On May 26, 2009, recipients of In-Home Service Support (IHSS) care filed a lawsuit under the Supremacy Clause against Arnold Schwarzenegger and other government officials in the Northern District Court of California. The Plaintiffs, represented by private counsel, asked the court for injunctive and declaratory relief, claiming that in enacting Section 12306. 1 (d)(6), the California Legislature failed to consider the required factors of efficiency, economy, quality of care, and access to services prior to its enactment.

The IHSS program provides crucial medical assistance to low-income elderly people and disabled people as part of California's Medicaid program (also called "Medi-Cal"). The types of assistance that IHSS providers give are bathing, feeding, dressing, and providing the medications IHSS recipients require. The IHSS program allows recipients to reside safely in their homes and costs less than institutionalized care.

At the time of this case, there were over 360,000 IHSS providers giving assistance to 440,000 individuals in California. Providers are often relatives, such as a parent, that leave a full-time job in order to care for a child or other person. The wages began at $8.10 per hour to $12.10, but with the state's reductions decreased to at most $10.10 per hour. Under the Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., such modifications must be approved by the Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) prior to being implemented. In September and December 2008, California submitted amendment proposals to CMS that incorporated most of the rate reductions the Legislature had already included in these statutes. Before CMS had completed its review the amendments, this suit and several others seeking injunctions to prevent the rate reductions were filed.

In the case at hand, Plaintiffs motioned for a preliminary injunction on June 4th, 2009. Defendants repeatedly challenged Plaintiffs' motion for a preliminary injunction, objecting to the declarations of Plaintiffs' witnesses and evidence filed by the Plaintiff. After a series of back and forth objections, the Northern District Court for California (Judge Claudia Wilken) ruled in favor of the Plaintiffs and granted Plaintiffs' motion for a preliminary injunction. Judge Wilken granted Plaintiffs' motion for preliminary injunction on June 26th, 2009, just a few days before IHSS cuts were set to take effect on July 1st, 2009.

In the Court's order, Judge Claudia Wilken concluded that the Plaintiffs established the necessary criterion for being granted a preliminary injunction. The Plaintiffs, according to Judge Wilken, established both a strong likelihood of success and that they would suffer irreparable injury if IHSS cuts were implemented. Judge Wilken found that State Defendants had violated the procedural requirements of the Medicaid Act, including the consideration of how IHSS cuts would affect efficiency, economy, and quality of care given by IHSS providers to elderly and disabled recipients (42 U. S. C. §1396a(a)(30)(A)). State Defendants did not consider factors laid in the federal statute when they decided to implement California Welfare and Institutions Code § 12301(d)(6).

The Defendants appealed the preliminary injunction to the Ninth Circuit Court of Appeals, which issued a decision on March 3, 2010. Judge Milan D. Smith reasoned that the factors of efficiency, economy, and quality of care applied to the statute in dispute, the California Welfare and Institutions Code Section 12306.1(d)(6). The Ninth Circuit Court of Appeals also wrote in the opinion that the legislative report Defendants had submitted regarding the quality and access in the IHSS system was inadequate under the Medicaid provision. Other important parts of the opinion included the Court's finding that Plaintiffs did show irreparable harm in showing that IHSS providers would be harmed by reduction in their hourly wages and benefits, in addition to IHSS recipients. The Court of Appeals found that the balance of hardships and the public interest also weighed in favor of implementing the preliminary injunction. In deciding to grant or deny a preliminary injunction, the Court of Appeals needed to review the District Court's finding for abuse of discretion. The Court of Appeals found no abuse of discretion and agreed with the District Court's first decision. Dominguez et al v. Schwarzenegger, 596 F.3d 1087 (N.D. Cal. 2009).

On March 24, 2010, the Defendants petitioned the United States Supreme Court to review the decision of the Ninth Circuit holding that the Supremacy Clause of the U.S. Constitution could serve as a basis for a cause of action in this case. During the period between the Appellate Court decision and the Supreme Court's grant of review, the case remained active at the District Court level. On June 8, 2010, prior to the Supreme Court's grant of certiorari, the District Court granted class certification, and on July 2, 2010, it ordered a temporary restraining order prohibiting the Defendants from lowering hourly wages and benefit contributions of IHSS workers in the County of Fresno. The Supreme Court granted certiorari review on January 18, 2011, consolidating this case with four others that raised the same issue. These four cases were Independent Living Center of Southern California, Inc. v. Shewry (Clearinghouse case code PB-CA-0016), Managed Pharmacy Care v. Maxwell-Jolly (PB-CA-0019), California Pharmacists Association v. Maxwell-Jolly (PB-CA-0020), and Santa Rosa Memorial Hospital v. Shewry (Docket #: 3:08-cv-05173-SC).

Oral argument before the Supreme Court took place on October 3, 2011. After oral argument and while the cases were pending before the Supreme Court, CMS approved California's amendments to its Medicaid plan. In light of this, the Supreme Court declined to issue a ruling on whether the Supremacy Clause could serve as a basis for a private suit to enforce Title XIX against a state. Instead, the Supreme Court vacated the Ninth Circuit Court's decision and remanded the case to the Ninth Circuit for reconsideration, with instructions to take into account CMS's approval of the amendments. Douglas v. Independent Living Center of Southern California, 132 S. Ct. 1204 (U.S. 2012).

After the Supreme Court decision was issued, the parties entered settlement mediation. On March 26, 2013, the parties were granted a joint motion to stay proceedings at the Ninth Circuit Court of Appeals pending the approval of the class-action settlement agreement at the District Court level. On April 4, 2013, the District Court granted preliminary approval of a settlement. Final approval of the settlement was granted on May 23, 2013.

The Settlement also resolved Oster v. Lightbourne (In the Clearinghouse as DR-CA-0027: V.L. v. Wagner, see related cases), a suit that raised similar issues. For the purpose of the settlement, the plaintiff classes from these two suits were combined and expanded to include all IHSS recipients who resided in Alameda, Calaveras, Contra Costa, Fresno, Los Angeles, Madera, Marin, Mariposa, Mendocino, Monterey, Napa, Placer, Riverside, Sacramento, San Benito, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Yolo, and Yuba counties. The settlement would prevent the IHSS wage cuts from coming into effect, keeping them at the statutory rates that were in place prior to the 2009 amendments contested in Dominguez. The terms also included an eight-percent cut in IHSS employee service hours for twelve months, which would then be replaced by a seven-percent cut in service hours, contingent on the passing of the legislation described below. These cuts in service hours would be inclusive of and not in addition to an already existing 3.4 percent cut in hours.

The attached legislation would repeal an earlier bill that cut authorized IHSS service hours by twenty percent across the board, implementation of which was delayed pending the outcome of these suits and related litigation. 12306.1(d)(6), the amendment which lowered IHSS wages, would also be repealed. If this legislation is not passed by the California Legislature and delivered to the Governor by November 1, 2013, then the Parties shall meet and confer to determine whether they can agree upon a mutually acceptable solution. If the Parties do not reach a new agreement, then any Party would be able to declare the settlement agreement void.

No attorneys' fees or costs were awarded.

This summary is current as of July 2013. It will be updated to reflect whether the State Legislature passed the legislation required by the settlement.

Julianne Nowicki - 05/27/2010
Alex Colbert-Taylor - 07/18/2013


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