Court Opinion

ID: 199790
Source: CourtListenerOpinion
Date Created: 2011-02-07 04:37:44+00
Date Added: 2024-06-11T17:27:02.850698
License: Public Domain

United States Court of Appeals
                       For the First Circuit
                        ____________________

No. 01-1410

BLANCHE E. GREENLESS, on behalf of herself and all others similarly
                             situated,
                      Plaintiff, Appellant,

                                 v.

LINCOLN C. ALMOND, in his capacity as Governor of the State of Rhode
Island; CHRISTINE FERGUSON, in her capacity as Director of the
Department of Human Services for the State of Rhode Island; and
SHELDON WHITEHOUSE, in his capacity as Attorney General for the State
                         of Rhode Island,
                      Defendants, Appellees.

                        ____________________

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                  FOR THE DISTRICT OF RHODE ISLAND

              [Hon. Mary M. Lisi, U.S. District Judge]

                        ____________________

                               Before

                        Lynch, Circuit Judge,
                    Coffin, Senior Circuit Judge,
                     and Young,* District Judge.

                        ____________________

     Antonio Ponvert III, with whom Michael A. St. Pierre, James E.
Kelleher, Revens, Revens & St. Pierre, and Koskoff, Koskoff & Bieder,
P.C., were on brief for appellant.

     Neil F. X. Kelly, Special Assistant Attorney General, with whom
Sheldon Whitehouse, Attorney General, was on brief for appellees.

     *    Of the District of Massachusetts, sitting by designation.
                     ____________________

                       January 28, 2002
                     ____________________

         LYNCH, Circuit Judge.   This case concerns claims made

on the allocation of monies to the states, specifically Rhode

Island, from the 1998 Master Settlement Agreement in the tobacco

litigation.

         Blanche E. Greenless appeals the dismissal of her suit

under 42 U.S.C. § 1983 for declaratory and injunctive relief

against the Governor of Rhode Island and various other state

officials, all in their official capacities. Greenless seeks to

represent all of Rhode Island's Medicaid recipients who have

suffered damages from the use of tobacco.      She claims that

federal law requires Rhode Island to pay that class a portion of

the proceeds from the settlement of its claims against the

tobacco industry, and that Rhode Island is wrongfully converting

what are essentially Medicaid recovery collections.

         The district court dismissed Greenless's suit without

a hearing as barred by the doctrine of state sovereign immunity

embodied in the Eleventh Amendment.   We affirm the dismissal of

the action, but on different grounds, holding that Greenless has

                              -2-
failed to state a claim on which relief can be granted due to a

recent amendment of the Medicaid statute.         We do not reach the

difficult   question   whether   a   claim   of   the   sort   Greenless

asserts, if provided by federal law, would be barred by the

Eleventh Amendment.

                                 -3-
                                     I.

A.   Facts

             During the 1990s, more than forty of the fifty states,

including     Rhode    Island,    filed     suits    against   the    major

manufacturers of tobacco products.              See State v. Brown &

Williamson Tobacco Corp., No. 97-3058 (R.I. Sup. Ct. Dec. 17,

1998) (consent decree and final judgment).            The exact theories

of recovery varied from state to state.             Generally, the states

alleged that the tobacco industry had misled the public by

concealing the risks of cigarette smoking and had therefore

caused the states to spend vast sums of public money on

providing health care for those made ill by tobacco.                 Unlike

prior   attempts      to   hold   tobacco   manufacturers      liable   for

smoking-related illnesses or deaths, the states' suits resulted

in a lucrative settlement, recorded by the Master Settlement

Agreement.      See National Association of Attorneys General,

Master Settlement Agreement, at http://www.naag.org/tobac/

                                    -4-
cigmsa.rtf (Nov. 23, 1998).      According to Greenless, under the

Agreement    Rhode   Island   will   receive   approximately   $1.408

billion.1

            The expenditures on health care on which the state's

suits relied arose in significant part through the Medicaid

program. The Medicare and Medicaid programs are the two largest

sources of public funding for health care in the United States.

Medicare, which provides health care primarily to the elderly

and to some individuals with disabilities, receives funds

exclusively from the federal government.            Medicaid, which

provides health care primarily to the indigent, receives funds

from both the federal government and the states. State Medicaid

expenditures consume large portions of states' budgets; in

fiscal year 2000, Rhode Island spent 22.6% of its budget on

Medicaid.    Rhode Island Department of Human Services, Annual

Report: Fiscal Year 2000: Rhode Island Medicaid Program 13,

     1    Payments under the Agreement are contingent on many
factors, and assigning values to a state's right to payment is
therefore difficult. See Floyd v. Thompson, 227 F.3d 1029, 1038
(7th Cir. 2000) ("The final amount to be paid . . . is unknown
and unknowable at this point . . . ."). The question presented
by this appeal is not quantitative, so exact amounts are not
material. Rhode Island stands to receive a great deal of money.

                                 -5-
available at http://www.dhs.state.ri.us/dhs/reports/ma2000.pdf.

When the states sought to recover funds spent on health care

made necessary by smoking, some of their alleged damages were

Medicaid expenditures.     So stated Rhode Island's complaint at

the time.

            The recovery of Medicaid expenditures from the tobacco

industry arguably brought into play certain aspects of the

federal Medicaid statute. When a state agrees to participate in

Medicaid by enacting a statute, it must create a plan that meets

requirements specified by Congress.     That state Medicaid plan

must "provide that, as a condition of eligibility for medical

assistance under the State plan . . . the individual is required

-- (A) to assign the State any rights . . . to payment for

medical care from any third party."        42 U.S.C. § 1396k(a)

(1994).

            Moreover, when a state, acting on an individual's

assignment of his or her rights, has recovered from a third

party compensation for state expenditures to provide health care

via Medicaid, the state may not necessarily keep all of the

money.    Instead,

                                -6-
          [s]uch part of any amount collected by the State under
          an assignment made under the provisions of this
          section shall be retained by the State as is necessary
          to reimburse it for medical assistance payments made
          on behalf of an individual with respect to whom such
          assignment    was    executed     (with    appropriate
          reimbursement of the Federal Government to the extent
          of its participation in the financing of such medical
          assistance), and the remainder of such amount
          collected shall be paid to such individual.

Id. § 1396k(b) (emphasis added).2            After the state and federal

governments     are   reimbursed,      any    excess     is   paid    to   the

individual, "who is usually a person of limited resources."                 45

Fed. Reg. 8982, 8983 (Feb. 11, 1980).

          If these provisions apply to the Master Settlement

Agreement (Rhode Island claims they do not because the suit was

brought   not   as    a   §   1396k   assignment   but    under      different

theories) then at least some of the money that the tobacco

industry paid the states under the Agreement belongs to the

    2     This language is clarified by regulation:

    The agency must distribute collections as follows --
         (a) To itself, an amount equal to State Medicaid
         expenditures for the individual on whose right the
         collection was based.
         (b) To the Federal Government, the Federal share of the
         State Medicaid expenditures, minus any incentive payment
         made in accordance with [a related provision] . . . .
         (c) To the recipient, any remaining amount. . . .

42 C.F.R. § 433.153 (2000).

                                      -7-
federal government as appropriate reimbursement within the

meaning of § 1396k(b).   If, as well, the states received more

money from the tobacco industry under the Agreement than was

necessary to reimburse both the state and federal governments

for medical assistance payments made on behalf of smokers, then

the remainder belongs to the smokers on whose behalf those

payments were made.   Greenless's claim rests on this theory.

         Congress has recently amended the statute.    The 1999

Emergency Supplemental Appropriations Act exempts from the

normal procedures by which the federal government takes its

share of state recoveries "any amount recovered or paid to a

State as part of the comprehensive settlement of November 1998

between manufacturers of tobacco products . . . and State

Attorneys General."   Pub. L. No. 106-31, § 3031, 113 Stat. 57,

103-04 (1999) (codified at 42 U.S.C. § 1396b(d)(3)(B)(i) (Supp.

V 1999)). It furthermore provides, with an exception irrelevant

to this case, that "a State may use amounts recovered or paid to

the State as part of a comprehensive . . . settlement . . .

described in [the prior] clause . . . for any expenditures

determined appropriate by the State."    Id., 113 Stat. at 104

(codified at 42 U.S.C. § 1396b(d)(3)(B)(ii)).

                              -8-
         The parties agree that this new language removes any

claim to the states' tobacco settlement money by the federal

government.   The question presented by this appeal is whether

the language also removes any possible claim to that money under

federal law by the individuals whose illnesses caused the states

to spend the money.

                              -9-
B.   History

          Greenless filed this suit in the District of Rhode

Island   against   the   various    defendants     in   their   official

capacities, claiming that Rhode Island must pay her and the

members of her class the amount by which the tobacco settlement

exceeds its actual costs.          She alleged this amount to be

substantial.   For her cause of action she relied on 42 U.S.C.

§ 1983 and its broad-ranging remedies for violations of federal

rights under color of state law.          She asked for declaratory and

injunctive relief to compel Rhode Island's officials to pay her

the alleged excess.

          The defendants moved to dismiss on two grounds. First,

they argued that Greenless's suit is barred under the Eleventh

Amendment by state sovereign immunity as a suit for, in effect,

money damages against the treasury of a state.            Second, they

argued that Greenless has no cause of action under § 1983

because her rights under the Medicaid statute have not been and

will not be violated.     Greenless in response claimed that her

suit does not run afoul of the Eleventh Amendment because the

state is not a party, only state officials, and because she

seeks only prospective relief permissible under the doctrine of

                                   -10-
Ex parte Young, 209 U.S. 123 (1908), as explained in Edelman v.

Jordan,   415 U.S. 651   (1974).        She   also   responded   to   the

defendants' statutory arguments.              On February 26, 2001, the

district court dismissed the case in a seven-page opinion

addressing only    the     question     of    state   sovereign    immunity.

Greenless v. Almond, C.A. No. 00-037ML (D.R.I. Feb. 26, 2001).

This appeal followed.         The defendants make on appeal both sets

of arguments presented to the district court in support of the

judgment.

                                    II.

            Our review of the district court's judgment in this

case is de novo.       See Mills v. Maine, 118 F.3d 37, 41 (1st Cir.

1997) (reviewing de novo a dismissal on Eleventh Amendment

grounds); Garita Hotel Ltd. P'ship v. Ponce Fed. Bank, F.S.B.,

958 F.2d 15, 17 (1st Cir. 1992) (same for failure to state a

claim). As always, we may affirm a district court's judgment on

any grounds supported by the record.           Doe v. Anrig, 728 F.2d 30,

32 (1st Cir. 1984).           Moreover, this circuit has held that

federal courts need not answer questions of state sovereign

immunity under the Eleventh Amendment before answering other,

easier legal questions that would decide a case.                  Parella v.

                                    -11-
Ret. Bd. of the R.I. Employees' Ret. Sys., 173 F.3d 46, 53-57

(1st Cir. 1999) (declining to apply to cases involving the

Eleventh Amendment the rule of    Steel Co. v. Citizens for a

Better Environment, 523 U.S. 83 (1998), in which "a majority of

justices rejected the use of 'hypothetical jurisdiction'").

A.   Eleventh Amendment and constitutional avoidance

          Other plaintiffs have brought cases similar to this one

against numerous other states.   None have yet succeeded.3    The

only circuit courts4 to address the Eleventh Amendment question,

the Fifth and Tenth Circuits, have held that the Amendment would

not prevent the plaintiffs in a case such as this one from

obtaining the relief they seek, if that relief were available

under federal law.    Harris v. Owens, 264 F.3d 1282, 1289-94

     3    Our discussion of similar cases in this opinion is not
exhaustive and includes only those published opinions useful to
give context to our decision today.
     4    Some district courts have decided, as the district
court concluded in this case, that state sovereign immunity bars
such claims. E.g., Clark v. Stovall, 158 F. Supp. 2d 1215 (D.
Kan. 2001); Cardenas v. Anzai, 128 F. Supp. 2d 704 (D. Haw.
2001); Martin v. New Mexico, 197 F.R.D. 694 (D.N.M. 2000);
Barton v. Summers, 111 F. Supp. 2d 989 (M.D. Tenn. 2000). The
decision of the District of New Mexico in Martin preceded the
Tenth Circuit's decision in Harris, discussed in text; Harris is
now, of course, the law of that circuit.

                              -12-
(10th   Cir.   2001)   (holding   that    the   relief   requested   is

permissible under the doctrine of Ex parte Young); Watson v.

Texas, 261 F.3d 436, 440-43 (5th Cir. 2001) (holding that Texas

waived its sovereign immunity in the settlement agreement).

          Every court to consider the question has, however,

decided that § 1396k(b) does not apply to the state tobacco

settlements, either because the settlements are not recoveries

of the sort governed by that section as a general matter or

because   §    1396b(d)(3)(B)(ii)        specifically    exempts     the

settlements. See Tyler v. Douglas, No. 00-7839, 2001 WL 1230630

(2d Cir. Oct. 16, 2001) (relying on § 1396b(d)(3)(B)(ii));

Harris, 264 F.3d at 1294-97 (same); McClendon v. Ga. Dep't of

Cmty. Health, 261 F.3d 1252, 1259-62 (11th Cir. 2001) (relying

on § 1396k(b));5 Floyd v. Thompson, 227 F.3d 1029, 1035-38 (7th

Cir. 2000) (relying on § 1396k(b) and on Wisconsin assignment

law); Skillings v. Illinois, 121 F. Supp. 2d 1235 (C.D. Ill.

2000) (following Floyd while applying Illinois law); see also

State v. Superior Court, 99 Cal. Rptr. 2d 735 (Cal. App. 2000)

    5     Judge Noonan would have relied on § 1396b(d)(3)(B)(ii).
McClendon, 261 F.3d at 1262 (Noonan, J., concurring in the
judgment).

                                  -13-
(interpreting         portion   of   state   code    implementing   federal

statutory scheme); Brown v. State, 617 N.W.2d 421, 425-27 (Minn.

Ct. App. 2000) (same).

                 In summary, the courts that have considered questions

of state sovereign immunity similar to those presented by this

case have split, and the circuit courts among this group have

held       the    Eleventh   Amendment   not   to    bar   claims   such   as

Greenless's.          Those that have considered statutory questions

similar to those here are so far unanimous, although different

courts have followed different reasoning to the same conclusion.

                 We do not decide any question of state sovereign

immunity today.         We will, however, sketch the outlines of the

question on the facts of this case in order to explain our

reasons for avoiding it. As a general matter the several states

are immune under the Eleventh Amendment from private suit in the

federal courts, absent their consent.6              Among the exceptions to

this rule is the doctrine of Ex parte Young, 209 U.S. 123

(1908), which allows a plaintiff to enforce a claim of federal

       6  States do not waive their Eleventh Amendment immunity
merely by participating in the Medicaid program. Fla. Dep't of
Health & Rehabilitative Servs. v. Fla. Nursing Home Ass'n, 450
U.S. 147 (1981) (per curiam).

                                      -14-
right by obtaining injunctive or declaratory relief against a

state officer in the officer's official capacity.                      In Edelman v.

Jordan, 415 U.S. 651 (1974), the Supreme Court explained that

the   purpose      of    this   exception        is    to    prevent     continuing

violations of federal law, but not to remedy past violations.

Therefore, an Ex parte Young plaintiff may obtain prospective,

but not retrospective, relief.                  See id. at 664-65; see also

Idaho     v.    Coeur    d'Alene     Tribe,      521 U.S. 261,    294   (1997)

(O'Connor,       J.,    concurring    in    part       and   concurring       in   the

judgment) ("[A] Young suit is available where a plaintiff

alleges an ongoing violation of                 federal law, and where the

relief sought is prospective rather than retrospective."); id.

at 298 (Souter, J., dissenting) (observing that, given the

disposition of the Justices in that case, "Justice O'Connor's

view is the controlling one").

               Greenless claims to seek a prospective remedy for an

allegedly ongoing violation of federal law that will recur each

time the state actually receives an installment payment of the

tobacco        settlement.         The     defendants          claim    she    seeks

retrospective compensation for the alleged violation that the

state committed when it reached agreement with the tobacco

                                         -15-
industry without providing that a portion of the proceeds would

go to Greenless and her class.            Because of the Supreme Court's

recent   reinvigoration        of   the   doctrine   of   state   sovereign

immunity, see, e.g., Seminole Tribe v. Florida, 517 U.S. 44

(1996); Alden v. Maine, 527 U.S. 706 (1999), private plaintiffs'

ability to enforce congressionally enacted restraints on the

states' use of many types of funds may well turn on just such

questions    to   a   degree    few   readers   of   Edelman   would   have

predicted when that case was decided.

            It is not, however, the role of the federal courts to

answer legal questions unless specific cases need answers. This

principle applies with special force to complex questions of

constitutional law, so that courts often avoid such questions by

choosing to focus on other aspects of a case that adequately

dispose of the controversy between the parties.             See Ashwander

v. Tenn. Valley Auth., 297 U.S. 288, 347 (1936) (Brandeis, J.,

concurring) ("The Court will not pass upon a constitutional

question although properly presented by the record, if there is

also present some other ground upon which the case may be

disposed of."); U.S.I. Props. Corp. v. M.D. Constr. Co., 230
F.3d 489, 495 (1st Cir. 2000) (avoiding a complex Eleventh

                                      -16-
Amendment question in favor of a simpler statutory subject

matter jurisdiction question); Parella, 173 F.3d at 56. In this

case, the constitutional question is difficult; but, as we

discuss below, at least one statutory question is easy and

disposes completely of Greenless's suit.    We therefore bypass

the constitutional question, as have the Second, Seventh, and

Eleventh Circuits, in favor of the easier question whether

plaintiffs have stated a claim on which relief may be granted.7

    7     The Tenth Circuit in Harris reached the same conclusion
about the relative difficulty of the questions but nevertheless
held itself bound to answer the constitutional question because
of its prior holding in Martin v. Kansas, 190 F.3d 1120 (10th
Cir. 1999), that questions involving the Eleventh Amendment must
be reached before all other legal issues in a case. Harris, 264
F.3d at 1288. The Fifth Circuit follows a similar rule. United
States ex rel. Foulds v. Tex. Tech Univ., 171 F.3d 279, 285-88
(5th Cir. 1999).      Under Parella, this circuit follows a
different one. Several other circuits appear to agree, or at
least to leave open some room for judicial discretion.        See
Tyler, 2001 WL 1230630, at *4 (observing the Tenth Circuit's
difficulty, and then deciding the statutory question);
McClendon, 261 F.3d at 1258 (distinguishing Seaborn v. Fla.
Dep't of Corr., 143 F.3d 1405 (11th Cir. 1998), which had
appeared to announce a holding similar to that of Martin, and
reaching the statutory question); United States ex rel. Long v.
SCS Bus. & Technical Inst., 173 F.3d 890 (D.C. Cir. 1999)
(holding that a federal court may reach other questions before
an Eleventh Amendment question at least if the state involved
consents, and observing the benefits of doing so when the
Eleventh Amendment question is complex); cf. Floyd, 227 F.3d at
1035 (stating that the court would resolve the Eleventh
Amendment issue first "if it appeared in any way possible" that

                              -17-
See Tyler, 2001 WL 1230630, at *4; Floyd, 227 F.3d at 1034;

McClendon, 261 F.3d at 1258.         We recommend this course to the

district courts of this circuit as the wiser approach.

B.   Statutory interpretation

             There are two reasons to doubt whether the amended

Medicaid statute will support Greenless's claim.            The first

reason is that it is not clear whether any of the money

recovered by Rhode Island is money to which Greenless and her

class can stake a claim under § 1396k(b) as it stood at the time

of the settlements. See McClendon, 261 F.3d at 1259-62; Watson,
261 F.3d at 443-45.      The second reason, and the one on which we

base   our    holding,   is   §   1396b(d)(3)(B)(ii),   added    by   the

Emergency Supplemental Appropriations Act of 1999, Pub. L. No.

106-31, 113 Stat. 57, 103-04 (1999).          We find persuasive the

reasoning of Tyler, in which the Second Circuit held that

§ 1396b(d)(3)(B)(ii) was plain and foreclosed a suit similar to

the present one.     Tyler, 2001 WL 1230630, at *5-8.           We agree

with the Second Circuit that the funds described in that section

as available "for any expenditures determined appropriate by the

the plaintiffs could sue the state, and then concluding that
such a suit was not possible).

                                   -18-
State" cannot simultaneously be owed to Medicaid recipients.

Id. at *6 (quoting § 1396b(d)(3)(B)(ii)).

          Greenless makes two arguments against this reading of

§   1396b(d)(3)(B)(ii)   based     on    traditional   principles    of

statutory interpretation.       First, she claims that the reading

violates the presumption against implied repeal.            Second, she

claims that the reading violates the presumption against giving

legislation retroactive effect. Although these two presumptions

are well-known landmarks of this area of the law, neither

applies to this case.

          The "implied repeal" argument is an odd one because at

issue is not whether Congress totally repealed § 1396k, but

whether it intended to carve out tobacco settlement monies from

the reach of that provision.            But we will use Greenless's

terminology.    She argues that the amendment only waives the

federal government's share of the settlement and does not affect

any rights of individuals.       Not so.     The presumption against

implied repeal, although of particular force when, as here,

applied   to   appropriations     riders,    nevertheless    turns   on

legislative intent. United States v. Will, 449 U.S. 200, 221-24

(1980) ("[W]hen Congress desires to suspend or repeal a statute

                                 -19-
in force, '[t]here can be no doubt that . . . it could

accomplish its purpose by an amendment to an appropriation bill,

or otherwise.'" (quoting United States v. Dickerson, 310 U.S.
554, 555 (1940)) (second and third alterations in Will)).

Indeed, the presumption results from certain assumptions that

courts make about the legislative process:

         Courts do not lightly assume that one statute has
         implicitly repealed another.     This principle is a
         product of a set of beliefs about the legislative
         process -- in particular, a belief that Congress,
         focused as it usually is on a particular problem,
         should not be understood to have eliminated without
         specific consideration another program that was likely
         the product of sustained attention.

C. R. Sunstein, Interpreting Statutes in the Regulatory State,

103 Harv. L. Rev. 405, 475 (1989) (footnote omitted).     These

concerns have less force where, as here, Congress was responding

to a recent event, the Master Settlement Agreement, and was

clear in its language.   The only even arguable doubt is whether

that repeal covered Medicaid recipients' possible claims as well

as the federal government's.    In our view the plain statutory

language means both.8

    8     Even were we to apply the presumption against implied
repeal, that presumption can be overcome by an "irreconciliable
conflict" between statutes. Matsushita Elec. Indus. Co. v.

                               -20-
           The presumption against retroactivity also does not

affect the result in this case.      It is true that as a general

matter Congress must speak clearly to make its legislation

retroactive.   Landgraf v. USI Film Prods., 511 U.S. 244, 280

(1994).9   Whatever the proper characterization of the relief

Greenless seeks in this case, Congress made its intent clear in

the amendment, which "applies to all funds received under the

Master Settlement Agreement, whether past, present, or future."

Harris, 264 F.3d at 1296.

Epstein, 516 U.S. 367, 381 (1996) (quoting Kremer v. Chem.
Constr. Corp., 456 U.S. 461, 468 (1982)) (internal quotation
marks omitted).   It is impossible to reconcile § 1396k(b)'s
requirement that "the remainder of [the tobacco settlement]
shall be paid to such individual" with § 1396b(d)(3)(B)(ii)'s
permission to use the money "for any expenditures determined
appropriate by the State."
     9    We disregard the tension between Greenless's argument
for Eleventh Amendment purposes that she seeks prospective
relief for a future injury, rather than retrospective
compensation for a past injury, and her argument that our
reading of the statute renders it retroactive. See Landgraf,
511 U.S. at 273 ("When the intervening statute authorizes or
affects the propriety of prospective relief, application of the
new provision is not retroactive.").

                              -21-
                                  III.

         To avoid the unnecessary resolution of a difficult

constitutional   question,   we    have   assessed   the   merits   of

Greenless's case and have found that she has failed to state a

claim upon which relief may be granted.      Therefore, although we

do not reach the reasoning of the district court's opinion, its

judgment dismissing the case is affirmed.

                                  -22-