Cardenas v. Anzai

311 F.3d 929 (9th Cir. 2002) ; Clearinghouse Number: 55019

Description

Medicaid, but Not Eleventh Amendment Bars Medicaid Recipients’ Claim to Tobacco Settlement “Overage”, Ninth Circuit Rules

Abstract

The Ninth Circuit ruled that the Eleventh Amendment did not bar Hawaii Medicaid recipients with smoking-related illnesses from recovering the “overage” portion of their state’s allocation of the 1998 tobacco settlement; however, the Ninth Circuit held that plaintiffs’ recovery was precluded by a 1999 amendment to the Medicaid statute, 42 U.S.C. § 1396b(d)(3)(B)(ii), which allowed use of tobacco settlement funds “for any expenditures deemed appropriate by the State.” Hawaii was one of forty-six states that entered with tobacco companies into a settlement under which the states received reimbursement for Medicaid expenditures and other smoking-related costs; the Hawaii legislature directed allocation of the funds. In their suit, plaintiffs alleged that 42 U.S.C. § 1396k(b) required the state to distribute to Medicaid recipients any settlement funds above the state’s actual expenditures. The district court granted defendants’ motion to dismiss on Eleventh Amendment grounds, and plaintiffs appealed. Analyzing U.S. Supreme Court decisions in Ex Parte Young and its progeny regarding prospective versus retrospective relief, the Ninth Circuit concluded that plaintiffs were seeking to remedy “a present and ongoing violation of federal law,” not to establish past state liability. Since plaintiffs sought only prospective relief, the Eleventh Amendment did not bar their claims. The Ninth Circuit, however, affirmed its right to uphold the decision below on any ground supported by the record. It held that the 1999 amendment to the Medicaid statute carved out an exception to the more general statute governing distribution of Medicaid funds recovered from a legally liable third party. The plain language of 42 U.S.C. § 1396b(d)(3)(B)(ii), said the Ninth Circuit, barred plaintiffs’ claims to any portion of the tobacco settlement funds.

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Docket Date
2002-11-18 00:00:00+00:00

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