## Facts

- Idaho officials administered the state Medicaid plan, including reimbursement rates for providers of habilitation services for individuals with developmental disabilities.
- The Medicaid Act requires state plans to set payments consistent with efficiency, economy, and quality of care and adequate to attract enough providers.  
- Idaho conducted provider cost studies that supported higher reimbursement rates, but the legislature did not appropriate funds to implement the increases.
- Providers sued state officials in federal court seeking an injunction requiring higher rates on the theory that Idaho’s rates conflicted with the Medicaid Act and were therefore preempted.
- The district court granted summary judgment to the providers and ordered relief consistent with federal requirements as understood in circuit precedent.
- The Ninth Circuit affirmed, holding that providers could seek injunctive relief against state officials under an implied Supremacy Clause cause of action.
- The Supreme Court granted review on whether the Supremacy Clause permits such a suit.

## Issues

1. Whether the Supremacy Clause itself supplies a private cause of action for Medicaid providers to obtain an injunction compelling state compliance with 42 U.S.C. § 1396a(a)(30)(A).
2. Whether Congress implicitly foreclosed private equitable actions to enforce § 30(A) by creating an administrative enforcement scheme centered on HHS oversight and funding consequences.

## Decision

- The Supreme Court reversed the Ninth Circuit (5–4).
- The Court held that the Supremacy Clause does not create a private right of action.
- The Court held that Medicaid providers may not obtain an injunction, via the Supremacy Clause, to force state officials to comply with § 30(A).
- The Court reasoned that § 30(A) sets a broad, judgment-based standard not suited to judicial administration in rate-setting litigation.
- The Court relied on Medicaid’s enforcement structure, under which the Secretary of HHS can withhold funds from noncompliant states, as evidence Congress meant to preclude provider suits seeking equitable enforcement of § 30(A).
- A separate concurrence agreed with the result, emphasizing institutional limits of courts in Medicaid rate-setting.
- The dissent would have allowed traditional equitable suits to enjoin state action alleged to be preempted and viewed § 30(A) as judicially manageable.

## Legal Principles

- The Supremacy Clause is a rule of priority for resolving conflicts between federal and state law; it does not, by itself, create private rights or causes of action.
- Federal courts’ equitable power to enjoin unlawful state action exists as a background feature, but it can be displaced when Congress provides a remedial scheme indicating private enforcement is not permitted.
- Where a federal statute supplies an administrative enforcement mechanism and the statutory standard is broad and policy-laden, courts may treat private equitable enforcement as implicitly foreclosed.
- For Medicaid § 30(A) rate challenges, enforcement is primarily administrative through HHS rather than provider-initiated injunctions in federal court.

## Conclusion

The Court held that Medicaid providers cannot rely on the Supremacy Clause to sue state officials for injunctive relief enforcing § 30(A) reimbursement requirements, because the Clause does not create a cause of action and Congress structured Medicaid to rely on agency enforcement rather than judicial rate-setting suits.


Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320 (2015)