Wilder v. Virginia Hospital Association/Dissent Rehnquist

by William Rehnquist

Chief Justice REHNQUIST, with whom Justice O'CONNOR, Justice SCALIA, and Justice KENNEDY join, dissenting.

The relevant portion of the Boren Amendment requires States to reimburse Medicaid services providers using

"rates (determined in accordance with methods and standards developed by the State . . .) which the State finds, and makes assurances satisfactory to the Secretary, are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities. . . ." 42 U.S.C. § 1396a(a)(13)(A) (1982 ed., Supp. V).

The Court notes in its opinion, ante, at 504, that respondent seeks permanent relief under § 1983 in the form of court-ordered reimbursement at new rates. Respondent also seeks, as interim relief, reimbursement at rates commensurate with payments under the Medicare program. Complaint &Par; 34-39; see App. 22. And though respondent's prayer for relief is only one example of a good claim for relief under today's decision, every § 1983 action hereafter brought by providers to enforce § 1396a(a)(13)(A) will inevitably seek the substitution of a rate system preferred by the provider for the rate system chosen by the State. Thus, whenever a provider prevails in such an action, the defendant State will be enjoined to implement a system of rates other than the rates "determined in accordance with methods and standards developed by the State," which the "State finds . . . are reasonable and adequate," and with respect to which the State made assurances to the Secretary that the Secretary found "satisfactory." See § 1396a(a)(13)(A). The court orders entered in such actions therefore will require the States to adopt reimbursement rate systems different from those Congress expressly required them to adopt by the above-quoted language.

The Court reasons that the policy underlying the Boren Amendment would be thwarted if judicial review under § 1983 were unavailable to challenge the reasonableness and adequacy of rates established by States for reimbursing Medicaid services providers. This sort of reasoning, however, has not hitherto been thought an adequate basis for deciding that Congress conferred an enforceable right on a party.

Before Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980), a plaintiff seeking to judicially enforce a provision in a federal statute was required to demonstrate that the statute contained an implied cause of action. Satisfaction of the now familiar standards from, e.g., Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), was the means for making the requisite showing. The Court's general practice was "to imply a cause of action where the language of the statute explicitly conferred a right directly on a class of persons that included the plaintiff in the case." Cannon v. University of Chicago, 441 U.S. 677, 690, n. 13, 99 S.Ct. 1946, 1954, n. 13, 60 L.Ed.2d 560 (1979). It was thus crucial to a demonstration of the existence of an implied action for the statute to contain a right "in favor of" the particular plaintiff. See, Cort, 422 U.S., at 78, 95 S.Ct., at 2088 ("First, . . . does the statute create a federal right in favor of the plaintiff?"). The plaintiff then would have to satisfy three additional standards to establish that the statute contained an implied judicial remedy for vindicating that right. See ibid. In Maine v. Thiboutot, the Court essentially removed the burden of making the latter three showings by holding that § 1983 generally (with an exception subsequently developed in Middlesex County Sewerage Authority v. National Sea Clammers Assn., 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981)) supplies the remedy for vindication of rights arising from federal statutes.

But while the Court's holding in Thiboutot rendered obsolete some of the case law pertaining to implied rights of action, a significant area of overlap remained. For relief to be had either under § 1983 or by implication under Cort v. Ash, supra, the language used by Congress must confer identifiable enforceable rights. See Wright v. Roanoke Redevelopment and Housing Authority, 479 U.S. 418, 432-433, 107 S.Ct. 766, 775-776, 93 L.Ed.2d 781 (1987) (O'CONNOR, J., dissenting) ("Whether a federal statute confers substantive rights is not an issue unique to § 1983 actions. In implied right of action cases, the Court also has asked, since Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2087, 45 L.Ed.2d 26 (1975), whether 'the statute create[s] a federal right in favor of the plaintiff' "). In this regard, the Court in Wright said that a § 1983 action does not lie where Congress did not intend for the statutory provision "to rise to the level of an enforceable right." Id., at 423, 107 S.Ct., at 770 (citing Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 19, 101 S.Ct. 1531, 1540, 67 L.Ed.2d 694 (1981)).

In Cannon, supra, the Court said that "the right- or duty-creating language of the statute has generally been the most accurate indicator of the propriety of implication of a cause of action." Id., 441 U.S., at 690, n. 13, 99 S.Ct., at 1954, n. 13. This statement is suggestive of the traditional rule that the first step in our exposition of a statute always is to look to the statute's text and to stop there if the text fully reveals its meaning. See, e.g., American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982) (" '[O]ur starting point must be the language employed by Congress,' and we assume 'that the legislative purpose is expressed by the ordinary meaning of the words used' ") (internal citations omitted). There is no apparent reason to deviate from this sound rule when the question is whether a federal statute confers substantive rights on a § 1983 plaintiff. Yet the Court virtually ignores the relevant text of the Medicaid statute in this case.

The Medicaid statute provides for appropriations of federal funds to States that submit, and have approved by the Secretary of Health and Human Services, "State plans for medical assistance." 42 U.S.C. § 1396 (1982 ed., Supp. V). The next provision in the statute specifies requirements for the contents of state medical assistance plans. § 1396a(a). The provision at issue here, § 1396a(a)(13)(A), is simply a part of the thirteenth listed requirement for such plans. In light of the placement of § 1396a(a)(13)(A) within the structure of the statute, see Pennhurst, supra, 451 U.S., at 19, 101 S.Ct., at 1540 (emphasizing the statutory "context" of the provision under review), one most reasonably would conclude that § 1396a(a)(13)(A) is addressed to the States and merely establishes one of many conditions for receiving federal Medicaid funds; the text does not clearly confer any substantive rights on Medicaid services providers. This structural evidence is buttressed by the absence in the statute of any express "focus" on providers as a beneficiary class of the provision. See Wright, supra, 479 U.S., at 430, 107 S.Ct., at 774 (finding a provision in the statute "focusing" on the plaintiff class dispositive evidence of Congress' intent in the Brooke Amendment to create rights in favor of the plaintiff class).

Even if one were to assume that the terms of § 1396a(a)(13)(A) confer a substantive right on providers in the nature of a guarantee of "reasonable and adequate" rates, the statute places its own limitation on that right in very plain language. Section 1396a(a)(13)(A) establishes a procedure for establishing such rates of reimbursement. The first step requires the States to make certain findings. The second and only other step requires the States to make certain assurances to the Secretary and the Secretary-not the courts-to review those assurances. Under the logic of our case law, respondent arguably may bring a § 1983 action to require that rates be set according to that process. Indeed, establishment of rates in accordance with that process is the only discernible right accruing to anyone under § 1396a(a)(13)(A). But as this case illustrates, Medicaid providers bring § 1983 actions to avoid the process rather than to seek its implementation. The Court approves such challenges despite the fact that a plaintiff's success in such a suit results in the displacement of rates created in accordance with the statutory process by rates established pursuant to court order. To support its decision, the Court looks beyond the unambiguous terms of the statute and relies on policy considerations purportedly derived from legislative history and superseded versions of the statute. See ante, at 515-520.

The Court concludes, ante, at 19, that the contrary position equates with the proposition that the States are not obligated to adopt reasonable rates. Indeed, the theme of much of the Court's argument is that without judicial enforceability, the States cannot be trusted to implement § 1396a(a)(13)(A)'s command of creating rate systems that are reasonable and adequate. The Court states at one point that "[i]t would make little sense for Congress to require a State to make findings without requiring those findings to be correct. . . . We decline to adopt an interpretation of the Boren Amendment that would render it a dead letter." Ante, at 514.

The interpretation to which the Court refers, however, would scarcely render the Boren Amendment a "dead letter." It is, instead, the Court's own reading that nullifies the "letter" of the amendment. Apart from its displacement of the statutory ratesetting process noted previously, the Court's suggestion that the States would deliberately disregard the requirements of the statute ignores the Secretary's oversight incorporated into the statute and does less than justice to the States. The Court itself recognizes that the basic purpose of the Boren Amendment was to allow the States more latitude in establishing Medicaid reimbursement rates. In light of that fact, the Court's interpretation takes far more liberties with the statutory language than does the position advanced by petitioners. I would reverse the judgment of the Court of Appeals.

Notes