Douglas v. Independent Living Center of Southern California, Inc., et al.

In order to qualify for the federal Medicaid program and receive funds, states must submit a plan and any subsequent amendments to the federal Centers for Medicare & Medicaid Services (CMS) agency for review and approval. Before granting its approval, CMS reviews the state’s plan and amendments to ensure they comply with federal statutory and regulatory requirements. In 2008-2009, the California Legislature passed three statutes amending the state’s Medicaid plan which effectively reduced payments to medical providers. The state subsequently sent the amendments to CMS for review. Before CMS concluded its review, Independent Living Center of Southern California, Inc. and others (plaintiffs) filed a number of different suits in various federal district courts against Toby Douglas in his official capacity as director of California's Department of Health Care Services (defendant) claiming the Supremacy Clause of the U.S. Constitution prohibited enforcement of the new amendments and seeking injunctive and declaratory relief that amendments conflicted with, and thus were pre-empted by, federal Medicaid law. The district courts reached varying decisions. The parties appealed. The Ninth Circuit Court of Appeals consolidated the lawsuits and held for Plaintiffs, striking down California’s Medicaid amendments as being pre-empted by federal Medicaid law. The U.S. Supreme Court granted certiorari. Thereafter, CMS approved several of California’s amendments as being consistent with federal law. The parties agreed the case was not moot and the Court reviewed the case.