Advocates representing Medicaid beneficiaries generally have the choice of bringing claims at a state administrative hearing or in state or federal court. When advocates file cases in federal district court, attorneys representing the state may argue that the court should abstain from hearing the case. This is particularly true if the beneficiary has also requested an administrative hearing. This Fact Sheet discusses various abstention doctrines and some notable recent cases in which federal courts have decided to abstain from hearing Medicaid claims.2 Advocates need to be aware of these cases, particularly the Eighth Circuit?s decision in Hudson v. Campbell, in which the Court dismissed the case based on Younger abstention.3
Background on Abstention
Generally, federal courts have ?a virtually unflagging obligation? to exercise their jurisdiction.?4 But under some circumstances, federal courts should decline to decide unsettled issues of state law and avoid interfering in ongoing state court or administrative proceedings. This practice, known as abstention, should be ?the exception and not the rule.?5 Consistent with that principle, courts have traditionally not abstained from hearing Medicaid cases. In the past several years, however, there have been several surprising decision in which federal courts decided to abstain from hearing Medicaid claims. There are several types of abstention. Notable are the following doctrines:
Younger abstention, named for the Supreme Court case Younger v. Harris, is invoked to prevent interference by a federal court in ongoing state judicial or administrative proceedings.6 It is appropriate when such proceedings involve important state interests that are traditionally addressed under state law, as long as the state proceedings could afford adequate relief for the plaintiff.7 The doctrine originally was applied only to ongoing state criminal court proceedings, but the grounds for Younger abstention have since been significantly expanded. Now, it is regularly applied in civil cases and to administrative proceedings, if the federal court finds that there is an opportunity to raise federal issues in the administrative proceeding itself or on court review of the administrative decision.8
Some courts have held that Younger should only be invoked when proceedings are ?coercive? (not initiated by potential plaintiffs but in which they must participate) and not ?remedial? (voluntarily initiated by a plaintiff to redress a wrong by the state).9 This concept was recognized in the Supreme Court?s decision in Ohio Civil Rights Comm?n v. Dayton Christian Schools.10 In that case, a state civil rights commission initiated an administrative proceeding against a private school, which then filed an action in federal court under § 1983, alleging that the proceedings would violate the First Amendment.11 The Supreme Court held that abstention was appropriate. It also held that its decision was consistent with Patsy v. Board of Regents of the State of Florida, which holds that a plaintiff are not required to exhaust administrative remedies before filing a claim under §1983.12 Unlike the situation in Patsy, the Court noted that administrative proceedings were well underway before the federal action, an important state interest was involved, and the proceedings were ?coercive? and not ?remedial.?13 As a recent Tenth Circuit decision illustrates and as discussed below, the distinction between coercive and remedial proceedings can be unclear.
Burford abstention is intended to prevent federal courts from bypassing a state administrative process and resolving issues of state law and policy that should properly be determined by a state administrative body.
Under this doctrine, federal district courts should decline from hearing claims that would affect proceedings or orders of state administrative agencies when there are ?difficult questions? regarding important state policy or federal review would disrupt state efforts to establish consistent policy related to a ?matter of substantial public concern.?14 Burford abstention is appropriate when adequate and timely state court review is available and a case involves: (1) a complex administrative scheme; (2) supervised by state courts; that (3) addresses complicated state law questions requiring specialized knowledge and expertise.15 For abstention to be appropriate, the primary purpose of the state?s administrative system must be to achieve a uniform policy regarding an essentially local problem.16
Colorado River Abstention
The Colorado River abstention doctrine allows a federal district court to stay or dismiss a suit when there is a substantially similar suit pending in state court.17 Suits are substantially similar when they involve the same parties and the claims are predicated on the same allegations.18
Colorado River holds that abstention is warranted only in exceptional circumstances. 19 A court must consider a number of factors in determining whether such circumstances exist, including the inconvenience of the federal forum for defendants, whether property is the subject of the suit, the desirability of avoiding piecemeal litigation, the order in which the state and federal courts obtained jurisdiction, the adequacy of the state forum, source of governing law, relative progress in each case, and whether federal or state law controls the litigation.20
While not technically an abstention doctrine, Rooker-Feldman is often raised when defendants argue for abstention. This doctrine provides that federal courts cannot entertain appeals of state court decisions.21 It holds that a district court has no jurisdiction over a matter in which a state court loser is asking the federal court to review and reverse a state court judgment that was rendered before the federal proceeding is initiated.22 For the doctrine to apply, the two claims must be inextricably intertwined such that the federal claim could only succeed if the court found that the state court had wrongly decided the issue.23 The Supreme Court has stated that Rooker-Feldman ?has no application? to state administrative decisions.24
Thus, while Younger abstention may compel a federal court from hearing a Medicaid claim while there is an ongoing state administrative hearing, even after a final state court decision is rendered, Rooker-Feldman can bar a federal district court from hearing a claim that amounts to a review of that particular decision.
The Pullman doctrine holds that federal district courts may abstain from hearing a case involving federal constitutional claims when a case also implicates: (1) uncertain issues of state law underlying the federal constitutional claims brought in federal court; (2) state law issues that could be interpreted by a state court would eliminate the need to adjudicate the constitutional claims; and (3) a federal court’s erroneous construction of state law would disrupt important state policies.25
There are few reported cases addressing the Pullman doctrine in the Medicaid context and those that do tend to find that the doctrine does not bar federal court adjudication.26
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1 Produced by the National Health Law Program with a grant from the Nathan Cummings Foundation, NC IOLTA, and the Training Advocacy Support Center (TASC), which is sponsored by the Administration on Developmental Disabilities, the Center for Mental Health Services, the Rehabilitation Services Administration, the Social Security Administration, and the HealthResources Services Administration. TASC is a division of the National Disabilities Rights Network (NDRN).
2 For an earlier review of Medicaid abstention decisions, see Sarah Somers & Natalie Kean,
Update on Federal Court Access ? Abstention (July 2007) (available from TASC and NHeLP). For a more general discussion of abstention, see SHRIVER CENTER ON LAW & POVERTY, FEDERAL PRACTICE MANUAL FOR LEGAL AID ATTORNEYS Ch. 2.8 (Jeffrey S. Gutman ed., 2010 update),
available at http://povertylaw.org/communication/federal-practice-manual.
3 663 F.3d 885.
4 Ankenbrandt v. Richards, 504 U.S. 689, 705 (1992).
6 Younger v. Harris, 401 U.S. 37 (1971); Ohio Civil Rights Comm?n v. Dayton Christian Sch., Inc., 477 U.S. 619 (1986).
7 Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 10-17 (1987)
8 Ohio Civil Rights Comm?n v. Dayton Christian Sch., Inc., 477 U.S. at 627; see also Middlesex County Ethics Com. v. Garden State bar Ass?n, 457 U.S. 423 (1982)
9 See, e.g., Kercado-Melendez v. Aponte-Roque, 829 F.2d 255 (1st Cir. 1987).
10 477 U.S. 619 (1986).
11 Id. at 625.
12 457 U.S. 496 (1982); see also Monroe v. Pape, 365 U.S. 167 (1961).
13 477 U.S. at 627, n. 2.
14 New Orleans Pub. Serv. Inc. v. Council of New Orleans, 491 U.S. 350, 361 (1989). See also Burford v. Sun Oil, 319 U.S. 315 (1943).
15 Arkansas Medical Soc., Inc. v. Reynolds, 6 F.3d 519, 528-29 (8th Cir. 1993); see also New Orleans Pub. Serv. Inc. s, 491 U.S. at 361; New Orleans Pub. Serv. Inc., 491 U.S. at 361.
16 491 U.S. at 362.
17 Colo. River Water Conservation Dist. v. U.S., 424 U.S. 800, 818-20 (1976).
18 Romine v. Compuserve Corp., 160 F.3d 337 (6th Cir. 1998); see also Nabash v. Marceau,
882 F.2d 1411, 1416 (9th Cir. 1989).
19 Colo. River at 818-19.
20 Id.; Moses S. Cone Mem. Hosp. v. Mercury Construction Corp., 460 U.S. 1, 16 (1983).
21 Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); D.C. Ct. of App. v. Feldman, 460 U.S. 462
22 See, e.g., Exxon Mobile Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 284 (2005). Federal review of state court decisions is only available when a state supreme court renders a final judgment that implicates a conflict with federal law and a petition for a writ of certiorari is filed with the Supreme Court pursuant to 28 U.S.C. § 1257. Feldman, 460 U.S. at 476.
23 See, e.g., Charchenko v. City of Stillwater, 47 F.3d 981 (8th Cir. 1995).
24 Verizon Md., Inc. v. Public Servs. Comm?n of Md., 535 U.S. 635, 644 n.3 (2002). See also Sanders v. Kan. Dep?t of Rehab Services, 317 F. Supp. 2d 1233 (D. Kan. 2004) (noting in a Medicaid case that the Rooker-Feldman does not apply to administrative proceedings).
25 See Railroad Comm?n of Tex. v. Pullman Co., 312 U.S. 496 (1941)
26 See, e.g., Providence Pediatric Medical Daycare, Inc. v. Alaigh, 799 F.Supp.2d 364 (D.N.J. 2011) (noting courts should employ Pullman rarely).