Developmental Services Network v. Douglas

The State must gain federal approval for State Plan Amendments. However, injunctions against enforcement of unapproved plans may not be granted where plaintiffs fail to assert an unambiguous federal right under § 1983.

Health service providers in California ("Providers") filed suit against the State to prevent implementation of an amendment to California Welfare and Institutions Code § 14105.191(f) that would change Medicaid reimbursement rates. The district court granted their injunction, as "the State did not obtain federal approval of its State Plan Amendment ("SPA") prior to implementing the rate changes." The State appealed. Reviewing for abuse of discretion, the Court affirmed the district court's decision and upheld precedent that a "law that effects a change in payment methods or standards without [DSHS] approval is invalid." However, the Court also found that "the Providers have not shown that they have an unambiguously conferred right to bring a § 1983 action." Showing a violation of federal law is insufficient to sustain a cause of action where no specific right of the plaintiff exists. For a right to be actionable for enforcement under § 1983, Congress must have created the right "in clear and unambiguous terms." No such right existed here, meaning that the Court "must hold that there is no likelihood of success on the merits and the preliminary injunction cannot stand," as plaintiffs had presented no cause of action. VACATED and REMANDED.