This Article explores Arlington Central School District Board of Education v. Murphy, a decision rendered by the first Roberts Court that may become a benchmark for Spending Clause jurisprudence. The majority in Arlington, led by Justice Alito, adopted the standard for constitutional conditions on spending that had been the dissenting view for years during the Rehnquist Court. More specifically, under the Pennhurst and Dole regime, the Court required Congress to provide "adequate" notice of conditions on spending, which seemed to be sufficient for the clear statement rule the Court (through Justice O'Connor) was seeking to institute. Arlington refashioned the foundational clear statement rule to a "clear notice" standard that requires more specific statutory language from Congress and that is particularly attuned to the state's viewpoint. This analytical shift may narrow Congress's ability to place conditions on federal spending, yet it fails to acknowledge the overlap between unambiguous conditions and coercing states, which this Article explores in the context of federal healthcare programs. These broad implications are focused by the example of the Clawback Provision, a section of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 that placed a new condition on states' receipt of Medicaid funds. The Clawback Provision shifts the administrative burden of pharmaceuticals for people enrolled in both Medicare and Medicaid (dual eligibles) to Medicare, while requiring the sates to continue to pay for the cost of the drugs for the foreseeable future. (The Clawback Provision has been challenged by a number of states, but the cases remain unresolved.) Because of the Clawback Provision, states must fund the Medicare drug benefit for dual eligibles or face a total loss of Medicaid funds, which prevents states from choosing whether to provide a drug benefit to these Medicaid beneficiaries.
Arlington seems to require language for conditions on spending that could not have been anticipated in the drafting of the Medicare and Medicaid statutes, and the new "clear notice" standard could lead to far-reaching effects on these forty-year-old programs. Arlington presents a shift in the Court's Spending Clause jurisprudence that, despite some uncertainties regarding the scope of the ruling, is likely to affect federal healthcare schemes by requiring Congress to provide clearer notice to the states of conditions of accepting federal funds. This Article concludes that the stricter standard of Arlington indicates that the Clawback Provision is unconstitutional, and the provision's fate may portend difficulties for a number of federal healthcare programs. The Court has been drifting toward a narrower view of Spending Clause jurisprudence, and the Roberts Court seems likely to continue to push toward that narrowed interpretation.
Nicole Huberfeld, Clear Notice for Conditions on Spending, Unclear Implications for States in Federal Healthcare Programs, 86 N.C. L. Rev. 441 (2008).