N.C. Won’t Get Disabled Girl’s Settlement

"The argument lacks any limiting principle: If a state arbitrarily may designate one-third of any recovery as payment for medi­cal expenses, there is no logical reason why it could not designate half, three-quarters, or all of a tort recovery in the same way. In Ahlborn, the state of Arkansas, under this rationale, would have succeeded in claiming the full amount it sought from the beneficiary had it been more creative and less candid in describing the effect of its full­ reimbursement law."

Kennedy bemoaned the lack of evidence that the one-third allocation is "reasonable in the mine rune of cases."

"The instant case, to be sure, is not quite so clear cut; for there was no allocation of the settlement by either judicial decree or binding stipulation of the parties," according to the ruling. "But the reasoning of Ahlborn and the design of the federal statute contemplate that possibility. When the state and the beneficiary are unable to agree on an allocation, Ahlborn noted, the parties could ''submi[t] the matter to a court for decision.'

"The facts of the present case demonstrate why Ahlborn anticipated that a judicial or administrative proceeding would be necessary in that situation. Of the damages stemming from the injuries E.M.A. suffered at birth, it isapparent that a quite substantial share must be allocated to the skilled home care she will require for the rest of her life. It also may be necessary to consider how much E.M.A. and her parents could have expected to receive as compensation for their other tort claims had the suit proceeded to trial. An irrebuttable, one-size-fits-all statutory presumption is incompatible with the Medicaid Act's clear mandate that a state may not demand any portion of a beneficiary's tort recovery except the share that is attributable to medical expenses."

In a concurring opinion, Justice Stephen Breyer emphasized the fact that the court'd decision is in harmony with the conclusion of the Centers for Medicare & Medicaid Services.

"Thus, even though this case does not fall directly within a case-defined category, such as 'Chevron deference,' 'Skidmore deference,' 'Beth Israel deference,' 'Seminole Rock deference,' or deference as defined by some other case, I believe the agency, in taking a position, nonetheless retains some small but special 'power to persuade.' And I would consequently to some degree take account of, and respect, the agency's judgment.

"I cannot measure the degree of deference with the preci­sion of a mariner measuring a degree of latitude. But it is still worth noting that the agency's determination has played some role in my own decision. That is because the agency, after looking into the matter more thoroughly (perhaps after notice-and-comment rulemaking), might change its mind. Given the nature of the question and of the agency's expertise, courts, I believe, should then give weight to that new and different agency decision."

The note is striking in the context of another opinion that the court released Wednesday, one in which Breyer took no part.

In a partial dissent to the decision Decker v. Northwest Environmental Defense Center , Justice Antonin Scalia called for the court to reconsider agency deference as established with the 1945 case Bowles v. Seminole Rock & Sand Co., and the 1997 case Auer v. Robbins.

Chief Justice John Roberts and Justice Samuel Alito also conceded reconsideration of the deference principle may be appropriate in another case.

Kennedy makes no direct mention of these points in his opinion.

Roberts meanwhile concluded that neither the law nor precedent compels the majority's reading of the federal Medicaid law.

The "unfortunate consequence" of this reading is denied "flexibility to the states - and, by necessary implication, the secretary of health and human services - in resolving a policy ques­tion with broad significance for this complicated program," Roberts wrote, joined by Justices Antonin Scalia and Clarence Thomas. "In short, the result is both unnecessary and unwise. I therefore respectfully dissent."

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