On July 12, 1999, several medical, dental, and child advocacy organizations, along with several individuals, filed this class-action lawsuit in the United States District Court for the Eastern District of Michigan. The plaintiffs sued the directors of the Michigan Department of Health, the Medical Services Administration, the Michigan Medical Services Administration, and the Michigan Department of Community Health under 42 U.S.C. § 1983. The plaintiffs, represented by The Public Interest Law Center, in collaboration with Dechert LLP, Michigan Legal Services, the National Health Law Project, and the Michigan Association for Children with Emotional Disorders, sought injunctive relief to prevent state officials from violating the Medicaid law, claiming violations of federal Medicaid laws.

The plaintiffs alleged that the state of Michigan failed to provide essential dental and medical services, known as Early and Periodic Screening, Diagnosis, and Treatment Services (“EPSDT services”) required by the Medicaid program to eligible minors. The plaintiffs alleged that Michigan’s Medicaid system paid doctors and dentists too little to ensure that they would be willing to treat patients on Medicaid, such that low-income families faced a dangerous shortage of essential care for their children. The case was assigned to Judge Robert H. Cleland.

On October 14, 1999, the plaintiffs filed a motion seeking class certification of children eligible for EPSDT services.

On November 9, 1999, the defendants filed a motion for judgment on the pleadings. The Clearinghouse does not have access to this document so it is unclear by what reasoning the defendants sought judgment.

On December 28, 1999, Judge Robert H. Cleland granted in part and denied in part the defendants’ motion for judgment on the pleadings. The Clearinghouse does not have access to this document so it is unclear which parts were granted or denied.

On March 26, 2001, Judge Cleland entered an order denying the plaintiffs’ motion to certify the class and granting the defendants’ motion to dismiss. Judge Cleland held that the substantive defendant, in this case, was the state of Michigan and that Ex parte Young was inapplicable, meaning state sovereign immunity doctrine barred this type suit against the state. While the Constitution says that federal statutes are the “supreme law of the land,” Judge Cleland ruled that because the Medicaid program was enacted under Congress’ spending power and is a consensual, contractual agreement between the states and Congress, it is not encompassed by the supremacy clause. Thus, Congress cannot compel states to participate in the program and individual state actors, indistinguishable from the state, retain “constitutional sovereignty from the suit.” 133 F.Supp.2d 549.

Judge Cleland also held that even if there were no immunity from these suits, Section 1983 did not authorize suits against states or state officials for failure to carry out the terms of a federal grant program like Medicaid. The Supreme Court has required a historical statutory construction when construing Section 1983 and Judge Cleland found “no such clear, unambiguous intent to subject States to private suit.” 133 F.Supp.2d 549.

On April 4, 2001, the plaintiffs appealed this decision to the United States Court of Appeals for the Sixth Circuit. The Sixth Circuit (Circuit Judges Merritt, Boggs, and Moore) delivered its opinion on May 15, 2002, in which it reversed the district court’s decision on all issues presented. The court held that conditions imposed by the federal government upon states participating in Medicaid do not arise out of a contractual agreement; they are federal laws. The court also ruled, in line with “well-established precedent,” that laws passed by Congress under its spending powers are supreme law of the land. Furthermore, while the district court ruled that Ex parte Young was unavailable to the plaintiffs, the Sixth Circuit held that because the plaintiffs sought relief from state officials for those officials’ alleged violations of federal law, this case was squarely within Ex parte Young and thus allowed to proceed. Lastly, the court held that the plaintiffs did have a cause of action under Section 1983. The case was remanded back to the district court. 289 F.3d 852.

With the case back in the district court, the plaintiffs moved for class certification on October 14, 2015, and filed an amended complaint on October 18, 2015. The Clearinghouse does not have access to these documents so it is unclear what was different in the amended complaint.

Accordingly, the defendants filed a motion to dismiss and/or for summary judgment on November 29, 2004.

On April 22, 2005, Judge Cleland granted in part and denied in part the defendants’ 2004 motion to dismiss and/or for summary judgment. Judge Cleland addressed the plaintiffs’ claim that the defendants failed to provide EPSDT services to all eligible children by holding that plaintiffs stated a cause of action to the extent that they alleged that the state of Michigan has a policy or practice of not providing the EPSDT services to eligible children who have requested them. Addressing the plaintiffs’ second claim, Judge Cleland held that the plaintiffs lacked a cause of action because the Medicaid statute did not “unambiguously confer rights enforceable under Section 1983.” Finally, Judge Cleland denied the plaintiffs’ final claim that the defendants failed to adequately inform eligible individuals of programs and services available through Medicare, holding that it was not their duty to inform all potentially eligible children of EPSDT services. 368 F.Supp.2d 740.

On May 17, 2005, the district court denied the plaintiffs’ motion for class certification and entered judgment in favor of the defendants. The plaintiffs appealed this judgment the next day.

On July 7, 2006, the Sixth Circuit (again before Judges Merritt, Moore, and now Chief Judge Boggs) affirmed in part the district court’s dismissal of the claims under the Medicaid statutory provisions but reversed the holding that there was no cause of action for failing to inform all potentially eligible children of EPSDT services. The appeals court also modified the district court’s order to reflect a dismissal without prejudice, which allowed the plaintiffs to file an amended complaint to allege that Michigan's inadequate payment system effectively denied many eligible children the right to medical assistance. The case was remanded back to the district court. 454 F.3d 532.

On October 11, 2006, the plaintiffs filed a second amended complaint in the district court. The complaint alleged that the reimbursement rates provided by the defendants were so low that an insufficient number of providers were willing to care for children who were enrolled in Medicaid. The plaintiffs further claimed that these inadequate payments effectively denied the plaintiffs and the class of minors eligible for Medicaid represented in the suit the right to medical assistance.

On August 7, 2007, the parties entered into a Settlement Agreement that resulted in the case being dismissed without prejudice. The settlement preserved significant expansions of the state’s program and major increases in rates paid to doctors and dentists for treating Medicaid patients. The settlement also required the state to monitor children’s access to care, which it had never done before the settlement. Finally, the settlement provided for ongoing oversight of the state’s program by representatives of the plaintiffs.

The case is now closed.