United States District Court, W.D. Tennessee, Eastern Division
STATE OF TENNESSEE, et al. Plaintiffs,
U.S. DEPARTMENT OF STATE, et al., Defendants,
TENNESSEE IMMIGRANT AND REFUGEE RIGHTS COALITION, et al., Intervenor-Defendants.
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND
DENYING MOTION TO INTERVENE AS MOOT
THOMAS ANDERSON, CHIEF UNITED STATES DISTRICT JUDGE.
Tennessee General Assembly, in its own right and on behalf of
the State of Tennessee, State Senator John Stevens,
individually and in his official capacity, and State
Representative Terri Lynn Weaver, individually and in her
official capacity, have brought this action contending that
federal laws requiring the State of Tennessee to provide
Medicaid benefits to refugees, under threat of losing its
federal Medicaid funding, coerce the State into subsidizing
the federal Refugee Resettlement Program. Plaintiffs have
sued the United States Department of State; Rex Tillerson, in
his official capacity as Secretary of State; the Bureau of
Population, Refugees, and Migration (“PRM”);
Simon Henshaw, in his official capacity as Acting Assistant
Secretary of State for the PRM; United States Department of
Health and Human Services (“HHS'); Thomas E. Price,
in his official capacity as Secretary of HHS; the Office of
Refugee Resettlement (“ORR”); and Ken Tota, in
his official capacity as Acting Director of ORR (collectively
the “Federal Government”). Plaintiffs seek a
declaration that the challenged laws exceed Congress's
authority under the United States Constitution's Spending
Clause and violate the Tenth Amendment to the Constitution.
They also seek injunctive relief prohibiting further refugee
resettlements in Tennessee until the Federal Government
absorbs all costs of those resettlements.
have filed a motion to dismiss for lack of subject-matter
jurisdiction or, in the alternative, for failure to state a
claim upon which relief can be granted. (ECF No. 24.)
Plaintiffs have filed a response to the motion (ECF No. 38),
Defendants have filed a reply to the response (ECF No. 39),
and Plaintiffs have filed a sur-reply. (ECF No. 40.) For
the reasons set forth below, the motion to dismiss is
Immigrant and Refugee Rights Coalition, on behalf of itself
and its members, Bridge Refugee Services Inc., and Nashville
International Center for Empowerment, has filed a motion to
intervene on behalf of Defendants. (ECF No. 25). Because the
Court grants Defendants' motion to dismiss, the motion to
intervene is DENIED as moot.
created the Medicaid program through enactment of Title XIX
of the Social Security Act, Pub. No. L. 89-97, 79 Stat. 286,
codified at 42 U.S.C. § 1396 et seq. See generally
Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S.
644, 650-51 (2003) (discussing the Medicaid program and its
purpose). “Medicaid is a cooperative
federal-state program through which the Federal Government
provides financial assistance to States so they may furnish
medical care to needy individuals.” Wilder v. Va.
Hosp. Ass'n, 496 U.S. 498, 502 (1990) (citation
omitted). See also In re Estate of Trigg, 368 S.W.3d
483, 499 (Tenn. 2012) (“The program is jointly funded
by the federal government and the states, and each state
operates its own program in accordance with federal
participation in the Medicaid program began when the General
Assembly enacted the Medical Assistance Act of 1968.
Roberts v. Sanders, 2002 WL 256740 at *5 (Tenn. Ct.
App. Feb. 22, 2002) (citing Act of Apr. 3, 1968, ch. 551,
1968 Tenn. Pub. Acts 496 (codified as amended at Tenn. Code
Ann. §§ 71-5-101-119 (1995 & Supp.
2001))). Participation in the program is voluntary,
but participating states must comply with the requirements
imposed by the statute and with regulations promulgated by
the Secretary of HHS. Wilder, 496 U.S. at 502.
See also Roberts, 2002 WL 256740 at *5 (While each
state operates its own Medicaid program, each state must
conform to federal requirements in order to receive federal
those requirements is that each state must have an approved
plan that provides coverage for specified groups. 42 U.S.C.
§ 1396a(a)(10)(A)(i), (b); 42 C.F.R. § 430.10. That
is, participating states must provide full Medicaid services
under the approved state plan to groups of individuals who
meet the eligibility criteria. See Lewis v.
Thompson, 252 F.3d 567, 570 (2d Cir. 2001)
(“States enjoy some flexibility in determining the
breadth of a Medicaid plan, but are nonetheless cabined by a
set of eligibility rules.”)
state with an approved plan receives payments from the
Federal Government according to a formula set out by statute.
42 U.S.C. § 1396d. If there is a determination that the
state's plan or its administration of the plan no longer
complies with Medicaid requirements, the Secretary will
either withhold further payments to the state or may
“limit payments to categories under or parts of the
State plan not affected” by the non-compliance. 42
U.S.C. § 1396c.
finding of non-compliance results in the following
administrative process. First an attempt is made by the HHS
Centers for Medicare & Medicaid Services
(“CMS”) to resolve the matter informally. 42
C.F.R. §§ 430.32, 430.35. If these efforts are
unsuccessful, CMS initiates a formal compliance action by
letter to the state which sets forth the finding of
non-compliance, provides notice that some or all federal
funding will be withheld absent compliance, and explains that
the state has an opportunity for an evidentiary hearing
before any payments will be withheld. 42 C.F.R. §§
430.35(a) & (d), 430.70, 430.83-430.88. If an adverse
ruling is made, the state may seek review by the
Administrator. Id. §§ 430.80(a)(11),
430.102(b). The Administrator's decision constitutes the
final decision of the agency and is the earliest point at
which federal funds can be withheld. Id.
§§ 430.102(c), 430.104(c). A state may seek review
of the final agency decision in the United States Court of
Appeals for the circuit in which the state is located. 42
U.S.C. § 1316(a)(3); 42 C.F.R. § 430.38(a) - (b). A
similar administrative process allows a state to seek
appellate-court review of CMS's disapproval of a proposed
plan amendment. 42 U.S.C. § 1316(a).
original Medicaid statute was “silent on the
availability of Medicaid to aliens.” Lewis,
252 F.3d at 571. However, in 1973 the Secretary issued a rule
requiring coverage of all lawful permanent residents and
other aliens “permanently residing in the United States
under color of law.” 45 C.F.R. § 248.50 (1973).
The purpose of the 1973 rule was to implement the Supreme
Court's decision in Graham v. Richardson, 403
U.S. 365, 376, 380 (1971), see 37 Fed. Reg. 11977
(June 16, 1972), in which the Court held that state laws
denying welfare benefits to resident aliens violated the
Equal Protection Clause of the Fourteenth Amendment and
impermissibly encroached upon exclusive federal power over
the admission of aliens and the conditions of their
Congress passed the Personal Responsibility and Work
Opportunity Reconciliation Act, Pub. L. No. 104-193, 110
Stat. 2105 (1996), known as the Welfare Reform Act of 1996.
In this Act, Congress announced a “national policy with
respect to welfare and immigration.” Korab v.
Fink, 797 F.3d 572, 580 (9th Cir. 2014) (quoting 8
U.S.C. § 1601). The Act “established] a uniform
federal structure for providing welfare benefits to distinct
classes of aliens.” Id. at 581. Reaffirming
national policy that “aliens within the Nation's
border [should] not depend on public resources to meet their
needs, ” 8 U.S.C. § 1601(2)(A), the Act
“impos[ed] sweeping restrictions on aliens' access
to federally sponsored government aid” such as
Medicaid. Lewis, 252 F.3d at 577-78; see also
Bruns v. Mayhew, 750 F.3d 61, 63 (1st Cir. 2014)
(citation omitted) (“For years, federal Medicaid
extended medical assistance to eligible individuals without
regard to citizenship status or durational residency. By act
of Congress, however, the alien eligibility requirements for
publicly-funded benefits, including Medicaid, changed
dramatically in 1996.”).
separated aliens in the United States into two classes -
qualified aliens who may be eligible for certain federally
funded benefits and all other aliens who generally are not. 8
U.S.C. §§ 1611 - 1613, 1641. The definition of
“qualified alien[s]” includes lawfully admitted
refugees. 8 U.S.C. § 1641(b)(3). Five years following
their entry into the United States, qualified aliens may be
considered eligible for certain designated federal programs,
including Medicaid; however, refugees are covered under
Medicaid without regard to the five-year residency rule.
Id. §§ 1612(b)(1), (2)(A)(i)(I)-(V),
1612(b)(3)(A)-(C), 1613(a), (b)(1). Medicaid coverage must be
provided to eligible refugees for seven years following their
admission to the United States, after which coverage of
refugees becomes optional at the state's discretion.
Id. § 1612(b)(1), (2)(A)(i). If the refugee
resettlement agency determines that a refugee is not eligible
for Medicaid under the state plan, the agency looks to the
Refugee Medical Assistance (“RMA”) program for
benefits for the refugee. 45 C.F.R. § 400.94(d).
to its authority to regulate the “admission,
naturalization, and residence of aliens in the United States
or the several states, ” Toll v. Moreno, 458
U.S. 1, 11 (1982) (citation omitted), Congress enacted the
Immigration and Nationality Act (“INA”), 8 U.S.C.
§ 1101, et seq., to establish a
“comprehensive and complete code covering all aspects
of admission of aliens to this country.” Elkins v.
Moreno, 435 U.S. 647, 664 (1978). Congress passed the
Refugee Act of 1980, Pub. L. No. 96-212, 94 Stat. 102 (1980),
an amendment to the INA, which sets forth “a permanent
and systematic procedure for the admission [of refugees] to
this country” and “provide[s] comprehensive and
uniform provisions for [their] effective resettlement.”
Id. § 101(b). The Act allows for the annual
admission of refugees in “such number as the President
determines . . . is justified by humanitarian concerns or is
otherwise in the national interest.” 8 U.S.C. §
1157(a)(2). One year following their admission, refugees must
apply for permanent-resident status, and they may apply for
citizenship within five years. Id. §§
Refugee Act also “provides for federal support of the
refugee resettlement process, ” S. Rep. No. 96-256 at
2, authorizing the Federal Government to issue grants to and
contract with state and local governments and private
non-profit agencies to manage the initial admission and
placement of refugees to the United States and provide
subsequent resettlement assistance. 8 U.S.C. § 1522.
Pursuant to this authority, the PRM maintains and oversees
the United States Refugee Admissions Program, a
public-private partnership involving federal agencies,
domestic non-profit organizations, and international
organizations to screen, transport, and provide initial
resettlement services for refugees. Id. §
works with the non-profit organizations with which it has
entered into cooperative agreements to determine where
refugees will be resettled in the United States. Although the
PRM consults with state and local governments
“concerning the sponsorship process and the intended
distribution of refugees among the States and localities
before their placement, ” 8 U.S.C. §
1522(a)(2)(A), the Refugee Act does not provide for the
involvement of state or local governments in determining
where individual refugees are resettled once admitted to the
United States. See H. R. Rep. No. 132, 99th Cong.,
1st Sess., 19 (1985) (observing that the Act is “not
intended to give States and localities any veto power over
refugee placement decisions”).
the Refugee Resettlement Program administered by the HHS
Office of Refugee Resettlement (“ORR”), the
Federal Government makes grants to and contracts with states
and local and private non-profit agencies to assist refugees
after their initial resettlement in achieving economic
self-sufficiency. See 45 C.F.R. § 400.1(a),
(b). States may receive grants for refugee assistance
programs. 8 U.S.C. § 1522(e). ORR is authorized to
reimburse a state for its costs of assisting refugees during
their first three years of residence in the United States.
Id. § 1522(e)(1). However, by the early 1990s,
ORR no longer reimbursed the states for the full cost of
providing cash and medical assistance to refugees due to an
insufficiency of funds appropriated for that purpose.
See 60 Fed. Reg. 33584, 33588 (June 28, 1995).
wishing to participate in the Refugee Resettlement Program
must submit a plan, approved by ORR, describing how it will
coordinate cash and medical assistance and other services to
promote refugee resettlement and economic self-sufficiency. 8
U.S.C. § 1522(a)(6); 45 C.F.R. §§ 400.4(a),
400.5(b). A state may withdraw from the program with proper
notice to ORR. 45 C.F.R § 400.301(a). However, the
Refugee Act does not condition the resettlement of refugees
in a state on that state's participation in the program.
If a state chooses to withdraw from the program, under the
1984 “Wilson/Fish Amendment” ORR may select one
or more other grantees, usually private non-profit
organizations, to administer federal funding for cash and
medical assistance and social services provided to eligible
refugee populations in that state. 8 U.S.C. §
1522(e)(7); 45 C.F.R. § 400.301(c); see also 69
Fed. Reg. 17692 (Apr. 5, 2004) (announcing availability of
funding for applicants “to continue the provision of
refugee program services and assistance … in a State
when the State elects to discontinue participation” in
the Refugee Resettlement Program). ORR currently funds
thirteen Wilson/Fish programs operating in twelve states,
letter dated October 29, 2007, Tennessee withdrew from
participation in the Refugee Resettlement Program effective
June 30, 2008. (Compl. ¶ 32, ECF No. 1.) Subsequently,
Catholic Charities of Tennessee, through its affiliate the
Tennessee Office of Refugees, was designated to administer
the Wilson/Fish program of refugee services and assistance in
Tennessee. (Id. ¶¶ 38-39.)
to the Complaint
the Tennessee General Assembly adopted Senate Joint
Resolution 467 (“SJR 467”) (Gilligan Decl. Exh.
A, ECF No. 24-3) “regarding the commencement of legal
action seeking relief … from the federal
government's mandated appropriation of state revenue
… with respect to refugee resettlement in
Tennessee.” SJR 467 at 1. Reciting that requiring Tennessee
to provide Medicaid benefits to eligible refugees or
“risk losing all Medicaid funding” subjects the
State to coercion in violation of the Tenth Amendment, the
resolution calls on the Attorney General of Tennessee to
initiate or intervene in litigation on the State's behalf
to seek relief regarding “any actions taken by the
federal government … prohibited by the Tenth
Amendment.” Id. at 1-3. Alternatively, the
resolution authorizes the General Assembly “to employ
outside counsel to commence a civil action” against the
Federal Government if the Attorney General fails to do so.
Id. at 4.
5, 2016, the Tennessee Attorney General sent a letter to the
General Assembly (“AG Letter”) declining to bring
suit against the Federal Government as requested by SJR 467.
(Gilligan Decl. Exh. A, ECF No. 24-3.) The Attorney General
explained that “extensive review of the legal issues
raised by SJR 467” had led his office “to
conclude that the 10th Amendment theories that underpin SJR
467 are unlikely to provide a viable basis for legal action,
” inasmuch as “[i]mmigration and refugee
resettlement are matters largely reserved for federal
jurisdiction.” Id. at 1, 3. However, due to
the General Assembly's “desire to resolve [its]
concerns through the adjudicative process, ” for
purposes of this matter the Attorney General delegated his
authority to bring litigation on the State's behalf to
staff counsel for the General Assembly “to the extent
allowed by Tennessee law.” Id. at 4. This
lawsuit then ensued.
of the Complaint
allege that, by enacting and implementing provisions of the
Refugee Act and the Welfare Reform Act, the Federal
Government has unconstitutionally “coerc[ed] the state
into subsidizing, ” and “commandeer[ed] state
funds to finance” the Refugee Resettlement Program in
Tennessee, thus “impermissibly intrud[ing] on
Tennessee's state sovereignty.” (Compl.
¶¶ 3, 4, 7.) Specifically, Plaintiffs contend that,
following Tennessee's withdrawal from the Refugee
Resettlement Program in 2008, (id. ¶ 32), the
Federal Government, rather than discontinuing refugee
resettlements in Tennessee, “bypassed” the State
and appointed Catholic Charities of Tennessee to continue the
resettlement program in Tennessee. (Id. ¶¶
38-39.) Plaintiffs allege that, under the mandate to provide
Medicaid benefits to otherwise eligible refugees located in
the State, 8 U.S.C. § 1612, Tennessee must spend in
excess of $30 million each year to fund the Refugee
Resettlement Program, (id. ¶ 29), despite its
withdrawal from the program. (Id. ¶¶ 36,
further allege that “[i]f Tennessee refuses to expend
state funds to provide these refugee services through
Medicaid, the state is subject to a loss of nearly $7
billion” in federal Medicaid funds which amounts to
“20% of its total state budget.” (Id.
¶¶ 35, 42, 54.) According to Plaintiffs, by
“threatening” Tennessee with this loss, the
Federal Government has “coerced the state to continue
funding the refugee resettlement program” and
“thereby commandeered state funds to support a federal
initiative.” (Id. ¶ 33.) Additionally,
the Federal Government's actions allegedly “deprive
…Tennessee of its sovereignty, ” (id.
¶¶ 46, 56), in excess of Congress's power under
the Spending Clause and in violation of the Tenth Amendment.
(Id. ¶¶ 3, 48, 50, 51, 59.)
to Plaintiffs, the “refugee resettlement program also
commandeers other state funds and instrumentalities through
health and welfare programs and public schooling, including
the program known as ‘English Language Learners, '
as mandated by 20 U.S.C. § 1703.” (Id.
seek declaratory relief and an injunction prohibiting
resettlement of additional refugees in Tennessee unless and
until the Federal Government pays for and absorbs the costs
of the resettlement program “without any involuntary
contribution” from the State. (Id., Prayer for
Relief, ¶¶ 1-3.)
to Dismiss for Lack of Subject Matter
complaint may be dismissed pursuant to Rule 12(b)(1) of the
Federal Rules of Civil Procedure for lack of jurisdiction.
Under Rule 12(b)(1), a motion to dismiss “may either
attack the claim of jurisdiction on its face or it can attack
the factual basis of jurisdiction.” Golden v. Gorno
Bros., Inc., 410 F.3d 879, 881 (6th Cir. 2005). “A
facial attack is a challenge to the sufficiency of
the pleading itself, ” and “the court must take
the material allegations of the petition as true and
construed in the light most favorable to the nonmoving
party.” United States v. Ritchie, 15 F.3d 592,
598 (6th Cir. 1994) (citation omitted). “A
factual attack, on the other hand, is . . . a
challenge to the factual existence of subject matter
jurisdiction.” Id. With a factual attack,
“no presumptive truthfulness applies to the factual
allegations, and the court is free to weigh the evidence and
satisfy itself as to the existence of its power to hear the
case.” Id. (citation omitted). The plaintiff
bears the burden of proving that jurisdiction exists.
Moir v. Greater Cleveland Reg'l Transit Auth.,
895 F.2d 266, 269 (6th Cir. 1990) (explaining that, when
“subject matter jurisdiction is challenged pursuant to
Rule 12(b)(1), the plaintiff has the burden of proving
jurisdiction in order to survive the motion”).
jurisdiction is a requirement in determining the validity of
a claim, and as such, Rule 12(b)(1) motions must be
considered prior to any other challenges.” Lemke v.
H&R Block Mortg. Corp., 2012 WL 715894 at *1 (E.D.
Mich. Mar. 6, 2012) (citing Bell v. Hood, 327 U.S.
678 (1946)). See also Moir, 895 F.2d at 269 (quoting
Bell v. Hood for the proposition that, when a
defendant moves to dismiss under both Rule 12(b)(1) and
(b)(6), the court should consider the 12(b)(1) motion first
because “the 12(b)(6) challenge becomes moot if this
court lacks subject matter jurisdiction.”).
Defendants contend that this Court lacks subject matter
jurisdiction over the complaint, the Court will first
consider the request for relief under Rule 12(b)(1).
Defendants specifically contend that this Court lacks
subject-matter jurisdiction over Plaintiffs' claims for
the following reasons: (1) Plaintiffs lack standing to bring
their claim; (2) the claim is not ripe for review; and (3)
review of Plaintiffs' claim in this Court is precluded by
the Medicaid Act. The Court finds Defendants' contentions
to be meritorious.
argue that neither the General Assembly nor the individual
legislators have alleged that the State's duty to cover
refugees under Medicaid inflicts concrete and particularized
injuries on them as required to establish standing under
Article III. Also according to Defendants, although the
General Assembly asserts that it may sue on the State's
behalf under a delegation of authority from the Attorney
General, Tennessee law does not permit the Attorney General
to delegate such authority to the General Assembly.
III of the United States Constitution endows federal courts
with “[t]he judicial Power of the United States;”
however, this power extends only to “cases” and
“controversies.” “No principle is more
fundamental to the judiciary's proper role in our system
of government than the constitutional limitation of
federal-court jurisdiction to actual cases or
controversies.” Raines v. Byrd, 521 U.S. 811,
818 (1997) (citation omitted). The standing requirement
limits federal court jurisdiction to actual controversies so
that the judicial process is not transformed into “a
vehicle for the vindication of the value interests of
concerned bystanders.” Valley Forge Christian Coll.
v. Ams. United for Separation of Church & State,
Inc., 454 U.S. 464, 473 (1982) (quoting United
States v. SCRAP, 412 U.S. 669, 687 (1973)).
Tenth Amendment challenges “often involve controversial
policy questions that courts are ill-equipped to handle and
that put the courts at particular risk of encroaching on the
proper domain of the political branches, ” before
proceeding to the merits of a claim, it is “incumbent
upon a federal court to ensure that a State asserting such a
claim has alleged a ‘particularized, concrete, and
otherwise judicially cognizable' injury.” West
Virginia v. United States Dep't of Health & Human
Servs., 145 F.Supp.3d 94, 110 (D.D.C. 2015),
aff'd sub nom. West Virginia ex rel. Morrisey v. U.S.
Dep't of Health & Human Servs., 827 F.3d 81
(D.C. Cir. 2016).
explained in Spokeo, Inc. v. Robins, 136 S.Ct. 1540
(2016), as revised (May 24, 2016),
Standing to sue is a doctrine rooted in the traditional
understanding of a case or controversy. The doctrine
developed in our case law to ensure that federal courts do
not exceed their authority as it has been traditionally
understood. The doctrine limits the category of litigants
empowered to maintain a lawsuit in federal court to seek
redress for a legal wrong. In this way, “[t]he law of
Article III standing ... serves to prevent the judicial
process from being used to usurp the powers of the political
branches, ” and confines the federal courts to a
properly judicial role.
Our cases have established that the “irreducible
constitutional minimum” of standing consists of three
elements. The plaintiff must have (1) suffered an injury in
fact, (2) that is fairly traceable to the challenged conduct
of the defendant, and (3) that is likely to be redressed by a
favorable judicial decision. The plaintiff, as the party
invoking federal jurisdiction, bears the burden of
establishing these elements. [When], as here, a case is at
the pleading stage, the plaintiff must “clearly ...
allege facts demonstrating” each element.
Spokeo, 136 S.Ct. at 1547; see also United
States v. Hall, 877 F.3d 676, 681 (6th Cir. 2017)
(reiterating the requirements of Article III standing). A
plaintiff must plead the elements of standing with
specificity. See Coyne v. Am. Tobacco Co., 183 F.3d
488, 494 (6th Cir. 1999) (stating that a “plaintiff
bears the burden of demonstrating standing and must plead its
components with specificity”). “[E]ach element
must be supported in the same way as any other matter on
which the plaintiff bears the burden of proof, i.e., with the
manner and degree of evidence required at the successive
stages of the litigation.” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992).
in fact is the “[f]irst and foremost” of the
three elements. Steel Co. v. Citizens forBetter
Environment, 523 U.S. 83, 103 (1998). To establish
injury in fact, a plaintiff must show that he suffered
“an invasion of a legally protected interest”
that is “concrete and particularized” and
“actual or imminent, not conjectural or
hypothetical.” Lujan, 504 U.S. at 560. For an
injury to be “particularized, ” it “must
affect the plaintiff in a personal and individual way.”
Id. at 560 n.1. For an injury to be “concrete,
” it “must actually exist.”
Spokeo, 136 S.Ct. at 1548. For an injury to be
“actual or imminent, ” the “threatened
injury must be certainly impending to constitute injury in
fact” - “[a]llegations of possible future
injury” are not sufficient. Clapper v. Amnesty
Int'l USA,568 U.S. 398, 409-10 (2013) (citations
omitted). The injury-in-fact requirement helps to
ensure that the plaintiff has a “personal stake in the
outcome of the controversy.” Susan B. Anthony List
v. Driehaus,134 S.Ct. 2334, 2341 (2014) (quoting
Warth v. Seldin,422 U.S. 490, 498 (1975)). Only one
party to a lawsuit ...