Citizens Action League v. Kizer

887 F.2d 1003, 1989 WL 126258
Court of Appeals for the Ninth Circuit·Decided October 23, 1989·No. No. 88-15044·Published·Cited by 33 cases

Opinions

O’SCANNLAIN, Circuit Judge:

This appeal turns on whether California has made a permissible interpretation of federal Medicaid law to authorize recovery of benefits from a deceased recipient’s “estate.” Plaintiffs are a class comprised of persons who by right of survivorship have succeeded to property they formerly held in joint tenancy with a benefits recipient. They argue that Congress’s use of the word “estate” in the recoupment provision limits a state’s recovery to property which descends to the recipient's heir or the beneficiaries of the recipient’s will upon death. Because the property California seeks to reach passes by right of survivorship— thereby bypassing probate altogether— they argue that the California statute is impermissibly broad and is inconsistent with federal law. We agree.

I

In 1965, Congress established “Medicaid,” a cooperative federal-state health benefits assistance program designed to provide necessary medical services to low income persons. Title XIX of the Social Security Act, codified at 42 U.S.C. § 1396 et seq. (“the Act”); see also Schweiker v. Gray Panthers, 453 U.S. 34, 36-37, 101 S.Ct. 2633, 2636-2637, 69 L.Ed.2d 460 (1981). State governments principally administer the program, and in so doing must abide by the requirements of the Act to qualify for receipt of federal Medicaid funds. Beltran v. Myers, 701 F.2d 91, 92 (9th Cir.), cert. denied sub nom., Rank v. Beltran, 462 U.S. 1134, 103 S.Ct. 3115, 77 L.Ed.2d 1369 (1983). California participates in the Medicaid program through its California Medical Assistance Program (“Medi-Cal”), which provides medical services to aged, disabled, and needy persons. Cal.Welf. & Inst.Code §§ 14005.1, 14050.1, 14051 (West Supp.1989); see generally Lynch v. Rank, 747 F.2d 528 (9th Cir.1984), modified, 763 F.2d 1098 (9th Cir.1985).

The Act requires state plans, among other things, to comply with its provisions “with respect to liens, adjustments and recoveries of medical assistance correctly paid, and transfers of assets.” 42 U.S.C. § 1396a(a)(18) (1982). In turn, section 1396p of the Act permits states to recover the costs of Medicaid benefits correctly paid to a recipient 65 years or older from the former recipient’s “estate.” 42 U.S.C. § 1396p(b)(l)(B). Pursuant to this federal authority, California enacted as part of its Medi-Cal statutory scheme a provision that authorizes the California Department of Health Services (“Department” or “DHS”) to “claim against the estate of the decedent, or against any recipient of the property of that decedent by distribution or survival an amount equal to the [Medi-Cal] payments received.” Cal.Welf. & Inst. [1006]*1006Code § 14009.5 (West Supp.1989) (emphasis supplied).

Appellant California residents who have been subjected to operation of the cited portion of the statute filed an action in California State Superior Court, seeking a writ of mandate and permanent injunction prohibiting the Department from recovering or seeking to recover Medi-Cal benefits correctly paid from any person who succeeds by survivorship to property he owned in joint tenancy with a former benefits recipient.1 The Department removed the action to the United States District Court for the Northern District of California under 28 U.S.C. § 1441(a).

After the federal district court certified appellants as a plaintiff class,2 appellants moved for summary judgment, alleging that section 14009.5 is inconsistent with 42 U.S.C. § 1396p(b)(l)(B). The district court denied the motion, reasoning that were it to rule for appellants, only those individuals shrewd enough to enter a joint tenancy with a Medi-Cal recipient would be protected while those individuals not shrewd enough to enter a formal joint tenancy would be subject to claims for recovery. Citizens Action League v. Kizer, 670 F.Supp. 874, 878 (N.D.Cal.1987).

Thereafter, the district court granted summary judgment in favor of defendants.

II

We must determine whether California Welfare & Institutions Code section 14009.-5, which allows for recoupment of MediCal benefits from surviving joint tenants, is inconsistent with federal Medicaid law. In so doing, we must construe 42 U.S.C. § 1396p(b)(l)(B) (1982).

In construing a statute, we look first to its plain meaning. United States v. 594,464 Pounds of Salmon, 871 F.2d 824, 825-26 (9th Cir.1989). If the statutory language is unambiguous, its plain meaning controls unless Congress has “clearly expressed” a contrary legislative intention. Id. at 826. In addition, unless Congress has made manifest an intent to the contrary, a presumption obtains that when Congress uses a common law term, it intends to use it in its common law sense. See, e.g., Gilbert v. United States, 370 U.S. 650, 655, 82 S.Ct. 1399, 1402, 8 L.Ed.2d 750 (1962); Black v. Commissioner, 765 F.2d 862, 864-65 (9th Cir.1985).

Federal Medicaid law limits a participating state’s ability to recoup benefits as follows: “No adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan may be made, except ... in the case of any other individual who was 65 years of age or older when he received such assistance, from his estate." 42 U.S.C. § 1396p(b)(l)(B) (1982) (emphasis supplied). Because Congress did not define “estate” in the Act, we look to its common law meaning in construing this statutory section.

At common law, “estate” excluded interests in a decedent’s property that were formerly held in joint tenancy. Powell on Real Property ¶ 617(3) (1986); see also In re Estate of Harris, 88 Misc.2d 60, 387 N.Y.S.2d 796 (Sur.Ct.1976), aff'd, 61 A.D.2d 881, 402 N.Y.S.2d 978 (1978); Citizens Action League, 670 F.Supp. at 877. Because the California statute is not so limited,3 appellants’ argument is compelling.

[1007]*1007Nonetheless, appellees contend that a letter from the Administrator of the United States Health Care Financing Agency (HCFA) to the Director of the California Department of Health Services decides the issue dispositively in their favor.

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Citizens Action League v. Kizer, 887 F.2d 1003, 1989 WL 126258 (9th Cir. 1989).

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