Opinion ID: 2659142
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: The Equal Protection Clause of the Fourteenth Amendment provides that “[n]o State shall . . . deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const. amend. XIV, § 1. Accordingly, states KORAB V. FINK 13 must generally treat lawfully present aliens the same as citizens, and state classifications based on alienage are subject to strict scrutiny review. See In re Griffiths, 413 U.S. 717, 719–22 (1973). In contrast, federal statutes regulating alien classifications are subject to the easier-to-satisfy rational-basis review. See Hampton v. Mow Sun Wong, 426 U.S. 88, 103 (1976). This case presents a conundrum that does not fit neatly within these broad rules. Although Basic Health Hawai‘i is a state-funded program directed to a certain class of aliens, it is part of a larger, federal statutory scheme regulating benefits for aliens. To understand the framework for resolving this case, it is helpful to start with the two key Supreme Court cases on benefits for aliens. In Graham v. Richardson, 403 U.S. 365, 367 (1971), the Supreme Court considered an equal protection challenge to two state statutes that denied welfare benefits to resident aliens. One statute imposed a residency requirement to become eligible for benefits, and the other statute excluded aliens from benefits altogether. Id. at 367–69. The Court emphasized that state classifications based on alienage are inherently suspect and subject to strict scrutiny, like classifications based on race or nationality. Id. at 372. “Aliens as a class,” the Court determined, “are a prime example of a ‘discrete and insular’ minority for whom such heightened judicial solicitude is appropriate.” Id. (quoting United States v. Carolene Prods. Co., 304 U.S. 144, 153 n.4 (1938)). In the light of this searching judicial review, “a State’s desire to preserve limited welfare benefits for its own citizens is inadequate to justify . . . making noncitizens ineligible.” Id. at 374. The Court struck down both statutes as violations of the Equal Protection Clause. Id. at 376. Continuing to apply strict scrutiny to state laws discriminating on the basis of alienage, the Court has 14 KORAB V. FINK repeatedly struck down an array of state statutes denying aliens equal access to licenses, employment, or state benefits. See, e.g., Bernal v. Fainter, 467 U.S. 216, 217–18 (1984); Nyquist v. Mauclet, 432 U.S. 1, 12 (1977); Examining Bd. of Eng’rs, Architects, & Surveyors v. Flores de Otero, 426 U.S. 572, 601 (1976); Sugarman v. Dougall, 413 U.S. 634, 643 (1973).6 In the context of eligibility for the federal Medicare program, in Mathews v. Diaz, 426 U.S. 67, 82 (1976), the Court considered the constitutionality of congressional distinctions on the basis of alienage. Because “the responsibility for regulating the relationship between the United States and our alien visitors has been committed to the political branches of the Federal Government,” the Court concluded that Congress may enact laws distinguishing between citizens and aliens so long as those laws are rationally related to a legitimate government interest. Id. at 81–82 (concluding that the Constitution “dictate[s] a narrow standard of review of decisions made by the Congress or the President in the area of immigration”); see also Hampton, 426 U.S. at 103 (holding that “[w]hen the Federal Government asserts an overriding national interest as justification for a discriminatory rule which would violate the Equal Protection Clause if adopted by a State, due process requires that there be a legitimate basis for presuming that the rule was actually intended to serve that interest”). 6 One limited exception to the application of strict scrutiny to state alienage classifications is the “political function” exception, which applies rational-basis review to citizenship requirements that states enact for elective and nonelective positions whose operations go to the heart of a representative government. See Cabell v. Chavez-Salido, 454 U.S. 432, 437–41 (1982). KORAB V. FINK 15 Although aliens are protected by the Due Process and Equal Protection Clauses, this protection does not prevent Congress from creating legitimate distinctions either between citizens and aliens or among categories of aliens and allocating benefits on that basis. Mathews, 426 U.S. at 78 (explaining that “a legitimate distinction between citizens and aliens may justify attributes and benefits for one class not accorded to the other”). The difference between state and federal distinctions based on alienage is the difference between the limits that the Fourteenth Amendment places on discrimination by states and the power the Constitution grants to the federal government over immigration. Id. at 84–85; see also Nyquist, 432 U.S. at 7 n.8 (“Congress, as an aspect of its broad power over immigration and naturalization, enjoys rights to distinguish among aliens that are not shared by the States.”). The Court in Mathews concluded that, given the federal government’s extensive power over the terms of immigrants’ residence, “it is unquestionably reasonable for Congress to make an alien’s [benefit] eligibility depend on both the character and the duration of his residence.” 426 U.S. at 82–83. Recognizing that Graham and Mathews present pristine examples of the bookends on the power to impose alien classifications—a purely state law eligibility restriction in the case of Graham and a federal statute without state entanglements in the case of Mathews—it is fair to say that Basic Health Hawai‘i presents a hybrid case, in which a state is following a federal direction. This variation was foreshadowed, however, by Graham. 403 U.S. at 381–82. In its examination of Arizona’s residency requirement for alien eligibility for welfare benefits, the Court in Graham considered whether a federal statute prohibiting state 16 KORAB V. FINK requirements based on the length of citizenship, but not explicitly prohibiting requirements based on alienage, could be “read so as to authorize discriminatory treatment of aliens at the option of the States” and concluded that it did not. Id. at 382. The Court addressed the issue of states following congressional direction only elliptically, suggesting that a federal law granting wide discretion to the states “to adopt divergent laws on the subject of citizenship requirements . . . would appear to contravene [the] explicit constitutional requirement of uniformity” arising out of the Naturalization Clause. Id. Expanding on the reference to the uniformity requirement in Plyler v. Doe, 457 U.S. 202, 219 n.19 (1982), the Court explained: “if the Federal Government has by uniform rule prescribed what it believes to be appropriate standards for the treatment of an alien subclass, the States may, of course, follow the federal direction.” Korab does not challenge directly the validity of the federal classifications in the Welfare Reform Act. Nor does he dispute Hawai‘i’s selective classification within the “discretionary benefits” category of the Act—COFA Residents and qualified aliens present in the United States for fewer than five years are eligible for Basic Health Hawai‘i; all other nonimmigrants and parolees are ineligible under Hawai‘i’s plan, even though they are included in the Act’s “discretionary benefits” group. (This latter group is not part of this suit.) Instead, Korab challenges the lack of parity in benefits COFA Residents receive through Basic Health Hawai‘i as compared to the benefits provided through Medicaid. As part of this argument, Korab essentially brings a backdoor challenge to the federal classifications, arguing that the state cannot provide differing levels of benefits through different programs because the uniformity requirement of the Naturalization Clause prohibits Congress KORAB V. FINK 17 from granting states any discretion in the immigration or alienage contexts. We begin with the federal classifications established by the Welfare Reform Act and then address the appropriate level of constitutional scrutiny applicable to Hawai‘i’s decision to exercise the discretion afforded it by the Act.
NATIONAL POLICY The Supreme Court has consistently held that the federal government possesses extensive powers to regulate immigration and the conditions under which aliens remain in the United States. See Arizona v. United States, 132 S. Ct. 2492, 2498 (2012) (“This authority [to regulate immigration and the status of aliens] rests, in part, on the National Government’s constitutional power to ‘establish an uniform Rule of Naturalization,’ U.S. Const., Art. I, § 8, cl. 4, and its inherent power as sovereign to control and conduct relations with foreign nations. . . .” (citations omitted)). The reference to naturalization has been read broadly to mean federal control over the status of aliens, not just criteria for citizenship. Id. (“The Government of the United States has broad, undoubted power over the subject of immigration and the status of aliens.”); see also Takahashi v. Fish & Game Comm’n, 334 U.S. 410, 419 (1948) (noting congressional power under the Naturalization Clause to regulate the conduct of aliens). In the Welfare Reform Act, Congress announced a “national policy with respect to welfare and immigration.” 8 U.S.C. § 1601. Congress determined that immigrant selfsufficiency was an element of U.S. immigration policy and that there was a compelling national interest in assuring both 18 KORAB V. FINK “that aliens be self-reliant” and that the availability of public benefits does not serve as an “incentive for illegal immigration.” Id. § 1601(5)–(6). To accomplish these objectives, the statute sets out a comprehensive set of eligibility requirements governing aliens’ access to both federal and state benefits. Federal benefits are, of course, strictly circumscribed by designated categories. Even for wholly state-funded benefits, the Act establishes three categories that states must follow: one category of aliens to whom states must provide all state benefits, a second category of aliens for whom states must not provide any state benefits, and a third category of aliens for whom Congress authorizes states to determine eligibility for state benefits. Id. §§ 1621–22. The limited discretion authorized for the third category, which includes COFA Residents, does not undermine the uniformity requirement of the Naturalization Clause. On the federal level, only the Tenth Circuit has considered this issue. Soskin v. Reinertson, 353 F.3d 1242, 1256–57 (10th Cir. 2004). Like Hawai‘i, Colorado initially chose to provide wholly state-funded health insurance coverage to all aliens in the third category. Id. at 1246. When Colorado did an about-face in 2003 and dropped this coverage, Soskin sued, arguing that letting states determine benefit eligibility was unconstitutional because it was not a sufficiently uniform federal rule. Id. Looking to the origin of the Naturalization Clause, the Tenth Circuit concluded that “the uniformity requirement in the Naturalization Clause is not undermined by the [Welfare Reform Act’s] grant of discretion to the states with respect to alien qualifications for Medicaid benefits.” Id. at 1257. The uniformity requirement was a response to the tensions that KORAB V. FINK 19 arose from the intersection of the Articles of Confederation’s Comity Clause and the states’ divergent naturalization laws, which allowed an alien ineligible for citizenship in one state to move to another state, obtain citizenship, and return to the original state as a citizen entitled to all of its privileges and immunities. See Gibbons v. Ogden, 22 U.S. 1, 36 (1824); The Federalist No. 42 (James Madison). The court in Soskin determined that because “the choice by one state to grant or deny . . . benefits to an alien does not require another state to follow suit,” the purpose of the uniformity requirement is not undermined by states’ discretion under the Welfare Reform Act. 353 F.3d at 1257. We agree. Considering the Welfare Reform Act as a whole, it establishes a uniform federal structure for providing welfare benefits to distinct classes of aliens. The entire benefit scheme flows from these classifications, and a state’s limited discretion to implement a plan for a specified category of aliens does not defeat or undermine uniformity. In arguing to the contrary, the dissent ignores that “a state’s exercise of discretion can also effectuate national policy.” Id. at 1255. As the Tenth Circuit explained in Soskin, When a state . . . decides against optional coverage [for certain noncitizens under the Welfare Reform Act], it is addressing the Congressional concern (not just a parochial state concern) that “individual aliens not burden the public benefits system.” 8 U.S.C. § 1601(4). This may be bad policy, but it is Congressional policy; and we review it only to determine whether it is rational. 20 KORAB V. FINK 353 F.3d at 1255. We are not in accord with the dissent’s myopic view that the Welfare Reform Act establishes no federal direction and conclude that Hawai‘i’s discretionary decision to deny coverage to COFA Residents effectuates Congress’s uniform national policy on the treatment of aliens in the welfare context. This reading of the uniformity requirement finds an analog in the Supreme Court’s interpretation of the Bankruptcy Clause, which similarly calls for uniformity. See U.S. Const. art. I., § 8, cl. 4 (empowering Congress “[t]o establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States”). In Hanover National Bank v. Moyses, 186 U.S. 181 (1902), the Court considered a challenge to the 1898 Bankruptcy Act on the ground that its incorporation of divergent state laws failed to “establish uniform laws on the subject of bankruptcies” and unconstitutionally “delegate[d] certain legislative powers to the several states.” Id. at 183. The Court held that the incorporation of state laws “is, in the constitutional sense, uniform throughout the United States” because the “general operation of the law is uniform although it may result in certain particulars differently in different states.” Id. at 190. The principle that “uniformity does not require the elimination of any differences among the States” has equal traction here. Ry. Labor Execs.’ Ass’n v. Gibbons, 455 U.S. 457, 469 (1982). As in the bankruptcy context, although the “particulars” are different in different states, the basic operation of the Welfare Reform Act is uniform throughout KORAB V. FINK 21 the United States.7 Stellwagen v. Clum, 245 U.S. 605, 613 (1918) (holding that bankruptcy law may be uniform and yet “may recognize the laws of the state in certain particulars, although such recognition may lead to different results in different states”). The overarching national policy and alienage classifications set out in the Welfare Reform Act have repeatedly been upheld by the federal courts on rationalbasis review. See, e.g., Lewis v. Thompson, 252 F.3d 567, 582–84 (2d Cir. 2001) (upholding the alienage classifications in the Welfare Reform Act); City of Chicago v. Shalala, 189 F.3d 598, 603–08 (7th Cir. 1999) (same); see also Arizona, 132 S. Ct. at 2499 (“Federal law also authorizes States to deny noncitizens a range of public benefits. . . .”).
POLICY AND DIRECTION The logical corollary to the national policy that Congress set out in the Welfare Reform Act is that, where the federal program is constitutional, as it is here, states cannot be forced 7 In an effort to distinguish the Bankruptcy Clause from the Naturalization Clause, the dissent argues that the Equal Protection Clause places constitutional constraints on states that are not present in the bankruptcy context. This argument misunderstands the analogy to the Bankruptcy Clause. We reference the Bankruptcy Clause only to show that uniformity is not undermined where states adopt different paths in effectuating a larger federal scheme or policy. That the Naturalization Clause is and has historically been subject to constitutional constraints not applicable to the Bankruptcy Clause says nothing about the more relevant question of whether uniformity is undermined by the existence of differences among the states. In the context of both clauses, the answer to that question is no, and the dissent offers no controlling authority to the contrary. Like the Tenth Circuit in Soskin, we conclude that the discretion afforded to states under the Welfare Reform Act does not undermine the uniformity established under that statute. Soskin, 353 F.3d at 1257. 22 KORAB V. FINK to replace the federal funding Congress has removed. See Pimentel v. Dreyfus, 670 F.3d 1096, 1109 (9th Cir. 2012). We considered a similar situation in Sudomir v. McMahon, 767 F.2d 1456, 1457 (9th Cir. 1985), where plaintiffs brought an equal protection challenge to California’s determination that a particular category of aliens was ineligible for benefits under the federal statute instructing states in the application of the cooperative federal-state Aid to Families with Dependent Children program. As we said in Sudomir, “[i]t would make no sense to say that Congress has plenary power in the area of immigration and naturalization and then hold that the Constitution impels the states to refrain from adhering to the federal guidelines.” Id. at 1466. Like the plaintiffs in Sudomir, Korab argues, and the dissent agrees, that the state has a constitutional obligation to make up for the federal benefits that Congress took away from him. Putting this argument in practical funding terms, states would be compelled to provide wholly state-funded benefits equal to Medicaid to all aliens in the discretionary third category, thus effectively rendering meaningless the discretion Congress gave to the states in 8 U.S.C. § 1622(a). See Sudomir, 767 F.2d at 1466 (“To so hold would amount to compelling the states to adopt each and every more generous classification which, on its face, is not irrational.”). As the New York Court of Appeals put it in upholding a state program that provided partial benefits to aliens who were federally ineligible, the right to equal protection does not “require the State to remediate the effects of [the Welfare Reform Act].” Khrapunskiy v. Doar, 909 N.E.2d 70, 77 (N.Y. 2009); see also Finch v. Commonwealth Health Ins. Connector Auth., 946 N.E.2d 1262, 1286 (Mass. 2011) (Gants, J. concurring in part and dissenting in part) (“It is inconsistent with Mathews to require the State to undo the KORAB V. FINK 23 effect of Congress’s decision and replace the funds that Congress, under its plenary power over aliens, determined it would not provide.”). Congress has drawn the relevant alienage classifications, and Hawai‘i’s only action here is its decision regarding the funding it will provide to aliens in the third, discretionary category created by Congress—an expenditure decision. Korab fails to offer any evidence that Hawai‘i, in making that decision, has not closely “follow[ed] the federal direction” and adhered to the requirements prescribed by Congress in its provision of state benefits. Plyler, 457 U.S. at 219 n.19. Notably, Korab has not even alleged that the state expenditures for health insurance for aliens within the discretionary category created by Congress are less than the state expenditures for health insurance for others.8 Even 8 At this stage of the proceedings, we harbor serious doubts that Korab has carried his initial burden to establish a claim of disparity vis-a-vis the state’s actions. Under Medicaid, citizens and eligible aliens are covered under a plan funded by both federal and state funds. By contrast, Basic Health Hawai‘i is funded solely by the state. Here, however, Korab has not claimed that COFA Residents are receiving less per capita state funding than citizens or qualified aliens. Finch, 946 N.E.2d at 1288 (Gants, J., concurring in part and dissenting in part) (“[S]trict scrutiny is the appropriate standard of review to evaluate a State’s alienage classification only where the State’s per capita expenditures for the plaintiff aliens are substantially less than the per capita amount contributed by the State for similarly situated Commonwealth Care participants . . . .”). Nor has Korab offered any evidence that the state’s average expenditures on behalf of COFA Residents in Basic Health Hawai‘i are less than the amount the state contributes for citizens and qualified aliens eligible for Medicaid. On this record, Hawai‘i “does nothing more than refuse to expend State monies to restore the Federal funds lost by Congress’s constitutional exercise of its plenary power.” Id.; Hong Pham v. Starkowski, 16 A.3d 635, 646 (Conn. 2011) (concluding that Connecticut’s elimination of state-funded health insurance for aliens 24 KORAB V. FINK assuming arguendo that Hawai‘i’s discretionary decision not to provide optional coverage for COFA Residents constitutes alienage-based discrimination, that decision, which is indisputably authorized by the Welfare Reform Act, is subject to rational-basis review. The posture of Korab’s constitutional challenge—essentially a complaint about state spending—coupled with the legitimacy of the federal statutory framework, leads to this conclusion. The dissent urges a contrary result, seizing upon the Supreme Court’s statement in Graham that “Congress does not have the power to authorize the individual States to violate the Equal Protection Clause.” 403 U.S. at 382. We acknowledge the rhetorical force of this proposition, but, like the Tenth Circuit, conclude that the “proposition is almost tautological.” Soskin, 353 F.3d at 1254. The constitutional question before us is not whether Congress may authorize Hawai‘i to violate the Equal Protection Clause but rather “what constitutes such a violation when Congress has (clearly) expressed its will regarding a matter relating to aliens,”9 as Congress has done through the Welfare Reform merely implemented the Act’s restrictions and did not create any alienagebased classifications). Nevertheless, because we vacate the district court’s grant of the preliminary injunction on the ground that rational basis, rather than strict scrutiny, is the appropriate standard of scrutiny, we need not resolve this evidentiary question at this stage. 9 The dissent claims that our reference to Congress’s clearly expressed will demonstrates our “confusion as to whether this an equal protection or a preemption case.” Dissent at 67 n.7. We are not confused. To determine the applicable level of constitutional scrutiny in this equal protection case, we ask whether Hawai‘i is following the federal direction, see Plyer, 457 U.S. at 219 n.19, which in turn, demands consideration of Congress’s intent in establishing a uniform federal policy through the Welfare Reform Act, Soskin, 353 F.3d at 1254–56. That Congress’s will KORAB V. FINK 25 Act. Id. Our determination that rational-basis review applies to Hawai‘i’s conduct is consistent with Graham and the Supreme Court’s equal protection cases because Hawai‘i is merely following the federal direction set forth by Congress under the Welfare Reform Act. See Plyer, 457 U.S. at 219 n.19. At bottom, the dissent reaches the wrong conclusion because it asks the wrong question and invites a circuit split.10 Soskin, 353 F.3d at 1254–56. Accordingly, we vacate the preliminary injunction and remand to the district court for further proceedings consistent with this opinion.11 See Doe v. Reed, 586 F.3d 671, 676 (9th is also the touchstone of preemption analysis does not render it irrelevant to the determination of the scrutiny required for our equal protection inquiry. See Plyer, 457 U.S. at 219 n.19; Sudomir, 767 F.2d at 1466. 10 Beyond asking the wrong question, the dissent muddies its own analysis by continually shifting the target of its constitutional inquiry. On one hand, the dissent argues that “the state of Hawai‘i . . . is ultimately responsible” for the “denial of equal benefits to COFA Residents,” Dissent at 58, and that we must subject “Hawai‘i’s actions” to strict scrutiny, Dissent at 59. On the other hand, the dissent acknowledges that Congress, through the Welfare Reform Act, “was giving states broad discretion to discriminate against aliens in the provision of welfare benefits” but concludes that Congress lacked the constitutional power to do so. Dissent at 68–69. So which is it? Does the dissent challenge the constitutionality of Hawai‘i’s actions, Congress’s, or both? The dissent’s own mixing and matching on this point underscores why Hawai‘i’s conduct should be viewed as part and parcel of the federal welfare scheme, a scheme that is not challenged by Korab and has been deemed constitutional. See, e.g., Lewis, 252 F.3d at 582–84; Shalala, 189 F.3d at 603–08. 11