Greenless v. Almond , 277 F.3d 601 ( 2002 )

United States Court of Appeals
For the First Circuit
____________________
No. 01-1410
BLANCHE E. GREENLESS, on behalf of herself and all others similarly
situated,
Plaintiff, Appellant,
v.
LINCOLN C. ALMOND, in his capacity as Governor of the State of Rhode
Island; CHRISTINE FERGUSON, in her capacity as Director of the
Department of Human Services for the State of Rhode Island; and
SHELDON WHITEHOUSE, in his capacity as Attorney General for the State
of Rhode Island,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Mary M. Lisi, U.S. District Judge]
____________________
Before
Lynch, Circuit Judge,
Coffin, Senior Circuit Judge,
and Young,* District Judge.
____________________
Antonio Ponvert III, with whom Michael A. St. Pierre, James E.
Kelleher, Revens, Revens & St. Pierre, and Koskoff, Koskoff & Bieder,
P.C., were on brief for appellant.
Neil F. X. Kelly, Special Assistant Attorney General, with whom
Sheldon Whitehouse, Attorney General, was on brief for appellees.
* Of the District of Massachusetts, sitting by designation.
____________________
January 28, 2002
____________________
LYNCH, Circuit Judge. This case concerns claims made
on the allocation of monies to the states, specifically Rhode
Island, from the 1998 Master Settlement Agreement in the tobacco
litigation.
Blanche E. Greenless appeals the dismissal of her suit
under 42 U.S.C. § 1983 for declaratory and injunctive relief
against the Governor of Rhode Island and various other state
officials, all in their official capacities. Greenless seeks to
represent all of Rhode Island's Medicaid recipients who have
suffered damages from the use of tobacco. She claims that
federal law requires Rhode Island to pay that class a portion of
the proceeds from the settlement of its claims against the
tobacco industry, and that Rhode Island is wrongfully converting
what are essentially Medicaid recovery collections.
The district court dismissed Greenless's suit without
a hearing as barred by the doctrine of state sovereign immunity
embodied in the Eleventh Amendment. We affirm the dismissal of
the action, but on different grounds, holding that Greenless has
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failed to state a claim on which relief can be granted due to a
recent amendment of the Medicaid statute. We do not reach the
difficult question whether a claim of the sort Greenless
asserts, if provided by federal law, would be barred by the
Eleventh Amendment.
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I.
A. Facts
During the 1990s, more than forty of the fifty states,
including Rhode Island, filed suits against the major
manufacturers of tobacco products. See State v. Brown &
Williamson Tobacco Corp., No. 97-3058 (R.I. Sup. Ct. Dec. 17,
1998) (consent decree and final judgment). The exact theories
of recovery varied from state to state. Generally, the states
alleged that the tobacco industry had misled the public by
concealing the risks of cigarette smoking and had therefore
caused the states to spend vast sums of public money on
providing health care for those made ill by tobacco. Unlike
prior attempts to hold tobacco manufacturers liable for
smoking-related illnesses or deaths, the states' suits resulted
in a lucrative settlement, recorded by the Master Settlement
Agreement. See National Association of Attorneys General,
Master Settlement Agreement, at http://www.naag.org/tobac/
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cigmsa.rtf (Nov. 23, 1998). According to Greenless, under the
Agreement Rhode Island will receive approximately $1.408
billion.1
The expenditures on health care on which the state's
suits relied arose in significant part through the Medicaid
program. The Medicare and Medicaid programs are the two largest
sources of public funding for health care in the United States.
Medicare, which provides health care primarily to the elderly
and to some individuals with disabilities, receives funds
exclusively from the federal government. Medicaid, which
provides health care primarily to the indigent, receives funds
from both the federal government and the states. State Medicaid
expenditures consume large portions of states' budgets; in
fiscal year 2000, Rhode Island spent 22.6% of its budget on
Medicaid. Rhode Island Department of Human Services, Annual
Report: Fiscal Year 2000: Rhode Island Medicaid Program 13,
1 Payments under the Agreement are contingent on many
factors, and assigning values to a state's right to payment is
therefore difficult. See Floyd v. Thompson, 227 F.3d 1029, 1038
(7th Cir. 2000) ("The final amount to be paid . . . is unknown
and unknowable at this point . . . ."). The question presented
by this appeal is not quantitative, so exact amounts are not
material. Rhode Island stands to receive a great deal of money.
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available at http://www.dhs.state.ri.us/dhs/reports/ma2000.pdf.
When the states sought to recover funds spent on health care
made necessary by smoking, some of their alleged damages were
Medicaid expenditures. So stated Rhode Island's complaint at
the time.
The recovery of Medicaid expenditures from the tobacco
industry arguably brought into play certain aspects of the
federal Medicaid statute. When a state agrees to participate in
Medicaid by enacting a statute, it must create a plan that meets
requirements specified by Congress. That state Medicaid plan
must "provide that, as a condition of eligibility for medical
assistance under the State plan . . . the individual is required
-- (A) to assign the State any rights . . . to payment for
medical care from any third party." 42 U.S.C. § 1396k(a)
(1994).
Moreover, when a state, acting on an individual's
assignment of his or her rights, has recovered from a third
party compensation for state expenditures to provide health care
via Medicaid, the state may not necessarily keep all of the
money. Instead,
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[s]uch part of any amount collected by the State under
an assignment made under the provisions of this
section shall be retained by the State as is necessary
to reimburse it for medical assistance payments made
on behalf of an individual with respect to whom such
assignment was executed (with appropriate
reimbursement of the Federal Government to the extent
of its participation in the financing of such medical
assistance), and the remainder of such amount
collected shall be paid to such individual.
Id. § 1396k(b) (emphasis added).2 After the state and federal
governments are reimbursed, any excess is paid to the
individual, "who is usually a person of limited resources." 45
Fed. Reg. 8982, 8983 (Feb. 11, 1980).
If these provisions apply to the Master Settlement
Agreement (Rhode Island claims they do not because the suit was
brought not as a § 1396k assignment but under different
theories) then at least some of the money that the tobacco
industry paid the states under the Agreement belongs to the
2 This language is clarified by regulation:
The agency must distribute collections as follows --
(a) To itself, an amount equal to State Medicaid
expenditures for the individual on whose right the
collection was based.
(b) To the Federal Government, the Federal share of the
State Medicaid expenditures, minus any incentive payment
made in accordance with [a related provision] . . . .
(c) To the recipient, any remaining amount. . . .
42 C.F.R. § 433.153 (2000).
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federal government as appropriate reimbursement within the
meaning of § 1396k(b). If, as well, the states received more
money from the tobacco industry under the Agreement than was
necessary to reimburse both the state and federal governments
for medical assistance payments made on behalf of smokers, then
the remainder belongs to the smokers on whose behalf those
payments were made. Greenless's claim rests on this theory.
Congress has recently amended the statute. The 1999
Emergency Supplemental Appropriations Act exempts from the
normal procedures by which the federal government takes its
share of state recoveries "any amount recovered or paid to a
State as part of the comprehensive settlement of November 1998
between manufacturers of tobacco products . . . and State
Attorneys General." Pub. L. No. 106-31, § 3031, 113 Stat. 57,
103-04 (1999) (codified at 42 U.S.C. § 1396b(d)(3)(B)(i) (Supp.
V 1999)). It furthermore provides, with an exception irrelevant
to this case, that "a State may use amounts recovered or paid to
the State as part of a comprehensive . . . settlement . . .
described in [the prior] clause . . . for any expenditures
determined appropriate by the State." Id., 113 Stat. at 104
(codified at 42 U.S.C. § 1396b(d)(3)(B)(ii)).
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The parties agree that this new language removes any
claim to the states' tobacco settlement money by the federal
government. The question presented by this appeal is whether
the language also removes any possible claim to that money under
federal law by the individuals whose illnesses caused the states
to spend the money.
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B. History
Greenless filed this suit in the District of Rhode
Island against the various defendants in their official
capacities, claiming that Rhode Island must pay her and the
members of her class the amount by which the tobacco settlement
exceeds its actual costs. She alleged this amount to be
substantial. For her cause of action she relied on 42 U.S.C.
§ 1983 and its broad-ranging remedies for violations of federal
rights under color of state law. She asked for declaratory and
injunctive relief to compel Rhode Island's officials to pay her
the alleged excess.
The defendants moved to dismiss on two grounds. First,
they argued that Greenless's suit is barred under the Eleventh
Amendment by state sovereign immunity as a suit for, in effect,
money damages against the treasury of a state. Second, they
argued that Greenless has no cause of action under § 1983
because her rights under the Medicaid statute have not been and
will not be violated. Greenless in response claimed that her
suit does not run afoul of the Eleventh Amendment because the
state is not a party, only state officials, and because she
seeks only prospective relief permissible under the doctrine of
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Ex parte Young, 209 U.S. 123 (1908), as explained in Edelman v.
Jordan, 415 U.S. 651 (1974). She also responded to the
defendants' statutory arguments. On February 26, 2001, the
district court dismissed the case in a seven-page opinion
addressing only the question of state sovereign immunity.
Greenless v. Almond, C.A. No. 00-037ML (D.R.I. Feb. 26, 2001).
This appeal followed. The defendants make on appeal both sets
of arguments presented to the district court in support of the
judgment.
II.
Our review of the district court's judgment in this
case is de novo. See Mills v. Maine, 118 F.3d 37, 41 (1st Cir.
1997) (reviewing de novo a dismissal on Eleventh Amendment
grounds); Garita Hotel Ltd. P'ship v. Ponce Fed. Bank, F.S.B.,
958 F.2d 15, 17 (1st Cir. 1992) (same for failure to state a
claim). As always, we may affirm a district court's judgment on
any grounds supported by the record. Doe v. Anrig, 728 F.2d 30,
32 (1st Cir. 1984). Moreover, this circuit has held that
federal courts need not answer questions of state sovereign
immunity under the Eleventh Amendment before answering other,
easier legal questions that would decide a case. Parella v.
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Ret. Bd. of the R.I. Employees' Ret. Sys., 173 F.3d 46, 53-57
(1st Cir. 1999) (declining to apply to cases involving the
Eleventh Amendment the rule of Steel Co. v. Citizens for a
Better Environment, 523 U.S. 83 (1998), in which "a majority of
justices rejected the use of 'hypothetical jurisdiction'").
A. Eleventh Amendment and constitutional avoidance
Other plaintiffs have brought cases similar to this one
against numerous other states. None have yet succeeded.3 The
only circuit courts4 to address the Eleventh Amendment question,
the Fifth and Tenth Circuits, have held that the Amendment would
not prevent the plaintiffs in a case such as this one from
obtaining the relief they seek, if that relief were available
under federal law. Harris v. Owens, 264 F.3d 1282, 1289-94
3 Our discussion of similar cases in this opinion is not
exhaustive and includes only those published opinions useful to
give context to our decision today.
4 Some district courts have decided, as the district
court concluded in this case, that state sovereign immunity bars
such claims. E.g., Clark v. Stovall, 158 F. Supp. 2d 1215 (D.
Kan. 2001); Cardenas v. Anzai, 128 F. Supp. 2d 704 (D. Haw.
2001); Martin v. New Mexico, 197 F.R.D. 694 (D.N.M. 2000);
Barton v. Summers, 111 F. Supp. 2d 989 (M.D. Tenn. 2000). The
decision of the District of New Mexico in Martin preceded the
Tenth Circuit's decision in Harris, discussed in text; Harris is
now, of course, the law of that circuit.
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(10th Cir. 2001) (holding that the relief requested is
permissible under the doctrine of Ex parte Young); Watson v.
Texas, 261 F.3d 436, 440-43 (5th Cir. 2001) (holding that Texas
waived its sovereign immunity in the settlement agreement).
Every court to consider the question has, however,
decided that § 1396k(b) does not apply to the state tobacco
settlements, either because the settlements are not recoveries
of the sort governed by that section as a general matter or
because § 1396b(d)(3)(B)(ii) specifically exempts the
settlements. See Tyler v. Douglas, No. 00-7839, 2001 WL 1230630
(2d Cir. Oct. 16, 2001) (relying on § 1396b(d)(3)(B)(ii));
Harris, 264 F.3d at 1294-97 (same); McClendon v. Ga. Dep't of
Cmty. Health, 261 F.3d 1252, 1259-62 (11th Cir. 2001) (relying
on § 1396k(b));5 Floyd v. Thompson, 227 F.3d 1029, 1035-38 (7th
Cir. 2000) (relying on § 1396k(b) and on Wisconsin assignment
law); Skillings v. Illinois, 121 F. Supp. 2d 1235 (C.D. Ill.
2000) (following Floyd while applying Illinois law); see also
State v. Superior Court, 99 Cal. Rptr. 2d 735 (Cal. App. 2000)
5 Judge Noonan would have relied on § 1396b(d)(3)(B)(ii).
McClendon, 261 F.3d at 1262 (Noonan, J., concurring in the
judgment).
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(interpreting portion of state code implementing federal
statutory scheme); Brown v. State, 617 N.W.2d 421, 425-27 (Minn.
Ct. App. 2000) (same).
In summary, the courts that have considered questions
of state sovereign immunity similar to those presented by this
case have split, and the circuit courts among this group have
held the Eleventh Amendment not to bar claims such as
Greenless's. Those that have considered statutory questions
similar to those here are so far unanimous, although different
courts have followed different reasoning to the same conclusion.
We do not decide any question of state sovereign
immunity today. We will, however, sketch the outlines of the
question on the facts of this case in order to explain our
reasons for avoiding it. As a general matter the several states
are immune under the Eleventh Amendment from private suit in the
federal courts, absent their consent.6 Among the exceptions to
this rule is the doctrine of Ex parte Young, 209 U.S. 123
(1908), which allows a plaintiff to enforce a claim of federal
6 States do not waive their Eleventh Amendment immunity
merely by participating in the Medicaid program. Fla. Dep't of
Health & Rehabilitative Servs. v. Fla. Nursing Home Ass'n, 450
U.S. 147 (1981) (per curiam).
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right by obtaining injunctive or declaratory relief against a
state officer in the officer's official capacity. In Edelman v.
Jordan, 415 U.S. 651 (1974), the Supreme Court explained that
the purpose of this exception is to prevent continuing
violations of federal law, but not to remedy past violations.
Therefore, an Ex parte Young plaintiff may obtain prospective,
but not retrospective, relief. See id. at 664-65; see also
Idaho v. Coeur d'Alene Tribe, 521 U.S. 261, 294 (1997)
(O'Connor, J., concurring in part and concurring in the
judgment) ("[A] Young suit is available where a plaintiff
alleges an ongoing violation of federal law, and where the
relief sought is prospective rather than retrospective."); id.
at 298 (Souter, J., dissenting) (observing that, given the
disposition of the Justices in that case, "Justice O'Connor's
view is the controlling one").
Greenless claims to seek a prospective remedy for an
allegedly ongoing violation of federal law that will recur each
time the state actually receives an installment payment of the
tobacco settlement. The defendants claim she seeks
retrospective compensation for the alleged violation that the
state committed when it reached agreement with the tobacco
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industry without providing that a portion of the proceeds would
go to Greenless and her class. Because of the Supreme Court's
recent reinvigoration of the doctrine of state sovereign
immunity, see, e.g., Seminole Tribe v. Florida, 517 U.S. 44
(1996); Alden v. Maine, 527 U.S. 706 (1999), private plaintiffs'
ability to enforce congressionally enacted restraints on the
states' use of many types of funds may well turn on just such
questions to a degree few readers of Edelman would have
predicted when that case was decided.
It is not, however, the role of the federal courts to
answer legal questions unless specific cases need answers. This
principle applies with special force to complex questions of
constitutional law, so that courts often avoid such questions by
choosing to focus on other aspects of a case that adequately
dispose of the controversy between the parties. See Ashwander
v. Tenn. Valley Auth., 297 U.S. 288, 347 (1936) (Brandeis, J.,
concurring) ("The Court will not pass upon a constitutional
question although properly presented by the record, if there is
also present some other ground upon which the case may be
disposed of."); U.S.I. Props. Corp. v. M.D. Constr. Co., 230
F.3d 489, 495 (1st Cir. 2000) (avoiding a complex Eleventh
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Amendment question in favor of a simpler statutory subject
matter jurisdiction question); Parella, 173 F.3d at 56. In this
case, the constitutional question is difficult; but, as we
discuss below, at least one statutory question is easy and
disposes completely of Greenless's suit. We therefore bypass
the constitutional question, as have the Second, Seventh, and
Eleventh Circuits, in favor of the easier question whether
plaintiffs have stated a claim on which relief may be granted.7
7 The Tenth Circuit in Harris reached the same conclusion
about the relative difficulty of the questions but nevertheless
held itself bound to answer the constitutional question because
of its prior holding in Martin v. Kansas, 190 F.3d 1120 (10th
Cir. 1999), that questions involving the Eleventh Amendment must
be reached before all other legal issues in a case. Harris, 264
F.3d at 1288. The Fifth Circuit follows a similar rule. United
States ex rel. Foulds v. Tex. Tech Univ., 171 F.3d 279, 285-88
(5th Cir. 1999). Under Parella, this circuit follows a
different one. Several other circuits appear to agree, or at
least to leave open some room for judicial discretion. See
Tyler, 2001 WL 1230630, at *4 (observing the Tenth Circuit's
difficulty, and then deciding the statutory question);
McClendon, 261 F.3d at 1258 (distinguishing Seaborn v. Fla.
Dep't of Corr., 143 F.3d 1405 (11th Cir. 1998), which had
appeared to announce a holding similar to that of Martin, and
reaching the statutory question); United States ex rel. Long v.
SCS Bus. & Technical Inst., 173 F.3d 890 (D.C. Cir. 1999)
(holding that a federal court may reach other questions before
an Eleventh Amendment question at least if the state involved
consents, and observing the benefits of doing so when the
Eleventh Amendment question is complex); cf. Floyd, 227 F.3d at
1035 (stating that the court would resolve the Eleventh
Amendment issue first "if it appeared in any way possible" that
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See Tyler, 2001 WL 1230630, at *4; Floyd, 227 F.3d at 1034;
McClendon, 261 F.3d at 1258. We recommend this course to the
district courts of this circuit as the wiser approach.
B. Statutory interpretation
There are two reasons to doubt whether the amended
Medicaid statute will support Greenless's claim. The first
reason is that it is not clear whether any of the money
recovered by Rhode Island is money to which Greenless and her
class can stake a claim under § 1396k(b) as it stood at the time
of the settlements. See McClendon, 261 F.3d at 1259-62; Watson,
261 F.3d at 443-45. The second reason, and the one on which we
base our holding, is § 1396b(d)(3)(B)(ii), added by the
Emergency Supplemental Appropriations Act of 1999, Pub. L. No.
106-31, 113 Stat. 57, 103-04 (1999). We find persuasive the
reasoning of Tyler, in which the Second Circuit held that
§ 1396b(d)(3)(B)(ii) was plain and foreclosed a suit similar to
the present one. Tyler, 2001 WL 1230630, at *5-8. We agree
with the Second Circuit that the funds described in that section
as available "for any expenditures determined appropriate by the
the plaintiffs could sue the state, and then concluding that
such a suit was not possible).
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State" cannot simultaneously be owed to Medicaid recipients.
Id. at *6 (quoting § 1396b(d)(3)(B)(ii)).
Greenless makes two arguments against this reading of
§ 1396b(d)(3)(B)(ii) based on traditional principles of
statutory interpretation. First, she claims that the reading
violates the presumption against implied repeal. Second, she
claims that the reading violates the presumption against giving
legislation retroactive effect. Although these two presumptions
are well-known landmarks of this area of the law, neither
applies to this case.
The "implied repeal" argument is an odd one because at
issue is not whether Congress totally repealed § 1396k, but
whether it intended to carve out tobacco settlement monies from
the reach of that provision. But we will use Greenless's
terminology. She argues that the amendment only waives the
federal government's share of the settlement and does not affect
any rights of individuals. Not so. The presumption against
implied repeal, although of particular force when, as here,
applied to appropriations riders, nevertheless turns on
legislative intent. United States v. Will, 449 U.S. 200, 221-24
(1980) ("[W]hen Congress desires to suspend or repeal a statute
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in force, '[t]here can be no doubt that . . . it could
accomplish its purpose by an amendment to an appropriation bill,
or otherwise.'" (quoting United States v. Dickerson, 310 U.S.
554, 555 (1940)) (second and third alterations in Will)).
Indeed, the presumption results from certain assumptions that
courts make about the legislative process:
Courts do not lightly assume that one statute has
implicitly repealed another. This principle is a
product of a set of beliefs about the legislative
process -- in particular, a belief that Congress,
focused as it usually is on a particular problem,
should not be understood to have eliminated without
specific consideration another program that was likely
the product of sustained attention.
C. R. Sunstein, Interpreting Statutes in the Regulatory State,
103 Harv. L. Rev. 405, 475 (1989) (footnote omitted). These
concerns have less force where, as here, Congress was responding
to a recent event, the Master Settlement Agreement, and was
clear in its language. The only even arguable doubt is whether
that repeal covered Medicaid recipients' possible claims as well
as the federal government's. In our view the plain statutory
language means both.8
8 Even were we to apply the presumption against implied
repeal, that presumption can be overcome by an "irreconciliable
conflict" between statutes. Matsushita Elec. Indus. Co. v.
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The presumption against retroactivity also does not
affect the result in this case. It is true that as a general
matter Congress must speak clearly to make its legislation
retroactive. Landgraf v. USI Film Prods., 511 U.S. 244, 280
(1994).9 Whatever the proper characterization of the relief
Greenless seeks in this case, Congress made its intent clear in
the amendment, which "applies to all funds received under the
Master Settlement Agreement, whether past, present, or future."
Harris, 264 F.3d at 1296.
Epstein, 516 U.S. 367, 381 (1996) (quoting Kremer v. Chem.
Constr. Corp., 456 U.S. 461, 468 (1982)) (internal quotation
marks omitted). It is impossible to reconcile § 1396k(b)'s
requirement that "the remainder of [the tobacco settlement]
shall be paid to such individual" with § 1396b(d)(3)(B)(ii)'s
permission to use the money "for any expenditures determined
appropriate by the State."
9 We disregard the tension between Greenless's argument
for Eleventh Amendment purposes that she seeks prospective
relief for a future injury, rather than retrospective
compensation for a past injury, and her argument that our
reading of the statute renders it retroactive. See Landgraf,
511 U.S. at 273 ("When the intervening statute authorizes or
affects the propriety of prospective relief, application of the
new provision is not retroactive.").
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III.
To avoid the unnecessary resolution of a difficult
constitutional question, we have assessed the merits of
Greenless's case and have found that she has failed to state a
claim upon which relief may be granted. Therefore, although we
do not reach the reasoning of the district court's opinion, its
judgment dismissing the case is affirmed.
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