Supreme Court Opens Door for Federal-State Program Beneficiaries

The US Supreme Court has reaffirmed that some beneficiaries of federal-state programs may go to court when states violate those programs’ rules. The court’s 7-2 decision in Health and Hospital Commission v. Talevski adhered to its established precedent, surprising observers who expected the court to slam the door on these kinds of suits.

In 1987, Congress passed and President Ronald Reagan signed the Federal Nursing Home Reform Act, which barred nursing homes from physically restraining or sedating residents for disciplinary or convenience reasons absent medical justification. It also restricted unnecessary transfers among facilities, which can cause patients to decline. To receive federal Medicaid funds, states had to agree to implement these protections, which all states did.

After Gorgi Talevski was admitted to a nursing home, his condition dramatically deteriorated. His family discovered that this resulted from heavy sedation that served no medical purpose. After they complained, the nursing home subjected him to a series of disruptive and disorienting transfers, ending in a facility 90 minutes from his family. His family complained to the state, but the nursing home ignored orders to readmit Talevski.

When the family sued, the nursing home argued that federal courts couldn’t consider whether it violated federal law. Section 1983, part of the Civil Rights Act of 1871, allows suits over “deprivation of any rights, privileges, or immunities secured by the Constitution and laws” by state or local governments. The nursing home, however, argued that the Medicaid statute didn’t count as a law because it was a spending program. If a recipient of federal funds was acting unlawfully, the nursing home argued that cutting off funds was the only recourse.

The Supreme Court had rejected that argument in 1980, but that was a long time ago. Since then, it has steadily narrowed the permissible scope of section 1983 litigation. Federal agencies typically lack the staff to monitor state and local governments’ violations of federal law. Cutting off federal funds is also a crude instrument: As much as illegal conduct disturbs them, federal agencies often fear that terminating funding would cause greater hardship.

These cases established a two-part test for when designated beneficiaries of federal programs could take lawless behavior to court under section 1983. First, the statute they seek to enforce must be framed in terms of individual rights. Statutory requirements that generally require sound program administration are insufficient. Second, Congress mustn’t have indicated that private enforcement would undermine the statutory scheme.

Under these tests, Talevski had a strong case. Both provisions of the nursing home reform law that he sought to enforce spoke explicitly of a right. And Congress did nothing to restrict or redirect individual enforcement of the law. Still, with so many cases rejecting fairly strong arguments for private enforcement of other laws, many observers expected the court would take the next step and block all or almost all such claims.

Instead, Justice Ketanji Brown Jackson’s opinion for the court faithfully applied the doctrine created in its prior cases. It acknowledged that federal statutes aren’t privately enforceable “as a matter of course” but made clear that the intent of Congress rather than any judge-made presumption is decisive. Justice Amy Coney Barrett, joined by Chief Justice John Roberts, emphasized that the “bar is high, and … many federal statutes will not” clear it. Nonetheless, she fully joined the court’s opinion. So did Justice Neil Gorsuch, though he expressed some openness to rethink these principles in a future case.

Justice Samuel Alito dissented, agreeing with the court’s statement of the test but finding sufficient federal oversight of compliance with the Medicaid statute to preclude private enforcement. Only Justice Clarence Thomas sought a fundamental change, arguing that spending programs’ statutes shouldn’t be enforceable in court.

Doctrinally, the court did little. But its forceful reiteration of its established standards will likely increase civil rights lawyers’ willingness to challenge violations of federal law. Many judges perceived a strong trend toward shutting down private enforcement of federal statutes in spending programs like Medicaid. Lawyers have either declined to bring cases involving patent lawlessness or have settled those cases for minimal corrective action.

Although Talevski will hardly trigger a flood of litigation, it will remove the sense of impunity that some state and local officials have come to feel. With federal agencies’ enforcement budgets likely to take further hits under the recent budget deal, private enforcement of federal law will increasingly be the sole means of preventing needless suffering like that inflicted on the Talevski family.

The case is Health & Hosp. Corp. of Marion Cty., Ind. v. Talevski, U.S., No. 21-806, opinion 6/8/23.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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David A. Super is a professor at Georgetown Law, where he studies the federal budget and anti-poverty programs.

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