Gallardo v. Marstiller 

In Gallardo v. Marstiller the U.S. Supreme Court will decide whether the federal Medicaid Act allows a state Medicaid program to recover reimbursement for Medicaid’s payment of a beneficiary’s past medical expenses by taking funds from the beneficiary’s tort recovery that compensate for future medical expenses.

The State and Local Legal Center (SLLC) filed an amicus brief in this case arguing Medicaid should be able to collect from whatever portion of a tort settlement represents payment for medical care, including for future medical expenses, to pay for past medical expenses.

Gianinna Gallardo has been in a persistent vegetative state since she was hit by a pickup truck getting off the school bus. Florida’s Medicaid program has paid for almost $900,000 for her medical care. Her parents settled a case against multiple parties for $800,000. Per the settlement agreement, about $35,000 was for past medical expenses. The settlement also said some of its balance may represent compensation for future medical expenses. The Florida Agency for Health Care Administration (FAHCA) didn’t participate in the settlement.

The Medicaid statute requires states to enact third-party liability laws under which “the State is considered to have acquired the rights . . . to payment by any other party,” “to the extent that payment has been made under the State plan for medical assistance.”

Per Florida law if a Medicaid recipient brings a tort action against a third party that results in a settlement, FAHCA is automatically entitled to half of the recovery (after 25 percent attorney's fees and costs), up to the total amount of medical assistance Medicaid has provided, from the settlement allocated for past and future medical expenses.   

FAHCA sought to recover not just the $35,000 specifically allocated by the parties for past medical expenses. It argued it was entitled to recover, to pay for past medical costs, the portion of the settlement representing compensation for Gallardo’s future medical expenses. The Eleventh Circuit agreed.

 

Before the Supreme Court Gallardo argues the “plain language [of the Medicaid statute] limits the State to third-party payments for medical care for which ‘payment has been made’ by Medicaid—past medical expenses.”

FAHCA notes that per the Medicaid statute Medicaid may obtain “any rights” a beneficiary has “to payment for medical care from any third party.” According to FAHCA, “[t]hat broad language permits Medicaid to recover from any damages representing payment for ‘medical care.’”

 

The SLLC amicus brief agrees with FAHCA that the Medicaid statute “unambiguously treats all third-party payments for medical care as fungible, and entitles the States to seek reimbursement for the whole portion of a settlement attributable medical case, regardless of whether the care was provided in the past or will be provided in the future.” The brief points out that due to “the massive financial burden on States imposed by Medicaid, it is crucial that States have every option open to them to defray their costs.”

 

Christopher M. Egleson, Kelly A. Eno, James R. Horner, and Cassandra Liu of Sidley Austin wrote the SLLC amicus brief which the following organizations joined:  National Conference of State Legislatures, National League of Cities, U.S. Conference of Mayor, and Government Finance Officers Association.  

Cummings v. Premier Rehab Keller 

In Cummings v. Premier Rehab Keller the State and Local Legal Center (SLLC) filed a Supreme Court amicus brief arguing that emotional distress damages aren’t available under the Rehabilitation Act and the Affordable Care Act.   

Title VI of the Civil Rights Act of 1964 prohibits “any program or activity receiving Federal financial assistance” from discriminating based on “race, color, or national origin.” Title VI has been interpreted to create a private right of action allowing victims of discrimination to sue for money damages including “compensatory damages.”

Congress has expressly incorporated Title VI’s remedies into other federal anti-discrimination laws including:  Section 504 of the Rehabilitation Act (prohibiting funding recipients from discriminating based on disability); the Affordable Care Act (prohibiting federally funded health programs from discriminating based on race, color, national origin, sex, age, or disability); Title IX of the Education Amendments Act of 1972 (prohibiting sex discrimination in federally funded education programs); and Title II of the Americans with Disabilities Act (prohibiting disability discrimination by state and local governments).

 

The question the Supreme Court will decide in this case is whether an individual bringing a private right of action under the Rehabilitation Act and the Affordable Care Act may recover emotional distress damages. How the Court answers this question will determine whether such damages are available under the other statutes listed above which also incorporate Title VI’s remedies.

 

Jane Cummings has been deaf since birth and is legally blind. She communicates mostly through American Sign Language (ASL). She contacted Premier, which offers physical therapy services, to treat her chronic back pain. She repeatedly requested that Premier provide an ASL interpreter, but it refused. She sued Premier under the Rehabilitation Act and the ACA for disability discrimination and sought emotional distress damages. 

 

The Fifth Circuit held that emotional distress damages aren’t available under these statutes. 

 

The Rehabilitation Act and the ACA are Spending Clause legislation. According to the Fifth Circuit, the Supreme Court has “repeatedly” likened Spending Clause legislation to contract law—“in return for federal funds, the [recipients] agree to comply with federally imposed conditions.” 

In Barnes v. Gorman (2002), the Supreme Court explained compensatory damages are available under Spending Clause legislation because federal-funding recipients are “on notice” that accepting such funds exposes them to liability for monetary damages under general contract law. In Barnes, the Supreme Court also held that punitive damages aren’t available under Spending Clause legislation because they aren’t generally available for breach of contract. So, federal funding recipients aren’t “on notice” that they could be liable for punitive damages.

 

According to the Fifth Circuit, emotional distress damages, like punitive damages are “traditionally unavailable in breach-of-contract actions.” So, the court held, federal-funding recipients aren’t on notice of them and can’t be held liable for them.  

 

The SLLC amicus brief argues that numerous legal and policy reasons indicate emotional distress damages are unavailable under the Rehabilitation Act and the ACA. For example, “[e]xposure to uncapped emotional damages would create extreme risk for state and local governments.  In contrast to traditional economic damages typically available for breach of contract, emotional distress damages by their nature are idiosyncratic, subjective, hard to measure, and subject to abuse because they depend on the feelings of the person who experiences them. They also can be very large.” “Faced with uncapped exposure to emotional distress damages, state and local governments may decide they need to reallocate local funds, raise taxes, or refuse the federal funding.”

 

Richard A. Simpson and Elizabeth E. Fisher of Wiley Rein and F. Andrew Hessick of UNC School of Law wrote the SLLC amicus brief which the following organizations joined:  National Conference of State Legislatures, National Association of Counties, National League of Cities, U.S. Conference of Mayors, International Municipal Lawyers Association, and National Public Labor Employer Labor Relations Association.

New York State Rifle & Pistol Association v. Bruen

In New York State Rifle and Pistol Association v. Bruen the U.S. Supreme Court will decide whether states and local governments may prevent persons from obtaining a concealed-carry license for self-defense if they lack “proper cause.” The State and Local Legal Center’s amicus brief asks the Court to rule in the affirmative.

 

In 2008 in District of Columbia v. Heller, the Supreme Court held that a “ban on handgun possession in the home violates the Second Amendment.” The Supreme Court has never opined on whether and under what circumstances a person may possess a gun outside the home.  

Per New York state law, to carry a concealed handgun for self-defense purposes a person must show “proper cause.”  New York case law requires an applicant to “demonstrate a special need for self-protection distinguishable from that of the general community” to satisfy the proper cause standard. The challengers in this case want to carry a concealed handgun but lack proper cause. 

The federal district court ruled against the challengers based on Second Circuit precedent. In a very brief opinion, noting that same Second Circuit case, the Second Circuit affirmed.

In Kachalsky v. County of Westchester (2012) the Second Circuit held that “New York’s handgun licensing scheme . . . requiring an applicant to demonstrate ‘proper cause’ to obtain a license to carry a concealed handgun in public” did not violate the Second Amendment. In Kachalsky, the Second Circuit applied intermediate scrutiny and upheld New York’s law stating: “New York has substantial, indeed compelling, governmental interests in public safety and crime prevention,” and “the proper cause requirement is substantially related to these interests.”

The SLLC amicus brief notes that “the law has long permitted prophylactic regulation that reduces the likelihood that individuals will carry firearms in public for an improper reason.” It notes that “[a]lthough many individuals carry firearms for proper purposes, in areas riven by gang- and drug-related crime, all too often firearms on the streetscape lead to violent confrontations and endanger officers on patrol.” It points out “[a]bsent a requirement that licensees show particularized need to carry concealable firearms, licensing laws could do little to stop a proliferation of concealed weapons on the streetscape.” For these reasons, the brief argues that “a requirement that those who seek to carry handguns in public demonstrate particularized need imposes no undue burden on Second Amendment rights.”

Larry Rosenthal, Chapman University School of Law wrote the SLLC’s amicus brief which the following organizations joined:  National League of Cities, U.S. Conference of Mayors, International City/County Management Association, Major Cities Chief Association, National Police Foundation, and National Association of Black Law Enforcement Executives.

CVS v. Doe

In CVS Pharmacy v. Doe, the U.S. Supreme Court will decide whether disability disparate impact claims may be brought under Section 504 of the Rehabilitation Act and therefore under Section 1557 of the Affordable Care Act (ACA). In an amicus brief the State and Local Legal Center (SLLC) asks the Supreme Court to rule that such claims cannot be brought.   

The Does are individuals living with HIV/AIDS who rely on employer-sponsored health plans for their medications. Per their prescription plan, to receive “in-network” prices they can only obtain specialized medication via mail or pick up at a CVS pharmacy. This means they must “forego essential counseling and consultation from specialty pharmacists.”

The Does sued CVS for disparate impact disability discrimination under the ACA.

 

Section 1557 of the ACA prohibits federally funded health programs from discriminating based on race, color, national origin, sex, age, or disability. Section 1557 of the ACA incorporates the anti-discrimination provisions of various civil rights statutes including, for disability, Section 504 of the Rehabilitation Act. So, to be able to sue for disparate impact disability discrimination under the ACA it must likewise be possible to sue for disparate impact disability discrimination under the Rehabilitation Act.

As CVS notes in its certiorari petition, the Supreme Court “expressly left open whether . . .  the Rehabilitation Act, provides a disparate-impact claim for disability discrimination” in Alexander v. Choate (1985). The Court agreed to decide that question. The Ninth Circuit assumed that disparate-impact claims could be brought under Choate, stating “the Supreme Court concluded that not all disparate-impact showings qualify as prima-facie cases under Section 504.” 

 

Section 504 of the Rehabilitation Act applies to all states and local governments that receive federal funds.

In arguing that disparate impact claims shouldn’t be possible the SLLC amicus brief points out “because federal funding is conditioned on compliance with § 504, expanding the Act to include disparate-impact liability would threaten to deprive state and local governments of critical federal funds without any proof of purposeful discrimination.”

The brief also argues that expanding liability is unnecessary because “existing federal and state legal schemes either expressly provide for disparate-impact claims or have been interpreted to support such claims. In contexts ranging from schools, to land use regulations, to prisons, disabled plaintiffs have ample avenues for relief available to them.”     

Michael McGinley, Justin Romeo, Eric Hageman, and Noah Becker, of Dechert wrote the SLLC’s amicus brief which the following organizations joined:  National Conference of State Legislatures, National Association of Counties, National League of Cities, U.S. Conference of Mayors, International City/County Management Association, International Municipal Lawyers Association, National School Boards Association, and National Public Labor Employer Labor Relations Association.

City of Austin, Texas v. Reagan National Advertising of Texas Inc. 
 

In the City of Austin, Texas v. Reagan National Advertising of Texas Inc., the State and Local Legal Center (SLLC) argues in a U.S. Supreme Court amicus brief that states and local governments should be able to regulate off-premises billboards differently than on-premises signs.
 

The City of Austin allows on-premises billboards to be digitized but not off-premises billboards. Two outdoor advertising companies claim that this distinction is “content-based” under the First Amendment.


In Reed v. Town of Gilbert (2015), the Supreme Court held that content-based restrictions on speech are subject to strict scrutiny, meaning they are “presumptively unconstitutional” under the First Amendment. In Reed the Court defined content-based broadly.


Per Austin’s Sign Code “off-premises” signs advertise “a business, person, activity, goods, products or services not located on the site where the sign is installed.”


According to the Fifth Circuit treating off-premises and on-premises signs differently is content-based because one must read the sign to determine whether it meets the above definition of “off-premises.”


The SLLC amicus brief encourages the Court to reject the “need to read” test.


The brief argues the test is “too onerous, because it could literally be applied to every sign ordinance, obliterating the concepts of content-neutral and concept-based and making all sign rules subject to strict scrutiny review.”
The SLLC suggests that instead the Court should “reaffirm that content-based rules involve a billboard’s topic, idea, or message—not its location. A cursory examination of content-neutral aspects of a sign, such as its lighting, moving parts, or location, is not a content-based inquiry.”


Finally, the brief notes that local governments “regulate digital billboards out of genuine concern for public safety and local aesthetics, without regard to the billboards’ topics, ideas, or messages.”


John Korzen of the Wake Forest University School of Law Appellate Advocacy Clinic wrote the SLLC amicus brief which the following organizations joined:  National League of Cities, U.S. Conference of Mayors, International City/County Management Association, and International Municipal Lawyers Association.

Thompson v. Clark

In Thompson v. Clark, Larry Thompson asserts that before suing police officers for “unreasonable seizure pursuant to legal process,” a plaintiff must await favorable termination of the criminal proceeding against him or her. Thompson frames the issue in this case as how “favorable determination” is defined and asks the Court to decide whether such favorable termination requires the plaintiff to show that the criminal proceeding has “formally ended in a manner not inconsistent with innocence,” or instead “ended in a manner that affirmatively indicates innocence.”

Larry Thompson’s sister-in-law, Camille, who was living with him, reported to 911 that Thompson was sexually abusing his week-old daughter. Thompson wouldn’t let police into his apartment because they didn’t have a warrant, blocked their path to entry, and allegedly shoved an officer. Camille’s report turned out to be false; she suffered from a mental illness which the officers “sensed” when they were in the apartment.

Although police arrested Thompson and he was charged with obstructing governmental administration and resisting arrest, the prosecutor dropped the charges against him “in the interests of justice.”

Thompson brought a number of civil claims against Officer Clark including one for “unreasonable seizure pursuant to legal process,” which he called a claim for “malicious prosecution.”

The Second Circuit held that Thompson couldn’t bring that claim because he failed to establish that the prosecution against him terminated favorably.

In a 2018 case, Lanning v. City of Glens Falls, the Second Circuit held that such a claim requires “affirmative indications of innocence to establish favorable termination.” In this case Thompson’s innocence wasn’t established because the only reason the prosecutor gave for dismissing charges against him was “in the interests of justice.”

Thompson argues in favor of the Eleventh Circuit rule that favorable termination occurs when criminal proceedings end in a manner “not inconsistent with . . . innocence.”

The Second Circuit allowed several of Thompson’s additional claims including his claim of denial of a right to a fair trial, to go to a jury, excluding the so-called “malicious prosecution” claim. Thompson lost all claims before the jury.

The State and Local Legal Center’s (SLLC) amicus brief argues that the “most analogous common-law tort” to claims for “unreasonable seizure pursuant to legal process” is false imprisonment, not malicious prosecution. Favorable termination is irrelevant in a false imprisonment claim. Claims for “unreasonable seizure pursuant to legal process” accrue, for statute-of-limitations purposes, when the seizure pursuant to legal process ends.

The SLLC argues that Thompson should nevertheless lose his claim for “unreasonable seizure pursuant to legal process” for two reasons. First, he was not “seized for any period after legal process [was] issued.” Instead, following his arrest he was held for two days until arraignment, then released on his own recognizance, and not taken into custody again before his charges were dismissed. Second, a jury ruled against Thompson’s denial of a fair trial claim indicating it either didn’t believe the officers lied about Thompson shoving an officer or “that such evidence was fabricated but would not likely have influenced a criminal jury’s decision.”

Myriam Zreczny Kasper and Julian N. Henriques, Jr. of the City of Chicago wrote the SLLC amicus brief which the following organizations joined:  the City of Chicago, National Association of Counties, National League of Cities, U.S. Conference of Mayors, International City/County Management Association, and International Municipal Lawyers Association.