Health Law Daily Tennessee lawmakers did not have standing to sue U.S. State Department over Medicaid funding for refugees
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Thursday, July 25, 2019

Tennessee lawmakers did not have standing to sue U.S. State Department over Medicaid funding for refugees

By Jeffrey H. Brochin, J.D.

Tennessee General Assembly could not show "institutional injury," a requisite element to give it standing to sue, and it was not the authorized agent to sue on behalf of the state—which did suffer an institutional injury.

The Federal Court of Appeals for the Sixth Circuit has affirmed the decision of the federal district court which dismissed a 2017 lawsuit brought by the Tennessee General Assembly and two of its elected officials against the U.S. Department of State over funding of Medicaid for the state’s 13,000 refugees. The appellate court affirmed that the General Assembly lacked Article III standing to sue on behalf of the state, and the two individual legislators who joined in the lawsuit did not have a personal stake in the outcome, or suffer an individual injury so as to confer standing (State of Tennessee v. U.S. Department of State, July 24, 2019, Boggs, D.).

Refugee resettlement statutes. Although the original Medicaid statute was silent as to the availability of Medicaid benefits to aliens, in 1973 the Secretary of HHS issued a rule requiring coverage of all lawful permanent residents and other aliens permanently residing in the United States, following a Supreme Court decision which held that state laws denying welfare benefits to resident aliens violated the Equal Protection Clause of the Fourteenth Amendment and impermissibly encroached upon exclusive federal power over the admission of aliens and the conditions of their residence.

In 1980 Congress passed the Refugee Act of 1980 in order to establish uniform provisions for refugee resettlement. To administer the Refugee Resettlement Program, HHS established the Office of Refugee Resettlement (ORR) to make grants to states to assist refugees after their initial resettlement. By the early 1990s, ORR no longer reimbursed the states for the full cost of providing medical assistance to refugees and in October, 2007, Tennessee withdrew from the program.

General Assembly resolution to intervene. In 2016 the Tennessee General Assembly adopted a resolution to commence legal action against the federal government claiming that the federal government mandated appropriation of state revenue with respect to refugee resettlement in Tennessee. The rationale was that requiring Tennessee to provide Medicaid benefits to refugees--or risk losing all Medicaid funding-- subjected the state to coercion in violation of the 10th Amendment of the U.S. Constitution. The Governor refused to sign the resolution and the General Assembly sent the matter to the Attorney General to initiate litigation on the state’s behalf. However, in July, 2016, the Attorney General declined to file suit because of doubts that the 10th Amendment theories provided a viable basis for legal action, and he delegated his authority to staff counsel for the General Assembly.

Alleged coercion to participate. The General Assembly, acting for itself and on behalf of Tennessee, along with two members of the Tennessee General Assembly, filed suit against the U.S. Department of State, HHS, and the Office of Refugee Resettlement (ORR), alleging that despite Tennessee’s withdrawal from the Refugee Resettlement Program, the federal government "coerced" Tennessee to continue funding the program "by threatening the state with the loss of federal Medicaid funding." They claimed that, because Tennessee had to then enroll eligible refugees in the state Medicaid program, TennCare, the state was forced to expend substantial amounts of state taxpayer money to fund the resettlement program despite its withdrawal. This amounted to an impermissible coercion, because if Tennessee did not enroll eligible refugees in TennCare, Tennessee could lose of 20 percent of its state budget. The federal district court dismissed the action due to lack of standing, and this appeal followed.

Institutional injury. The court began by addressing the complicated question of when a legislative body, or a group of legislators from that body, has standing to sue. A legislative body may, in some circumstances, sue as an institutional plaintiff if it has suffered an institutional injury, which is one that constitutes some injury to the power of the legislature as a whole rather than harm to an individual legislator. Such an injury is not confined to a single legislator, but affects each member of the body equally. Assessing whether a legislative body has suffered an institutional injury sufficient for Article III standing turns on the facts and circumstances of the particular case.

The court concluded that the General Assembly did not identify an injury that it suffered, such as disruption of the legislative process, or a usurpation of its authority, and therefore, the district court did not err when it concluded that the General Assembly lacked Article III standing. Its alleged injury simply did not satisfy the first element of standing.

Individual legislators. The court next turned to the question of whether the individual legislators had standing. The senator and representative filed suit in both their individual and official capacities, and they argued that they had official-capacity standing, rather than alleging that they had suffered a personal injury that would provide them with individual-capacity standing. Basically, they contended that because the General Assembly had standing, that body could designate individuals to act on its behalf. However, the court ruled that the individual legislators did not have Article III standing based on an allegation of an institutional injury, or a complaint about a dilution of legislative power because an individual legislator cannot tenably claim a personal stake in a suit based on such an institutional injury.

Based on the foregoing, the court found a lack of standing by the legislators or the General Assembly, and affirmed the district court’s dismissal for lack of jurisdiction.

The case is No. 18-5478.

Attorneys: John J. Bursch (Bursch Law PLLC) for State of Tennessee. Alisa B. Klein. U.S. Department of Justice, for U. S. State Department.

Companies: U. S. State Department; State of Tennessee

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