In Health and Hospital Corp. of Marion County, Indiana v. Talevski the State and Local Legal Center (SLLC) has asked the U.S. Supreme Court to hold that private parties can’t bring lawsuits for money damages under Spending Clause legislation unless the statute explicit states such suits are possible.

In 1990 in Wilder v. Virginia Hospital Association the Supreme Court held that private parties could sue to enforce rights contained in some federal Spending Clause legislation, even where Congress didn’t expressly provide for a private right of action in the statute. Wilder involved the Boren Amendment to Medicaid which Congress has repealed.

Since Wilder the Supreme Court hasn’t recognized any new Spending Clause-based private rights. But lower courts have, like the Seventh Circuit in this case. The Seventh Circuit held that private rights of action may be brought under the Federal Nursing Home Rights Act (FNHRA) transfer and medication rules. FNHRA lacks an express private right of action.   

Medicaid is Spending Clause statute. To receive Medicaid funding nursing homes must comply with FNHRA. Ivanka Talevski sued Valparaiso Care claiming it violated FNHRA’s medication rules by giving her husband, who had dementia, unnecessary psychotropic medications for purposes of chemical restraint. She likewise claimed it violated FNHRA’s transfer rules by transferring him to another facility without consent. 

The SLLC amicus brief argues that the Supreme Court should hold that the Spending Clause does not permit implied private rights of action. The brief points out that the Supreme Court has held that federal grants to states may only be accompanied by unambiguous conditions. “But judicially created implied rights of action expose states to conditions unknown at the time they agreed to accept federal dollars. This is a serious problem, because a substantial portion of states’ revenue comes from federal grants, so the possibility of future private actions turns every federal dollar States accept into a litigation risk down the road.”

If the Court decides to continue to allow implied private rights of action in Spending Clause legislation the SLLC argues that it should hold that no private right of action exists under FNHRA’s transfer and medication rules. Counties operate hundreds of nursing homes around the country. “Under the Seventh Circuit’s holding, many local governments may simply decide it is not worth the increased risk of liability, and choose to get out of the nursing-home business. That would not be good for patients: As numerous studies confirm, county-owned nursing homes are widely regarded as providing better patient outcomes than private alternatives.”

Finally, the SLLC argues federalism supports not implying a private right of action under FNHRA. “The decision below also interferes with States’ ability to craft their own legal remedies for medical malpractice, by superimposing an unnecessary, uniform federal cause of action. Every state in the country has medical malpractice laws that keep the doors to the courthouse open for litigants, and federalism concerns counsel against allowing private FNHRA actions as a means of circumventing state-law malpractice claims.”

Christopher J. Wright and John R. Grimm of Harris, Wiltshire & Grannis wrote the SLLC amicus brief which the following organizations joined:  National Conference of State Legislatures, Council of State Governments, National Association of Counties, National League of Cities, U.S. Conference of Mayors, International City/County Management Association, International Municipal Lawyers Association and Government Finance Officers Association.

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