Justice Thomas joins Court’s refusal to compel Texas to issue Confederate flag license plate

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Walker v. Texas Division, Sons of Confederate Veterans, Inc., No. 14-144, 2015 DJDAR 6811 (U.S. S.Ct. June 18, 2015).

On June 17, nine African-Americans were murdered in an African-American church in Charleston, South Carolina by a white gunman who allegedly posted racist messages which included images of the Confederate battle flag. The murders have prompted reactions across the country–especially in the South–over the propriety of continuing displays, public and private, of the Confederate flag.

In an opinion completed prior to those murders, but coincidentally released the following day, the United States Supreme Court, in a 5 to 4 opinion authored by Justice Breyer, considered a case brought by a Texas non-profit group–the Sons of the Confederate Veterans–which pursuant to Texas law had proposed a “specialty” license plate design which included a Confederate flag image, and which Texas had declined to approve. The group sued, alleging that the state’s rejection of their proposed plate violated their First Amendment right to freedom of expression. The majority disagreed, and in a rather dry opinion, concluded that the state’s license plates, specialty or otherwise, constituted government speech, and that the state had the right to refuse the appearance of government endorsement of any particular image or cause, as it did in refusing to approve the Confederate flag design.

In a rare alignment with the Court’s liberal wing (and an unexplained one, since he published no separate opinion), Justice Thomas provided the fifth vote by which the Court upheld the rejection of the old symbol of the Confederacy.

DHCS may recover from special needs trust after a beneficiary’s death where trust’s purpose was to preserve Medi-Cal eligibility

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Herting v. Calif. Dept. of Health Care Services, (6th Dist. Ct. of App.), 2015 DJDAR 3521 (March 27, 2015)

Alexandria Pomianowski was severely injured in a auto accident at age 19.  For the next four years, until her death, she required constant nursing and personal care. A personal injury lawsuit related to the accident resulted in a large damages award for Ms. Pomianowski and that award was placed in a special needs trust for her care to facilitate her continued eligibility for Medi-Cal. Her mother, appellant, was named trustee.

Relying upon federal and state law that bars Medi-Cal from seeking reimbursement from a decedent’s estate for care provided to  via Medi-Cal to him or her while younger than 55, appellant sought to terminate the trust in which more than $1 million remained and deny Medi-Cal’s claim for reimbursement for more than $400,000 in health care costs it paid for the woman’s care. Department of Health Care Services (DHCS) pursued its claim, citing state and federal regulations that special needs trusts must provide for reimbursement to the state upon death. Ms. Pomianowski’s trust included such a provision.

Finding that the Ms. Pomianowski’s trust was established for the “specific and exclusive” purpose of maintaining the her eligibility for Medi-Cal and to pay for her additional needs not covered by Medi-Cal during her life rather than as an instrument to preserve and distribute estate property, the court held that DHCS may recover its expenses for her care prior to her death.  Appellant should have paid DHCS’s claim for its expenses for Ms. Pomianowski’s care in accordance with the terms of the trust, which specifically provided for such reimbursement.

Supreme Court refuses to allow enforcement of State’s violation of Medicaid provision

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Armstrong v. Exceptional Child Center, __U.S.__, S.Ct. No. 14-15 (March 31, 2015)

The fears of advocates across the country were realized with the publication of this widely anticipated decision on March 31st. The plaintiffs in this case are providers of habilitative services who sued Idaho’s Department of Health and Welfare to compel the agency, under the Supremacy Clause and the Medicaid Act, to raise Medicaid reimbursement rates to comply with the mandate in section 30(a) of the Act [42 U.S.C. § 1396a(a)(30)] to “assure that payments … are sufficient to enlist enough providers so that care and services are available under the plan [to the same extent as in the general population].”

The Idaho district court and the Ninth Circuit concluded that the Supremacy Clause and the Medicaid statutory scheme gave the providers an implied federal right of action to enforce section 30(a) of the Act, and ordered the state to raise reimbursement rates in compliance with the statutory standard. In a 5-4 decision authored by Justice Scalia, with Justice Breyer incongruously aligned with the four conservative justices, and Justice Kennedy joining Justice Sotomayor’s dissent for the liberals, the majority ruled that neither the Supremacy Clause nor section 30(a) provides an implied private right of action to enforce the reimbursement rate standards.

The majority first dismissed the plaintiffs’ invocation of the Supremacy Clause as neither creating a cause of action nor providing a source of any substantive law. Justice Scalia then blithely overruled several decades of lower federal court decisions by holding that the availability of an “administrative remedy” from the federal Secretary of Health and Human Services, for a state’s non-compliance with section 30(a), indicated congressional intent to preclude a private right of action to enforce the statute directly in federal court.

Justice Sotomayor’s dissent mocked the so-called administrative “remedy” — the potential for the federal agency to withhold Medicaid funds from the state for non-compliance with section 30(a) — not only as completely inadequate but as “self-defeating” and “counterproductive,” because “a state’s non-compliance creates a damned-if-you-do, damned-if-you-don’t scenario [for the federal agency], where the withholding of state funds will only lead to depriving the poor of essential medical assistance.”

Jane Perkins, Legal Director of the National Health Law Program, who authored an amicus brief on behalf of many public interest advocacy organizations, stated that the decision “ignores hundreds of Supreme Court decisions, dating back to the early 1800s, which have recognized the ability of private parties to bring Supremacy Clause suits in federal courts to stop state officials from implementing state laws that violate a federal law or the Constitution.” While this ruling applies to medical providers, advocates fear that the majority’s analysis will soon be used to knock Medicaid recipients out of federal court as well.

Court bars personal suits by junior lienholders when foreclosure proceeds are insufficient to repay loan

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Alborzian et al. v. JPMorgan Chase Bank, (2d Dist. Ct. of App.), 2015 DJDAR 2950 (March 12, 2015)

In a decision clarifying the rights of borrowers, the 2d District Court of Appeal held that junior lienholders may not sue a borrower personally to recover a loan balance post-foreclosure and borrowers may sue such junior lienholders under certain federal and state fair debt collection statutes if lienholders’ collection efforts imply that a debt is still enforceable.

Appellant former homeowners sued JP Morgan Chase Bank after the bank attempted, nearly a year after the foreclosure sale, to collect the remaining balance on the junior lien, which was not repaid with the foreclosure sale proceeds. The bank sent letters to the appellants implying that they were personally liable for the debt and offering to settle for a smaller amount. Appellants argued the collection efforts were misleading and violated several state and federal statutes including the Fair Debt Collection Practices Act (FDCPA), the Rosenthal Fair Debt Collection Practices Act and California’s Unfair Competition Law.

Despite the fact that respondent’s collection letters included a disclaimer saying the letter did not constitute an attempt to collect a debt or impose personally liability, the court held that the letters were ambiguous and allowed the appellants to allege misrepresentation and deception sufficient to survive demurrer on the FDCPA claim. However, the court held that mortgage borrowers may not sue collectors or lienholders under the Consumer Legal Remedies Act because the statute applies only to debt collection involving “goods and services” and mortgages are money debts.

“Plain meaning” requires narrow definition of who qualifies for enhanced relocation benefits

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City of Los Angeles v. Superior Court of Los Angeles County, (2nd Dist. Ct. of App.) 2015 DJDAR 1724, (February 10, 2015).

The Los Angeles Municipal Code, as part of its rent stabilization ordinance, guaranteed certain displaced tenants relocation assistance. Any head of household who is “handicapped” as defined by the Calif. Health & Safety Code Section 50072 is deemed a “qualified tenant” under the code section and received an enhanced payment.

The real party in interest in the case, Mr. Wade, was evicted by his landlord after his rental unit was deemed an illegal rental by the city. Mr. Wade argued he was entitled to the enhanced payment due to his disability, but his request was denied at the administrative level because he was a single person, and according to the city not the head of a household. He filed a petition for writ of administrative mandamus pursuant to Calif. Code of Civ. Proc. Section 1094.5. Finding that the term “head of household” can be an individual who is the head of a household of one, the Superior Court held the application for the writ in abeyance and directed the city to conduct an additional administrative hearing. The city appealed.

While the Court of Appeal found that the lower court had not actually issued the writ and its decision was therefore not a final judgment, it treated the appeal as a petition for writ of mandate and, applying the plain language principle of statutory construction, held that since Calif. Health & Safety Code Section 50072 specifically defined “handicapped” as including a “family in which the head of household is suffering from an orthopedic disability impairing personal mobility…”, a single person, like Mr. Wade, could not be a “qualified tenant” and he was consequently not entitled to the enhanced relocation assistance payment.

Court of Appeal upholds rent control protections for lawful occupants

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Mosser Companies v. San Francisco Rent Stabilization and Arbitration Board, (1st Dist. Ct. of App.) 2015 DJDAR 878, (January 21, 2015).

Upholding the trial court’s denial of a landlord’s petition for writ of mandate, the Court of Appeal held that San Francisco’s rent control ordinance limiting rent increases for “original occupants” of a unit under a rental agreement protects any lawful original occupants, including minors.

The case involves a landlord’s attempt to nearly double the rent on a unit when the original signatories to the lease vacated the unit, but their son remained. The son was 13 years old when the family took possession of the unit ten years before and had lived in the unit continuously since his parents entered into the rental agreement. The case hinges on the definition of “occupant” under both the rent control ordinance and the 1995 Costa-Hawkins Act, which prohibited vacancy control ordinances that limited a landlord’s ability to set rental rates for new tenancies. The court found that in both laws, occupant meant lawful occupant and the son was a lawful, original occupant of the unit and entitled to protection under the ordinance. The court was careful to note that its ruling did not establish a right to inherit a parent’s tenancy, rather the son in this case had his own personal right to occupancy as he had been a continuous, lawful occupant since the family moved into the unit.