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Private Enforcement of Spending Conditions After Douglas

Congress cannot compel the states to implement its regulatory agenda, but it may purchase their compliance through the exercise of its spending power. Today, the federal government achieves many of its signature policy goals, including the provision of Medicaid benefits to the poor, disabled, and elderly, in cooperation with the states. These joint spending programs promote federalism values, but they also place important federal initiatives at the mercy of state budgetary pressures. When the economy falters and state revenues decline, entitlement programs like Medicaid become a perennial target for cuts. In Douglas v. Independent Living Center of Southern California, Inc., a case from the 2011 term, the Supreme Court considered whether hospitals and other private parties have an implied right of action under the Supremacy Clause to challenge the sufficiency of state payments under a cooperative spending program. In this Case Note, the author explores the background, history, and resolution of the Douglas litigation in the Supreme Court. She argues that the Court was right to suggest that private enforcement of the Medicaid statute sits uncomfortably within the system of agency oversight prescribed by Congress. But that is not to say that a Supremacy Clause action should never be available in the spending context. Though some scholars have likened joint spending programs to contracts between the state and federal governments, an analogy that might suggest a limited role for private parties in enforcing their terms, the author rejects that view and explores some cases in which a Supremacy Clause action would be appropriate.