Opinion ID: 2752180
Heading Depth: 1
Heading Rank: 3

Heading: Equal Sovereignty Claim

Text: Maine DHHS also argues that the MOE provision deprives Maine of its right to equal sovereignty under Shelby County v. Holder, 133 S. Ct. 2612 (2013), because it prohibit[s] Maine from exercising the prerogative to design its Medicaid laws in ways that many of its sister States remain free to do. This argument fails at every step of the analysis. First, Maine DHHS's premise that § 1396a(gg) singles out certain states for disparate treatment is wrong. Shelby County is also not relevant here because § 1396a(gg) does not similarly effect a federal intrusion into a sensitive area of state or local policymaking. Finally, there is no constitutional problem because any disparate treatment caused by § 1396a(gg) is sufficiently related to the problem that the statute was designed to address.
Shelby County considered the continuing constitutionality of §§ 4 and 5 of the Voting Rights Act (VRA) of 1965. Section 4 set forth a coverage formula that identified jurisdictions with a history of voter discrimination, and § 5 required those jurisdictions to obtain preclearance for any change in voting procedures by proving that the change had neither 'the purpose [nor] the effect of denying or abridging the right to vote on -30- account of race or color.' Id. at 2618–20 (alteration in original). In the years after the VRA's passage, Congress repeatedly re-authorized the Act (most recently in 2006), but it made no changes to § 4's coverage formula after 1975. Id. at 2620–21. The Shelby County Court held that § 4's coverage formula unconstitutionally infringed the equal sovereignty of the states. Id. at 2623–31. The majority explained that, when a statute authorizes federal intrusion into sensitive areas of state and local policymaking, . . . and represents an extraordinary departure from the traditional course of relations between the States and the Federal Government, id. at 2624 (citations omitted) (internal quotation marks omitted), any 'disparate geographic coverage' must be 'sufficiently related to the problem that it targets.' Id. at 2627 (quoting Nw. Austin Mun. Util. Dist. No. One v. Holder, 557 U.S. 193, 203 (2009)).12 The Court found that § 4's coverage 12 Shelby County relied primarily on two cases for its discussion of the equal sovereignty doctrine: Coyle v. Smith, 221 U.S. 559 (1911), and Northwest Austin. Coyle held that when a new state is admitted into the Union, it is so admitted with all of the powers of sovereignty and jurisdiction which pertain to the original states, and that such powers may not be constitutionally diminished, impaired, or shorn away by any conditions, compacts, or stipulations embraced in the act under which the new state came into the Union, which would not be valid and effectual if the subject of congressional legislation after admission. -31- formula as used in Shelby County did not satisfy this test because it was based on decades-old data and eradicated practices. Id. at 2627.
Maine DHHS's premise that § 1396a(gg) results in disparate treatment of states, as that phrase was used in Shelby County, is mistaken. On its face, the MOE provision applies the same rule to each state: freeze eligibility standards in existence as of March 23, 2010 until October 1, 2019, or risk losing Medicaid funding. In Shelby County, the government admitted that the coverage formula was 'reverse-engineered': Congress identified the jurisdictions to be covered and then came up with criteria to describe them. Id. at 2628. In contrast, Maine has not been singled out at all. The rule is uniform and performs an important function of not providing incentives to states to act in ways Congress wishes to avoid. See, e.g., Bennett v. Ky. Dep't of Educ., 470 U.S. 656, 671–72 (1985). Every state has simply been 221 U.S. at 573. In other words, Congress can enact laws affecting a state differently from other states at the time of its admission only if Congress could constitutionally do so after the state's admission. Northwest Austin expressed concerns in dicta that the VRA might conflict with our historic tradition that all the States enjoy 'equal sovereignty.' 557 U.S. at 203 (quoting United States v. Louisiana, 363 U.S. 1, 16 (1960)). -32- required to continue for a limited period of time13 to fund Medicaid services for those children it was funding before the ACA. Maine DHHS resists this distinction, pointing out that even the preclearance requirement in Shelby County, in a sense, applied to all states. This contention is unpersuasive. In Shelby County, the government expressly admitted that it had singled out certain states for disfavored treatment and then reverse-engineered a coverage formula that would target only those states. 133 S. Ct. at 2628. Here, in contrast, there is no suggestion that the MOE provision was reverse-engineered; from all indications, Congress came up with the criteria without regard to which states would be covered by their application. C. Intrusion Into a Sensitive Area of State or Local Policymaking We reject Maine DHHS's equal sovereignty claim for another reason as well. Shelby County involved a situation of federal intrusion[s] into sensitive areas of state and local policymaking, id. at 2624, and required in that context that disparate treatment must be sufficiently related to the problem that it targets, id. at 2627. The Court repeatedly emphasized that the VRA marked an extraordinary departure from basic principles of federalism because it intruded into a realm (regulation of state and local elections) that has traditionally 13 Section 1396a(gg) will remain in effect only until 2019. See 42 U.S.C. § 1396a(gg)(2). -33- been the exclusive province of the states.14 Id. at 2618 (characterizing § 5 as a drastic departure from basic principles of federalism); id. at 2623 (noting that the Framers intended the States to keep for themselves . . . the power to regulate elections); id. at 2624 (stating that the VRA 'authorizes federal intrusion into sensitive areas of state and local policymaking,' . . . and represents an 'extraordinary departure from the traditional course of relations between the States and the Federal Government'); id. at 2630 (explaining, [a]t the risk of repetition, that the VRA is far from ordinary); id. at 2631 (stating that any preclearance formula must reflect conditions that justify[] such an 'extraordinary departure from the traditional course of relations between the States and the Federal Government'). The equal sovereignty doctrine has been applied only in such extraordinary situations. See NCAA v. Governor of N.J., 730 F.3d 208, 239 (3d Cir. 2013) ([T]here is nothing in Shelby County to indicate that the equal sovereignty principle is meant to apply with the same force outside the context of 'sensitive areas of state and local policymaking.' (quoting Shelby 14 Similarly, in Coyle v. Smith, the challenged federal statute mandated that Oklahoma, as a condition of admittance to the Union, establish its state capital in a particular city. See 221 U.S. 559, 564 (1911). The Court found that this statute violated the equal sovereignty doctrine, noting that [t]he power to locate its own seat of government, and to determine when and how it shall be changed from one place to another, and to appropriate its own public funds for that purpose, are essentially and peculiarly state powers. Id. at 565. -34- County, 133 S. Ct. at 2624)).15 This is not such an extraordinary situation. Federal laws that have differing impacts on different states are an unremarkable feature of, rather than an affront to, our federal system. Indeed, MOE provisions like the one at issue here have long been a common feature of federal spending programs, including Medicaid. See, e.g., Social Security Amendments of 1965, Pub. L. No. 89-97, sec. 121(a), § 1902(c), 79 Stat. 286, 348 (codified at 42 U.S.C. § 1396a(c) (1969)) (MOE provision in the original Medicaid statute); Bennett, 470 U.S. at 671 (describing MOE provision in the Elementary and Secondary Education Act of 1965). The MOE provision at issue here does not intrude on an area of traditional state concern; to the contrary, it simply requires an extension of states' prior choices to participate in a limited federal-state cooperative program. Maine DHHS's assertion that the MOE provision affects its ability to pass and implement laws, in the exercise of the fundamental police power over health and welfare is stated at much too high a level of generality to be 15 In NCAA, the Third Circuit rejected an equal sovereignty challenge to a statute that, in effect, prohibits casino-operated sports books outside of Nevada. The Third Circuit held that the Commerce Clause, under which the challenged statute had been enacted, 'does not require geographic uniformity.' Id. at 238 (quoting Morgan v. Virginia, 328 U.S. 373, 388 (1946) (Frankfurter, J., concurring)). We need not and do not hold that the equal sovereignty doctrine is categorically inapplicable to congressional action under the Spending Clause. We simply find the doctrine inapplicable on the facts of this case. -35- true. A state's ability to set the conditions of eligibility for participation in a federal health insurance program that is funded primarily by the federal government is not a core sovereign state function in the same way as is a state's ability to regulate the conduct of its elections. Cf. NCAA, 730 F.3d at 237–39 (reasoning that the equal sovereignty doctrine did not apply to a statute affecting a state's ability to pass laws legalizing sports gambling). Put simply, the MOE provision is not at all an intrusion, much less an intrusion into state sovereignty as was true of § 4 of the VRA. The equal sovereignty doctrine of Shelby County is not applicable to this case. D. Sufficient Justification Maine DHHS makes, and we reject, an argument that under Shelby County the MOE provision is not sufficiently related to the problem it targets. Shelby County permits legislation that single[s] out states if the singling out makes sense in light of current conditions. 133 S. Ct. at 2629. The coverage formula of § 4 of the VRA failed that test because it was based on decadesold data and eradicated practices. Id. at 2627. Section 1396a(gg), in contrast, does make[] sense in light of current conditions, and so, to the extent that it results in disparate treatment of states at all, the disparity is permissible. -36- Congress has long used temporary MOE provisions in Medicaid and other benefits programs for a specific, legitimate purpose: to protect low-income individuals from losing public assistance in times of transition between different statutory schemes for delivering that assistance.16 The MOE provision at issue here is no different. As counsel for the United States explained at oral argument, when Congress passed the ACA, it did not want to create incentives for states to drop children previously covered on the often mistaken premise that they will be easily transitioned to new coverage, when in fact, there are gaps in enrollment, people lose better benefits packages, or Congress may just not want to shift from an existing program to one that is now funded through [new] federal dollars. And as amici point out, Congress was entitled to consider that widespread withdrawal of coverage for children could have a serious impact on the public fisc, since children who have health insurance are more likely to avoid serious (and expensive) long-term health problems that often beset children who lack insurance. The MOE provision avoided these potential negative consequences of the shift from the pre-ACA 16 For example, when Congress passed the Medicaid statute in 1965, it included a provision prohibiting the U.S. DHHS from approving a state plan that would result in a reduction in aid or assistance provided under any of the five assistance programs related to Medicaid eligibility, such as AFDC. See Social Security Amendments of 1965, Pub. L. No. 89-97, sec. 121(a), § 1902(c), 79 Stat. 286, 348 (codified at 42 U.S.C. § 1396a(c) (1969)). -37- regime. The coverage conditions here are based on current conditions and address real problems. Thus, we reject Maine DHHS's argument that the MOE provisions . . . [are] not sufficiently tailored to any constitutional purpose.17 To the contrary, § 1396a(gg) directly serves the legitimate purpose of ensuring that children do not lose health insurance as the country transitions from the pre-ACA Medicaid regime to the post-ACA Medicaid regime. This is a far cry from the situation the Court confronted in Shelby County, where Congress reenacted a formula based on 40-year-old facts having no logical relation to the present day. 133 S. Ct. at 2629. Any disparity in treatment caused by the MOE provision is justified.