On May 26th, 2009, the San Francisco Gray Panthers filed a lawsuit under the Supremacy Clause against Governor Arnold Schwarzenegger and Michael E. Genest, the Director of Finance of the State of California, along with other government officials. The lawsuit was filed in the Northern District of California. The plaintiffs, represented by an attorney from the Medicaid Defense Fund and private counsel, were made up of individuals and the following groups: the Gray Panthers of San Francisco, Independent Living Center of Southern California, Inc., and LifeLong Medical Care.
Plaintiffs sought an injunction to halt implemention of the California Welfare & Institutions Code § 14131.10, arguing it was preempted under the Supremacy Clause. Specifically, Plaintiffs claimed that the California law would eliminate federal healthcare benefits for eligible recipients, including adult dental services, acupuncture services, audiology services, speech therapy services, chiropractic services, optometric and optician services, podiatric services, psychology services, and incontinence creams and washes.
Plaintiffs argued that money the State received pursuant to the American Recovery and Reinvestment Act of 2009 should be spent to maintain these healthcare services for recipients, rather than added to the general budget.
On July 1st, 2009, plaintiffs moved for a preliminary injunction to stop the state of California from implementing the California Welfare and Institutions Code § 14131.10.
On July 15th, 2009, defendants filed a motion to dismiss, arguing the Cal. Welf. & Inst. Code did not conflict with the relevant ARRA provisions and that the ARRA provisions were not privately enforceable.
On September 1st, 2009, the Northern District Court (Judge Phyllis J. Hamilton) ruled in favor of defendants' motion to dismiss. Judge Hamilton reasoned that state officials are guaranteed immunity from lawsuit in federal court by the Eleventh Amendment. The court also reasoned that the sections of ARRA plaintiffs brought to the case were "not at issue" in the case. Gray Panthers v. Schwarzenegger. (N.D. Cal. 2009).
The same day, Judge Hamilton denied plaintiffs' motion for preliminary injunction. The court found that plaintiffs failed to show a likelihood of success on their merits. Judge Hamilton reasoned that ARRA Title V "contains no express statement of intent to preempt state law." The court reasoned that § 5000(a) does not create an obligation for states to halt cuts to Medicaid programs, but rather that the enhanced FMAP payments are meant to "help avert" cuts. Gray Panthers v. Schwarzenegger, (N.D. Cal. 2009).
After the case was decided, the Services Employees International Union (SEIU) moved to file an amicus brief to support the emergency motion of the plaintiffs. This motion was denied. Judge Hamilton also denied the emergency motion filed by plaintiffs for a stay pending appeal on October 22nd, 2009.
On October 29th, 2009, Judge Hamilton entered an order dismissing the complaint with prejudice. (Other similar cases, like V.L. v. Wagner, continue to be brought to courts in California challenging the budget cuts affecting benefits for disabled and elderly people.)Julianne Nowicki - 04/14/2010