Harrison v. Young

Case: 19-10874 Document: 00516454595 Page: 1 Date Filed: 08/31/2022

United States Court of Appeals

for the Fifth Circuit

United States Court of Appeals

Fifth Circuit

FILED

August 31, 2022

No. 19-10874 Lyle W. Cayce

Clerk

Barbara Harrison, by her next friend and guardian, Marguerite

Harrison,

Plaintiff—Appellee,

versus

Cecile Erwin Young, in her official capacity as the Executive

Commissioner, Texas Health and Human Services Commission,

Defendant—Appellant.

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:19-CV-01116

Before King, Jones, and Costa, Circuit Judges.

Gregg Costa, Circuit Judge:

This dispute is about whether Texas must provide around-the-clock

nursing services to a disabled individual even though the expense of doing so

exceeds the cost cap in the state’s Medicaid program. Plaintiff contends that

the Americans with Disabilities Act and Rehabilitation Act require this

service because the alternative of institutionalization would amount to

discrimination. The district court issued a preliminary injunction requiring

Texas to provide the nursing services. Although we conclude that the district

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No. 19-10874

court has jurisdiction to hear this suit under Ex parte Young, we vacate the

injunction and remand for the district court to make additional findings.

I

Barbara Harrison suffers from cerebral palsy, epilepsy, obstructive

sleep apnea, severe dysphagia, gastrostomy tube dependence, scoliosis, and

substantial intellectual disabilities. Because of those conditions, Harrison

needs intensive medical care. The Texas Health and Human Service

Commission (HHSC)—of which defendant Cecile Erin Young is now

Commissioner 1—pays for Harrison to receive that care from Berry Family

Services, a community-based care center near Dallas.

Until Harrison’s health deteriorated in early 2018, her care was

funded through a Medicaid program that states can adopt to provide home-

and community-based care for persons with disabilities who would otherwise

require institutionalization. 42 U.S.C. § 1396n(c)(1). This is called a

“waiver” program because approval of such a plan by the federal Centers for

Medicare and Medicaid waives a number of Medicaid requirements, such as

the requirements that a plan be available throughout the state and that a

single standard be used for financial eligibility. Id. § 1396n(c)(3) (referring to

42 U.S.C. §§ 1396a(a)(1), (a)(10)(C)(i)(III)). As with other Medicaid

programs, the source of these funds includes a mix of federal and state

dollars.

Such waiver plans are aimed at promoting “cost-effectiveness and

efficiency.” Id. § 1396n(b). To ensure those goals, a state must certify that

the average per-person cost of providing home and community care through

the waiver program does not exceed the average cost of providing that care

1Courtney Phillips was Commissioner when the suit was litigated in district court

and when the appeal was filed.

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in an institution. Id. § 1396n(c)(2)(D). Texas’s waiver program thus

provides home- and community-based care only if the annual cost of care is

less than approximately $170,000. 40 Tex. Admin. Code § 9.155(a)(3)

(2016).

To cover expenses that would surpass the limit in the waiver plan,

HHSC may use general state revenues. If HHSC chooses not to use those

funds for a patient whose cost of home care exceeds the cap,

institutionalization is the only remaining option for government-funded care.

Indeed, one of the prerequisites for using general revenue for home care is a

determination that “there is no other available living arrangement in which

the person’s health and safety can be protected at that time, as evidenced by:

(i) an assessment conducted by clinical staff of the commission; and (ii)

supporting documentation, including the person’s medical and service

records.” General Appropriations Act, 85th Leg., R.S., art. II, §

23(b).

In April 2018, Harrison’s worsening health required additional care

that exceeded the cap in the waiver program. Her primary care physician

concluded that she faces a substantial risk of death if a nurse does not attend

to her constantly. Harrison proposed a plan that included around-the-clock

nursing care at an annual cost of approximately $330,000—well in excess of

the $170,000 cap for the community-based service program. To make up the

difference, Harrison requested that the HHSC use general revenue funds.

The agency denied Harrison’s request, concluding that her needs could be

met in a state facility based on the opinion of a doctor who reviewed

Harrison’s medical records and visited her. But HHSC approved Harrison

for eight hours of daily nurse care in the community care center where she

has been residing since 2017.

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Harrison’s guardian sought administrative review. 2 The Medicaid

hearing officer decided that Harrison was ineligible to receive the home- and

community-based service program funds because the cost of her proposed

plan exceeded the $170,000 cap. The parties, though, had not disputed that

cost issue. Harrison had asked the officer to review HHSC’s refusal to dip

into the general revenues. The agency argued that there is no administrative

review of that discretionary decision. The hearing officer was silent on the

disputed issue, not addressing HHSC’s refusal to use general revenue.

Harrison’s guardian then brought this suit, alleging that the HHSC

Commissioner discriminated against Harrison because of her disability,

violating the Americans with Disabilities Act and the Rehabilitation Act. The

complaint also asserts a section 1983 claim alleging that depriving Harrison

of the general revenue funds without a hearing violates due process. The

plaintiff asked the district court to enter a preliminary injunction ordering the

Commissioner to maintain 24/7 nurse care until a Medicaid fair-hearing

officer resolves whether HHSC should use general revenue funds to pay for

her community care and whether her care complies with the ADA.

The district court issued the requested injunction. The

Commissioner appeals.

II

We first address whether the district court had jurisdiction. The

Eleventh Amendment generally bars private individuals from suing states in

federal court. 3 Bd. of Trs. of the Univ. of Ala. v. Garrett, 531 U.S. 356, 363

2 Harrison’s guardian had filed a federal suit in 2018 that was soon dismissed after

HHSC agreed to provide 24-hour nurse care pending the administrative hearing.

3 That sovereign immunity can, however, be waived or abrogated. In a footnote in

her brief, Harrison argues that Texas waived sovereign immunity for suits under section

504 of the Rehabilitation Act, one of the two disability-discrimination statutes at issue here.

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(2001). There is, however, an important exception when a plaintiff seeks

injunctive relief to enjoin ongoing violations of federal law. Va. Off. for Prot.

& Advoc. v. Stewart, 563 U.S. 247, 254–56 (2011); Ex parte Young, 209 U.S

123, 156 (1908). A state official violating federal law can be sued for

prospective relief. Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S.

635, 645 (2002).

Does Ex parte Young allow this suit being brought against another state

official named Young? The general dividing line is between impermissible

suits seeking remedies for past violations of federal law and permissible suits

seeking prospective relief to prevent ongoing violations. A request for

injunctive relief does not automatically put a suit on the Ex parte Young side

of the line. The key is not the type of relief sought but whether the remedy

is preventing ongoing violations of federal law as opposed to past ones.

Edelman v. Jordan, 415 U.S. 651, 664 (1974) (contrasting the permissible

prospective relief granted in Young with the impermissible retrospective

relief sought in Edelman). A state employee fired because of her disability

could not obtain an award of “equitable restitution” requiring the state

official to pay her for lost wages. Id. at 668 (concluding that such a remedy is

“in practical effect indistinguishable in many aspects from an award of

damages against the State”); see also Garrett, 531 U.S. at 374 (holding that the

Eleventh Amendment bars suits for damages under Title I of the ADA). But

such an employee could sue the state seeking reinstatement. See Nelson v.

Univ. of Tex. at Dallas, 535 F.3d 318, 322 (5th Cir. 2008) (“[R]einstatement

See Miller v. Tex. Tech Univ. Health Scis. Ctr., 421 F.3d 342, 352 (5th Cir. 2005) (en banc)

(holding that a state waives sovereign immunity from claims arising under section 504 by

accepting the relevant federal financial assistance). The Commissioner responds that

Harrison did not raise this argument in district court. We need not decide whether

Harrison forfeited this argument given our conclusion that the suit seeks prospective relief

under Ex parte Young.

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[is] an acceptable form of prospective relief that may be sought through Ex

parte Young”).

A prospective remedy like reinstatement will, of course, have some

effect on the state treasury. The reinstated worker will have to be paid going

forward. But that impact on the fisc does not take the suit outside Young’s

ambit. Ex parte Young itself had an “effect on the States’s revenues, since

the state law which the Attorney General was enjoined from enforcing

provided substantial monetary penalties against railroads which did not

conform to its provisions.” Edelman, 415 U.S. at 667. Much bigger drains

on state funds resulted from a number of Supreme Court cases, brought

under Young, that required future payment of welfare benefits. Id. (citing

Graham v. Richardson, 403 U.S. 365 (1971); Goldberg v. Kelly, 397 U.S. 254

(1970)); see also Milliken v. Bradley, 433 U.S. 267, 288−90 (1977) (holding that

the Eleventh Amendment did not bar an injunction to eliminate a segregated

school system and share ongoing educational costs among defendants).

Closer to home, we allowed a suit for injunctive relief against a previous

HHSC Commissioner for allegedly denying access to the same Medicaid

program at issue here. McCarthy ex rel. Travis v. Hawkins, 381 F.3d 407, 414

(5th Cir. 2004). These cases show that even when substantial sums are at

stake, “an ancillary effect on the state treasury is a permissible and often an

inevitable consequence of the principle announced in Ex parte Young.”

Edelman, 415 U.S. at 668.

It follows that despite its potential impact on the Texas treasury,

Harrison’s suit is properly brought under Young because it seeks only

prospective relief to remedy ongoing violations of law. That Harrison seeks

only forward-looking relief distinguishes this suit from cases like Edelman and

Ford Motor Co. v. Department of Treasury, 323 U.S. 459 (1945), in which the

injunctions against state officials required payments to compensate for past

violations of the law. In Edelman, sovereign immunity barred a district court

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from ordering states to compensate federal-aid applicants whose applications

were processed too slowly before the injunction issued. 415 U.S. at 668. In

Ford Motor, sovereign immunity barred a district court from ordering a state

to return taxes it previously collected in violation of federal law. 323 U.S. at

460–62; see also Turnage v. Britton, 29 F.4th 232, 239–40 (5th Cir. 2022)

(holding that sovereign immunity barred suit against state officials seeking

interest for refund payments based on unlawful utility rate increase). By

contrast, any costs Texas would incur if Harrison were to succeed would be

based on her future needs. In fact, there is not even possibility of

retrospective relief as up to now Harrison has received all the Medicaid care

she has sought.

The Commissioner also misses the mark in arguing that Pennhurst

State School & Hospital v. Halderman, 465 U.S. 89 (1984), bars this suit.

Pennhurst emphasizes another requirement for Ex parte Young: the plaintiff

must be seeking to prevent an ongoing violation of a federal law. Id. at 106.

Suits to enjoin violations of state law do not get around sovereign immunity.

Id. Harrison’s claims, however, arise under federal law—the Rehabilitation

Act, the Americans with Disabilities Act, and the Due Process Clause of the

14th Amendment. Federal jurisdiction thus does not offend Pennhurst. See,

e.g., Jordan v. Fisher, 823 F.3d 805, 809−10 (5th Cir. 2016) (holding that

sovereign immunity and Pennhurst do not bar a section 1983 lawsuit alleging

that failure to adhere to state law violated federal due process); Raj v. La.

State Univ., 714 F.3d 322, 327−29 (5th Cir. 2013) (holding that sovereign

immunity and Pennhurst barred only state law claims when a defendant

brought both federal and state causes of action seeking the same relief).

Sovereign immunity does not bar this suit. There is federal

jurisdiction.

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III

We thus review the injunction. For a preliminary injunction to issue,

a plaintiff must show: (1) a substantial likelihood of success on the merits, (2)

a substantial threat of irreparable harm absent the injunction, (3) that the

harm she will suffer without the injunction outweighs the cost to comply with

the injunction, and (4) that the injunction is in the public interest. Jefferson

Cmty. Health Care Ctrs., Inc. v. Jefferson Par. Gov’t, 849 F.3d 615, 624 (5th

Cir. 2017). We review the district court’s grant of Harrison’s preliminary

injunction for abuse of discretion, reviewing underlying factual findings for

clear error and legal conclusions de novo. Atchafalaya Basinkeeper v. U.S.

Army Corps of Eng’rs, 894 F.3d 692, 696 (5th Cir. 2018).

A

In addressing the plaintiff’s likelihood of prevailing, we first consider

whether she is likely to overcome the Commissioner’s argument that the

district court should abstain from exercising jurisdiction.

District courts have discretion to abstain from deciding unclear

questions of state law arising in complex state administrative schemes when

federal court intervention would undermine uniform treatment of local

issues. New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491 U.S. 350,

362 (1989) (NOPSI); Burford v. Sun Oil Co., 319 U.S. 315, 332 (1943). But

this “Burford abstention is disfavored as an abdication of federal

jurisdiction.” Aransas Proj. v. Shaw, 775 F.3d 641, 653 (5th Cir. 2014); see

also Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817

(1976) (recognizing that federal courts have a “virtually unflagging

obligation” to exercise the jurisdiction Congress gives them). In deciding

whether to abstain under Burford, district courts consider: (1) whether the

plaintiff raises state or federal claims, (2) whether the case involves unsettled

state law or detailed local facts, (3) the importance of the state’s interest in

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the litigation, (4) the state’s need for a coherent policy in the area, and (5)

whether there is a special state forum for judicial review. Grace Ranch, L.L.C.

v. BP Am. Prod. Co., 989 F.3d 301, 313 (5th Cir. 2021).

The first factor counsels against abstention as Harrison raises only

federal claims (under the ADA, the Rehabilitation Act, and section 1983).

The second factor likewise supports the court’s excercising its

jurisdiction. The case does not require a federal court to resolve unsettled

state law or apply detailed facts related to local conditions. The state

statutory scheme seems clear, as our due process analysis below

demonstrates. Evaluating Harrison’s claims requires applying federal law to

her circumstances, an exercise of judicial authority well within the expertise

of federal courts. See Romano v. Greenstein, 721 F.3d 373, 380 (5th Cir. 2013)

(declining to abstain when Medicaid beneficiary alleged her benefits were

terminated in violation of the federal Medicaid Act and Due Process Clause

of the 14th Amendment).

The third factor does point towards abstention. Texas has a strong

interest in deciding how it allocates state funds. That is somewhat offset by

the countervailing federal interest in combating disability discrimination. Cf.

Aransas Proj., 775 F.3d at 650–51 (balancing state and federal interests in

Endangered Species Act context). Plus, Medicaid is a program of

cooperative federalism that involves the expenditure of both state and federal

funds. Although this factor still favors abstention, “[t]he weight” it receives

depends on the next factor, “which focuses on the potential for federal

disruption of a coherent state policy.” Grace Ranch, 989 F.3d at 316.

Whether a lawsuit might cause a complex state administration “to

crumble” is the “fundamental Burford concern.” Id. at 319; see also NOPSI,

491 U.S. at 362 (reasoning that Burford abstention is primarily concerned

with preventing federal court rulings from disrupting the uniform application

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of state policy). This lawsuit by a single Medicaid recipient does not risk

“recurring and confusing federal intervention in an ongoing state scheme.”

Wilson v. Valley Elec. Membership Corp., 8 F.3d 311, 315 (5th Cir. 1993).

Although ordering Young to provide services to Harrison would reduce

funds available for other state priorities, Young cites no case holding that

merely ordering the expenditure of state funds represents the federal court

interference with an “interdependent” administrative scheme that Burford

seeks to prevent. Grace Ranch, 989 F.3d at 317. To the contrary, we have

rejected abstention in another suit seeking an order to provide Medicaid

services. Romano, 721 F.3d at 380.

The final factor also counsels against abstention as Texas does not

have a special forum for judicial review of Medicaid determinations.

With the scorecard lopsided in favor of exercising jurisdiction, it is

unlikely the district court abused its discretion in declining to abstain. See

Grace Ranch, 989 F.3d at 319 (holding that abstention was not warranted even

when the first three factors favored abstention).

B

Although Harrison has shown that the district court should hear her

claims, we conclude she is unlikely to succeed on one of them: her due

process claim.

States cannot “deprive any person of life, liberty, or property, without

due process of law.” U.S. Const. amend. XIV, § 1. The preliminary

question is whether Harrison has a property interest in receiving Texas

general revenue to pay for 24/7 nursing care.

We have a hard time seeing such a property right. Individuals have a

constitutionally protected property interest in social welfare benefits when a

statute entitles them to the benefits if they satisfy eligibility criteria. See Bd.

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of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972). Social Security

disability benefits are an example of such a property interest. See Mathews v.

Eldridge, 424 U.S. 319, 332 (1976); see also Goldberg v. Kelly, 397 U.S. 254,

261–62 (1970) (recognizing property interest in state welfare payments when

statute entitles a recipient to them). Such a property interest likely exists for

Texas’s Medicaid “waiver” program that provides home- and community-

based care. Those who satisfy the criteria for that program have a “legitimate

claim of entitlement” to participate. Roth, 408 U.S. at 577. But Harrison

concedes she no longer qualifies for that program as her medical needs now

far exceed the spending cap.

Given her concession that she no longer qualifies under the waiver

program, no statute promises Harrison the home care she is seeking. Id.

(explaining that a “claim of entitlement” to benefits must be “grounded in

the statute defining eligibility for them”). Texas law says HHSC is

“authorized” to use general funds for home-care services in certain

situations but does not require the agency to do so or otherwise guarantee

such benefits to Medicaid beneficiaries. Without “mandatory language”

requiring the payment of benefits, a claimant has no property interest in the

requested funds. Ridgely v. FEMA, 512 F.3d 727, 736 (5th Cir. 2008) (quoting

Ky. Dep’t of Corr. v. Thompson, 490 U.S. 454, 463 (1989)) (finding it unlikely

that applicants for FEMA rental assistance had a property interest in those

benefits because neither statutes nor regulations contained “‘explicitly

mandatory language’ that entitles an individual to receive benefits if he

satisfies that criteria”). A “benefit is not a protected entitlement if

government officials may grant or deny it in their discretion.” Town of Castle

Rock v. Gonzales, 545 U.S. 748, 756 (2005). HHSC appears to have that

discretion in deciding whether to use general revenue for home- or

community-care services that exceed the cap in Texas’s Medicaid waiver

plan.

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Because it is unlikely that Harrison has a property interest in the

treatment she is seeking, a preliminary injunction was not warranted on her

due process claim. See Cardoni v. Prosperity Bank, 805 F.3d 573, 589 (5th Cir.

2015) (noting importance of the “likelihood of success” factor in holding that

preliminary injunction was not warranted based on plaintiff’s failure to meet

this first factor).

C

That leaves the Rehabilitation Act and ADA claims as the only

potential source for the injunction.

“Unjustified isolation” of disabled individuals in institutions rather

than community placement is unlawful discrimination under the ADA and

the Rehabilitation Act. Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 597

(1999). That requirement is rooted in an ADA regulation providing that “[a]

public entity shall administer services, programs, and activities in the most

integrated setting appropriate to the needs of qualified individuals with

disabilities.” 28 C.F.R. § 35.130(d), quoted in Olmstead, 527 U.S. at 592.

The difficulty is determining when institutionalization is

“unjustified.” States accordingly must treat disabled individuals in

community settings if: (1) treatment professionals determine such placement

is appropriate, (2) the individual does not oppose the placement, and (3) the

placement can be reasonably accommodated, taking into account state

resources and the needs of other disabled individuals. Olmstead, 527 U.S. at

607.

In addressing plaintiff’s likelihood of prevailing, the district court

recognized conflicting evidence on whether 24-hour nursing care was

necessary but “afford[ed] more weight to the opinion of Harrison’s

doctors.” We do not see clear error in that credibility determination. And

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the second requirement—Harrison’s desire to remain at the community care

center with nursing care—was not contested.

That leaves the third requirement: the reasonable accommodation

inquiry that is the crux of an ADA claim. The district court concluded that

plaintiff is likely to show the 24/7 nursing care is a reasonable

accommodation because she provided a cost estimate showing that the

alternative of institutionalization would be slightly more expensive.

($333,204.85 for institutionalization versus $327,923.10 for community-

based care with a nurse always present). But Olmstead warned against “so

simple” a focus on just the marginal costs of the plaintiff’s treatment. Id. at

604 (explaining that such a limited focus “overlooks costs the State cannot

avoid; most notably, a ‘State . . . may experience increased overall expenses

by funding community placements without being able to take advantage of

the savings associated with the closure of institutions’” (omission in original)

(quoting Brief for United States as Amicus Curiae at 21, Olmstead, 527 U.S.

581)). Determining whether an Olmstead accommodation is reasonable

requires “taking into account the resources available to the State and the

needs of others with . . . disabilities.” Id. at 607.

Although we recognize that the Commissioner did not offer its own

evidence of costs at this early stage in the case, we nonetheless conclude that

the narrow, marginal cost comparison the district court relied on—one that

just barely showed institutionalization to be more costly—is not sufficient to

determine that plaintiff is likely to succeed on her disability-discrimination

claims. That is especially so when the plaintiff cites no case, nor could we

find one, holding that Olmstead requires community-care services that would

exceed the federally approved cost cap on a Medicaid program that provides

an alternative to institutionalization. In fact, other courts have rejected

Olmstead claims that would exceed similar caps on Medicaid programs. See,

e.g., Arc of Wash. State Inc. v. Braddock, 427 F.3d 615, 620–22 (9th Cir. 2005)

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(rejecting ADA class action that sought expansion of the cap on the number

of enrollees in Medicaid waiver plan because the existence of the plan showed

the state’s commitment to deinstitutionalization). And the cost cap of

roughly $170,000 in Texas’s Medicaid waiver plan is itself some evidence of

the relevant costs as federal law allows approval of waiver plans only if “the

average per capita expenditure estimated by the State in any fiscal year for

medical assistance provided with respect to such individuals does not exceed

100 percent of the average per capita expenditure that the State reasonably

estimates would have been made . . . for such individuals if the waiver had

not been granted.” 42 U.S.C. § 1396n(c)(2)(D).

A “preliminary injunction is an extraordinary remedy which should

not be granted unless the party seeking it has ‘clearly carried the burden of

persuasion.’” PCI Transp., Inc. v. Fort Worth & W.R. Co., 418 F.3d 535, 545

(5th Cir. 2005) (quotation omitted). On the current record, plaintiff has not

shown that she can prevail on an Olmstead claim seeking services that exceed

the cost cap in Texas’s Medicaid waiver program.

* * *

We VACATE the preliminary injunction and REMAND for further

proceedings.

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Edith H. Jones, Circuit Judge, concurring:

I concur in the opinion and decision to remand but am skeptical, not

only because no court has yet issued an individual treatment plan in this

setting, but for several additional reasons, that the plaintiff has slender

likelihood of prevailing on remand. First, the extent to which Olmstead

remains definitive is unclear to me in light of the 2008 amendments to the

ADA. Second, Justice Kennedy’s concurrence in Olmstead, which furnished

the fifth vote for the Supreme Court’s judgment, emphasizes that

(a) whether “isolation” is justified includes considerations such as the fact

that the ADA does not require individual treatment plans, Olmstead,

527 U.S. at 613–14, 119 S. Ct. at 2193, and (b) federalism costs inherent in

federal court decrees concerning state-managed programs must be taken

seriously, id. at 610, 2192. Third, the extent to which the plaintiff is a

qualified individual under ADA, that is, a person who would actually benefit

from her community placement as opposed to institutionalization, is

disputed on this record and, indeed, may have changed since the preliminary

injunction hearing. These second and third points reinforce that Olmstead’s

reasoning does not boil down to a mere comparative cost analysis in this case.

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