Eleventh Amendment Bars Medicaid Applicant's Federal Lawsuit Over Interpretation of Caregiver Exemption

The Third Circuit Court of Appeals rules that the Eleventh Amendment bars a New Jersey Medicaid applicant's lawsuit against the state for imposing a penalty period despite a claimed caregiver exemption because the lawsuit seeks retroactive relief. Williams v. Connolly (U.S. Ct. App., 3rd Cir., No. 17-3569, March 19, 2018).

John Davis brought his mother, Elizabeth Williams, to live with him in 2012 when she was diagnosed with Alzheimer's disease. Mr. Davis sold his mother his home and cared for her in the home for three years. In 2014, Ms. Williams deeded the home back to Mr. Davis for $1 and entered a nursing home. In 2015, Ms. Williams applied for Medicaid benefits. New Jersey imposed a penalty period because Ms. Williams had transferred the home to Mr. Davis.

Ms. Williams appealed, arguing that the caregiver exemption applied to the transfer. The state determined that the transfer did not fall within the caregiver exemption because Ms. Williams paid for additional caregivers in addition to her son. Ms. Williams sued the state in federal court under § 1983. The district court granted the state's motion to dismiss, holding that the claim is barred by Eleventh Amendment immunity because it seeks retroactive relief. Ms. Williams appealed.

The U.S. Court of Appeals, Third Circuit, affirms, holding that the Eleventh Amendment bars Ms. Williams' lawsuit. According to the court, Ms. Williams was seeking injunctive relief, which would require the state to "reevaluate her Medicaid application and find her eligible for benefits without a transfer penalty" and "that would mean awarding her Medicaid benefits that were withheld as a result of the imposition of transfer penalties . . . The Eleventh Amendment bars this type of retroactive relief against the State. "

For the full text of this decision, go to: https://www2.ca3.uscourts.gov/opinarch/173569np.pdf

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