ARMSTRONG v. EXCEPTIONAL CHILD CENTER, INC., 575 U.S. ___ (2015)


Issues: ,

Concurrence (Breyer)

Contents

Opinion of BREYER, J.

?575 U.?S. ____ (2015)

No. 14-15

RICHARD ARMSTRONG, ET?AL., PETITIONERS v. EXCEPTIONAL CHILD CENTER, INC., ET?AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

[March 31, 2015]


JUSTICE BREYER, concurring in part and concurring in the judgment.

I join Parts I, II, and III of the Court’s opinion.

Like all other Members of the Court, I would not characterize the question before us in terms of a Supremacy Clause “cause of action.” Rather, I would ask whether “federal courts may in [these] circumstances grant injunctive relief against state officers who are violating, or planning to violate, federal law.” Ante, at 5; post, at 4 (SOTOMAYOR, J., dissenting). I believe the answer to this question is no.

That answer does not follow from the application of a simple, fixed legal formula separating federal statutes that may underlie this kind of injunctive action from those that may not. “[T]he statute books are too many, the laws too diverse, and their purposes too complex, for any single legal formula to offer” courts “more than general guidance.” Gonzaga Univ. v. Doe, 536 U.?S. 273, 291 (2012) (BREYER, J., concurring in judgment). Rather, I believe that several characteristics of the federal statute before us, when taken together, make clear that Congress intended to foreclose respondents from bringing this particular action for injunctive relief.

For one thing, as the majority points out, ?30(A) of the Medicaid Act, 42 U.?S.?C. ?1396a(a)(30)(A), sets forth a federal mandate that is broad and nonspecific. See ante, at 7. But, more than that, ?30(A) applies its broad standards to the setting of rates. The history of ratemaking demonstrates that administrative agencies are far better suited to this task than judges. More than a century ago, Congress created the Interstate Commerce Commission, the first great federal regulatory rate-setting agency, and endowed it with authority to set “reasonable” railroad rates. Ch. 104, 24 Stat. 379 (1887). It did so in part because judicial efforts to maintain reasonable rate levels had proved inadequate. See I. Sharfman, Railway Regulation: An Analysis of the Underlying Problems in Railway Economics from the Standpoint of Government Regulation 43-44 (1915).

Reading ?30(A) underscores the complexity and nonjudicial nature of the rate-setting task. That provision requires State Medicaid plans to “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers” to assure “care and services” equivalent to that “available to the general population in the geographic area.” ?1396a(a) (30)(A). The methods that a state agency, such as Idaho’s Department of Health and Welfare, uses to make this kind of determination may involve subsidiary determinations of, for example, the actual cost of providing quality services, including personnel and total operating expenses; changes in public expectations with respect to delivery of services; inflation; a comparison of rates paid in neighboring States for comparable services; and a comparison of any rates paid for comparable services in other public or private capacities. See App. to Reply to Brief in Opposition 16; Idaho Code Ann. ?56-118 (2012).

At the same time, ?30(A) applies broadly, covering reimbursements provided to approximately 1.36 million doctors, serving over 69 million patients across the Nation. See Dept. of Health and Human Servs., Office of Inspector General, Access to Care: Provider Availability in Medicaid Managed Care 1, 5 (Dec. 2014). And States engage in time-consuming efforts to obtain public input on proposed plan amendments. See, e.g., Kansas Medicaid: Design and Implementation of a Public Input and Stakeholder Consult Process (Sept. 16, 2011) (prepared by Deloitte Consulting, LLP) (describing public input on Kansas’ proposed Medicaid amendments).

I recognize that federal courts have long become accustomed to reviewing for reasonableness or constitutionality the rate-setting determinations made by agencies. See 5 U.?S.?C. ?706; FPC v. Hope Natural Gas Co., 320 U.?S. 591, 602-606 (1944). But this is not such an action. Instead, the lower courts here, relying on the rate-setting standard articulated in Orthopaedic Hospital v. Belshe, 103 F. 3d 1491 (CA9 1997), required the State to set rates that “approximate the cost of quality care provided efficiently and economically.” Id., at 1496. See Inclusion, Inc. v. Armstrong, 835 F.?Supp. 2d 960, 963-964 (Idaho 2011), aff’d, 567 Fed. Appx. 496 (CA9 2014). To find in the law a basis for courts to engage in such direct rate-setting could set a precedent for allowing other similar actions, potentially resulting in rates set by federal judges (of whom there are several hundred) outside the ordinary channel of federal judicial review of agency decisionmaking. The consequence, I fear, would be increased litigation, inconsistent results, and disorderly administration of highly complex federal programs that demand public consultation, administrative guidance and coherence for their success. I do not believe Congress intended to allow a statute-based injunctive action that poses such risks (and that has the other features I mention).

I recognize that courts might in particular instances be able to resolve rate-related requests for injunctive relief quite easily. But I see no easy way to separate in advance the potentially simple sheep from the more harmful rate-making goats. In any event, this case, I fear, belongs in the latter category. See Belshe, supra, at 1496. Compare Brief for Respondents 2, n.?1 (claiming that respondents seek only to enforce federally approved methodology), with Brief for United States as Amicus Curiae 5, n.?2 (the relevant methodology has not been approved). See also Idaho Code Ann. ?56-118 (describing in general terms what appears to be a complex rate-setting methodology, while leaving unclear the extent to which Idaho is bound to use, rather than merely consider, actual provider costs).

For another thing, like the majority, I would ask why, in the complex rate-setting area, other forms of relief are inadequate. If the Secretary of Health and Human Services concludes that a State is failing to follow legally required federal rules, the Secretary can withhold federal funds. See ante, at 7 (citing 42 U.?S.?C. ?1396c). If withholding funds does not work, the federal agency may be able to sue a State to compel compliance with federal rules. See Tr. of Oral Arg. 23, 52 (Solicitor General and respondents acknowledging that the Federal Government might be able to sue a State to enjoin it from paying less than what ?30(A) requires). Cf., e.g., Arizona v. United States, 567 U.?S. __ (2012) (allowing similar action in another context).

Moreover, why could respondents not ask the federal agency to interpret its rules to respondents’ satisfaction, to modify those rules, to promulgate new rules or to enforce old ones? See 5 U.?S.?C. ?553(e). Normally, when such requests are denied, an injured party can seek judicial review of the agency’s refusal on the grounds that it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” ??702, 706(2)(A). And an injured party can ask the court to “compel agency action unlawfully withheld or unreasonably delayed.” ??702, 706(1). See also Tr. of Oral Arg. 15-16 (arguing that providers can bring an action under the Administrative Procedure Act (APA) whenever a waiver program is renewed or can seek new agency rulemaking); Japan Whaling Assn. v. American Cetacean Soc., 478 U.?S. 221, 230, n.?4, 231 (1986) (APA challenge to the Secretary of Commerce’s failure to act).

I recognize that the law may give the federal agency broad discretionary authority to decide when and how to exercise or to enforce statutes and rules. See Massachusetts v. EPA, 549 U.?S. 497, 527 (2007). As a result, it may be difficult for respondents to prevail on an APA claim unless it stems from an agency’s particularly egregious failure to act. But, if that is so, it is because Congress decided to vest broad discretion in the agency to interpret and to enforce ?30(A). I see no reason for this Court to circumvent that congressional determination by allowing this action to proceed.