F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
AUG 16 2001
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
BEN LEWIS; AARON NORRID; BILLY
JO QUISENBERRY; ARC OF NEW
MEXICO, as legal guardian and next
friend of Fred Romero; JUDY LIDDELL,
as parent and legal guardian of Breanne
Liddell; JIM ALLEN, as parent and legal
guardian of Matthew Allen; ANGELA
ALLEN, as parent and legal guardian of
Matthew Allen; FAYE MORGAN;
DEBORAH EMINGER; PROTECTION &
ADVOCACY SYSTEM,
No. 00-2154
Plaintiffs - Appellees,
v.
NEW MEXICO DEPARTMENT OF
HEALTH; NEW MEXICO
DEPARTMENT OF HUMAN SERVICES;
J. ALEX VALDEZ, Secretary of the
Department of Health and Secretary
Designee of the Department of Human
Services in his official capacities; GARY
JOHNSON, Governor, in his official
capacity,
Defendants - Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D. Ct. No. CIV-99-21-MV)
Kurt Wihl, Keleher & McLeod, P.A., Albuquerque, New Mexico (Robyn
Hoffman, General Counsel, Barbara Glenn, Assistant General Counsel, Office of
the General Counsel, New Mexico Department of Health, Santa Fe, New Mexico,
and Charles A. Pharris and Gary J. Van Luchene, Keleher & McLeod, P.A.,
Albuquerque, New Mexico, with him on the briefs), for Appellant.
Maureen A. Sanders, Sanders & Westbrook, P.C., Albuquerque, New Mexico
(Duff Westbrook, Sanders & Westbrook, P.C., Albuquerque, New Mexico, and
V. Colleen Miller, Michael C. Parks, and Sandra L. Gomez, Protection &
Advocacy, Inc., Albuquerque, New Mexico, with her on the brief), for Appellee.
Before TACHA, Chief Judge, POLITZ, * and LUCERO, Circuit Judges.
TACHA, Chief Circuit Judge.
The defendants appeal the district court’s denial of their motions to dismiss
based on Eleventh Amendment immunity and Federal Rule of Civil Procedure
12(b)(6). Pursuant to the collateral order doctrine, we have jurisdiction under 28
U.S.C. § 1291 to review the district court’s denial of the defendants’ motion
asserting Eleventh Amendment immunity, see Puerto Rico Aqueduct & Sewer
Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 146-47 (1993), and we affirm the
district court’s denial of the motion. We decline, however, to exercise pendent
appellate jurisdiction over the district court’s denial of the defendants’ 12(b)(6)
motions.
Honorable Henry A. Politz, Senior Circuit Judge, United States Court of
*
Appeals for the Fifth Circuit, sitting by designation.
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I. Background
Medicaid is a cooperative federal-state program under which states
choosing to participate receive federal funds for state-administered Medicaid
services provided they comply with the requirements of the Medicaid Act, 42
U.S.C. §§ 1396 et seq., and its implementing regulations, 42 C.F.R. §§ 430 et.
seq. Under the Medicaid Act, a participating state may ask the Secretary of
Health and Human Services to provide a waiver allowing the state to pay for
home or community-based services as “medical assistance” under its approved
Medicaid plan. 42 U.S.C. § 1396n(c). New Mexico has chosen to participate in
Medicaid and has received a waiver from the Secretary allowing for the inclusion
of two “waiver services” in its plan: the Developmental Disabilities Home and
Community-Based Services Waiver and the Disabled and Elderly Home and
Community-Based Services Waiver.
In addition to an advocacy group called Protection and Advocacy, the
initial plaintiffs in this case were individuals who claimed they were eligible for
Medicaid services because of their physical or developmental disabilities or
because of their advanced age. 1 After applying for waiver services under New
1
Since the district court issued its decision, some of the individually
named plaintiffs in this case have received the waiver services for which they
applied. Others have unfortunately passed away. At this stage, none of these
plaintiffs remains a party in this case, leaving only the advocacy group. The
(continued...)
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Mexico’s Medicaid plan, the plaintiffs were placed on waiting lists for as many
as seven years. The plaintiffs argue that the state must provide the waiver
services to which they are entitled “with reasonable promptness” as required by
42 U.S.C. § 1396a(a)(8). Alleging violations under both the Medicaid Act and
the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 1201 et. seq., as well
as due process violations actionable under 42 U.S.C. § 1983, the plaintiffs
brought suit against two state agencies, the New Mexico Department of Health
and the New Mexico Department of Human Services. In addition, the plaintiffs
sued Alex Valdez in his official capacity as both Secretary of the Department of
Health and Secretary-Designee of the Department of Human Services, as well as
Governor Gary Johnson in his official capacity as Governor of New Mexico. The
plaintiffs seek a declaration that the defendants’ current administration of the
waiver services violates federal law and injunctive relief ordering the defendants
to comply with the Medicaid Act by providing waiver services with “reasonable
1
(...continued)
defendants do not, however, raise this issue. Although we would typically
consider the issue sua sponte, see Qwest Communications Int’l, Inc. v. Fed.
Communications Comm’n, 240 F.3d 886, 891 (10th Cir. 2001), we decline to do
so because of the procedural posture of this case. As several of our sister circuits
have recognized, the issue of standing does not meet all the elements of the
collateral order doctrine because it is not effectively unreviewable on appeal from
a final judgment. See, e.g., Summit Med. Assocs., P.C. v. Pryor, 180 F.3d 1326,
1334 (11th Cir. 1999) (citing cases from other circuits). We therefore express no
opinion concerning the advocacy group’s standing to bring this suit.
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promptness.”
The plaintiffs also initially sought injunctive relief under the ADA,
requesting that the state agencies provide them with services in the most
integrated setting appropriate to their needs. Since the district court issued its
order, however, the plaintiffs have voluntarily dismissed their ADA claim,
leaving only their § 1983 claims alleging violations of their federal rights under
the Medicaid Act and the Constitution. Accordingly, the only remaining
defendants are the two individuals named in their official capacities, narrowing
our inquiry concerning Eleventh Amendment immunity to whether the plaintiffs’
claims fall within the Ex parte Young doctrine, which allows plaintiffs to seek
prospective equitable relief for violations of federal law by state officials. We
conclude Ex parte Young applies and affirm the district court’s denial of the
defendants’ motion to dismiss based on Eleventh Amendment immunity.
II. Standard of Review
Because an assertion of Eleventh Amendment immunity involves questions
of law, we review the district court’s decision de novo. See Powder River Basin
Res. Council v. Babbitt, 54 F.3d 1477, 1483 (10th Cir. 1995); see also Dang v.
UNUM Life Ins. Co., 175 F.3d 1186, 1189 (10th Cir. 1999) (recognizing that
appellate court reviews questions of law de novo).
III. Eleventh Amendment Immunity
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Although citizens may not generally sue states in federal court under the
Eleventh Amendment, the Ex parte Young doctrine has carved out an alternative,
permitting citizens to seek prospective equitable relief for violations of federal
law committed by state officials in their official capacities. Ex parte Young, 209
U.S. 123, 159-60 (1908). In Elephant Butte Irrigation District of New Mexico v.
Department of the Interior, 160 F.3d 602 (10th Cir. 1998), we discussed at length
the Ex parte Young doctrine and the federal courts’ struggle to define it. In
addition, we specifically outlined the four-part inquiry required by Supreme
Court precedent, particularly Idaho v. Coeur d’Alene Tribe, 521 U.S. 261 (1997),
and Florida v. Treasure Salvors, Inc., 458 U.S. 670 (1982). See Elephant Butte
Irrigation Dist., 160 F.3d at 609. In order to conclude that the plaintiffs in this
case may proceed against the defendant state officials, we must find that the
following four requirements are met: (1) the plaintiffs are suing state officials,
rather than the state itself; (2) the plaintiffs have alleged a non-frivolous
violation of federal law; (3) the plaintiffs seek prospective equitable relief, rather
than retroactive monetary relief from the state treasury; and (4) the suit does not
implicate “special sovereignty interests.” Id. After addressing each of these
elements, we conclude the plaintiffs’ claims meet the requirements of the Ex
parte Young doctrine, and the defendants are therefore not immune from suit
under the Eleventh Amendment.
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A. Alleging a suit against state officials
The Ex parte Young doctrine allows plaintiffs to sue state officials even if
they claim to be acting under valid state law because, if the officials’ conduct
constitutes an ongoing violation of federal law, the state “cannot cloak their
actions with state authority or state immunity.” Id. That is, when state officials
are arguably violating federal law, “[t]he state is not the real party in interest
because the state cannot ‘authorize’ the officials to violate federal law.” Id. at
610. Hence, in allegedly violating federal law, the officials are stripped of their
state authority and the Eleventh Amendment will not protect them from suit. In
the case before us, the defendants are two state officials exercising considerable
control over the implementation and administration of the waiver services under
New Mexico’s Medicaid plan. The plaintiffs claim these officials, acting
pursuant to state authority, are violating federal law in failing to provide waiver
services to eligible individuals with “reasonable promptness.” The plaintiffs
have, therefore, properly sued state officials, rather than the state itself.
Moreover, we are not persuaded by the defendants’ contention that the
plaintiffs have failed to bring a permissible suit against state officials because the
relief would require that the courts interfere with discretionary, rather than
simply ministerial, acts by state officials. We have previously addressed the same
argument, noting that “[a]lthough this general premise is sound, Ex parte Young
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does not extend this rule to preclude judicial review of discretionary acts that
violate federal law.” Id. at 611. When plaintiffs establish a non-frivolous
violation of federal law, we have held we “will not deny jurisdiction solely on the
basis that a ruling might indirectly impact state officials’ discretionary acts.” Id.
The relief sought in the present case requires only that the court order state
officials to comply with federal law; because the court would not instruct the
defendants in how to use their discretion to comply, any impact on the official
exercise of discretion would be indirect.
B. Alleging a violation of federal law
We must next determine whether the plaintiffs have alleged a non-frivolous
claim for relief “that does not merely allege a violation of federal law solely for
the purpose of obtaining jurisdiction.” Id. at 610 (internal quotation marks
omitted). Although this question may rest on the later decision on the merits, we
have characterized the two steps as separate, distinct inquires. Id. As the
Supreme Court has recognized, a state official must act in violation of federal
law and therefore outside any delegated authority in order for plaintiffs to avoid
dismissal based on Eleventh Amendment immunity. See, e.g., Larson v.
Domestic & Foreign Commerce Corp., 337 U.S. 682, 689-90 (1949), cited
in Elephant Butte, 160 F.3d at 610. The question of whether state officials
violated federal law therefore affects both the initial immunity inquiry and the
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court’s ultimate decision on the merits. Id. at 690 & n.10. At the immunity
stage, however, federal courts apply the limited jurisdictional standard used to
assess whether a claim sufficiently confers subject matter jurisdiction, asking
only whether the claim is “wholly insubstantial and frivolous,” rather than
reaching the legal merits of the claim. Id.
Applying this standard, we conclude that the plaintiffs’ claims are not
“wholly insubstantial and frivolous.” Although the defendants argue that §
1396a(a)(8) fails to create a binding obligation on the state, the language of the
statute and implementing regulations discourages the dismissal of the plaintiffs’
statutory claim as frivolous. As in Wilder v. Virginia Hospital Association, 496
U.S. 498 (1990), the statute and implementing regulations at issue here are at
least arguably specific enough to create a binding obligation. See id. at 519-20;
see also Sutter v. Artist, 503 U.S. 347, 359 (1992) (noting the Court in Wilder
“relied in part on the fact that the statute and regulations set forth in some detail”
the relevant factors). Under § 1396a(a)(8), the state “must” facilitate
applications for medical assistance and “shall” furnish such assistance “with
reasonable promptness to all eligible individuals.” 42 U.S.C. § 1396a(a)(8). In
addition, the regulations require that states adopt time limits within certain
parameters for determining eligibility. 42 C.F.R. § 435.911. Given such specific
language, the claim that the statute creates a binding obligation on the states is
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not frivolous.
Although the defendants do not raise the argument, we note the more
difficult question for resolution on the merits is whether § 1396a(a)(8) creates a
federal right directly benefitting the plaintiffs in this case. In order to create a
federal right, the statute must reflect Congress’s clear intent to benefit directly
the particular plaintiffs in this case. See Blessing v. Freestone, 520 U.S. 329,
344-45 (1997). This question turns on whether the plaintiffs may be included as
“eligible individuals” under § 1396a(a)(8). Whether “eligible” means eligible for
Medicaid or eligible for both Medicaid and waiver services is not entirely clear.
But because construing this language involves a more complicated analysis of the
Medicaid statutes, the inquiry is more appropriately reserved for resolution on the
merits of the case. In light of the statute’s ambiguity, the plaintiffs have at least
alleged a non-frivolous claim.
Finally, although the plaintiffs allege a deprivation of both substantive and
procedural due process rights, we note their argument essentially alleges only a
deprivation of procedural due process. They argue that state officials have failed
to process their applications for waiver services in the manner required by federal
law; they do not, quite wisely, argue that the Medicaid statutes create a
substantive property interest in waiver services to which they are entitled. Again,
although we will not decide the merits, we do conclude that the plaintiffs’
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procedural due process claim survives the Ex parte Young inquiry because it is
not wholly insubstantial or frivolous. In fact, a determination of whether the
plaintiffs’ procedural due process rights have been violated depends on the
resolution of the plaintiffs’ statutory claim–whether the Medicaid statutes
actually create a federal statutory right to the reasonably prompt provision of
services.
C. Seeking permissible prospective equitable relief
Under the third element, we must find that the plaintiffs are seeking
prospective equitable relief, rather than retroactive monetary relief. As we have
recognized, however, in applying this distinction we ask “not whether the relief
will require the payment of state funds, but whether the relief will remedy future
rather than past wrongs.” Elephant Butte, 160 F.3d at 611 (internal quotation
marks omitted). Because the main question is whether the relief will remedy an
ongoing wrong rather than whether it will require payment of state funds, courts
may grant prospective relief with “a substantial ancillary effect on a state
treasury.” ANR Pipeline Co. v. Lafaver, 150 F.3d 1178, 1189 (10th Cir. 1998).
The plaintiffs in the case before us clearly seek prospective equitable relief: they
ask that state officials be compelled to comply with federal statutes that allegedly
entitle them to the reasonably prompt provision of waiver services. They are not,
for example, asking to be reimbursed for past home or community-based services.
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The relief sought simply requires “that officials conform their future actions to
federal law,” Elephant Butte, 160 F.3d at 611 (internal quotation marks omitted),
and any effect on the state treasury is, therefore, “ancillary.”
D. Implicating special sovereignty interests
In response to the Supreme Court’s decision in Coeur d’Alene, we
recognized: “[I]f we determine the relief Plaintiffs seek, although prospective and
not tantamount to a damages award, is an excessive intrusion into an area of
special state sovereign interest, Ex parte Young does not apply, and the Eleventh
Amendment bars the suit.” Elephant Butte, 160 F.3d at 611-12. The defendants
argue that the present action invades special sovereignty interests. But we may
easily dispense with this argument because, in J.B. ex rel. Hart v. Valdez, 186
F.3d 1280 (10th Cir. 1999), we held that a “state’s interest in administering a
welfare program at least partially funded by the federal government is not such a
core sovereign interest as to preclude the application of Ex parte Young.” Id. at
1287. We also noted that a “challenge to the administration of a welfare program
is not the equivalent of a suit for money damages, nor does it strike at the state’s
fundamental power, such as the power to tax.” Id. Moreover, one of the claims
in Valdez involved an alleged violation of the Medicaid Act, the same statutory
scheme at issue in the case before us. Because the plaintiffs in the present case
are challenging the administration of New Mexico’s Medicaid plan, we conclude
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it is analogous to Valdez and special sovereignty interests are not implicated.
IV. Pendent Jurisdiction
Because the district court’s denial of the defendants’ motions to dismiss
under Rule 12(b)(6) is not immediately appealable, they urge us to exercise our
pendent appellate jurisdiction, arguing that the 12(b)(6) inquiry is “inextricably
intertwined” with the second element of the Ex parte Young inquiry, which
requires us to determine whether the claim alleges a violation of federal law. We
have interpreted the Supreme Court’s discussion of pendent jurisdiction in Swint
v. Chambers County Commission, 514 U.S. 35 (1995), to permit pendent
appellate jurisdiction “only when the otherwise nonappealable decision is
‘inextricably intertwined’ with the appealable decision, or where review of the
nonappealable decision is necessary to ensure meaningful review of the
appealable decision.” Foote v. Spiegel, 118 F.3d 1416, 1423 (10th Cir. 1997).
In order for a nonappealable, or pendent, decision to be inextricably intertwined
with an appealable decision, “the pendent claim [must be] coterminous with or
subsumed in the properly appealable claim–that is, when resolution of the
properly appealable claim necessarily resolves the pendent claim.” Id. In
addition to recognizing that the discretionary exercise of pendent appellate
jurisdiction “is generally disfavored,” we have noted that the Supreme Court has
discouraged appellate courts from exercising pendent jurisdiction over otherwise
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interlocutory appeals. Armijo v. Wagon Mound Pub. Sch., 159 F.3d 1253, 1264
(10th Cir. 1998) (internal quotation marks omitted) (citing Swint, 514 U.S. at 50-
51).
Despite the interlocutory nature of the defendants’ nonappealable claims,
they argue that pendent jurisdiction is proper because the 12(b)(6) inquiry is
inextricably intertwined with the Ex parte Young inquiry into whether the
plaintiffs have alleged a violation of federal law. As we noted above, the
Supreme Court has, however, approached this part of the Ex parte Young
doctrine as a question of subject matter jurisdiction, which requires a less
demanding standard under which to review plaintiffs’ legal claims. See Larson,
337 U.S. at 689-90. In addressing the Ex parte Young scenario in which
defendant state officials acted beyond their authority in violation of federal law,
the Court has used the familiar language of Bell v. Hood, 327 U.S. 678, 682-83
(1946), recognizing a separate jurisdictional standard that requires dismissal only
when the claim is “‘made solely for the purpose of obtaining jurisdiction or . . . is
wholly insubstantial and frivolous.’” Larson, 337 U.S. at 690 n.10. In addition,
we have also held that once the issue of Eleventh Amendment immunity is raised
“such immunity constitutes a bar to the exercise of federal subject matter
jurisdiction.” Fent v. Ok. Water Res. Bd., 235 F.3d 553, 559 (10th Cir. 2000)
(emphasis added). Consequently, as a kind of exception to Eleventh Amendment
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immunity, the Ex parte Young doctrine is jurisdictional as well.
The Ex parte Young doctrine is therefore governed by precedent that
clearly distinguishes the initial jurisdictional inquiry from the 12(b)(6) inquiry.
The threshold necessary to sustain jurisdiction is well settled: “Jurisdiction . . . is
not defeated . . . by the possibility that the averments might fail to state a cause
of action on which petitioners could actually recover . . . .” Bell, 327 U.S. at
682; see also Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89 (1998) (“It
is firmly established in our cases that the absence of a valid (as opposed to
arguable) cause of action does not implicate subject-matter jurisdiction . . . .”).
Furthermore, our circuit, as well as the Supreme Court, has exercised jurisdiction
in cases with similar issues. For example, we have held that “[i]f the
applicability of the federal statute upon which a plaintiff relies is genuinely at
issue, the federal courts possess jurisdiction and should reach the merits of the
claim.” Davoll v. Webb, 194 F.3d 1116, 1129 (10th Cir. 1999); see also Steel
Co., 523 U.S. at 89 (“[T]he district court has jurisdiction if the right of the
petitioners to recover under their complaint will be sustained if the Constitution
and laws of the United States are given one construction and will be defeated if
they are given another . . . .”).
We have already determined that the plaintiffs in the present case have
alleged at least arguable violations of federal law sufficient to allow the suit to
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proceed to the merits. We need not, however, exercise pendent jurisdiction over
the district court’s denial of the defendants’ motions to dismiss under
Rule12(b)(6) because whether the plaintiffs have failed to state a claim upon
which relief may be granted is not inextricably intertwined with our jurisdictional
analysis under Ex parte Young and the Eleventh Amendment. Simply stated,
Rule 12(b)(6) and the Ex parte Young doctrine are two distinct inquiries
requiring the application of different standards.
Accordingly, we AFFIRM the district court’s denial of the defendants’
motion to dismiss based on Eleventh Amendment immunity and decline to
exercise pendent appellate jurisdiction over the remaining portions of the district
court’s order.
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