10th Cir.: Younger abstention inapplicable to Medicaid claim

The Tenth Circuit held that the Younger abstention doctrine does not apply to challenges to Medicaid eligibility determinations.

The court rejected the argument that federal courts should refuse to hear claims regarding Medicaid eligibility when judicial review is available in state courts. Brown ex rel. Brown v. Day --- F.3d ----, 2009 WL 70201 (10th Cir. Jan. 13, 2008) (No. 06-3387).

 

Brown challenged the termination of her Medicaid benefits through the administrative process but failed. She then brought a federal suit under 42 U.S.C. § 1983, claiming that applicable Kansas law conflicted with the Medicaid Act by treating assets in a residuary trust as available resources. The district court dismissed the case on the basis of abstention under Younger v. Harris, 401 U.S. 37 (1971), claiming it could not exercise jurisdiction due to Brown’s failure to pursue her remedies in state court. 477 F.Supp.2d 1110, 1116 (D.Kan. 2007) (summary).

 

Generally, Younger requires that federal courts refuse jurisdiction when there is (1) an ongoing state enforcement proceeding that (2) provides an adequate forum to hear federal claims, and (3) involves important state interests. The rule originated in criminal cases but has been extended to civil cases and administrative proceedings. However, Younger does not apply to all state proceedings, since the Supreme Court has also held that exhaustion of remedies is generally not required in § 1983 cases. Patsy v. Florida Board of Regents, 457 U.S. 496 (1982). This appears to be the first Court of Appeals decision to address Younger abstention in the Medicaid context.

 

Coercive vs. remedial proceedings

         

Following Ohio Civ. Rts. Cmte. v. Dayton Christian Schs., Inc., 477 U.S. 619, 627 n. 2 (1986), most circuits have recognized that Younger abstention applies to state proceedings that are “coercive” in nature but not to ones that are “remedial.” Maymo-Melendez v. Alvarez-Ramirez, 364 F.3d 27, 36 (1st Cir.2004) (horse trainer’s license suspended: abstention); Moore v. City of Asheville, 396 F.3d 385, 388 (4th Cir.2005) (citation under noise ordinance: abstention); Majors v. Engelbrecht, 149 F.3d 709, 712 (7th Cir.1998) (nurse’s license suspended: abstention); Planned Parenthood of Greater Iowa, Inc. v. Atchison, 126 F.3d 1042, 1047 (8th Cir.1997) (challenge to administrative requirements for clinic construction: no abstention); O'Neill v. City of Philadelphia, 32 F.3d 785, 791 (3d Cir.1994) (parking ticket: abstention). The circuits have varied in their application of this distinction.

 

Based on these decisions, the Tenth Circuit identified three criteria for applying the coercive/remedial distinction: 1) Was the state proceeding initiated by the state or the federal plaintiff? 2) Does the federal suit seek to enjoin the state proceeding itself or to correct some other state action? 3) Was the federal plaintiff alleged to have committed some “bad act”?

 

Medicaid eligibility proceedings are remedial

 

The court held that a Medicaid beneficiary’s challenge to the termination of benefits is not the kind of case to which Younger applies, because it is remedial rather than coercive in nature. First, the state administrative proceeding was initiated by Brown, not the state. Second, Brown challenges the termination of her Medicaid benefits, not the state administrative proceedings that went against her. And third, “Brown committed no cognizable bad have that would have precipitated state coercive proceedings.” Accordingly, the court said that applying Younger abstention here would “divorce [the doctrine] from its traditional roots” in criminal prosecutions and closely analogous proceedings.

 

The upshot of this analysis would seem to be that Younger abstention is generally inapplicable to Medicaid eligibility or benefits disputes.

                                                                      

Is the state proceeding “ongoing”?

 

Because of the above holding, the panel did not decide whether a state proceeding is “ongoing” when a state agency has issued a final order but appeal to a state court was possible. The panel noted that this question is an open one, but declined to address it.

 

The dissent

 

Judge Tymkovich’s lengthy dissent is clearly aimed at securing en banc or Supreme Court review and at convincing other circuits to create a split. He points out that the Third, Fourth and Seventh Circuits “focus on the underlying nature and substance of the administrative proceedings,” rather than who initiated them, to determine whether they are coercive or remedial. Tymkovich argues that administrative review of Medicaid benefits termination is, in substance, a coercive procedure in which the state is “effectively the plaintiff” (since the state is obliged to provide a hearing whenever benefits are terminated). “From the perspective of the State of Kansas,” he protests, “Brown was an unlawful recipient of Medicaid benefits, and the state was acting in its enforcement role during Brown’s administrative proceedings.”

 

Tymkovich also argues that when a final administrative order can be appeal to state court, it is an “ongoing” state procedure for purposes of Younger abstention. Six circuits take this position – see the above-cited cases; but see Thomas v. Tex. State Bd. of Med. Exam'rs, 807 F.2d 453, 456 (5th Cir.1987). “Once Brown started down the path of administrative relief,” Tymkovich asserts, “Younger abstention prevents us from letting her detour into federal court in these circumstances. His contention that Brown’s choice to pursue administrative remedies destroys federal jurisdiction seems in tension with his argument that it is the state that is “essentially the plaintiff” in those proceedings.

 

Perversely, if this dissent were the law, Medicaid recipients with even colorable federal claims would have a substantial disincentive to pursue state administrative remedies instead of proceeding straight to federal court.