State ex rel. Cleveland Right to Life v. State of Ohio Controlling Bd.

[Cite as State ex rel. Cleveland Right to Life v. State of Ohio Controlling Bd., 138 Ohio St. 3d
57, 2013-Ohio-5632.]
THE STATE EX REL. CLEVELAND RIGHT TO LIFE ET AL. v. THE STATE OF
OHIO CONTROLLING BOARD ET AL.
[Cite as State ex rel. Cleveland Right to Life v. State of Ohio Controlling Bd.,
138 Ohio St. 3d 57, 2013-Ohio-5632.]
Legislative process—Appropriations—Veto—Controlling Board’s authority—
R.C. 127.17—Medicaid—R.C. 5163.03.
(No. 2013-1668—Submitted December 11, 2013—Decided December 20, 2013.)
IN MANDAMUS AND PROHIBITION.
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O’CONNOR, C.J.
{¶ 1} This case came on for consideration upon relators’ request for
writs of mandamus and prohibition. Relators have abandoned their request for
prohibition, as they fail to argue it on the merits in their briefs. We therefore
concentrate our efforts on the prayer for a writ of mandamus.
{¶ 2} To be entitled to a writ of mandamus, the relators must establish
(1) a clear legal right to the requested relief, (2) a clear legal duty on the part of
the relevant agency or governmental unit to provide it, and (3) the lack of an
adequate remedy in the ordinary course of the law. State ex rel. Waters v. Spaeth,
131 Ohio St. 3d 55, 2012-Ohio-69, 960 N.E.2d 452, ¶ 6. Relators must prove that
they are entitled to the writ by clear and convincing evidence. Id. at ¶ 13.
{¶ 3} The relators fail in their quest because they have not adequately
shown that the Controlling Board had a clear legal duty to follow the directives of
the legislature when those directives are not expressed in the final, enrolled bill.
{¶ 4} Although this case arises in the context of a complex social and
political debate, our task is limited. Quite simply, a single question of law is
presented to us: Did the Ohio Controlling Board violate R.C. 127.17 by
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approving the Ohio Department of Medicaid’s request for increased appropriation
authority for the Hospital Care Assurance Match Fund? For the reasons that
follow, we must answer that question in the negative. Therefore, we deny
relators’ request for a writ of mandamus.
RELEVANT BACKGROUND
{¶ 5} Congress created Medicaid in 1965 as a program to provide federal
funds to states that pay for medical treatment for the poor. 42 U.S.C. 1396 et seq.
State participation is voluntary, but once a state chooses to participate, it must
administer a plan in a manner that meets federal requirements. Frew v. Hawkins,
540 U.S. 431, 433, 124 S. Ct. 899, 157 L. Ed. 2d 855 (2004).
{¶ 6} To receive federal funds, states must prepare a plan that defines the
categories of individuals eligible for benefits and the specific kinds of medical
services the plan will cover. 42 U.S.C. 1396a(a)(1) and (17). A state plan must
comply with federal criteria regarding covered services, eligible populations, and
costs, 42 U.S.C. 1396a, and the plan must be approved by the secretary of health
and human services. 42 U.S.C. 1396a(b).
{¶ 7} If the secretary determines that a state has changed or administered
its approved plan in such a way that it no longer complies with federal
requirements, the secretary may reduce or eliminate federal payments to the
noncomplying state. 42 U.S.C. 1396c.
{¶ 8} The federal Medicaid statutes require participating states to
provide medical coverage for certain populations. 42 U.S.C. 1396(a)(10). As
originally enacted, mandatory coverage applied to individuals who received cash
assistance under one of four programs: Old Age Assistance, 42 U.S.C. 301 et seq.;
Aid to Families with Dependent Children, 42 U.S.C. 601 et seq.; Aid to the Blind,
42 U.S.C. 1201 et seq.; and Aid to the Permanently and Totally Disabled, 42
U.S.C. 1351 et seq. Id.; see also Schweiker v. Gray Panthers, 453 U.S. 34, 37,
101 S. Ct. 2633, 69 L. Ed. 2d 460 (1981).
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{¶ 9} Over time, Congress has amended the Medicaid program on
multiple occasions to expand the scope of those to whom mandatory coverage
must apply. The term used for this concept is “mandatory eligibility.” For
example, between 1988 and 1990, Congress required states to include as program
beneficiaries pregnant women with family incomes up to 133 percent of the
federal poverty line, children up to age 6 at the same income levels, and children
ages 6 to 18 with family incomes up to 100 percent of the federal poverty line. 42
U.S.C. 1396a(a)(10)(A)(i) and 1396a(l).
{¶ 10} States may also provide optional coverage for the “medically
needy,” meaning persons whose income exceeds financial eligibility criteria for
those programs, and hence for Medicaid, but who otherwise satisfy the criteria for
one or more of those assistance programs. 42 U.S.C. 1396a(a)(10)(C);
Pharmaceutical Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 651, 123 S. Ct.
1855, 155 L. Ed. 2d 889 (2003). If states choose to cover an optional eligibility
group, the federal government subsidizes a significant portion of the cost.
{¶ 11} Ohio is a Medicaid participant. The Ohio Department of Medicaid
acts as the single state agency to supervise and administer the Medicaid program.
R.C. 5162.03 (formerly R.C. 5111.01). Ohio’s Medicaid statutes preserve the
dichotomy between “mandatory services” and “optional services.” R.C.
5164.01(I) and (N).
{¶ 12} In 2010, Congress enacted the Patient Protection and Affordable
Care Act (“PPACA”), Pub.L. No. 111-148, 124 Stat. 119 (2010). Among its
many provisions, the PPACA created a new category of mandatory beneficiaries,
called Group VIII, consisting of all individuals under the age of 65 with incomes
below 133 percent of the federal poverty line. 42 U.S.C. 1396a(a)(10)(A)(i)(VIII).
In addition, the PPACA changed the essential health-benefits package that states
must provide to all Medicaid recipients. 42 U.S.C. 1396a(k)(1); 1396u-7(b)(5);
18022(B).
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{¶ 13} The PPACA guaranteed that the federal government would pay
100 percent of the costs for covering the newly eligible Group VIII individuals for
three years, through 2016. 42 U.S.C. 1396d(y)(1)(A). Thereafter, the federal
contribution would gradually decrease to a permanent minimum of 90 percent in
2020. 42 U.S.C. 1396d(y)(1)(B) through (E).
{¶ 14} On June 28, 2012, the United States Supreme Court announced its
decision in Natl. Fedn. of Indep. Business v. Sebelius, ___ U.S. ___, 132 S. Ct.
2566, 183 L. Ed. 2d 450 (2012). The petitioners claimed that the PPACA was
unconstitutional in two respects.
{¶ 15} First, the petitioners challenged the individual mandate, which
requires all Americans to maintain minimum essential health insurance or else
pay a “shared responsibility payment” to the federal government. 26 U.S.C.
5000A. The Supreme Court rejected that argument and upheld the individual
mandate as a legitimate exercise of Congress’s constitutional authority to lay and
collect taxes. Id. at 2593-2600.
{¶ 16} Second, the petitioners argued that Congress lacked the authority
to increase the scope of Medicaid coverage or to compel participating states to
comply with the expansion. The court disagreed and upheld the ability of
Congress to expand the availability of health care. Id. at 2607. However, the
court declared that 42 U.S.C. 1396c, the provision that authorizes the secretary to
reduce or eliminate federal subsidies to participating states for noncompliance
with federal mandates, was unconstitutional if used to compel states to extend
Medicaid coverage to Group VIII. Id. Essentially, the Supreme Court made
coverage of Group VIII optional rather than mandatory.
{¶ 17} On June 27, 2013, one year after Sebelius was released, the
General Assembly passed Am.Sub.H.B. No. 59, the omnibus budget bill.
Am.Sub.H.B. No. 59 added two relevant provisions to the Revised Code, R.C.
5163.03 and 5163.04.
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{¶ 18} R.C. 5163.03 provided:
(A) Subject to sections 5163.04 and 5163.05 of the Revised
Code, the medicaid program shall cover all mandatory eligibility
groups.
(B) The medicaid program shall cover all of the optional
eligibility groups that state statutes require the medicaid program
to cover.
(C) The medicaid program may cover any of the optional
eligibility groups to which either of the following applies:
(1) State statutes expressly permit the medicaid program to
cover the optional eligibility group.
(2) State statutes do not address whether the medicaid
program may cover the optional eligibility group.
(D) The medicaid program shall not cover any eligibility
group that state statutes prohibit the medicaid program from
covering.
{¶ 19} R.C. 5163.04. as passed by the General Assembly stated:
The medicaid program shall not cover the group described
in the “Social Security Act,” section 1902(a)(10)(A)(i)(VIII), 42
U.S.C. 1396a(a)(10)(A)(i)(VIII).
Thus, by passing R.C. 5163.04, the General Assembly refused to provide
coverage for Group VIII, which, by virtue of Natl. Fedn. of Indep. Business, was
entitled to optional coverage.
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{¶ 20} On June 30, 2013, Governor John Kasich signed Am.Sub.H.B. No.
59, but only after exercising his line-item veto authority to strike certain
provisions. Most notably, the governor vetoed R.C. 5163.04, the prohibition on
Medicaid coverage for Group VIII.
{¶ 21} Thus, after the governor’s veto, the statute, as enrolled, gave the
state Medicaid program authority to cover any federal optional eligibility group
that is not addressed by state law. R.C. 5163.03(C)(2). And the law, as enrolled,
no longer expressly prohibited optional coverage for Group VIII.
{¶ 22} On September 26, 2013, the state Medicaid director filed a
proposed plan amendment with the Centers for Medicare and Medicaid Services
(“CMS”), the federal agency overseeing Medicaid, to modify Ohio’s plan to
provide services to Group VIII. The state Medicaid director applied for the
modification in reliance on the authority conferred by R.C. 5162.07(B), which
permits the Medicaid director to seek federal approval for amendments to the state
Medicaid plan. CMS approved the amendment on October 10, 2013.
{¶ 23} On October 11, 2013, the Ohio Department of Medicaid submitted
an application to the Controlling Board for an increase in its appropriation
authority from the accounts holding federal Medicaid funds. Specifically, the
director asked the Controlling Board to increase its appropriation authority in
fund 3F001 for fiscal year 2014 by $561,700,000 and by $1,999,500,000 in fiscal
year 2015. The request made clear that every dollar of increased spending would
come from the federal government, and not a single dollar of state money would
be expended.
1. “Fund 3F00” refers to a fund created by R.C. 5168.11(B) (formerly R.C. 5112.18) to hold
federal matching funds received as a result of certain department health-care expenditures. The
Ohio Administrative Code refers to this fund as the “Hospital Care Assurance Match Act.” Ohio
Adm.Code 5160-2-08(A)(5).
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{¶ 24} The Controlling Board approved the department’s request on
October 21, 2013.
{¶ 25} Relators filed the present request for writs of mandamus and
prohibition on October 22, 2013.
ANALYSIS
{¶ 26} A state agency can receive permission to spend federal dollars in
one of three ways: a specific appropriation by the General Assembly, by
executive order of the governor pursuant to R.C. 107.17 (which is inapplicable
because the governor never issued an executive order), or by way of a request to,
and approval from, the Controlling Board. R.C. 131.35(A)(1).
{¶ 27} As noted above, Ohio has authorized participation in the federal
Medicaid plan. The federal funds at issue here constitute excess money over and
above the amounts appropriated by the General Assembly. And the Revised Code
expressly permits expenditure of excess federal funds when authorized by the
Controlling Board. R.C. 131.35(A)(2).
{¶ 28} Relators dispute the applicability of R.C. 131.35(A)(2) because
they do not consider this a modification of the preexisting Medicaid program.
Rather, they view the extension of Medicaid services to Group VIII as the
implementation of an entirely new health-care law. However, characterizing the
PPACA as a component of a new national health-care plan will not result in
authorization of the writs sought by the relators.
{¶ 29} Even if the PPACA is an entirely new federal program, the
Revised Code provides an alternative source of authority for the Controlling
Board’s actions. “Controlling board authorization for a state agency to make an
expenditure of federal funds constitutes authority for the agency to participate in
the federal program providing the funds.” R.C. 131.35(A)(5). Therefore, even if
the PPACA constitutes a new federal program, the department of Medicaid could
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still participate, and expend federal funds, as long as it receives authorization
from the Controlling Board. Here, it received that authorization.
{¶ 30} This leads to the central question in relators’ complaint: whether
the Controlling Board exceeded its statutory authority when it authorized
participation in the program because it acted contrary to the intentions of the
General Assembly.
{¶ 31} The limitations on the authority of the Controlling Board can be
found in R.C. 127.17: “The controlling board shall take no action which does not
carry out the legislative intent of the general assembly regarding program goals
and levels of support of state agencies as expressed in the prevailing appropriation
acts of the general assembly.”
{¶ 32} Relators argue that the General Assembly expressed its intention
not to extend medical services to Group VIII members in the plain language of
R.C. 5163.04. According to relators, the “legislative intent of the general
assembly” can be found only in the appropriation act as passed by the legislature,
irrespective of the governor’s later line-item veto. Thus, relators conclude, by
granting an appropriation authorization increase, the effect of which is to provide
medical services to Group VIII members, the Controlling Board violated R.C.
127.17.
{¶ 33} The argument is not well taken.
{¶ 34} R.C. 127.17 indicates that the legislature’s intention is to be found
in the “prevailing appropriation acts of the general assembly.” (Emphasis added.)
Black’s Law Dictionary 1188 (6th Ed.1990) defines “prevail” as “[t]o become
effective or effectual, to be in force, to obtain, to be in general use or practice, to
be commonly accepted or adopted.” The “prevailing” appropriations act is
therefore the one that has become effective or in force. Under our Constitution,
an act is not effective and in force, that is, it does not become law, until it is
signed into law, or permitted to become law, by the governor. Ohio Constitution,
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Article II, Section 16; see also Patterson Foundry & Machine Co. v. Ohio River
Power Co., 99 Ohio St. 429, 434-435, 124 N.E. 241 (1919).
{¶ 35} Any other conclusion would create a constitutional crisis.
{¶ 36} The Ohio Constitution expressly confers upon the governor
authority to excise any item or items in an appropriation bill, and such
disapproved items “shall be void.” Ohio Constitution, Article II, Section 16. But
R.C. 127.17, as construed by relators, would operate as a statutory negation of the
governor’s constitutional powers. The General Assembly would have the power
to command the Controlling Board, in all cases, to disregard the governor’s veto
in the implementation of appropriations. This interpretation is clearly contrary to
the checks and balances that are critical to our constitutional democracy.
{¶ 37} Finally we note that the Ohio Constitution provides the mechanism
by which the General Assembly may override a veto: repass the legislation by a
vote of three-fifths of the members of both houses. Constitution, Article II,
Section 16. The legislature cannot circumvent this constitutional option by
obtaining a writ from this court that forbids the Controlling Board to comply with
the law, as that law is modified by the governor’s veto. State ex rel. Pub. Util.
Comm. v. Controlling Bd., 130 Ohio St. 127, 132, 197 N.E. 129 (1935).
{¶ 38} We therefore reject relators’ prayer because the relators have not
established a legal basis for the issuance of an extraordinary writ. More
specifically, the relators fail to establish a clear legal right to the requested relief
and a clear legal duty on the part of the Controlling Board to undo the
authorization of the expenditure of additional federal funds to provide medical
insurance for Group VIII members.
Writs denied.
PFEIFER and O’NEILL, JJ., concur.
LANZINGER, J., concurs in judgment only.
O’DONNELL, J., dissents.
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KENNEDY and FRENCH, JJ., dissent and would dismiss.
____________________
O’DONNELL, J., dissenting.
{¶ 39} Respectfully, I dissent.
{¶ 40} The case does not present an issue of constitutional magnitude for
interpretation but rather raises a political question for resolution by the political
branches of government. As the lead opinion articulates, the question is “Did the
Ohio Controlling Board violate R.C. 127.17?” Lead opinion at ¶ 4.
{¶ 41} R.C. 127.17 provides, “The controlling board shall take no action
which does not carry out the legislative intent of the general assembly regarding
program goals and levels of support of state agencies as expressed in the
prevailing appropriation acts of the general assembly.” In my view, the court
ought not to stray into the tangled policy questions at issue here, but rather, should
dismiss the complaint.
{¶ 42} The role of the judiciary is to decide legal questions. This case,
however, involves a political question concerning whether a legislative agency
has acted contrary to policy goals of the General Assembly. “The
nonjusticiability of a political question is primarily a function of the separation of
powers,” Baker v. Carr, 369 U.S. 186, 210, 82 S. Ct. 691, 7 L. Ed. 2d 663 (1962),
which excludes from judicial review the providence of policy choices and value
judgments made by the political branches of government. It operates “to restrain
the Judiciary from inappropriate interference in the business of the other branches
of Government.” United States v. Munoz-Flores, 495 U.S. 385, 394, 110 S. Ct.
1964, 109 L. Ed. 2d 384 (1990).
{¶ 43} Thus, as we explained in State ex rel. Grendell v. Davidson, 86
Ohio St. 3d 629, 633, 716 N.E.2d 704 (1999), “A writ of mandamus will not issue
to a legislative body or its officers to require the performance of duties that are
purely legislative in character and over which such legislative bodies have
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exclusive control.” Citing Wapakoneta v. Helpling, 135 Ohio St. 98, 108, 19
N.E.2d 772 (1939). “The constitutional principle of separation of powers protects
the General Assembly from such infringement.” Id., citing State v. Hochhausler,
76 Ohio St. 3d 455, 463, 668 N.E.2d 457 (1996).
{¶ 44} This court’s intervention is sought in a conflict that exists solely
within the legislative branch, asking us to supervise its internal functioning and
decision making and implicating the power of the General Assembly to oversee
its own affairs in regulating a legislative arm of its own creation. These matters
are not the subject of judicial cognizance.
{¶ 45} The General Assembly established the Controlling Board solely as
a convenience, delegating to it authority to make the myriad adjustments to
appropriations needed on a periodic basis. State ex rel. Ohio Funds Mgt. Bd. v.
Walker, 55 Ohio St. 3d 1, 2, 561 N.E.2d 927 (1990). But having created the
Controlling Board, the legislature can abolish it, or regulate its decision making,
or override its decisions by legislative action. As Justice Holmes explained in his
separate opinion in State ex rel. Meshel v. Keip, 66 Ohio St. 2d 379, 391, 423
N.E.2d 60 (1981) (Holmes, J., concurring in part and dissenting in part), “Clearly,
if the General Assembly disapproved of the Controlling Board’s action, it could
order the board to replace the funds in the account. The General Assembly has
unlimited right to terminate, recall, or abridge the delegated power of the
Controlling Board if it so desires.” Or, as Justice Paul Brown put it in his dissent
in Meshel, “The General Assembly, as a body, clearly is empowered to reverse
any decision of the Controlling Board. Thus, the instant case represents an
unjustifiable attempt to circumvent the legislative process.” Id. at 396 (Brown, J.,
dissenting), citing Outagamie Cty. v. Smith, 38 Wis. 2d 24, 37, 155 N.W.2d 639
(1968).
{¶ 46} Because it is a creature of statute, the Controlling Board is wholly
accountable to the legislative branch of government. The Controlling Board is
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comprised of seven individuals: the director of budget and management or the
director’s designate; the chair or vice-chair of the House Finance-Appropriations
Committee, designated by the Speaker; the chair or vice-chair of the Senate
Finance-Appropriations Committee, designated by the president; one member of
the House each from the majority and the minority parties, designated by the
Speaker; and one member of the Senate each from the majority and minority
parties, designated by the president. R.C. 127.12. Thus, six members of the
Controlling Board are directly answerable to the General Assembly, appointed by
leadership in the House and the Senate.
{¶ 47} The facts as presented to our court reveal that Governor Kasich
proposed to amend the state Medicaid plan to extend coverage to Group VIII
individuals, but the General Assembly did not agree and interlineated “shall not”
into that line item in the budget bill. The governor, exercising his constitutional
prerogative to veto items in appropriations legislation, modified H.B. 59 to
authorize coverage of Group VIII, changing the legislature’s “shall not” to
“may.” Because the General Assembly did not override the governor’s veto, H.B.
59, as modified by the governor, became law.
{¶ 48} Notably, after the Medicaid director sought authorization from the
Controlling Board for the expenditure of federal funds to expand Medicaid, but
before the vote of the Controlling Board, two members of the board were
replaced. As the Columbus Dispatch reported, “To help ensure the request got
the needed votes, [Speaker] Batchelder replaced Rep. Cliff Rosenberger of
Clarksville this morning with McGregor, a moderate, term-limited Republican
who had said he would vote for the measure.” (http://www.dispatch.com
/content/stories/local/2013/10/21/Medicaid-expansion-vote.html).
{¶ 49} The General Assembly has both the incentive to protect its
prerogatives and the institutional mechanisms to do so. This case involves an
impermissible judicial foray into the province of the legislature and raises a
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political question that is not justiciable and which we ought not to answer. The
complaint should be dismissed.
____________________
1851 Center for Constitutional Law and Maurice A. Thompson; and
Callendar Law Group, L.L.C., and Christopher B. Burch, for relators.
Michael DeWine, Attorney General, and Eric E. Murphy, Ryan L.
Richardson, and Charity S. Robl, Assistant Attorneys General, for respondents.
Thomas W. Connors, urging granting of the writs for amicus curiae
American Policy Roundtable, d.b.a. Ohio Roundtable.
AARP Foundation Litigation and Iris Y. Gonzalez, urging denial of the
writs for amicus curiae AARP.
Ohio Poverty Law Center, L.L.C., Douglas L. Rogers, and Eugene R.
King, urging denial of the writs for amici curiae American Cancer Society Cancer
Action Network, Community Legal Aid Services, Inc., Franklin County Public
Defender, Legal Aid of Western Ohio, Legal Aid Society of Cleveland, Legal Aid
Society of Columbus, Legal Aid Society of Southwest Ohio, L.L.C., National
Association of Social Workers-Ohio, National Health Law Program, National
Multiple Sclerosis Society Ohio Chapters, Ohio Association of Area Agencies on
Aging, Ohio Federation of Teachers, Ohio Olmstead Task Force, Ohio Poverty
Law Center, L.L.C., Ohio Voices for Children, Policy Matters Ohio, Southeastern
Ohio Legal Services, Center for Community Solutions, Coalition on
Homelessness and Housing in Ohio, Toledo Area Jobs with Justice & Interfaith
Worker Justice Coalition, and Universal Health Care Action Network of Ohio.
Vorys, Sater, Seymour & Pease, L.L.P., G. Ross Bridgman, Sylvia A.
Brown, and Suzanne J. Scrutton, urging denial of the writs for amici curiae
Advocates for Ohio’s Future, Coalition for Healthy Communities, National
Alliance on Mental Health, Ohio Association of County Behavioral Health
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Authorities, Ohio Council of Behavioral Health and Family Services Providers,
and Ohio Provider Resource Association.
Carpenter Lipps & Leland, L.L.P., Jeffrey A. Lipps, Jonathan A. Allison,
and Joel E. Sechler, urging denial of the writs for amici curiae Ohio National
Guard Association, Clark County Sheriff Gene A. Kelly, Cincinnati Regional
Chamber of Commerce, Columbus Chamber of Commerce, Philanthropy Ohio,
Dayton Chamber of Commerce, Ohio Association of Community Health Centers,
Ohio Association of Health Plans, Ohio Manufacturers Association, and Ohio
Right to Life Society.
Bricker & Eckler, L.L.P., Michael K. Gire, Anna Marie Sferra, Michael L.
Corey, and James J. Hughes; and Sean McGlone, urging denial of the writs for
amici curiae Ohio Hospital Association, Ohio Osteopathic Association, and Ohio
State Medical Association.
Disability Rights Ohio, Ohio Disability Rights Law and Policy Center,
Inc., and Kerstin Sjoberg-Witt, urging denial of the writs for amici curiae
Disability Rights Ohio, People First of Ohio, ARC of Ohio, and Ohio
Empowerment Coalition.
Eric H. Kearney and Bethany E. Sanders, urging denial of the writs for
amici curiae Members of the Ohio Senate Democratic Caucus.
Advocates for Basic Legal Equality, Inc., and W. David Koeninger, urging
denial of the writs for amici curiae Advocates for Basic Legal Equality, Inc., and
Toledo/Lucas County CareNet.
_________________________
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