OPINION ANALYSIS

Court endorses private Section 1983 enforcement of spending clause enactments

Civil rights plaintiffs scored a significant victory in Health & Hospital Corp. of Marion County v. Talevski on Thursday, with a seven-justice majority reaffirming that private plaintiffs can enforce spending clause enactments through 42 U.S.C. § 1983 and allowing private damages actions to enforce the Federal Nursing Home Reform Act of 1987.

FNHRA, a law enacted under Congress’s spending clause powers, requires nursing facilities participating in Medicare and Medicaid to “protect and promote the rights of each resident” as a condition of receiving funds. Gorgi Talevski’s family brought a Section 1983 action against Valparaiso Care and Rehabilitation, a government nursing facility owned by Health and Hospital Corp. The suit alleged that VCR violated two FNHRA provisions in treating Talevski: 1) a prohibition on physical or chemical restraints as disciplinary or convenience mechanisms not necessary to treat medical symptoms; and 2) a prohibition on transferring or discharging residents except for specified reasons.

Justice Ketanji Brown Jackson wrote for a seven-justice majority.

Section 1983 provides a cause of action against any person acting under color of state law who deprives a person of “rights, privileges, or immunities secured by the Constitution and laws” of the United States. Congress attached no modifiers to “and laws,” erasing any doubt that any federal law can secure a right for Section 1983 purposes.

HHC argued that spending clause enactments are unique. They operate as contracts between the federal government and the recipient of funds; any private person suing to enforce the terms of that contract is a third-party beneficiary, who is generally barred from enforcing contractual obligations. Jackson explained that two well-established principles prompted the court to reject HHC’s invitation to reimagine the statute and precedent. First, the principle that third-party beneficiaries could not sue to enforce contractual obligations “is, at a minimum, contestable,” ambiguous history insufficient to justify overruling 45 years of major decisions. Second, the court regards Section 1983 as a tort claim, making HHC’s focus on 19th-century contract law “perplexing;” contract principles should not displace Section 1983’s “’species of tort liability.’”

The court then applied its long-standing two-step analysis to conclude that FNHRA is enforceable through Section 1983.

First, FNHRA “unambiguously” confers individual federal rights. The statutory provisions at issue are “phrased in terms of the persons benefitted” and contain “’rights-creating, individual-centric language with an ‘unmistakable focus on the benefitted class.’” Both provisions reside in a section concerning requirements relating to residents’ rights; both refer to rights, to individual residents, and to residents’ health, welfare, and medical needs. That the provisions also speak to the participating nursing homes subject to the statutory restrictions does not divert from the statutory focus on the nursing-home residents; a statute can secure rights when it considers the rights bearers and the actors who might threaten those rights.

Second, HHC did not defeat the presumption of private Section 1983 enforceability of those statutory rights. It failed to show that Congress intended a statutory remedial scheme to be the exclusive avenue for enforcing rights. That “boils down to what Congress intended, as divined from text and context.” The sine qua non is incompatibility between Section 1983 enforcement and any enforcement scheme in the statute. The majority “discern[ed] no incompatibility” between FNHRA’s enforcement scheme and Section 1983 enforcement. FNHRA does not include an express private right of action. And however comprehensive its administrative scheme, nothing shows that Congress intended it to provide the exclusive enforcement mechanism.

The majority closed by rejecting the unique argument of the United States, which filed a “friend of the court” brief in the case. The government argued that FNHRA is not privately enforceable because private entities — who do not act under state law and thus cannot be sued under Section 1983 — own most nursing homes. Because most nursing-home owners could not be sued under Section 1983, Congress understood FNHRA’s enforcement scheme as exclusive. Instead, the court focused on the statute creating the right, refusing to speculate about “ostensible marketplace realities that appear nowhere in the statute’s text or relevant context.” Nothing in FNHRA hints that Section 1983 actions would thwart congressional intent.

Justice Neil Gorsuch joined the majority opinion but wrote a concurring opinion. He warned of lurking question in this area of law, which HHC failed to develop and are “for another day.” These include whether legal rights in spending clause enactments are “secured” as against states and whether Congress can do so consistent with the Constitution’s anti-commandeering principle.

In a concurring opinion joined by Chief Justice John Roberts, Justice Amy Coney Barrett insisted that “[c]ourts must tread carefully before concluding that Spending Clause statutes may be enforced through § 1983.”

She elaborated on three points from the majority opinion. First, HHC’s “novel contract-law theory” provided no basis to “abandon” the principle that “laws” in Section 1983 means all federal laws, including those passed under Congress’s spending clause authority. Second, the bar for finding Section 1983 enforcement “is high, and although the FNHRA clears it, many federal statutes will not.” FNHRA is the third spending clause enactment Congress has found enforceable through Section 1983 since 1981. Third, a court need not identify an actual clash between private judicial remedies to find that a spending statute forecloses Section 1983. Government enforcement and administrative remedies may suffice, as will a “centralized review mechanism” that would be undermined by piecemeal individual litigation.

Justice Clarence Thomas wrote a 36-page solo dissent, arguing that the court’s jurisprudence has ignored a fundamental distinction between Congress’s exercise of sovereign legislative powers and its power to spend money and attach conditions to the receipt of that money. He argued that the former creates a federal law that “secures” rights and imposes legal obligations enforceable through Section 1983, while the latter is “no more than a disposition of funds,” a contractual offer that secures rights through acceptance of funds, not through “federal law” itself. Ignoring that distinction, as the court does in allowing Section 1983 enforcement of spending laws, contradicts “the bedrock constitutional prohibition against federal commandeering of the States.” Thus, Thomas concluded, FNHRA and similar statutes either are not laws securing rights cognizable under Section 1983 or they are unconstitutional direct regulations of states.

Justice Samuel Alito also dissented, joined by Thomas. Alito agreed with the “high bar” required for Section 1983 enforcement but disagreed with how the majority applied that standard. Although FNHRA creates substantive private rights, he wrote, the act created a “reticulated remedial regime that both balances federal and state enforcement and channels disputes through that regime.” Section 1983 suits, he said, “upend this careful balance.” The act allows states broad enforcement authority, limits federal enforcement, and grants residents internal grievance procedures funneled to the same state authorities. Thus, he argued, Section 1983 enforcement of FNHRA circumvents those remedies.