brief) is any explanation of how the State’s policy in Fred C.

contradicted any requirement of the federal Medicaid Act or its implementing

regulations. The district court in Fred C. acknowledged that “[t]he term durable

medical equipment has no federal Medicaid definition,” yet insisted that Texas must

nevertheless provide augmentative communication devices to all Medicaid

beneficiaries because these devices satisfied the State’s definition of “durable medical


26

equipment” and because the State provided those devices to persons under the age of

21. See 988 F. Supp. at 1035-36.

One of the many problems with Fred C.’s approach is that federal courts may

enjoin state officials only to prevent violations of federal law, and whether an

augmentative communication device falls within the State’s definition of “durable

medical equipment” is irrelevant to this inquiry. The district court in Fred C. thought

it could compel state officials to adhere to a state-law definition of “durable medical

equipment,” but Pennhurst II bars a federal court from enjoining state officials to obey

state law. See Pennhurst State Sch. v. Halderman, 465 U.S. 89 (1984). The plaintiffs’

invitation for this Court to “str[ike] down state Medicaid agencies’ exclusions of

medical equipment that m[eets] states’ Medicaid DME definition and serve[s] a

medical need,” is likewise incompatible with Pennhurst II, and is not supported by any

judicial decision that represents law in this circuit.7 Appellees’ Br. at 31-32.

That Texas provides mobile standers (or augmentative communication devices)

to persons under the age of 21 is likewise irrelevant to the State’s obligations under

Medicaid. Persons under 21 receive services from the Early and Periodic Screening,

Diagnostic, and Treatment services (EPSDT) benefit, a program that provides

children with more generous benefits than those provided to adults. See 42 U.S.C.

7 The plaintiffs have no answer to the Commissioner’s Pennhurst II objection other than to assert (without citations or explanation) that the reasonable-standards requirement and the amount, duration, and scope regulation “incorporate state-law principles.” Appellees’ Br. at 39. Neither 42 U.S.C. § 1396a(a)(17) or 42 C.F.R. § 440.230 says anything about state law or purports to incorporate state law in any manner.


27

§ 1396a(a)(43). Texas’s EPSDT program is also subject to two institutional-reform

injunctions that compel state officials to provide benefits beyond those that are

strictly required. See Consent Decree, Frew v. Hawkins, No. 3:93-cv-00065 (E.D. Tex.

Feb. 20, 1996), ECF No. 135; Order, Alberto N. v. Gilbert, Case No. 6:99-cv-00459,

(E.D. Tex. April 19, 2002), ECF No. 133; Motion, Alberto N. v. Gilbert, Case No. 6:99-

cv-00459 (E.D. Tex. May 19, 2005), ECF No. 176. It was absurd for Fred C. to have

held that Texas must provide the same benefits under Medicaid that it provides under

EPSDT, and that the State violates the “rational basis” test by distinguishing between

the recipients of these different benefits. 988 F. Supp. at 1036. It is equally absurd

for the plaintiffs to ask this Court to adopt Fred C.’s reasoning.

Fred C. must be expressly disavowed because it calls into question numerous

provisions of the federal Medicaid Act, as well as many other health benefits that

Texas offers only to children. Age-based classifications are ubiquitous in the federal

Medicaid Act, and each of these provisions becomes constitutionally suspect under

the reasoning of Fred C. See 42 U.S.C. § 1396a(a)(43) (requiring special notification to

recipients under the age of 21 regarding the availability of services under section

1396d(a)(4)(B)); 42 U.S.C. § 1396a(a)(62) (mandates use of pediatric vaccines); 42

U.S.C. § 1396a(l) (drawing age distinctions between infants under one year of age,

children between 1 and 6, and children between 6 and 19); 42 U.S.C. § 1396a(s)

(adjustment in payment for hospital services furnished to low-income children under

age 6); 42 U.S.C. § 1396d(a)(i) (provision of medical services for individuals under the


28

age of 21, or at the option of the State, under the age of 20, 19, or 18); 42 U.S.C.

§ 1396d(a)(4)(A) (nursing facility services for individuals 21 years of age or older); 42

U.S.C. § 1396d(a)(4)(B) and 1396d(r) (early and periodic screening, diagnostic, and

treatment services); 42 U.S.C. § 1396d(h) (inpatient psychiatric services for individuals

under age 21). There are many other medical benefits that Texas offers to children

but not necessarily to adults, including private-duty nursing,8 dental and orthodontal

services,9 and hearing aids for both ears.10 Under Fred C.’s reasoning (and under the

reasoning in the plaintiffs’ brief), all of these age-based classifications are unlawful.

Finally, the plaintiffs have yet to identify any federal statute or regulation, or any

language in the DeSario Letter, that limits a State’s prerogative to exclude items from

“medical equipment” covered by its Medicaid program. The plaintiffs’ discussion of

the DeSario Letter simply fabricates requirements that appear nowhere in that

document. See Appellees’ Br. at 37-38. The DeSario Letter nowhere says that

“exclusive coverage lists and lists of expressly excluded DME items are prohibited,” as

the plaintiffs assert. Id. at 37. What the Letter says is that there must be a process for

requesting items that do not appear on a pre-approved DME list. That does not preclude

8 Adults may receive home health nursing, but private duty-nursing extends beyond the regular skilled nursing provided under home health.

9 Adults do not receive dental or orthodontal coverage unless they are enrolled in ICF/MRs, as defined in 42 C.F.R. § 440.150.

10 EPSDT beneficiaries can obtain hearing aids for both ears, while adult Medicaid beneficiaries get only one even if hearing loss is in both ears.


29

a State from categorically excluding items because they do not qualify as “medical

equipment” (yachts, Rolex watches), or because they are too extravagant even if they

may provide therapeutic value (in-home bowling alleys, hot tubs). (Do the plaintiffs

really believe that no item can ever be categorically excluded from DME?) The only

restriction that the DeSario Letter imposes on a State’s prerogative to limit the scope

of available medical equipment is to prohibit exclusions of DME “based solely on

diagnosis, type of illness, or condition.” DeSario Letter at 1 (emphasis added);

USCA5 433; see also Appellant’s Br. at 36. The plaintiffs refuse even to acknowledge

this language from the DeSario Letter.

IV. THE PLAINTIFFS FAILED TO PRESENT SUFFICIENT EVIDENCE OF

MEDICAL NECESSITY TO SURVIVE A MOTION FOR SUMMARY

JUDGMENT.

The plaintiffs’ brief fails to present any evidence that a mobile stander is

medically necessary, as opposed to merely convenient, for any of the plaintiffs.

Conclusory assertions from the plaintiffs’ hand-picked physicians are not sufficient;

the record as a whole must allow a reasonable factfinder to conclude that medical

necessity exists. Much of the plaintiffs’ discussion continues to equate a medical need

for standing with a medical need for a mobile stander (as opposed to a stationary stander).

Plaintiff Koenning has been using a stationary stander twice a week, and there

is no evidence in the record that this regime has threatened his health. Koenning’s

physician did not claim that Koenning’s use of a stationary stander poses health risks,

and she acknowledged that the Permobil C500 wheelchair was not necessary to reduce


30

the risks of transfer injury. USCA 670. Koenning’s physician stated that her “goal

with him would be to stand every day, with a minimum of three times a week, and as

long as we’re doing that and as long as we’re not losing range of motion and we’re

meeting the goals, I’m happy.” Id. But a “goal” is not a claim of medical necessity,

and in all events a Permobil C500 wheelchair is not needed for Koenning to meet this

goal. Avoiding the need to travel to a rehabilitation facility does not establish medical

necessity.

The plaintiffs’ brief denies that Plaintiff Martin failed a standing-treatment

program but does not provide any citations, and the record unmistakably shows that

the goal for Martin’s 2009 standing program was “[n]ot achieved.” USCA 607. The

Commissioner’s opening brief further noted that “even if Martin is capable of

standing, there is no evidence in the record that using a stationary stander rather than

a mobile stander will jeopardize his health.” Appellants’ Br. at 40. The plaintiffs do

not cite anything from the record to refute this claim, nor could they. Dr. Donovan

even admitted in his deposition that a “medically necessary” benefit of the Permobil

C500 wheelchair was “a heightened sense of confidence and equality by enabling eye-

to-eye conversations with the non-disabled society,” and declared that he understood

“health” to mean “a state of complete physical, mental, and social well-being and not

merely the absence of disease or infirmity.” USCA 679.

The plaintiffs attempt to establish “medical necessity” for plaintiff Ryals by

citing deposition testimony from Dr. Nuruddin. Appellees’ Brief at 43. But Dr.


31

Nuruddin testified only that Ryals needs to stand, not that a mobile stander is

medically necessary vis-à-vis a stationary stander. The only reasons that Dr. Nuruddin

could offer for the mobile stander is that a stationary stander would be “less

convenient,” and that Ryals’s mother alone would be unable to transfer her from the

wheelchair to the stander. USCA5 682, 688. That is not evidence that a mobile

stander is “medically necessary,” as Texas could accommodate Ryals’s need to stand

through other means—such as providing a stationary stander along with additional

caretakers or providing standing opportunities at a rehabilitation clinic.

Finally, the plaintiffs wrongly assert that denials of motions for summary

judgment are reviewed for abuse of discretion. See Gonzalez v. Seal, 702 F.3d 785, 787

(5th Cir. 2012) (“We review the district court’s denial of summary judgment de novo.”);

Appellees’ Br. at 12, 40.

V. THE DISTRICT COURT WAS REQUIRED TO ABSTAIN UNDER THE

DOCTRINE OF PRIMARY JURISDICTION.

The plaintiffs falsely assert that the Commissioner’s primary-jurisdiction

argument was not presented to the trial court. See Appellees’ Br. at 45. But the

Commissioner expressly and repeatedly asked the district court to stay its hand and

await CMS’s determination. See USCA5 399 (“To the extent HHSC’s state plan

violates the federal Medicaid Act, it should be address[ed]—at least in the first instance—by

CMS. See Douglas v. Independent Living Center of Southern California, Inc. 132 S. Ct. 1204,

1210-11 (2012).”) (emphasis added); see also USCA 703.


32

In all events, it has long been established that courts may and should consider

abstention doctrines on their own initiative—even if a State fails to present the

argument to any court. See Bellotti v. Baird, 428 U.S. 132, 143 n.10 (1976)

(“[A]bstention may be raised by the court sua sponte.”); Schlesinger v. Councilman, 420

U.S. 738, 743 (1975); Younger v. Harris, 401 U.S. 37, 40-41 (1971). In Arizona v. United

States, the Supreme Court accepted Arizona’s abstention argument even though it was

raised for the first time in the Supreme Court. Compare Br. for Pet’rs, 132 S. Ct. 2492

(2012) (No. 11- 182), 2012 WL 416748, at *40-41, with Appellants’ Opening Br.,

United States v. Arizona, 689 F.3d 1132 (9th Cir. 2012) (No. 10-16645), 2010 WL

5162518, at *23-43, and Defs.’ Resp. to Pl.’s Mot. for Prelim. Inj. at 15-21, 703 F.

Supp. 2d 980 (D. Ariz. 2010) (No. 10-CV-01413), 2010 WL 3154413.

The plaintiffs also overstate the degree of deference owed to the district court

on this matter. Although a district court’s abstention ruling is reviewed for abuse of

discretion, this Court “reviews de novo whether the requirements of a particular

abstention doctrine are satisfied.” Nationwide Mut. Ins. Co. v. Unauthorized Practice of

Law Committee, 283 F.3d 650, 652 (5th Cir. 2002).

Finally, we cannot help but to note the irony of the plaintiffs asking this Court

to defer to the views expressed in the CMS DeSario Letter, while simultaneously

insisting that this Court rule on the legality of the State’s policies without first

soliciting the views of CMS. If CMS’s interpretations of the Medicaid Act are indeed

entitled to deference—as the plaintiffs obviously believe given their reliance on the


33

DeSario Letter—then it is hard to understand why a federal court should plow ahead

without any input from the agency charged with administering the Medicaid Act. The

plaintiffs’ stance also risks embarrassing a federal court that issues a permanent

injunction against a State’s policy, only to have CMS later confer formal approval

upon the very policy that the court declared unlawful.

VI. THE PLAINTIFFS’ DUE-PROCESS CLAIMS ARE EITHER MERITLESS

OR MOOT.

The plaintiffs’ due-process arguments are premised on their insistence that the

Commissioner categorically excludes mobile standers from coverage and makes no

allowance for “exceptional circumstances.” The HHSC’s “exceptional circumstances”

policy shows that this is false. See supra at 1-5. The plaintiffs seem to suggest that this

policy was not in effect at the time the district court rendered its decision—even

though 1 TEXAS ADMINISTRATIVE CODE § 354.1039(a)(4)(D) unambiguously allows

non-covered DME to be covered when “exceptional circumstances” are shown. If

this Court believes the plaintiffs, then their due-process claims are moot, and this

Court must vacate the district court’s judgment on those claims. See United States v.

Munsingwear, Inc., 340 U.S. 36 (1950). If this Court disbelieves the plaintiffs, then their

due-process claims are meritless, for the reasons discussed in the Commissioner’s

opening brief.

The Commissioner is not arguing that the plaintiffs were required to “exhaust”

their due-process claims before filing suit, nor is he asserting that the plaintiffs’ due-


34

process claims should be dismissed for failure to exhaust. Rather, the Commissioner’s

contends that the plaintiffs’ due-process claims must be rejected on the merits, because

they cannot prove that the “fair hearing” offered by the State would have been biased

or useless when they never bothered to take advantage of it. It is a problem of proof,

not a lack of exhaustion, that sinks the plaintiffs’ due-process claims.

Finally, the plaintiffs are wrong to suggest that Goldberg’s constitutional holding

applies to initial denials of Medicaid services. See Appellees’ Br. at 55 n.26 (citing

Goldberg v. Kelly, 397 U.S. 254 (1970)). The federal regulations that incorporate

Goldberg’s requirement do so not as a matter of constitutional obligation, but as a

federal statutory requirement. See 42 U.S.C. § 1396a(a)(3). The Commissioner is

contending only that the plaintiffs cannot maintain a Fourteenth Amendment due-process

claim based on a State’s alleged failure to comply with 42 U.S.C. § 1396a(a)(3) or 42

C.F.R. § 431.205(d). The plaintiffs fail to cite any binding judicial authority that

extends Goldberg’s constitutional holding to the initial denial of welfare benefits, and

they do not make any effort to explain how these Permobil C500 wheelchairs are

“property” belonging to Koenning, Martin, and Ryals. Neither do the decisions that

they cite from other courts.

VII. THE DISTRICT COURT HAD NO AUTHORITY TO “REVERSE” THE

DECISIONS OF HHSC AND TMHP OR TO “REMAND[]” THE

“CASE” TO TMHP.

Federal courts have no authority to “reverse” the decisions of state agencies,

and the plaintiffs do not argue to the contrary. The plaintiffs attempt to defend only


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the district court’s “remand” to TMHP. But they do not cite any provision of federal

law that authorizes federal courts to “remand” Article III cases to state agencies. And

the opinion in Meyers v. Reagan, 776 F.2d 241, 244 (8th Cir. 1985), does not even

attempt to answer the objections in the Commissioner’s opening brief. Finally,

TMHP was not even named as a defendant in this case, and the plaintiffs do not

begin to explain how a federal court can enter judgment or direct an order against a

person or entity that is not a named party to the federal judicial proceeding.


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CONCLUSION

The judgment of the district court should be vacated, and the case remanded

with instructions to enter judgment in favor of the Commissioner or (in the

alternative) to abstain in favor of CMS’s primary jurisdiction.

Respectfully submitted. GREG ABBOTT Attorney General of Texas DANIEL T. HODGE First Assistant Attorney General /s/ Jonathan F. Mitchell JONATHAN F. MITCHELL Solicitor General State Bar No. 24075463

RANCE L. CRAFT ARTHUR C. D’ANDREA DOUGLAS D. GEYSER MICHAEL P. MURPHY Assistant Solicitors General DREW L. HARRIS Assistant Attorney General

OFFICE OF THE ATTORNEY GENERAL P.O. Box 12548 (MC 059) Austin, Texas 78711-2548 Tel.: (512) 936-1695 Fax: (512) 474-2697

Counsel for Defendant-Appellant


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CERTIFICATE OF SERVICE I certify that this document has been filed with the Clerk of the Court and served by ECF on April 1, 2013, upon: Maureen A. O'Connell SOUTHERN DISABILITY LAW CENTER 1307 Payne Avenue Austin, TX 78757-0000 Lewis Alan Golinker, Esq. ASSISTIVE TECHNOLOGY LAW CENTER Suite 300 401 E. State Street Ithaca, NY 14850-0000 Maryann Overath 1404 Crestwood Road Austin, TX 78722 Martha Jane Perkins Sarah Jane Somers NATIONAL HEALTH LAW PROGRAM, INC. 101 E. Weaver Street, Suite G-7 Carrboro, NC 27510 Attorneys for Plaintiffs-Appellees /s/ Jonathan F. Mitchell

JONATHAN F. MITCHELL Solicitor General Counsel for Defendant-Appellant


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CERTIFICATE OF ELECTRONIC COMPLIANCE

Counsel also certifies that on April 1, 2013, this brief was transmitted to Mr. Lyle W. Cayce, Clerk of the United States Court of Appeals for the Fifth Circuit, via the Court’s CM/ECF Document Filing System, https://ecf.ca5.uscourts.gov/.

Counsel further certifies that: (1) required privacy redactions have been made, 5TH CIR. R. 25.2.13; (2) the electronic submission is an exact copy of the paper document, 5TH CIR. R. 25.2.1; and (3) the document has been scanned with the most recent version of Symantec Endpoint Protection and is free of viruses.

/s/ Jonathan F. Mitchell

JONATHAN F. MITCHELL Counsel for Defendant-Appellant


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CERTIFICATE OF COMPLIANCE

With Type-Volume Limitation, Typeface Requirements, and Type Style Requirements

1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because: [ ] this brief contains 8994 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii), or [ ] this brief uses a monospaced typeface and contains [state the number of] lines of text, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). 2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because: [ X] this brief has been prepared in a proportionally spaced typeface using Microsoft Word in Garamond 14-point type face, or [ ] this brief has been prepared in a monospaced typeface using [state name and version of word processing program] with [state number of characters per inch and name of type style].

/s/ Jonathan F. Mitchell

JONATHAN F. MITCHELL Counsel for Defendant-Appellant Dated: April 1, 2013


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