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Guaman v. Velez

Superior Court of New Jersey, Appellate Division

August 13, 2013


Argued January 8, 2013 [2]

On appeal from the Adoption and Amendment of Regulations by the Department of Human Services, Division of Medical Assistance and Health Services.

Jennifer B. Condon argued the cause for appellants (Seton Hall University School of Law Center for Social Justice and Gibbons, P.C., attorneys; Lawrence S. Lustberg, of counsel and on the brief; Ms. Condon and Rachel Lopez, on the brief).

Melissa H. Raksa, Assistant Attorney General, argued the cause for respondents (Jeffrey S. Chiesa, Attorney General, attorney; Ms. Raksa, of counsel and on the brief; Dianna Rosenheim, Deputy Attorney General, on the brief).

Judah Skoff argued the cause for amicus curiae New Jersey Appleseed Public Interest Law Center; New Jersey Policy Perspective; New Jersey Citizen Action; State Parent Advocacy Network; Family Voices of New Jersey; Next Step; New Jersey Working Families Alliance; Blue Wave; South Jersey Chapter of the National Organization of Women; The Unitarian Universalist Legislative Ministry of New Jersey; The Lutheran Office of Governmental Ministry in New Jersey; Latino Action Network; and Democracia (McCarter & English, LLP, attorneys; John C. Kelly and Mr. Skoff, of counsel and on the brief).

Ronald K. Chen argued the cause for amicus curiae American Civil Liberties Union of New Jersey (Rutgers Constitutional Litigation Clinic Center for Law & Justice, attorney; Mr. Chen, on the brief).

Before Judges Reisner, Yannotti, and Harris.


The issue in this case is whether, consistent with the United States Constitution and the New Jersey Constitution, the State may eliminate state-funded Medicaid benefits for adult legal permanent resident aliens who do not qualify for federally-funded Medicaid benefits, i.e., adult legal aliens who do not meet the federal five-year residency requirement set forth in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), 8 U.S.C.A. § 1601 to 1646.[3] In a prior opinion denying plaintiffs' application for preliminary injunctive relief, we found they were unlikely to prevail on the merits of their constitutional claims. Guaman v. Velez, 421 N.J.Super. 239 (App. Div. 2011) (Guaman I). We agree with the legal analysis in Guaman I, and this opinion is intended to be read together with Guaman I. Based on that analysis, and the additional reasoning set forth in this opinion, we conclude that the State's action is consistent with both the Federal and State Constitutions, and we affirm.[4]

The State's limitation on benefits to aliens is based on PRWORA, which imposed a five-year residency requirement before most permanent legal aliens could qualify for Medicaid. The federal limits were succinctly described in A.B. v. Div. of Medical Assist. & Health Servs., 407 N.J.Super. 330, 343 (App. Div.), certif. denied, 200 N.J. 210 (2009):[5]

In 1996, Congress enacted legislation that had a profound effect upon aliens' access to medical benefits. [PRWORA] was designed to reduce the impact of "aliens . . . applying for and receiving public benefits from Federal, State, and local governments at increasing rates." 8 U.S.C.A. § 1601(3). PRWORA "imposes several limitations on the availability of Medicaid benefits to aliens." Soskin v. Reinertson, 353 F.3d 1242, 1245-46 (10th Cir. 2004).
There are two classes of aliens: "qualified aliens" and "unqualified aliens." The definition of "qualified aliens" includes, among others, aliens who were "lawfully admitted for permanent residence under the Immigration and Nationality Act." 8 U.S.C.A. § 1641(b)(1)-(4). "Unqualified aliens" are all aliens who do not fall within the definition of "qualified aliens." Id. at § 1611(a). Only qualified aliens are eligible for most federal means-tested public benefits. Soskin, supra, 353 F.3d at 1245; 8 U.S.C.A. § 1611(a).
Qualified aliens entering the United States on or after August 22, 1996, are "not eligible for any Federal means-tested public benefit for a period of 5 years beginning on the date of the alien's entry into the United States, " 8 U.S.C.A. § 1613(a), unless they were receiving benefits as of that date, in which case the states were required to continue their benefits until January 1, 1997, id. at § 1612(b)(2)(D).

As we summarized in Guaman I, supra, 421 N.J.Super. at 250, the State initially responded to PRWORA by excluding legal aliens from the Medicaid program unless they satisfied the Federal five-year residency requirement. See N.J.S.A. 30:4D-3; L. 1997, c. 352; Assembly Appropriations Committee Statement to Senate Bill No. 2170. The State expanded coverage in 2005 to delete the five-year requirement, based on the Legislature's findings that limiting State subsidized healthcare coverage had resulted in increased costs for emergency hospital charity care. Id. at 251; N.J.S.A. 30:4J-9e.

In 2010, in response to a budget crisis, the State reinstated the five-year residency requirement for most adult legal aliens. However, the State continued to provide coverage for legal aliens who were pregnant women or children under the age of nineteen, and existing enrollees who were receiving treatment for life threatening illnesses or were receiving ongoing life sustaining treatment. As part of the economic cutbacks, the State also closed the N.J. Familycare program to all adults "whose benefits are not funded or payable under Title XIX of the Social Security Act." N.J.A.C. 10:78-1.1(a).

In Guaman I, we recognized that ordinarily, alienage is a suspect classification, and discrimination against aliens must be justified under a strict scrutiny standard of review. Guaman I, supra, 421 N.J.Super. at 262. However, we also acknowledged that due to Congress's broad constitutional power over immigration, the rational basis standard of review applies to Congressional enactments affecting immigrants, and to State enactments authorized by a uniform federal policy:

Even though lawful immigrants comprise a suspect class otherwise triggering strict scrutiny analysis, the Supreme Court applies a dichotomized standard of review. Because of the federal government's plenary power to regulate immigration, classifications based on alienage in federal programs are subject to rational basis review. Mathews v. Diaz, 426 U.S. 67, 85-87, 96 S.Ct. 1883, 1894-95, 48 L.Ed.2d 478, 493-94 (1976). Because the states lack plenary power over immigration policy, similar classifications in a State's benefits programs are subject to strict scrutiny. [Graham v. Richardson, 403 U.S. 365, 376, 91 S.Ct. 1848, 1854, 29 L.Ed.2d 534, 544 (1971).]
Therefore, despite the federal government's broad power over immigration and naturalization, "Congress does not have the power to authorize the individual States to violate the Federal Equal Protection Clause." Graham, supra, 403 U.S. at 382, 91 S.Ct. at 1857, 29 L.Ed.2d at 548 (emphasis added); . . . . However, "if the Federal Government has by uniform rule prescribed what it believes to be appropriate standards for the treatment of an alien subclass, the States may, of course, follow the federal direction." Plyler, supra, 457 U.S. at 219 n.19, 102 S.Ct. at 2396 n.19, 72 L.Ed.2d at 800-01 n. 19 (citing De Canas v. Bica, 424 U.S. 351, 96 S.Ct. 933, 47 L.Ed.2d 43 (1976)).

[Id. at 262-63 (quoting Plyler v. Doe, 457 U.S. 202, 102 S.Ct. 2382, 72 L.Ed.2d 786 (1982)).]

Noting the difficulty in determining whether Congress had adopted a "uniform policy" with respect to the five-year eligibility requirement, we nonetheless were persuaded that the State scheme was likely to pass constitutional muster. We found convincing the rationale expressed in Soskin v. Reinertson, 353 F.3d 1242 (10th Cir. 2004):

[I]n Soskin v. Reinertson, [supra, 353 F.3d at 1244] the court applied a rational basis standard in reviewing equal protection challenges to a Colorado law that repealed jointly funded Medicaid coverage to otherwise legal aliens. The Soskin court determined that that case fell somewhere between Graham and Mathews, because unlike the state statute at issue in Graham, PRWORA provided specific Congressional authorization for the state's action, and unlike Mathews, it involved a state-administered program. Id. at 1255. The court noted:
Some benefits for aliens are required, some are prohibited. In between, the states are permitted to be more restrictive (or, depending on one's point of view, more generous). Relying on Graham, one could say, as Plaintiffs do, that when a state elects not to provide aliens with the maximum benefits permitted by federal law, it is discriminating against aliens and the federal government's imprimatur for such discrimination cannot reduce the level of scrutiny to which the state's choice is subjected under the Equal Protection Clause. . . .
We do not share that view. The reason for applying rational-basis review to federal law regarding aliens is that such laws reflect national policy that Congress has the constitutional power to enact. Once Congress has expressed that policy, the courts must be deferential. What Plaintiffs fail to consider is that a state's exercise of discretion can also effectuate national policy. Recall that the PRWORA does not give the states unfettered discretion. Some coverage must be provided to aliens; some coverage is forbidden. State discretion is limited to the remaining optional range of coverage. In exercising that discretion each state is to make its own assessment of whether it can bear the burden of providing any optional coverage. When a state determines that the burden is too high and decides against optional coverage, it is addressing the Congressional concern (not just a parochial state concern) that "individual aliens not burden the public benefits system." 8 U.S.C.A. § 1601(4). This may be bad policy, but it is Congressional policy; and we review it only to determine whether it is rational.

[Id. at 264-65 (quoting Soskin, supra, 353 F.3d at 1244) (additional citations omitted).]

After reviewing the conflicting decisions from the courts of other states, we concluded that Soskin was persuasive:

Given the Federal goals explicitly stated in PRWORA, and the complicated nature of the funding for the FamilyCare program that implicates Federal and State resources, we find the court's reasoning in Soskin, supra, 353 F.3d at 1255, that the appropriate standard of review lies somewhere between Graham and Mathews, to be compelling. FamilyCare is a state program created to provide subsidized health insurance coverage to low-income children, their parents, and other adults whose family incomes are too high for them to be eligible for traditional Medicaid. The program is jointly funded by the state and federal government. N.J. FamilyCare, (last visited June 23, 2011). Lawful permanent residents, otherwise eligible for Medicaid but for the five-year bar, were eligible for coverage under FamilyCare, but only with the use of state funds. N.J.A.C. 10:78-1.1. Within the complex funding structure, defendants have now chosen to impose an eligibility requirement for state-funded benefits which directly conforms to federal requirements, 8 U.S.C.A. § 1613(a), and has been upheld by the federal courts. See, e.g., Mathews, supra, 426 U.S. at 69, 96 S.Ct. at 1886, 48 L.Ed.2d at 484. We have upheld the five-year bar in other jointly-funded, state-administered Medicaid programs. A.B., supra, 407 N.J.Super. at 349-50.
The adoption of the federal five-year eligibility bar in the state program, while not mandated, mirrors federal objectives, corresponds to an identifiable congressional policy, and "operate[s] harmoniously" within the federal program. Plyler, supra, 457 U.S. at 226, 102 S.Ct. at 2399, 72 L.Ed.2d at 805; see Sudomir v. McMahon, 767 F.2d 1456, 1466 (9th Cir. 1985) ("It would make no sense to say that Congress has plenary power in the area of immigration and naturalization and then hold that the Constitution impels the states to refrain from adhering to the federal guidelines.").
We conclude, therefore, that plaintiffs are not likely to succeed on their equal protection claims under the United States Constitution.

[Id. at 266-67.]

We were likewise unpersuaded by plaintiffs' arguments premised on the State Constitution:

In analyzing equal protection challenges under the state constitution, our courts have rejected the federal multi-tiered analysis (strict scrutiny, intermediate scrutiny, rational basis), and employ a more flexible balancing test that considers three factors: "(1) the nature of the right asserted; (2) the extent to which the statute intrudes upon that right; and (3) the public need for the intrusion." Although the federal and state tests are different, they "weigh the same factors and often produce the same result."
Here, the means selected by defendants — adopting the federal eligibility criteria for aliens — bears a real and substantial relationship to PRWORA's "compelling governmental interest of assuring that aliens be self-reliant in accordance with national immigration policy, " and New Jersey's interest in providing subsidized health insurance within the limits of the appropriations as set forth in the enabling act. N.J.S.A. 30:4J-16. We conclude that under the more flexible standard of review applied to plaintiffs' state constitutional claims, they are unlikely to succeed on the merits of their complaint.

[Id. at 267-68 (citations omitted).]

Without unnecessarily plowing over the same ground we covered in Guaman I, we return to Mathews v. Diaz, 426 U.S. 67, 96 S.Ct. 1883, 48 L.Ed.2d 478 (1976), and some newer cases that we deem pertinent. Mathews reminds us, in powerful language, of the deference due Congress's authority over immigration-related benefit issues. Mathews addressed a Federal statute that created a uniform residency requirement for aliens applying for the Medicare Part B supplemental medical insurance program. The plaintiffs challenged "42 U.S.C. § 1395o (2) (1970 ed., Supp. IV), which grants eligibility to resident citizens who are 65 or older but denies eligibility to comparable aliens unless they have been admitted for permanent residence and also have resided in the United States for at least five years." Id. at 69. In that context, the Court addressed "whether Congress may discriminate in favor of citizens and against aliens in providing welfare benefits." Id. at 74.

The Court began by reviewing the many permissible ways in which aliens may lawfully be treated differently than citizens.

In the exercise of its broad power over naturalization and immigration, Congress regularly makes rules that would be unacceptable if applied to citizens. The exclusion of aliens and the reservation of the power to deport have no permissible counterpart in the Federal Government's power to regulate the conduct of its own citizenry. The fact that an Act of Congress treats aliens differently from citizens does not in itself imply that such disparate treatment is "invidious."

[Id. at 79-80 (footnotes omitted).]

The Court then considered Congress's broad power to differentiate between classes of aliens in determining how to distribute welfare benefits:

In particular, the fact that Congress has provided some welfare benefits for citizens does not require it to provide like benefits for all aliens. Neither the overnight visitor, the unfriendly agent of a hostile foreign power, the resident diplomat, nor the illegal entrant, can advance even a colorable constitutional claim to a share in the bounty that a conscientious sovereign makes available to its own citizens and some of its guests. The decision to share that bounty with our guests may take into account the character of the relationship between the alien and this country: Congress may decide that as the alien's tie grows stronger, so does the strength of his claim to an equal share of that munificence.
The real question presented by this case is not whether discrimination between citizens and aliens is permissible; rather, it is whether the statutory discrimination within the class of aliens - allowing benefits to some aliens but not to others - is permissible. We turn to that question.

[Id. at 80.]

The Court went on to consider the important national and international repercussions of federal immigration decisions and the reluctance with which courts should interfere in clearly-articulated federal immigration policies:

For reasons long recognized as valid, the responsibility for regulating the relationship between the United States and our alien visitors has been committed to the political branches of the Federal Government. Since decisions in these matters may implicate our relations with foreign powers, and since a wide variety of classifications must be defined in the light of changing political and economic circumstances, such decisions are frequently of a character more appropriate to either the Legislature or the Executive than to the Judiciary. . . . Any rule of constitutional law that would inhibit the flexibility of the political branches of government to respond to changing world conditions should be adopted only with the greatest caution. The reasons that preclude judicial review of political questions also dictate a narrow standard of review of decisions made by the Congress or the President in the area of immigration and naturalization.

[Id. at 81-82 (footnotes omitted).]

The Court noted that the potential consequence of deciding the case adversely to the federal government would be a requirement that the government extend Medicare benefits to a huge additional pool of immigrants. Id. at 81 n. 20.

Further, the Court accepted as a given that some form of residency requirement was appropriate in deciding which aliens would qualify for welfare benefits:

Since it is obvious that Congress has no constitutional duty to provide all aliens with the welfare benefits provided to citizens, the party challenging the constitutionality of the particular line Congress has drawn has the burden of advancing principled reasoning that will at once invalidate that line and yet tolerate a different line separating some aliens from others. In this case the appellees have challenged two requirements - first, that the alien be admitted as a permanent resident, and, second, that his residence be of a duration of at least five years. But if these requirements were eliminated, surely Congress would at least require that the alien's entry be lawful; even then, unless mere transients are to be held constitutionally entitled to benefits, some durational requirement would certainly be appropriate. In short, it is unquestionably reasonable for Congress to make an alien's eligibility depend on both the character and the duration of his residence. Since neither requirement is wholly irrational, this case essentially involves nothing more than a claim that it would have been more reasonable for Congress to select somewhat different requirements of the same kind.
We may assume that the five-year line drawn by Congress is longer than necessary to protect the fiscal integrity of the program. We may also assume that unnecessary hardship is incurred by persons just short of qualifying. But it remains true that some line is essential, that any line must produce some harsh and apparently arbitrary consequences, and, of greatest importance, that those who qualify under the test Congress has chosen may reasonably be presumed to have a greater affinity with the United States than those who do not. In short, citizens and those who are most like citizens qualify. Those who are less like citizens do not.

[Id. at 82-83 (footnote omitted) (emphasis added).]

We next return to our consideration of Plyler v. Doe, supra. In Plyler, the Court suggested that, in treating aliens differently than citizens, the States may follow a uniform rule created by Congress:

With respect to the actions of the Federal Government, alienage classifications may be intimately related to the conduct of foreign policy, to the federal prerogative to control access to the United States, and to the plenary federal power to determine who has sufficiently manifested his allegiance to become a citizen of the Nation. No State may independently exercise a like power. But if the Federal Government has by uniform rule prescribed what it believes to be appropriate standards for the treatment of an alien subclass, the States may, of course, follow the federal direction. See De Canas v. Bica, 424 U.S. 351 [, 96 S.Ct. 933, 47 L.Ed.2d 43] (1976).
[Plyler, supra, 457 U.S. at 219 n. 19, 102 S.Ct. at 2396 n. 19, 76 L.Ed.2d at 800 n. 19.]

In Plyler, the Court searched for any Congressional policy authorizing the Texas law excluding undocumented alien children from attending the public schools, and found none. "Faced with an equal protection challenge respecting the treatment of aliens, we agree that the courts must be attentive to congressional policy; the exercise of congressional power might well affect the State's prerogatives to afford differential treatment to a particular class of aliens. But we are unable to find in the congressional immigration scheme any statement of policy that might weigh significantly in arriving at an equal protection balance concerning the State's authority to deprive these children of an education." Id. at 224-25. The Court elaborated on that finding:

[T]here is no indication that the disability imposed by § 21.031 corresponds to any identifiable congressional policy. The State does not claim that the conservation of state educational resources was ever a congressional concern in restricting immigration. More importantly, the classification reflected in § 21.031 does not operate harmoniously within the federal program.

[Id. at 225-26.]

In Toll v. Moreno, 458 U.S. 1, 102 S.Ct. 2977, 73 L.Ed.2d 563 (1982), the Court further refined its interpretation of Graham, supra, in the course of invalidating a State restriction on in-State tuition for the children of certain aliens. Harmonizing Graham with Takahashi v. Fish & Game Comm'n, 334 U.S. 410, 68 S.Ct. 1138, 92 L.Ed.2d 1478 (1948), which invalidated a State law denying fishing licenses to aliens, the Court explained that the tuition restriction was invalid because it placed on aliens a burden not authorized by Congress, and therefore violated the Supremacy Clause.[6] Toll, supra, 458 U.S. at 17, 102 S.Ct. at 2986, 73 L.Ed.2d at 576.

The decision in Graham v. Richardson, supra, followed directly from Takahashi. In Graham we held that a State may not withhold welfare benefits from resident aliens "merely because of their alienage." 403 U.S., at 378. Such discrimination, the Court concluded, would not only violate the Equal Protection Clause, but would also encroach upon federal authority over lawfully admitted aliens. In support of the latter conclusion, the Court noted that Congress had "not seen fit to impose any burden or restriction on aliens who become indigent after their entry into the United States, " id. at 377, but rather had chosen to afford "lawfully admitted resident aliens . . . the full and equal benefit of all state laws for the security of persons and property, " id. at 378. The States had thus imposed an "auxiliary [burden] upon the entrance or residence of aliens" that was never contemplated by Congress. Id. at 379.
Read together, Takahashi and Graham stand for the broad principle that "state regulation not congressionally sanctioned that discriminates against aliens lawfully admitted to the country is impermissible if it imposes additional burdens not contemplated by Congress." De Canas v. Bica, 424 U.S. 351, 358, n.6.

[Id. at 12-13 (footnote omitted).]

Dicta in the Supreme Court's most recent pronouncement on Congress's immigration powers also touches on this issue. In describing the breadth of Congressional authority, Justice Kennedy cited PRWORA in stating:

Federal governance of immigration and alien status is extensive and complex. Congress has specified categories of aliens who may not be admitted to the United States. See 8 U.S.C. § 1182. Unlawful entry and unlawful reentry into the country are federal offenses. §§ 1325, 1326. Once here, aliens are required to register with the Federal Government and to carry proof of status on their person. See §§ 1301-1306. Failure to do so is a federal misdemeanor. §§ 1304(e), 1306(a). Federal law also authorizes States to ...

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