FILED

United States Court of Appeals

Tenth Circuit

September 1, 2009

Elisabeth A. Shumaker

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

STEFFAN HOBBS, by and through

his parents and next friends, JIMMY

and JANET HOBBS, 

 Plaintiff–Appellant,

v.

MARSHA ZENDERMAN; JOEY

KELLENAERS; and PAMELA HYDE,

Secretary of the Department of Human

Services, in their individual and

official capacities, 

 Defendants–Appellees.

__________________

THE SPECIAL NEEDS ALLIANCE;

NEW MEXICO CHAPTER OF THE

NATIONAL ACADEMY OF ELDER

LAWYERS; NEW MEXICO TRIAL

LAWYERS ASSOCIATION; STATES

OF COLORADO, ALASKA,

DELAWARE, FLORIDA, HAWAII,

IDAHO, NEBRASKA, NEVADA,

NEW HAMPSHIRE, NEW JERSEY,

OKLAHOMA, SOUTH CAROLINA

VERMONT, WEST VIRGINIA, and

WYOMING,

 Amici Curiae.

No. 08-2099
- 2 -

Appeal from the United States District Court

for the District of New Mexico 

(D.C. No. 6:06-CV-00985-BB-WDS)

Duff Westbrook (Maureen A. Sanders with him on the briefs), Sanders &

Westbrook, P.C., Albuquerque, New Mexico, for Plaintiff-Appellant.

Paul R. Ritzma, General Counsel/Special Assistant Attorney General (Mark

Dawson Jarmie and Mark Standridge, Mark D. Jarmie LLC, with him on the

briefs), New Mexico Human Services Department, Santa Fe, New Mexico, for

Defendants-Appellees.

Before HENRY, Chief Circuit Judge, BRISCOE, and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

Steffan Hobbs, by and through his parents as next friends, sued several

employees of the New Mexico Human Services Department (“NMHSD”)

following that agency’s denial of Hobbs’ application for Medicaid benefits. 

NMHSD’s denial turned on its determination that a certain trust was a “countable

resource” because the trust was not being administered for Hobbs’ sole benefit. 

Hobbs advanced claims under 42 U.S.C. § 1983 alleging defendants violated his

rights under the Medicaid Act and denied him due process by rejecting his

application on the basis of unwritten, unascertainable standards. The district

court agreed with defendants’ interpretation of the relevant statutes, concluded
- 3 -

that Hobbs’ rights had not been violated, and granted summary judgment to

defendants. 

We hold that the statutory provisions upon which Hobbs relies do not

confer private rights enforceable under § 1983. We further hold that defendants

did not violate Hobbs’ right to due process, but simply applied a “sole benefit”

standard to the particular facts of his case. Exercising jurisdiction under 28

U.S.C. § 1291, we affirm the judgment of the district court. 

I

Hobbs was severely injured in an auto accident in 2000 when he was six

years old. He suffered traumatic brain injury that required him to undergo two

partial lobectomies. As a result of his injuries, Hobbs is prone to seizures and

requires significant assistance in daily activities such as eating and bathing. For

purposes of the Medicaid Act, Hobbs is disabled. See 42 U.S.C. § 1382c(a)(1).

In 2003, Hobbs and his parents entered into a $2.5 million settlement

agreement for injuries related to the accident. Under the terms of that agreement,

$1.1 million was set aside for a special needs trust to benefit Hobbs. A state

court approved the creation of “The Steffan Hobbs Medicaid Payback Trust” (the

“Trust”) on May 29, 2003. MassMutual Trust Co., F.S.B., serves as trustee, and

Hobbs is listed as the sole beneficiary. Although the Trust purports to be

irrevocable, the trust agreement permits “the Trustee and the Guardian . . . to

revoke this Trust or amend the terms hereof.” 
- 4 -

The trust agreement specifies that it was established pursuant to “42 U.S.C.

[§] 1396p(d)(4)(A)” and that its assets “should not be deemed to be available to

[Hobbs] for purposes of Supplemental Security Income (SSI) or Medicaid

eligibility.” Upon Hobbs’ death, any funds remaining in the Trust will be paid to

state Medicaid agencies, up to the amount Hobbs received from those agencies. 

During Hobbs’ lifetime, Trust funds may be distributed “for the benefit of”

Hobbs. However, “such distributions shall be limited to expenditures which shall

not cause ineligibility for [Medicaid] benefits” if receiving Medicaid or other

need-based benefits is in Hobbs’ best interests as determined in the sole discretion

of the trustee. The trust agreement further provides:

Expenditures may be made directly to any of [Hobbs’] family

members, or any other person who takes [Hobbs] into his or her

home or provides special care or attention to him, to compensate

such person for the reasonable value of services provided and to

reimburse such person for costs associated with shelter, care, or

attention. 

From the Trust corpus, $750,000 was used to purchase an annuity, which

provides the Trust with gradually increasing monthly payments. As of November

2006, the annuity provided monthly income of $2,479.40 to the Trust. The

primary outlay from the Trust is payment to Mrs. Hobbs for “extraordinary care

provided to Steffan Hobbs.” Mrs. Hobbs helps her son with dressing and bathing,

and she monitors him for seizures. She also transports him to and from school

and has helped train school personnel to deal with Hobbs’ injury. Mrs. Hobbs
- 5 -

receives a bi-weekly payment from the Trust that, as of November 2006, equaled

$1,322.10 per installment. Trust funds have also been used to purchase a 50%

interest in the Hobbs’ land and home, home furnishings, homeowner’s insurance,

home maintenance and improvement, and life insurance on Hobbs’ parents.

In 2003, Hobbs applied to Medicaid’s Medically Fragile Waiver Program

(the “Program”). That Program provides home care services to Medicaid

recipients with serious medical needs. At the time he applied, Hobbs was

receiving Supplemental Security Income (“SSI”) and SSI Medicaid. New Mexico

Department of Health determined that Hobbs was medically eligible for the

Program and reserved a slot for him pending determination of his financial

eligibility. Joey Kellenaers, a Management Analyst at NMHSD, was responsible

for determining whether Hobbs’ Trust constituted a “countable resource” for

Medicaid eligibility purposes. Consistent with NMHSD practice, Kellenaers

referred the Trust to NMHSD Office of General Counsel, where Assistant General

Counsel Marsha Zenderman reviewed it.

To be eligible for the Program, an applicant must possess no more than

$2,000 in “countable resources.” Certain trust assets, including those in a

“special needs trust,” are not considered countable resources. § 1396p(d)(4). A

“special needs trust” is statutorily defined as:

A trust containing the assets of an individual under age 65 who is

disabled . . . and which is established for the benefit of such

individual by a parent, grandparent, legal guardian of the individual,
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or a court if the State will receive all amounts remaining in the trust

upon the death of such individual up to an amount equal to the total

medical assistance paid on behalf of the individual under a State plan

under this subchapter.

 § 1396p(d)(4)(A).

Following Zenderman’s review of the Trust and related documents, she

determined that the Trust was a countable resource. On April 15, 2004,

Zenderman wrote to Hobbs’ personal injury attorney, stating that the use of Trust

funds “has effectively disqualified your client from being eligible for Medicaid.” 

In particular, Zenderman noted that 

under state Medicaid policies, special needs trust funds may not be

used, for example, to purchase land and a family home, pay property

taxes and insurance on that home, pay for home furnishings (unless

related to the beneficiary’s disabilities), purchase farm animals and

outbuildings, compensate a parent for taking care of her disabled

child, pay the beneficiary’s personal income taxes, or pay advisory

fees to the trustee’s affiliates.

Although Hobbs was not then eligible for the Program, Zenderman advised

Hobbs’ lawyer to “take whatever legal steps are necessary to remedy these

problems” and provided a sample trust to assist Hobbs in “amending the trust so

that it [would] meet state Medicaid requirements.” 

After receiving this letter, Hobbs’ new attorney contacted Zenderman, and

the two corresponded throughout the summer of 2004. On July 29, 2004,

Zenderman sent a ten-page letter to Hobbs’ counsel detailing her concerns with

the Trust. Zenderman’s letter discussed specific provisions of the New Mexico
- 7 -

Administrative Code, the State Medicaid Manual, and the Social Security

Administration’s Program Operations Manual System (“POMS”), considered

several cases to which Hobbs’ counsel had referred Zenderman, and identified a

number of problems with the Trust as written. Zenderman relied on sections of

the State Medicaid Manual that require a special needs trust be “for the sole

benefit” of a disabled individual, along with provisions defining that phrase. She

also cited to a section of the POMS that differentiates between compensation paid

to third-party care providers and that paid to family members. 

Following further correspondence, Hobbs’ counsel requested that NMHSD

issue a decision on Hobbs’ application so that Hobbs could obtain a “fair hearing”

on the benefits denial. Zenderman then conveyed this request to NMHSD

officials. On October 20, 2004, NMHSD notified Hobbs that his application for

the Program had been denied because “[t]he value of your resources exceeds the

program resource limit of $2,000,” citing New Mexico Administrative Code

§ 8.290.500.11.

A hearing to review NMHSD’s determination began on April 27 and

continued on June 10, 2005. Hobbs was represented by counsel throughout the

hearing and was permitted to submit evidence. At the hearing, NMHSD bore the

burden of proof to support its decision by a preponderance of the evidence. After

considering the evidence, the administrative law judge (“ALJ”) recommended that

the NMHSD decision to deny benefits be affirmed, concluding that the Trust
- 8 -

payments to Mrs. Hobbs for “providing routine ongoing care” were not “for the

sole benefit” of Hobbs. The ALJ expressly declined to rule on whether payments

to a family member for “performing the functions of a physical or other therapist,

or perform[ing] skilled services” would render the Trust a countable resource. 

Instead, the ALJ’s holding was limited to payments for care that Mrs. Hobbs was

already legally obligated to provide as a parent. The NMHSD Medical Assistance

Division adopted the ALJ’s recommendation on December 2, 2005. Hobbs then

appealed this administrative determination in state court. 

In October 2006, the Social Security Administration informed Hobbs that

his SSI payments would cease in October because he exceeded the resource limit

of $2,000. Because Hobbs was no longer eligible for SSI, so too was he

ineligible for the SSI Medicaid benefits he had been collecting. 

Hobbs, through his parents as next friends, filed the present suit in the U.S.

District Court for the District of New Mexico on October 12, 2006. Hobbs

successfully moved to stay his state court administrative appeal pending the

outcome of this federal suit. In his complaint, Hobbs asserted claims against

Zenderman, Kellenaers, and NMHSD Secretary Pamela Hyde in both their

individual and official capacities. Proceeding under § 1983, Hobbs alleged that

defendants denied him procedural due process, substantive due process, and equal

protection, and violated his rights under the Medicaid statutes. With respect to

these claims, Hobbs sought: (1) monetary damages, both compensatory and
1

 Although the district court dismissed the First Amendment claim, Hobbs

does not appeal that dismissal. Accordingly, we do not consider it.

- 9 -

punitive; (2) an injunction prohibiting the defendants from treating the Trust as a

countable resource or requiring amendments to the Trust; and (3) declaratory

relief holding that the Trust complies with § 1396p(d)(4), that Hobbs is entitled to

use Trust funds for the purposes challenged by NMHSD, and that Hobbs was

categorically eligible for Medicaid due to his status as an SSI recipient. Hobbs

also brought a § 1983 claim against Zenderman for chilling his First Amendment

right to petition for a redress of grievances, seeking compensatory and punitive

damages.1

Both parties moved for summary judgment. In an order granting summary

judgment to defendants, the district court concluded that NMHSD may review the

manner in which a special needs trust is administered to determine Medicaid

eligibility and that Hobbs had been afforded due process. With respect to Hobbs’

argument that he was categorically eligible for Medicaid based on his SSI

benefits, the court ruled that Hobbs presented no admissible evidence that the

Social Security Administration considered his Trust a non-countable resource. 

Finally, the district court held that the defendants were entitled to qualified

immunity regardless of the merits determination because there was no clearly

established law on point. After the district court dismissed each of his claims,

Hobbs timely appealed.
- 10 -

II

A

Before proceeding to the merits, we note that this appeal does not present

the primary issue the district court decided. As the district court put it, the “key

question in this case is whether a state has authority to assess the administration

of a special-needs trust in determining Medicaid eligibility of the trust

beneficiary.” Hobbs argued that under the plain text of 42 U.S.C.

§ 1396p(d)(4)(A), NMHSD could review whether the Trust had been initially

established for Hobbs’ benefit, but could not consider how the Trust was later

administered. In granting summary judgment to the defendants, the district court

rejected this argument, concluding that the statute was ambiguous and that

Congress intended States to review the administration of special needs trusts. 

On appeal, Hobbs challenged that ruling in his opening brief, arguing that

the “district court’s conclusion that the word ‘established’ as used in 42 U.S.C.

§ 1396p(d)(4)(A) meant ‘administered’ was in error.” (Appellant’s Br. at 36.) 

The response briefs from the defendants and from several States, as amici,

focused on this question of statutory interpretation. In his reply brief, however,

Hobbs affirmatively concedes the matter, stating:

The issue is not whether States have the authority to evaluate and

assess the administration of a special needs trust, or to place

restrictions on what Special Needs funds may be used for, in

determining Medicaid eligibility. In fact, Plaintiff does not contest

the States’ authority to do so in this appeal. Rather, the issue
- 11 -

presented here involves how the State must carry out its eligibility

determinations, and whether it can exercise such authority in the

absence of written policies and ascertainable standards in

determining Plaintiff’s Medicaid eligibility.

(Appellant’s Reply Br. at 2-3.) Given this concession, we are in the somewhat

unusual position of assuming without deciding that the statute at issue permits

States to “evaluate and assess the administration of a special needs trust, [and] to

place restrictions on what Special Needs funds may be used for, in determining

Medicaid eligibility.” (Id.)

We further note that this case is not an appeal of NMHSD’s denial of

benefits to Hobbs. NMHSD is not a party to this case. Rather, pursuant to New

Mexico Statutes §§ 27-3-4 and 39-3-1.1, Hobbs has a direct appeal of the

NMHSD decision currently pending in New Mexico state court. Hobbs is free to

contest the manner in which NMHSD applied § 1396p(d)(4)(A)’s “for the benefit

of” standard to his Trust—including its treatment of payments to a minor’s

parents—in that case.

Rather than challenging States’ authority to monitor the administration of

special needs trusts or appealing the NMHSD’s denial, Hobbs raises several other

contentions before us. First, he alleges that his special needs trust met the

requirements of § 1396p(d)(4)(A), excluding it from consideration for Medicaid

eligibility. Next, he asserts that the state violated § 1396a(a)(10) because it

imposed a standard more restrictive than that applicable to SSI eligibility to
2

 Although the existence of private rights of action was raised below, the

district court declined to address it. Yet, we may affirm on any ground

adequately supported by the record provided that the parties have had a fair

opportunity to address it. See Thomas v. City of Blanchard, 548 F.3d 1317, 1327

n.2 (10th Cir. 2008). Both parties have briefed the private right of action issue on

appeal, and the record is adequately developed to allow us to decide it.

- 12 -

determine whether the Trust was a countable resource for Medicaid purposes. 

Lastly, Hobbs argues that NMHSD violated his substantive and procedural due

process rights by rendering standardless, ad hoc determinations regarding his

Medicaid eligibility.

B

We review a grant of summary judgment de novo, applying the same

standard as the district court. Weigel v. Broad, 544 F.3d 1143, 1150 (10th Cir.

2008). Summary judgment is appropriate “if the pleadings, the discovery and

disclosure materials on file, and any affidavits show that there is no genuine issue

as to any material fact and that the movant is entitled to a judgment as a matter of

law.” Fed. R. Civ. P. 56(c). In making this determination, “[w]e view the

evidence and draw reasonable inferences therefrom in the light most favorable to

the nonmoving party.” Weigel, 544 F.3d at 1151 (quotation omitted). 

III

We consider first whether the statutory provisions at issue provide Hobbs a

right of action cognizable under 42 U.S.C. § 1983.2

 Hobbs seeks enforcement of

three provisions of the Social Security Act: §§ 1396p(d)(4)(A),
- 13 -

1396a(a)(10)(C)(i), and 1396a(a)(17). 

It is well established that some statutory rights may be enforced via § 1983.

 Gonzaga Univ. v. Doe, 536 U.S. 273, 279 (2002) (collecting cases). As in the

implied right of action context, the primary question in determining whether a

statute will support a claim under § 1983 is whether “Congress intended to confer

individual rights upon a class of beneficiaries.” Id. at 285. We examine three

factors in making this determination:

First, Congress must have intended that the provision in question

benefit the plaintiff. Second, the plaintiff must demonstrate that the

right assertedly protected by the statute is not so vague and

amorphous that its enforcement would strain judicial competence. 

Third, the statute must unambiguously impose a binding obligation

on the States. In other words, the provision giving rise to the

asserted right must be couched in mandatory, rather than precatory,

terms. 

Blessing v. Freestone, 520 U.S. 329, 340-41 (1997) (quotation omitted). A statute

embodies congressional intent to benefit the plaintiff only if it is “phrased in

terms of the persons benefited.” Gonzaga Univ., 536 U.S. at 284. 

A

Regarding Hobbs’ claim under § 1396p(d)(4)(A), we conclude that this

statute cannot support a § 1983 claim because it does not “unambiguously impose

a binding obligation on the State[],” Blessing, 520 U.S. at 341. Hobbs reads this

provision as obligating States to exempt special needs trusts when making

eligibility determinations and thus conferring a right on Medicaid applicants to
3

 Keith considered “income trusts” established pursuant to

§ 1396p(d)(4)(B). Because the same statutory language in § 1396p(d)(4) exempts

(continued...)

- 14 -

shield assets held in a special needs trust from being counted as resources. Yet,

the text of the statute and our case law belie his reading.

Section 1396p requires States to count certain trust assets as resources

available to an individual when determining Medicaid eligibility. See

§ 1396p(d)(3)(B)(i) (if funds from an irrevocable trust could be used “for the

benefit of the individual,” such funds “shall be considered resources available to

the individual”). Section 1396p(d)(4) exempts certain trusts, including special

needs trusts, from that requirement. See Keith v. Rizzuto, 212 F.3d 1190, 1193

(10th Cir. 2000). 

Interpreting the intersection of these two provisions, this court concluded in

Keith that “Congress required that states generally count trust assets and income

for purposes of determining Medicaid eligibility, but exempted [§ 1396p(d)(4)]

trusts from that requirement. Thus, Congress left the States free to decide

whether and under what conditions to recognize such trusts.” 212 F.3d at 1193. 

We thus held that States “need not count [§ 1396p(d)(4)] trusts for eligibility

purposes, but nevertheless may . . . opt to do so.” Id. (emphases added). 

Although the statute might have been read in the first instance to require States to

exempt special needs trusts, that construction is foreclosed by our opinion in

Keith.

3
3

(...continued)

both special needs and income trusts from the operation of § 1396p(d)(3), we see

no principled distinction that would allow us to read § 1396p(d)(4)(A) as a

mandatory exclusion when we have read § 1396p(d)(4)(B) as a discretionary

exclusion. 

- 15 -

Hobbs cites Lewis v. Rendell, 501 F. Supp. 2d 671 (E.D. Pa. 2007), a case

in which the court determined § 1396p(d)(4)(A) does confer a private right of

action. Id. at 687-88. There, the court analogized to § 1396p(c)(2)(D), which

provides that an “individual shall not be ineligible for medical assistance” if “the

State determines . . . that the denial of eligibility would work an undue hardship.” 

 § 1396p(c)(2), (c)(2)(D). Noting that an earlier case found a private right of

action under § 1396p(c)(2)(D), the court expanded on that holding, reasoning that

§ 1396p(d)(4)(A) similarly “‘refers to the eligibility for Medicaid and provides

that eligibility will not be affected by the existence of a [special] needs trust.’” 

Lewis, 501 F. Supp. 2d at 688 (quoting Sullivan v. County of Suffolk, 1 F. Supp.

2d 186, 190 (E.D.N.Y. 1998)). As discussed above, however, this circuit does not

interpret § 1396p(d)(4) as a mandatory provision. See Keith, 212 F.3d at 1193.

Hobbs’ citation to Wong v. Daines, 582 F. Supp. 2d 475 (S.D.N.Y. 2008),

is unavailing for the same reason. In that case, the district court concluded that

§ 1396p(d)(4)(A) unambiguously exempted all statutorily-compliant special needs

trusts from eligibility determinations. Id. at 484. Based on that reading, the court

held that § 1396p(d)(4)(A) is enforceable under § 1983. Id. at 479 n.2. Given

this circuit’s prior holding that States have discretion to count § 1396p(d)(4)
- 16 -

trusts as resources, Keith, 212 F.3d at 1193, we are not free to adopt the reasoning

contained in Wong or Lewis even if we were to agree with that approach. See,

e.g., United States v. Mitchell, 518 F.3d 740, 752 n.14 (10th Cir. 2008) (“We are

bound by the precedent of prior panels absent en banc reconsideration or a

superseding contrary decision by the Supreme Court.” (quotation omitted)).

Finally, Hobbs relies on § 1396p(c)(2)(B), which states that “[a]n

individual shall not be ineligible for medical assistance by reason of paragraph (1)

to the extent that . . . the assets . . . were transferred to a trust (including a trust

described in subsection (d)(4)).” § 1396p(c)(2), (c)(2)(B), (c)(2)(B)(iv). The

“paragraph (1)” reference relates to a provision requiring States to deny Medicaid

coverage to individuals who “dispose[] of assets for less than fair market value”

prior to applying for Medicaid. § 1396p(c)(1)(A). Although subsection (c)(2)(B)

contains the type of mandatory language that might create a private right

enforceable under § 1983, it is not at issue in this case. NMHSD did not deny

Hobbs’ application based on a determination that Hobbs transferred assets into the

Trust for less than fair market value; it did so because it found the Trust was not

being administered for Hobbs’ sole benefit and was thus a countable resource. In

other words, Hobbs cannot assert a § 1396p(c)(2)(B) claim because he was not

deemed “ineligible for medical assistance by reason of [§ 1396p(c)(1)].” See

§ 1396p(c)(2). 
4

 This section includes disabled individuals such as Hobbs. See

§ 1396d(a)(vii). 

- 17 -

We are compelled to conclude that § 1396p(d)(4)(A) does not require States

to exempt special needs trusts from Medicaid eligibility determinations. See

Keith, 212 F.3d at 1193. It follows that the subsection confers no binding

obligation on the States to exclude special needs trusts from Medicaid eligibility

consideration. Accordingly, under the third prong of the Blessing test, we hold

that § 1396p(d)(4)(A) is not enforceable through § 1983.

B

Hobbs’ claim under § 1396a(a)(10)(C)(i) and 1396a(a)(17) (“the

methodology provisions”), leads to the same conclusion. Section 1396a(a)

requires that

[a] State plan for medical assistance must . . . if medical assistance is

included for any group of individuals described in [42 U.S.C.

§ 1396d(a)4

] . . . include a description of . . . the methodology to be

employed in determining [Medicaid] eligibility, which shall be no

more restrictive than the methodology which would be employed

under the supplemental security income program . . . . 

§ 1396a(a), (a)(10)(C), (a)(10)(C)(i), (a)(10)(C)(i)(III). A “methodology is

considered to be ‘no more restrictive’ if, using the methodology, additional

individuals may be eligible for medical assistance and no individuals who are

otherwise eligible are made ineligible for such assistance.” § 1396a(r)(2)(B). 

Further, state Medicaid plans must
- 18 -

include reasonable standards . . . for determining eligibility for and

the extent of medical assistance under the plan which . . . provide for

taking into account only such income and resources as . . . would not

be disregarded (or set aside for future needs) in determining [the

applicant’s] eligibility for [SSI] aid assistance or benefits.

§ 1396a(a)(17), (a)(17)(B).

Both methodology provisions fail the first prong of the Blessing test. 

Gonzaga University explained that the first prong requires “an unambiguously

conferred right,” 536 U.S. at 283, and that rights-conferring statutes must be

“phrased in terms of the persons benefited” rather than speaking “only in terms of

institutional policy and practice,” id. at 284, 288 (quotation omitted). “Statutes

that focus on the person regulated rather than the individuals protected create no

implication of an intent to confer rights on a particular class of persons.” 

Alexander v. Sandoval, 532 U.S. 275, 289 (2001). 

Like the statute considered in Gonzaga University, the methodology

provisions contained in § 1396a speak only to the administrator of a spending

program. See § 1396a(a) (“A State plan for medical assistance must . . . .”). 

Unlike some subsections of § 1396a(a), the methodology provisions do not phrase

their directions to program administrators in terms of the persons benefited. 

Their “focus is . . . removed from the interests of individual [applicants] and

[they] clearly do[] not confer the sort of ‘individual entitlement’ that is

enforceable under § 1983.” Gonzaga Univ., 536 U.S. at 287 (quoting Blessing,

520 U.S. at 343). 
5

 Our circuit previously assumed without deciding that a § 1396a(a)(10)(A)

claim is cognizable under § 1983 because neither party raised the issue and it is

not jurisdictional. Okla. Chapter of the Am. Acad. of Pediatrics v. Fogarty, 472

F.3d 1208, 1212 n.1 (10th Cir. 2007); Mandy R. v. Owens, 464 F.3d 1139, 1143

(10th Cir. 2006).

- 19 -

Hobbs cites to numerous circuit cases that have found rights articulated in 

§ 1396a(a)(10) enforceable under § 1983. Each of those cases, however, dealt

with § 1396a(a)(10)(A)(i), which requires States to make Medicaid available to

“all individuals” who meet certain criteria.5

 See Spry v. Thompson, 487 F.3d

1272, 1275-76 (9th Cir. 2007); Watson v. Weeks, 436 F.3d 1152, 1159 (9th Cir.

2006); S.D. ex rel. Dickson v. Hood, 391 F.3d 581, 603 (5th Cir. 2004); Sabree ex

rel. Sabree v. Richman, 367 F.3d 180, 189-90 (3d Cir. 2004); Pediatric

SpecialtyCare, Inc. v. Ark. Dep’t of Human Servs., 293 F.3d 472, 478-79 (8th

Cir. 2002); Westside Mothers v. Haveman, 289 F.3d 852, 863 (6th Cir. 2002);

Miller ex rel. Miller v. Whitburn, 10 F.3d 1315, 1319 (7th Cir. 1993). 

Hobbs, by contrast, relies on § 1396a(a)(10)(C) and § 1396a(a)(17). Unlike

subsection (a)(10)(A), these methodology provisions are not “phrased with an

unmistakable focus on the benefited class.” Gonzaga Univ., 536 U.S. at 284

(quotation omitted). Central to subsection (a)(10)(A) is its reference to “all

individuals.” The methodology provisions contain no such language focusing on

the benefited class. They mention individuals only tangentially. The first

reference is included in a condition; the methodology requirement only applies “if

medical assistance is included [in the state plan] for any group of individuals
- 20 -

described in section 1396d(a).” § 1396a(a)(10)(C). Another reference to

individuals is implicit in (a)(10)(C)(i)(III) because it is contained in the definition

of “no more restrictive,” a term used in that subsection. “No more restrictive”

means that in applying the methodology, “no individuals who are otherwise

eligible [for SSI] are made ineligible for [Medicaid] assistance.” 

§ 1396a(r)(2)(B). Section 1396a(a)(10)(C)(i) also refers to individuals, but

merely states that a state Medicaid plan must describe “the criteria for

determining eligibility of [certain] individuals.” Finally, § 1396a(a)(17) contains

similar tangential references to individuals, requiring that a state Medicaid plan

“include reasonable standards” for various types of applicants.

None of these passing references provides the necessary “‘rights-creating’

language critical to showing the requisite congressional intent to create new

rights.” Gonzaga Univ., 536 U.S. at 287. The methodology provisions are not

“phrased in terms of the persons benefited,” id. at 284 (quotation omitted); they

are unmistakably directed not to the benefited class but to the administrators of

state Medicaid plans. As in Gonzaga University, the individual references merely

describe “the type of policy or practice” that a state official must follow. Id. at

288. 

Our conclusion that the methodology provisions do not provide rights

enforceable under § 1983 comports with the holding in Watson, the only other

circuit opinion we have found addressing the issue. In that case, although the
6

 Several district court cases have concluded that subsection (a)(17) creates

a private right enforceable under § 1983, but we find none persuasive. In Mendez

v. Brown, 311 F. Supp. 2d 134 (D. Mass. 2004), the defendant failed to brief the

issue in any detail, and the district court did not mention the Gonzaga University

requirement that a rights-conferring statute be phrased in terms of the benefited

class. Id. at 138-40. Two other district court cases were decided prior to

Gonzaga University. Markva v. Haveman, 168 F. Supp. 2d 695, 711-12 (E.D.

Mich. 2001); Smith v. Palmer, 24 F. Supp. 2d 955, 963-64 (N.D. Iowa 1998).

- 21 -

Ninth Circuit found an enforceable right in § 1396a(a)(10)(A), 436 F.3d at 1159,

it reached the opposite conclusion with respect to § 1396a(a)(17), id. at 1162. 

The Watson court held that the “key wording of section 1396a(a)(17) fails to even

mention individuals or persons. . . . [It] is not framed in terms of the individuals

benefited, which is fatal under Gonzaga to the existence of a section 1983 right.” 

Id. (citation omitted); see also Sanders ex rel. Rayl v. Kan. Dep’t of Soc. &

Rehab. Servs., 317 F. Supp. 2d 1233, 1250 (D. Kan. 2004) (§ 1396a(a)(17)

“imposes only a duty on the State, and creates no rights in individuals, and thus

does not support a right of action under § 1983”).6

 We agree with this analysis. 

Because the methodology provisions are not phrased in terms of Medicaid

applicants, we cannot infer that Congress created private rights enforceable under

§ 1983 when it passed the methodology provisions.
7

 Because we conclude that Hobbs may not contest violations of either of

these statutes by means of a § 1983 suit, we do not address the merits of his

various statutory arguments.

- 22 -

Accordingly, Hobbs may not enforce § 1396p(d)(4) or the methodology

provisions contained in § 1396a by means of a § 1983 suit.7

 The district court’s

dismissal of Hobbs’ statutory claims was therefore correct.

IV

Lastly, we address whether the New Mexico officials were entitled to

qualified immunity as to Hobbs’ constitutional claims. When a defendant moves

for summary judgment on the basis of qualified immunity, the plaintiff must carry

a two-part burden for his claims to survive. Serna v. Colo. Dep’t of Corr., 455

F.3d 1146, 1150 (10th Cir. 2006). Under these circumstances, the plaintiff must

show both “that the defendant’s actions violated a constitutional or statutory

right” and that “the right at issue was clearly established at the time of the

defendant’s unlawful conduct.” Medina v. Cram, 252 F.3d 1124, 1128 (10th Cir.

2001) (quotation omitted). 

Qualified immunity shields government officials from “harassment,

distraction, and liability when they perform their duties reasonably.” Pearson v.

Callahan, 129 S. Ct. 808, 815 (2009). This doctrine affords “protection to all but

the plainly incompetent or those who knowingly violate the law.” Malley v.

Briggs, 475 U.S. 335, 341 (1986). “The relevant, dispositive inquiry in

determining whether a right is clearly established is whether it would be clear to a
8

 Prior to Pearson, Saucier required courts to determine whether a

constitutional violation had occurred before proceeding to consider whether the

right at issue was clearly established. Saucier, 533 U.S. at 201. Pearson held that

“the district courts and the courts of appeals should be permitted to exercise their

sound discretion in deciding which of the two prongs of the qualified immunity

analysis should be addressed first in light of the circumstances in the particular

case at hand.” 129 S. Ct. at 818. We begin by examining whether there was a

constitutional violation and because we discern none, we do not address whether

the alleged rights were clearly established.

- 23 -

reasonable [official] that his conduct was unlawful in the situation he

confronted.” Saucier v. Katz, 533 U.S. 194, 202 (2001), overruled on other

grounds by Pearson, 129 S. Ct. at 818.8 

A

Hobbs argues that defendants violated his substantive due process rights by

determining his eligibility for Medicaid benefits under unwritten and

unascertainable standards. He relies primarily on Morton v. Ruiz, 415 U.S. 199

(1974), and its statement that “the determination of eligibility cannot be made on

an ad hoc basis by the dispenser of the funds.” Id. at 232.

1 

In Ruiz, the plaintiff challenged a decision by the Bureau of Indian Affairs

(“BIA”) to deny him benefits because he did not live on a reservation. Id. at 204-

05. The statute at issue required that BIA “shall direct, supervise, and expend

such moneys as Congress may from time to time appropriate, for the benefit, care,

and assistance of the Indians throughout the United States.” 25 U.S.C. § 13. The
- 24 -

BIA limited benefits eligibility to Indians residing on a reservation or otherwise

under BIA jurisdiction based on a provision in the Indian Affairs Manual, which

was unpublished and not generally available to the public. Ruiz, 415 U.S. at 204,

204 n.6, 208 n.10. 

The Supreme Court concluded that Congress intended these benefits to

extend to Indians living near reservations as well as those living on reservations. 

Id. at 230. It then noted that the BIA “has placed itself under the structure of the

APA procedures” and its own internal rules required publication of benefiteligibility standards in the Federal Register and codification in the Code of

Federal Regulations. Id. at 233. “Where the rights of individuals are affected,”

the Court held, “it is incumbent upon agencies to follow their own procedures.” 

Id. at 235.

Because the BIA had repeatedly represented to Congress that benefits

would be available to Indians living near reservations, the Court deemed it

“essential that the legitimate expectation of these needy Indians not be

extinguished by what amounts to an unpublished ad hoc determination of the

agency that was not promulgated in accordance with [the BIA’s] own procedures,

to say nothing of those of the Administrative Procedure Act.” Id. at 236. “The

denial of benefits to these respondents under such circumstances is inconsistent

with the distinctive obligation of trust incumbent upon the Government in its
- 25 -

dealings with these dependent and sometimes exploited people.” Id. (quotation

omitted).

We do not read Ruiz to require state or federal agencies to promulgate

detailed regulations for every conceivable circumstance that may arise in making

benefits determinations. See Pulido v. Heckler, 758 F.2d 503, 506 (10th Cir.

1985) (“[A]s a general rule, an administrative agency is not required to

promulgate detailed rules interpreting every statutory provision that may be

relevant to its action.”). “[T]he choice made between proceeding by general rule

or by individual, ad hoc litigation is one that lies primarily in the informed

discretion of the administrative agency.” SEC v. Chenery Corp., 332 U.S. 194,

203 (1947); accord NLRB v. Bell Aerospace Co. Div. of Textron, Inc., 416 U.S.

267, 294 (1974) (“[T]he choice between rulemaking and adjudication lies in the

first instance within the [agency’s] discretion.”). Rather, the provision at issue in

Ruiz was invalid because the BIA violated its own procedures when it did not

publish the rule. The Supreme Court has subsequently clarified that Ruiz held

“that the Bureau’s failure to abide by its own procedures” coupled with “the

distinctive obligation of trust incumbent upon the Government in” dealing with

Indians rendered the provision invalid. Lincoln v. Vigil, 508 U.S. 182, 199

(1993). Moreover, this court has previously held that Ruiz was not decided on

due process grounds but as a matter of statutory interpretation. See Vigil v.

Andrus, 667 F.2d 931, 939 (10th Cir. 1982); see also Ruiz, 415 U.S. at 238 (“In
9

 Even though Ruiz may well not have been a due process case, we

nonetheless consider whether it bears on the due process right asserted because its

basis is somewhat opaque.

- 26 -

view of our disposition of the statutory issue, we do not reach the respondents’

constitutional arguments. We intimate no views as to them.”).9

We recognize that absolute discretion in government decision-making

invites mischief. See, e.g., United States v. Wunderlich, 342 U.S. 98, 101 (1951)

(Douglas, J., dissenting) (“Absolute discretion is a ruthless master. It is more

destructive of freedom than any of man’s other inventions.”); Holmes v. N.Y.

City Housing Auth., 398 F.2d 262, 265 (2d Cir. 1968) (“[A]bsolute and

uncontrolled discretion in an agency of government vested with the administration

of a vast program, such as public housing, would be an intolerable invitation to

abuse.”). Further, we are sympathetic to the special needs trust practitioners

appearing as amici who seek guidance from NMHSD. Yet, we must also

acknowledge that a rigid rule-making requirement “would make the

administrative process inflexible and incapable of dealing with many of the

specialized problems which arise.” Chenery Corp., 332 U.S. at 202; cf. United

States v. Platte, 401 F.3d 1176, 1189 (10th Cir. 2005) (“The Constitution does

not, however, impose impossible standards of specificity.” (citation and alteration

omitted)).

Balancing these somewhat competing principles, courts have found benefits

determinations to be insufficiently guided by standards only when agencies acted
- 27 -

absent any ascertainable limit on eligibility. In Ruiz, the statute at issue merely

provided “for the benefit, care, and assistance of the Indians throughout the

United States,” 25 U.S.C. § 13; Ruiz, 415 U.S. at 205 n.7, and the BIA did not

promulgate any publicly-available implementing regulations, Ruiz, 415 U.S. at

204, 204 n.6, 208 n.10. Similarly, in Baker-Chaput, 406 F. Supp. 1134 (D.N.H.

1976), a benefits statute simply stated: “Whenever a person in any town shall be

poor and unable to support himself he shall be relieved and maintained by the

overseers of public welfare of such town, whether he has a settlement there or

not.” Id. at 1137 (quoting N.H. Rev. Stat. Ann. § 165:1); see also Carey v.

Quern, 588 F.2d 230, 232 (7th Cir. 1978) (“[D]efendants neither issued an

Official Bulletin nor utilized any administrative guidelines governing eligibility

determinations . . . .”); White v. Roughton, 530 F.2d 750, 753 n.8, 754 (7th Cir.

1976) (per curiam) (statute providing for “[f]inancial aid in meeting basic

maintenance requirements for a livelihood compatible with health and well-being”

vested “virtually unfettered discretion” in agency).

These cases upon which Hobbs relies establish, at most, a due process right

to be free from eligibility determinations made without reference to any publiclyavailable standard. As did the Fourth Circuit in interpreting this line of cases, so

do we acknowledge the possibility “that an apparent standard might be so vague

as to be no standard at all,” but “we are not aware of any pertinent case so

holding.” Harris v. Lukhard, 733 F.2d 1075, 1080 (4th Cir. 1984). We need not
10 The State Medicaid Manual is not promulgated under the notice and

comment provisions of the Administrative Procedure Act and thus does not “have

the force and effect of law.” Ramey v. Reinertson, 268 F.3d 955, 963 (10th Cir.

2001). We will defer to such interpretive documents, however, to the extent that

they are consistent with the purposes of the federal statute and provide a

reasonable interpretation thereof. See id.; Reames v. Okla. ex rel. Okla. Health

Care Auth., 411 F.3d 1164, 1170-71 (10th Cir. 2005). 

- 28 -

delineate the precise boundary of the right Hobbs alleges because the standards

applied by defendants here are a far cry from no standards at all. 

2

Eligibility for Medicaid is based on an extraordinarily complex set of

interlocking statutes, federal and state regulations, and other interpretive

documents. In the present case, NMHSD was applying the eligibility standards

contained in 42 U.S.C. § 1396p(d) and the State Medicaid Manual, which

provides detailed guidance concerning treatment of trust assets as countable

resources. See Centers for Medicare and Medicaid Services, U.S. Dep’t of Health

& Human Servs., State Medicaid Manual, § 3259, available at

http://www.cms.hhs.gov/Manuals/PBM/list.asp [hereinafter State Medicaid

Manual].10 The State Medicaid Manual advises agencies to apply the exception

contained in §1396p(d)(4)(A) if the trust “is established for the sole benefit of the

individual.” State Medicaid Manual § 3259.7(A). It defines “sole benefit” as

follows: 

[A] trust is considered to be established for the sole benefit of a

spouse, blind or disabled child, or disabled individual if the trust

benefits no one but that individual, whether at the time the trust is
11 Hobbs argues in a footnote that the “sole benefit” standard impermissibly

restricts the reach of the statute, which provides that a special needs trust must be

“established for the benefit of [the disabled] individual.” 42 U.S.C.

§ 1396p(d)(4)(A). We have already held that Hobbs does not possess cognizable

rights under this subsection. Moreover, as noted above, see supra note 10, we

owe some deference to the Centers for Medicare and Medicaid Services’

interpretation of the Social Security Act as embodied in the State Medicaid

Manual as long as its interpretation is consistent with statutory language,

statutory purpose, and is reasonable. We conclude that its interpretation of

(continued...)

- 29 -

established or any time in the future. . . . [A] trust that provides for

funds or property to pass to a beneficiary who is not the spouse,

blind or disabled child, or disabled individual is not considered to be

established for the sole benefit of one of these individuals. 

§ 3257.B.6.

These detailed provisions—which themselves comprise only a small corner

of the eligibility regulation universe—bear little resemblance to the entirely

generalized spending statutes considered in the cases Hobbs cites. See Ruiz, 415

U.S. at 205 n.7; Carey, 588 F.2d at 232; White, 530 F.2d at 753 n.8, 754;

Baker-Chaput, 406 F. Supp. at 1137. Unlike those provisions, which relate no

information as to who may be eligible for benefits, Hobbs was well informed of

the standard used to govern whether his Trust would be a countable resource for

determining Medicaid eligibility: The Trust would be exempt if it “benefits no

one but [Hobbs], whether at the time the trust is established or any time in the

future.” State Medicaid Manual § 3257.B.6. 

The evidence presented to the district court confirms that this “sole

benefit”11 standard was applied in Hobbs’ case. Zenderman testified that she
11(...continued)

§ 1396p(d)(4)(A) satisfies that standard. 

When only one criterion is articulated in a statute, we have read the statute

to compel exclusion of other criteria. See United Keetoowah Band of Cherokee

Indians of Okla. v. U.S. Dep’t of Housing and Urban Development, 567 F.3d

1235, 1242 (10th Cir. 2009) (reading statute delegating authority to U.S.

Department of Housing and Urban Development to promulgate a formula based

on factors reflecting need as barring other considerations). Similarly, in requiring

that a special needs trust be established “for the benefit of” a disabled individual,

it is at least reasonable to conclude that Congress did not mean that a special

needs trust must merely include the disabled individual as one of many

beneficiaries. Our reading of the statute relies on ordinary application of the

maxim expressio unius est exclusio alterius, see, e.g., In re Villa W. Assocs., 146

F.3d 798, 805 n.6 (10th Cir. 1998), combined with a certain level of deference to

the agency’s interpretation.

- 30 -

determined Hobbs’ Trust was a countable resource based on sections 3259.7(A)

and 3257.B.6 of the State Medicaid Manual. She cited those same provisions in

her July 29, 2004 letter to Hobbs’ attorney. She further testified that her

interpretation of the Trust was merely an application of the “sole benefit”

standard. Although Hobbs’ attorney repeatedly questioned Zenderman regarding

“unwritten policies” of NMHSD, Zenderman was clear that the department

“approach[es] each case individually,” and she was required to “take each trust

and each case on its own merit and look at the individual facts in the individual

situation.” Contrary to Hobbs’ assertion, the defendants did not admit that they

operated without written guidelines. Zenderman simply noted that she did not

know of any written rules that governed the specific issue of whether payments

from a minor’s trust to the minor’s parent for routine care were for the sole

benefit of the minor.
- 31 -

The mere fact that written regulations do not cover every contingency does

not rise to the level of a constitutional violation. Substantive due process does

not command an agency to promulgate a Napoleonic Code. At most, Hobbs was

entitled to have his eligibility determination made pursuant to a written,

ascertainable standard. Defendants here applied such a standard in determining

eligibility. Accordingly, we conclude that the defendants did not violate Hobbs’

substantive due process rights.

B

Hobbs also argues that defendants violated his procedural due process

rights. We see no merit to this contention. “The fundamental requirement of

[procedural] due process is the opportunity to be heard at a meaningful time and

in a meaningful manner.” Mathews v. Eldridge, 424 U.S. 319, 333 (1976)

(quotation omitted). Hobbs was afforded a “fair hearing” pursuant to N.M. Stat.

§ 27-3-3 during which he was represented by counsel, permitted to submit

evidence to an ALJ, and for which NMHSD bore the burden of proving its

position by a preponderance of the evidence. The only defect Hobbs claims in

this process is that the hearing determination, like the eligibility determination

generally, was based on unwritten, unascertainable standards. As discussed

above, we reject this characterization of defendants’ actions. Thus, Hobbs’

procedural due process rights were not violated.

V
- 32 -

For the foregoing reasons, the judgment of the district court is

AFFIRMED.