GALLARDO, an incapacitated person, by and through her parents and co-guardians VASSALLO et al. v. MARSTILLER, SECRETARY OF THE FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION
Certiorari To The United States Court Of Appeals For The Eleventh Circuit
No. 20–1263. Argued January 10, 2022—Decided June 6, 2022
Petitioner Gianinna Gallardo suffered catastrophic injuries resulting in permanent disability when a truck struck her as she stepped off her Florida school bus. Florida’s Medicaid agency paid $862,688.77 to cover Gallardo’s initial medical expenses, and the agency continues to pay her medical expenses. Gallardo, through her parents, sued the truck’s owner and driver, as well as the Lee County School Board. She sought compensation for past medical expenses, future medical expenses, lost earnings, and other damages. That litigation resulted in a settlement for $800,000, with $35,367.52 expressly designated as compensation for past medical expenses. The settlement did not specifically allocate any amount for future medical expenses.
The Medicaid Act requires participating States to pay for certain needy individuals’ medical costs and then to make reasonable efforts to recoup those costs from liable third parties. 42 U. S. C. §1396k(a)(1)(A). Under Florida’s Medicaid Third-Party Liability Act, a beneficiary like Gallardo who “accept[s] medical assistance” from Medicaid “automatically assigns to the [state] agency any right” to third-party payments for medical care. Fla. Stat. §409.910(6)(b). Applied to Gallardo’s settlement, Florida’s statutory framework entitled the State to $300,000—i.e., 37.5% of $800,000, the percentage the statute sets as presumptively representing the portion of the tort recovery that is for “past and future medical expenses,” absent clear and convincing rebuttal evidence. §§409.910(11)(f )(1), (17)(b). Gallardo challenged the presumptive allocation in an administrative proceeding. She also brought this lawsuit seeking a declaration that Florida was violating the Medicaid Act by trying to recover from portions of the settlement compensating for future medical expenses. The Eleventh Circuit concluded that the relevant Medicaid Act provisions do not prevent a State from seeking reimbursement from settlement monies allocated for future medical care. 963 F. 3d 1167, 1178.
Held: The Medicaid Act permits a State to seek reimbursement from settlement payments allocated for future medical care. Pp. 5–12.
(a) Gallardo argues that the Medicaid Act’s anti-lien provision—which prohibits States from recovering medical payments from a beneficiary’s “property,” §1396p(a)(1)—forecloses recovery from settlement amounts other than those allocated for past medical care paid for by Medicaid. But this Court has held that the provision does not apply to state laws “expressly authorized by the terms of §§1396a(a)(25) and 1396k(a)” of the Medicaid Act. Arkansas Dept. of Health and Human Servs. v. Ahlborn, 547 U. S. 268, 284. Here, Florida’s Medicaid Third-Party Liability Act—under which Florida may seek reimbursement from settlement amounts representing “payment for medical care,” past or future—“is expressly authorized by the terms of . . . [§]1396k(a)” and thus falls squarely within the “exception to the anti-lien provision” that this Court has recognized. Ibid.
The plain text of §1396k(a)(1)(A) decides this case. Nothing in §1396k(a)(1)(A) limits a beneficiary’s assignment to payments for past “medical care” already paid for by Medicaid. To the contrary, the grant of “any rights . . . to payment for medical care” most naturally covers not only rights to payment for past medical expenses, but also rights to payment for future medical expenses. §1396k(a)(1)(A); see United States v. Gonzales, 520 U. S. 1, 5. The relevant distinction is thus “between medical and nonmedical expenses,” Wos v. E. M. A., 568 U. S. 627, 641, not between past and future medical expenses.
Statutory context reinforces that §1396k(a)(1)(A)’s reference to “payment for medical care” is not limited as Gallardo suggests. For example, when the Medicaid Act separately requires state plans to comply with §1396k, it describes that provision as imposing a “mandatory assignment of rights of payment for medical support and other medical care owed to recipients.” §1396a(a)(45) (emphasis added). Section 1396a(a)(45) thus distinguishes only between medical and nonmedical care, not between past (paid) medical care payments and future (unpaid) medical care payments. If Congress had intended to draw such a distinction, “it easily could have drafted language to that effect.” Mississippi ex rel. Hood v. AU Optronics Corp., 571 U. S. 161, 169. In fact, Congress did include more limiting language elsewhere in the Medicaid Act. Section 1396a(a)(25)(H), which requires States to enact laws granting themselves automatic rights to certain third-party payments, contains precisely the limitation that Gallardo would read into the assignment provision. Thus, if §1396k(a)(1)(A)’s broad language alone were not dispositive, its contrast with the limiting language in §1396a(a)(25)(H) would be. Pp. 5–7.
(b) Gallardo’s arguments that §1396k(a)(1)(A) has a different meaning are unconvincing. Gallardo construes the prefatory clause to §1396k(a)(1)(A)— which provides that the “purpose” of the assignment provision is to “assis[t] in the collection of medical support payments and other payments for medical care owed to recipients of medical assistance under the State plan”—to limit the assignment provision to payments that are already “owed” for “past medical care provided under the [state] plan.” Brief for Petitioner 30. But the prefatory clause defines to whom the third-party payments are “owed”—“recipients of medical assistance under the State plan.” It does not specify the purpose for which those payments must be made, referring to “medical support” and “medical care” payments, consistent with the adjacent language in §1396k(a)(1)(A).
Gallardo also proposes that the Court read the assignment provision to incorporate the more limited language in §1396a(a)(25)(H). But the Court must give effect to, not nullify, Congress’ choice to include limiting language in some provisions but not others, see Russello v. United States, 464 U. S. 16, 23. Ahlborn, which Gallardo contends eliminated any daylight between §1396a(a)(25)(H) and §1396k(a)(1)(A), was clear that these two provisions “ech[o]” or “reinforc[e]” each other insofar as they both involve “recovery of payments for medical care,” 547 U. S., at 282, and not “payment for, for example, lost wages,” id., at 280. Ahlborn did not suggest that these provisions must be interpreted in lockstep. Gallardo’s idea that one of these two complementary provisions must “prevail” over the other is therefore mistaken. The complementary provisions concern different requirements; they do not conflict just because one is broader than the other.
Gallardo and the United States also argue that §1396k(a)(1)(A) should be interpreted consistently with §§1396a(a)(25)(A) and (B), which require a State to seek reimbursement “to the extent of ” a third party’s liability “for care and services available under the plan.” But the relevant language—“pay[ment] for care and services available under the plan”—could just as readily refer to payment for medical care “available” in the future. Regardless, Congress did not use this language to define the scope of an assignment under §1396k(a)(1)(A), implying again that the provisions should not be interpreted the same way. This implication is strengthened by the fact that §1396k(a)(1)(A) was enacted after §§1396a(a)(25)(A) and (B), and Congress did not use the existing language in §§1396a(a)(25)(A) and (B) to define the scope of the mandatory assignment.
Finally, Gallardo’s two policy arguments for her preferred interpretation both fail. First, citing a footnote from Ahlborn, she contends that it would be “ ‘absurd and fundamentally unjust’ ” for a State to “ ‘share in damages for which it has provided no compensation.’ ” 547 U. S., at 288, n. 19. But the Court’s holding there was dictated by the Medicaid Act’s “text,” not by the Court’s sense of fairness. Id., at 280. Second, Gallardo speculates that the Court’s reading of §1396k(a)(1)(A) would authorize a “lifetime assignment” covering not only the rights an individual has while a Medicaid beneficiary but also any rights acquired in the future when the individual is no longer a Medicaid beneficiary. Not so. The provision is most naturally read as covering those rights “the individual” possesses while on Medicaid. And given background legal principles about the scope of assignments, §1396k(a)(1)(A) cannot be read to cover the sort of “lifetime assignment” Gallardo invokes. Pp. 8–12.
963 F. 3d 1167, affirmed.
Thomas, J., delivered the opinion of the Court, in which Roberts, C. J., and Alito, Kagan, Gorsuch, Kavanaugh and Barrett, JJ., joined. Sotomayor, J., filed dissenting opinion in which, Breyer, J., joined.
Siegel, Trustee of the Circuit City Stores, Inc. Liquidating Trust v. Fitzgerald, Acting United States Trustee for Region 4
Certiorari To The United States Court Of Appeals For The Fourth Circuit
No. 21–441. Argued April 18, 2022—Decided June 6, 2022
Congress created the United States Trustee Program (Trustee Program) as a mechanism to transfer administrative functions previously handled by bankruptcy judges to U. S. Trustees, a component of the Department of Justice. Congress permitted the six judicial districts in North Carolina and Alabama to opt out of the Trustee Program. In these six districts, bankruptcy courts continue to appoint bankruptcy administrators under a system called the Administrator Program. The Trustee Program and the Administrator Program handle the same core administrative functions, but have different funding sources. Congress requires that the Trustee Program be funded in its entirety by user fees paid to the United States Trustee System Fund (UST Fund), largely paid by debtors who file cases under Chapter 11 of the Bankruptcy Code. 28 U. S. C. §589a(b)(5). Those debtors pay a fee in each quarter of the year that their case remains pending at a rate set by Congress and determined by the amount of disbursements the debtor’s estate made that quarter. See §1930(a). In contrast, the Administrator Program is funded by the Judiciary’s general budget. While initially Congress did not require Administrator Program district debtors to pay user fees at all, Congress permitted the Judicial Conference of the United States to require Chapter 11 debtors in Administrator Program districts to pay fees equal to those imposed in Trustee Program districts. See §1930(a)(7). Pursuant to a 2001 standing order of the Judicial Conference, from 2001 to 2017 all districts nationwide charged similarly situated debtors uniform fees.
In 2017, Congress enacted a temporary increase in the fee rates applicable to large Chapter 11 cases to address a shortfall in the UST Fund. See 131 Stat. 1229 (2017 Act). The 2017 Act provided that the fee raise would become effective in the first quarter of 2018, would last only through 2022, and would be applicable to currently pending and newly filed cases. The Judicial Conference adopted the 2017 fee increase for the six Administrator Program districts, effective October 1, 2018, and applicable only to newly filed cases.
In 2008, Circuit City Stores, Inc., filed for Chapter 11 bankruptcy in the Eastern District of Virginia, a Trustee Program district. In 2010, the Bankruptcy Court confirmed a joint-liquidation plan, overseen by a trustee (petitioner here), to collect, administer, distribute, and liquidate all of Circuit City’s assets. The liquidation plan required petitioner to pay quarterly fees to the U. S. Trustee while the Chapter 11 case was pending. Circuit City’s bankruptcy was still pending when Congress increased the fees for Chapter 11 debtors in Trustee Program districts through the 2017 Act. Across the first three quarters of 2018, petitioner paid $632,542 in total fees, significantly more than the $56,400 petitioner would have paid absent the fee increase in the 2017 Act. Petitioner filed for relief against the Acting U. S. Trustee for Region 4 (respondent here) contending that the fee increase was nonuniform across Trustee Program districts and Administrator Program districts, in violation of the Constitution’s Bankruptcy Clause. The Bankruptcy Court agreed, and directed that for the fees due from January 1, 2018, onward, the Circuit City trustee pay the rate in effect prior to the 2017 Act. The Bankruptcy Court reserved the question whether the trustee could recover any “overpayments” made under the 2017 Act. The Fourth Circuit reversed, holding that the fee increase did not violate the uniformity requirement of the Bankruptcy Clause because the increase applied only to debtors in Trustee Program districts in order to bolster the dwindling UST Fund, which funded the Trustee Program alone.
Held: Congress’ enactment of a significant fee increase that exempted debtors in two States violated the uniformity requirement of the Bankruptcy Clause. Pp. 7–15.
(a) The Bankruptcy Clause’s uniformity requirement—which empowers Congress to establish “uniform Laws on the subject of Bankruptcies throughout the United States,” U. S. Const., Art. I, §8, cl. 4—applies to the 2017 Act. Respondent contends that the 2017 Act was not a law “on the subject of Bankruptcies” to which the uniformity requirement applies, but instead a law enacted pursuant to the Necessary and Proper Clause, U. S. Const., Art. I, §8, cl. 18, meant to help administer substantive bankruptcy law. Nothing in the language of the Bankruptcy Clause suggests a distinction between substantive and administrative laws, however, and this Court has repeatedly emphasized that the Bankruptcy Clause’s language, embracing “laws on the subject of Bankruptcies,” is broad. This Court has never distinguished between substantive and administrative bankruptcy laws or suggested that the uniformity requirement would not apply to both. Further, the Court has never suggested that all administrative bankruptcy laws are enacted pursuant to the Necessary and Proper Clause, nor that the Necessary and Proper Clause permits Congress to circumvent the limitations set by the Bankruptcy Clause. To the contrary, Congress cannot evade the “affirmative limitation” of the uniformity requirement by enacting legislation pursuant to other grants of authority. See Railway Labor Executives’ Assn. v. Gibbons, 455 U. S. 457, 468–469. In any event, the 2017 fee provision fits comfortably under the scope of the Bankruptcy Clause: The provision amended a statute titled “Bankruptcy fees,” §1930, and the only “subject” of the 2017 Act is bankruptcy. Moreover, the 2017 Act does affect the “substance of debtor-creditor relations” because increasing mandatory fees paid out of the debtor’s estate decreases the funds available for payment to creditors.
Respondent points to purported historic analogues to argue that the uniformity requirement does not apply where Congress sets different fee structures with different funding mechanisms for debtors in different bankruptcy districts. But the fee increase at issue here is materially different from the examples cited by respondent. Unlike respondent’s examples, the 2017 Act does not confer discretion on bankruptcy districts to set regional policies based on regional needs. Rather, Congress exempted debtors in only 2 States from a fee increase that applied to debtors in 48 States, without identifying any material difference between debtors across those States. Pp. 7–10.
(b) The 2017 Act violated the uniformity requirement of the Bankruptcy Clause. The Bankruptcy Clause confers broad authority on Congress with the limitation that the laws enacted be “uniform.” The Court’s three decisions addressing the uniformity requirement together stand for the proposition that the Bankruptcy Clause does not permit arbitrary geographically disparate treatment of debtors. In Moyses v. Hanover Nat’l Bank, 186 U. S. 181, the Court rejected a challenge to the constitutionality of the Bankruptcy Act of 1898, which permitted individual debtor exemptions under different state laws, explaining that the “general operation of the law is uniform although it may result in certain particulars differently in different States.” Id., at 190. In the Regional Rail Reorganization Act Cases, 419 U. S. 102, the Court affirmed the constitutionality of legislation which applied only to rail carriers operating within a defined region of the country, noting the “flexibility inherent” in the Bankruptcy Clause, id., at 158, permits Congress to enact geographically limited bankruptcy laws consistent with the uniformity requirement in response to a geographically limited problem. In Gibbons, 455 U. S. 457, the Court struck down legislation in which Congress altered the priority of claimants in a single railroad’s bankruptcy proceedings, holding that “[t]o survive scrutiny under the Bankruptcy Clause, a law must at least apply uniformly to a defined class of debtors.” Id., at 473.
Here, all agree that the 2017 Act’s fee increase was not geographically uniform because the fee increase applied differently to Chapter 11 debtors in different regions. That geographical disparity meant that petitioner paid over $500,000 more in fees compared to an identical debtor in North Carolina or Alabama. While respondent contends that such disparities were a permissible effort to solve the budgetary shortfall in the UST Fund, an arguably geographical problem, that shortfall stemmed not from an external and geographically isolated need, but from Congress’ creation of a dual bankruptcy system which allowed certain districts to opt into a system more favorable for debtors. The Clause does not permit Congress to treat identical debtors differently based on artificial distinctions Congress itself created. Pp. 10–14.
(c) The Court remands for the Fourth Circuit to consider in the first instance the proper remedy. Pp. 14–15.
996 F. 3d 156, reversed and remanded.
Sotomayor, J., delivered the opinion for a unanimous Court.
Southwest Airlines Co. v. Saxon
Certiorari To The United States Court Of Appeals For The Seventh Circuit
No. 21–309. Argued March 28, 2022—Decided June 6, 2022
Respondent Latrice Saxon, a ramp supervisor for Southwest Airlines, trains and supervises teams of ramp agents who physically load and unload cargo on and off airplanes that travel across the country. Like many ramp supervisors, Saxon also frequently loads and unloads cargo alongside the ramp agents. Saxon came to believe that Southwest was failing to pay proper overtime wages to ramp supervisors, and she brought a putative class action against Southwest under the Fair Labor Standards Act of 1938. Because Saxon’s employment contract required her to arbitrate wage disputes individually, Southwest sought to enforce its arbitration agreement and moved to dismiss. In response, Saxon claimed that ramp supervisors were a “class of workers engaged in foreign or interstate commerce” and therefore exempt from the Federal Arbitration Act’s coverage. 9 U. S. C. §1. The District Court disagreed, holding that only those involved in “actual transportation,” and not those who merely handle goods, fell within §1’s exemption. The Court of Appeals reversed. It held that “[t]he act of loading cargo onto a vehicle to be transported interstate is itself commerce, as that term was understood at the time of the [FAA’s] enactment in 1925.” 993 F. 3d 492, 494.
Held: Saxon belongs to a “class of workers engaged in foreign or interstate commerce” to which §1’s exemption applies. Pp. 3–11.
(a) This Court interprets §1’s language according to its “ordinary, contemporary, common meaning.” Sandifer v. United States Steel Corp., 571 U. S. 220, 227. To discern that ordinary meaning, those words “ ‘must be read’ ” and interpreted “ ‘in their context.’ ” Parker Drilling Management Services, Ltd. v. Newton, 587 U. S. ___, ___. Pp. 3–7.
(1) The parties dispute how to define the relevant “class of workers.” Saxon argues that because the air transportation industry engages in interstate commerce, airline employees, as a whole, constitute a “class of workers” covered by §1. By contrast, Southwest maintains that the relevant class includes only those airline employees actually engaged day-to-day in interstate commerce. This Court rejects Saxon’s industrywide approach. By referring to “workers” rather than “employees,” the FAA directs attention to “the performance of work.” New Prime Inc. v. Oliveira, 586 U. S. ___, ___. And the word “engaged” similarly emphasizes the actual work that class members typically carry out. Saxon is therefore a member of a “class of workers” based on what she frequently does at Southwest—that is, physically loading and unloading cargo on and off airplanes—and not on what Southwest does generally. Pp. 3–4.
(2) The parties also dispute whether the class of airplane cargo loaders is “engaged in foreign or interstate commerce.” It is. To be “engaged” in “commerce” means to be directly involved in transporting goods across state or international borders. Thus, any class of workers so engaged falls within §1’s exemption. Airplane cargo loaders are such a class.
Context confirms this reading. In Circuit City Stores, Inc. v. Adams, 532 U. S. 105, the Court applied two well-settled canons of statutory interpretation to hold that §1 exempted only “transportation workers,” rather than all employees. The Court indicated that any such exempted worker must at least play a direct and “necessary role in the free flow of goods” across borders. Id., at 121. Cargo loaders exhibit this central feature of a transportation worker.
A final piece of statutory context further confirms that cargo loading is part of cross-border “commerce.” Section 1 of the FAA defines exempted “maritime transactions” to include “agreements relating to wharfage . . . or any other matters in foreign commerce.” Thus, if an “agreemen[t] relating to wharfage”—i.e., money paid to access a cargo-loading facility—is a “matte[r] in foreign commerce,” it stands to reason that an individual who actually loads cargo on vehicles traveling across borders is himself engaged in such commerce. Pp. 4–7.
(b) Both parties proffer arguments disagreeing with this analysis, but none is convincing. Pp. 7–11.
(1) Saxon thinks the relevant “class of workers” should include all airline employees, not just cargo loaders. For support, she argues that “railroad employees” and “seamen”—two classes of workers listed immediately before §1’s catchall provision—refer generally to employees in those industries. Saxon’s premise is flawed. “Seamen” is not an industrywide category but instead a subset of workers engaged in the maritime shipping industry. For example, “seamen” did not include all those employed by companies engaged in maritime shipping when the FAA was enacted. Pp. 8–9.
(2) Southwest’s three counterarguments all fail. First, Southwest narrowly construes §1’s catchall category—“any other class of workers engaged in foreign or interstate commerce”—to include only workers who physically transport goods or people across foreign or international boundaries. Southwest relies on the definition of “seamen” as only those “employed on board a vessel,” McDermott Int’l, Inc. v. Wilander, 498 U. S. 337, 346, and argues that the catchall category should be read along the same lines to exclude airline workers, like Saxon, who do not ride aboard an airplane in interstate or foreign transit. But Southwest’s acknowledgment that the statute’s reference to “railroad employees” is somewhat ambiguous in effect concedes that the three statutory categories in §1—“seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce”—do not share the attribute that Southwest would like read into the catchall provision. Well-settled canons of statutory interpretation neither demand nor permit limiting a broadly worded catchall phrase based on an attribute that inheres in only one of the list’s preceding specific terms. Second, Southwest argues that cargo loading is similar to other activities that this Court has found to lack a necessary nexus to interstate commerce in other contexts. But the cases Southwest invokes all addressed activities far more removed from interstate commerce than physically loading cargo directly on and off an airplane headed out of State. See, e.g., Gulf Oil Corp. v. Copp Paving Co., 419 U. S. 186. Finally, Southwest argues that the FAA’s “proarbitration purposes” counsel in favor of an interpretation that errs on the side of fewer §1 exemptions. Here, however, plain text suffices to show that airplane cargo loaders, and thus ramp supervisors who frequently load and unload cargo, are exempt from the FAA’s scope under §1. Pp. 9–11.
993 F. 3d 492, affirmed.
Thomas, J., delivered the opinion of the Court, in which all other Members joined, except Barrett, J., who took no part in the consideration or decision of the case.