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RECENT DEVELOPMENTS By Peter A. Buchsbaum It's been a number of months since we've had an update on recent developments. So let's get to it. State Immunity-Enforcement of Medicaid Re-quirements-No Cause of Action. The U.S. District Court for the Eastern District of Michigan determined on March 26, 2001, that the Eleventh Amendment bars a private cause of action against a state for noncompliance with Medicaid requirements. Plaintiffs alleged that Michigan's administration of Medicaid included systemic failures in the state's early and periodic screening, diagnosis, and treatment services. Plaintiffs sought injunctive relief and appointment of a special master. The suit was dismissed. The court held, first, that Michigan by participating in the Medicaid program did not consent to a lawsuit. Further, Ex parte Young, which allows suits against individual officials for constitutional violations, is inapplicable because this case involved voluntary participation in a federal-state program. Further, there is no cause of action under § 1983 since it independently creates no right of action for beneficiaries of federal programs enacted pursuant to the constitutional spending power. This case seems a substantial departure from numerous precedents, such as the U.S. court rulings that allowed suits to validate the "man in the house rule," or required due process in termination of welfare benefits. Westside Mothers v. Haveman, 69 U.S.L.W. 1619 (E.D. Mich. Mar. 26, 2001). Immunity-Federal False Claims Act. Extending a Supreme Court decision that states cannot be sued under the False Claims Act, 31 U.S.C. § 3729(a), the Fifth Circuit has held that local governments also cannot be sued under that Act for submitting false claims to the federal government. Two employees of the New Orleans School Board were successful in persuading a federal trial court jury that the Board had committed 1,570 violations of the Federal False Claims Act. The jury had awarded total damages of approximately $22 million, with 25 percent payable to the plaintiff employees. On appeal, the Fifth Circuit held that a "person," for purposes of the Act, did not include a local government. It found that the punitive nature of the relief under the False Claims Act and the fact that the act was designed mainly to reach commercial entities filing false claims weighed against declaring local governments to be persons in this context, even though they are persons for purposes of determining liability for damages under 42 U.S.C. § 1983. U.S. ex rel. Garibaldi v. Orleans Parish School Board, 69 U.S.L.W. 1606 (5th Cir. Mar. 28, 2001). Title VI, Civil Rights Act of 1964-Relationship to 42 U.S.C. § 1983. The Supreme Court's April 24, 2001, 5-4 decision in Alexander v. Sandoval held that private plaintiffs could not sue for violations of disparate impact regulations adopted by agencies pursuant to Title VI of the Civil Rights Act of 1964 involving federal grant programs. Left open under Alexander was whether local governments could be sued alternatively under 42 U.S.C. § 1983 for violation of these same regulations since § 1983 does provide a cause of action against state and local government actions which violate federal laws, including regulations. This particular issue came home to roost quickly, within days. On April 19, 2001, five days before Alexander, the U.S. District Court for New Jersey had enjoined environmental permits New Jersey officials had issued for a $50 million cement plant in Camden on the grounds that the location of the plant violated the federal EPA's environmental justice regulations in its effect on a minority community. Within days after Alexander, the trial judge immediately accepted the issue left open in Alexander. Conceding that a preliminary injunction could no longer stand for violation of Title VI, he asked for briefs on whether failure to comply with EPA's environmental justice regulations was a violation of § 1983. On May 10, 2001, Judge Orlofsky did determine to continue the injunction, finding a cause of action under 42 U.S.C. § 1983. This is an important holding South Camden Citizens in Action v. New Jersey Department of Environmental Protection, Civ. No. 01-702 (D.N.J. April 19, 2001), reported in 29 LAND USE L. REP. 73 (May 9, 2001). See also 104 N.J. L.J. 856 (May 10, 2001). Land Use-Standing to Challenge Local Actions-Specific Injury. One of the trickiest issues in local government is standing to challenge a grant of permit. In a decision reflecting the difficulty of this problem, the Ohio Supreme Court split 4-3 in deciding that a homeowner who lived on the other side of the street from a fireworks plant could appeal the issuance of a permit allowing the fireworks company to rebuild two buildings destroyed in an explosion several years previously. The plaintiff sued both as a taxpayer and a property owner who lived directly across the street. The majority held that the plaintiff's position was unique compared to others in that community who did not live in such proximity to the fireworks plant. Further, the fact that an explosion had occurred gave reality to the plaintiff's claim of potential injury in fact. The three dissenting judges argued that the plaintiff had not claimed personal or pecuniary injury before the Board of Zoning Appeals and had instead rested on his generic rights as a taxpayer to ensure enforcement of township zoning regulations. Further, the proposed buildings were not to be used for fireworks but for a garage. Overall the decision reflects the trend toward liberal standing to challenge local decisions in state court. Midwest Fireworks Manufacturing Co., Inc. v. Deerfield Township Board of Zoning Appeals, 91 Ohio St. 3d 174 (2001), reported in 29 LAND USE L. REP. (Apr. 11, 2001). And on a somewhat lighter note: In a somewhat related matter it has been held that in at least northern Illinois a lingerie shop cannot be regulated as an adult business. Lovers Lane and Co. v. Village of Libertyville, 128 F. Supp. 2d 1126 (N.D. Ill. 2001), reported at 29 LAND USE L. REP. 60 (May 9, 2001). Finally, a sleeper. Representatives Earl Blumenauer (D-Ore.) and Wayne Gilcrest (R-Md.) have introduced the Community Character Act of 2001 (H.R. 1433). This act would put the federal government in the business of providing funding to states for the development of comprehensive smart growth plans. The bill, supported by the American Planning Association, contains a modest appropriation of $50 million. It bears watching. Once again, I ask of all of you to send your interesting, bizarre, or otherwise noteworthy cases along to me at pbuchsbaum@greenbaumlaw.com. Peter A. Buchsbaum practices law with Greenbaum, Rowe, Smith, Ravins, Davis & Himmel in Woodbridge, New Jersey |