(Slip Opinion) OCTOBER TERM, 2012 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
WOS, SECRETARY, NORTH CAROLINA DEPARTMENT
OF HEALTH AND HUMAN SERVICES v. E. M. A., A
MINOR, BY AND THROUGH HER GUARDIAN AD LITEM,
JOHNSON, ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FOURTH CIRCUIT
No. 12–98. Argued January 8, 2013—Decided March 20, 2013
The federal Medicaid statute’s anti-lien provision, 42 U. S. C.
§1396p(a)(1), pre-empts a State’s effort to take any portion of a Medi-
caid beneficiary’s tort judgment or settlement not “designated as
payments for medical care,” Arkansas Dept. of Health and Human
Servs. v. Ahlborn, 547 U. S. 268, 284. A North Carolina statute re-
quires that up to one-third of any damages recovered by a beneficiary
for a tortious injury be paid to the State to reimburse it for payments
it made for medical treatment on account of the injury.
Respondent E. M. A. was born with multiple serious birth injuries
that require her to receive between 12 and 18 hours of skilled nursing
care per day and that will prevent her from being able to work, live
independently, or provide for her basic needs. North Carolina’s Med-
icaid program pays part of the cost of her ongoing medical care.
E. M. A. and her parents filed a medical malpractice suit against the
physician who delivered her and the hospital where she was born.
They presented expert testimony estimating their damages to exceed
$42 million, but they ultimately settled for $2.8 million, due in large
part to insurance policy limits. The settlement did not allocate mon-
ey among their various medical and nonmedical claims. In approving
the settlement, the state court placed one-third of the recovery into
escrow pending a judicial determination of the amount of the lien
owed by E. M. A. to the State. E. M. A. and her parents then sought
declaratory and injunctive relief in Federal District Court, claiming
that the State’s reimbursement scheme violated the Medicaid anti-
2 WOS v. E. M. A.
Syllabus
lien provision. While that litigation was pending, the North Carolina
Supreme Court held in another case that the irrebuttable statutory
one-third presumption was a reasonable method for determining the
amount due the State for medical expenses. The Federal District
Court, in the instant case, agreed. But the Fourth Circuit vacated
and remanded, concluding that the State’s statutory scheme could
not be reconciled with Ahlborn.
Held: The federal anti-lien provision pre-empts North Carolina’s irre-
buttable statutory presumption that one-third of a tort recovery is at-
tributable to medical expenses. Pp. 4–16.
(a) In Ahlborn, the Court held that the federal Medicaid statute
sets both a floor and a ceiling on a State’s potential share of a benefi-
ciary’s tort recovery. Federal law requires an assignment to the
State of “the right to recover that portion of a settlement that repre-
sents payments for medical care,” but also “precludes attachment or
encumbrance of the remainder of the settlement.” 547 U. S., at 282,
284. Ahlborn did not, however, resolve the question of how to deter-
mine what portion of a settlement represents payment for medical
care. As North Carolina construes its statute, when the State’s Med-
icaid expenditures exceed one-third of a beneficiary’s tort recovery,
the statute establishes a conclusive presumption that one-third of
the recovery represents compensation for medical expenses, even if the
settlement or verdict expressly allocates a lower percentage of the
judgment to medical expenses. Pp. 4–7.
(b) North Carolina’s law is pre-empted insofar as it would permit
the State to take a portion of a Medicaid beneficiary’s tort judgment
or settlement not designated for medical care. It directly conflicts
with the federal Medicaid statute and therefore “must give way.”
PLIVA, Inc. v. Mensing, 564 U. S. ___, ___. The state law has no pro-
cess for determining what portion of a beneficiary’s tort recovery is
attributable to medical expenses. Instead, the State has picked an
arbitrary percentage and by statutory command labeled that portion
of a beneficiary’s tort recovery as representing payment for medical
care. A State may not evade pre-emption through creative statutory
interpretation or description, “framing” its law in a way that is at
odds with the statute’s intended operation and effect. National Meat
Assn. v. Harris, 565 U. S. ___, ___. North Carolina’s argument, if ac-
cepted, would frustrate the Medicaid anti-lien provision in the con-
text of tort recoveries. It lacks any limiting principle: If a State could
arbitrarily designate one-third of any recovery as payment for medi-
cal expenses, it could arbitrarily designate half or all of the recovery
in the same way. The State offers no evidence showing that its allo-
cation is reasonable in the mine run of cases, and the law provides no
mechanism for determining whether its allocation is reasonable in
Cite as: 568 U. S. ____ (2013) 3
Syllabus
any particular case.
No estimate of an allocation will be necessary where there has been
a judicial finding or approval of an allocation between medical and
nonmedical damages. In some cases, including Ahlborn, this binding
stipulation or judgment will attribute to medical expenses less than
one-third of the settlement. Yet even in these circumstances, North
Carolina’s statute would permit the State to take one-third of the to-
tal recovery. A conflict thus exists between North Carolina’s law and
the Medicaid anti-lien provision.
This case is not as clear-cut as Ahlborn was, for here there was no
such stipulation or judgment. But Ahlborn’s reasoning and the fed-
eral statute’s design contemplate that possibility: They envisioned
that a judicial or administrative proceeding would be necessary
where a beneficiary and the State are unable to agree on what por-
tion of a settlement represents compensation for medical expenses.
See 547 U. S., at 288. North Carolina’s irrebuttable, one-size-fits-all
statutory presumption is incompatible with the Medicaid Act’s clear
mandate that a State may not demand any portion of a beneficiary’s
tort recovery except the share that is attributable to medical ex-
penses. Pp. 7–10.
(c) None of North Carolina’s responses to this reasoning is persua-
sive. Pp. 10–15.
674 F. 3d 290, affirmed.
KENNEDY, J., delivered the opinion of the Court, in which GINSBURG,
BREYER, ALITO, SOTOMAYOR, and KAGAN, JJ., joined. BREYER, J., filed a
concurring opinion. ROBERTS, C. J., filed a dissenting opinion, in which
SCALIA and THOMAS, JJ., joined.
Cite as: 568 U. S. ____ (2013) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 12–98
_________________
ALDONA WOS, SECRETARY, NORTH CAROLINA
DEPARTMENT OF HEALTH AND HUMAN SER-
VICES, PETITIONER v. E. M. A., A MINOR, BY
AND THROUGH HER GUARDIAN AD LITEM,
DANIEL H. JOHNSON, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FOURTH CIRCUIT
[March 20, 2013]
JUSTICE KENNEDY delivered the opinion of the Court.
A federal statute prohibits States from attaching a lien
on the property of a Medicaid beneficiary to recover ben-
efits paid by the State on the beneficiary’s behalf. 42
U. S. C. §1396p(a)(1). The anti-lien provision pre-empts a
State’s effort to take any portion of a Medicaid benefi-
ciary’s tort judgment or settlement not “designated as pay-
ments for medical care.” Arkansas Dept. of Health and
Human Servs. v. Ahlborn, 547 U. S. 268, 284 (2006).
North Carolina has enacted a statute requiring that up to
one-third of any damages recovered by a beneficiary for a
tortious injury be paid to the State to reimburse it for pay-
ments it made for medical treatment on account of the in-
jury. See N. C. Gen. Stat. Ann. §108A–57 (Lexis 2011);
Andrews v. Haygood, 362 N. C. 599, 604–605, 669 S. E. 2d
310, 314 (2008). The question presented is whether the
North Carolina statute is compatible with the federal anti-
lien provision.
2 WOS v. E. M. A.
Opinion of the Court
I
When respondent E. M. A. was born in February 2000,
she suffered multiple serious birth injuries which left her
deaf, blind, and unable to sit, walk, crawl, or talk. The
injuries also cause her to suffer from mental retardation
and a seizure disorder. She requires between 12 and 18
hours of skilled nursing care per day. She will not be able
to work, live independently, or provide for her basic needs.
The cost of her ongoing medical care is paid in part by the
State of North Carolina’s Medicaid program.
In February 2003, E. M. A. and her parents filed a
medical malpractice suit in North Carolina state court
against the physician who delivered E. M. A. at birth and
the hospital where she was born. The expert witnesses for
E. M. A. and her parents in that proceeding estimated
damages in excess of $42 million for medical and life-care
expenses, loss of future earning capacity, and other as-
sorted expenses such as architectural renovations to their
home and specialized transportation equipment. App. 91–
112. By far the largest part of this estimate was for
“Skilled Home Care,” totaling more than $37 million over
E. M. A.’s lifetime. Id., at 112. E. M. A. and her parents
also sought damages for her pain and suffering and for
her parents’ emotional distress. Id., at 64–65, 67–68, 72–73,
75–76. Their experts did not estimate the damages in
these last two categories.
Assisted by a mediator, the parties began settlement
negotiations. E. M. A. and her parents informed the North
Carolina Department of Health and Human Services of
the negotiations. The department had a statutory right
to intervene in the malpractice suit and participate in the
settlement negotiations in order to obtain reimbursement
for the medical expenses it paid on E. M. A.’s behalf, up to
one-third of the total recovery. See N. C. Gen. Stat. Ann.
§§108A–57, 108A–59. It elected not to do so, though its
representative informed E. M. A. and her parents that the
Cite as: 568 U. S. ____ (2013) 3
Opinion of the Court
State’s Medicaid program had expended $1.9 million for
E. M. A.’s medical care, which it would seek to recover
from any tort judgment or settlement.
In November 2006, the court approved a $2.8 million
settlement. The amount, apparently, was dictated in large
part by the policy limits on the defendants’ medical mal-
practice insurance coverage. See Brief for Respondents 5.
The settlement agreement did not allocate the money
among the different claims E. M. A. and her parents had
advanced. In approving the settlement the court placed
one-third of the $2.8 million recovery into an interest-
bearing escrow account “until such time as the actual
amount of the lien owed by [E. M. A.] to [the State] is con-
clusively judicially determined.” App. 87.
E. M. A. and her parents then filed this action under
Rev. Stat. §1979, 42 U. S. C. §1983, in the United States
District Court for the Western District of North Carolina.
They sought declaratory and injunctive relief, arguing
that the State’s reimbursement scheme violated the Medi-
caid anti-lien provision, §1396p(a)(1). While that litiga-
tion was pending, the North Carolina Supreme Court con-
fronted the same question in Andrews, supra. It held that
the irrebuttable statutory presumption that one-third of
a Medicaid beneficiary’s tort recovery is attributable to
medical expenses was “a reasonable method for determin-
ing the State’s medical reimbursements.” Id., at 604, 669
S. E. 2d, at 314. The United States District Court, in the
instant case, agreed. Armstrong v. Cansler, 722 F. Supp.
2d 653 (2010).
The Court of Appeals for the Fourth Circuit vacated and
remanded. E. M. A. v. Cansler, 674 F. 3d 290 (2012). It
concluded that North Carolina’s statutory scheme could
not be reconciled with “Ahlborn’s clear holding that the
general anti-lien provision in federal Medicaid law prohib-
its a state from recovering any portion of a settlement or
judgment not attributable to medical expenses.” Id., at
4 WOS v. E. M. A.
Opinion of the Court
310. In some cases, the court reasoned, the actual portion
of a beneficiary’s tort recovery representing payment for
medical care would be less than one-third. North Caro-
lina’s statutory presumption that one-third of a tort recov-
ery is attributable to medical expenses therefore must be
“subject to adversarial testing” in a judicial or administra-
tive proceeding. Id., at 311.
To resolve the conflict between the opinion of the Court
of Appeals in this case and the decision of the North Caro-
lina Supreme Court in Andrews, this Court granted certio-
rari. 567 U. S. ___ (2012).
II
At issue is the interaction between certain provisions of
the federal Medicaid statute and state law. Congress has
directed States, in administering their Medicaid programs,
to seek reimbursement for medical expenses incurred on
behalf of beneficiaries who later recover from third-party
tortfeasors. States must require beneficiaries “to assign
the State any rights . . . to support (specified as support
for the purpose of medical care by a court or administra-
tive order) and to payment for medical care from any third
party.” 42 U. S. C. §1396k(a)(1)(A). States receiving Medi-
caid funds must also
“ha[ve] in effect laws under which, to the extent that
payment has been made under the State plan for med-
ical assistance for health care items or services fur-
nished to an individual, the State is considered to
have acquired the rights of such individual to pay-
ment by any other party for such health care items or
services.” §1396a(a)(25)(H).
A separate provision of the Medicaid statute, however,
exists in some tension with these requirements. It says
that, with exceptions not relevant here, “[n]o lien may be
imposed against the property of any individual prior to his
Cite as: 568 U. S. ____ (2013) 5
Opinion of the Court
death on account of medical assistance paid or to be paid
on his behalf under the State plan.” §1396p(a)(1).
In Ahlborn, the Court addressed this tension and held
that the Medicaid statute sets both a floor and a ceiling
on a State’s potential share of a beneficiary’s tort recovery.
Federal law requires an assignment to the State of “the
right to recover that portion of a settlement that repre-
sents payments for medical care,” but it also “precludes
attachment or encumbrance of the remainder of the set-
tlement.” 547 U. S., at 282, 284. This is so because the
beneficiary has a property right in the proceeds of the
settlement, bringing it within the ambit of the anti-lien
provision. Id., at 285. That property right is subject to
the specific statutory “exception” requiring a State to seek
reimbursement for medical expenses paid on the benefi-
ciary’s behalf, but the anti-lien provision protects the
beneficiary’s interest in the remainder of the settlement.
Id., at 284.
A question the Court had no occasion to resolve in Ahl-
born is how to determine what portion of a settlement
represents payment for medical care. The parties in that
case stipulated that about 6 percent of respondent Ahl-
born’s tort recovery (approximately $35,600 of a $550,000
settlement) represented compensation for medical care.
Id., at 274. The Court nonetheless anticipated the concern
that some settlements would not include an itemized
allocation. It also recognized the possibility that Medicaid
beneficiaries and tortfeasors might collaborate to allocate
an artificially low portion of a settlement to medical ex-
penses. The Court noted that these problems could “be
avoided either by obtaining the State’s advance agreement
to an allocation or, if necessary, by submitting the matter
to a court for decision.” Id., at 288.
North Carolina has attempted a different approach. Its
statute provides:
6 WOS v. E. M. A.
Opinion of the Court
“Notwithstanding any other provisions of the law, to
the extent of payments under this Part, the State, or
the county providing medical assistance benefits, shall
be subrogated to all rights of recovery, contractual
or otherwise, of the beneficiary of this assistance . . . .
The county attorney, or an attorney retained by the
county or the State or both, or an attorney retained by
the beneficiary of the assistance if this attorney has
actual notice of payments made under this Part shall
enforce this section. Any attorney retained by the
beneficiary of the assistance shall, out of the proceeds
obtained on behalf of the beneficiary by settlement
with, judgment against, or otherwise from a third
party by reason of injury or death, distribute to the
Department the amount of assistance paid by the
Department on behalf of or to the beneficiary, as
prorated with the claims of all others having medical
subrogation rights or medical liens against the
amount received or recovered, but the amount paid to
the Department shall not exceed one-third of the gross
amount obtained or recovered.” N. C. Gen. Stat. Ann.
§108A–57(a).
Before Ahlborn was decided, North Carolina and the
state courts interpreted this statute to allow the State to
“recover the costs of medical treatment provided . . . even
when the funds received by the [beneficiary] are not re-
imbursement for medical expenses.” Campbell v. North
Carolina Dept. of Human Resources, 153 N. C. App. 305,
307–308, 569 S. E. 2d 670, 672 (2002). See also Ezell
v. Grace Hospital, Inc., 360 N. C. 529, 631 S. E. 2d
131 (2006) (per curiam). Under Ahlborn, however, this
construction of the statute is at odds with the Medicaid
anti-lien provision, which “precludes attachment or encum-
brance” of any portion of a settlement not “designated as
payments for medical care.” 547 U. S., at 284.
Cite as: 568 U. S. ____ (2013) 7
Opinion of the Court
In response to Ahlborn, the State advanced—and the
North Carolina Supreme Court in Andrews accepted—
a new interpretation of its statute. Under this interpreta-
tion the statute “defines ‘the portion of the settlement that
represents payment for medical expenses’ as the lesser of
the State’s past medical expenditures or one-third of the
plaintiff ’s total recovery.” Andrews, 362 N. C., at 604,
669 S. E. 2d, at 314. In other words, when the State’s
Medicaid expenditures on behalf of a beneficiary exceed
one-third of the beneficiary’s tort recovery, the statute
establishes a conclusive presumption that one-third of the
recovery represents compensation for medical expenses.
Under this reading of the statute the presumption oper-
ates even if the settlement or a jury verdict expressly
allocates a lower percentage of the judgment to medical
expenses. See Tr. of Oral Arg. 10, 16–17. Cf. Andrews,
supra, at 602–604, 669 S. E. 2d, at 313.
III
A
Under the Supremacy Clause, “[w]here state and federal
law ‘directly conflict,’ state law must give way.” PLIVA,
Inc. v. Mensing, 564 U. S. ___, ___ (2011) (slip op., at 11).
The Medicaid anti-lien provision prohibits a State from
making a claim to any part of a Medicaid beneficiary’s
tort recovery not “designated as payments for medical care.”
Ahlborn, supra, at 284. North Carolina’s statute, there-
fore, is pre-empted if, and insofar as, it would operate that
way.
And it is pre-empted for that reason. The defect in
§108A–57 is that it sets forth no process for determining
what portion of a beneficiary’s tort recovery is attributable
to medical expenses. Instead, North Carolina has picked
an arbitrary number—one-third—and by statutory com-
mand labeled that portion of a beneficiary’s tort recovery
as representing payment for medical care. Pre-emption is
8 WOS v. E. M. A.
Opinion of the Court
not a matter of semantics. A State may not evade the
pre-emptive force of federal law by resorting to creative
statutory interpretation or description at odds with the
statute’s intended operation and effect.
A similar issue was presented last Term, in National
Meat Assn. v. Harris, 565 U. S. ___ (2012). That case
involved the pre-emptive scope of the Federal Meat In-
spection Act, 21 U. S. C. §601 et seq. The Act prohibited
States from imposing “ ‘[r]equirements . . . with respect to
premises, facilities and operations’ ” at federally regulated
slaughterhouses. National Meat Assn., 565 U. S., at ___
(slip op., at 4) (quoting §678). The State of California
had enacted a law that prohibited slaughterhouses from
(among other things) selling meat from nonambulatory ani-
mals for human consumption. Id., at ___ (slip op., at 5)
(citing Cal. Penal Code Ann. §599f(b) (West 2010)). Cali-
fornia sought to defend the law on the ground that it did
not regulate the activities of slaughterhouses but instead
restricted what type of meat could be sold in the market-
place after the animals had been butchered. 565 U. S., at
___–___ (slip op., at 9–10).
The Court rejected that argument. It recognized that
if the argument were to prevail, “then any State could im-
pose any regulation on slaughterhouses just by framing it
as a ban on the sale of meat produced in whatever way
the State disapproved. That would make a mockery of the
[Act’s] preemption provision.” Id., at ___ (slip op., at 10).
In a pre-emption case, the Court held, a proper analysis
requires consideration of what the state law in fact does,
not how the litigant might choose to describe it.
That reasoning controls here. North Carolina’s argu-
ment, if accepted, would frustrate the Medicaid anti-lien
provision in the context of tort recoveries. The argument
lacks any limiting principle: If a State arbitrarily may
designate one-third of any recovery as payment for medi-
cal expenses, there is no logical reason why it could not
Cite as: 568 U. S. ____ (2013) 9
Opinion of the Court
designate half, three-quarters, or all of a tort recovery in
the same way. In Ahlborn, the State of Arkansas, under
this rationale, would have succeeded in claiming the full
amount it sought from the beneficiary had it been more
creative and less candid in describing the effect of its full-
reimbursement law.
Here the State concedes that it would be “difficult . . . to
defend” a law purporting to allocate most or all of a benefi-
ciary’s tort recovery to medical expenses. Tr. of Oral Arg.
20. That is true; but, as a doctrinal matter, it is no eas-
ier to defend North Carolina’s across-the-board allocation
of one-third of all beneficiaries’ tort recoveries to medical ex-
penses. The problem is not that it is an unreasonable ap-
proximation in all cases. In some cases, it may well be a
fair estimate. But the State provides no evidence to sub-
stantiate its claim that the one-third allocation is reason-
able in the mine run of cases. Nor does the law provide
a mechanism for determining whether it is a reasonable
approximation in any particular case.
In some instances, no estimate will be necessary or
appropriate. When there has been a judicial finding or
approval of an allocation between medical and nonmedical
damages—in the form of either a jury verdict, court de-
cree, or stipulation binding on all parties—that is the end
of the matter. Ahlborn was a case of this sort. All parties
(including the State of Arkansas) stipulated that approxi-
mately 6 percent of the plaintiff ’s settlement represented
payment for medical costs. 547 U. S., at 274. In other
cases a settlement may not be reached and the judge or
jury, in its findings, may make an allocation. With a
stipulation or judgment under this procedure, the anti-lien
provision protects from state demand the portion of a
beneficiary’s tort recovery that the stipulation or judgment
does not attribute to medical expenses.
North Carolina’s statute, however, operates to allow the
State to take one-third of the total recovery, even if a
10 WOS v. E. M. A.
Opinion of the Court
proper stipulation or judgment attributes a smaller per-
centage to medical expenses. Consider the facts of Ahl-
born. There, only $35,581.47 of the beneficiary’s settle-
ment “constituted reimbursement for medical payments
made.” Ibid. North Carolina’s statute, had it been applied
in Ahlborn, would have allowed the State to claim
$183,333.33 (one-third of the beneficiary’s $550,000 set-
tlement). A conflict thus exists between North Carolina’s
law and the Medicaid anti-lien provision.
The instant case, to be sure, is not quite so clear cut; for
there was no allocation of the settlement by either judi-
cial decree or binding stipulation of the parties. But the
reasoning of Ahlborn and the design of the federal statute
contemplate that possibility. When the State and the
beneficiary are unable to agree on an allocation, Ahlborn
noted, the parties could “submi[t] the matter to a court for
decision.” Id., at 288.
The facts of the present case demonstrate why Ahlborn
anticipated that a judicial or administrative proceeding
would be necessary in that situation. Of the damages
stemming from the injuries E. M. A. suffered at birth, it is
apparent that a quite substantial share must be allocated
to the skilled home care she will require for the rest of
her life. See App. 112. It also may be necessary to consider
how much E. M. A. and her parents could have expected to
receive as compensation for their other tort claims had the
suit proceeded to trial. An irrebuttable, one-size-fits-all
statutory presumption is incompatible with the Medicaid
Act’s clear mandate that a State may not demand any por-
tion of a beneficiary’s tort recovery except the share that
is attributable to medical expenses.
B
North Carolina offers responses to this reasoning, but
none is persuasive.
First, the State asserts that it is doing nothing more
Cite as: 568 U. S. ____ (2013) 11
Opinion of the Court
than what Ahlborn said it could do: “adop[t] special rules
and procedures for allocating tort settlements.” 547 U. S.,
at 288, n. 18. This misreads Ahlborn. There the Court,
citing an amicus brief, referred to judicial proceedings
some States had established for allocating tort settlements
where necessary for insurance or tax purposes. See Brief
for Association of Trial Lawyers of America, O. T. 2005,
No. 04–1506, pp. 20–21 (citing Henning v. Wineman, 306
N. W. 2d 550 (Minn. 1981), and Rimes v. State Farm Mut.
Auto. Ins. Co., 106 Wis. 2d 263, 316 N. W. 2d 348 (1982)).
Those examples illustrated the kind of “special rules and
procedures for allocating tort settlements” that Ahlborn con-
sidered. The decision did not endorse irrebuttable pre-
sumptions that designate some arbitrary fraction of a tort
judgment to medical expenses in all cases.
Second, North Carolina contends that its law falls with-
in the scope of a State’s traditional authority to regulate
tort actions, including the amount of damages that a party
may recover. This argument begins from a correct prem-
ise: In our federal system, there is no question that States
possess the “traditional authority to provide tort remedies
to their citizens” as they see fit. Silkwood v. Kerr-McGee
Corp., 464 U. S. 238, 248 (1984). But North Carolina’s law
is not an exercise of the State’s general authority to regu-
late its tort system. It does not limit tort plaintiffs’ ability
to recover for certain types of nonmedical damages, and
it does not say that medical damages are to be privileged
above other damages in tort suits. All it seeks to do is to
allocate the share of damages attributable to medical
expenses in tort suits brought by Medicaid beneficiaries.
A statute that singles out Medicaid beneficiaries in this
manner cannot avoid compliance with the federal anti-lien
provision merely by relying upon a connection to an area
of traditional state regulation.
Third, North Carolina suggests that even though its
allocation of one-third of a tort recovery to medical ex-
12 WOS v. E. M. A.
Opinion of the Court
penses may be arbitrary, other methods for allocating a
recovery would be just as arbitrary. In the State’s view
there is no “ascertainable ‘true value’ of [a] case that
should control what portion of any settlement is subject
to the State’s third-party recovery rights.” Brief for Peti-
tioner 26–27. As explained earlier, allocations, while to
some extent perhaps not precise, need not be arbitrary. See
supra, at 9–10. In some cases a judgment or stipulation
binding on all parties will allocate the plaintiff ’s recovery
across different claims. Where no such judgment or stipu-
lation exists, a fair allocation of such a settlement may be
difficult to determine. Trial judges and trial lawyers,
however, can find objective benchmarks to make projec-
tions of the damages the plaintiff likely could have proved
had the case gone to trial.
In the instant case, for example, the North Carolina
trial court approved the settlement only after finding that
it constituted “fair and just compensation” to E. M. A. and
her parents for her “severe and debilitating injuries”; for
“medical and life care expenses” her condition will require;
and for “severe emotional distress” from her injuries. App.
82. What portion of this lump-sum settlement constitutes
“fair and just compensation” for each individual claim will
depend both on how likely E. M. A. and her parents would
have been to prevail on the claims at trial and how much
they reasonably could have expected to receive on each
claim if successful, in view of damages awarded in compa-
rable tort cases.
This relates to North Carolina’s fourth argument: that
it would be “wasteful, time consuming, and costly” to hold
“frequent mini-trials” in order to divide a settlement be-
tween medical and nonmedical expenses. Brief for Peti-
tioner 28. Even if that were true, it would not relieve
the State of its obligation to comply with the terms of the
Medicaid anti-lien provision. And it is not true as a
general proposition. States have considerable latitude to
Cite as: 568 U. S. ____ (2013) 13
Opinion of the Court
design administrative and judicial procedures to ensure
a prompt and fair allocation of damages. Sixteen States
and the District of Columbia provide for hearings of this
sort, and there is no indication that they have proved bur-
densome. Brief for United States as Amicus Curiae 28–
29, and n. 7. See, e.g., Cal. Welf. & Inst. Code Ann.
§14124.76(a) (West 2011); Mo. Rev. Stat. §§208.215.9–11
(2012); Tenn. Code Ann. §§71–5–117(g)–(i) (2012); In re
E. B., 229 W. Va. 435, ___, 729 S. E. 2d 270, 297 (2012).
Many of these States have established rebuttable pre-
sumptions and adjusted burdens of proof to ensure that
speculative assessments of a plaintiff ’s likely recovery do
not defeat the State’s right to recover medical costs, a
concern North Carolina raises. See, e.g., Haw. Rev. Stat.
§346–37(h) (2011 Cum. Supp.) (rebuttable presumption of
a one-third allocation); Mass. Gen. Laws, ch. 118E, §22(c)
(West 2010) (rebuttable presumption of full reimburse-
ment); Okla. Stat., Tit. 63, §5051.1(D)(1)(d) (West 2011)
(rebuttable presumption of full reimbursement, “unless a
more limited allocation of damages to medical expenses is
shown by clear and convincing evidence”). Without hold-
ing that these rules are necessarily compliant with the
federal statute, it can be concluded that they are more
accurate than the procedure North Carolina has enacted.
The task of dividing a tort settlement is a familiar one.
In a variety of settings, state and federal courts are called
upon to separate lump-sum settlements or jury awards
into categories to satisfy different claims to a portion of
the moneys recovered. See supra, at 11. See also, e.g.,
Green v. Commissioner, 507 F. 3d 857, 867–868 (CA5
2007) (separation of compensatory from noncompensatory
damages for tax purposes); Donnel v. United States, 50
Fed. Cl. 375, 386–387 (2001) (separation of employee
severance bonus from other payments for tax purposes);
In re Harrison, 306 B. R. 172, 182–183 (Bkrtcy. Ct. ED
Tex. 2003) (separation of pain-and-suffering damages from
14 WOS v. E. M. A.
Opinion of the Court
other damages for purposes of bankruptcy exemption);
Colorado Compensation Ins. Auth. v. Jones, 131 P. 3d
1074, 1077–1078 (Colo. App. 2005) (separation of economic
from noneconomic damages for purposes of insurance sub-
rogation); Spangler v. North Star Drilling Co., 552 So.
2d 673, 685 (La. App. 1989) (separation of past dam-
ages from future damages for purposes of calculating pre-
judgment interest). Indeed, North Carolina itself uses a
judicial allocation procedure to ascertain the portion of a
settlement subject to subrogation in a workers’ compensa-
tion suit. It instructs trial courts to
“consider the anticipated amount of prospective com-
pensation the employer or workers’ compensation car-
rier is likely to pay to the employee in the future, the
net recovery to plaintiff, the likelihood of the plaintiff
prevailing at trial or on appeal, the need for finality in
the litigation, and any other factors the court deems
just and reasonable.” N. C. Gen. Stat. Ann. §97–
10.2(j) (Lexis 2011).
North Carolina would be on sounder footing had it adopted
a similar procedure for allocating Medicaid beneficiaries’
tort recoveries. It might also consider a different one
along the lines of what other States have done in Medicaid
reimbursement cases.
The State thus has ample means available to allocate
Medicaid beneficiaries’ tort recoveries in an efficient man-
ner that complies with federal law. Indeed, if States are
concerned that case-by-case judicial allocations will prove
unwieldy, they may even be able to adopt ex ante adminis-
trative criteria for allocating medical and nonmedical
expenses, provided that these criteria are backed by evi-
dence suggesting that they are likely to yield reasonable
results in the mine run of cases. What they cannot do is
what North Carolina did here: adopt an arbitrary, one-
size-fits-all allocation for all cases.
Cite as: 568 U. S. ____ (2013) 15
Opinion of the Court
Fifth, and finally, North Carolina contends that in two
documents—a July 2006 memorandum and a December
2009 letter responding to an inquiry from a member
of North Carolina’s congressional delegation—the federal
Centers for Medicare and Medicaid Services approved of
North Carolina’s statutory scheme for Medicaid reim-
bursement. In the State’s view, these agency pronounce-
ments are entitled to deference. See Brief for Petitioner
33–36 (citing Chevron U. S. A. Inc. v. Natural Resources
Defense Council, Inc., 467 U. S. 837 (1984)).
The 2006 and 2009 documents, however, no longer re-
flect the agency’s position. See Brief for United States
as Amicus Curiae 8–34. And at any rate, the documents
are opinion letters, not regulations with the force of law.
We have held that “[i]nterpretations such as those in
opinion letters—like interpretations contained in policy
statements, agency manuals, and enforcement guidelines,
all of which lack the force of law—do not warrant Chevron-
style deference.” Christensen v. Harris County, 529 U. S.
576, 587 (2000). These documents are “ ‘entitled to re-
spect’ ” in proportion to their “ ‘power to persuade.’ ” Ibid.
(quoting Skidmore v. Swift & Co., 323 U. S. 134, 140
(1944)). Insofar as the 2006 and 2009 documents approve
of North Carolina’s statute, they lack persuasive force for
the reasons discussed above.
* * *
The law here at issue, N. C. Gen. Stat. Ann. §108A–57,
reflects North Carolina’s effort to comply with federal law
and secure reimbursement from third-party tortfeasors for
medical expenses paid on behalf of the State’s Medicaid
beneficiaries. In some circumstances, however, the stat-
ute would permit the State to take a portion of a Medicaid
beneficiary’s tort judgment or settlement not “designated
as payments for medical care.” Ahlborn, 547 U. S., at 284.
The Medicaid anti-lien provision, 42 U. S. C. §1396p(a)(1),
16 WOS v. E. M. A.
Opinion of the Court
bars that result.
The judgment of the Court of Appeals for the Fourth
Circuit is affirmed.
It is so ordered.
Cite as: 568 U. S. ____ (2013) 1
BREYER, J., concurring
SUPREME COURT OF THE UNITED STATES
_________________
No. 12–98
_________________
ALDONA WOS, SECRETARY, NORTH CAROLINA
DEPARTMENT OF HEALTH AND HUMAN SER-
VICES, PETITIONER v. E. M. A., A MINOR, BY
AND THROUGH HER GUARDIAN AD LITEM,
DANIEL H. JOHNSON, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FOURTH CIRCUIT
[March 20, 2013]
JUSTICE BREYER, concurring.
I join the Court’s opinion with one qualification: My
concurrence in the Court’s views rests in part upon the
fact that the federal agency that administers the Medicaid
statute, known as the Centers for Medicare & Medicaid
Services, has reached the same conclusion.
The question before us is how to measure what share of
a judgment or settlement of an accident victim’s lawsuit
represents payment (or reimbursement) for health care
items (or services) for which a State has already paid on
behalf of the victim. The statute is silent on the question.
It simply says that a State may recover the amount of
“payment” that the State has made on behalf of the
victim “for medical assistance for health care items or
services” from funds that “any other party” has paid “for
such health care items or services.” 42 U. S. C.
§1396a(a)(25)(H). Moreover, the question focuses upon
a comparatively minor matter of statutory detail, not a
major issue of far-reaching statutory policy. It concerns
everyday administration. It calls for expertise of a kind
that the administering agency is more likely than a court
to possess. And any of several different answers to the
2 WOS v. E. M. A.
BREYER, J., concurring
question would seem reasonable. Under these circum-
stances, normally we should find that Congress delegated
to the agency authority to fill the statutory gap, and we
should uphold the agency’s conclusion as long as it is
reasonable. See Chevron U. S. A. Inc. v. Natural Re-
sources Defense Council, Inc., 467 U. S. 837, 844 (1984).
Here, however, the agency did not engage in rulemaking
procedures, it did not carefully consider differing points of
view of those affected, it did not set forth its views in a
manual intended for widespread use, nor has it in any
other way announced an interpretation that Congress
would have “intended . . . to carry the force of law.” United
States v. Mead Corp., 533 U. S. 218, 221 (2001). Indeed,
the agency does not claim that it exercised any dele-
gated legislative power.
Neither do the documents in which the agency set forth
its position (a memorandum and a letter) have much
“ ‘power to persuade.’ ” Christensen v. Harris County, 529
U. S. 576, 587 (2000) (quoting Skidmore v. Swift & Co.,
323 U. S. 134, 140 (1944)). Their reasoning is skimpy.
And the conclusion now advanced by the agency repre-
sents a radical departure from the agency’s previous posi-
tion. See App. to Pet. for Cert. 129a, 141a–142a. Thus,
the Solicitor General does not ask us to defer to the agen-
cy’s views—and understandably so.
Nonetheless, the Administrative Procedure Act is not
the tax code. And cases that seek to determine whether
Congress intended courts to give weight to agency views
provide rules of thumb, general principles meant to guide
interpretation, not rigid rules that narrowly confine it.
They seek to advance Congress’ intent as embodied in
particular statutory schemes by helping courts to deter-
mine whether, and how, Congress intended those courts to
respect an agency’s expertise when reasonably exercised
in particular cases. They seek to allocate the law-
interpreting function between court and agency in a way
Cite as: 568 U. S. ____ (2013) 3
BREYER, J., concurring
likely to work best within any particular statutory
scheme. But they do not purport to do more than that. In
particular, they do not set forth all-encompassing absolute
rules, impervious to nuance and admitting of no excep-
tions. Felix Frankfurter’s observation, made many years
ago, remains valid today: “The problems subsumed by . . .
‘administrative discretion’ . . . must be related to . . . the
particular interest . . . as to which ‘administrative discre-
tion’ is exercised.” The Task of Administrative Law, 75
U. Pa. L. Rev. 614, 619–620 (1927). That is to say, “the
standard doctrines of administrative law . . . should not
be taken too rigidly.” Jaffe, Administrative Law: Burden
of Proof and Scope of Review, 79 Harv. L. Rev. 914, 918
(1966).
Thus, even though this case does not fall directly within
a case-defined category, such as “Chevron deference,”
“Skidmore deference,” “Beth Israel deference,” “Seminole
Rock deference,” or deference as defined by some other
case, I believe the agency, in taking a position, nonethe-
less retains some small but special “power to persuade.”
Skidmore, supra, at 140. See generally Eskridge & Baer,
The Continuum of Deference: Supreme Court Treatment
of Agency Statutory Interpretations from Chevron to Ham-
dan, 96 Geo. L. J. 1083 (2008). And I would conse-
quently to some degree take account of, and respect, the
agency’s judgment.
I cannot measure the degree of deference with the preci-
sion of a mariner measuring a degree of latitude. But it
is still worth noting that the agency’s determination has
played some role in my own decision. That is because the
agency, after looking into the matter more thoroughly
(perhaps after notice-and-comment rulemaking), might
change its mind. Given the nature of the question and
of the agency’s expertise, courts, I believe, should then
give weight to that new and different agency decision. Cf.
National Cable & Telecommunications Assn. v. Brand X
4 WOS v. E. M. A.
BREYER, J., concurring
Internet Services, 545 U. S. 967, 980–986 (2005). In my
view, today’s decision does not freeze the Court’s present
interpretation of the statute permanently into law.
With that understanding, I join the Court’s opinion.
Cite as: 568 U. S. ____ (2013) 1
ROBERTS, C. J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 12–98
_________________
ALDONA WOS, SECRETARY, NORTH CAROLINA
DEPARTMENT OF HEALTH AND HUMAN SER-
VICES, PETITIONER v. E. M. A., A MINOR, BY
AND THROUGH HER GUARDIAN AD LITEM,
DANIEL H. JOHNSON, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FOURTH CIRCUIT
[March 20, 2013]
CHIEF JUSTICE ROBERTS, with whom JUSTICE SCALIA
and JUSTICE THOMAS join, dissenting.
The State of North Carolina paid for E. M. A.’s medical
expenses under its Medicaid plan. E. M. A. sued those al-
leged to have caused her injuries, eventually settling for
an amount that included, among other things, medical
expenses already covered by North Carolina. The federal
Medicaid statute requires North Carolina to recoup those
expenses. But neither the Act nor the regulations issued
under it tell States how to determine what portion of a
third-party recovery should be attributed to medical ex-
penses. The Court concludes that North Carolina’s law
addressing that question is nonetheless preempted by the
Act.
The Court’s reading of the Act, while plausible, is not
compelled by the statutory text or our precedent. It has
the unfortunate consequence of denying flexibility to the
States—and, by necessary implication, the Secretary of
Health and Human Services—in resolving a policy ques-
tion with broad significance for this complicated program.
In short, the result is both unnecessary and unwise. I
therefore respectfully dissent.
2 WOS v. E. M. A.
ROBERTS, C. J., dissenting
I
Medicaid is a cooperative federal-state program de-
signed to provide medical assistance to certain needy
populations. The basic idea is simple: The statute—as
interpreted by the Secretary of HHS—sets out the re-
quirements for an eligible Medicaid program. If States
decide to enroll and comply with those requirements, they
get federal money. If they don’t, they don’t. The federal
contribution is not enough to fully fund any State’s pro-
gram; States contribute anywhere from 17 to 50 percent
of the costs. See 42 U. S. C. §1396d(b) (2006 ed., Supp. V).
The States have considerable discretion in structuring and
administering their programs, subject of course to federal
law and regulations.
In practice, it’s not always so simple. The books are
thick with federal regulations that States must interpret
and reconcile. By my count, at least 39 federal-court
opinions, including one of our own, have reiterated Judge
Friendly’s observation that Medicaid law is “almost unin-
telligible to the uninitiated.” See Schweiker v. Gray Pan-
thers, 453 U. S. 34, 43 (1981) (quoting Friedman v. Berger,
547 F. 2d 724, 727, n. 7 (CA2 1976)); see also 453 U. S., at
43, n. 14 (quoting the District Court’s description of Medi-
caid in Friedman as “an aggravated assault on the English
language, resistant to attempts to understand it”). “Per-
haps appreciating the complexity of what it had wrought,
Congress conferred on the Secretary exceptionally broad
authority to prescribe standards for applying certain sec-
tions of the Act.” Schweiker, supra, at 43. But where
the law and the Secretary are silent on a specific ques-
tion, it is up to the States—sometimes informally advised
by the federal Centers for Medicare and Medi-
caid Services—to make sense of it all in running their
programs.
The relevant provisions here require that North Caro-
lina (1) pay for certain people’s medical care, (2) make
Cite as: 568 U. S. ____ (2013) 3
ROBERTS, C. J., dissenting
reasonable efforts to recoup from liable third parties (such
as tortfeasors and insurers) any medical expenses it paid,
and (3) not recoup such payments by imposing a lien on
the beneficiary’s property. See ante, at 4–5; see also 42
U. S. C. §1396a(a)(25)(B) (2006 ed.). To comply, North
Carolina pays for a beneficiary’s medical expenses on the
condition that any such expenses the beneficiary recovers
from third parties will go towards repaying the State. See
N. C. Gen. Stat. Ann. §108A–59(a) (Lexis 2011).
The difficulty, however, is that tort victims seldom seek
only medical expenses. Take this case: E. M. A. and her
parents sought damages not only for medical expenses,
but for lost income, pain and suffering, and other things,
and ended up settling all these claims for a lump sum of
$2.8 million. Such a situation poses the question of how
much North Carolina can recoup—indeed, under federal
law, must recoup—from a lump sum that reflects more
than just medical expenses.
This puts North Carolina in a tight spot. If it fails to
recover what it must, it violates federal law. If it takes a
beneficiary’s property beyond medical expenses, it violates
federal law. Trying to navigate between these competing
requirements—with no interpretive guidance from the
Secretary of HHS—North Carolina elected to resolve the
problem by laying out ground rules in advance, condition-
ing a beneficiary’s right to recover from third parties on
the beneficiary’s willingness to fully repay the State, or,
at a minimum, define one-third of her damages as “medi-
cal expenses,” whichever is less. N. C. Gen. Stat. Ann.
§§108A–59(a); 108A–57(a); see also Andrews v. Haygood,
362 N. C. 599, 603–604, 669 S. E. 2d 310, 313–314 (2008).
II
The Court states that “[t]he problem” with North Caro-
lina’s designation—actual expenses or one-third of the
recovery, whichever is less—“is not that it is an unreason-
4 WOS v. E. M. A.
ROBERTS, C. J., dissenting
able approximation in all cases,” and acknowledges that
“[i]n some cases, it may well be a fair estimate.” Ante,
at 9. According to the Court, however, because North
Carolina’s law provides no “mechanism for determining
whether it is a reasonable approximation in any particular
case,” ibid., (emphasis added), it “directly conflict[s]” with
the “clear mandate” of the federal Medicaid statute, and is
therefore preempted. Ante, at 7 (quoting PLIVA, Inc. v.
Mensing, 564 U. S. __, __ (2011) (slip op., at 11) (internal
quotation marks omitted)), 10. This reflects a basic policy
judgment: that segregating medical expenses from a lump-
sum recovery must be done on a case-specific, after-the-
fact basis, rather than pursuant to a general rule spelled
out in advance.
The problem is that the Court can point to no statutory
or regulatory requirement, much less an unambiguous
one, requiring such an approach. The federal statute,
which provides that States must recoup medical expenses
owed by third parties, and which prevents States from
placing a lien on a beneficiary’s property, says nothing
about how to comply with these two requirements in the
event of a settlement. See ante, at 1 (BREYER, J., concur-
ring) (“The statute is silent on the question”).
Nor does our case law. As the Court acknowledges, our
decision in Arkansas Dept. of Health and Human Servs. v.
Ahlborn, was an easy one. 547 U. S. 268 (2006). There,
the underlying tort suit settled for $550,000, and the
Medicaid beneficiary and the State of Arkansas stipulated
that only $35,581.47 of the settlement represented medi-
cal expenses. The State nonetheless claimed it “was enti-
tled to a lien in the amount of $215,645.30”—i.e., the total
amount paid by the State for the beneficiary’s health care.
Id., at 274. The question was whether the State could
demand this money in light of its stipulation that only
$35,581.47 reflected medical expenses. The answer, of
course, was no. The State is only entitled to recover medi-
Cite as: 568 U. S. ____ (2013) 5
ROBERTS, C. J., dissenting
cal expenses; nothing else. So when Arkansas contended
that it was entitled to money the beneficiary had received
for something other than medical expenses, we had no
trouble rejecting that argument. That proposition—that
States may not take money that is unrelated to medical
expenses—does not help answer the question here: May a
State condition Medicaid benefits on a beneficiary agree-
ing to define one-third of a tort recovery as reflecting
“medical expenses”?
The Court recognizes that Ahlborn “had no occasion to
resolve” the question “how to determine what portion of a
settlement represents payment for medical care,” ante, at
5, but then promptly proceeds as if Ahlborn had done just
that. The Court quotes Ahlborn for the proposition that
a State may not claim any portion of a tort recovery
“not ‘designated as payments for medical care,’ ” and then
faults North Carolina’s law because it “sets forth no pro-
cess for determining what portion” is “attributable to med-
ical expenses.” Ante, at 6, 7 (quoting 547 U. S., at 284),
7. Ahlborn spoke of “designated” amounts because, as
noted, there was a stipulated designation in that case.
What to do when there is no such stipulation—when it’s
not clear “what portion of a settlement represents pay-
ment for medical care”—is a different question. The Court
assumes the answer must be the same: that the settle-
ment must be parsed in every case, so that there is an
actual, after-the-fact designation in every case. If the
parties do not agree on one, as they did in Ahlborn, there
must be a process in place for reaching a case-specific
attribution.
The nature of the “process” contemplated by the major-
ity is unclear, but it must involve an effort to determine
what claims would have succeeded had there been a trial,
what the damages would have been for the separate
claims, and so on—the very sort of inquiries settlement is
intended to obviate. The Court talks of addressing these
6 WOS v. E. M. A.
ROBERTS, C. J., dissenting
concerns through “rebuttable presumptions and adjusted
burdens of proof to ensure that speculative assessments of
a plaintiff ’s likely recovery do not defeat the State’s right
to recover medical costs,” but ominously declines to give
any assurance “that these rules are necessarily compliant
with the federal statute.” Ante, at 13.
Nothing in Ahlborn requires all this, and North Caro-
lina has taken a different approach. It has adjusted its tort
law to account for its obligations under federal Medicaid
law by requiring that beneficiaries pay the State back in
full or designate one-third of any recovery as “medical ex-
penses,” whichever is less. This approach allows bene-
ficiaries to obtain settlements, “meet[s] concerns about
settlement manipulation,” Ahlborn, supra, at 288, n. 18,
complies with the statutory obligation that States make
reasonable efforts to recover medical expenses from liable
third parties, and guarantees that the beneficiary will
never have to give back more than she has already re-
ceived from the State.
There’s nothing unusual about such an approach.
States define the contours of their own tort law all the
time, setting rules about who may recover in particular
circumstances, what claims may be alleged, which parties
are liable, what defenses may be asserted, what damages
are recoverable, and so on. Doing so does not amount to
imposing a lien on any property to which an individual has
a vested right under state tort law. The Court says North
Carolina cannot rely on its “traditional authority to regu-
late tort actions” because its rule in this case is not an
exercise of its “general authority.” Ante, at 11. The Court
cites no support for this vague new limitation on a State’s
power to define tort remedies under state law, and I am
aware of none.
In fact, federal law says nothing about how States must
define the recovery available to a Medicaid beneficiary
suing a third party. That silence is a good indication that
Cite as: 568 U. S. ____ (2013) 7
ROBERTS, C. J., dissenting
Congress did not mean to strip States of their traditional
authority to regulate torts. See Wyeth v. Levine, 555 U. S.
555, 565 (2009) (“[I]n all pre-emption cases, and particu-
larly in those in which Congress has legislated in a field
which the States have traditionally occupied, we start
with the assumption that the historic police powers of the
States were not to be superseded by the Federal Act un-
less that was the clear and manifest purpose of Congress”
(internal quotation marks and ellipses omitted)). The
closest the Medicaid Act gets to this topic is its require-
ment that States have “in effect laws under which . . . the
State is considered to have acquired the rights of such
individual to payment by any other party for such health
care items or services.” See 42 U. S. C. §1396(a)(25)(H).
That Congress has said nothing else about what recovery
a State must allow, though clearly aware of the traditional
power of States to regulate recoveries under private
law, should be worth something. Cf. Bonito Boats, Inc. v.
Thunder Craft Boats, Inc., 489 U. S. 141, 166–167 (1989)
(“The case for federal pre-emption is particularly weak
where Congress has indicated its awareness of the opera-
tion of state law in a field of federal interest, and has
nonetheless decided to stand by both concepts and to
tolerate whatever tension there [is] between them” (inter-
nal quotation marks omitted)).
The majority nonetheless dismisses North Carolina’s
solution as an arbitrary “one-size-fits-all” approach, ante,
at 10, that has no “logical” endpoint; one that, if accepted,
could permit States to “designate half, three-quarters, or
all of a tort recovery in the same way.” Ante, at 8, 9. This
is an age-old objection to any line-drawing, to which Jus-
tice Holmes provided a familiar response: “Neither are we
troubled by the question where to draw the line. That is
the question in pretty much everything worth arguing in
the law.” Irwin v. Gavit, 268 U. S. 161, 168 (1925). What-
ever the case “as a doctrinal matter,” it is in fact “easier to
8 WOS v. E. M. A.
ROBERTS, C. J., dissenting
defend North Carolina’s” one-third designation than the
Court’s hypothetical where a State allocates all of a recov-
ery to medical expenses. Ante, at 9. In addition, the
majority’s hobgoblin is less frightening when we remem-
ber that North Carolina never takes back more than what
it paid for such expenses.
The reasons for drawing a bright line, as North Carolina
has, are obvious and familiar. See generally Scalia, The
Rule of Law as a Law of Rules, 56 U. Chi. L. Rev. 1175
(1989). Bright lines provide clear notice; here that means
beneficiaries know exactly where they stand with respect
to reimbursing the State as they negotiate settlements
with third parties. Such clear rules are easy, cheap, and
administrable—laudable qualities in the context of a vast
and intricate program. The Court’s approach, on the other
end, requires the time of lawyers and judges, and that
time costs money—money better spent on providing health
care to the needy. Or so the State, responsible for admin-
istering its program, could conclude, and nothing in the
statute, regulations, or our precedent says otherwise.
The majority points out that nearly one-third of the
States conduct hearings of the sort it contemplates. Ante,
at 13. Good for them. The whole point of our federal
system is that different States may reach different judg-
ments about how to run their own different programs.
Such flexibility is particularly important in this context,
where Medicaid spending is the largest component of most
state budgets. The Court also notes that, in other areas,
courts have undertaken the work of “separat[ing] lump-
sum settlements or jury awards into categories to satisfy
different claims.” Ibid. My point is not that the work
required by the Court cannot be done—just that it has not
been required by Congress or the Secretary.
On that note, it’s bad enough that the Court finds the
State’s reasonable effort to reconcile its competing obliga-
tions preempted. What is doubly unfortunate is that the
Cite as: 568 U. S. ____ (2013) 9
ROBERTS, C. J., dissenting
Court’s analysis necessarily implies that the Secretary’s
hands are also tied. The Medicaid Act is Spending Clause
legislation, and such legislation is binding on States
only insofar as it is “unambiguous.” See Pennhurst State
School and Hospital v. Halderman, 451 U. S. 1, 17 (1981).
In addition, the anti-lien provision only precludes North
Carolina’s law if, as the Court acknowledges, there is a
“direct conflict” between the two. Ante, at 7 (quoting
PLIVA, Inc., 564 U. S., at ___ (slip op., at 11) (internal
quotation marks omitted). The Court says—wrongly, I
believe—that there is. Ante, at 10 (“An irrebuttable, one-
size-fits-all statutory presumption is incompatible with
the Medicaid Act’s clear mandate that a State may not
demand any portion of a beneficiary’s tort recovery except
the share that is attributable to medical expenses” (em-
phasis added)). But if North Carolina’s approach directly
conflicts with an unambiguous, clear mandate in the Act—
such that any presumption against preemption is over-
come, see Wyeth, supra, at 565, n. 3—it’s hard to see how
the Secretary could adopt a similar approach. See Chev-
ron U. S. A. Inc. v. Natural Resources Defense Council,
Inc., 467 U. S. 837, 842–843 (1984) (“If the intent of Con-
gress is clear, that is the end of the matter; for the court,
as well as the agency, must give effect to the unambigu-
ously expressed intent of Congress”).
The concurrence wishes this were not so, see ante, at 4
(“today’s decision does not freeze the Court’s present in-
terpretation of the statute permanently into law”), but
fails to acknowledge the express rationale of the Court’s
opinion. There is no other way to read the majority opin-
ion than as foreclosing what the concurrence would like to
leave open.
Or is there? In exactly two sentences, the Court seems
to falter and lose the courage of its conviction that a State
must have a process in place for an individual allocation
of medical expenses in every case. The Court views the
10 WOS v. E. M. A.
ROBERTS, C. J., dissenting
problem with North Carolina’s law as being that “the
State provides no evidence to substantiate its claim that
the one-third allocation is reasonable in the mine run of
cases.” Ante, at 9. That thought does not resurface until
five pages later—and only then—when the Court says that
States “may even be able to adopt ex ante administrative
criteria for allocating medical and nonmedical expenses,
provided these criteria are backed by evidence suggesting
that they are likely to yield reasonable results in the mine
run of cases.” Ante, at 14.
I am not sure whether this is a concession that individ-
ualized hearings may not be required after all, but if it is,
it is flatly contrary to the rest of the opinion. It is also
quite odd to suggest that the problem with North Caro-
lina’s law would go away if only the State provided some
sort of study substantiating the idea that one-third was a
good approximation in most cases. North Carolina is not a
federal agency, whose actions are subject to review under
the Administrative Procedure Act’s “substantial evidence”
test. See 5 U. S. C. §706(2)(E). We have never before, in
a preemption case, put the burden on the State to compile
an evidentiary record supporting its legislative determina-
tion. The burden is, of course, on those challenging the
law. See Pharmaceutical Research and Mfrs. of America v.
Walsh, 538 U. S. 644, 661–662 (2003) (plurality opinion)
(“We start . . . with a presumption that the state statute
is valid, and ask whether petitioner has shouldered the
burden of overcoming that presumption” (citation omit-
ted)). We have said that, as a general matter, “Congress is
not obligated, when enacting its statutes, to make a record
of the type that an administrative agency or court does to
accommodate judicial review.” Turner Broadcasting Sys-
tem, Inc. v. FCC, 520 U. S. 180, 213 (1997) (internal quota-
tion marks omitted). Sovereign States should be accorded
no less deference.
Keep in mind that the basis for all this is a federal law
Cite as: 568 U. S. ____ (2013) 11
ROBERTS, C. J., dissenting
that prohibits liens for medical assistance, but says noth-
ing about how medical and nonmedical expenses are to be
allocated. It is hard enough to figure out what the Medi-
caid Act means by what it says; we should not read so
much into its silence.
Ultimately, it is a basic policy judgment whether the
Medicaid program is best served in this instance by
post hoc individualized determinations, or whether the
issue may be addressed in advance, through a general
rule, as North Carolina has done here. See ante, at 1–2
(BREYER, J., concurring) (“any of several different answers
to the question would seem reasonable”). The Court can
point to nothing that delegates to it the prerogative to
make that judgment. Rather, States and the Secretary—
working together—should be afforded the leeway to make
their joint venture a workable one.
Because North Carolina’s law does not conflict with
federal law, I would let it be. I respectfully dissent.