FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

STEPHEN SANCHEZ, by and through 

his mother and next friend, Joyce

Hoebel; KORY NIGIAN, by and

through his mother and next

friend, Irene Ybarra; KATHY

TOBIASON, by and through her

mother and next friend, Sandra

Nash; SCOTT DE SANTO; GRACE

EWALT, a minor, by and through

her mother, Suzanne Ewalt; SCOTT

CROSE, by and through his mother No. 04-15228

and conservator, Janice Crose;

D.C. No. EDWARD EDDIE COMPTON, by and 

through his parents and next CV-00-01593-CW

friends, Edward and Elaine OPINION

Compton; AUTISM SOCIETY OF LOS

ANGELES; CALIFORNIA

REHABILITATION ASSOCIATION;

CALIFORNIA COALITION OF UNITED

CEREBRAL PALSY ASSOCIATIONS;

EASTER SEALS CALIFORNIA; SYSTEMS

REFORM, INC.; TIERRA DEL SOL,

INC.,

Plaintiffs-Appellants,

v. 

8887
GRANTLAND JOHNSON, in his official 

capacity as Secretary of the

California Department of Health

and Human Services; CLIFFORD

ALLENBY, in his official capacity

as Director of the California

Department of Developmental  Services; DIANE M. BONTA, in her

official capacity as Director of the

California Department of Health

Services; B. TIMOHTY GAGE, in his

official capacity as Director of the

California Department of Finance,

Defendants-Appellees. 

Appeal from the United States District Court

for the Northern District of California

Claudia Wilken, District Judge, Presiding

Argued and Submitted

December 8, 2004—San Francisco, California

Filed August 2, 2005

Before: Diarmuid F. O’Scannlain, Robert E. Cowen,* and

Carlos T. Bea, Circuit Judges.

Opinion by Judge O’Scannlain

*The Honorable Robert E. Cowen, Senior United States Circuit Judge

for the Third Circuit, sitting by designation. 

8888 SANCHEZ v. JOHNSON
COUNSEL

Thomas K. Gilhool, The Public Interest Law Center of Philadelphia, Philadelphia, Pennsylvania, argued the cause for the

appellants. Michael Churchill, Judith A. Gran, and James

Eiseman, Jr., of The Public Interest Law Center of Philadelphia, and Arlene Mayerson and Larisa M. Cummings, of the

Disability Rights Education & Defense Fund, Berkeley, California, were on the briefs. 

Susan M. Carson, Deputy Attorney General, State of California, argued the cause for the appellee. Bill Lockyer, Attorney

General, Teresa Stinson, Supervising Deputy Attorney General, and Elizabeth Edwards, Deputy Attorney General, State

of California, and Henry S. Hewitt, Todd Boley, and Clarisa

R. Canady, of Erickson, Beasley, Hewitt & Wilson LLP, Oakland, California, were on the briefs.

OPINION

O’SCANNLAIN, Circuit Judge: 

We must decide whether developmentally disabled recipients of Medicaid funds and their service providers have a private right of action against state officials to compel the

enforcement of a federal law governing state disbursement of

such funds. We are also asked to decide, separately, whether

the State of California has unlawfully discriminated by allegedly paying community-based service providers lower wages

and benefits than it pays employees in state institutions. 

I

In May, 2000, seven named plaintiffs representing a class

of developmentally disabled individuals, and six organiza8892 SANCHEZ v. JOHNSON
tions that advocate for, or provide community-based services

to, the developmentally disabled, brought this action against

California officials who manage and administer various state

programs for the developmentally disabled. 

The class (collectively referred to by reference to the first

named plaintiff as “Sanchez”) consists of those individuals

who would be capable of living in the community with properly funded support services but who now live in, or are at

risk of living in, state institutions because community-based

services are inadequately funded. All members of the class are

entitled to services under Title XIX of the Social Security

Act, 42 U.S.C. § 1396 et seq. (the “Medicaid Act”), and are

“qualified individual[s] with a disability” under § 504 of the

Rehabilitation Act (“§ 504”), 29 U.S.C. § 794(a), and under

Title II of the Americans with Disabilities Act, 42 U.S.C.

§§ 12131-12134 (the “ADA”). 

The organizational plaintiffs (the “Providers”) are not part

of the class, but receive reimbursement from the State of California under the Medicaid Act for providing services to the

developmentally disabled. 

The state officials are, respectively, officials of California’s

Department of Health and Human Services, Department of

Health Services, Department of Developmental Services

(“DDS”) and Department of Finance. These departments

administer and oversee services funded, in part, through the

Medicaid Act. Generally, the Department of Health and

Human Services ensures that the services of the other departments are provided in compliance with state and federal law;

the Department of Health Services directs, organizes and

administers California’s medical assistance programs, including Medi-Cal, California’s Medicaid program; DDS directs,

organizes and administers California’s developmental disabilities services program; and the Department of Finance oversees all of the State’s financial and business policies,

including health care funding. 

SANCHEZ v. JOHNSON 8893
A

Under the Medicaid Act, the federal government distributes

funds to participating states to help them provide health care

services for the poor and needy. Because California accepts

Medicaid funds, it must administer its state Medicaid program, Medi-Cal, in compliance with a state plan that has been

pre-approved by the U.S. Department of Health and Human

Services. The Medicaid Act sets out the requirements for a

state plan at 42 U.S.C. § 1396a(a)(1)-(65). 

In 1981, in response to the fact that a disproportionate percentage of Medicaid resources were being used for long-term

institutional care and studies showing that many persons

residing in Medicaid-funded institutions would be capable of

living at home or in the community if additional support services were available, Congress authorized the Home and

Community Based Services (“HCBS”) waiver program. The

HCBS program allows a variety of noninstitutional care

options for persons who would otherwise be eligible for Medicaid benefits in an institution, but who would prefer to live

at home or in the community.1 To obtain a HCBS waiver for

a qualified person, the State must certify that the cost of placing that individual through the waiver program will be less

than or equal to the cost of his care in an institution. See generally Olmstead v. L.C., 527 U.S. 581, 601-02 (1999). 

1The program was established under 42 U.S.C. § 1396n(c)(1), which

provides, in part, that: 

The Secretary may by waiver provide that a State plan approved

under this title [42 USCS §§ 1396 et seq.] may include as “medical assistance” under such plan payment for part or all of the cost

of home or community-based services (other than room and

board) approved by the Secretary which are provided pursuant to

a written plan of care to individuals with respect to whom there

has been a determination that but for the provision of such services the individuals would require the level of care provided in

a hospital or a nursing facility or intermediate care facility for the

mentally retarded the cost of which could be reimbursed under

the State plan. 

8894 SANCHEZ v. JOHNSON
B

Sanchez and the Providers claim that, because California

pays wages to community-based service providers participating in the HCBS waiver program at a lower rate than it pays

employees in state institutions, the State is in violation of the

provision of the Medicaid Act that requires that 

A State plan for medical assistance — [must] provide such methods and procedures relating to the utilization of, and the payment for, care and services

available under the plan . . . as may be necessary to

. . . assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and

services are available under the plan at least to the

extent that such care and services are available to the

general population in the geographic area[.] 

42 U.S.C. § 1396a(a)(30)(A) (“§ 30(A)”). They further claim

that the lower pay in community-based programs has resulted

in some developmentally disabled persons remaining unnecessarily institutionalized, which, they allege, constitutes discrimination against them in violation of the ADA and § 504.

Sanchez and the Providers seek injunctive relief requiring the

state officials to increase wages and benefits for communitybased service providers to match substantially the wages and

benefits of employees in state institutions. 

C

The state officials moved for judgment on the pleadings

with respect to the § 30(A) claim, on the ground that § 30(A)

does not provide a private right of action enforceable under 42

U.S.C. § 1983 (“§ 1983”), and for summary judgment with

respect to the ADA and § 504 claims, on the ground that Sanchez and the Providers failed to establish sufficient facts

establish a prima facie case for discrimination. 

SANCHEZ v. JOHNSON 8895
The district court initially granted the state officials’ summary judgment motion, but denied the motion for judgment

on the pleadings with respect to the § 30(A) claim. The state

officials subsequently filed a motion for reconsideration of the

§ 30(A) claim in light of the Supreme Court’s intervening

decision in Gonzaga v. Doe, 536 U.S. 273 (2002), which clarified the standard for evaluating whether a statute creates a

private right of action.2 The district court granted the motion

and, by opinion and order dated January 5, 2004, reversed its

earlier decision. Applying the Supreme Court’s guidance in

Gonzaga, the district court concluded that neither Sanchez nor

the Providers could bring suit under § 1983 for a violation of

§ 30(A). 

Sanchez and the Providers timely appeal from the district

court’s adverse decisions with respect to both their § 30(A)

and their ADA and § 504 claims. 

II

Both Sanchez and the Providers claim that § 30(A) creates

an individual right enforceable by them under § 1983. Their

interests, however, though similar, are not congruent. Sanchez’s claim requires us to decide whether § 30(A) creates a

private right of action for recipients of Medicaid funding; the

Providers’ claim requires us to decide the same question with

respect to providers of Medicaid services. Both claims require

us to consider the current state of the Supreme Court’s private

right of action and § 1983 jurisprudence. 

2Gonzaga involved an alleged violation of the Family Educational

Rights and Privacy Act of 1974 (“FERPA”), 20 U.S.C. § 1232g, which

prohibits “the federal funding of educational institutions that have a policy

or practice of releasing education records to unauthorized persons.” 536

U.S. at 276. Gonzaga University disclosed a student’s alleged sexual misconduct to the state agency responsible for teacher certification, whereupon the student sued to enforce the privacy provisions of FERPA. The

Court held that “such an action [was] foreclosed because the relevant provisions of FERPA create no personal rights to enforce under 42 U.S.C.

§ 1983.” Id. 

8896 SANCHEZ v. JOHNSON
A

In Maine v. Thiboutot, 448 U.S. 1 (1980), the Supreme

Court held for the first time that § 1983 permits suits against

state officials to enforce statutes enacted pursuant to Congress’s spending power. Id. at 4-5. The scope of these new

remedies available under § 1983 was clarified in Pennhurst

State School and Hospital v. Halderman, 451 U.S. 1 (1981),

in which the Court explained that Thiboutot did not alter the

fact that “the typical remedy for state noncompliance with

federally imposed conditions is not a private cause of action

for noncompliance but rather action by the Federal Government to terminate funds to the State.” Id. at 28. Pennhurst

established that the remedy announced in Thiboutot was to be

applied sparingly and only to statutes in which Congress

“speak[s] with a clear voice,” and “unambiguously” creates a

“right[ ] secured by the laws of the United States.” Id. at 17,

28 (quotation marks omitted). The Court also advised that the

identification of a substantive right embodied in a statute was

only the first of at least two steps that must be considered

when analyzing whether that right is enforceable under

§ 1983. Id. at 28 n.21 (“Because we conclude that § 6010 confers no substantive rights, we need not reach the question

whether there is a private cause of action under that section

or under 42 U.S.C. § 1983 to enforce those rights.”) (emphasis added). 

Ten years later, in Wilder v. Virginia Hospital Ass’n, 496

U.S. 498 (1990), the Court held that 42 U.S.C.

§ 1396a(a)(13)(A) (subsequently repealed) of the Medicaid

Act could give rise to a private right of action under § 1983.

Id. at 523. This anomalous decision appeared to mark a sudden expansion in the Court’s § 1983 jurisprudence. In hindsight, however, it was merely a rare case in which, as the

Court explained in Gonzaga, a statute “explicitly conferred

specific monetary entitlements upon the plaintiffs . . . [and]

SANCHEZ v. JOHNSON 8897
Congress left no doubt of its intent for private enforcement

. . . .” Gonzaga, 536 U.S. at 280.3

[1] In Blessing v. Freestone, 520 U.S. 329 (1997), the

Court finally provided an analytical framework for courts to

use when evaluating whether or not a statute creates a right

enforceable under § 1983. Blessing requires a court to consider three factors: (1) “Congress must have intended that the

provision in question benefit the plaintiff,” id. at 340-41; (2)

“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,” id. at 340;

and (3) “the statute must ambiguously 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.” Id. at 341. Somewhat confusingly, the first

Blessing factor addressed whether or not the plaintiff receives

an intended “benefit” from the statute, whereas the second

factor referred not to a “benefit” but to a “right.” In Gonzaga,

the Court resolved this inconsistency. 

[2] The Court first acknowledged that “[s]ome language in

our opinions might be read to suggest that something less than

an unambiguously conferred right is enforceable by § 1983.”

Gonzaga, 536 U.S. at 282 (referring specifically to the Blessing test). Correcting this misperception, the Court announced

that

[w]e now reject the notion that our cases permit anything short of an unambiguously conferred right to

3

Justice Stevens, writing in dissent in Gonzaga, even suggested that the

reasoning in Wilder is so out of step with the Court’s holding in Gonzaga

that it has been effectively overruled. Id. at 300 n.8 (Stevens, J., dissenting) (“[Imposing the implied right of action framework upon the § 1983

inquiry] sub silentio overrules cases such as Wright and Wilder. In those

cases we concluded that the statutes at issue created rights enforceable

under § 1983, but the statutes did not ‘clearly and unambiguously,’ . . .

intend enforceability under § 1983.”) 

8898 SANCHEZ v. JOHNSON
support a cause of action brought under § 1983. Section 1983 provides a remedy only for the deprivation

of “rights, privileges, or immunities secured by the

Constitution and laws” of the United States. Accordingly, it is rights, not the broader or vaguer “benefits” or “interests,” that may be enforced under the

authority of that section. This being so, we further

reject the notion that our implied right of action

cases are separate and distinct from our § 1983

cases. To the contrary, our implied right of action

cases should guide the determination of whether a

statute confers rights enforceable under § 1983. 

Id. at 283. The Court repeatedly stressed that it is Congress’s

use of explicit, individually focused, rights-creating language

that reveals congressional intent to create an individually

enforceable right in a spending statute.4See Gonzaga, 536

4The Medicaid Act was promulgated under Congress’s spending power,

see Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 682-83

(2003) (Thomas, J., concurring), which is encompassed in Art. I, § 8, cl.

1, of the United States Constitution. One of the few enumerated grants of

federal legislative authority, see Marbury v. Madison, 5 U.S. 137, 176 1

Cranch 137, 176, 2 L. Ed. 60 (1803) (Marshall, C. J.) (“The powers of the

legislature are defined, and limited; and that those limits may not be mistaken, or forgotten, the constitution is written.”), the Spending Clause

states that “Congress shall have Power To . . . provide for the . . . general

Welfare of the United States.” In Pennhurst, the Court advised that, when

reviewing legislation enacted pursuant to the spending power, courts

should be especially reluctant to conclude that Congress intended to create

a new individual right enforceable against the States. Because of the quasicontractual nature of Congress’s spending power, states accepting funds

from the federal government must be aware of the conditions attached to

the receipt of those funds so that they can be said to have “voluntarily and

knowingly accept[ed] the terms of the ‘contract.’ ” 451 U.S. at 17. (citing

Steward Machine Co. v. Davis, 301 U.S. 548, 585-598 (1937); Harris v.

McRae, 448 U.S. 297 (1980)). “Accordingly, if Congress intends to

impose a condition on the grant of federal moneys, it must do so unambiguously. . . . [and] speak with a clear voice [in order to] enable the States

to exercise their choice knowingly, cognizant of the consequences of their

participation.” Id. 

SANCHEZ v. JOHNSON 8899
U.S. at 283-84 (“[T]he question whether Congress intended to

create a private right of action is definitively answered in the

negative where a statute by its terms grants no private rights

to any identifiable class.”) (quotation marks and alterations

omitted, emphasis added).5

[3] As examples of paradigmatic rights-creating language,

the Court cited the texts of Title VI of the Civil Rights Act of

1964 and Title IX of the Education Amendments of 1972. Id.

at 287 (comparing the text of FERPA unfavorably to “the

individually focused terminology of Titles VI and IX”). Those

5Relying on an opaque item of legislative history, Sanchez and the Providers argue that the district court erred by focusing unduly on the explicit

text of the statute to the exclusion of legislative intent. They allege that

classic “rights-creating” language could not be used in § 30(A), since the

section is included as part of the state plan requirements and that, in 1994,

Congress amended the Medicaid Act to provide that 

[i]n an action brought to enforce a provision of the Social Security Act [42 U.S.C. §§ 301 et seq.], such provision is not to be

deemed unenforceable because of its inclusion in a section of the

Act requiring a State plan or specifying the required contents of

a State plan. This section is not intended to limit or expand the

grounds for determining the availability of private actions to

enforce State plan requirements other than by overturning any

such grounds applied in Suter v. Artist M., 112 S. Ct. 1360 (1992)

but not applied in prior Supreme Court decisions respecting such

enforceability; provided, however, that this section is not

intended to alter the holding in Suter v. Artist M. that section

471(a)(15) of the Act [42 U.S.C. § 671(a)(15)] is not enforceable

in a private right of action. 

42 U.S.C. § 1320a-2; accord 42 U.S.C. § 1320a-10. Although this text is

hardly a model of clarity, the caveat that it “is not intended to limit or

expand the grounds for determining the availability of private actions to

enforce State plan requirements” shows that, at the very least, it does not

disturb the Supreme Court’s reasoning in Pennhurst, which was decided

prior to Suter. And as we are bound to follow the Court’s holdings in

Blessing and Gonzaga, which followed the enactment of 42 U.S.C.

§ 1320a-2, this provision does not disturb the general framework that we

—and the district court in this case—have used to analyze private rights

of action under § 1983. 

8900 SANCHEZ v. JOHNSON
statutes provide, respectively, that “No person in the United

States shall . . . be subjected to discrimination,” 42 U.S.C.

§ 2000d, and that “No person in the United States shall, on the

basis of sex . . . be subjected to discrimination.” 20 U.S.C.

§ 1681(a). Although our inquiry should not be limited to looking for those precise phrases, statutory language less direct

than the individually-focused “No person shall . . .” must be

supported by other indicia so unambiguous that we are left

without any doubt that Congress intended to create an individual, enforceable right remediable under § 1983. 

B

Since Gonzaga, no federal court of appeals of which we are

aware has concluded that § 30(A) provides Medicaid recipients or providers with a right enforceable under § 1983. 

Before Gonzaga, the Fifth and Eighth Circuits each held

that Medicaid recipients had such a private right of action. See

Evergreen Presbyterian Ministries, Inc. v. Hood, 235 F.3d

908, 927-28 (5th Cir. 2000); Ark. Med. Soc’y, Inc. v. Reynolds

6 F.3d 519, 528 (8th Cir. 1993); cf. Pa. Pharmacists Ass’n v.

Houstoun, 283 F.3d 531, 543-44 (3rd Cir. 2002) (en banc)

(positing, in dicta, a right for recipients while rejecting such

a right for providers); Visiting Nurse Ass’n v. Bullen, 93 F.3d

997, 1004 n.7 (1st Cir. 1996) (positing, in dicta, a right for

recipients while holding that such a right existed for providers). The First, Seventh and Eighth Circuits held that such a

right existed for Medicaid providers. See Visiting Nurse

Ass’n, 93 F.3d at 1005 (1st Cir. 1996); Methodist Hosps. v.

Sullivan, 91 F.3d 1026, 1029 (7th Cir. 1996); Ark. Med.

Soc’y, Inc., 6 F.3d at 528. By contrast, the Third and Fifth

Circuits explicitly held that § 30(A) did not create a right

enforceable by Medicaid providers. See Pa. Pharmacists

Ass’n, 283 F.3d at 543; Evergreen Presbyterian Ministries,

Inc., 235 F.3d at 929. 

However, in light of Gonzaga, the First Circuit has since

reversed itself in a case involving only the rights of providers.

SANCHEZ v. JOHNSON 8901
See Long Term Care Pharm. Alliance v. Ferguson, 362 F.3d

50, 59 (1st Cir. 2004) (“If Gonzaga had existed prior to Bullen, the panel could not have come to the same result. . . . Providers such as pharmacies do not have a private right of action

under subsection (30)(A).”). With the First Circuit’s example

in mind, we turn to the language of § 30(A) to determine if

it unambiguously manifests Congressional intent to create

individual rights, whether for Medicaid recipients or providers, remediable under § 1983.

C

In contrast to the language of Title VI and Title IX, there

is nothing in the text of § 30(A) that unmistakably focuses on

recipients or providers as individuals. Moreover, the flexible,

administrative standards embodied in the statute do not reflect

a Congressional intent to provide a private remedy for their

violation.

1

[4] In Gonzaga, the Supreme Court instructed that, when a

“provision focuse[s] on ‘the aggregate services provided by

the State,’ rather than ‘the needs of any particular person,’ it

confer[s] no individual rights and thus [cannot] be enforced

by § 1983.” Id. at 282 (quoting Blessing, 520 U.S. at 340).

Like the statute under review in Gonzaga, § 30(A) also has an

aggregate focus, rather than an individual focus that would be

evidence of an intent to confer an individually enforceable

right. The statute speaks not of any individual’s right but of

the State’s obligation to develop “methods and procedures”

for providing services generally. Indeed, the only reference in

§ 30(A) to recipients of Medicaid services is in the aggregate,

as members of “the general population in the geographic

area.” A statutory provision that refers to the individual only

in the context of describing the necessity of developing statewide policies and procedures does not reflect a clear Congressional intent to create a private right of action. 

8902 SANCHEZ v. JOHNSON
The text does at least refer explicitly to Medicaid providers,

but as a means to an administrative end rather than as individual beneficiaries of the statute. The State is directed to “provide methods and procedures . . . sufficient to enlist enough

providers so that care and services are available under the

plan at least to the extent that such care and services are available to the general population in the geographic area.” Under

§ 30(A), providers are to be “enlisted” as subordinate partners

in the administration of Medicaid services. They may certainly benefit from their relationship with the State, but they

are, at best, indirect beneficiaries and it would strain common

sense to read § 30(A) as creating a “right” enforceable by

them. See Gonzaga, 536 U.S. at 284 (“For a statute to create

such private rights, its text must be phrased in terms of the

persons benefitted.”).

2

Far from focusing on the rights of a specific class of beneficiaries, § 30(A) is concerned with a number of competing

interests. It requires a State to “provide such methods and procedures relating to . . . care and services . . . as may be necessary to . . . assure that payments are consistent with

efficiency, economy, and quality of care.” The most efficient

and economical system of providing care may be one that

benefits taxpayers to the detriment of medical providers and

recipients; likewise, the provision of “quality” care—

whatever standard may be implied by such a nebulous term—

is likely to conflict with the goals of efficiency and economy.

The tension between these statutory objectives supports the

conclusion that § 30(A) is concerned with overall methodology rather than conferring individually enforceable rights on

individual Medicaid recipients. 

In Gonzaga, Justice Breyer observed that the “broad and

nonspecific” language of FERPA indicated that “Congress

may well have wanted . . . to achieve the expertise, uniformity, wide-spread consultation, and resulting administrative

SANCHEZ v. JOHNSON 8903
guidance that can accompany agency decisionmaking and to

avoid the comparative risk of inconsistent interpretations and

misincentives that can arise out of an occasional inappropriate

application of the statute in a private action for damages.” 536

U.S. at 292 (Breyer, J., concurring in the judgment). The language of § 30(A) is similarly ill-suited to judicial remedy; the

interpretation and balancing of the statute’s indeterminate and

competing goals would involve making policy decisions for

which this court has little expertise and even less authority. 

3

[5] The text and structure of § 30(A) simply do not focus

on an individual recipient’s or provider’s right to benefits, nor

is the “broad and diffuse” language of the statute amenable to

judicial remedy. We conclude, therefore, that Congress has

not spoken with an unambiguous, clear voice that would put

a State on notice that Medicaid recipients or providers are

able to compel state action under § 1983.

D

This conclusion follows our discussion of the impact of

Gonzaga in Price v. City of Stockton, 390 F.3d 1105 (9th Cir.

2004). In that case, former tenants of low-income hotels and

a nonprofit organization involved in assisting the homeless

sued the City of Stockton, alleging that the closing of residential hotels for health and safety reasons violated federal and

state laws, including the Housing and Community Development Act. We were asked to decide whether the plaintiffs had

a private right of action to enforce the relevant provisions of

the act. 

We began by observing that, after Gonzaga, “to create

enforceable rights [such as would satisfy the first prong of the

Blessing test] the language of the statute must focus on individual entitlement to benefits rather than the aggregate or systemwide policies and practices of a regulated entity.” Price,

8904 SANCHEZ v. JOHNSON
390 F.3d at 1110. Applying this rule, we noted that “[f]irst

and foremost, Section 104(k) mandates that ‘each grantee

shall provide for reasonable benefits to any person involuntarily and permanently displaced as a result of the use of assistance received under this chapter to acquire or substantially

rehabilitate property.’ ” Id. (emphasis added). From this language, we concluded that the section “is ‘phrased with an

unmistakable focus on the benefited class’ [and] does not

speak ‘only in terms of institutional policy and practice,’ . . .

but rather requires that benefits be provided to particular persons displaced by federally funded redevelopment activities,”

and, therefore, it “evinces a clear intent to create a federal

right.” Id. at 1111 (quoting Gonzaga, 536 U.S. at 288) (citations omitted). 

We also held that the “ ‘reasonable benefits’ to which displaced persons unquestionably are entitled under Section

104(k),” were not “too vague for judicial enforcement.” Id.

Because related statutory provisions and regulations “enumerate[d] the monetary benefits to which displaced persons of

low and moderate income are entitled, ‘including reimbursement for actual and reasonable moving expenses, security

deposits, credit checks, and other moving-related expenses,

including any interim living costs,’ ” id. at 1112, we concluded that the terms of the statute anticipated a clear,

enforceable remedy for violations of the rights enumerated in

the statute. Id. at 1112, 1114. 

In contrast, we held that “other provisions of [the statute

under consideration] do not share Section 104(k)’s focus on

individual benefits,” id. at 1113, and, instead, “are directed to

governmental agencies . . . and are phrased in aggregate

terms, without reference to individual displaced persons.” Id.

(emphasis added, quotation marks omitted). We concluded

that, “[i]n consideration of this aggregate focus, we hold that

the requirements of [these other sections of the statute] do not

. . . create individual rights directly: . . . the lack of ‘rightscreating’ language and the absence of any focus on individual

SANCHEZ v. JOHNSON 8905
entitlements, would prevent us from holding that [they] create

individual rights.” Id. at 1113-14 (quotation marks and citation omitted). 

Because § 30(A) also lacks “rights-creating” language and

“any focus on individual entitlements,” and does not anticipate a judicially enforceable remedy, it shares the flaws that

Price identified as fatal to the sections of the Housing and

Community Development Act that we held to be unenforceable. 

E

Our conclusion also accords with the First Circuit’s analysis of the text of § 30(A) in Long Term Care. Although that

case was concerned only with Medicaid providers, its reasoning applies also to recipients. The First Circuit noted that

§ 30(A) “has . . . broad[ ] coverage, sets forth general objectives, and mentions no category of entity or person specially

protected” and “has no ‘rights creating language’ and identifies no discrete class of beneficiaries — two touchstones in

Gonzaga’s analysis and of those earlier cases on which Gonzaga chose to build.” Long Term Care, 362 F.3d at 56-57

(citations omitted). Instead, “[t]he provision focuses . . . upon

the state as the person regulated rather than individuals protected, suggesting no intent to confer rights on a particular

class of persons.” Id. (quotation marks and citation omitted).

The court concluded that, “[s]ubsection (30)(A) presents the

same concern” that Justice Breyer identified in Gonzaga,

namely that “much of the statute’s key [substantive] language

is broad and non-specific,” id. at 58 (quoting Gonzaga, 536

U.S. at 292 (Breyer, J., concurring in the judgment)) (alteration in original), which suggests “that exclusive agency

enforcement might fit the scheme better than a plethora of private actions threatening disparate outcomes.” Id. 

We do not believe the Third Circuit case, Sabree v. Richman, 367 F.3d 180 (3d Cir. 2004), which held that “it [is] dif8906 SANCHEZ v. JOHNSON
ficult, if not impossible, as a linguistic matter, to distinguish

the import of the relevant Title XIX language—‘A State plan

must provide’—from the ‘No person shall’ language of Titles

VI and IX,” id. at 190, to be applicable to our analysis of

§ 30(A). Sabree involved two sections of the Medicaid Act

that are prefaced by language very different from that which

introduces § 30(A). Those provisions specifically focus on

entitlements available to “all eligible individuals” and “provide . . . for making medical assistance available . . . to all

individuals” rather than on the “methods and procedures” by

which a State can balance the often incompatible goals of “efficiency, economy, and quality of care” in the administration

of Medicaid services. Compare 42 U.S.C. §§ 1396a(a)(8) and

(a)(10) (emphases added) with 42 U.S.C. § 1396a(a)(30)(A).

The Third Circuit observed that the phrase “A State plan must

provide,” when read together with the individual focus of 42

U.S.C. §§ 1396a(a)(8) and (a)(10), has an overall direction

that is similar to the individually focused Title VI and IX language approved by the Court in Gonzaga. Such language is

also notably absent from § 30(A). 

Although 42 U.S.C. § 1396a(a) sets out a comprehensive

list of requirements that a state plan must meet, it does not

describe every requirement in the same language. Some

requirements, such as those addressed in Sabree, focus on

individual recipients, while others are concerned with the procedural administration of the Medicaid Act by the States and

only refer to recipients, if at all, in the aggregate. Section

30(A) is one of the latter provisions; it is directly concerned

with the State as administrator and only indirectly with recipients and providers as beneficiaries of the administered services. Gonzaga made it clear that simply being the intended

beneficiary of a statute is not enough to demonstrate the intentional creation of an enforceable right. 

F

[6] After Gonzaga, there can be no doubt that, to satisfy the

Blessing test, a plaintiff seeking redress under § 1983 must

SANCHEZ v. JOHNSON 8907
assert the violation of an individually enforceable right conferred specifically upon him, not merely a violation of federal

law or the denial of a benefit or interest, no matter how unambiguously conferred. The text and structure of § 30(A) do not

persuade us that Congress has, with a clear voice, intended to

create an individual right that either Medicaid recipients or

providers would be able to enforce under § 1983. Because we

hold that § 30(A) fails the first prong of the Blessing test, we

do not need to consider the second and third prongs. 

III

Sanchez and the Providers also appeal the district court’s

order granting the state officials’ summary judgment motion

with respect to the ADA and § 504 claims. They allege that

California has failed to pursue HCBS waiver reimbursements

under Medicaid aggressively, which, they further allege,

could be used to set payment rates to community-based service providers at a level high enough to provide communitybased care for all developmentally disabled persons who

desire it. They request an injunction compelling the state officials to increase payments to community-based service providers to prevent what they characterize as the continuing,

unnecessary segregation of developmentally disabled persons

in institutions. 

A

[7] Both the ADA and § 504 prohibit discrimination on the

basis of disability in the administration of a public program

receiving Federal funding. Because of the nearly identical language of 42 U.S.C. § 12132 and § 504 of the Rehabilitation

Act,6 and because the Sanchez appellants are “qualified

6

42 U.S.C. § 12132 (§ 202 of the ADA) provides, in part, that: 

[N]o qualified individual with a disability shall, by reason of such

disability, be excluded from participation in or be denied the ben8908 SANCHEZ v. JOHNSON
individual[s] with a disability” within the meaning of both

statutes, for the purposes of this case we construe the two provisions as co-extensive. Cf. Barnes v. Gorman, 536 U.S. 181,

184-85 (2002); Lovell v. Chandler, 303 F.3d 1039, 1052 (9th

Cir. 2002); Helen L. v. DiDario, 46 F.3d 325, 331-32 (3d Cir.

1995). 

[8] Regulations enacted pursuant to the ADA and § 504

both express a clear policy preference in favor of integrating

developmentally disabled persons into the community over

institutional care: one § 504 regulation requires programs that

receive federal funding to “administer programs and activities

in the most integrated setting appropriate to the needs of qualified handicapped persons,” 28 C.F.R. § 41.51(d) (2005); and

one of the ADA’s Title II regulations requires a public entity

to “administer services, programs, and activities in the most

integrated setting appropriate to the needs of qualified individuals with disabilities.” 28 C.F.R. § 35.130(d) (2005).

Again, for the purposes of this appeal, we interpret these provisions as co-extensive.

B

In granting the state officials’ motion for summary judgment on Sanchez’s and the Providers’ ADA and § 504 claims,

the district court held that, drawing all reasonable inferences

in favor of Sanchez and the Providers, they had failed to

efits of the services, programs, or activities of a public entity, or

be subjected to discrimination by any such entity. 

29 U.S.C. § 794(a) (§ 504 of the Rehabilitation Act) provides, in part,

that: 

No otherwise qualified individual with a disability in the United

States . . . shall, solely by reason of her or his disability, be

excluded from the participation in, be denied the benefits of, or

be subjected to discrimination under any program or activity

receiving Federal financial assistance . . . . 

SANCHEZ v. JOHNSON 8909
establish any material factual dispute with respect to three key

issues, all of which were necessary elements of a prima facie

case for discrimination. 

First, the court held that “[e]ven if unjustified institutionalization is occurring, [Sanchez and the Providers] have failed

to show that an increase in wages and benefits for

community-based direct care workers would remedy the

alleged violation.” Second, the court held that the relief proposed by Sanchez and the Providers is not a “reasonable modification” of California’s current policies and practices

because the $1.4 billion of extra expenditure they request

would represent a forty percent increase in the State’s budget

for developmentally disabled services. Third, the court held

that California already has in place an acceptable plan for

deinstitutionalization, the disruption of which would involve

a fundamental alteration of the State’s current policies and

practices in contravention of the Supreme Court’s instructions

in Olmstead. If we uphold any one of these conclusions, then

the state officials must prevail.

1

[9] In Olmstead, the Supreme Court interpreted Title II of

the ADA as forbidding the arbitrary segregation of the disabled in large state institutions. “Unjustified isolation,” the

Court held, “is properly regarded as discrimination based on

disability.” 527 U.S. at 597. However, the Court “recognize[d], as well, the States’ need to maintain a range of facilities for the care and treatment of persons with divers mental

disabilities, and the States’ obligation to administer services

with an even hand.” Id. Justice Ginsburg, writing for a plurality of the Court, elaborated on this balancing of integration

with competing policy and fiscal considerations, emphasizing

that “[t]he State’s responsibility, once it provides communitybased treatment to qualified persons with disabilities, is not

boundless.” Id. at 603. A State is only required to modify its

current practices if the modifications necessary to satisfy the

8910 SANCHEZ v. JOHNSON
request for increased deinstitutionalization are reasonable and

do not fundamentally alter the nature of the State’s services

or program. Id.; 28 C.F.R. § 35.130(b)(7) (2005) (“A public

entity shall make reasonable modifications in policies, practices, or procedures when the modifications are necessary to

avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications

would fundamentally alter the nature of the service, program,

or activity.”). 

[10] One state defense under the ADA, which was explicitly approved by the Court,7

 is the existence of a state plan for

deinstitutionalization (an “Olmstead Plan”). The Court held

that, 

[i]f . . . the State were to demonstrate that it had a

comprehensive, effectively working plan for placing

qualified persons with mental disabilities in less

restrictive settings, and a waiting list that moved at

a reasonable pace not controlled by the State’s

endeavors to keep its institutions fully populated, the

reasonable-modifications standard would be met. 

Id. at 605-06. 

The district court concluded that California is currently

operating an acceptable deinstitutionalization plan, which,

under Olmstead, should not be set aside or modified by the

courts. 

7We have held that, while “[t]he section of Justice Ginsburg’s opinion

discussing the state’s fundamental alteration defense commanded only

four votes . . . [b]ecause it relied on narrower grounds than did Justice Stevens’ concurrence or Justice Kennedy’s concurrence, both of which

reached the same result, Justice Ginsburg’s opinion controls.” Townsend

v. Quasim, 328 F.3d 511, 519 n.3 (9th Cir. 2003). 

SANCHEZ v. JOHNSON 8911
a

Under California law, all persons with developmental disabilities are entitled to free health care services. The Lanterman Developmental Disabilities Services Act, Cal. Welf. &

Inst. Code, §§ 4500-4846, (the “Lanterman Act”) requires the

State to provide “[a]n array of services and supports . . .

which is sufficiently complete to meet the needs and choices

of each person with developmental disabilities, regardless of

age or degree of disability, and at each stage of life and to

support their integration into the mainstream life of the community.” Id. § 4501. As described by the California Supreme

Court,

[t]he purpose of the statutory scheme is twofold: to

prevent or minimize the institutionalization of

developmentally disabled persons and their dislocation from family and community, and to enable them

to approximate the pattern of everyday living of nondisabled persons of the same age and to lead more

independent and productive lives in the community.

Ass’n for Retarded Citizens v. Dep’t of Developmental Servs.,

696 P.2d 150, 152 (Cal. 1985) (“ARC”)(citations omitted).

The Lanterman Act gives DDS “jurisdiction over the execution of the laws relating to the care, custody, and treatment of

developmentally disabled persons,” Cal. Welf. & Inst. Code

§ 4416, but DDS’s role “is basically limited to promoting the

cost-effectiveness of the operations of [21 Regional Centers],

and does not extend to the control of the manner in which

they provide services or in general operate their programs.”

ARC, 696 P.2d at 152. The Lanterman Act also established 21

Regional Centers, independent, private non-profit community

agencies under contract with the DDS, which coordinate services to “provide each developmentally disabled person with

services that enable him to live . . . in the community.” Id. 

Through the Regional Centers, California provides care services for more than 180,000 developmentally disabled per8912 SANCHEZ v. JOHNSON
sons. Of these, approximately 3,800 live in one of seven large,

congregate institutions called Developmental Centers, which

are located throughout the State and are operated by DDS.

Although they are operated by DDS, it is the Regional Centers that determine if a consumer needs to be institutionalized

in a Developmental Center and for how long. Regional Centers are required to develop an Individual Program Plan for

each consumer. Once an individual plan is prepared, the

responsible Regional Center must review it annually and

modify it as necessary. An individual plan must include an

assessment of the consumer’s capabilities and limitations, a

statement of time-limited objectives for improving his situation, a schedule of the type and amount of services necessary

to achieve these objectives, and a schedule of periodic review

to ensure that the services have been provided and the objectives met. 

The ninety-eight percent of developmentally disabled persons who receive care in the community do so either at Intermediate Care Facilities, which are licensed to provide 24-hour

nursing care and are scattered throughout the State; Community Care Facilities, which provide 24-hour, non-medical,

community-based residential care for developmentally disabled persons in need of personal services, and supervision or

assistance essential for self-protection; or through a variety of

non-residential day programs and residential support services

for developmentally disabled persons who live at home or in

the community. It is the Regional Centers that select and contract with these community based service providers, which

include Family Home Agencies, Foster Family Agencies,

Independent Living Programs, Supported Living Services,

and other support programs, such as vocational training, transportation, health care, respite services, community integration

training, community activities support, adaptive skills training, behavior management, tutors, special education, recreation therapy, counseling, infant development, and speech

pathology. 

SANCHEZ v. JOHNSON 8913
Care of developmentally disabled persons in these

community-based programs may be eligible for Medicaid

reimbursement pursuant to the HCBS waiver program. However, in order to qualify for Medicaid reimbursement, the

recipient must be a low income person and the services must

also be provided at a lower cost than if they were provided in

a state institution. For qualifying recipients using qualifying

services, Medicaid provides matching funds equal to approximately half of the cost of those services.8

The number of places in the HCBS waiver program is

capped and a State must apply for any increases of the cap

from the U.S. Department of Health and Human Services.

Because of this, States often apply for, and receive, preapproval for more places than they currently need. In 2002,

California had more than 45,000 waiver places approved and

received matching funds for approximately 35,000 registered

persons. That cap has been approved to increase to approximately 70,000 by October, 2005. Because Sanchez and the

Providers have only identified, at most, 1,125 allegedly unjustifiably institutionalized persons, there would be no reason for

California to increase the number of places in its HCBS

waiver program at this time and Sanchez and the Providers do

not explicitly request such an increase. 

b

In the 1980s, the DDS and the Regional Centers developed

a program of Regional Resource Development Projects to

enable the placement of more Developmental Center residents

8Under the Lanterman Act, all developmentally disabled persons are

entitled to services funded out of the State’s general funds. However, only

seventy percent of these developmentally disabled persons qualify for

Medicaid funding on the basis of financial need. In addition, many of the

developmentally disabled persons eligible for services under the Lanterman Act do not have a level of impairment which would qualify them for

matching funds from the federal government under California’s HCBS

waiver program. 

8914 SANCHEZ v. JOHNSON
in the community. The regional development projects assist

the Regional Centers in identifying the services that Developmental Center residents need to live in the community. The

regional development projects maintain a database that indicates whether a Developmental Center resident is recommended by his individual plan (either in the short-term or as

a longer-term goal) to live in the community. 

The DDS also utilizes a system of Community Placement

Plans (“CPPs”) to move Developmental Center residents to

community residential settings. Community Placement Plans

are individualized and reflect a partnership between the

Regional Center, each individual and his family, the Developmental Center, and the Regional Resource Development Project. Because many recipients require specialized services that

may be difficult to locate in some areas of California, part of

a Community Placement Plan often involves the Regional

Center enhancing and developing the local resources needed

to move the consumer from a Developmental Center into the

community. 

Despite the comprehensive and accommodating nature of

California’s deinstitutionalization practices, barriers to individual community placement remain. One common barrier is

the opposition of an individual’s family to community placement. Although a family cannot veto a decision by the

Regional Center to place a family member in the community,

family involvement is often crucial in making a successful

placement. Many current Developmental Center residents also

exhibit complex and difficult behaviors, including selfinjurious or aggressive behavior, that make community placement difficult, and many have serious and life-threatening

medical conditions requiring 24-hour nursing care. Therefore,

for the developmentally disabled that still reside in Developmental Centers, placement in the community can be a very

challenging process. 

Despite these obstacles, California successfully reduced the

percentage of developmentally disabled persons residing in

SANCHEZ v. JOHNSON 8915
Developmental Centers from six percent of the developmentally disabled population to two percent over the last decade.

This success is due in part to the fact that the State’s spending

on community-based care increased significantly over that

same period. The 2002/2003 CPP program allocated funding

as high as $286,000 for the first year that a developmentally

disabled person moves into the community. After the first

year, the budget provided for an average of $102,000 per person to maintain the community placement. That budget represented an increase in total CPP funding of over sixty percent.

Finally, and most significantly, § 4669.2 of the Lanterman

Act authorizes DDS to bypass other restrictions to fund proposals for special projects. This means that DDS is authorized

to fund certain services, such as those provided under the latest iteration of the CPP program, outside the existing rate

structure. DDS has used this authority to fund services that

encourage deinstitutionalization at much higher rates than in

the recent past. 

Sanchez and the Providers argue that, although California

has achieved significant success moving institutionalized persons into the community, in recent years the rate of community placement has slowed. Sanchez and the Providers have

shown that for the three years prior to the district court’s decision, the number of admissions to Developmental Centers was

actually greater than the number of discharges, although the

overall residential population declined, in part due to the natural deaths of residents. However, the record supports the district court’s finding that this recent decline in the rate of

community placements has been due to the fact that those persons with the least severe disabilities or with the best prospects for integration into the community were

deinstitutionalized first. Those who remain in Developmental

Centers have, on average, more, and more severe, disabilities

and face higher barriers to deinstitutionalization, including

family or personal opposition. The 2% of developmentally

disabled persons who still reside in Developmental Centers

are more than four times more likely to have serious medical

8916 SANCHEZ v. JOHNSON
problems, more than six times more likely to have severe

behavior problems, and 69% of current residents are among

the top 10% of all persons with the most acute levels of retardation. In addition, since 1998, the number of persons admitted to Developmental Centers pursuant to court orders finding

them incompetent to stand trial (so called “forensic” admittances) has increased dramatically.9

2

The district court concluded that California’s commitment

to the deinstitutionalization of those Developmental Center

residents for whom community integration is desirable,

achievable and unopposed, is genuine, comprehensive and

reasonable. This conclusion was based on evidence from the

record, which showed that “[o]verall, California’s expenditures for individuals in community settings increased 196%

[between 1991 and 2001], while caseload . . . increased fiftyfive percent in the same period,” that California has applied

for increased places under the HCBS waiver program, and

that, “[between 1996 and 2000], California reduced its institution population by twenty percent.” DDS has also budgeted to

develop 42 new Community Care Facilities and ten new Intermediate Care Facilities, and anticipates a reduction in institutionalization that would allow it to close at least one

Developmental Center by 2007. We are satisfied, therefore,

that the district court’s conclusion that California’s “plan is

comprehensive, effective, and moving at a reasonable pace,”

is supported by the record.

3

In Olmstead, the Court recognized that a State must have

sufficient leeway “[t]o maintain a range of facilities and to

9The district court noted that, “[o]f the 436 people admitted into Developmental Centers since January, 1999, almost forty percent were committed by a court.” 

SANCHEZ v. JOHNSON 8917
administer services with an even hand,” 527 U.S. at 605, and

that courts should be sympathetic to fundamental alteration

defenses against proposed modifications to state services and

programs for care of the disabled.10 Id.; see also Townsend,

328 F.3d at 520. 

[11] Concomitant with this leeway is a recognition that,

when there is evidence that a State has in place a comprehensive deinstitutionalization scheme, which, in light of existing

budgetary constraints and the competing demands of other

services that the State provides, including the maintenance of

institutional care facilities, see Olmstead, 527 U.S. at 597, is

“effectively working,” id. at 605, the courts will not tinker

with that scheme. Olmstead does not require the immediate,

state-wide deinstutionalization of all eligible developmentally

disabled persons, nor that a State’s plan be always and in all

cases successful. Id. at 606 (“It is reasonable for the State to

ask someone to wait until a community placement is available.”) (endorsing position of State of Georgia). The record

supports the district court’s finding that California has a successful record of personalized evaluations leading to a reasonable rate of deinstutionalization and, moreover, that California

has undertaken to continue and to increase its efforts to place

current residents of Developmental Centers into the commu10Olmstead also specifically disapproved two methods of analyzing

whether a requested modification is financially reasonable, or whether it

amounts to a “fundamental alteration” of a State’s services. First, it held

that measuring the cost of placing one or two disabled people in the community against the entirety of the State’s budget for treatment of that disability is inappropriate because the requested relief will almost always

appear to be a reasonable modification. 527 U.S. at 603-604. Second, the

Court held that it was not appropriate merely to compare the cost of institutionalization against the cost of community-based services, because that

comparison would not account for the State’s financial obligation to continue to operate partially full institutions with fixed overhead costs. Id. at

604 n.15. Even if a community-based placement would be less costly than

an institutional placement for a specific individual, the State must still factor into its overall budget the fixed cost of maintaining some necessary

number of state institutions. 

8918 SANCHEZ v. JOHNSON
nity when such placement is feasible. Sanchez’s and the Providers’ requested relief would require us to disrupt this

working plan and to restrict impermissibly the leeway that

California is permitted in its operation of developmentally

disabled services under Olmstead.

IV

Congress did not unambiguously create an individually

enforceable right in § 30(A) that would be remediable under

§ 1983 either by recipients or providers of Medicaid services.

Furthermore, Sanchez’s and the Providers’ requested relief

under Title II of the ADA and § 504 of the Rehabilitation Act

would require the “fundamental alteration” of a comprehensive, working plan for deinstitutionalization in contravention

of Olmstead. 

AFFIRMED. 

SANCHEZ v. JOHNSON 8919