1 RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Six

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ELECTRO NIC CIT

ATION: 2004 FED App . 0139P (6th C ir.) File Name: 04a01 39p.06



### UNITED STATES COURT OF APPEALS

FOR THE SIXT H CIR CUIT

_________________
L ARNCE H AMBY ,

Plaintiff-Appellee,

B ETTY O OTEN , Intervenor Plaintiff-Appellee,

N ORA H YSLOPE , Intervenor Plaintiff-Appellee,

v.

C. W ARREN N EEL , Commissioner, Tennessee Department of Finance and Administra

tion; M ARK R EYNOLDS , Deputy Commissioner, Bureau of TennCare, Defenda nts-Appe llants. X - - - -
> , - - - - - - - - - - - - - - - - - N Nos. 01-5653/5930

Appeal from the United States District Court for the Middle District of Tennessee at Nashville. No. 98-01023—William J. Haynes, Jr., District Judge.

Argued: January

31, 2003 2 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

Decided and Filed: May

17, 2004

Befor e: BATCHELDE

R, MOORE, a

nd CLA Y, Circui t Judges.

_________________ COUNSEL

ARGUED: Sue A. Sheldon, OFFICE OF THE ATTORNEY GEN ER AL, Nashville, Tennessee, for Appellants. L enny L. Croce, RURAL LEG

AL SERVI CES OF TENNESSEE, Oak Ridge, Tennessee, for Appellees. ON BRIE F: Sue A. Sh eldon, OFFI CE OF THE ATTORNEY

GENERAL , Nashville, Te nne ssee, for Appellants. Lenny L. Croce, RURALLEGAL

SERVICES OF TENNESSEE, Oak Ridge, Tenness ee, for

Appellee s. CLAY, J., delivered the opinion of the court, in which MO ORE, J., joined. BATCHELDER, J. (pp. 27-34), delivered a separate dissenting opinion.

_________________ OPINION

_________________ CLA Y, Circui t J udg e. T hi s i s a c ons ol id ate d ap pea l. In Case No. 01-5653, De fendan ts, C. Warren Neel, the Com m issioner

of the Tennessee Department of Fina nce and Admi nistrati on, and Mark Reynolds, the D eput y Commissionerof the Burea u of Tenness ee’s Me dicaid DemonstrationProject

(“TennCare”), appeal from the district court’s order entered on Apr il 27, 2001, granting summary judgment in favor of Pl ai nt if fs , La rn ce Ha mb y, Betty Ooten, and Nor a Hys lo pe. InCase No. 01-5930, Defendants appeal from the district court’s order entered June 8, 2001, denying Defend ants’ motion to stay the district court’s April 17, 2001Nos. 01-5653/5930 Hamby v . Neel, e t al. 3

order. For the r

easons se t f orth be low, we AFFIRM the district court’s orders.

STATEMENT OF

FACTS

Procedur al History
Plaintiffs b rought this action under 42 U.S.C. § 1983 and the Fourteenth Amendment of the United

States Constitution, challenging

th e TennCar

e prog ram’s ha ndling of

their applications for coverage unde r the program

when Plaintiffs were denied coverag e.
Plaintiff Hamby commenc ed this action in Octob er of 1998. Plai ntif fs Ooten and Hyslope r

equested and were gra

nted per mission to intervene in the action in 1998 and 2000 , respect ive ly. Thereafter, Plaintiffs and Defenda nts filed cross-motions for partial summary judgment . On A pril 13, 2001 , the district c ourt issue d an orde r gran ting Plai ntiffs’ motion for par

tial s um mary judg

ment, thereby a

warding TennCare benefit s to Plaintiffs from the date of their original applica tions, and denying

Defendants’ motion for partial summary judgme

nt. The district court modified its order on April27, 2001 and

May 10, 2001, chang

ing a sentence in the order and providing a correc t citation to a regulation.

Defend ants timely filed a notice of a ppeal on May 11, 2001 (CaseNo. 01-5653). Pending appeal, Defe ndants filed a motion to stay the distri ct court’s Ap ril 27, 200 1 order. By order entered on June 8, 2001, the district court denied the motion to stay . On J uly 2, 2001, D efenda

nts moved t

his Courtfor a stay pending

appeal. This Court denied the mot ion to stay

on Augu st 9, 2001, insofar as the mo tio n sought a s ta y o f an injunction requirin g Defe ndants to approve benefits under

the TennCare pro gram to Plaintiffs as of the date of their first applications. However, this Court granted a st ay pendi ng appeal of all other aspects of the district court’s April 17, 2001 order. 4 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

OnJuly 5 , 2001, De fendant s timely filed a notice of appeal fromthe district court’s June 8, 20 01 order (Case No. 01- 5930). This Court consolidated the two appeals on July 26, 2001, and cond

ucte d oral argument on January 31, 2003. Thereafter, on February

24, 2003, Plaintiffs filed

a motion to dismiss the appeals

for lack of jurisdiction. By order issued on April 11 , 2003, this

Court den

ied the mo tion to dismi ss.
Facts

A. TennCare Enrollment and Eligibility

The Tennessee Department of Health (“TDH”) administers the TennCare program fo r t he State of Tennessee. T ENN

. C ODE ANN . § 71-5-104 . The Ten nCare pr ogram i s a

federal

w aiver plan under the Medicaid Act approved by the Secretary of Health and Human Services under 42 U.S.C

. § 1315. The waiver eliminated certain req u irements for eligibil ity f

or medic al benef

its under the Medic aid Act.

Under the TennCare progra

m, Tennessee provides medical assistance to eli gible persons through managed ca re organizations rather than through traditional fe e- for-service arrang ements with providers. TennCare coverag e is extended to three g

roups of i

ndividual s: (1) exis ting M edicaid beneficiaries and those

who meet Medicaid’s financial and/or medical eligibility requi

remen ts; (2) the uninsured; and (3) the uninsurable. T ENN

. C OMP

. R. & R EGS . 1200-13-12-.02(2) (a) 2 and 3. The TennCare regulations def ine uninsured persons a s: [A]ny pers on[s] who as of March 1, 1993 . . . did not have coverage under an individual he alt h insurance policy or who did not have (either directly or throu gh a family member) coverage under, or access to, employersponsored

health insurance or t o another government plan, and continues to lack this access . . . .Nos. 01-5653/5930 Hamby v . Neel, e t al. 5

T ENN

. C OMP

. R. & R EGS . 1200-13-12-.01(36). P ersons eli gible for TennCare coverag e as uninsureds can enro l l during periods of open enrollment. T ENN

. C OMP

. R. & R EGS

. 1200-13-13-.03(1)(d). The open enrollment period continues until the prog

ram rea ches 85% of the maximum enrollment cap for that yea

r. T ENN

. C OMP

. R. & R EGS . 1200- 13-13

- .03(1)(d).

The TennCare regulations define uninsurable persons as “[A]ny person[s] who are u nable, because of an existing medical condition, to purchase h ealt h insurance, but who meets the guid

elines of the [prog ram] .” T ENN

. C OMP

. R. & R EGS

. 1200-13-12.-.02(35). Persons eligible for TennCare
covera ge as un in su ra bl es ca n e nr ol l a t a ny t im e. T ENN

. C OMP

. R. & R EGS . 1200-13-12-.03(1) (b) 2.

To e nrol l in the Te

nnCare progra

m, an appl icant must
answer a series of written questions and submit the completed forms to the TennCare Bureau. The same application is used for both uninsu

re d and uninsurable applicants. Applicants are notrequired to reflect on theapplic ation whether they are seekingmedic al in surance as an unin sured or

uninsura ble person.
The T enn Care regulations state that enrollment in the program is complet

e when th e “pers on eligi

ble for enrollment has selected

a managed care plan f

rom those available in the
area wh ere the person resides, the application has been approved by the Bur

eau of Ten

n Care, and when any applica ble prem iums have been paid.” T ENN

. C OMP

. R. & R EGS

. 1200-13-12-.03(1). The regulations furthe r prov id e that “[e]nrollment shall be deemed complete retroactive to the date of the or

iginal a pplication, if that a

pplication is approved.” T ENN

. C OMP

. R. & R EGS . 1200-13-12-.01(1). This is consisten t wi th the Medicaid regulations and waiver that require approva l of medic aid

coverage up to three

months from the date of the approved application. 6 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

However, if an application is denied, the TennCare regulations require that

written notice to the applicant include the fo llow ing:

1. Anexplanation of the reasons for the Bureau’s actions, including a brief s tate ment of the factua l basis and the ru le or contract provision relied upon by the Bureau; 2. Anexplana tion of the circumst ances under which the TennCare applicant can request an a ppeal; and 3. Anexplanation of the TennCare applicant’s right to submit document s or other

informat io n in support of a request for appe al.

T ENN

. C OMP

. R. & R EGS

. 12 00-13-12-.11(3)(b). Furthermore , anapplicant may

appeal the de nial o f Tenn Care co verage within 30 days aft er the date of the notice of denial. T ENN

. C OMP

. R. & R EGS . 1200-13-12-.11 (3) (a).

B. Plaintiff Ha mby’s A pplication P rocess
In1995, Hamby, then sixty -one yea rs old, was treated for skin ca nc er an d t es ti cu la r c an ce r. Ha mb y app lied for TennCare coverage in Decembe r of 1995. Because Hamby had not yet rec eived a response from the TennCare B ureau regarding his December 1995 application, Hamby completed and mailed a second application to the Bureau in February of 1996.

Onhis applications, Hamby stated that he ha d notb een turned down for a health insurancepolicy other tha n Medica id
or Medicare. The TennCare Bur eau denied

both of Hamby’s app lications

. The TennCare Bureau sent Ha mby a wri

tte n notice, d ated Mar ch 20, 199 6, which provided i n part:
THIS IS WHY WE THINK YOU DO NOT Q UALI FY FOR TENNCARE.Nos. 01-5653/5930 Hamby v . Neel, e t al. 7

Your [February

1996] application was received after the end of an open enrollment period.

. . . . If you or someone in y

our family has lost or cannot get health insurance bec ause o f a medic al condit ion, fill in the attached appeal for

m a nd return it to us. You and your family members

may qualify

for TennCar e becau se you are u ni nsurable . Uninsur

able peo ple can e nroll in TennCare at any

time.

. . . . There are thr

ee way s to qualif y f or TennCa

re. We onl

y checked one way. Y ou m ay also be eligible if y ou are uninsura ble (you lo se or cannot get health insurance because of a medi cal c on dition you have) or if y ou qualify for Me dicaid.

. . . . REMEMBER ! Even if you are not eligible for TennCare
or Medicaid . . . you ca

n apply later

if the facts about

you change. (J.A. at 211-12.)

In J une of 1996, Hamby se nt a third application t o th e TennCare Bureau, in which h e in dicated that he had been denied health in suran ce. Hamby ’s third application was received by the TennCare

Bur eau o n June 12, 1996. The TennCare Bureau later informed Hamby that he was enrolled in the program effective June 12, 1996.

InJune of 1997, Hamby filed an appe al and decla ratory ruling requesting that his enrollment relate back to the date of his original application in December of 1995. On June 12, 1998, the Admini strati ve Law Judge (“the ALJ”) issued an order finding Hamby

eligible for TennCare co verage based on his second application submitted in February of 1996. The ALJ reasone d that the Commissioner was required to open 8 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

TennCare enrollment during the first three months of each calender ye ar until enrollment reached 95% of the enrollment cap applica

ble for that y ear, an

d that Ham

by had filed

his February 1996 application during the open enrollment period of that year , when the total enrollment was less than 85% of the maximum enrollment of 1.5 million.

OnSeptember 4, 199 8, th e Commissioner’s designee reversed the ALJ’s order. The desig nee concluded that Hamby’s enrollment date should have been based on his third applicationof June 12, 1996 because Hamby responded on his December

4, 1995 and

February 15, 1996 applications that he had never been denied other medica l insurance . Th e designee also concluded

that Hamby’s first two applica tions
were submitted after enrollment for coverage as an uninsured person was closed. Hamby

did n ot appeal or request for a hearing concer ning t he de nial of his December 1995 and February 1996 applications.

C. Plaintiff Oo ten’s Appl ication P rocess
On July 2, 1998, Ooten, then forty-nine years old, had a heart attack and

was take n to Roane

County Medical Center inHarriman, Tennessee. While in emergency care, Ooten’s daughter completed a TennCare appl icatio n for Ooten and submitt ed it to the hos

pital. Af

ter her releas e from th e hospital, Ooten called the TennCare Burea u to inquire about her application. The TennCare Bureau informed Ooten that her applica tion had be en denie d and advised her to submit a
newapplication together with a denial letter f r om an insurance c ompan y. The TennCar e Bureau later sent Ooten written n otice, da ted July 23, 1998, w

hich prov ided in pa rt:

THI S I S WHO IN YOUR FAMI LY DOES NOT QUALIFY AND WHY WE THINK THEY DO NO T QUAL IFY : Betty S. Ooten ###-##-#### [Soc ial Security Number ] This person(s) denied for the reason listed below.Nos. 01-5653/5930 Hamby v . Neel, e t al. 9

Your applicationwas received during a period of closed enrollment.

. . . . YOU HAVE THE R IGHT TO REQUEST A REASSESSMENT Do you think we are

wro ng fo r turning y

ou down for TennCare? You have the right to ask for a reasse ssment to tell us wh y. (J.A. at 499.)

OnJuly 21, 1998, Ooten filed another applica ti on with a denial letter f

rom a private insur

ance company . This applicationwas received

by the TennCare

Bureau on

July 24, 1998. The TennCare Bureau enrolled Ooten in the program effective July 24, 199 8. On July 28, 1998, Ooten requested
a rea ssessme nt of her original application and informed the TennCare Burea

u that she could not get medical insurance because she ha d a pree xis ting med ical condition; a 70% block age in h er ar

teries. Ooten’s request for reassessment was ref erred t o a form al hear ing.

At a hearing held on February 3, 1999, Dena Bost, an officer of the TennCare Bureau, testified as follows on direct examination: Q. Canyou explain why TennCar e denied the July 2nd application? A. The J uly

2nd applic ation did not indica te that Ms. Ootenhad been turned down for other insurance , and there was no attachment indicating that either

. Q. Why did TennCare approve the July 24th application? A. A denial letter from an insurance company denying her coverage on the basis of he r med ical condition
was attache d to that a

pplication, and she indicated that she had been denied. 10 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

(J.A. at 609.) On cross-examination, Bost conceded tha t a person can have an existing medical condition that they know makes them unin sur able and cited pe rsonal c ircumsta

nces. Bost also conceded t

hat appl icants are not asked if they are unable, because

of an existi

ng cond ition, to ob ta in he alth insurance. Bost testified that applicants may respond differe ntly to the question“h av e y

ou b ee n de

nie d in sur an ce ?” if they were a sked abo

ut existing

medical c onditions.

The ALJ issued an order on May 3, 1999, deny

ing Ooten’s request that her date of e ligibility

relate b ack to the date of her original application. Ooten filed a petition for appeal. As of the da te of thi s appeal, Defendants had not y et ruled on Ooten’s a dministra tive appe al.

D. Plaintiff Hy slope’s Ap plication P rocess Hyslope, suffering

from diabetes, submitted an application for TennCare coverage

on May 14, 1999. Hy

slope indicated inher application that she had not been de nied hea lth insurance. The TennCare Bure au denied Hy slope’s applicationbecause

it was received during a per iod of closed enrollme nt. The TennCare Bureau sent Hyslope written notice dated June 9, 2000, which was identical to the written notice sent to Ooten.

Ther eaf ter, on June 12, 1999, Hyslope requested reassessment

of her denied a pplication. On July

22, 1999, the TennCar e Bu reau affirmed the denial of Hy slope’s applica tion. The w

ritten not ice prov ided in pa rt:

We want you to know that it is still possible that you are eligible for TennCare. Other way s you may

be able to get TennCare: 1) . . . . 2) . . . .Nos. 01-5653/5930 Hamby v . Neel, e t al. 11

3) Apply for TennCa

re again i f you canno t get he alth insurance because

of healt h problem s

. Include an insurance company letter w hich states a medical rea so n why you cannot g et

health in surance

. . . . I f the lett

er is froman ins urance agent, it must be on the agent’s lett erhead. It must be dated within the last 12 mon th s prior to your TennCar

e application. (J.A. at 794.) (emphasis in original). Hyslope request ed a hea ring on Jul

y 28 , 1999. While awaiting a heari ng, Hyslope sent a second application, dated August 23, 1999, t

o th e Te nnC are Bur eau . In the application, Hyslope responded “y

es” to the question “have y ou been denied he al th i nsu ra nc e?” The TennCare Bureau appr oved Hyslope’ssecond application effective August 30, 1999. On November

4, 1999, a telephone hearing was held. Hy slope
was no t repr esent ed by coun sel at the he aring.

The ALJ af

firmed th e denial

of Hy slope’s f

irst application
on November 8, 1999, finding that Hy slope did

not submit an insurance denial let ter

with the application. On November 10, 1999, Hyslope reque sted a reconsideration of the denial of her first application. Hyslope stated that she had to go to the hospital due to an ulcer

ation on he

r toe and that she a

lmost l ost her foo t due t o diab etes. The Co mmis sion er’s de sign e e affirmed the denial of Hyslope ’ s f irst application on May 2, 2000.

DISCUSSION

Standard of Review

We review a

district court’s grant

of summar

y ju dgment de

novo

. Johns on v. Econ. Dev. Corp., 241 F.3d 5 01, 509 (6 th Cir. 2001). A moving party is entitled to summary

judgment
as a matter of law when there are no g e nuine issues of material fa ct. Id .; Fed. R. Civ. P. 56(c). When determining
a summary judgme

ntmotion, we view the evidence and draw 12 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

all reasona

ble in feren ces in the light most favorable to the non-moving party. Williams v. Int’l Paper Co. , 227 F.3d 706, 710 (6th Cir. 2000). Nevertheless, “[t]he moving party need notsupport its

motion wit

h evidence disproving the nonmoving party’s

claim, bu t need onl y show that the

re is an absence of evide

nce to support the nonmoving party’s ca se.” CelotexCorp. v. Catret t , 477 U.S. 317, 325 (1986). Mo reover, constituti onal ques tions are questions

of la w subject to de novo review. Johnson , 241 F.3d at 509. Analysis

Plaintif fs contend that TennCare’s eligibility and enrollment

process violates their Due Process rights under the Fourtee nth Amendmen

t becaus e the process does not provide adequa te notice that, upon appl

yin g, appl icants mus tidentify themselves as either uninsured or uninsurable persons, nor does the proc ess expre ss that suc h a disti nctio n is determinative of their

eligibility for cove

rage. The Plaintiffs also contend t

hat they were de nied a me anin gfu l hearin g, in violation of their

Due Proc ess rights, because of Defe ndants’ policy to determine a claimant’s “unininsurable” status by focusing upon the receipt of an insurance company ’s letter of rejection rather than the Plaintiffs’ medical condition.

Defend ants argue that

Plaintiffs have no legitimate claim of entitlement

to have their denied TennCare a pplications treate d
as applications for coverage a s uninsurable individuals since P laintiffs did not indi cate on t heir den ied appli catio ns tha t they were uninsurable or were apply ing as un i nsurable s. Defend ants contend that because Plaintiffs did n ot submit insurance denial letters , th e TennCare Bureau had no indication whatsoever that Plaintiffs had existing medical conditions that rendered them uninsurable. Defend ants assert that Plaintif fs did n ot inform t

he TennCa

re Bur eau of their existing medical conditions until they submitted subseq ue nt applications which the TennCare Bureau appr oved. Defend ants theref

ore arg ue that Pla

intiffs a r e entitle d to TennCare coverage as of

the date they submitted

approva bleNos. 01-5653/5930 Hamby v . Neel, e t al. 13

applications and not the date they actually became uninsurable. We disagree with Defendants for the following
reasons

. I. Due Pr ocess Rights

The district court concluded that “Plaintiffs have a ‘substantive in ter est’ in TennCare or Medicaid benefits and if they meet the p

rogra m’s requ irements , each

of the Plaintiffs has ‘a leg itimateclaim of entitle ment’ tha

t gives r ise to procedural and substantive due process rig hts.”

It is well established that the requi re ments of substantive and procedural due p rocess apply to the de privation of in terestsencompassed by the Fourteenth Amendment ’ s protect ion of liberty and prope rty. Bd. of Reg

ents v. Ro th , 408 U.S. 564, 571 ( 1972) (holding that a professor did not possess a proper

ty in terest in his tea ching p osition whe re it
was subject to a limited term app ointment such that no legitima te claim to re-e mpl oyment existed). The United States Suprem e Court established a standard, in Roth , for determin ing whe ther a pe rson has a propert y in terest:
The Fourteenth Amendment’s pro cedural protection of propert y is a safe guard

of the se curity

interest s that a person has already

acquired in specifi c ben efits. Th ese interest s–proper

ty in terests– may take man y f orms.

. . . . To have a propert y in terest in a benefit, a

person c learly must have more than an abstract need or desire for it. He must have mor

e than a u nilatera l expecta tion of it. H e must, instead, have a

legitimate claim of

entitleme nt to it.

. . . . Property interests, of course, are not create d by t h e Const itut ion. Rather they are cr eated a nd their dimensions are defined by existing r

ules o r und e rstan dings that stem from an independent source 14 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

su chas state l aw–rule s or under standing s that se cur e certain benefits and that support

claims of entitle

ment to those benefits.

Id

. at 576. Thus, the first issue we must decide is whe ther Plaintiffs have a le gitimate claim of e

ntitlemen t to have t heir denied TennCare appli cations treated as applications for
covera ge as uninsur

able in dividu als such t

hat due pr

ocess requirements are invoked. See id

. Plai ntiffs, like o ther T ennes see cit izen s, hav e a righ t t o apply for and enroll in the TennCare progr amas uninsur

able persons at any time. See T ENN

. C OMP

. R. & R EGS

. 1200-13- 12-.03(1)(b). The TennCare re gulation s provide that enrollment

in the TennCar e program is complete when the “person eligible for enrollment has selected a mana g ed c are planfrom those

available in the area where the pers on reside s, the applica

ti o n has been approved by the Bureau of TennCare, and when any applicable premiums have been paid.” T ENN

. C OMP

. R. & R EGS . 1200-13-12-. 03(1). The TennCare regulations further provide that “[e]nrollme

nt shall be de emed complete retroactive to the date of the orig inal application, if that ap

plication is approved.” T ENN

. C OMP

. R. & R EGS . 1200-13-12-

. 03(1). Finally, TennCare nonMedicai d applica nts, if de nied, “will be giv en an opp ortunity to have an administrative hearing befor e the Commissioner regarding the denial of their applications

. ” (J.A. at 583.) Unsuccessful TennCare applicants must be notifi edin writi ng, which must contain: “(1 ) [a]n explanation of the
reasons of the Bureau’s actions, including a br ief statement

of the factual basis or the rule or contract provision

relied upon by the Bure au; (2) [a]n explanation of the circumstances under which the

TennCar e applic ant can r

equest a n appea l; (3)[a ]nexplanation of the TennCare applicant ’s right to submit document s or other information in support

of a req uest for appeal.” T ENN

. C OMP

. R. & R EG . 1200-13-12-.11(3)(b).

Both t h e Supreme Court and this Court, have analy zed
var ious scenarios that involve a legitimate claim ofNos. 01-5653/5930 Hamby v . Neel, e t al. 15

entitleme nt, giving rise to a property interest. Roth , 408 U.S. at 576-79; Flatford v. Chater , 93 F.3d 1296, 1304 (6th Cir. 1996); Banks v. Block

, 700 F.2d 292, 296-297 (6th Cir. 1983). Thesecases ha

ve been instructi ve to this Co

urt in determining what constitute s a prope

rty interest warran ting due process scrutiny , and wha t does not.

In Roth , the Supreme Court rejec t ed the pla intiff’s claim holding that he had no pr

operty interest inre-employme

nt, but merely a unilateral expectation, which wou ld not cons titute a legitima te claim of e

ntitlemen t ris ing to the level of a protected constitutional right. 408 U.S . at 578. The Court stated that the limited“terms of respondent’s appointment [as
a profess or] secur

ed absolu tely no intere st in

re-employme

nt for the next year.” Id. The Court compared this claim to that of a welfa re rec ipient’s l egiti mate claim of continuous entitlement

to his or her welfarebenefits for which they had notye t s hown eligibility, but were e ntitled to do so. Id . at 577 (c itin g Goldberg

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

Th is Court, in Banks , used the Supreme Cou rt’ s determination

in Roth , as instructi

ve guid ance in determining the propert

y in terest in a plaintiff’s expectancy of c ontinuous receipt of food st amp assistance. 700 F.2d at 296. We stated that Roth was instructive in two respects. Id

. First, this Court held that the plaintiff’s “unilatera l exp ectancy in the continuous receipt of food stamps is not enough to crea te a constituti onally

protected interest,” because the Food Stamp Act’s explicit terms did not “justify a reasonable e xpectancy of entitlement” beyon

d the “expiration of the assigned certification

period.” Id . at 292-29 7. In Ba nks , the Food Stamp benefit

recipie nts were “elig ible for only a limited ‘certification

period,’ defined as the ‘period for which households shall be eligible to receiveauthorization cards.’” Id

. at 294 (quot ing 7 U.S.C. § 2012(c)). Banks differs from Goldberg in this res

pect; whe

reas Goldberg ’s continuous welfare benefit

receip t was a le gitimate

claim of e

ntitlemen t, the limitednature of Banks’ Food Stam

p award s was mer

ely a unilateral expectation. 16 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

1 Contrary to th e diss ent’ s anal ysis , a propert y int erest

is ne ith er predicat ed upo n whe ther an in divi du al has “e arned ” the b enefits in question, nor up on the existenc e an ind ividua l’s contri bution t owards th at ben efit. Instead , the Sup reme Co urt has m ade clear tha t the rights best owed upon individ uals with legi timat e property

int erest s are def

ined by the language of int ent found in t he federa l or state st atut e creat ing s uch benefits, to th en aid the particu lar plain tiff in questio n. Atkins v. Parker , 472 U.S. 115, 128 , 105 S.Ct 2520 (1985) (reiterating t he Court ’ s deter mination that

“[f ]ood- st amp benefit s, l ike t he welf are benef

its at issue in Go ldbe rg v. K elly , [], ‘are a matter of st atutory ent itlement f or the persons qualifi ed to receive them.’”) (internal citati ons omitted). Second, we we re gu id ed by Roth ’s holding that “pr operty int erestsar e c re at ed an d t he ir di me ns io ns ar e d ef in ed by a n independent

source,” meani ng that the determination of the existence of a property

right pr otec ted by

due proc ess is controlled

by the statute cre ating and defining that right. Id. ;
see also Goldb erg , 397 U.S. at 254

. Therefore, this Court held in Banks th at th e e xp ec ta nc y o f entitlement to a continuous receip t of food s tamps was an abstr act, unilateral one, and would not

rise to the level of a

property intere st, due to the Food Stamp Act’s limited cert ifi cation period of eligibility, much like the one-y ear teaching contract in Roth , whichestablished

no prope rty interest beyond the te

rm of the assigned period. Banks , 700 F.2d at 297. 1

With Roth ’s property inter est claim of re-em

p loyment subject to a limited

and defi ned emp l oyment contract, and Bank ’s food stamp rec ipient’s property intere st claim of continuous benefits sub

ject to a limited certification period, th e di ffere

nce between the d

enial of due proc ess rig

hts in those two instances and the a ffirm ation of a welfare recipient’s property intere st in Goldberg , lies in the conti nuity of entitl ement. Id . In Goldberg , welfar e recip ients challenged

existing a

id terminationprocedures, where under the statute involved, recipients were not al lo wed to appear and present evidenc e prior to

terminat ion of the ir suppose dly continuous welfare benefits. 397 U.S. at 254 . The Supr eme Courtheld that such a procedu re v iolated d

ue proce ssNos. 01-5653/5930 Hamby v . Neel, e t al. 17

2 In Gonzaga Univer

sit y v. Doe , the Supreme Court in h oldi ng that

a plainti ff may bring a priva te cause of action f or “the deprivation of any rights, privileges, or immuni ties sec ured by the C onstitution and laws” under 42 U.S.C. § 1983, found t hat t he det ermina tion of a private plai nti ff ’s priv ate rig hts si mply requi re a de termination a s t o whet her or not Congress int ended to con fer indi vidu al r igh ts upon a cl ass of beneficiaries. 536 U.S. 273, 285- 87 (20 02) ; see also C alifornia v. Sierra Club , 451 U .S. 287, 294 (198 1) (deter mining whethe r or no t a statute “confer[s] ri ghts on a particul ar class of persons”). concep ts since re cip ie nts were entitled to benefits, on a continuous basis, so long as they r emained eligible. Id.

Since TennCare is a waive r cr eated un der the M edicaid Act, 42 U.S.C. § 1315, medical assistance to “uninsured”and “uninsurable” individuals is partially federa lly funded. The Medicai d Act does not subject its recipients to a limited durationof servi ces so long as the eligibility require ments are met; and if chal lenging a discontinuance, up until the exhaustion of all ap

peals

. 42 C.F.R. §§ 431.230(a) and 431.232(d). Furthermore, this Court has previously held that
a social se curity

claim ant h as a prop erty

interest in benef its for which he or she hopes to qualify. Flatford, 93 F.3d at1304 (based on the hold i ng in Richardson v. Perales , 402 U.S. 389, 398 (1971), i n whi ch the Court accepted the proposition that petit

ioner’s claim to be

nefits g ave him a protectable property

interest). Since Medicai d is a program established

by T itle XIX of the Soc ial Secur ity Act, 42 U.S. C. § 1396, et seq. , we find that Plaintiffs likewise have a propert y interest in the TennCare coverag e for whi ch they hope to qualify. Id

. 2

Based solely on Plaintiffs’ neg ative responses to the question “have y

ou been denied health i nsuranc e” and their failure to submit insurance denial letters with their original applica ti ons, the TennCare Bureau presumed tha t Plaintiffs applied for co vera ge as uninsured persons only , and that Plaintiffs did n ot hav e an ex isti ng m edical condition that prevented them from obtaining heal t h insurance elsewhere. 18 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

Moreover, Defendants do not even cont end th at Plaintiffs
were not uninsurable persons at the time of their original applica tions. Rather, D efenda nts conte nd that be cause P l aintiffs did not subm

it insuran ce denia l letters with their origina l applica tions, Defend

ants prop erly

denied Pla

intiffs’ claims of entitlement to TennCare coverage. However, because Defendants’ applications did not inform Plaintiffs of this presumption and be cause none of Defendants’ re gulations explaining uninsura

ble elig ibility

criteri a sta

t ed that an insuranc e den ial letter must be submitted with the application, Pla intiffs were jus tified in b elieving their ori g inal application s would be c onside red in light of the relevant laws and regulations that w ould grant P laint iffs m edical covera ge provided they were

eligible. Theref

ore, g iven Plain

tiffs’ eligibil i ty, we h old that Plaintiffs have a legitimate claim of entitlement

to TennCare coverage a s of t he da te of the ir origina l applica tions.

II. Proce dural Due P rocess
Ad di ti on al ly, it is well-es tablished that a possess ory

interest inpropert y in vokes pro cedura

l due proc ess, whic

h would require adequate notice and a meaning ful hear

ing prior to any attempt to depriv e the inte

rest hold er of an y r ights. Thomas

v. Cohen, 304 F.3d 563,576 (6th Cir. 2002) (citing Fuentes v. S hevin

, 407 U.S. 67, 87 (1972)) ; see also Mathews v. Eldridge , 424 U.S. 319 (1976) (holding that a cl aimof entitlement

to social s ecuri ty b enefits t rigge rs due pr ocess protection).

A. Adequate Notice

The district c ourt conc luded tha t Defend ants’ notices “ did notinform Plaintiffs that they could offe r proof of anexisting condition to qualify

as uninsur

able, a b asic ele

ment of thi s status under TennCare rules” or “that a se cond application will undisputa

bly result in a

loss of an

y be nefits under thei

r first application.”Nos. 01-5653/5930 Hamby v . Neel, e t al. 19

The Supreme Court’s standard applied to a notice inquiry when establishing the constitutionality of a process which may be determinative of the finality of parties’ rights requires that “notice [be] re asonably ca lcul ated, und

er all circumst ances, to appris e interested parties of the pendency

of the action a

nd affor d them an o

pportunit y to pr esent the ir objections.” Mullane v. Cent. Hanover Trust Co. , 339 U.S. 306, 314 (1950). The Supreme Court further clari fied the standard for adequate notice in Goldberg . 397 U.S. a t 268 (requiring that notice be reasonably calculated to i n form the

r ecipientof the action to be taken and an “effe ctive opportunity to be heard” ).

Defend ants argue

th at th e TennCare Bureau provided Plaintiffs with adequate written no tic es that (1 ) their applications were den ied because the applications were received durin g a period of closed enrollment; (2) they had a right to appeal and

seek assistance in appealing; and (3) the y had a right to reque st a hear

ing withi n 30 day s from the

date of the notices. Defendants point out that the forms necessary for appe aling w ere inc luded with the notic es.
We find that a

lthough D efenda

nts’ notic es adequ

ately informed Plaintiffs of TennCare’s denial of their appl icat ions, th e notices f

ailed to inform Plain

tiffs tha t (1) thei

r applications wer e de nied because they were not considered uni nsura ble persons; (2) their applications were rejecte d because the appli cations w ere inc omplete d ue to a l ack of proof of a p revio us insurance denial; (3) if an appeal of a de nied application was not pursued, applicants would be barred from a claim of ben efits originating from the date of th eir origina l applica tions; and (4) if ap plicants d id su bmi t
newapplica

tions wit h insurance denial letters, the second claim would cut

off eligibility base d

on the first applica

tions. Becau se Defendants failed to include such informationin the notices, Plaintiffs were not adequately

advised of the reasons for denial of their applications , the ir right to appeal, the existence of a pre sumption that Plaintiffs did not apply for 20 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

covera ge as uninsur

able persons, and the consequences of not appeali ng and f iling ne w applica tions.

In Gonzal ez v. Sullivan , 914 F.2d 1197, 1203 (9th Cir. 1990), th e N in th Ci rc ui t r ev ie we d t he su ff ic ie nc y of no tices by the Secretary

of Health and Human Services (the“HHS”) concerning

denial of applications for social security disability benefits. The HHS’s initial notices of denial provided: If y ou believe that this determination is not cor

rect, you may request that your c ase be reex am ined. If y ou want this reconsideration, y

ou must request it no later than 60 da ys from the date y

ou rec eive this notice. You may make your reque st through any So cia l S ecu rit y off

ice . If additi onal evidenc e is avai lable, y ou should su

bmit it with your request. Please read the enclosed leaf let for a full explanation of your rig ht to ques t ion the determination

made in your

cla im . If you do not req

uest reconsideration

of your case within the

prescr ibed time period, you

still have the rig ht to file another application at any time.

Id. The Ninth Circuit held that the HHS’s notices violated a claimant’s right to procedural due process bec ause the notices did not “clearly

indicate that if no request for reconsideration is m ade, the determination is final.” Id . The Nint h Ci rcui t reasoned: Requiring notices to ac cur ately state how a claimant

m ight appeal a

n initial de cision doe s not im pose a significant

financ ial or administrative burden on the Secretary

. . . . Moreover, the form of the notice[s] used here is sufficiently misleading tha t it intro d uces a h igh risk of error into the disability

decision making process .

. . . One of the fundamental requirements of procedural due process is that

a notice must be reasonably calculated to affor d partie s their ri ght to pr

esent obj ections.

Id

.Nos. 01-5653/5930 Hamby v . Neel, e t al. 21

This Court, in Day v. Sh alala , has foll owed the Nin t h Circuit’s views regarding the suff iciency of notice . 23 F.3d 1052, 1066 (6th Cir. 1994) (stating that “[w]e join the Ninth Circuit in finding this particular

notice form . . . inadequate). In Day , the notic e of an a

pplicant ’s denia

l was simila

r to that of Gonzalez

. Id. at 1065-66. Plaintiffs argued that the denial of a disability benefits notice and the a ccompanying explanatory

leaflet failed to make clear the cr ucial distinction b etween appeal ing a de termi natio n and r eappl ying fo r benefit s. Id

. The Court agreed that a claimant who re applied rather than appe aled mig

ht e ncounter limitations on the payment of retro active b enefits

if eventually appr

oved, which would be calculated f

rom the date of the new application rather than the date of the initial, unappealed one. Id

. In the instant ca se, Plaint

iffs ar gued th at Defe

ndants’ notificationattempts violated due pro c ess in two s eparat e way s. Firs t, Te nnCare’ s denial notices fa iled to ad

vise applica nts of its rea sons for d

enial an d of their right to appeal. There is no mention of anappl icant’s status as an “uninsur able applicant,” when

the appli cant is iss

ued a de nial. All three Plaintiffs received denial lettersfrom thei r original applications stating that

they failed to enr

oll within the open enrollment

period, which is a requirement for “uninsured” applica nts only. Since

there was no section of the application itself that req uired an applica nt to specify unde

r which status they wished to enroll, all applications that did not have an insurance letter attached indicating a recen t denial, or an
an swer in the affirmative as to whether or not they have previous ly

“been denied insuran ce, ” were categ orically denied. Once Pla

intiffs e ventuall y sent a previous insurance letter indicating a denial, they

were approved; however, the benefit s w er e not ret

roactiv e to the da

te of the

first application. Applican

ts eligib le for Tenn

Care’s b enefit

were notadequately

informed as to how to fully re ceive th e benefit s to which the y

were entitled, at the time they were entitled to them, nor w ere they fully apprised of the reasons for deni al as “un

insurabl e” appli cants. 22 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

Second, the denial notices did not adv ise the a pplicant s of the conseq

uenc es of not appealing and filing new applica tions. Again, all three Pla intiffs we re told to re-app ly to TennCar

e upon re ceiving

their de nial l e tters, instead of appeal ing. There was no notice given that a new application would cut off e li gibil ity for the bene fits requested by Plaintiff s’ first a pplications.
Like the notices in Gonzalez and Day , we find the notices here to be constitutionally inadequate inasmuch a s they failed to adequa tely advise Pla

intiffs of their rig hts to proper

ly apply
as “uninsurable” persons, to be fully informed as to why they
were denied as “uninsurable” applicants, and not mere l y “uninsured” applicants, and to the conseq uenc es of reapp lying a fter a d enial inst ead of a ppeallin g such d ecisions

. We therefore hold thatPlaintiff s were given cons titutional ly inadequa te notice s in violati on of proc edural d ue proce ss.
B. Meaningful He aring

The district c ourt conc lu de d that Plaintiffs “were not allo wed to show an existing medical condition that mak e s them unable to obtain health insurance.”

Defend ants argue that Plaintiffs we re n ot denied meaningful hearings because they wer e represented by counsel, obtained significant discovery

from Defendants, and
were giventhe opportunity to raise leg al challenges to the TennCare covera

ge elig ibility criteri a whic h re sulted in the denial of their applications. We disagree.

Alth ough Plaintiffs timely appealed the denial of their f

irst applica tions, the TennCare Bu reau continued to deny Plai ntiffs covera

ge bec ause Plai

ntiffs fa iled to indi cateo n their applications that

they had been denied health insurance and fai led to attach in surance denial le

tters to th eir applica tions. When the TennCare Bureau rec eived Plaintiff s’ subsequent applications with attach ed insura nce den ial lette rs, it treated the appl ications as separate applications forNos. 01-5653/5930 Hamby v . Neel, e t al. 23

covera ge as unins urabl e individuals. Plaintiffs’ subsequent applica tions, filed before their reque sts for reasse ssm ent, were ignored by

the TennCare Bureau for purposes of rea ssessing their fi rst appl ications. In sum, because Plaintiffs stated on their fi rs t a pp li ca ti on s t ha t t he y ha d n ot pr ev io us ly b ee n denied health in surance , Defen

dants disa

ll owedthem from demons trating at a hearing that they had existing medica l conditions that made

them unab le to obtain health insurance, thus evidencing their “uninsurable” status, befor e denying
covera ge under the original application. See Friedrich v. Sec’y Health & H

uman Servs ., 894 F.2d 829, 837 (6th Cir. 1990) (finding that the touchstone of proc edural d ue proce ss is the fundamental requirement that an individual be given the opportuni ty to be heard in a meani ngf ul man ner) . We therefore hold that Plaintiffs were denied a m eani ngful hearing in violation of proc edural d ue proce ss.
The diss ent’s dism issive sug gestion s that a ruling in Plaintif fs’ favor would make a constitutional issue out of every bureaucracy ’s faulty pape rwork, is only partly

true. Becau se statutory lang

uage bestows legitimate rights upon an individua l, and those r ights are entitled to procedural due proces s, on ly those bureauc racies which engag e in practices that violate an individ

ual’s rig hts, proc edurall

y or otherwise, will have themselves created a constitutional problem.

III. Constitutionality of Defendant s’ Irre buttable Presumption

The district court conclud ed that Defendants’ policy and practice of requiring an insurance denial letter to demonstr ate eligibil ity for TennCare coverag e as an uninsurable person constitutes an unconstitutional irrebuttable presumption.

Defend ants argue t hat the di strict co urt’s co nclusion i s errone ous bec ause Cleveland Bd. of Educ. v. LaFleur , 414 U .S. 632 (1974 ), was the last line o f cases

in whic h th e Supreme Court ven

tured into the irre butt ab le presumption analy sis. Shortly after

its decision in Cleveland Bd. of Educ. , 24 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

3 The Court in Kirk recogni zed that no irr ebu ttable p resum ption exists wh ere the plai nti ff

s hav e th e opport

uni ty to pr esen t t

he evi de nce upo n
w hich the ult imat e deci sion is deri ved. Nevert

hele ss, the Cou rt goes o n to say that

absent proof of a failure to prese nt evid ence , a plaintiff’s “on ly consti tut ional clai m is t hat t he tes t th ey ca nnot meet is not so rationa lly relat ed to a legit imate legis lative objecti ve that it can be used to deprive the Supreme Court made it clear t hat hei ghtened scrutiny

of
a statute c ould not be

trigg ered by

merely assertin g a cla i m th at the chal lenged

statute c ontained

an irre buttable pres umpt ion. See W

einberge r v. Salfi , 422 U.S. 749, 777 (1975)).

In Weinberger , the Court re viewed the Social Se curity Administration’s duration -of-re lationship require me n t that irrebutt ably presume d that if a

marr iage did not precede the wage earner’s death by

nine months, the marri age was entered into for the purpose of securing Social Security benef

its. The Court uphe ld

the requirement, finding that “the Due Process Clausecan be thou ght t o impose a bar only if the sta

tute manifest s a patent

ly a rbitrar y c lassific ation, utte

rly lacking in rational justification.” Id . at 768. T he Court explained th a t the p laintiff

s’ “only constitutional claim is that the test they cannot meet is notso rat ionally related to a leg itimate legislative objective that it can be used t o d eprive them of bene fits available to those who do satisfy that test.” Id . at 772. The Court

reasone d that the

irrebutt able presumption analy sis was inappropria te because the p laintiffs ’ noncontractual claim to receive funds from the public t reasur y did not deserve heightened constitutional protection. Id

. In Kirk v. Secretary of Health and Human Services , 667 F.2d 524, 534 (6th Cir. 1 981 ), we recognized that the irr ebuttabl e presumption an alysis is inapplicable to challeng es to aspects of social welfare prog rams. To challenge the constituti on ality

of Defendants’ alleged pre sumption, Plaintiffs must

prove that Defendants’ presumption is not rationa lly related to a legitimate state objective. Id .; see also Weinberger , 422 U.S. at 772. 3Nos. 01-5653/5930 Hamby v . Neel, e t al. 25

them of ben efi ts avai labl e to t hose w ho do satisfy that test. Weinberger ,[] 422 U.S .[ at 77 2].” 6 67 F .2d a t 533 . The Co urt then d ismissed the pla intiffs ’ claim because they could not argue “ successful ly that the guidel ines [were] so unrel ated to a legi timat e legi slat ive goal as to viola te this ‘rationa l relation ship’ test.” Id. In the instant ac tion, this C ourt w ill not affi rm the dis tri ct c ourt ’s chara cter izat ion of Defendants’ enrollment pro cess as an un con stitutional irre buttab le pre sump tion; ho weve r, w e dispu te Defend ants’ assertion that the current proc ess is rati onally relat ed to their p roffere d legitim ate state g oals. Here, Defend

ants arg ue that their presumption that Plaintiffs did n ot app ly for Tenn Care co verage as uninsur able persons because they

responded “no” to the question “ have you been denied health insurance?” and bec ause they ha d failed to attach insurance denial letters to their a pplications is rationa lly related to the legitimate state goals of (1) extending

m edical benefits to those persons most in need of the m; (2 ) verifying that appl icants a

re unabl e to purchase hea lth insurance d

ue to existing medical conditions; and (3) discouraging

health insurance carriers from c os t-sh ifting their enrolle es to the p

ublicly -funded TennCar e prog ram.
We find that Defendants’ presumption is no t ra tionally related to legiti mate stat e goals because applicants, who have notbeen previou sly refu sed health insurance but have existing medical conditions that make them unable t o obtai n health insurance, will be excluded f rom TennC are cov erage

simply because they pro vide d a negative response to the question “have yo u been denied health insurance?” A negative response to th at q uestion is not conclusive of an applicant’s status and should not be determinative o f th eir approval or disappro val. The appa

rent justi fication

for Def endants’ presumption is administrative convenience. By asking “have you been denied health insuranc e,” Defend ants see k to eliminate the need for an

individualized determination which may be m ore t ime consuming and expensive. However, Defend ants’ “intere st in admini strative ease an d certa inty cannot, in and of

itself, save the conclusive presumption from 26 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

the invalidity under the Due Proc ess Clau se where there are other reasonable and practicable mea ns of establishing the pertinent facts on which the state’s ob ject ive is premised.” Vlandisv. Kline , 412 U.S. 441, 451 (1 973); see also Weinberger , 422 U.S. a

t 776- 77 (criticizing portions of the Vlandis ruling on other grounds; however, re iterating the validity of statutory restrictions, so long as Congr ess “cou ld [have] rati onal ly

[] concluded both that a particular limitation
or qualific ation wou

ld protect again st

its occurrence, and that the expe nse and other dif

ficulties of individual determinations justified the inherent imprecision of a prophylactic rule.”). Defend ants’ enrollme

nt proce ss is not ra

tionally related to their proff

ered legitimate state goals. I n fact, there are alternative reas on able and practical means by which TennCare can admi

nister its medical b enefits, su ch as modifying

the application

so as to el iminate

the solicitation of vague or ambig

uous infor

matio n regarding the applica nt’s insurance coverage hi st or y, instead opting for direct and concise infor mati on; o r modi fying t he initial de nial proc ess by encouraging the immediate supplementa tion of the applicationbefore a decision is made or there is an immed

iate appeal, rather than suggesting re-appl icatio n. We therefore hold that Defendants’ current

process is not rationally relate d to legitimate state goals.

CONCLUSION

For the forgoing reasons, we AFFIRM the district

court’s order in Case No. 01-5653; and AFFIRM the district court’s order in Case No. 01-5930.Nos. 01-5653/5930 Hamby v . Neel, e t al. 27

_________________ DISSENT

_________________ ALI CE M. BATCHELDER, Di ssenting . I re spectfu lly dissent. I woul d hold that the plaintiffs do not have a propert y interest in or a legitimate claim of entitlement to the TennCare benefits prior to pla intiffs’ obtaining approval of th eir applica tions, and

that eve

n if the pla

intiffs c oul d demonstr ate such an in

terest , they have not de

monstrated either a pro cedural or a substantive due process violation. Fi na ll y, I wou

ld hold tha

t the irre

buttable pres umption doctrine has no rational application to this case.

It is not clear to me whether in the sect ion entitled “Due Process Rights” the majority opinion actua lly holds that the plaintiffs have de

monstrate d a substa

ntiv e du e proce ss violation, or holds on

ly that the plaintiffs have demonstrated that they have a

property intere st for the purposes of a procedural due proc ess claim . In my view, the plaintiffs can d emons trateneither. Unlike the plaintiffs in Goldberg v. Kelly , 397 U.S. 254 (1970), these plaintiffs were not already receiving benefit s which the

state inte nded to or did

terminat e withou t a pretermination hearing. And the majority ’s conclusionthat bec ause Te nnCare is a program created

under the Medicai d Act, and Me dicaid is a program established under the Soc ial S ecurity Ac

t, applicants for TennCare, like applica nts for social security , have a proper ty i nterest in the benefit s “f

or wh ich they hope to qualify ” is unwarranted. Contrary to the majority

opinion’s

claim, we did not hold

in Flat ford v. Chater , 93 F.3d 1296 (6th Cir. 1996), t ha t applica nts for social security bene fits have a propert y in terest inthose benefits. Ra

ther, ba sed on th e Supr eme Court’s decisio n in Richardson v. Perales , 402 U.S. 389, 401-02 (1971), which in turn quoted the Court’s obser vati on in Flemming

v. Nestor , 363 U.S. 603, 610 (1960), that the “right to Social Security benef

its is in one sense earned,” we said: 28 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

1 The maj or ity opinion cites Atkins v. Parker , 472 U.S. 115 (1985), where the property ri ghts (food stamp bene fits) establish ed b y statute
were being taken a way; unlike t he sit uati on here wher e no righ t has ever bee n estab lished. See Atkins , 472 U.S. at 117- 18. Becau se the Supreme Court has assumed in Perales that
a social se curity

applica nt has ‘ more than a unilateral expectation’ of

a benefit, and because this assumption is necessary to the hold

ing in tha t case ( that due process applied) we proceed

on the same bas is. Thus we will

assume that F latford has a property interest in the benefit s he clai

ms. Flatford , 93 F.3dat 1304-05 (internal citations omitted) (emphasis added).

In Bd. of Reg

ents v. Ro th , 408 U.S. 564 (1972), th e Supreme Court made

it clear that a pr

operty in terest is something in which an individual “must ha ve more than an abstract need or desire . . . . He mus t have more than a unilateral expectation of it. He must, instead, have a legitima te cl aim of ent itlement to it.” Id. at 577. And propert y interest s, the Cour

t emp has ized, are not created by the Constitution butare creatures of independe nt sources such as state law. 1 Id.

TennCa re is a partially fede

rally funded waiver plan created by the State of Tenne ssee unde r Medica id. TennCa

re bene fits
are differe nt from soc ial secu

rity benefits, which are premised on contributions paid into the system by the claimant during his or her ye ars of employ ment. Although Medicaid is set up under the so cial s ecurit y progr a m, it is not a program that awards benefits that are in any sense “ earned,” and TennCare, whic h is established under Medicaid, is not a medica l insurance program into which these plaintiff s h ave made pay ments or contr

ibutions. M edic ai d is a program that was enacted “for the purpose o f p roviding federal financial assistanc e to State s that cho ose to reimburse certain costs of medical treatment for

needy pe rsons,” Harrisv. McRae , 448Nos. 01-5653/5930 Hamby v . Neel, e t al. 29

U.S. 297, 301 (19 80), a nd a state is not required to provide Medicai d servi ces for which there is no federal f inancial par ticipa tion. See id. The Ten nCare pr ogram i s subject

to both state and federal funding limits, and the state law
e stab lishing the prog

ram provides that e

xpenditure s of state funds for the program cannot exceed the amount appropriated for it by the legislature. T ENN

. C ODE ANN

. § 71-5-109.

TennCare is not only limited in financial scope, it is limited to specific

classes of reci pients: material to this litigation are those who are uninsured and those who are uninsurable. The program is furt her limited as to the former—they have a window of o pportunity for apply ing for the insurance; no suchlimitation applies to the latter. In or der to en force t

hose limitations , the State has empowered the Commi ssioner of the Department

of Finance and Administration t o designate the place and manner in which applications for enrollment in the program are to be filed. The Commissioner requires that any applican t w ho seeks enrollment in TennCare on the basis of

u ninsurab ility

must provide a letter from a private insur e r stating that the applicant has been denied insurance cove rage. Inshort, onl

y those appli cants w

h o are eligible by

reason of their being u ninsured or uninsur

able have a ny hope of becoming ins ured und

er TennCare; onl

y those uninsu

rable applica nts who provide evidence of uni nsurability may

take advan tage of

the open e

nrollment ; and only

a finite number of those will be enrolle d in the pr ogram b ecause

of the funding limitations

. Thesepla in tiffs have demonstrated no more than a unilateral expectat

ion that the

y w ould be able to enroll in the TennCar e prog ram. They a re not in the position of the Goldberg plaintiff s, whose e xisting be nefits were about to be terminated

without an

y op portunity for the p laintiff

s to establish their co ntinuing

elig ib ility for those benefits under the st at ut e. Th ey are n ot in the po sition of th e plaintif f in Flatford , whose cl aim was for benefits from the social security system into which he had

paid duri ng the y ears of his employ ment. The fact that Medicaid does not limit the 30 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

2 The majo rity opin ion’s relia nce o n Sup reme Co urt preced ent
conc erning private rights of action to bu ttress its conclusions as t o pro perty rights is troubli ng. In Gonzaga Univer sit y v. Doe , 536 U.S. 273 (2002), the Sup reme Co urt discu ssed th e dete rmin ati on of a caus e of acti on unde r § 19 83. Gonzaga , 536 U.S. at 283 -84. T he Su prem e Co urt’s disc uss ion in Ca li

fornia v. Si erra Club , 451 U .S. 287 (1 981 ), likewise

concerns a priva te right o f action. Sierra Club , 451 U.S . at 294 (“Here, the statut e states no more than a g enera l pros criptio n of ce rtain activities; it doe s not un mista kably foc us on any

parti cular class of benef icia ries whose welfare Congr ess in tende d to f urther. Such l angua ge does not indica te an i nten t t o provi de for pr iva te rights o f action.” ) Th e ma jority opini on provides n o authori ty t o support i ts apparen t concl usion t hat property rights are the equivalent of private ri ghts of acti on. durationof benefits to Medicaid recipi ents after they have been found to be elig ible does not, as the majority opinion holds, establish

a continu ity of entitlement in an applicant for enrol lmentin the Ten

nCare pr ogram, and the f

act t ha t Medicai d is established under the Social Security Act does notsuffice to convert a TennCare applica nt’s hope of becoming an enrol lee into a legitim a te expectation of obtaining TennCare coverage . These plai nti ffs have no property intere st in the TennCare benefits they seek. 2

Even if o ne could conclude that the plaintiffs have demonstrated

a pr ope rty interest, howeve r, they have

not demonstrated

that they have be endenied due process, either subst antive or procedural. Turning first to substantive du e process , as this cou r t has ofte n observe d, “[t]he int

erests protected by substantive d

u e process are of course much
narrower than those protected by

procedural due process.” Bell v. Ohi o State Univ. , 351 F.3d 240, 249-50 (6th Cir. 2003). The Supreme Court has made it clear how narrow those interests are:

Ou restablished method

of substa

ntive-due-proc ess analy sis h as two primary f

eatures: First, we have regula rly observed that the Due Proc ess Clause special ly protect s those fun

damenta l rights and liberties which are, ob je ct iv el y, dee pl y r ooted in this Nation’s history andNos. 01-5653/5930 Hamby v . Neel, e t al. 31

tradition, and implicit in the conc ep t o f o rd er ed li be rt y, suchthat neither liberty nor justice would exist if they
were sacrificed. Second , we have require d in substantiv e-due-

process cases a caref ul desc ription o f the asserte d fundame

ntal liber ty in terest. Washington v. Gluck

sberg , 521 U.S. 7 02, 720-21 (1997). Under no stretch of

the imag ination do es the pla intiffs’ claim
o f en titlement to enrollment in TennCare rise to the level of
a fundamental right or liberty implicit in the concept of ordered lib erty . Indeed, it is difficult to imagine liberty or justice being disturbe d at all by the depr

ivation the se plaintiff s claim, le

t alone c easing

to exist.

While I do not think that the form s u sed by the TennCar e program pro vid ed applicants with the best or clearest notice of the application requirements or the appeal proce dures, I believe an y d efic iencies in these forms fall well short of depriving thes e pla intiffs of procedu ral due process. These plaintiffs may

have be en confu sed by

the appli cation f

orms or the den ial letters, but even if that confusion was the fault of the TennCare Bureau, it does not rise to the level of a denial of due pr ocess . Con trary to t he maj ority opi nion ’s fin ding, the denial letters did advise plaintiffs that they ha d a right to appeal, and, indeed, the letters invited the plaintiffs to call the telephone number provided in the letter if they had ques tions. To hold, as the majority opinion does, that forms utilized by the bureaucracy

deny due proc ess to the individuals who are to use them because those forms are confusin g or ar e less clear than they might be , is to make a constitutional issue out of every disp ute over an agency ’s paperwork. Neither was there any denial of a

meaningful opportunity

to be h ea rd. Theseplaintiffs not only rece ived a hearing, they were represented

by c ounsel an

d had the o

pportunit y to raise the ir legal challenges to the procedures. Tha t those challen ges were not successful does not mean that the plaintiffs were denied du e proce ss. 32 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

Finally , the majority opinion concludes that TennCar e’s
re quirement

that a ppli cants seeki ng to en roll i n the p rogr a m as uninsurables must provide a letter f r om a private insurer establishing uninsur a bility, subjects those applicants to an unconstitutional irrebuttable presumption that they are not uninsurable. This flies

in the fa ce of log ic . An ir rebutta ble presumption is a pres

umptio n that as a matter of law can
never be rebutted, regardless of the facts. But an applicant

for TennC are who has not pr ovided the

require d letter a

nd is therefore presumed not to be uninsur able, may rebut the presumption simply

by providing the le

tter. It is true that an applicant who is in fa

ct not unin surable

will not be

able to obtain the letter, and he nce will not, as a matter of fact, be able to rebut the presumption. But the presumption as to that applicant is irrebu ttable on ly b ecause

it is true, not becau se the applicant, regardless of the actual facts, is not permitted as a matte r of law t o rebut it.

The majority opinion’s reliance on Cleveland Bd. of Educ.

v. LaFleur , 414 U.S. 6 32 (1974)(irrebu tt abl e presumption that e very

pregnant teac

her is phy

sically incapab le after

th e fifth or sixth month of pregnancy of continuing to teach), and Vlandisv. Kline , 412 U.S. 4 41 (1973) (irrebu ttable presumption of nonresidency for any student wh

o had lived outside the state

during the year prior to his application for instate tuition ra

te) is ent irely mispla ced . In neither

of these
cases were the plaintiffs permitted to avoid the application of the presumptions by providing evidence to rebut

them. The plaintiffs bef

ore u s here, on the other hand, could rebut the presumption that they were not uninsurable simply by providing TennCare with the required letter . The fact that they failed to d o so or failed to do so timely, does not make the presumption irrebuttable. In any event, the Supreme

Court has e

xplicitly decline d to extendthe principles annunciated in Vlandisand LaFleur , to “a noncontr

actual c laim to re ceive f unds from

the public trea sury [, which claim] enjoys no constitutionally protected status . . . .” Wein berger v . Salfi , 422 U.S. 749, 772 (1975).Nos. 01-5653/5930 Hamby v . Neel, e t al. 33

Inthat cas e, the Court upheld the constitutionality of a provision of the Soc ial Secur ity Act that barred widows who had been married to their l a te husbands for less than nine months from rec eiving c ertain so cial sec urity benef its that would normally be paid to

widowedspouses. Rejecting the districtcourt’s extension of the holdings of Stanley v. Illinois , 405 U.S. 645 (1 972) (hol ding unc onstitutional an irr ebuttabl e presumption that all unmarried fathers are unf it to raise the ir children), Vlandis , and LaFleur to the “nine-month rule,” the Co urt said that to apply the doctrine of those cases to the eligibil ity rule would turn that

doctrine “into a virtual engine of destruc tion for c ountlesslegislative judgments which have heretofore been thought wholly consistent

with the Fifth and Fourtee nth Amendments to the Constitution.” Id. at 771. The “nine-mon th rule,” the Court concluded, would pass muster if it were legislatively

reasonable: [T]he question r

aised isnotwhether a statutory provision precise ly filters out those, and

only those, who are in the factual positio n which generated the cong ressional
concern refl ected in

the statute. Such a rule would ban all prophylactic pr ovisions, a nd would be

directly contrary to our holding in Mourning [ v. Family Publications Serv. Inc. , 411 U.S. 3 56 (1973) ]. Nor is the question whether the pro vis ion filters out a substantial part of the class which caused

congressional concern, or whether it filters out more members of the class than nonmembe

rs. The ques ti on is whether Congre ss, its
concern having been reasonabl y aroused by the possibility

of an abuse w

hich it legiti

mately desired to avoid, could rationally ha ve conclude d both that a particu lar limitation or qualification would protect agains tits occurrence, and that the expense a nd othe r difficul t ies of individual determinations justified the inherent imprecision of a prophy lactic rule.

Id. at 777. 34 Hamby, e t al. v. Nee l, et al. Nos. 01-5653/5930

The TennCare r equirement at issu e here i s designed to
e nsure that only individuals who are in fac t uninsurable ar e eligible for Tenn Care’s o pen enro llment. Ce

rtainly the State has a legitimate desire to avoid abuse of the open enrollment benefit , and certainly the State c ould rationally have concluded

that requi ring a letter

establish ing unins urability would protect agains tsuch abu se. Unlike the indisc

riminate “nine-month

rule” upheld

in Weinberger , the Ten

nCare ru le is imprecise only for

that period of time until the ind ividua l applicant submits the letter de

monstrati ng his un in su ra bi li ty. It is diffic ult to envision a method of ensuring agains t abuse wi th wh ic h i t w ou ld be ea si er fo r t he ap pl ic an t t o c om pl y.
Final l y, the challenged requirement is perf ectly rational when o ne consid

ers the d efinition of “unins

urable” that is promulgated

inthe Tenness ee reg

ulations: “

unable, b ecause of anexisting medical condition, to purchase health insurance

. . . .” T ENN

. C OMP

. R. & R EG S

. 1200-13-12-.02. The TennCare Bureau does not determine whether a n individual i s able to purchase health insurance from a privat e carrier—the carrier does. The alter native would be for the TennCare Bureau to keep abreas tof changes both in medical
sc ience and hea

lth insura nce stan dards so a s to be abl e to make a conclusive gue ss as to whether or not a given individual would, if he applied f or i nsuranc e, be ab le to purchas e it. It is diffi cult to imagine that such an approach would be more applicant-friendly than the requirement challen ged by these pla intiffs.

For all o f the for

egoing reasons , I dis sent.