9th Cir. limits standing for Tenth Amendment claims

The Ninth Circuit held that the State of Oregon lacked standing to bring a Tenth Amendment/Spending Clause challenge to Legal Services Corporation (LSC) funding restrictions.

The court held the State suffered no injury to its sovereign legislative authority by virtue of a conflict between LSC restrictions and state guidelines for legal services programs. The court also held that the State could not assert injury based on its interest in regulating access to its justice system, because the State had no interest independent of the interests of private agencies who accept LSC funds. Oregon v. Legal Services Corp., --- F.3d ----, 2009 WL 37152 (9th Cir. Jan. 8, 2008) (No. 06-36012).

 

          In the past, States have asserted “coercion” claims to challenge provisions of laws such as Medicaid and the Individuals with Disabilities in Education Act (IDEA). Here, Oregon challenges LSC’s requirement of physical and financial separation between LSC-funded agencies and those that engage in restricted activities. 45 C.F.R. § 1610.8. These regulations conflict with Oregon State Bar guidelines that require consolidation of legal services programs serving the same geographic areas. Oregon argued that the LSC restrictions are unconstitutional because they are unduly coercive, and because they infringe on the State’s regulatory authority. The district court rejected these claims on the merits. Case No. 05-1443 (D.Or. Jul. 10, 2006) (read as PDF here). The case was formerly consolidated with an ultimately unsuccessful First Amendment challenge by legal services agencies. See Legal Aid Servs. of Or. v. LSC, 561 F.Supp.2d 1187 (D.Or. 2008). The Ninth Circuit, sua sponte, requested briefing on standing.

          The court began by noting that only states may bring Tenth Amendment challenges. But states can only bring such a claim if they suffer a direct injury. Where LSC places restrictions on funds to private parties, the court said, the state suffers no injury. Although the Supreme Court has suggested that, under some set of circumstances, federal spending conditions might be unconstitutionally “coercive,” South Dakota v. Dole, 483 U.S. 203 (1987), the court said that restrictions on funds to private entities cannot coerce the State. Neither could the State assert an infringement on its policymaking authority, because the LSC regulations do not displace Oregon’s guidelines; LSC restrictions only apply because private entities voluntarily accept LSC funds.

 

          The court also rejected standing under the parens patriae doctrine recognized in Massachusetts v. EPA, 549 U.S. 497 (2007). While states have standing “in situations involving the abatement of public nuisances, such as global warming,” the court said there would be “no effective way federal courts could ever limit parens patriae standing were a state allowed to bring suit on behalf of its citizens solely by virtue of its interest that its citizens benefit from voluntary federal grants.”

 

          Deciding the case on standing grounds allowed the panel to avoid addressing the viability of the “coercion” theory regarding federal funding, on which the Ninth Circuit has previously cast doubt. California v. U.S., 104 F.3d 548 (9th Cir. 1997). The district court had rejected the State’s contention that recent decisions breathed new life into “coercion” claims, saying discussions of coercion in recent Supreme Court and Fourth Circuit cases were mere dicta.