SAN FRANCISCO (CN) – A federal judge signaled Wednesday he will likely overturn a Trump administration rule that blocks states from directly deducting union dues from hundreds of thousands of in-home health care workers’ paychecks.
Hearing arguments on dueling motions for summary judgment, U.S. District Judge Vince Chhabria rejected the Trump administration’s position that a decades-old Medicaid Act provision prohibits the deduction of union dues and health insurance fees from in-home care workers’ paychecks.
“I don’t see how you can say at least from the language on its own that Congress has spoken to the precise issue at hand, which is what you need on this motion to win,” Chhabria told a lawyer representing the U.S. Department of Health and Human Services.
California and five other states sued Health and Human Services Secretary Alex Azar in May 2019, accusing the administration of attempting to reinterpret the Medicaid Act in a way that would weaken unions by banning automatic deductions of union membership fees. The fees pay for first aid training and some health supplies.
Nearly 600,000 seniors and people living with disabilities in California receive support from home care workers through a Medicaid program called In-Home Supportive Services, which operates under the state’s collective bargaining laws due to action by the Legislature in the 1990s.
The state’s more than 500,000 in-home care workers help patients bathe, prepare meals, dress themselves, drive to doctor appointments and take any necessary medications.
Health and Human Services, which first proposed the rule in July 2018, relies on its reading of a provision of the Medicaid Act that prohibits third parties from collecting payment for Medicaid services. Congress passed the provision 48 years ago to prevent fraudulent medical financing schemes.
The law says no Medicaid payments shall be made to the people or institutions “under an assignment or power of attorney or otherwise.” The Trump administration says Congress intended the law to ensure payments only go to a person receiving care or the person or institution providing care.
However, Chhabria did not read the law as barring the deduction of union dues and health insurance costs from Medicaid paychecks to in-home care workers.
“It seems clear this language was directed at re-assignment, power of attorney or something similar, not the kind of very different paycheck deduction we’re talking about now,” Chhabria said.
The judge also demanded the government explain inconsistencies in how it chose to apply its new interpretation of the law. For instance, the rule does not bar the deduction of union dues when Medicare payments go through a third-party administrator, even though the administration claims Congress intended to forbid such deductions.
“It’s like saying there are two pieces of trash over there,” Chhabria said. “I’ll pick up one piece of trash, put it in the garbage, then walk to the other side of the street and not pick up the other one.”
Justice Department lawyer Carol Federighi replied that the government is entitled to change its rules incrementally and go one step at a time.
Playing on the judge’s simile, Federighi argued the “two pieces of trash” are not identical. One piece of trash is like an aluminum can, which can easily be recycled. The other is like a plastic bottle, and due to differing rules about recycling plastics, one might need extra time to figure out how the bottle should be discarded, she said.
Turning to the issue of remedy, Chhabria appeared flabbergasted by the government’s suggestion that he should keep the rule in place or limit relief to six states that filed suit instead of completely overturning the rule.
When asked, Federighi could not identify a prior case in which a rule was found to be unlawful but still upheld as enforceable in part of the country.
“You’re proposing this,” Chhabria said. “I think you would come with at least one case where a court has actually done it. It seems completely contrary to the statute that says the court must set aside the action if it’s arbitrary & capricious.”
A lawyer representing a home care workers’ union asked Chhabria to look back at the legislative history of the Medicaid Act and conclude that the law does not authorize Health and Human Services to prohibit union fee deductions.
Representing United Domestic Workers AFSCME Local 3930, which intervened in the case, attorney Stacey Leighton said the uncertainty around this issue is harming labor groups. Unions have expended resources figuring out how to deal with the potential fallout of a rule barring union deductions, including looking into starting a retirement plan for home care workers.
The Trump administration is expected to enact more rules based on its purportedly flawed interpretation, which could spur more lawsuits, she said.
That argument did not appear to hold much weight with the judge.
“It strikes me that striving for a world with no litigation is not a very realistic option these days,” Chhabria said.
The judge indicated he will issue a written order nullifying the rule and remanding it back to Secretary Azar to revise.
Connecticut, Massachusetts, Oregon, and Washington state – which together represent an additional 300,000 in-home care workers – joined California as plaintiffs in the lawsuit.
California Deputy Attorney General Anna Rich argued on behalf of the Golden State.
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