Published Online: July 12, 2012
Published in Print: July 18, 2012, as Ed. Law Challenges Loom After Health-Care Ruling

Ed. Law Challenges Loom After Health-Care Ruling

Carol Paris of Leonardtown, Md., demonstrates outside the Supreme Court in Washington. The court largely upheld the Affordable Care Act.
—Evan Vucci/AP

High court reins in Congress on aid conditions

Legal analysts say that part of the U.S. Supreme Court decision on the federal health-care law will encourage states to challenge education laws and other federal aid programs and legislation passed under Congress’ spending power, a pivotal aspect of the historic ruling.

The justices ruled 5-4 to uphold a key provision of the Affordable Care Act—the requirement that individuals purchase a health-insurance policy with at least a minimum level of coverage—as a valid exercise under Congress’ taxing power. But the court effectively ruled 7-2 that the states could not be threatened with the loss of their existing Medicaid funding if they refused to participate in the law’s expansion of the federal health-care program for the poor.

That portion of the June 28 decision in National Federation of Independent Business v. SebeliusRequires Adobe Acrobat Reader (Case No. 11-393) could open the door to lawsuits over the spending strings attached to federal programs—or even the conditions for securing federal waivers under the No Child Left Behind Act, some commentators say.

A view of the Supreme Court in Washington on June 27. The court ruled on health care, immigration, religious schools, and other cases involving education-related issues.
—Evan Vucci/AP

“I think it’s a very big deal,” said Samuel R. Bagenstos, a law professor at the University of Michigan, in Ann Arbor, who helped write a friend-of-the-court brief in support of President Barack Obama’s administration and the Medicaid expansion. “The result of this decision will be that states will file a lot of challenges to the constitutionality of federal spending statutes and conditions. There will be a lot of litigation in the courts.”

In fact, in debating the scope of congressional spending authority in this area, the justices on both sides of the divided Supreme Court illustrated their positions with references to federal education laws such as the Elementary and Secondary Education Act. The NCLB law is its latest iteration.

‘Pressure’ or ‘Compulsion’?

In his main opinion in the health-care case, Chief Justice John G. Roberts Jr. said Congress had put “a gun to the head” of the states with the Affordable Care Act to force them to add a much larger pool of the poor to the Medicaid rolls. Medicaid funding accounts for more than 20 percent of the average state’s total budget, with federal funds covering anywhere from 50 percent to 83 percent of those costs, the chief justice noted.

“Congress may use its spending power to create incentives for states to act in accordance with federal policies,” the chief justice said. “But when pressure turns into compulsion, the legislation runs contrary to our system of federalism.”

High Court Highlights:
The 2011-12 Term

While just a single case during the U.S. Supreme Court’s 2011-12 directly involved a school—in that instance, a private, religious school—some of the most high-profile cases of the year, including those involving the Affordable Care Act and Arizona’s immigration statute, had implications for public education, as did cases dealing with public-employee unions, juvenile justice, immunity from lawsuits, and other topics.

CHURCH AND STATE
Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission (Case No. 10-553)

The court ruled unanimously that the U.S. Constitution’s religion clauses bar lawsuits against churches by their ministers. The justices said a Lutheran school teacher could not sue her church employer over alleged disability discrimination because she was effectively a minister of the church. But the decision left uncertainty about whether all teachers in religious schools were no longer protected by civil rights laws.

PUBLIC-EMPLOYEE UNIONS
Knox v. Service Employees International Union (No. 10-1121)

The justices ruled 7-2 that public-sector unions, including teachers’ unions, must provide an accounting notice to nonmembers when they assess extra dues for special expenses such as a ballot battle. And on a 5-4 vote, the court went on to hold that unions must get the “opt-in” consent of nonmembers to be charged such special fees, rather than making the employee take affirmative steps to opt out.

IMMIGRATION
Arizona v. United States (No. 11-182)

The court ruled 5-3 in striking down three challenged provisions of Arizona’s immigration law, saying they were pre-empted by federal law. But the court, by an 8-0 vote, upheld a measure that requires the police to determine the immigration status of someone they stop if they have reasonable suspicion that person is in the United States illegally. The decision was watched closely for clues on how courts will rule on other states’ tough immigration measures, such as an Alabama law requiring school officials to determine the citizenship status of new students.

HEALTH CARE/FEDERAL SPENDING
National Federation of Independent Business v. Sebelius (No. 11-39)

In the term’s biggest case, the court ruled 5-4 to uphold the central provisions of the Affordable Care Act, but ruled 7-2 that the health-care law’s expansion of the Medicaid program violates the Constitution by threatening the states with the loss of their exisiting Medicaid funding if they opt out of the expansion. Legal observers see this part of the ruling as having implications for other statutes adopted under Congress’ spending-clause authority, such as the Elementary and Secondary Education Act of 1965 and Title IX of the Education Amendments of 1972.

JUVENILE JUSTICE
Miller v. Alabama (No. 10-9646)

The justices ruled 5-4 that states may not mandate life-without-parole prison sentences for anyone convicted of a murder committed when the offender was younger than 18. The ruling continues a trend that includes recent decisions barring the death penalty for juveniles in any crime and life without parole for juveniles who commit offenses other than homicides. In the new decision, which involved two 14-year-olds convicted in separate murders, the court said trial judges must have the opportunity to take into account the hallmarks of youth, including “immaturity, impetuosity, and failure to appreciate risks and consequences.”

LOCAL GOVERNMENT/QUALIFIED IMMUNITY
Filarsky v. Delia (No. 10-1018)

The court ruled unanimously that individuals working temporarily for local governments, such as private lawyers conducting investigations, are entitled to seek the same immunity from lawsuits enjoyed by government officers. The case was watched closely by groups for school districts and other municipal governments that said they must rely on outside lawyers to handle sensitive and complex matters and that a lack of immunity defenses would make it harder to enlist such help.

BROADCAST INDECENCY
Federal Communications Commission v. Fox Television Stations Inc. (No. 10-1293)

The justices did not reach the First Amendment issues in this long-running case over FCC penalties on broadcasters for airing “fleeting expletives” or brief nudity at a time when children are in the TV audience. Instead, the court ruled 8-0 that the commission’s standards as applied to several specific broadcasts were vague and violated the due precess rights of the broadcasters.

NATIVE AMERICAN AFFAIRS
Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak (No. 11-246)

The federal government was not immune to a lawsuit brought by a Michigan man challenging the acquisition of land to be put in trust for an American Indian tribe, the court ruled 8-1. The tribe built a successful casino on the land, which has been contributing to the coffers of local school districts and other state and locals that took an interest in the fact that the now-revived suit could lead to the closure of the casino.

Salazar v. Ramah Navajo Chapter (No. 11-551)

The court ruled 5-4 that the federal government must pay certain support costs in full when it contracts with American Indian tribes to provide services such as education and law enforcement that would otherwise be provided by the Bureau of Indian Affairs. The court said it was up to Congress to deal with a lack of sufficient funds to cover all the contracting arrangements mandated by a federal law.

SOCIAL SECURITY/CHILD BENEFITS
Astrue v. Capato (No. 11-159)

The court upheld a federal definition of “child” that means children born through in vitro fertilization after the death of a parent are not guaranteed to receive Social Security survivors’ benefits. The justices ruled unanimously that the Social Security Administration was entitled to deference for its interpretation of the relevant statute on benefits for a “natural child,” which also includes adoptees.

Justices Stephen G. Breyer and Elena Kagan joined the chief justice’s opinion on those points, while Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas, and Samuel A. Alito Jr. wrote an opinion that said the Medicaid expansion—along with the rest of the health-care law—was unconstitutional. (Thus, they helped make up a majority holding on the state coercion issue.)

Chief Justice Roberts said, though, that the law’s Medicaid expansion could be saved by barring the federal government from withholding existing Medicaid funds from any state that fails to comply with the expansion. The government may condition new Medicaid funding on acceptance of the expansion.

Justices Split

Justice Ruth Bader Ginsburg, in an opinion joined by Justice Sonia Sotomayor, went along with this saving effort but would have allowed the federal government to withhold existing Medicaid funds.

Congress’ power to attach conditions to federal grants is based on the spending clause in Article I of the Constitution, which allows Congress to “provide for … the general welfare of the United States.” The court’s precedents, though, have long recognized certain limits on the attachment of any conditions to federal aid, including that they must be unambiguous so that the states know what they are getting into when they accept federal funds. The conditions must also be related to federal interests, and Congress may not cross the “point at which pressure turns into compulsion,” as a 1937 decision put it.

In a joint minority opinion, Justices Scalia, Kennedy, Thomas, and Alito cite a dissent by Justice Kennedy in a 1999 decision that set rules for school district liability for peer sexual harassment under Title IX of the Education Amendments of 1972, which bars sex discrimination in federally funded education programs.

“The spending-clause power, if wielded without concern for the federal balance, has the potential to obliterate distinctions between national and local spheres of interest and power by permitting the federal government to set policy in the most sensitive areas of traditional state concern,” Justice Kennedy had written in the dissent in Davis v. Monroe County Board of Education.

A Hypothetical

Often, the federalism concerns of the court’s conservatives have emerged in the context of the federal role in education. The joint opinion of the four conservatives reflects a hypothetical question raised by Justice Alito at the March oral arguments in the health-care case. The hypothetical suggests a federal deal that bears some resemblance to the Obama administration’s Race to the Top program, which provides competitive grants to states that embrace certain education redesign priorities.

Suppose, the conservatives said, Congress offered states a grant equal to the state’s entire annual spending on K-12 education. But the funding came with conditions “governing such things as school curriculum, the hiring and tenure of teachers, the drawing of school districts, the length and hours of the school day, the school calendar, a dress code for students, and rules for student discipline,” the opinion said. The state could turn down the grant, the conservatives suggest, but its residents would still have to pay the same amount in federal taxes and pay state taxes to fund education without the federal aid.

“If the state gave in to the federal law, the state and its subdivisions would surrender their traditional authority in the field of education,” say the conservatives, who found that idea troubling. With “a federal program that offers large grants,” they said, the “states may, as a practical matter, be unable to refuse to participate.”

Chief Justice Roberts didn’t engage with the four other conservatives on that point, but Justice Ginsburg did. She questioned the idea that when spending legislation is first passed, or when states first join a federal program, “Congress must provide clear notice of conditions it might later impose.”

She noted that in a 1985 decision, Bennett v. Kentucky Department of Education, the Supreme Court upheld the U.S. secretary of education’s efforts to recapture Title I funds after Kentucky in 1974 violated a spending condition that Congress added in 1970 to the Elementary and Secondary Education Act, which was first adopted in 1965.

“We held that the commonwealth suffered no surprise after accepting the federal funds,” Justice Ginsburg said, and thus Kentucky was obliged to return the money.

Court precedents demand “that conditions on federal funds be unambiguously clear at the time a state receives and uses the money—not at the time, perhaps years earlier, when Congress passed the law establishing the program,” she said.

Justice Ginsburg predicted that the Medicaid decision will bring a raft of new spending-clause challenges, and she wondered how “litigants and judges will assess whether a state has a legitimate choice whether to accept the federal conditions in exchange for federal funds.”

Medicaid’s Spending Footprint

Justices Scalia, Kennedy, Thomas, and Alito said there could be no doubt that the Medicaid expansion was coercive. Medicaid is by far the largest federal program of aid to the states (with the federal contribution covering nearly two-thirds of total Medicaid spending), they said, followed by federal aid for elementary and secondary education, which they said amounts to 12.8 percent of total federal outlays to the states.

Fartun Sengow, from Somalia, now living in Concord, N.H., holds a sign during a rally for immigrants and refugees at the State House in Concord. She was responding to the U.S. Supreme Court's ruling on Arizona's immigration law on June 25. The court struck down key provisions of the law.
—Jim Cole/AP

“The offer that the [health-care law] makes to the states—go along with a dramatic expansion of Medicaid or potentially lose all federal Medicaid funding—is quite unlike anything that we have seen in a prior spending-power case,” the four justices said.

Neal Katyal, a Washington lawyer who defended the health-care law in the lower courts as acting U.S. solicitor general until last year, said he agreed with Justice Ginsburg that challenges to other federal laws were likely.

“This opens up a whole new avenue of litigation that until now had just been a theoretical possibility,” Mr. Katyal said.

Ilya Somin, an associate professor of law at George Mason University in Fairfax, Va., said it was significant that, “for the first time in 75 years, the court has struck down part of a statute based on the fact that it exceeds Congress’ powers under the spending clause.”

But the opinion leaves many questions, said Mr. Somin, a libertarian who filed a brief in opposition to the law. “How much money is necessary before it becomes coercive?” he said. “And how can we tell when a program is a new one? That is precisely what the opinion does not tell us. And Roberts says he is not drawing a bright line.”

Issues Remain

Mr. Bagenstos of the University of Michigan noted that some federal education laws, such as the ESEA, have relatively frequent reauthorizations and revisions, leading to uncertainty about when conditions are first imposed. And other federal laws that come with conditions on the states, such as Title IX, are not grant programs per se but anti-discrimination statutes.

“The rules aren’t tied to any particular funds” under such statutes, he said.

Mr. Bagenstos does not believe that the state challenges ultimately will be successful. But the Medicaid ruling could alter the dynamics of state-federal relations over such things as federal waivers for the No Child Left Behind Act, he said.

“A state could say, ‘Look, if our waiver gets denied, we’re going to court,’ ” Mr. Bagenstos said.

“Do I think these arguments are going to be successful in the courts? Ultimately, no,” he added. “But these are arguments that are going to take a while to work their way through the courts.”

Vol. 31, Issue 36, Pages 20-21, 23

Related Stories
You must be logged in to leave a comment. Login | Register
Ground Rules for Posting
We encourage lively debate, but please be respectful of others. Profanity and personal attacks are prohibited. By commenting, you are agreeing to abide by our user agreement.
All comments are public.

Back to Top Back to Top

Correction: 
The original version of this story incorrectly identified Professor Ilya Somin of George Mason University as a conservative. He considers himself a libertarian.

Most Popular Stories

Viewed

Emailed

Recommended

Commented