State of Tennessee, by and through the Tennessee General Assembly, et al., Plaintiffs-Appellants,
United States Department of State, et al., Defendants-Appellees.
Argued: March 19, 2019
from the United States District Court for the Western
District of Tennessee at Jackson. No. 1:17-cv-01040-S. Thomas
Anderson, District Judge.
J. Bursch, BURSCH LAW PLLC, Caledonia, Michigan, for
Samantha L. Chaifetz, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellees.
Richard Thompson, B. Tyler Brooks, Kate Oliveri, THOMAS MORE
LAW CENTER, Ann Arbor, Michigan, for Appellants.
Samantha L. Chaifetz, Alisa B. Klein, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees.
Grusin, NATIONAL HEALTH LAW PROGRAM, Carrboro, North
Carolina, Cody Wofsy, AMERICAN CIVIL LIBERTIES UNION
FOUNDATION IMMIGRANTS' RIGHTS PROJECT, San Francisco,
California, for Amici Curiae.
Before: COLE, Chief Judge; and BOGGS, Circuit Judge.
case presents the question of whether the Tennessee General
Assembly ("General Assembly") has standing to file
suit on its own behalf, as well as on behalf of the State of
Tennessee. The General Assembly alleged that the federal
government violated the Spending Clause and the Tenth
Amendment to the United States Constitution through enacting
and implementing certain statutes that require states to
provide Medicaid coverage to eligible refugees. The district
court dismissed the General Assembly's complaint for lack
of standing. Tennessee v. U.S. Dep't of State,
329 F.Supp.3d 597, 616-17 (W.D. Tenn. 2018). Because the
General Assembly has not alleged an injury that gives it
standing, and because the General Assembly has not
established that it has the authority to bring suit on behalf
of Tennessee, we affirm the district court's judgment.
turning to the parties' arguments, we briefly discuss the
statutory schemes that are relevant to this case. In 1980,
Congress amended the Immigration and Nationality Act by
passing the Refugee Act, Pub. L. No. 96-121, 94 Stat. 102
(1980) (codified in scattered sections of 8 U.S.C.). The
Refugee Act created the Office of Refugee Resettlement
("ORR") within the Department of Health and Human
Services ("HHS"). 8 U.S.C. § 1521(a). ORR
administers the Refugee Resettlement Program. See
id. (b). ORR consults with state and local governments
and private nonprofit agencies concerning "the
sponsorship process and the intended distribution among the
States and localities before their placement in those States
and localities." 8 U.S.C. § 1522(a)(2)(A). The
parties do not dispute that states cannot prevent the federal
government from settling refugees within their borders.
See Tennessee, 329 F.Supp.3d at 607 (citing H.R.
Rep. No. 132, at 19 (1985)); see also Exodus Refugee
Immigration, Inc. v. Pence, 838 F.3d 902, 904 (7th Cir.
Refugee Resettlement Program assists refugees in achieving
economic self-sufficiency in the United States through
federal grants to provide employment training,
English-language education, and other skill development. 8
U.S.C. § 1522(a)(1)(A); Exodus Refugee
Immigration, 838 F.3d at 903; 45 C.F.R. § 400.11.
States may choose to administer this program. To participate,
a state must submit a proposal for ORR's approval,
describing how the state will "coordinate cash and
medical assistance and other services to promote refugee
resettlement and economic self-sufficiency."
Tennessee, 329 F.Supp.3d at 607; 8 U.S.C. §
1522(a)(6)(A)-(C); 45 C.F.R. § 400.4. If a state chooses
not to participate, or withdraws from participation, then the
state does not receive or administer the grant funding. 45
C.F.R. § 400.301. ORR may then "authorize a
replacement designee or designees to administer the provision
of assistance and services, as appropriate, to refugees in
that State." Id. (c); see also 8
U.S.C. § 1152(c)(1)(A), (e)(1); Exodus Refugee
Immigration, 838 F.3d at 905; 60 Fed. Reg. 33584, 33588
(June 28, 1995). ORR funds thirteen such programs in twelve
states. Tennessee, 329 F.Supp.3d at 608.
Refugee Act authorizes, but does not require, ORR to
reimburse states, subject to available appropriations,
"for 100 per centum of the cash assistance and medical
assistance provided to any refugee" during the first
three years of the refugee's residence in the United
States. 8 U.S.C. § 1522(e)(1); see also
Tennessee, 329 F.Supp.3d at 607. "[B]y the early
1990s, ORR no longer reimbursed the states for the full cost
of providing cash and medical assistance to refugees due to
an insufficiency of funds appropriated for that
purpose." Tennessee, 329 F.Supp.3d at 607. ORR
amended the program regulations in light of the "steady
decline in Federal refugee funding for the State share of . .
. Medicaid . . . due to insufficient appropriated
funds." 60 Fed. Reg. 33584, 33588 (June 28, 1995).
is a "cooperative federal-state public assistance
program that makes federal funds available to states electing
to furnish medical services to certain impoverished
individuals." Mowbray v. Koslowski, 914 F.2d
593, 595 (4th Cir. 1990). Medicaid assists states in
providing medical care to "pregnant women, children,
needy families, the blind, the elderly, and the disabled . .
. ." Nat'l Fed'n of Indep. Bus. v.
Sebelius (NFIB), 567 U.S. 519, 541 (2012).
Participation in Medicaid is voluntary, but to receive
federal funding, states must have an approved state Medicaid
plan satisfying federal criteria that establish who is
eligible for care, the services provided, and the cost of
services. Id. at 541-42; see also 42 U.S.C.
§ 1396a(10); 42 C.F.R. § 430.10. Tennessee has
participated in Medicaid since 1968. Tennessee, 329
F.Supp.3d at 605.
must submit its Medicaid plan, or any proposed amendments, to
the Centers for Medicare & Medicaid Services
("CMS") for approval. 42 C.F.R. § 430.12. Once
the plan is approved, the state receives reimbursement from
the federal government for a percentage of the costs of
providing care to eligible individuals: the "Federal
Medical Assistance Percentage" ("FMAP").
West Virginia v. U.S. Dep't of Health & Human
Servs., 289 F.3d 281, 284 (4th Cir. 2002); see
also 42 U.S.C. § 1396d(b). If a state plan is not
in compliance with the Medicaid Act's requirements,
"after reasonable notice and opportunity for
hearing," HHS may withhold the state's FMAP or limit
the FMAP to the parts of the state plan that are not affected
by noncompliance. 42 U.S.C. § 1396c. The Medicaid Act
provides for a system of administrative and judicial review
for HHS's decisions concerning state plans and a
determination to reduce or withhold a state's
FMAP. See 42 U.S.C. § 1316.
Medicaid spending accounts for a substantial portion of the
average state's budget, and the FMAP covers "50 to
83 percent of those costs." NFIB, 567 U.S. at
581. In recent years, Tennessee's annual FMAP has ranged
from four to seven billion dollars, which represents 17 to
21% of the state's total budget for all purposes.
original Medicaid Act "was . . . silent on the
availability of Medicaid to aliens." Lewis v.
Thompson, 252 F.3d 567, 571 (2d Cir. 2001). In 1971, the
Supreme Court held in Graham v. Richardson, 403 U.S.
365, 376 (1971), that states violated the Equal Protection
Clause of the Fourteenth Amendment by denying public
assistance to noncitizens on that basis, or because the
noncitizen had not resided in the United States for a certain
number of years. Following Graham, HHS proposed a
rule to implement the decision that was also consistent with
recent amendments to the Social Security Act that denied
Social Security benefits to noncitizens. See 38 Fed.
Reg. 16910, 16910-11 (June 27, 1973); see also
Lewis, 252 F.3d at 571. The rule, codified at the time
at 45 C.F.R. § 248.50 (1974), required states that
participated in Medicaid to provide benefits to eligible
noncitizens "lawfully admitted for permanent residence
or otherwise permanently residing in the United States under
color of law[.]" 38 Fed. Reg. 30259, 30259 (Nov. 2,
1973). A noncitizen's eligibility for Medicaid depended
on whether the noncitizen fit the criteria for coverage in
the Medicaid Act.
1996, Congress passed the Personal Responsibility and Work
Opportunity Reconciliation Act, Pub. L. No. 104-193, 110
Stat. 2015 (1996). The Act restricts the availability of
public benefits for noncitizens to promote self-sufficiency
as part of the United States' national immigration
policy. See 8 U.S.C. § 1601(5)-(6). To that
end, the Act provided that "an alien who is not a
qualified alien . . . is not eligible for any Federal public
benefit[.]" 8 U.S.C. § 1611(a); see also Bruns
v. Mayhew, 750 F.3d 61, 63-64 (1st Cir. 2014).
"Qualified alien" is defined at 8 U.S.C. §
1641(b)-(c), and includes, inter alia, "a
refugee who is admitted to the United States under section
207 of [the Immigration and Nationality] Act."
Id. (b)(3). Most qualified aliens are subject to
additional restrictions on federal program participation.
See 8 U.S.C. §§ 1612(a)(1), 1613(a). Five
years after entry into the United States, qualified aliens
may be able to participate in certain federal programs, if
they are eligible, including Medicaid. Tennessee,
329 F.Supp.3d at 606. Congress identified some classes of
qualified aliens, including refugees, who may participate in
identified federal programs, including Medicaid, immediately
upon admission to the United States, until seven years
after the refugee was admitted to the United States.
8 U.S.C. § 1612(a)(2)(A)(i).
if a state participates in Medicaid, it "must determine
a refugee applicant's eligibility for Medicaid as
medically needy[, ]" and provide assistance "to all
refugees eligible under its State plans." 45 C.F.R.
§ 400.94(b)-(c). If the refugee is in one of the groups
that must be covered, see 8 U.S.C. § 1396a(10),
then the refugee's status as a noncitizen does not bar
the refugee from receiving Medicaid. See 8 U.S.C.
§ 1612(a)(2)(A)(i); 45 C.F.R. § 400.94(c). If a
refugee is not eligible for Medicaid under a state plan, then
the refugee may be eligible for the federally funded Refugee
Medical Assistance Program. 45 C.F.R. § 400.94(d).
AND PROCEDURAL HISTORY
withdrew from participation in the Refugee Resettlement
Program in 2008. Tennessee, 329 F.Supp.3d at 608.
ORR designated the Catholic Charities of Tennessee, and its
subsidiary the Tennessee Office for Refugees, to administer
refugee services in Tennessee. Ibid. The General
Assembly asserts that, from the time of the state's
withdrawal until 2016, the federal government resettled more
than 13, 000 refugees in Tennessee. Refugees who satisfy
eligibility criteria can enroll in TennCare, Tennessee's
Medicaid program. The General Assembly states in its
complaint that in 2015, it spent over $31 million dollars in
state funds "to support the federal refugee resettlement
program through TennCare."
2016, the General Assembly passed Senate Joint Resolution 467
("SJR 467"), directing the Tennessee Attorney
General to "initiate or intervene" in a
civil action on behalf of Tennessee for alleged violations of
the Tenth Amendment with respect to the operation and
implementation of the Refugee Resettlement Program. S. Res.
467, 109th Gen. Assembly, at 3 (Tenn. 2016). SJR 467 stated
that if the Attorney General declined to file suit, then
"the Speaker of the Senate and the Speaker of the House
of Representatives are authorized to employ outside counsel
to commence a civil action effectuating the purposes of this
resolution." Id. at 4. The General Assembly
sent SJR 467 to the Governor of Tennessee. He returned it
without his signature. The Governor explained in an
accompanying statement that he "trust[ed] the Attorney
General to determine whether the state has a claim in this
case or in any other," and noted his
"constitutional concerns about one branch of government
telling another what to do." The General Assembly took
no further legislative action on SJR 467.
Attorney General did not file suit. In a letter to the
General Assembly, he explained that he thought that the Tenth
Amendment theories "that underpin SJR 467 are unlikely
to provide a viable basis for legal action." Letter from
Herbert H. Slatery, III, Attorney General and Reporter,
Tennessee, to Tennessee Senate Chief Clerk Russell Humphrey
and Tennessee House of Representatives Chief Clerk Joe
McCord, at 3 (July 5, 2016) (hereinafter "Slatery
Letter"). The Attorney General then, "to the extent
allowed by Tennessee law delegate[d his] constitutional . . .
and statutory . . . authority to commence litigation on
behalf of the State of Tennessee to staff counsel for the
General Assembly for the limited purpose of pursuing
litigation to address the issues raised in SJR 467 in the
manner provided for by SJR 467." Id. at 4.
General Assembly, acting for itself and on behalf of
Tennessee, along with two members of the Tennessee General
Assembly, Senator John Stevens and Representative Terri Lynn
Weaver, in their official and individual capacities, filed
suit in the Western District of Tennessee against the United
States Department of State, HHS, ORR, and several federal
government officials in their official capacities
(collectively "State Department"). It alleged that,
despite Tennessee's withdrawal from the Refugee
Resettlement Program, the federal government
"coerced" Tennessee to continue funding the program
"by threatening the state with the loss of federal
Medicaid funding." The General Assembly claimed that,
because Tennessee must enroll eligible refugees in TennCare,
the state "is forced to expend substantial amounts of
state taxpayer money to fund the resettlement program"
despite its withdrawal. It asserted that 42 U.S.C. §
1396c represents impermissible coercion, because if Tennessee
does not enroll eligible refugees in TennCare, Tennessee
could lose of 20% of its state budget. The General
Assembly sought a declaratory judgment that the State
Department had violated the Spending Clause and Tenth
Amendment in its implementation of the Refugee Act. It also
requested injunctive relief prohibiting the federal
government from settling refugees in Tennessee until the
United States paid for all resettlement costs, and to compel
the State Department to comply with the Spending Clause and
the Tenth Amendment by "fund[ing] refugee resettlement
from federal dollars and without any involuntary contribution
from the State of Tennessee[.]"
State Department moved to dismiss for lack of subject-matter
jurisdiction. It asserted that the General Assembly and the
individual legislators lacked Article III standing, and
challenged the General Assembly's authority to bring suit
on behalf of the state of Tennessee. Tennessee, 329
F.Supp.3d at 610. The State Department disputed that the case
was ripe because Tennessee had not amended its Medicaid plan,
and so did not actually face the loss of its FMAP.
Id. at 617. The State Department also contended that
42 U.S.C. § 1316 of the Medicaid Act precluded
district-court review of the General Assembly's claims.
Tennessee, 329 F.Supp.3d at 619. Finally, it also
moved to dismiss for failure to state a claim upon which
relief can be granted under Fed.R.Civ.P. 12(b)(6), because
the General Assembly had not shown that Tennessee's
obligation to provide Medicaid to eligible refugees violated
the Tenth Amendment or that the possible loss ...