Supremacy Clause

Altria Group, Inc. v. Good

Issues

Can smokers sue for misrepresentations in cigarette advertising under state law, or does the Federal Cigarette Labeling and Advertising Act prohibit such state-law claims?

 

Stephanie Good and other smokers (“Good”) brought a class action suit against Altria Group (“Altria”) and its subsidiary, Philip Morris, for fraudulent misrepresentation under Maine state law. Good and the other plaintiffs claim that the use of descriptors such as “light” and “lower in tar and nicotine” in cigarette advertisements are misrepresentations because Federal Trade Commission mandated testing does not reflect the actual tar and nicotine delivery of “light” cigarettes. Altria argues that state law claims of fraudulent misrepresentation against cigarette companies are preempted by federal law. The First Circuit rejected Altria’s argument, and the Supreme Court will review that decision. Given the diversity of state laws and the widespread use of “light” descriptors, the outcome of this case could expose tobacco companies to different levels of liability based on the content of their advertising. This case may affect other federally regulated industries, potentially subjecting them to state law claims for fraudulent misrepresentation on the ground that federally permissible advertising and testing is misleading under various state laws.

Questions as Framed for the Court by the Parties

To ensure that interstate commerce is "not impeded by diverse, nonuniform, and confusing cigarette labeling and advertising regulations," Congress has precluded the States from imposing any "requirement or prohibition based on smoking and health . . . with respect to the advertising or promotion of any cigarettes," and has authorized the Federal Trade Commission to regulate "unfair or deceptive acts or practices in the advertising of cigarettes." 15 U.S.C. §§ 1331, 1334, 1336. Based on studies suggesting that cigarettes with comparatively lower tar and nicotine yields may present fewer health risks, the FTC requires tobacco companies to disclose those yields as measured using an FTC-mandated test, and has authorized tobacco companies to advertise cigarettes using "descriptors," such as "light," as shorthand references to the numerical test results. Respondents in this case contend that such descriptors are misleading, in violation of a state deceptive trade practices statute.

The question presented is whether state-law challenges to FTC-authorized statements regarding tar and nicotine yields in cigarette advertising are expressly or impliedly preempted by federal law.

Defendants Altria Group and Philip Morris (Altria’s subsidiary) manufactured and sold two brands of cigarettes, “Marlboro Lights” and “Cambridge Lights.” See Good v. Altria Group, Inc., 501 F.3d 29, 30 (1st Cir.

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Ark. Dep't of Human Servs. v. Ahlborn

Issues

If a party receives Medicaid benefits for an injury, and later receives a settlement payment from a third party, can the state force the party to use the entire settlement to repay the state's Medicaid expenses?

 

Medicaid provides certain needy individuals with funds for medical treatment. The program is administered by the states with federal funding and statutory guidelines. Federal Medicaid law generally forbids states from placing liens on the "pre-death" property of Medicaid beneficiaries. The Arkansas Medicaid program requires beneficiaries to sign over their interest in any future legal claim before receiving benefits. Technically, this case will decide whether the federal statutes prohibit states from doing this. More importantly, the decision will determine to what extent states can recoup Medicare expenses from private tort judgments and settlements, and could have a profound effect on how the costs of the Medicaid are distributed between the states and private parties.

Heidi Ahlborn suffered severe, permanently disabling injuries in a 1996 car accident. Ahlborn v. Arkansas Dep't of Human Services, 397 F.3d 620, 622 (8th Cir. 2005). She sought and received roughly $215,000 in medical benefits through Arkansas's Medicaid program. Id.

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Armstrong v. Exceptional Child Center, Inc.

Issues

Does section (30)(A) of the Medicaid Act provide a private right of action for Medicaid providers against states under the Supremacy Clause, even when Congress has not explicitly created the right? 

The Supreme Court will consider whether individual Medicaid providers have a private right of action under the Supremacy Clause to enforce section (30)(A) of the Medicaid Act (“§ (30)(A)”), which requires state Medicaid agencies to take provider costs into account when setting reimbursement rates, when Congress has not explicitly granted a private right of action. Richard Armstrong, the Director of Idaho’s Department of Health and Welfare, argues that individuals do not have a private right of action under § (30)(A) or the Supremacy Clause because a private remedy cannot exist without congressional intent and private litigants should not play a role in determining whether a state gets federal funding. According to Exceptional Child Center, however, when a state law conflicts with federal law, individuals have a private right of action under the Supremacy Clause to bring an injunction and prevent harm that would result from the conflicting state statute. The Court’s ruling will impact the right of individuals to recover under the Supremacy Clause as well as the administration of Medicaid and other statutory schemes that provide funding to states as long as they comply with federal law. 

Questions as Framed for the Court by the Parties

Does the Supremacy Clause give Medicaid providers a private right of action to enforce § 1396a(a)(30)(A) against a state where Congress did not expressly create enforceable rights under that statute?

Exceptional Child Center, Inc., and four other companies (collectively, “ECC”) offer in-home healthcare and other services for those who are Medicaid-eligible in Idaho. See Inclusion, Inc. v. Armstrong, 835 F. Supp. 2d 960, 961 (D.

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Additional Resources

•    Robert Pear: As Medicaid Rolls Swell, Cuts in Payments to Doctors Threaten Access to Care, The New York Times (Dec. 27, 2014). 

•    Peyton M. Sturges: High Court to Review Medicaid Dispute, Providers' Rights to Force Higher Payments, Bloomberg BNA's Health Law Reporter (Oct. 9, 2014). 

•    Steve Vladeck: Enforcing Medicaid Against Recalcitrant States: The Former HHS Officials' Amicus Brief in Armstrong, PrawfsBlawg (Dec. 23, 2014). ​

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Christie v. National Collegiate Athletic Association

Issues

Does the Professional and Amateur Sports Protection Act violate the Tenth Amendment anti-commandeering doctrine by preventing states from modifying or repealing state-law prohibitions on sports gambling?

The Court will decide whether § 3702(1) of the Professional and Amateur Sports Protection Act (“PASPA”), which prohibits state authorization of sports gambling, is a lawful preemption of New Jersey’s 2014 law repealing previous state bans on sports gambling or is a violation of the Tenth Amendment anti-commandeering doctrine. The issue was originally presented when the National Collegiate Athletic Association (“NCAA”) sued New Jersey claiming PASPA preempted a 2012 New Jersey law which legalized and regulated sports gambling. There, the Third Circuit held that PASPA did not violate the anti-commandeering doctrine because it did not require states to act. In response, New Jersey enacted a 2014 law which repealed existing state-law bans of sports gambling. The NCAA once again filed suit and the case once again rose through the Third Circuit. Christie claims PASPA’s prohibition of authorization of sports gambling violates the anti-commandeering doctrine because requiring states to maintain prohibitions is just as harmful to federalism as is requiring states to act. The NCAA contends that PASPA is a lawful preemption of state law, and even if § 3702(1)’s prohibition of authorization is unlawful, the rest of PASPA’s provisions should remain in effect. The Court’s decision will determine the scope of the Tenth Amendment and could have significant consequences for the legality of sports gambling nationwide.

Questions as Framed for the Court by the Parties

Does a federal statute that prohibits modification or repeal of state-law prohibitions on private conduct impermissibly commandeer the regulatory power of States in contravention of New York v. United States, 505 U.S. 144 (1992)?

In 1992, Congress passed the Professional and Amateur Sports Protection Act (“PASPA”), which prohibits states and their political subdivisions from authorizing, licensing, regulating, and controlling sports gambling. See NCAA v. Governor of New Jersey, 832 F.3d 389, 392 (3d Cir. 2016).

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Coventry Health Care of Missouri, Inc. v. Nevils

Issues

Does the Federal Employees Health Benefits Act (“FEHBA”) preempt state anti-subrogation law and does 5 U.S.C. § 8902(m)(1) violate the Supremacy Clause? 

The Supreme Court will decide whether § 8902(m)(1) of the Federal Employees Health Benefits Act (“FEHBA”) allows insurance companies to collect reimbursements from the insured after personal injury claims or whether a “presumption against preemption” allows state anti-subrogation laws to prevail.  Petitioner Coventry Health of Missouri, Inc. argues that FEHBA unambiguously preempts state anti-subrogation laws; preemption comports with the Supremacy Clause; and the Office of Personnel Management’s new final rule, codified in § 8902(m)(1), should be granted Chevron deference. In contrast, Respondent Jodie Nevils argues that FEHBA’s language is ambiguous; Chevron deference does not apply; and allowing preemption of state anti-subrogation law violates the Supremacy Clause by encroaching on law traditionally left to the states to regulate. This case will clarify the potential for state anti-subrogation law preemption to influence the cost of health care coverage for FEHBA plan enrollees and will address federalism concerns regarding the balance of power between the federal government and the states for the administration and provision of health insurance to federal employees. 

Questions as Framed for the Court by the Parties

The Federal Employees Health Benefits Act (“FEHBA”), 5 U.S.C. § 8901 et seq., governs the health benefits of millions of federal workers and dependents, and authorizes the Office of Personnel Management (“OPM”) to enter into contracts with private insurance carriers to administer benefit plans. FEHBA expressly “preempt[s] any State or local law” that would prevent enforcement of “[t]he terms of any contract” between OPM and a carrier which “relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits).” In a 2015 regulation, OPM codified its longstanding position that FEHBA-contract provisions requiring carriers to seek subrogation or reimbursement “relate to . . . benefits” and “payments with respect to benefits,” and therefore FEHBA preempts state laws that purport to prevent FEHBA insurance carriers from pursuing subrogation and reimbursement recoveries. 5 C.F.R. § 890.106(h). Expressly disagreeing with multiple federal circuits and state appellate courts, the Missouri Supreme Court nevertheless construed FEHBA not to preempt state laws—explicitly refusing to accord any deference to OPM’s regulation. A majority of the court further concluded that Section 8902(m)(1) violates the Supremacy Clause of the U.S. Constitution. The questions presented are:

  1. Whether FEHBA preempts state laws that prevent carriers from seeking subrogation or reimbursement pursuant to their FEHBA contracts.
  2. Whether FEHBA’s express-preemption provision, 5 U.S.C. § 8902(m)(1), violates the Supremacy Clause. 

In 2006, Respondent Jodie Nevils, a federal employee working for the United States Postal Service, was injured in a car accident. See Brief for Respondent, Jodie Nevils at 11. Nevils was covered by a health insurance plan through the petitioner Coventry Health Care of Missouri, Inc.

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Douglas v. Independent Living Center of Southern California; Douglas v. California Pharmacist Association; Douglas v. Santa Rosa Memorial Hospital

Issues

Can medical providers sue under the Supremacy Clause of the United States Constitution, arguing that 42 U.S.C. § 1396a(a)(30)(A) preempts a state law that reduces Medicaid reimbursement payments?

 

A series of reforms passed by the California Assembly in 2008 and 2009 reduced the state’s payments made to California Medicaid providers. Respondents Independent Living Center of Southern California, the California Pharmacists Association, and Santa Rosa Memorial Hospital brought suit in the U.S. District Court for the Central District of California, claiming that the payment reductions violated 42 U.S.C. § 1396a(a)(30)(A), which requires that state Medicaid plans comply with federal law or lose federal funding. Petitioner Toby Douglas, the Director of the Department of Health Care Services for the State of California, argues that health care providers cannot sue to enforce § 30(A) because the statute does not grant any enforceable rights, and Congress did not intend for private parties to sue to enforce the statute. Conversely, the health care providers argue that the Supremacy Clause permits private parties to sue if they have suffered an injury from state action, and they assert that Congress did not explicitly disallow private lawsuits in § 30(A). The Supreme Court’s decision will affect the predictability of federal law, the ability of private parties to bring lawsuits to enforce federal law, and the availability of health care to Medicaid beneficiaries.

Questions as Framed for the Court by the Parties

1. Whether Medicaid recipients and providers may maintain a cause of action under the Supremacy Clause to enforce § 1396a(a)(30)(A) by asserting that the provision preempts a state law reducing reimbursement rates?

2. Whether a state law reducing Medicaid reimbursement rates may be held preempted by § 1396a(a)(30)(A) based on requirements that do not appear in the text of the statute?

The Medicaid program authorizes dissemination of federal funds to participating states to reimburse health care providers for services provided to individuals who are eligible for Medicaid. See California Pharmacists Ass’n v. Maxwell-Jolly, 596 F.3d 1098, 1103 (9th Cir.

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Haywood v. Drown

Issues

Whether a state may constitutionally withdraw jurisdiction over 42 U.S.C. § 1983 civil actions filed in state courts against state corrections officers.

 

While Keith Haywood was serving a prison sentence for his second felony conviction, corrections officers filed two separate misbehavior reports against him. After Haywood was found guilty of both offenses, he sued several corrections officers, including the hearing officers who heard his case, in civil lawsuits. Haywood asserted several claims under 42 U.S.C. § 1983. The New York Supreme Court dismissed Haywood’s claims on the basis of New York Corrections Law § 24, which prohibits suits against individual state corrections officers rather than against the state itself. The Appellate Division and the New York Court of Appeals affirmed. Haywood is now appealing to the Supreme Court of the United States. His case will determine whether a state has the sovereign authority to withdraw jurisdiction over an area of federal law. The Supreme Court’s decision will also affect New York corrections officers, who, at present, are immune to suits arising in the course of their jobs. In reaching its decision, the Court will have to balance the efficiency concerns the corrections officers raise with the fairness concerns that Haywood and his supporters raise.

Questions as Framed for the Court by the Parties

Whether a state’s withdrawal of jurisdiction over certain damages claims against state corrections employees — from state courts of general jurisdiction — may be constitutionally applied to exclude federal claims under Section 1983, especially when, as here, the state legislature withdrew jurisdiction because it concluded that permitting such lawsuits is  bad  policy?

In 1992, Keith Haywood received a fifteen- to thirty-year sentence in Attica Correctional Facility for his second violent felony. See Haywood v. Drown, 9 N.Y.3d 481, 484 (N.Y. 2007); see also People v.

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Additional Resources

· Workplace Prof Blog

· Oyez

· PrawfsBlawg: A blog post from before the Supreme Court granted cert, arguing that the Court should do so.

· Constitutional Law: Check out more about the Supremacy Clause here.

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Hillman v. Maretta

Warren Hillman named his wife, Judy Maretta, the beneficiary of his Federal Employees’ Group Life Insurance Act (FEGLIA) in 1996. The two subsequently divorced and Hillman remarried, but never changed the named beneficiary on his plan to his new wife, Jacqueline Hillman. Upon Warren Hillman’s death, Jacqueline Hillman attempted to claim death benefits under this policy, but her claim was denied because she was not the named beneficiary. Maretta received the benefits instead and Jacqueline Hillman commenced a suit against Maretta for the full amount of the death benefits.

Under Virginia state law, when a couple is divorced their beneficiary designations are automatically revoked. However, the  FEGLIA states that the beneficiary named on the policy shall receive the death benefits regardless of current marital status. The Supreme Court will now decide whether FEGLIA preempts Virginia’s state law regarding named beneficiaries, which will determine whether Jacqueline Hillman or Judy Maretta receives Warren Hillman’s death benefits. This case involves the proper balance of the federal government’s interest in uniform rules for the distribution of FEGLI benefits and the state of Virginia’s interest in seeing the intended beneficiary, rather than the named beneficiary, receive the death benefits.

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Questions as Framed for the Court by the Parties

VA. CODE ANN. § 20-111.1(A) (2011) provides that a life insurance policy's revocable beneficiary designation naming a then spouse is deemed revoked upon the entry of a Final Decree of Divorce. 5 U.S.C. § 8705(a) provides that the proceeds from a Federal Employees Group Life Insurance (FEGLI) policy should be paid to the beneficiaries properly designated by the employee, and if none, then to the widow of the employee. If VA. CODE ANN. § 20-111.1 (A) is preempted by 5 U.S.C. § 8705(a) or any other federal law, VA. CODE ANN. § 20-111.1(D) (2011), gives the widow (or whoever would otherwise be entitled to the insurance proceeds), after FEGLI insurance proceeds have been distributed to an ex-spouse, a domestic relations equitable remedy against the ex-spouse for the amount of the insurance proceeds received.

The Supreme Court of Virginia, in agreement with the Supreme Court of Alabama, the First, Seventh and Eleventh Circuits of the United States Court of Appeals and several lower federal courts, but in direct conflict with the Indiana Supreme Court, the Supreme Court of Mississippi, the Court of Appeals of North Carolina, the Appellate Court of Illinois, the Missouri Court of Appeals, the Court of Appeals of Texas, the Superior Court of New Jersey, Appellate Division, the Superior Court of Pennsylvania, and the Court of Appeals of Kentucky, held that 5 U.S.C. § 8705(a) preempts a state domestic relations equitable action against the beneficiary of a FEGLI policy after the insurance proceeds of such policy have been paid to such beneficiary in accordance with the statutory order of precedence in 5 U.S.C. § 8705(a).

The question presented is whether 5 U.S.C. § 8705(a), any other provision of the Federal Employees Group Life Insurance Act of 1954 (FEGLIA) or any regulation promulgated thereunder preempts a state domestic relations equitable remedy which creates a cause of action against the recipient of FEGLI insurance proceeds after they have been distributed, like the one contained in VA. CODE ANN. § 20-111.1(D).

Issue

Whether any provision of the Federal Employees Group Life Insurance Act of 1954 preempts states from creating an equitable remedy where a third party can recover the amount of the Federal Employees Group Life Insurance benefit from the original beneficiary.

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Howell v. Howell

Issues

Does the Uniformed Services Former Spouses’ Protection Act preempt state domestic relations law when a veteran waives part of his military retirement pay in order to receive veterans’ disability benefits and an ex-spouse seeks to collect reimbursement for the resultant decrease in her court-ordered half of his retirement pay, as ordered at the time of divorce? 

Court below

In this case, the Supreme Court will decide whether the Uniformed Services Former Spouses’ Protection Act (“USFSPA”) overrides state domestic relations law. In deciding this matter, the Court will determine whether a divorced veteran, who waives a portion of the total allocated military retirement pay (“MRP”) in order to receive disability benefits, must reimburse an ex-spouse for lost MRP when there exists a divorce decree ordering the equal division of the full MRP between the parties. Petitioner John Howell argues that the USFSPA overrides an Arizona divorce court order granting fifty percent of his MRP to his ex-wife, Respondent Sandra Howell, as the parties agreed during their divorce, without regard for Mr. Howell’s subsequent disability waiver. Mr. Howell contends that, because the court order directly conflicts with the USFSPA and its objectives, the court order is not legally valid. Respondent Sandra Howell counters that the divorce court’s order is valid because there is no direct conflict between the order and the USFSPA. This case will clarify the scope of the Military Powers Clauses and the Supremacy Clause for cases involving veterans’ benefits and domestic relations issues that have been traditionally left to the states to regulate, such as divorce. This case will also address the effects on retired and active-duty military personnel as well as their ex-spouses in navigating disability payments, partially-waived MRPs, and divorce decrees that allocate a portion of pre-waiver MRP to the ex-spouse. 

Questions as Framed for the Court by the Parties

Whether the Uniformed Services Former Spouses’ Protection Act preempts a state court’s order directing a veteran to indemnify a former spouse for a reduction in the former spouse’s portion of the veteran’s military retirement pay, where that reduction results from the veteran’s post-divorce waiver of retirement pay in order to receive compensation for a service-connected disability. 

Petitioner John Howell and Respondent Sandra Howell, residents of Arizona, divorced in 1991. See Brief for Petitioner, John Howell at 8. Mr. Howell, who was anticipating retiring from the Air Force shortly after the divorce, came to an agreement with Ms.

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Hughes v. Talen Energy Marketing, LLC; CPV Maryland, LLC v. Talen Energy Marketing, LLC

Issues

Did Maryland usurp the Federal Energy Regulation Commission’s authority to approve rates in federal energy markets by entering fixed-rate contracts with an energy provider?

 

The Federal Power Act (“FPA”) gives the Federal Energy Regulatory Commission (“FERC”) power to regulate interstate energy markets. If the FPA does not address a particular area of regulation, then states can regulate that area. One of FERC’s powers is approving wholesale energy rates. In Hughes, the Court will consider whether Maryland encroached on FERC’s rate-setting power by entering fixed-rate contracts with an energy producer. Petitioners W. Kevin Hughes, the chairman of the Maryland Public Service Commission, and CPV Maryland, LLC (“CPV”), the “energy producer” in this case, argue that Maryland is within its rights to secure new sources of energy through competitive bidding. Maryland does not usurp FERC’s authority unless it actually dictates what price producers sell at, which it did not, Hughes and CPV claim. But respondent Talen Energy Marketing, a CPV competitor, contends that Maryland overstepped its authority by offering fixed-rate contracts, which Talen claims essentially guarantee revenue, to entice bidders like CPV. The outcome of this case may implicate state and FERC regulation of energy markets, and the growth of renewable energy.

Questions as Framed for the Court by the Parties

  1. When a seller offers to build generation and sell wholesale power on a fixed-rate contract basis, does the FPA field-preempt a state order directing retail utilities to enter into the contract?​

  2. Does FERC’s acceptance of an annual regional capacity auction preempt states from requiring retail utilities to contract at fixed rates with sellers who are willing to commit to sell into the auction on a long-term basis?

The Federal Energy Regulatory Commission (“FERC”) regulates interstate electricity markets. To that end, FERC “authorized the creation of ‘regional transmission organizations,’ to oversee [] multistate markets.” See PPL EnergyPlus, LLC v. Nazarian, 753 F.3d 467, 472 (2014). “FERC rules encourage the construction of new plants and sustain existing ones . . .

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