Brown v. Day

By Lee Fanyo

In Brown v. Day, 555 F.3d 882, 885 (10th Cir. 2009), the Tenth Circuit addressed whether an individual challenge to a state administrative agency’s decision in federal court is the type of state proceeding that requires abstention under Younger v. Harris, 401 U.S. 37 (1971).  The Tenth Circuit exercised jurisdiction and held that a federal plaintiff's challenge to a state administrative agency’s decision to terminate Medicaid benefits under 42 U.S.C. § 1983 is not the type of proceeding entitled to Younger abstention because the ruling would contradict with Congressional intent and misinterpret Supreme Court precedent.

Financing healthcare costs without bankrupting states and the federal government is a critical issue for the entire healthcare system.  States, now more than ever, must find ways to reduce healthcare expenditures. Caught in the crossfire is forty-six year old Dena Brown.  With the mind of a three-year-old child, the state and federal government finance her every day care.  In an apparent turn of fortune, Brown became the beneficiary of a trust worth $68,000.  As a result, the Kansas Health Policy and Finance administrative agency (HPF) terminated Ms. Brown’s benefits because a Kansas statute deemed her trust an “available asset” to pay for her care.  

Kansas law allowed Brown to request state judicial review of the HPF’s decision to terminate her benefits. However, Brown filed suit in federal district court seeking an injunction that would prevent HPF from terminating her benefits under 42 U.S.C. § 1983 alleging, “that HPF violated federal Medicaid law . . .” because it determined that the trust was an “available asset.”  The federal district court dismissed Brown’s case based on Younger abstention doctrine.  Brown timely appealed.

In its analysis, the Tenth Circuit reviewed related Younger abstention precedent.  The Court noted that other Circuits have interpreted the Supreme Court’s decisions in Patsy v. Board of Regents of the State of Florida and Ohio Civil Rights Commission v. Dayton Christian Schools, Inc. to determine whether proceedings are remedial or coercive and thus, whether the action “is the type afforded Younger deference.”  Because Brown’s case turned on an answer to the coercive or remedial proceeding question, the Tenth Circuit reviewed these Circuit Courts of Appeals cases in search of a rule to apply.

The Tenth Circuit found the reasoning from the First Circuit “most compelling” because it described a distinction between “optional” participation by the Plaintiff and “mandatory” participation by the Plaintiff. Kercado-Melendez v. Aponte-Roque, 829 F.2d 255, 257-58 (1st Cir. 1987).  If a plaintiff’s participation is optional, the proceeding is remedial and Younger does not require abstention.  In contrast, a proceeding is coercive when a plaintiff’s participation is mandatory because the state is enforcing a violation of law.  Younger requires abstention in coercive proceedings and the Tenth Circuit reasoned that a proceeding is coercive if a federal plaintiff has allegedly violated state law.

The Court decided that Younger abstention was not appropriate in Brown because Brown “initiated a challenge to . . . state action by requesting a hearing before the HPF.”  Thus, the Court reasoned that Brown’s action was a remedial proceeding because the state did not make Brown’s participation mandatory.  Rather, the Court presented the issue as whether Kansas violated the federal-state Medicaid pact with its new law.  Because Kansas allegedly violated federal law, the Tenth Circuit exercised jurisdiction.

Judge Tymkovich dissented from the majority opinion because he disagreed with the majority’s conclusion that Brown’s proceedings were remedial.  Additionally, Judge Tymkovich concluded that the judicial proceeding was ongoing.  Thus, the Court should have abstained under Younger and its progeny.

Dena Brown opened the door for future plaintiffs to sidestep state appellate proceedings subsequent to an administrative ruling by filing a claim under 42 U.S.C. § 1983 in federal court.  Because the Tenth Circuit ruled that Brown’s benefits were improperly terminated, federal plaintiffs will likely begin challenging state healthcare administration decisions in federal court instead of state court in the hope that federal courts will be more sympathetic to plaintiff’s Medicaid claims.