Various pharmacies, health care providers, senior citizens’ groups, and Medi-Cal beneficiaries (collectively, “Citizens”) filed suit in California state court for injunctive relief against the enforcement of AB 5, alleging that it was in conflict with 30(A) of the Medicaid Act and therefore preempted under the Supremacy Clause of the U.S. Constitution. The State removed the suit to U.S. District Court (C.D. Calif.), which denied the preliminary injunction on the grounds that 30(A) of the Medicaid Act did not create a private right of action.
The Citizens appealed, and argued that the Supremacy Clause permits suits for injunctive relief from state laws that are allegedly preempted by a federal statute even where the federal statute contains no private right of action.
At the outset, the Court of Appeals pointed out that the Supreme Court has frequently heard claims made for injunctive relief based on federal preemption without requiring statutory authorization of a private right of action, relying on federal question jurisdiction and the Supremacy Clause. The Court rejected the notion that the Supremacy Clause permits such suits only if they fall within one of three specific categories.
The Court also rejected the State’s argument that because 30(A) was a federal statute based upon Congress’ spending power, a private right of action should be a prerequisite to using it as the basis for an injunction. According to the Court, the Citizens gave no rational justification for such a distinction, nor was it supported by precedent.
Ultimately, the Court held that it was irrelevant that section 30(A), the allegedly preemptive statute, did not confer a private right of enforcement on individuals; a suit for injunctive relief may be brought under the Supremacy Clause regardless.
Finally, the Court held that the Citizens had standing to bring the suit, as there was evidence that they would be directly injured by the 10% rate reduction mandated by AB 5.
The Court of Appeals reversed the ruling of the District Court and remanded the case for a hearing on the merits of the Citizens’ claim for preliminary relief.
Jurisdiction: U.S. Court of Appeals, Ninth Circuit
Related Categories: Civil Procedure , Government / Politics , Health Care
|Appellant Lawyer(s)||Appellant Law Firm(s)|
|Lynn S. Carman||Medicaid Defense Fund|
|Stanley L. Friedman||Stanley L Friedman Law Offices|
|Appellee Lawyer(s)||Appellee Law Firm(s)|
|Edmund G. Brown, Jr.||Office of the California Attorney General|
|Gregory M. Cribs||Office of the California Attorney General|
|Phillip J. Matsumoto||Office of the California Attorney General|
|Tara L. Newman||Office of the California Attorney General|
|Sara Ugaz||Office of the California Attorney General|
|Jennifer M. Kim||Supervising Deputy Attorney General|
|Richard T. Waldow||Supervising Deputy Attorney General|