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With a severe budget crisis as the backdrop, California urged the U.S. Supreme Court on Monday to bar private individuals from challenging state decisions to reduce Medicaid reimbursement rates for doctors and other health care providers. The justices gave no indication of what they might do with the complex case in which California has drawn support from 31 states and the federal government. The case, Douglas v. Independent Living Center of Southern California, was the first argument of the new term after Chief Justice John Roberts Jr. officially announced the end of the October 2010 term. Roberts also made special mention of Justice Antonin Scalia’s “quarter of a century” on the high court bench. Scalia assumed his seat on Sept. 26, 1985, and “the place has not been the same since,” said Roberts to laughter in the courtroom. As is custom on the First Monday of a new term, the justices also released an orders list in which they denied review in more than 1,500 cases that had been filed during the summer recess. No new cases were added to the argument docket. They also called for the views of the solicitor general of the United States in five challenges, including a case about lawsuits under the Fair Debt Collection Practices Act involving communications from a debt collector to a debtor’s attorney ( Fein v. Allen). Among the many cases turned away was an appeal by the National Conference of Bar Examiners seeking to overturn a ruling by the U.S. Court of Appeals for the 9th Circuit in an Americans with Disabilities Act (ADA) challenge. The bar examiners had rejected requests by Stephanie Enyart for special accommodations on the bar exam because of her progressive macular degeneration. The bar examiners challenged the 9th circuit’s interpretation of Department of Justice regulations for implementing the obligations of testing entities under the ADA. The case, National Conference of Bar Examiners v. Enyart, was featured in the Aug. 24 Supreme Court Insider. The justices also declined for now to step back into issues concerning the scope of the Second Amendment. The Court denied review in Williams v. Maryland, which asked whether the Second Amendment protects the right to carry or transport a registered handgun outside the home without a carry permit. Two other cases raising similar issues are pending: Masciandaro v. U.S. and Chein v. California. And the justices sent a $1.14 million-attorney fee request by Jenner & Block down to the 9th Circuit for decision. The fee motion stems from last term’s major First Amendment challenge to California’s law banning the sale or rental of violent video games to minors. California lost, and Jenner’s Paul Smith, who successfully argued on behalf of the Entertainment Merchants Association, filed with the Court a petition for fees and expenses. Smith sought nearly $1.03 million in fees charged by Jenner, $39,000 in expenses, and $24,000 for a moot court run by Supreme Court litigators Paul Clement, Lee Levine and Theodore Olson. Smith’s hourly rate, according to the fee motion, was $725 in 2009 and $765 in 2010. In the fee motion, Smith told the justices, “In this case, California persisted in defending a law that Plaintiffs warned the Legislature was unconstitutional before it was passed; that was previously found to be unconstitutional by the district court and a unanimous panel of the Ninth Circuit, and that is similar to at least eight other laws invalidated as unconstitutional prior to the time that California sought certiorari in this case.” In the Medicaid case argued on Monday, a group of Medicaid recipients and providers brought five different lawsuits against California when it enacted across-the-board cuts in payments and reimbursement rates for hospitals, physicians, pharmacies and other providers. The group sought to stop the cuts and claimed that private individuals had the right to sue under the Constitution’s supremacy clause. The 9th Circuit approved a preliminary injunction to halt the reductions. At roughly the same time, the federal agency responsible for administering the Medicaid program had rejected the cuts, which triggered an administrative hearing process that is pending. Congress enacted the federal Medicaid program for the poor and disabled under its spending clause power. States are free to participate, but if they do and accept federal funds, they must comply with the program’s requirements. If they don’t comply, they risk forfeiting the federal money. During arguments on Monday, California Supervising Deputy Attorney General Karin Schwartz forcefully argued that Congress controls who can enforce federal law. Congress, in spending clause legislation, must state “clearly and unambiguously” whether there is a private cause of action, which it did not do in the federal provision governing conditions for participating in the Medicaid program. “This is a spending clause provision, vague and ambiguous in its terms, which cries out for an administrative process,” she said. Justice Elena Kagan noted that an amicus brief by former officials of the Department of Health and Human Services supported a private right to sue because the $400 billion program is supervised by a small number of government employees and a private cause of action is much more efficient to ensure compliance. But Schwartz said it is not efficient to have “700 federal judges interpreting the statute in different ways.” Justice Anthony Kennedy called that response “a sky is falling” answer and he seemed unconvinced by it. Deputy Solicitor General Edwin Kneedler argued that the spending clause “is a contractual relationship between the United States and the states.” Third parties, he said, only can sue if the contracting parties intended them to sue. There is not such intent in the Medicaid provision. Representing the Medicaid recipients and providers, Carter Phillips of Sidley Austin pressed the supremacy clause argument. (That clause declares that federal laws are “the supreme law of the land” and a state law or action that conflicts with federal law is “preempted” under the clause.). Phillips argued that, under the Court’s supremacy clause precedents, “an injunction which restrains the State from taking any steps to the enforcement of an unconstitutional enactment to the injury of the complainant is the basis for relief. And that’s exactly the circumstance we have in this case.” He added, “The question is, what do you do with someone who is suffering a lack of access to vital medical care in a way that is irreparable, and is it realistic to think that Congress meant under those circumstances to deprive the individual plaintiff of any kind of rights? And the answer is no. And that’s as far as the Court needs to go. It doesn’t need to figure out exactly how far Congress could deal with the supremacy clause. I realize that there is some skepticism on that score.” The case has drawn some strange bedfellows on the side of the providers and recipients, including the American Civil Liberties Union, the U.S. Chamber of Commerce and House and Senate Democratic leaders. Marcia Coyle can be contacted at [email protected].

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