Court Opinion

ID: 8411532
Source: CourtListenerOpinion
Date Created: 2022-11-02 19:01:29.212572+00
Date Added: 2024-06-11T16:47:51.909668
License: Public Domain

EASTERBROOK, Chief Judge,
dissenting.
My colleagues’ approach to this case is in the spirit of the maxim: “Where there is a right, there must be an effective remedy.” Indiana has failed to implement federal requirements that go with grants that the state has accepted, and the state is resisting efforts to enforce the federal statutes directly. The prospects of a funding cutoff or a suit by the national government are not effective enough, in my colleagues’ assessment, so the court creates an additional remedy.
That approach was common in the era of J.I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964). But it was disavowed in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). Today remedies depend on the statutory text and structure, not on judges’ views about how much enforcement, and by whom, is optimal. Moreover, the maxim that a right implies a remedy applies only when there is a “right.” The statutes in question do not confer rights on the plaintiff.
Indiana would not violate anyone’s rights by turning down the federal money and disbanding Indiana Protection and Advocacy Services. The federal statute imposes conditions on a grant. A state that wants the money must fulfil the conditions. Such a state-federal contract creates third-party beneficiaries (such as Advocacy Services and the patients), but the Supreme Court has held that these third-party beneficiaries are not entitled to enforce the contract directly. See Brunner v. Ohio Republican Party, — U.S.-, 129 S.Ct. 5, 172 L.Ed.2d 4 (2008); Gonzaga University v. Doe, 536 U.S. 273, 122 S.Ct. 2268, 153 L.Ed.2d 309 (2002); Alexander v. Sandoval, 532 U.S. 275, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). The contract is enforced by the federal agency, which can end the funding or sue if the state does not keep its part of the bargain.
One reason why a state’s decision to accept a grant does not imply a third-party right to litigate is the Supreme Court’s clear-statement doctrine:
Congress has broad power to set the terms on which it disburses federal money to the States, see, e.g., South Dakota v. Dole, 483 U.S. 203, 206-207, 107 S.Ct. 2793, 97 L.Ed.2d 171 (1987), but when Congress attaches conditions to a State’s acceptance of federal funds, the conditions must be set out “unambiguously,” see Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 17, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1981); [Board of Education of Hendrick Hudson Central School District v. Rowley, 458 U.S. 176, 204 n. 26, 102 S.Ct. 3034, 73 L.Ed.2d 690 (1982)]. “legislation enacted pursuant to the spending power is much in the nature of a contract,” and therefore, to be bound by “federally im*389posed conditions,” recipients of federal funds must accept them “voluntarily and knowingly.” Pennhurst, 451 U.S. at 17, 101 S.Ct. 1531. States cannot knowingly accept conditions of which they are “unaware” or which they are “unable to ascertain.” Ibid. Thus, in the present case, we must view the [federal statute] from the perspective of a state official who is engaged in the process of deciding whether the State should accept [the] funds and the obligations that go with those funds.
Arlington Central School District v. Murphy, 548 U.S. 291, 296, 126 S.Ct. 2455, 165 L.Ed.2d 526 (2006). When Congress extends a lure to state governments, the conditions must be express; otherwise the state is buying a pig in a poke.
Nothing in 42 U.S.C. §§ 10801-51 alerts Indiana that, by taking the money, it agrees to be sued in federal court by its own agency, Indiana Protection and Advocacy Services. Section 105, 42 U.S.C. § 10805, bears the caption “[s]ystem requirements”; it does not mention patients’ rights or authorize the “system” to file suit in federal court. Section 103, 42 U.S.C. § 10803, says that the Secretary may contract with states that “meet the requirements of section 105”, which reiterates the point that the statute sets conditions on a grant rather than establishing personal rights.
Even if we were to treat “system requirements” the same as “system rights”, nothing in either § 105 or § 106 says that systems have a right to sue states in federal court. (Reading “shall” in § 105 as “has a right to”, which my colleagues think appropriate, does not overcome the statute’s lack of a right to sue states. And treating “shall” as “has a right to” produces some mighty odd constructions. I invite the reader to run through § 105 and § 106, replacing each “shall” with “has a right to”. For example, § 105(a)(10) says that a system “shall ... not use allotments ... in a manner inconsistent with section 14404 of this title.” Replacing “shall” with “has a right to” turns this rule on its head. It is far better to use “shall” to denote obligation rather than entitlement.)
What’s more, nothing in the statute creates a personal remedy of any kind. To the contrary, 42 U.S.C. § 10851(a) says that the statute “shall not be construed as establishing any new rights for individuals with mental illness.” Without a remedy, there cannot be an implied private right of action. See Gonzaga University, 536 U.S. at 284, 122 S.Ct. 2268.
What a state anticipates when it accepts a federal grant is that enforcement rests in the hands of the grantor, which can either turn off the spigot or sue in its own name — for, as long as the contract lasts, the federal government is entitled to compliance. See Barnes v. Gorman, 536 U.S. 181, 187, 122 S.Ct. 2097, 153 L.Ed.2d 230 (2002). But the Department of Health and Human Services has neither cut off the money nor sued to enforce the contract. To subject the state to any other remedy is to transgress the principle that only clearly articulated conditions may be enforced against state recipients of federal funds.
One explicit federal right of action sometimes can be used to implement the conditions of federal grants: 42 U.S.C. § 1983 authorizes suits when the defendant is a state actor and the conditions are specific enough to be enforced as rules of law. See Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980). I am content to assume that the requirements of 42 U.S.C. §§ 10805 and 10806 meet that standard. Four other courts of appeals have held this. Protection & Advocacy for Persons with Disabilities v. Mental Health & Addiction Services, 448 F.3d 119 (2d Cir. 2006) (Sotomayor, J.); Pennsylvania Pro*390tection & Advocacy, Inc. v. Houstoun, 228 F.3d 423, 428 (3d Cir.2000) (Alito, J.); Missouri Protection & Advocacy Services v. Missouri Department of Mental Health, 447 F.3d 1021 (8th Cir.2006); Center for Legal Advocacy v. Hammons, 323 F.3d 1262, 1272 (10th Cir.2003). But Advocacy Services is part of Indiana and so is not a “person” within the scope of § 1983. Will v. Michigan Department of State Police, 491 U.S. 58, 109 S.Ct. 2304,105 L.Ed.2d 45 (1989). Forty-two states created their advocacy agencies as private entities, which could take advantage of Thiboutot. Indiana did not. Because plaintiff is not a “person” it can’t use § 1983. See also Illinois v. Chicago, 137 F.3d 474, 477 (7th Cir.1998).
Advocacy Services contends, with the support of the United States as amicus curiae, that, because it relies on federal funds, it isn’t “really” part of Indiana and therefore can use § 1983. The argument that an entity is “not the state” if its funding is federal was made and roundly rejected in Regents of University of California v. Doe, 519 U.S. 425, 117 S.Ct. 900, 137 L.Ed.2d 55 (1997). Indiana Protection and Advocacy Services is part of the state, whose governor appoints a third of the Board (see 42 U.S.C. § 15044(a)(2); Ind. Code § 12-28-l-6(a)). (No one else appoints any member; the Governor’s appointees initially chose the rest of the board, which since has picked its own members other than the Governor’s selections.) Advocacy Services has the same powers as other state agencies to make administrative rules, Ind.Code § 12-28-1-12(7), and its employees are civil servants, id. at § 12-28-1-12(2). Its offices are in state buildings, and its web site (http:// www.in.gov/ipas/) is part of Indiana’s; the site’s header is the name and picture of Indiana’s governor. It is the organization chart rather than sources of funds that distinguishes the states from other kinds of entities. (And if this is wrong, and federal funding means that Advocacy Services is “not the state,” then Advocacy Services would be a federal instrumentality, and again not a “person” under § 1983.)
Thus § 1983 is unavailable. Is there an alternative source of authority to sue?
One possibility is that a right of action may be implied directly from the substantive federal statute, without the need for aid from § 1983. But the Supreme Court’s cases do not support that approach. The closest is Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979). It is not enough, for three reasons.
First, the defendant in Cannon was a private organization, so the clear-statement requirement did not apply.
Second, the Court’s rationale was that, when enacting Title IX of the Education Amendments of 1972, Congress relied on decisions creating private rights of action, using pr e-Cort law, under a different statute. 441 U.S. at 694-703, 99 S.Ct. 1946. Title IX is a pr e-Cort statute; the Justices were unwilling to frustrate reliance interests that underlay it. Justices Stewart and Rehnquist, whose votes were essential to the majority in Cannon, wrote separately to make it clear that the legislative reliance on pre-Cort law was essential to the outcome. 441 U.S. at 717-18, 99 S.Ct. 1946. But no one contends that, when it enacted 42 U.S.C. §§ 10801-51 more then a decade after Cort, Congress relied on decisions allowing state agencies to sue their own states; there are no such decisions.
Third, Cannon observed that the plaintiff was a member of a special class for *391whose benefit the statute was enacted. 441 U.S. at 689-94, 99 S.Ct. 1946. Advocacy Services is not a member of any class supposed to receive a benefit from the federal legislation; it is an ombudsman designed to provide assistance to patients. Advocacy Services wants information that it may be able to use to make suggestions for improving Indiana’s mental-health-care system. That is a long distance from the model of personal rights that was vital to the disposition in Cannon.
The remit of an administrative agency such as Advocacy Services does not affect anyone’s “personal” rights — and the Court has stated repeatedly that a private right of action will be implied only when necessary to vindicate the plaintiffs personal rights. E.g., Thiboutot (deprivation of the plaintiffs welfare benefits); Jackson v. Birmingham Board of Education, 544 U.S. 167, 125 S.Ct. 1497, 161 L.Ed.2d 361 (2005) (plaintiffs right to be free of retaliatory discharge). By contrast, “[s]tatutes that focus on the person regulated rather than the individuals protected create no implication of an intent to confer rights on a particular class of persons.” Sandoval, 532 U.S. at 289, 121 S.Ct. 1511 (internal quotation omitted).
My colleagues (both the majority opinion and the concurring opinion) believe that Advocacy Services should be allowed to sue precisely because it is not trying to vindicate its own rights. It is an advocate for the mentally disabled, and my colleagues think that it should occupy a privileged position as a protector of others. That policy argument might be a sound one, yet the Supreme Court has held that a private right of action will be implied from a funding statute only when necessary so that the litigant may vindicate his or her personal rights. Perhaps my colleagues will persuade the Justices to change their doctrine, but under existing doctrine a personal right is essential.
Indeed, under existing doctrine a personal right often is not sufficient even when the federal statute is unconditional (that is, not tied to a grant). E.g., Thompson v. Thompson, 484 U.S. 174, 108 S.Ct. 513, 98 L.Ed.2d 512 (1988) (no implied private right of action to enforce Parental Kidnapping Prevention Act of 1980); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979) (no implied private right of action to enforce the Investment Advisers Act of 1940). Since Cort the Justices have never created a private right of action on behalf of anyone other than a private person trying to vindicate statutory rights enacted for his personal benefit. Advocacy Services is not in that category.
My colleagues say that the federal statute has given “rights” directly to Advocacy Services. Yet any rights in § 105 or § 106 are for the benefit of patients, not “systems.” Advocacy Services is not trying to improve its own mental health! What’s more, these statutes do not create rights; they create duties. As I have already mentioned, the statute calls the subsections in § 105 “requirements.” They are obligations laid on a grant’s recipient— that is, on Indiana, not on Advocacy Services. Indiana may have a duty to confer rights on Advocacy Services, but § 105 does not confer any rights directly. Nothing in the statute gives any entitlement to any “system” established under the Act; instead the statute tells the state what conditions it must meet to be eligible for federal funds (and to drive the point home § 10851(a) says that the statute does not add to patients’ rights).
The only thing looking remotely like a “right” held by an agency to which funds are routed — and the provision on which the majority principally relies (pages 21-*39222)—is the exhaustion requirement in § 107(a), 42 U.S.C. § 10807(a). This subsection provides that, before filing suit, the “system” must exhaust any other remedies. My colleagues say that this “provision would have little purpose if protection and advocacy systems ... were not empowered to sue” (page 376). Not at all. Section 107(a) speaks of filing suit “on behalf of a [sic] individual with mental illness”. A “system” may sue on behalf of mentally ill persons, whose own entitlements supply the right of action, see 42 U.S.C. §§ 10804(c), 10805(a)(1)(C), but the current proceeding is by Advocacy Services on its own behalf and so is outside of § 107(a). And there is a more general problem: the majority’s approach turns a precondition to suit (that’s what an exhaustion requirement is) on- someone else’s behalf into an authorization to sue on one’s own behalf.
The transmutation is unwise. The proposition that § 107(a) has “little purpose” if it doesn’t authorize a system to sue on its own behalf is hyperbole. Section 107(a) serves many functions. First, § 107(a) applies to suits that systems file on behalf of persons with disabilities. Second, if § 107(a) applies at all to suits by systems in their own names, it covers litigation in state court. Third, it applies to suits filed under § 1983 by private “systems” (which, recall, exist in 42 states). Fourth, it applies to suits that public systems file against private defendants, which are not protected by the Supreme Court’s dear-statement principle. We should treat § 107(a) as what it purports to be: a restriction on litigation rather than a backhanded grant of authority to sue. Section 107(a) assuredly is not the “clear statement” required by Arlington Central and similar decisions.
A few words are in order about Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). Now that we are sitting en banc, and thus more willing than a panel to create a conflict, I accept my colleagues’ view that Young (read in connection with Verizon Maryland Inc. v. Public Service Commission of Maryland, 535 U.S. 635, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002)) overcomes any sovereign-immunity defense. I therefore join my colleagues in disagreeing with Virginia v. Reinhard, 568 F.3d 110 (4th Cir.2009). But to say that a claim against a state officer sidesteps sovereign immunity is not enough; plaintiffs still need a right of action. Most suits to which Young applies rest on § 1983; in Verizon, 47 U.S.C. § 252(e)(6) supplied an express right of action; Advocacy Services lacks any equivalent.
Brunner illustrates my point. The Help America Vote Act of 2002 requires state officials to take specific steps to ensure that all persons entitled to vote are properly registered, while other names are purged from the rolls. The statute applies, however, only to states that accept federal grants that defray the cost of meeting the federal objectives. See 42 U.S.C. § 15301. Ohio took the federal money but, according to plaintiffs in a § 1983 suit filed under Ex parte Young against Ohio’s Secretary of State, failed to perform its obligations. As a result, plaintiffs contended, invalid votes would be counted.
The district court entered an order directing the Secretary of State to comply with § 303 of the Act, 42 U.S.C. § 15483(a)(5)(B)(i) (2000 ed. Supp. V), which requires the state’s election officials to “match information in the database of the statewide voter registration system with information in the database of the [state’s] motor vehicle authority to the extent required to enable each such official to verify the accuracy of the information *393provided on applications for voter registration.” The court of appeals affirmed, holding that § 303 establishes rights that can be enforced under § 1983 and that judicial relief was essential to ensure a reliable election. 544 F.3d 711 (6th Cir.2008) (en banc).
Everything that my colleagues say about 42 U.S.C. §§ 10805 and 10806 was true about 42 U.S.C. § 15483(a)(5)(B)(i). Each statute establishes specific responsibilities for states that take the federal money. Each state balked at carrying out its obligations. Each plaintiff used Ex parte Young to sidestep sovereign immunity. Each suit sought prospective relief rather than damages. Each plaintiff wanted a systemic improvement rather than the vindication of person-specific entitlements. Other ways of enforcing each statute appeared to be ineffectual; neither federal agency revoked the grant or filed suit to enforce the conditions. And Brunner was easier for the plaintiff, which was not part of the state and so could invoke § 1983 as the right of action. Yet the Supreme Court reversed — unanimously and summarily.
Observing that § 303 is a condition on a federal grant and not a free-standing entitlement, the Supreme Court cited Gonzaga University and Sandoval for the proposition that the plaintiff could not obtain interlocutory relief even if the state was clearly violating § 303. In other words, the suit was doomed, so the plaintiff lost even on the assumption that irreparable injury was certain to occur. The opinion in Brunner was one paragraph long. The Supreme Court’s point was simple. My point is equally simple — and, to repeat, this case is weaker for the plaintiff than was Brunner, because Advocacy Services is a state agency that can’t use § 1983.
Not so, my colleagues say, because this statute lacks something present for the Help America Vote Act (and the statutes at issue in Gonzaga University and Sandoval ): an administrative enforcement process. Without one, there won’t be enough enforcement (pages 29-30), “unfair” or “counterproductive” results will ensue (pages 16-17, 31), and the federal courts must step in. As I said at the outset, that is the method of Borak, a method that the Justices repudiated in 1975. Congress, not the judiciary, decides whether enforcement via litigation is essential. But the majority’s premise also is not correct. There is an administrative enforcement process. The Secretary of Health and Human Services has established one by regulation. 42 C.F.R. § 51.10, incorporating the procedures of 45 C.F.R. Part 74 and 42 C.F.R. Part 50. The administrative mechanism may or may not be optimal — my colleagues think that it isn’t, because it operates only against the “system” (page 379 n. 12) — but that decision is for Congress, the President, and the Secretary to make; a court ought not declare that more is required and then establish an enforcement mechanism of its own design.
Both the majority opinion and the concurring opinion express a belief that statutes such as this one should not be enforced by terminating grants. “[Glutting off one’s nose to spite one’s face”, the concurrence puts it at page 39. This reflects a fundamental disagreement with the Supreme Court, which has held that the principal and often exclusive method of enforcing conditions on federal grants is by funding curtailments. Perhaps my colleagues have a wise view as a matter of policy, but the Supreme Court’s perspective is the one we must use in a hierarchical judicial system. I don’t think that the Justices’ perspective can be avoided by saying that Gonzaga University was an offender, while Advocacy Services is a vin*394dicator of rights. That won’t distinguish Brunner. And the vindieatorMolator line misses the point that the threat of funding cutoffs is what induces violators such as Gonzaga University to conform. Deterrence is not limited to the criminal law. There would be even more reason for these institutions to comply if federal courts could award damages or issue injunctions, but Brunner, Gonzaga University, and Sandoval curtail that option.
The concurring opinion expresses confidence that an injunction is superior to the threat of administrative funding cutoff because then “[t]he state and the federal government would be playing a game of chicken — with Indiana’s mentally ill citizens the victims of any collision that might result” (page 39). Put to one side the fact that the Secretary of Health and Human Services is not limited to yanking the grant; she can sue to enforce the grant’s conditions. Suppose that the Secretary’s only lever were cash. Why should we think that it is only the Secretary who plays chicken with the state? Indiana tells us that it cares deeply about whether it is subject to suit in federal court by Advocacy Services. Our affirmative answer may lead Indiana to reject the grant and send Advocacy Services’ staff to the unemployment line. It is not possible to say that the Secretary’s levers commence a game of chicken while the judiciary’s levers don’t. At least the Secretary can negotiate with Indiana to find a satisfactory solution. All the judicial branch can do is issue judgments. Once we have issued ours, everything is in Indiana’s hands, and if we drive the state to end this program there is nothing we can do to bring it back again.
If the Secretary passes out federal money without enforcing the conditions, that’s unfortunate, but it is hard to see how it can be called “unfair” to anyone other than the federal taxpayers. The Secretary has ample means to ensure that the federal dollars are not wasted. And the majority’s view that litigation must be authorized, because cutting off funds would be “counter-productive,” is impossible to reconcile with Brunner, Gonzaga University, or Sandoval; it would mean that conditions attached to federal grants always may be enforced by private litigation — at least if the judges approve the goal of the grant program. The Supreme Court has held otherwise.
Both Indiana Protection and Advocacy Services and Indiana Family and Social Services Administration believe that they have patients’ interests at heart, though they disagree about how to serve those interests. Fights between two state agencies should be resolved within the state (including the state’s judiciary, if state law so provides), or through the auspices of the Department of Health and Human Services, which administers the federal grant program. This statute establishes a program of cooperative federalism. Cooperation usually requires negotiation and compromise among multiple public bodies. That is the way of the administrative rather than the judicial process. We should dismiss this suit and let the administrative process take its course.