Home › Case briefs › Civil Procedure

New York State Association for Retarded Children, Inc. v. Carey

United States Court of Appeals for the Second Circuit · 1984 · Civil Procedure

Civil ProcedureEleventh AmendmentAbstentionConsent DecreesMedicaid ReimbursementEleventh Amendmentretroactive monetary reliefstate sovereign immunity

Facts

This class action had been resolved in 1975 by the Willowbrook Consent Judgment, which required New York to provide specified services to class members and to take all steps necessary to ensure full and timely financing of those responsibilities. UCP was not an original party, but later became a party defendant for the limited purpose of carrying out the consent judgment while operating certain facilities as the State's agent under revocable permits and contracts with the State. In 1982, UCP and the State settled reimbursement disputes for services provided through July 1, 1982, agreed to interim rates pending new Medicaid rates, and no final new rates were set. UCP then sought federal court relief, claiming the interim rates were inadequate and requesting both retroactive reimbursement for deficits since July 1, 1982, and prospective rate increases.

Issue

Whether UCP, a later-added party defendant operating facilities as the State's agent, could obtain in federal court retroactive reimbursement from New York by characterizing its claim as enforcement of the consent judgment, and whether the federal court should set prospective Medicaid reimbursement rates. Also at issue was whether the State had waived Eleventh Amendment immunity.

Rule

A party may invoke a consent judgment in federal court only to enforce rights the judgment gives that party; when the asserted payment right arises solely from contract with the state, a claim for past reimbursement is a suit for retroactive monetary relief barred by the Eleventh Amendment absent an unmistakable waiver by the state. Federal courts should abstain from deciding disputes over prospective state Medicaid reimbursement rates when the claim is contractual and the state provides its own administrative and judicial review mechanisms, because federal intervention would needlessly interfere with state administration.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

A federal consent decree requires Illinois to provide specified residential services to a class of disabled children in Chicago and to ensure adequate funding for those services. Two years later, Lakeview Support Network is added as a defendant solely to operate one facility as the state's agent, and its operating agreement with Illinois sets payment terms. After the state underpays for 18 months, Lakeview sues in federal court for the unpaid balance, calling the suit an action to enforce the decree.

How should the federal court rule on Lakeview's claim for the past unpaid balance?

Explanation. A later-added party may invoke a consent decree only to enforce rights the decree actually gives that party. Where the decree's funding language protects the beneficiary class, but the provider's entitlement to be paid comes only from its contract or permit with the state, a federal suit for past underpayment is a suit for retroactive monetary relief barred by the Eleventh Amendment. Merely labeling the action as decree enforcement does not change the source of the right asserted. (Derived from New York State Association for Retarded Children, Inc. v. Carey (n.d.).)