This Report summarizes opinions issued on April 28 and May 2, 2022 (Part I); and cases granted review on April 25 and May 2, 2022 (Part II).
Case Granted Review: Health and Hospital Corp. of Marion County v. Talevski, 21-806
Health and Hospital Corp. of Marion County v. Talevski, 21-806. The Court will reexamine its holding that Spending Clause legislation may grant rights that are privately enforceable under §1983. If Spending Clause statutes give rise to enforceable private rights, the Court will then consider whether the Federal Nursing Home Amendments Act of 1987 (FNHRA) does so through its rules regarding transfer and medication. Due to dementia, Gorgi Talevski was placed in a nursing facility owned by Health and Hospital Corporation (HHC). Because of his condition, Talevski repeatedly acted in a physically and sexually aggressive manner toward female staff and residents. As a result, his doctors prescribed drugs for the facility to administer. Talevski’s family disagreed with those prescriptions and hired a private neurologist, who had the drugs removed. The facility tried to discharge Talevski to an all-male facility more than two hours away, and then to a facility an hour away. The family filed a complaint under §1983 alleging violations of FNHRA’s transfer and medication provisions. The district court dismissed the action after finding that FNHRA does not grant a private right of action that may be redressed under §1983. The Seventh Circuit reversed. 6 F.4th 714.
The Seventh Circuit noted that FNHRA establishes the minimum standards of care for nursing homes that receive Medicaid funds. As relevant to Talevski, the Act prohibits the use of chemical restraints for purposes of discipline or convenience, rather than treatment, and prohibits transfer or discharge of nursing home residents unless certain criteria are met. The court noted that §1983 plaintiffs must assert “the violation of a federal right, not merely a violation of federal law.” The court found that FNHRA establishes a right under the test in Gonzaga University v. Doe, 536 U.S. 273 (2002), and Blessing v. Freestone, 520 U.S. 329 (1997), because (1) Congress intended the provision to benefit persons such as Talevski, (2) the statute is not vague, and (3) the statute is couched in mandatory terms, describing what nursing facilities must and must not do. Having found a statutory right under FHNRA, the court concluded that HHC failed to rebut the presumption that the right is enforceable under §1983. The court noted HHC’s argument that it should not enforce a private right in a statute passed pursuant to Congress’s powers under the Spending Clause. The court agreed that the Supreme Court has declined to find such private rights since Wilder v. Virginia Hospital Association, 496 U.S. 498 (1990). But the court also noted that the Supreme Court “has never disapproved Wilder.” Accordingly, the Seventh Circuit held that FNHRA confers a right that is enforceable through §1983.
HHC asserts in its petition that “Congress knows how to enact a private cause of action when it wants to.” It was not until 1980 that the Court held that federal statutory rights may be enforced through §1983. In subsequent cases like Wilder, the Court allowed §1983 suits to enforce rights contained in Spending Clause legislation, even though Congress did not expressly provide for private rights of action. HHC argues that state and local governments did not anticipate the cost of such suits when they agreed to accept federal funding. Because Spending Clause legislation is “much in the nature of a contract,” HHC argues that state and local governments should not have to shoulder unexpected costs they did not accept knowingly. HHC maintains that third-party beneficiaries typically have no right to enforce contracts, the issue was not raised in Wilder, and some on the Court have questioned whether §1983 provides a private enforcement right for Spending Clause statutes. HHC adds that judicially created causes of action implicate important principles of federalism, sovereignty, and separation of powers by “federaliz[ing] medical malpractice law” for “garden-variety” disputes about proper treatment. HHC points out that by going to federal court a patient may evade whatever limitations a state has imposed, such as caps on damages and fees.
Even if the Court declines to alter its Spending Clause jurisprudence, HHC argues that the Court should reverse the finding that FNHRA gives rise to private rights of action. HHC says that the Act does not create rights for patients to avoid chemical restraint or transfers, but instead orders nursing facilities to act in a certain way. Additionally, decisions about chemical restraint and transfer are not made by nursing facilities themselves, but by doctors, and federal courts should not be embroiled in such treatment questions. HHC argues that the remedies expressly provided by FNHRA rebut any presumption that the statute creates a privately enforceable right. For example, nursing facilities must undergo an annual survey for compliance with FNHRA, and a facility’s failure to comply with the statute may result in denial of Medicaid payment, civil monetary penalties, appointment of temporary management, or even closure. Individualized remedies under the Act include an administrative appeal process such as the one Talevski used. Finally, HHC claims that the Seventh Circuit’s decision threatens the quality of care in nursing facilities due to underfunding and increased liability insurance rates.
Talevski responds that HHC cannot meet its heavy burden to show that Wilder should be overruled. He points out that the Third and Ninth Circuits have previously found that FNHRA confers rights protected by Section 1983, and no circuit court has agreed with HHC’s position. Talevski argues that the Supreme Court has never questioned Wilder’s basic premise that Spending Clause legislation can create federal rights, only whether various statutes have done so. And Talevski says that Congress relied on Wilder when it included a “Residents’ Bill of Rights” in FHNRA. Indeed, he notes, the Court has previously invited Congress to act if it disagreed with the Court’s finding that Spending Clause litigation created a private cause of action. See Maine v. Thiboutot, 448 U.S. 1, 8 (1980). Thus, Talevski argues, the principle of stare decisis weighs strongly against reconsidering Wilder.
On the second question, Talevski argues that FNHRA grants a private right against transfer and chemical restraint based on the statute’s plain text and the three-part test in Blessing and Gonzaga. On the first factor, says Talevski, the Act creates an unambiguous individual entitlement by dictating that a nursing home “must protect” the “right” of each resident to be free from chemical restraints, and it “must” permit each resident to remain in the facility rather than transfer or discharge the resident. On the second factor, Talevski maintains that these rights are not “so vague and amorphous” that they cannot be judicially enforced. Talevski argues that questions about transfer and chemical restraint are tort-like legal questions that courts are competent to adjudicate. Third, Talevski points out that the statute is framed in “mandatory, rather than precatory, terms,” stating that nursing homes “must” fulfill certain obligations. Based on this showing, Talevski argues that HHC cannot overcome the rebuttable presumption that FNHRA establishes an enforceable right. He argues that the oversight and remedies included within the Act do not create a “comprehensive enforcement scheme that is incompatible with individual enforcement.” Finally, Talevski argues that FNHRA’s saving clause preserves a private cause of action by stating that the remedies under the Act do not limit other remedies available under federal law.